Voices

'Subprime' behavior

We are all part of the mounting mortgage mess

Issue: "Safe haven," Sept. 15, 2007

To say that the recent troubles of the U.S. market in home mortgages are the result of human sinfulness will strike some folks as overly moralistic, accusatory, and judgmental. But it is the case-on at least two fronts.

We're uncomfortable, of course, calling these things "sin." To some, they simply represent the cyclical, if not altogether predictable, ups and downs of a gyrating marketplace. To others, at worst, they represent some unfortunately unwise decisions. We use the euphemism "subprime."

But subprime mortgages, by definition, are loans written on behalf of borrowers who really can't afford them. That means that at least two forms of sin are occurring: First, someone is coveting a house that he shouldn't yet be thinking about buying; it's beyond his means. Second, someone who should be looking out for the weakness of his neighbor (the customer), and helping protect him against that weakness, is instead sucking him right into destructive behavior.

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The first person is trifling with the Tenth Commandment. The second person is trifling with the whole Second Table of the Law-the commandments that Jesus summarized as teaching us to love our neighbor as much as we love ourselves.

But before we start feeling too judgmental and superior toward the first sinner, the one trifling with the Tenth Commandment, we need to remember how much a picture of our whole society that person has become. We are a nation of coveters. We spend our whole lives trying to figure out how to have what God has not yet given us.

I'm honestly not quite sure how to apply the doctrine of contentment to the issue of housing. If we all waited until we could pay cash for a house, we'd all be eternal renters. I paid $11,000 for my first house, with a 30-year mortgage that my dad thought was more debt than I should be taking on. In retrospect, it helped me begin building some equity I have always been thankful for.

But there may be a reason the Tenth Commandment starts right off by warning us not to covet our neighbor's house. There's something about a house that sets us drooling. We're not quite satisfied with what God has already provided at $100 a square foot, and as rebels against His providence we end up telling Him He hasn't been generous enough; we need something that costs $300 a square foot. The danger of sin comes when we put our whole lives in hock to get it. Maybe if those of us who can't afford such houses were actually willing to call the process sin, we would more easily resist the temptation.

But then, on the other side, are all those evil influences that make it so hard to resist. Just five miles from where I live, a new mountain development is underway where entry-level houses will go for over a million dollars each. Tiger Woods announced last week he's designing a golf course for the development, and that he and his family will buy a house there. I doubt that the marketers will be touting formica in the kitchens, linoleum in the bathrooms, or anything less than a three-car garage.

A few people will be able to pay cash-and more power to them. But for those who have to be shoehorned into such houses with inventive credit arrangements, shame not just on them but even more so on the inventors of those arrangements. "Interest-only loans" and "adjustable rate mortgages" remind me of nothing so much as an overly indulgent bartender who keeps serving drinks to the customer who's already around the bend.

There are laws that hold such bartenders accountable. Right now, the main laws holding lending institutions accountable are the laws of the market, and they've exacted some pretty severe penalties in recent weeks as reminders that you can't play games with financial realities.

And oh, yes. There are also God's laws. Godliness, with contentment, is great gain. And even in your business dealings, treat your neighbor the way you want him to treat you. Anything less is subprime.

Joel Belz
Joel Belz

Joel, WORLD's founder, writes a regular column for the magazine and contributes commentaries for The World and Everything in It. He is also the author of Consider These Things.

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