Solutions to the Mortgage Mess


In her Washington Post/Bloomberg column, Michelle Singletary cites various steps that should be taken to prevent another massive housing crisis, including forcing lenders to make good loans by looking at an applicant's income, major expenses and debt-to-income ratio.


During a recent financial workshop I conducted at my church, I met a single mother who couldn’t afford her mortgage.

She and I talked about her options, which included selling her two-bedroom townhouse and moving into an affordable apartment or getting a roommate. But while speaking with her, I had to suppress my anger.

I was angry with the lender that approved her interest-only loan. It’s true that the young woman should have realized that once her mortgage was adjusted to include principal, her monthly payment would crush her budget. It now takes more than half her monthly income to pay the mortgage, which leaves little room for her to save or cover her other expenses.

But having worked with so many homeowners in her predicament, I understand that the desire to have a home overrode the financial sense she needed to realize that in the long term, the mortgage would be too much to handle. She was trying to better herself by buying a home. She had the right intentions, so I have compassion for her and her situation. 

Read Michelle Singletary's entire column at the Washington Post/Bloomberg.