The plasma TV, new carpeting, playground set in the yard, sit-down mower, and other goods they planned to buy evaporated. Unable to pay the mortgage on both houses, Rob and Barb eventually sold their old house for much less than they had hoped. To compensate, buyers decreased the amount they were willing to offer and in some cases stopped looking for a new home entirely. Higher interest meant it was more expensive to borrow money to buy a house (or anything else for that matter). because the economy, including the housing market, was too hot (growing too quickly), portending a higher price level across the economy (inflation). They put it up for sale just as the Federal Reserve, America’s central bank (monetary authority), decided to raise the interest rate The price of borrowed money. But they too discovered that their ignorance of the financial system came with a price when they had difficulty selling their old house. They found a suitable home, had their offer accepted, and obtained a conventional thirty-year mortgage. Rob and Barb had a more modest dream of a nice house in a good location with many conveniences, a low crime rate, and a decent public school system. The couple now rents a small apartment and harbors a deep mistrust of the financial system. They lost their home and, worse, their credit. Traditionally, one has to miss several payments before a lender can foreclose, but several new types of mortgages developed during the housing boom of the mid-2000s have “call” features that allow lenders to ask for immediate repayment of the principal if the value of the home sinks, leaving the lender undersecured. When housing prices in their area began to slide downward, the lender foreclosed, although they had never missed a payment. Their monthly payments were so low because they paid just part of the interest due each year and none of the (growing) principal. with a balloon payment A principal payment due in a large lump sum, usually at the end of the loan period. Instead of declining over time, the principal owed increases as unpaid interest is added to it. Rose and Joe unwittingly agreed to a negative amortization mortgage A mortgage with periodic payments lower than what would be required to pay the interest on the loan. It seemed too good to be true because it was. The couple could not really afford such a home, but they found a lender that offered them low monthly payments. Married for a decade, Rose and Joe also had a dream, the American Dream, a huge house with a big, beautiful yard in a great neighborhood. Ben’s a good guy, so he probably won’t turn to drugs and crime but his life will be less fulfilling, and Americans less healthy, if he never has a chance to pursue his dream. If he cannot obtain financing, however, the world will never know whether his idea was a good one or not. If Ben can get some financial help but is wrong about Americans preferring natural ingredients to hydrogenized this and polysaturated that, he will have wasted his time and his financial backers may lose some money. retail food industry, Fast Food Nation (2001), as obsolete as The Jungle (1901), /Jungle /Literature/Sinclair/TheJungle Upton Sinclair’s infamous description of the disgusting side of the early meatpacking industry. If Ben is right, and he can obtain financing, his restaurant could become a chain that might revolutionize America’s eating habits, rendering Eric Schlosser’s exposé of the U.S. ![]() He doesn’t have enough money to start his own restaurant, and he’s having difficulty borrowing what he needs because of some youthful indiscretions concerning money. Trouble is, Ben, like most people, came from humble roots. Ben wants to be his own boss and thinks he sees a demand for his style of tasty, healthy cuisine. He chafes, therefore, when the owner of the restaurant for which he works forces him to use cheaper, but less nutritional, ingredients in his recipes. Nothing pleases him more than applying what he learned earning his degrees in hospitality and nutrition to prepare delicious yet healthy appetizers, entrées, and desserts for restaurant-goers. Although tall, dark, and handsome enough to be a movie star, Ben’s real passion is culinary, not thespian. How can ignorance of the principles of money and banking destroy your dreams?Īt 28, Ben is in his prime.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |