Thursday, June 29, 2006

Slavery is not Dead

The homeowner that has bought into this real estate mess in the last two years can probably classify him or herself as a slave to the bank, or to whoever owns the note on their house.

Here is a definition of Slavery from Wikipedia:

"Slavery is a condition in which one person, known as a slave, is
under the control of another person, group, organization, or state.
Slavery almost always occurs for the purpose of securing the labor
of the slave. A specific form, known as chattel slavery, is defined
by the absolute legal ownership of a person or persons by another
person or state, including the legal right to buy and sell them just
as one would any common object."

It sounds as if I am being facetious, but think about it. This homeowner is going to pay up to 55% of their income to keep up the house payments. This is after tax income. So add 10% onto the 55% and you get 65% of income spent on the home. Add another 10% for expenses like heat, water, trash electricity and you are up to 75% of their income. This leaves 25% left for enjoyment of living; food, clothes, restaurants, movies, cars, insurance (health, car, life, home) and maybe a payment on their credit card. Add a Home Equity Line of Credit (HELOC) and you could be dead meat!

At this point, you have to ask yourself, can the owner of the contract perform as expected by the bank and everyone else? On an individual case basis, the answer is “maybe,” but homeowners as a group, the answer is “no.”

The concept of slavery, is that someone else will profit from most of the efforts of your labor. The homeowner has no concept of the slavery issue—Lincoln freed the slaves, and buddy, I have news for you. Your Realtor, Bank and Appraiser, found a new way to hook you up to that wagon of serfdom. The real irritating thing is, that you let them help you into the mess, and thanked them for it, to boot!

The new homeowner reading this claims says; "Hey I’m not a slave, I own, I don’t rent." Well, I’ll give you two years before your wife and kids file for divorce and leave you. This satisfies the last part of being a slave, the right to buy and sell the slave. What is not realized is that the wife and kids want more out of life, and it is not happening. Money problems break up most marriages. So your wife leaving is the equivalent of being sold to another owner. Admittedly this is very far fetched, but what the hey, its only a blog!

So remember New Homeowner, slavery is a concept that is invisible, only because everyone else is doing it. When the music stops, they are not taking away one chair, the sad truth is, there will be only one chair left!

The only advice I can give, if you are married, and find yourself in this situation, is to not blame each other. Once you realize that the situation is bad and that mistakes were made, work to a solution together. The most common reflex is to blame someone else for your situation, and this is normal, no one wants to be labeled as a cause of present problems. A divorce is a lose, lose situation and often seems like the easiest route out of the disaster, don’t do it. You are at this point in your life only because several professional people made a lot of money off of you and your family.


Anonymous said...

Is it still slavery when one doesn't know he is indoctrinated?

Jim in San Marcos said...

Point well taken, How can you be a slave if you have no concept of a bank being a slave "owner." Signature required!

Anonymous said...

I think:

It doesn't matter if the person realizes they are a slave or not - they are still performing the functions that a slave would/should.

Anonymous said...

ok. so i've been thinking about it since i posted the original question... It would be the fiduciary duties of the "slave owners" in this "democratic" society to "free" the slaves... So does that mean the folks who were sold by their very own government (by means of lowering te rate) and bought into the housing boom (for whatever reason - quick bucks, home for the family, you name't), who will face foreclosures, be given amnesties and set free of debt obligations??? But what about other "minority of people who could've done the same" that didn't sign their names on the dotted lines???

btw: can someone talk about M3, 30 year note, 10 year note and mortgage rate relationships?