Elizabeth Davies: Owning a home takes some patience

Elizabeth Davies

The homes are beautiful, the yards are pristine and the neighborhoods are safe.

So what’s not to love? The price.

And that’s why we’ve heard far too many stories in recent years about families who lose their homes to foreclosure. Their interest rates go up, their homes’ values goes down and they’re already living paycheck-to-paycheck, so there’s no room to stretch the budget any further.

It’s a sad story that, according to the Mortgage Bankers Association, affects 250,000 U.S. families every quarter.

The effects of losing your home — the uncertainty and fear, the overwhelming short-term stress and long-term worry — are so great that I have trouble understanding opposition to talk that legislators might tighten the rules for home loans.

A pared-down version of the issue: Some home loans would be required to have a 20 percent down payment, which those in the real estate industry say would prevent people from being able to afford homes. That would harm recovery in the housing sector, and subsequently, overall economic health.

I understand the motivations there. Obviously, a Realtor isn’t going to be happy about anything that stands in the way of home sales.

But is that really in the best financial interest of Americans? For many years, 20 percent down was standard for home loans in the U.S. If you didn’t have the money, you didn’t buy the house. It was a very simple concept.

Of course, those also were the days when a 25-year loan meant that you actually would no longer have a mortgage payment after 25 years. These days, that’s not the strategy. We upgrade to more expensive homes and take out second mortgages so our payments never really go away.

While it’s nice to think that this resistance against the 20 percent requirement is benefiting the homeowner, the fact is that there are very few homeowners left anymore. Or at least, your average American is not a homeowner. Commonwealth Bank is a homeowner. Bank of America is also a homeowner. The thousands of people living in their homes? They are debtors.

If ever I make a reference to owning our home, my husband is very quick to point out that we do not yet own it — the bank does. He will, however, let you know exactly how many years and months are left until we are the free-and-clear owners of the home. He’s got that data imprinted on the back of his eyelids.

A vocal real estate group, the National Association of Realtors, is making 20 percent down sound like a deep financial hardship for Americans.

The true financial hardship, in my opinion, is having a bill you can’t pay. That’s a whole lot harder than not being able to afford something you want.

So perhaps, contrary to what the National Association of Realtors would suggest, the American Dream isn’t actually to spend your life in a nice home where you rest your head on 500-thread-count pillowcases but can’t fall asleep because you’re too busy trying to figure out how to keep that pretty roof over your head.

Perhaps the American dream is more about working hard, saving up and earning what you have. Maybe it’s the security of knowing that you’re not just one crisis away from financial ruin.

And that might mean that a first home isn’t sparkly and new. It might mean that a family of five makes do with one bathroom for a while.

That’s the life our parents lived, and the life their parents lived. They eventually got to the point where they could burn their mortgage note and say, in all truth, that they finally owned their homes.

We can do it, too. But patience and common sense will get us there, not relaxed lending laws.

We owe it to ourselves, not the banks, to be homeowners.

Elizabeth Davies can be reached at edavies@rrstar.com.