HomeSweetLoan

homesweetloan
"Home still seems sweet even though we know we're more indentured to it than own it."

Almost nobody owns their home in this country. Here, we assume thin mantles of ownership by agreeing to carry outrageous debt loads in lieu of owning a home we might actually afford. The more outrageous the debt load, the more prestigious the address. Credit-worthiness stands in for perhaps more responsible forms of citizenship. Those who have not found a bank willing to indenture them are considered second-class citizens, renters. Homeowners, or, more properly, "home-loaners" tend to stay in one place for a while, lending stability to an otherwise potentially footloose populous. Each homeowner engages in speculation, plotting for the place to be worth more than they paid for it by the time they decide to move. Almost nobody ever pays off their mortgage since that would erase the leverage loanership affords them, the opportunity to enjoy any increase in total value of a property they own only a small portion of.

Leverage is the name of this game, though it works both ways.
Economist John Kenneth Galbraith claimed that each successive generation has to learn about leverage anew. Each seemingly discovers its upside then its downside, none learning anything until experiencing both the up and the down side. I was fortunate to discover the downside first. My first home lost twenty percent of its value over the decade we owned it, even after I'd repainted it, reproofed it, and refinished every wall and half the ceilings in the place. It was a fifteen and a half percent per annum money pit. I never expect to recover from that downward slide, though I'm clear that it was all my fault, though I also blame Reagan's ridiculous economic policies which I did not foresee. I could have stayed a second-class citizen and avoided the harsh lesson in economics.

In a rising real estate market, people use their homes as piggy banks, though this requires stacking successive loans on top of each other or periodically refinancing the whole thing. In practice, what started out as a considerable debt hole tends to grow ever larger over time. We think of our homes as our primary asset but they often represent an even larger liability. We still refer to them as our home anyway. The banks can rightfully refer to our homes as assets. We can only think of them that way.

None of these financial shenanigans seem to blunt the emotional attachments we develop with our loans. Er, homes. We proudly tend the gardens and repaint the siding, feeling responsible for so doing. We direct our mail to come directly to "our" place, and rarely grumble about the indenture we serve under. Some imagine eventually making a killing in the real estate market, buying low and selling high, though a market dominated by such thinking seems somehow destined to disappoint most. I gave my second house away to my first wife as a tariff on exiting the relationship. The third place, my second wife owned. I just paid the mortgage for a time. I left that one behind, too, so I was almost fifty when The Muse and I finally mustered up to actually buy a permanent place of our own. We almost lost it in the subsequent crash, but managed to hold onto that debt through bankruptcy and displacement. No matter how destitute one becomes, they cannot take away your primary indebtedness without your agreement, as long as you service that debt.

Now we own two homes, or service two mortgages. We live in one and rent the other to The Muse's son's family. Double leveraged, we might eventually make out like bandits, though we never intended to rob anyone, not even ourselves. The desire for a place seems capable of driving no end of irrational behaviors, some driven by understandable exuberance and others by impending desperation. We've seen both the sides Galbraith considered and survived them both. Home still seems sweet even though, like most, we know we're more indentured to it than own it.

©2019 by David A. Schmaltz - all rights reserved










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