Searching for the perfect victim
For journalists, one of the most difficult things about covering the housing crisis seems to be finding the perfect Joe Homeowner to cite as an example of the carnage wrought by the real estate meltdown. A reporter for my local newspaper took a whack at that piñata yesterday, and the result was predictable: the nagging sense that the reader wasn’t being told everything.
The hook for the article was a bill before Congress that would give bankruptcy court judges authority to reduce mortgage payments for beleaguered homeowners. As newspaper stories of this type typically do, it focused on a real-life family who would benefit from the legislation — in this case, the Bostics of east Raleigh.
The story explained how the family ended up in financial distress:
But about four years ago, [Mr. Bostic] went into the hospital for a routine biopsy. He says a radiologist twice punctured his gall bladder by accident, spilling bile through his innards with grave results. He struggled to work and refinanced his home with an adjustable rate to pay a dozen employees and his mounting medical bills. Eventually, he closed his business. He lost his health insurance.
… If the flawed surgery hadn’t occurred, Bostic said, he wouldn’t have had to refinance his house. He still would have a low interest rate, a good credit rating, his small business and enough money to take vacations every year.
“We haven’t done anything directly, that I can see, to put us in this situation,” Bostic said. “A gall bladder gets punctured, and everything richochets from there.”
From that passage, the reader knows (1) the homeowner had health insurance of some kind when his medical problems began; (2) the high mortgage the family now cannot pay was the result of a refinancing they sought, and not because some evil banker conned them into taking a subprime loan for a house they couldn’t afford; and (3) that by the homeowner’s own account, all woes can be traced back to the flawed medical procedure.
Here’s what the reader doesn’t know: How did the family end up with big medical bills if they had health insurance? What were the circumstances surrounding the loss of that insurance? Why did they opt for an adjustable rate mortgage when they refinanced, knowing payments would later rise, when fixed-rate mortgages at that time were relatively low? (My fixed-rate mortgage, which I took in April 2005 — almost exactly four years ago — is under 6 percent.) And most significantly, did the couple pursue a malpractice claim against the radiologist? If not, why not? When a doctor does serious harm to an internal organ, that’s the kind of thing that makes a trial attorney drool with anticipation.
There surely are answers to those pertinent questions, yet the story doesn’t provide them. Still, it’s clear that this family is in dire straits thanks to the combination of simple bad luck and a ham-handed doctor. Why, then, should the one blameless party in this situation — namely, the bank — bear responsibility for it?
Call that yet another unanswered question.
March 6th, 2009 at 8:57 am
Can’t ask questions like that. It detracts from the narrative. And the N&O wonders why it’s going under.
March 6th, 2009 at 12:10 pm
Obviously all of this happened when Bush was President.
March 7th, 2009 at 9:38 am
I am just wondering who the family is blaming for their problems.
March 7th, 2009 at 11:12 am
So glad, you George D. Gearino, are the self-appointed poster boy for financial acumen and personal responsibility. And thanks for sharing the high points of the favorable interest rate you negotiated on your new mortgage. You rock!
Tell me, was the beleaguered bank you speak of the beneficiary of TARP funds perhaps? If so, I wonder what they did with that windfall? I’m pretty sure I can eliminate APPLY FUNDS TO TROUBLED ASSETS off the list of their possible choices.
Hey, Uncle Sam didn’t explicitly tell them they had to apply Troubled Assets Relief funds to their own troubled assets. That’s just shrewd business practice on their part. That’s what makes America great.
Here’s Mr. Bostic, a guy who owns a small business. He supports himself, his family and provides employment to a dozen of his fellow citizens. He’s victimized by a medical procedure gone terribly awry and your reaction is “Why didn’t he negotiate more favorable terms for his new mortgage?” “Why isn’t he reaping the benefits of a huge malpractice settlement?” “What kind of crappy health insurance did this bozo have, anyway?” “Why pick on the poor bank?”
God Almighty, Gearino. Are the powerful and well-connected ALWAYS victims in your world? Duke Lacrosse, Big Oil and now banks.
Banks for chrissakes. The nemesis of widows and orphans and the purveyors of profligate and double-secret service charges that nickel-and-dime their customers into madness and near insolvency.
When you watch Animal Planet, do you feel sorry for the alligator that eats the baby antelope? “Poor guy. I bet those hooves are hard to digest. He’s gonna have one helluva case of indigestion.”
And no doubt your scorn for the bad judgment and obvioius character flaws of the devoured yearling are well-placed. “Frequenting a watering hole filled with gators? How imprudent is that? Serves the little critter right.”
You are a smug and hard-hearted man.
March 7th, 2009 at 11:48 am
Smug and hard-hearted? No, but I’ll cop to cold-eyed and hard-headed. If a newspaper wants to explain to me why a judge should have the power to reduce mortgage payments for distressed people, it should come up with a better example than this one — in which the bank (despite John’s knee-jerk populist view of all lenders as predators) didn’t do anything wrong.
Or to use John’s analogy: When we see the alligator eat the baby antelope, why does he want to blame the lion, which only happened to be near the watering hole at the time?
My frustration with this kind of reporting is that the country has a whale of a task ahead of it. Righting the economy is a job that should be undertaken with good information in hand. Instead, the proceedings are driven by stereotype and hysteria (which John has put on ample display here).
John did me a favor, though: He reinforced my point. Did the bank in question here take TARP money? I don’t know. That’s something else the news article didn’t tell me.
March 7th, 2009 at 6:36 pm
I’d guess justification for the judge reducing the mortgage rate is the same as why TARP money is being doled out to the banks: we are in uniquely, troubled financial times. Desperate times and a whale of a task ahead of us, maybe?
We can argue about who’s most to blame, but that seems like quibbling over who poked a whole in the raft we’re both floating in. Does it really matter right now? We both drown if we don’t figure a way to plug it - and soon. So get on the stick Gearino! I’m a middling swimmer and I got a lot to live for.
And what about the TARP money? If Mr. Bostic’s bank took it (as many did) and did not apply it as intented (as many didn’t), then that’s an obscenity.
A year ago, hell, six months ago, Mr. Bostic’s story is the stuff of human interest only. Maybe you include him in your prayers, or utter a silent “There but for the Grace of God go I”; or condemn him as just another irresponsible wretch who now must suffer the consequences of his sloth and mendacity.
But today, Mr. Bostic’s is but one of millions of distressed loans clogging our nation’s credit colon like so much government cheese. We need an industrial-strength enema to break this log-jam, and we need it now.
March 8th, 2009 at 5:13 pm
John:
“We need an industrial-strength enema to break this log-jam, and we need it now. ”
We need to let the system work it out. Foreclosure works very well.
My stocks that I purchased last year are now worth less than I paid for them. I am underwater. Anyone think I should be bailed out?
Ken
Dallas
March 9th, 2009 at 8:04 am
Ken,
I think our shrinking stock portfolios are rightly perceived a byproduct of this wonderful financial cluster-f–, rather than the root cause (or one of the root causes).
I keep hearing that lack of credit is what’s fueling our economic decline. I also heard somebody say that you can’t save the banking system without saving banks. I don’t think you can save the banks without relieving them of their troubled loans.
Like it or lump it, that’s who’s first in line to get the cash infusion - at least they’re ahead of you and me.
March 9th, 2009 at 9:00 am
Another unanswered question: why did the Bostics’ misfortunes inspire Gearino to write such a snarky piece in the first place?
March 9th, 2009 at 1:29 pm
“Why?” Lipzee? For the same reason Dan feeds gerbils to his pet boa constrictor. For the same reason he gives his neices and nephews a dollar to go to bed without their supper, then sneaks into their rooms and steals back the money - then beats the crap out of them in the morning for losing the money - because he’s mean, that’s why.
Given more time to confirm my sources, I woulda also included these wanton acts
* Every Halloween he heats up pennies on his griddle and gives them to Trick Or Treaters
* He cuts the express line on Senior Day at the Piggly Wiggly - claims “Author’s Privelige”
* He pinched a baby just to see if he could make it cry
* He shot a man once just for snoring - no wait that was
John Wesley Harding - and Gearino, when were you planning on returning my TIME LIFE books on Outlaws of the Old West anyway?
* that’s another thing, he doesn’t return stuff he borrows