TANSTAAFL

TANSTAAFL, an acronym for, “There ain’t no such thing as a free lunch.” This was coined by the Award Winning Science Fiction Writer Robert Anson Heinlein. It was used first in his novel,”The Moon is a Harsh Mistress,” and it seemed to show up off and on in several of his works. TANSTAAFL actually came into the popular vernacular years ago although I think that its use has faded, probably more because people don’t want to believe it than because it isn’t factual, because it is.

I think this country is in dire need of remembering that term, and coming to grips with the simple truth it contains. Nothing in this world is free, yet every day in the streets and on the news people are complaining about how they have been mistreated and how they have a right to this or that. I would like to know who was passing out these rights and why I wasn’t in line when they were being distributed.

I was watching the CBS Evening News with Katie Couric. I normally don’t watch that news program as I like CNN Headline News’ Erica Hill much better. Anyway, that isn’t the point, the thing that caught my attention was a story they did on protesters marching on their mortgage lender. These were people caught up in the sub-prime mortgage crisis this country is facing right now.

One woman was interviewed who said that she wasn’t looking for help because her husband lost his job, or (and she actually said this) because they didn’t read the contracts they were signing, but it was because there was a crisis in this country and the country needed to help them out. Personally, I had a little trouble understanding that.

First, I had always thought that losing a job was one of the major reasons people would lose their home. Suddenly they couldn’t afford it any longer, they would default and the bank would foreclose. Certainly heartbreaking for the individual family, but that isn’t cause for a national crisis.

Second, I can certainly understand how stupidity and ignorance could be the root cause of a national education system crisis, but how does this translate into a national mortgage crisis that I am supposed to be concerned with? I don’t see the connection between someone’s greed and my pocketbook.

It has always been my understanding that the interest rate people are charged is to pay the lender for the risk of the loan. Lower rates are applied to loans with less risk, higher rates to those with greater risk. That is how the industry pays its’ bills. Now while Mrs. Grundy may not have been smart enough to read the contract, the underwriter certainly was and should have known better.

Now we are marching in the streets and saying that the Government has to bail them out of the mess they made. Hogwash! If the underwriter doesn’t want to renegotiate the loan, and the buyer can’t make the payments, let the underwriter foreclose and try to move the property themselves. That is the risk they assumed when they wrote bad loans. That is the risk that they were very aware of when their greed caused them to get people in debt over their capacity to pay.

It wasn’t my idea to provide money to people who did not have the capability to repay it, and I have received not one thin dime in interest for those loans. The mortgage company made the money on those loans so they should be the ones to absorb any losses.

Back to Mrs. Grundy. Let’s stop and think for a moment, okay? Was she living on the street before she purchased a house beyond her means? Wasn’t she paying rent to someone somewhere? Of course she was. How is she hurt by this? Her credit has a stain on it. Ooops! I forgot, she didn’t have good credit before they lent her the money for the house or it wouldn’t have been a sub-prime. She has lost nothing and has actually had a couple of years in a better house than she was renting before all this took place.

Again, not my problem. The mortgage lender knew and accepted the risks involved in writing these sub-prime loans. The borrowers, while it is unfortunate, would have still been paying someone rent during this time period so they aren’t truly out anything. It looks like a wash to me. If the mortgage lenders go out of business, they are the ones at fault in the first place and need to step up and assume the loss if needed.