The Foreclosure Report

'Buying Borrowed Time' With A Credit Card

Ms. DiMartino at the Dallas News has this interview. "Carl George is on a mission. The chairman of the American Institute of Certified Public Accountants' Financial Literacy Commission says he's determined to insulate American homeowners against the dangers of the deflating housing bubble. 'One of life's stages is buying a home,' Mr. George said. 'Extend that logic, and it becomes all about keeping a home.'"

"Because so many U.S. households are living on the razor's edge, 43 percent spend $1.22 for every $1 they earn, there's a real risk that the housing downturn will bring on financial disaster. 'It's kind of like buying a new car and being upside down the minute you drive off the lot,' Mr. George said. 'These people are going to be in serious trouble because the housing market is going to get worse before it gets better.'"

"Homeowners should do is change their way of thinking about their homes. 'The idea that you can wait to sell your house because it's going to keep rising in value is awfully dangerous,' Mr. George said. 'You just can't put your house in the same category as you do a stock, especially if it's your primary residence.'"

"Mr. George says he's worried that he has much more work to do. He's recently seen a big increase in people putting their house payments on credit cards. (I didn't know you could even do that.) 'These families' balance sheets are quickly become cockeyed, assets are going down while liabilities are going up,' Mr. George said. 'People are literally buying borrowed time.'"

posted by Ben Jones @ 3:13 PM