Is Financial Illiteracy the Driving Force Behind the Foreclosure Epidemic?

So, my wife and I were invited to be a part of the ‘Stop The Killing Rally’ in Pine Hills, (Orlando, FL a few weeks ago), at the J-Mart in the parking area. There were tents, food, speakers, singers, musicians, dancers, mimes and other entertainers and activities. More than thirty vendors showed up with their wares and services. Statistics show that the crime levels have steadily been declining in the region but the foreclosure rates continue to rise at alarming levels, especially in the African-American community.

We were asked to talk about the state of foreclosures in the Central Florida community. My wife and I were heavily involved in the foreclosure industry after the results of identity theft forced us into that horrible situation. We lost everything and therefore became students of the industry.

As students and participants of the foreclosure/slow economy situation, we learned first hand how the industry works. For a few years ending several months ago, we were owners of a for-profit modification company, where we guided clients through the process of applying for a home loan modification. Over time, we watched the mortgage companies and their attorneys manipulate the system to their own benefit. We noticed the civil/circuit judges who were handling these cases were transferred by the Orange County Court System to other duties and were replaced by retired judges to handle the ever increasing foreclosure hearings.

I sat in many hearing rooms during these cases and noticed that these retired/rehired judges were not astute in foreclosure matters at all. They seemed to be take direction only from the mortgage companies’ attorneys to the detriment of the homeowners in the foreclosure process. Congressman Alan Grayson documented much of this questionable activity recently, http://grayson.house.gov/News/DocumentSingle.aspx?DocumentID=209245

We noticed many homeowners still struggling with home payments even after successfully obtaining a loan modification. The financial struggle is usually caused by cutbacks on their jobs, including fewer working hours or loss of jobs completely. This type of personal financial situation brings on a totally different issue.

We have noticed that hundreds of ‘financially stable’ homeowners are facing the same situation of living paycheck-to-paycheck even after successfully obtaining home loan modifications, while their jobs remained steady. They lack the knowledge of how money works, as well as the failure of the homeowners to discipline themselves to effectively make changes to their spending habits, which forces them into a negative financial situation all over again. They found themselves struggling to make ends meet, this time with no solution at hand (because they will not get another loan modification.) Some were in this situation after only a few months of being granted the modification, even with monthly mortgage payments several hundred dollars less.

Today’s foreclosure crisis brings forth concrete evidence that our new slave master is in essence… ourselves, because we lack the knowledge of how money actually works and we have relied on the extension of credit (with no questions asked) far too long. Ever notice how just a few generations ago our parents/grandparents, took care of all the necessities of life, and sent children to college on minimum wage incomes? We noticed that most people could live comfortably today, if only they would live within their means. If homeowners just acquired a little knowledge of money, with the application of a little more discipline, it would create a positive change in their families’ lives for future generations.

In the state of today’s economy, with thousands of families losing their homes to foreclosure in Central Florida, and their jobs due to downsizing, many people turn to prayer to relieve themselves of their stress and burdens of life. Have you noticed how many additional church services there are per week at many local houses of worship? But, most people don’t know that the bible contains over 2,300 verses that refer to very practical, detailed ways how to earn, save, spend, invest and give money. Two-thirds of the parables deal with finances.

We cannot let this foreclosure issue present yet another excuse for us not to educate ourselves and to blame someone else for not being able to move our personal lives forward. The corporate business community sees us as consumers and laborers instead of builders and thinkers. If we don’t educate ourselves on basic money principles, we as a people will find ourselves struggling financially for generations to come. So isn’t it time we take charge of our own finances, educate ourselves about how money works and break the chains of financial slavery, to eliminate our debt and build wealth?

Contact Lawrence and Darlene Robinson (fomerly of The Steeple H.O.M.E. Team) at [email protected].