There has been much talk lately about the role of the federal government and what action they should be taking with respect to the increasing number of foreclosures. If people are losing their homes because they cannot make the monthly payment, should Uncle Sam ride in on the white horse with saddle bags full of money?

First, understand why people are in foreclosure. Many people are irresponsible and cannot manage their finances. The money tree stopped growing, putting an end to escalating property values and an endless supply of new found “cash” and refinancing. They choose to spend their money on other things besides a mortgage. Isn’t there a certain amount of responsibility that comes with home ownership and being an adult?

I also know there are large number of people who were probably coerced into accepting a payment that was unattainable. There was no way their incomes would ever allow them to meet the monthly principal and interest obligation when the adjustable interest rate was reset. Maybe they were the victims of an overzealous mortgage industry and easy money policies. For these people I am truly sorry, but I also know in life there is risk.

I am an advocate of mortgage reform and think that we need to simplify the disclosures and paperwork. I’ve dealt with too many lenders who hold a transaction hostage to protect their commission. Some of the proposals by the Presidential hopefuls actually make sense, while others seem ridiculous. My guess is after the dust begins to settle we will see some kind of reform. A one page summary explaining the terms of the mortgage would be a great place to start. It could identify certain factors such as the interest rate - fixed or adjustable; what year does the rate reset; is there a prepayment penalty - yes or no, and what is the amount. If a lender issues a pre-approval letter to a prospective Buyer, then game over. They should have to honor it and be bound by the loan terms.

The American Dream of home ownership does not come with a guarantee, nor is it underwritten by the federal government. You simply have the right to life, liberty and the pursuit of happiness. It is that pursuit of happiness that implies a certain degree of responsibility.