She's Back!

Sorry, I haven't been swept away by a Tsunami or plague, or recession. Just on the road with spotty connections and new focuses and so I left MomBlog for a minute.

Sorry to those who missed me.



And yes, it is official, we are undergoing something called a recession. According to Wikipedia, that means a reduction of a country's gross domestic product (GDP) for at least two quarters. So that's like, what, half a year?

There are many stories around, but we can't help but notice the mortgage industry, that falsely bolstered a sense of wealth throughout the kingdom.
The Wall Street Journal runs a story about a little blue shack's sale that illustrates the delusion, predation and false hope that ran through this period called "my house is worth something."

Little town, big dreams.

"Four decades ago, when she bought the West Hopi Street house for $3,500, Avondale was a small town built around cotton farms. From 2000 to 2005, the heart of the housing boom, it doubled in size to 70,000 residents.

Today, one in nine Avondale houses is in foreclosure or close to it.

Her lender, Integrity, was one of a flurry of small mortgage firms that sprang up nationwide during the boom, using loans from big banks to generate mortgages to resell to larger financial institutions. Whereas traditional mortgage lenders profit by collecting borrowers' monthly payments, Integrity made its money on fees and commissions.

The company was owned by Barry Rybicki, 37, a former loan officer who started it in 2003. Of the boom years, he says: "If you had a pulse, you were getting a loan."

When an Integrity telemarketer called Ms. Halterman in 2006, she was cash-strapped, owing $36,605 on a home-equity loan. The firm helped her get a $75,500 credit line from another lender.

Ms. Halterman used it to pay off her pickup, among other things. But soon she was struggling again.

In early 2007, she asked Integrity for help, Mr. Rybicki's records show. This time, Integrity itself provided a $103,000, 30-year mortgage. It had an adjustable rate that started at 9.25% and was capped at 15.25%, according to loan documents.

It was one of 197 loans Integrity originated last year, totaling almost $47 million.

For a $350 fee, an appraiser hired by Integrity, Michael T. Asher, valued the house at $132,000. Mr. Asher says although he didn't personally believe the house was worth that much, he followed standard procedures and found like-sized homes nearby that had sold in that price range in 2006."

Yeah right. "Integrity."
We all have heard similar tales.
So the banks lent money, not really supported by value.
Now we all feel something crunchy.

Let's hope that we can dance away from this, with the grace of a four-year-old.
Innocent. Hopeful. Alighting on dreams that do exist, just not in fashion right now.

Coping With Financial Stress.......Stay Calm

Scary week, no? Financial swings the likes of which we haven't seen since.....horse and buggy days? Everyone around me is uncertain, confused, anxious. And what of the children? Certainly they are picking up on our stresses of paying bills, filling fridges, if not through direct conversation, or listening in on our end of phone calls, then certainly from the tone in our voices. Shopping for school supplies was never fun but now it is painful.
"Who needs all those crayons?!"
"What's wrong with last year's backpack?"
"Ten dollars for the Disney Princess six-piece stationary set?"
I am neither an economist nor a psychic, I don't know what will happen. But I am a Mom. I feel it is our job, as responsible beings to set a tone for the family. We are all feeling fear these days, but we should try to keep our financial anxiety in check. Lets just try to maintain a sense of calm and grace during this crazy time.
Breathe, Stay Active
Fear can effect our body with a "fight or flight" response, flooding us with adrenaline. Get up, move, run, walk, kick a ball, punch a punching bag, work it off. If you sit still, you will feel panic. And breathe. Again. long, slow, throughout the day. Let the shoulders go.
Couples Coping
Money is a huge stress-out subject in relationships, even in the best of times. Try to set some ground rules during these crazy days. Don't talk about money before bed. Or in bed. Support each other, acknowledge the fear. Focus on what you do have. Lovely children. Friends and family. A functioning body. Each other.
The Kids
Don't lie to your children, they always seem to know anyway. But don't overwhelm them either. A child can't comprehend the FDIC, bank consolidation or jumbo loans. I can barely. Simply sit them down and talk about how the money world is really complicated right now, and scary (certainly they have heard stuff from friends) but reassure them that you will all be OK.
And you will. Turn off the TV. Eat simple, homemade meals together, at home. Talk about other things. Certainly the financial world isn't the only thing going on right now. Just, possibly, the scariest.