Preparing your kids for tough economic times - Mortgages & Foreclosures

Over the last several days, an ongoing discussion has been taking place around the McCord family household. That discussion being preservation during an economic depression.

My kids join me, almost daily, in watching national news – in order to be fair and allow them to develop their own position, I do bounce between MSNBC, CNN, Bloomberg and Fox. I want them to see the differing viewpoints and to feel confident in discussing any topic they may question.

Given that I do want them to have a well rounded take on what’s going on, I’d like to ask my readers to pitch in and offer up their viewpoints on what’s taking place in the economy.

Part of bringing about an understanding has involved taking a drive around our area – I set the trip gauge on the car and pull out of the driveway – my kids were instructed to watch for foreclosed homes and write down the mileage points of each one. What we’ve found is you can’t drive more than a couple (2) miles any direction without passing a foreclosure.

We then sat down in a discussion on why President Bush and Co. were insisting urgency in passing this bailout plan. I did explain to them, that people were wrong, very wrong in fact, when they gave in to the hard sales pitches of mortgage lenders and signing on for sub-prime mortgages. I further explained what that meant is that people signed on for low interest rates with an understanding those rates would take a large jump in a couple years. The people went in thinking they would borrow from Peter to get the mortgage, refinance before the rates jumped, pay back Peter while borrowing from Paul, well, it didn’t work out quite that way.

Now, in as much as people were wrong in signing on for these rates, mortgage companies were wrong in even promoting them. You’d think, with all the economic specialists and advisers available, they’d know that was a bad plan going in and they would most likely end up sitting on a bunch of homes they couldn’t sell.

Do I have this right so far? Anyone have a different perspective?

I’d like to continue this discussion by addressing the various aspects at play.

I’d also like to include discussion on other topics that come up with my kids during this heated election time.  I do hope some of you will fill comfortable in joining in by offering up your viewpoints. My goal is to keep this as civil as possible – it’s intended to be a learning experience for my kids – not one that shows an ensuing battle between the red and blue. This means comments WILL be moderated to eliminate anything that is not considered constructive.