Do I Have To Come Right Flat Out And Tell You Everything?

I was recently talking to a blogger who was droning on and on about some arcane power struggle within the state Republican Party. I mentioned one of the larger economic issues of the day and his eyes glazed over. This seems to be a common reaction for political insiders, which is one reason that I fear politicians getting involved in economic matters. However, I assume our readers are smarter than the poli-bloggers and care about things that happen in the real world besides "who gets the nomination?" Those of you who fit that bill will note that the US is facing a sub-prime lending crisis.

Financial guru Jim Cramer claims seven million Americans may lose their homes. One such family was recently profiled in the Wall Street Journal. Prepare to see more stories like this one:

Until recently, the Montes family didn't seem like the type that would find itself faced with foreclosure. They live in a solid neighborhood and are both employed and in good health. "My wife and I make pretty good money," says Mr. Montes. Mrs. Montes works as a school secretary. Together, they earned nearly $90,000 last year.

Of course, the story goes on to detail that they certainly are going to lose their home. And if it can happen to them, it could happen to you. If you are hoodwinked by an unscrupulous mortgage broker like the Montes'. Or like our old friend Leon, who writes with his sob story:

Nihilist, I know you's a financial genius, so I'm asking your help. King Vitamin won't speak to me. Here's my story. As you remember, I lived in a dumpster behind a KFC in St. Paul. A couple of winters ago, I decided to move in with one of my baby mamas, the way I do every November. Anyway, we was gettin' it on and I decided I would stick around a while.

Eventually, we looked for a house. I wanted one near the Big V Saloon, and sure enough, we found a mansion on Summit Avenue. Now, baby momma makes a good $20k per year as a part time stripper, and I make a little more on my disability paycheck. So we didn't think we could afford a $650,000 home. But the realtor made us talk to their mortgage broker and he set us up in an interest-only 2 year mortgage. We actually pay less than the interest due on the loan for the first 2 years, and our payment was only $900 per month.

Now all of a sudden, I'm getting a notice that I will have to pay $5,900 per month once the 2 year period ends. That doesn't seem fair and I sure can't afford it.

Nihilist, I just want to keep paying my $900 per month. I also don't want to give up my leased BMW. What can you do for me?

While I am flattered by Leon's confidence in me, I am stumped. I think it's grossly unfair to force people to pay for something they bought. It really is kind of taking advantage of the poor. Fortunately, Hillary Clinton has a plan that will bail out some of those who were over served by the mortgage industry. Maybe not Leon, but certainly the Montes family.