The Lost Dreams

The Lost Dreams
We have seen small towns away from big cities fade away. It could be loss of population, or the town is away from main interstate highway or nature played a role in bringing the towns ruin. This time however, it is not the small towns and distant places that are degrading. Like many small towns, hopes and dreams are lost in the big cities. What we saw in small towns are being felt in cities all over America. Jobs are disappearing, homes are vacant and hopes are lost. Suddenly, it came a time where the price of housing stops going up and the same lenders devalued the value of the houses thereby decreasing the credit line of mortgage owners drastically forcing people to pay their debts from other means. Incomes from jobs could not support a debt payment that was meant to be taken care of by speculative real-estate market. Too much debt, little income and speculation forced people to bankruptcy. The result is what we see now; empty parking lots, for sale signs, and out of business buildings. Finally, our innocent belief of business as usual is challenged, like an orphan we felt abandoned by the system. We are questioning everything as well as soul searching for better tomorrow.

Success in American life did not need a secret. All one have to do was listening and following the proven knowledge to participate in the American dream. The dream is based on a simple formula of “a job, credit line, and a house". A house is a residence, investment and a guarantee of economic security. In the last few years however, the meaning of a house turned upside down. It became a liability rather than an asset. It lost its primary meaning of security and residence. The house literally became a burden instead of a pride. Signs that say bank owned or foreclosed became the new identity of houses. In some areas, people’s belongings including children’s toys are thrown out of the door while the homeowners are sleeping. People’s faith is shattered; trust in the system is gone (Pearson, 1991, p.78). The same thing is happening in the larger real estate area. They may not have signs of foreclosure on the side of the door but they had everything else that is a sign of deterioration. Businesses had gone bankrupt, or moved somewhere. Customers are scarce, and parking lots are empty. The place once it used to be full of life is now vacant. What had happened?

The answer is not that complex. It is simple. People never owned their houses until it is completely paid. Houses are sold on credit to be paid off over several decades with one goal in mind for the lender, higher income in the form of interest. The total interest payment usually ends up more than the principal does at the end of the term. It is designed not to be paid off instantly. Marketers and bankers made sure the concept of owing house is an instant profit or sometimes double the price of the house within a few years. Lenders sold hope. Customers borrowed money against their mortgage. It was their ATM (Money Central).Twenty or thirty years of payment on a mortgage were not that bad. However, lenders were not satisfied with that. They wanted more. They start packaging old loans into securities where they can sell it piece by piece. People are left with mortgage debts for the house they lost. We cannot continue any longer business as usual (Campbell, 2008, P.67) threshold.

The house that was once a residence as well as an investment to the owner becomes an investment instrument where it can be sold and traded on the market without the knowledge of the owner. That is why we see empty parking lots, empty gas stations, and empty office buildings everywhere.







Reference:



Campbell, Joseph. (2008),The Hero With a Thousand Faces. Bollingen series XVII. 3rd ed.



Novata: New World Library.

Money central. (2007, February 19). The housing ATM rot is just the beginning. Retrieved, November, 14, 2009, from

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheHousingATMRotIsJustTheBeginning.aspx



Pearson, Carol S. (1991), Awakening the Heroes Within:

Twelve Archetypes to Help Us Find Ourselves and Transform our World.

San Francisco: Harper San Francisco.