Reply #33: I don't think this guy WANTS to be bailed out

[jmowreader]

Introducing Shawn Forgaard: the Welfare Mother Driving A Cadillac of the New Millennium.

Mr. Forgaard decided to flip nine houses using the riskiest form of mortgage I ever heard of. Negative amortization loans are an even more advanced form of insane than the traditional interest-only loan, where the payments at least cover the interest. If the economy would have stayed good, he would have turned a profit on all nine deals and we'd be reading about him in the paper as a great, wonderful leader of the new financial vanguard, or whatever you want to call someone who gambled huge and won. Unfortunately for him, the economy hit the skids and his whole financial world fell apart.

Oh fucking well. It's a gamble that went to shit, but relatively speaking it wasn't huge--it's possible to lose millions shorting stock or buying futures. And he's handling it fairly philosophically--I fucked up, I won't do it again.

The real problem here isn't that Shawn Forgaard lost $800,000 gambling on the real estate market, but that our right-wing media is going to use him as The Example of why banks, builders, material suppliers, Realtors and everyone else in the housing-market foodchain except for homeowners deserves to be bailed out. Because, you know, banks would never push people into rotten loans, builders would never stop building well-constructed, sensible houses in favor of $500,000 3000-sf castles with 20-year shingles, Masonite siding and polybutylene pipe embedded into concrete slab foundations, and Realtors would never change a mortgage application to get a family who makes $2500/month into a $400,000 home...but homeowners will routinely buy ten houses using paper so bad it doesn't even cover the interest. (Skinner, when is the "extreme, biting sarcasm" tag coming out? I need that.)