Stop me if you’ve heard this one before. A guy buys a condo on the Gulf Coast because he knows it is a great investment…
I’m going to stop right there because we’ve all heard this one before. Many of us in the Mobile area have even lived this story ourselves. That’s why it is interesting that a new book about the housing bubble that popped during the Great Recession is making headlines even as we stare down another financial crisis.
Underwater: How Our American Dream of Homeownership Became a Nightmare
“Underwater: How Our American Dream of Homeownership Became a Nightmare” by Ryan Dezember, a reporter for the Wall Street Journal who got his start at the Mobile Press-Register tells the familiar story of financing, subprime mortgages, interest rates, the bundling of mortgages into securities, but he puts an Alabama spin on it by telling it through the lens of his purchase of a condo on Audubon Place in Foley.
Instead of walking away from the mortgage when his work required a move, and property values had dropped to the point that his mortgage was underwater, Dezember tried his hand at property management. His colorful stories about the various renters he had to deal with will have you thinking you might know the person he is talking about. But that is not what makes the book interesting to us, as bankruptcy attorneys.
Dezember talks at great length about the debate he was having with himself about holding on to this property. He could have walked away, as so many people were doing, but he felt honor-bound to pay his debt. This really struck a chord with us because these are feelings many of the local people here in Mobile that we counsel on bankruptcy are also wrestling with.
Many of our clients tell us they feel guilty for considering bankruptcy because it means they didn’t keep their word. We have a strong belief in America, and in Southern Alabama in particular, that a person is only as good as their word. That if you can’t live up to your promises, you aren’t worth anything. Maybe this is a good code of honor to uphold in your personal life, but it is dangerous thinking in the financial world.
Our financial system was built to cater to risk takers. It is designed to bail people out when they get in over their heads. As Dezember notes, big developers, corporations, and banks take advantage of this. They don’t feel bad when a deal falls through, and we would argue neither should the average family that finds themselves in a tough spot.
Bankruptcy is part of our social safety net. At Padgett & Robertson we are proud of the work we do to help regular people and their families take advantage of our nation’s bankruptcy laws. We want our clients to be able to hold their heads high because they made the choice to face their problems head on instead of suffering silently. If you are ready to move forward after facing a financial setback, we are here to help. Please contact us today to schedule a free consultation.