Hillary Clinton is looking to bail out homeowners facing foreclosure. She chose as her poster child… Kristi Schofield of New Hampshire (address below), who could not afford to continue making $6,000 monthly mortgage payment on savings and unemployment. Hillary sure has the common man’s back, saving folks from their $6,000 mortgages being foreclosed. Since the victims of "predatory lending" were the poor, the uneducated, and minorities, I am not sure why the Schofields fit the bill for putting a human face on the problem... but do read on.
At the time this poster child bought her home about 8 years ago, the median house in New Hampshire cost $133,000; the Schofields must have paid at least $420,000. According to Baron Mortgage Corporation, New Hampshire lead the real estate bubble – the poor, overburdened Schofields could have sold their luxury home for a substantial profit. Over the past 8 years, interest rates dropped to historic lows. The Schofields could have refinanced. How does this represent predatory lending? What I'm betting - and I hope someone in the press will get the cojones to investigate and prove me wrong (or right) - is that the Schofields pulled almost half a million dollars out of their house - that's how a $2,400 monthly nut grows to $6,000. That's tax-free income, baby, 'cause loans don't count as income unless/until you default on 'em.
Clinton proposes $1 Billion in new taxes to save these folks. No word on whether real estate investors (commonly called “flippers”) and borrowers who overstated income will be excluded from the bailout.
Do me a favor, folks - plug the Schofield's numbers into your favorite mortgage calculator. Interest rates on ARMs were about 5.6% in 1999. What kind of loan do you have to take out to pay $2,400 a month at 5.6%? My calculator says $420k - add in 10-20% down, and you've got something like a half million-dollar home. 3-4 times the median home price in N.H. at that time.
Fast forward 8 years. The poor, devestated Schofields lost their home because they couldn't afford the $6,000 monthly payment. Go back to your mortgage calculator, kiddies - what kind of interest rate would require a $6,000 payment on $420k? My calculator says that's 17%. As in, there's no way - unless there's a LOT more to this story than Hillary's telling us - that the Schofields' mortgage climbed to $6,000 all by itself.
New Hampshire had the second largest housing price appreciation in the country during the bubble. The Schofields had two good, solid options to get out of a toxic mortgage - if that's what really caused their payment to climb. They could have sold their home for a very nice profit (somewhere around half a million dollars, most likely) or they could have refinanced. Any reasonable person would have gotten out of an ARM that was adjusting to 17% in an era of 5% mortgages.
It appears, based on publicly available web info, that the Schofields lived at 44 Collins Drive, East Hampstead, NH. East Hampstead is just across the border from Massachusettes, and some folks consider it to be a commuter town or bedroom community of Boston.
According to Paul Schofield's linkedin.com profile (which matches other details publicly disclosed about Kristi Schofield's husband), he was employed until 2006. His CV, includes positions with companies such as Agilent Technologies (M&A Risk Management), HP (Senior IT Engineer), BJs Wholesale (InfoSec Project Manager), Liberty Mutual, and Verdisys. This is the kind of family us taxpayers want to rescue - people with high-paying jobs in homes priced at least 3 times the median home price. Poor fellow - he can't be expected to save some of his salary, or downsize to a house he can afford, or otherwise take care of himself. He's just a computer security engineer in cutting-edge implementations - he can't be smart enough to understand stuff like mortgages.
If anyone out there knows the Schofields, please let us know - are we exaggerating the luxury of their home? Of their lifestyle? Did they really spend the half million dollars in equity appreciation on a sick parent? Or did they drive a couple of newer luxury cars and give their kids "nothing but the best"?
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http://www.hampsteadnh.us/files/Owners%20list%20by%20Street%20Name%205-07.pdf
Home valuation for the Schofields... $337,500 according the town. Not entirely sure how they can owe $6000/month on it
I think fair to say that we don't really know what the Schofields problems were but irrepective of this, thye needed help. Did they exercize poor financial judgement? Probably yes but what's done is done.
It is true that they should have gotten out of their house, but who are you really to pass judgement on people without knowing the issues? When people are in a dilema you don't tell them 'tough luck' and blast them. Hopefully they did learn a lesson.
Hi, anon, Thanks for stopping by.
I don't know if the Schofields needed help or not. With their education and connections, I imagine they're already back in the middle class or better. Good. I wish them all the best - I just don't think taxpayers should foot the bill for their mistakes.
Dual-income families earning a fraction of the Schofields' income, living in homes nowhere near as nice, pay taxes to fund all the government bailouts and assistance programs. It is wrong to ask poor, hard-working families to fund a bailout of a highly advantaged, college-educated upper-middle-class lifestyle.
If Hillary is going to parade them out in front of the media as "victims" of lending, the story better add up, and this one does not. Not as victims - as people who took their advantageous life for granted and frittered it away, maybe, but not as victims needing taxpayer funded help.
Is it Kristi Schofield or Kristie Schofield?
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