Let’s Be Realistic

19 11 2008

Interesting article in the LA Times about adult children moving their families back in with their parents due to job loss and or/foreclosure. Some typical examples:

Donald Garcia, 35, and his wife, Augustine, were living in a Burbank apartment when Augustine’s mother approached them for help. She had refinanced her three-bedroom Tujunga home a year and a half earlier with an interest-only loan, and what had been a $900 monthly house payment had doubled.

“Her mortgage company told her she couldn’t refinance for seven years, so we moved in to help out,” says Garcia, who added that a change in his apartment’s pet policy would have forced a move anyway.

Then, a few months ago, more change: Augustine lost her $60,000-a-year job as a manager at a hardware store. Garcia, trained as an electrician’s assistant, could find no such work following the collapse of the housing market, so he started driving a tow truck. Now he and Augustine, he says, owe money to her mother because they haven’t been able to help much with household expenses.

…29-year-old Ondor Ozer of West L.A. In 2006, Ozer was working in retail when he decided to buy a 3,500-square-foot house in Hemet with plans to find a new job nearby. After a year without success, he realized he’d have to lose the house to foreclosure or rent it out and move back in with his parents. He chose the latter.

“I’m upside-down in my mortgage quite a bit — about $1,300,” he says, citing the difference between what he pays on the loan each month and what he’s able to collect in rent. “I’m almost 30, and I really don’t want to be here, in my parents’ house. But I have a nearly 2-year-old son to worry about.”

Ozer says his sister and her two kids have also moved back into his parents’ 1,300-square-foot home. She’s renting out her house to cover that mortgage — and coming up short about $200 to $300 each month, he says.

I had a few thoughts after reading this article. First is that I see and hear of many people that haven’t really accepted their own personal “worst-case scenario”. They’ll be discussing their need to float two mortgages, and explain that “Worst-case scenario, I can rent the old one out (or pay both monthly bills, etc.)”

In the worst-case scenario, though, you might not have a job. You also might need to support more than your own immediate family! And renting out the house may be a proposition which loses money! We need to be realistic about the future, and not adjust the frame so that it only shows the palatable outcomes.

Second is that there is a sense in which financial hard-times are good because they force people to become less independent, and more interdependent with family, church, and community. It is a mixed blessing, but there really is a silver lining there.

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One response

19 11 2008
Rob

You know I have really been re-thinking the 20th century invention of ‘moving away from the folks’ And I think I would like to do a spin-off of your article here tonight.

Great post, and a great segway into some thoughts on multi-generational thinking.

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