WaPo article on family with $1.3 million debt

[zhelud]

http://www.washingtonpost.com/sf/investigative/2015/01/26/distressed-family-swamped-by-an-underwater-home/?hpid=z1

The thing about this article that really annoyed me is that the paper made it seem like this family's debt had just popped out of nowhere, when it is instead the result of many years of bad decisions. ($20k loan to sell Mary Kay junk, $90k student loans on top of underwater subprime mortgage, etc). Unfortunately this perfectly nice immigrant family got a lot of really bad advice on how to make it in the US.

[4alpacas]

They currently earn about $100,000 a year.

If they haven't paid their mortgage in 6 years, what are they doing with their income?

[sirdoug007]

The tone of these articles implies that the folks in this neighborhood were taken advantage of by subprime lenders and generally screwed over by the system.  But in many of the specific cases cited, the families put little or nothing down on houses they couldn't and can't afford and got to live in them since the mid-2000's.  I lived in the area at this time and remember the prevailing attitude that you'd better get in before home prices go up another 50%.  It didn't make any sense to me and I ended up leaving the area and buying an affordable house in Texas.

Overall I'm amazed that some of these folks have been able to stay in these houses for so long without being able to make the payments.  If you finance 100% of a house on the hopes it will appreciate, can't make the payments, and then the house doesn't appreciate, do you deserve to stay in that house?

"In August 2006, Edith Garner, who taught special education at Benjamin Tasker Middle School in Bowie, was one of those who fell in love with Fairwood.

She bought a townhouse in an area called “The Retreat at Fairwood” for $427,213. The 2,200-square-foot home looked sturdy, with a red brick facade and blue shutters.

She signed an agreement for an adjustable-rate mortgage with an interest rate of 8.875 percent through First Guarantee Mortgage, which declined to comment for this article. She was counting on a rising house market.

“Everything was going up and up and higher,” Garner, 58, said of the housing market. “I wanted to make money, too.”

But the home purchase was 100 percent financed with a loan that carried a high interest rate."

[rocksinmyhead]

This is so depressing. Yeah, part of it is that they made a string of seriously fucked up decisions. But I was mostly stunned by the fact that loans like this even existed. I also found it a distressing reminder of how people can be seriously misled by their church communities and yet they refuse to be skeptical of advice from those people (not a commentary on religious beliefs, but on the non-religious advice they were getting).

[sirdoug007]

One of the commenters did some digging that sheds a bit more light on what was going on with this family

"Once again, the Post misses the facts in the third installment. 
 
Between 7/20/04 and 10/25/05, the Boatengs refinanced the Germantown property 3 times. The first on 7/20/04, a principal loan of $189k paid off $141k, and netted roughly $42,000 after settlement costs. Then a line of credit, on 2/1/05 for 83k was taken, finally a 10/25/05 note for $284,000. Adjusting for settlement costs, that appears to be 120k out the Germantown property in 18 months.
 
On 9/21/06, they refinanced the Fairwood property with a $620k note, netting approximately 60k. In 25 months, that's 180k in equity cashed out. 
 
The best part is that even though they haven't made a mortgage payment since 2008, they put a solar heating system in the house this fall. Solar City recorded a financing statement. See what you can do when you game the system in the US?"

[Josiecat]

Wow!  They need to let their house and move back into their townhouse.  I assume they still own that one.

Oh, and stop borrowing money..... Sheesh.

[Inkedup]

"'It wasn’t that we didn’t manage our money,' Comfort said. 'We know in America, everyone owes something. We couldn’t get things done the way we expected. It happens to everybody.'"

This really stood out. In their eyes, debt is commonplace in America and "everybody" owes something. It doesn't justify their poor decisions, but part of me feels sorry for them. It didn't take long for them for to fall under the spell of the pervasive keep-up-with-the-joneses mentality.       

[rocksinmyhead]

"'It wasn’t that we didn’t manage our money,' Comfort said. 'We know in America, everyone owes something. We couldn’t get things done the way we expected. It happens to everybody.'"

This really stood out. In their eyes, debt is commonplace in America and "everybody" owes something. It doesn't justify their poor decisions, but part of me feels sorry for them. It didn't take long for them for to fall under the spell of the pervasive keep-up-with-the-joneses mentality.     

yeah, agreed.

[arebelspy]

How are they drowning in debt if they don't pay it?

I'm guessing there's chain of title issues with the house, which is why the lender hasn't foreclosed after 6+ years of no payments.

They should probably be happy about their free housing, and put all their money to work improving their situation.

/eyeroll

[PEIslander]

The best part is that even though they haven't made a mortgage payment since 2008, they put a solar heating system in the house this fall. Solar City recorded a financing statement.

I imagine someone at their church told them they could reduce their utility costs if they installed a solar system. Next time they might hear that remodelling a kitchen can increase home value and you know what they will do. After that it will be an inground pool...

If the info sirdoug007 added is true it certainly does sound like they know exactly what they are doing.

[Capsu78]

Yes this is the third article in the series where it isn't hard to feel some empathy for the subjects... until you drill down into the comments section and find that other readers ran the properties deeds and found a good number of "subprime" decisions.  I went to a "subprime servicing conference" about 2003. 

 Not having much familiarity with the industry, I asked a lot of questions about how these subprime loans differed from other mortgage vehicles.  One guy I asked looked at me and said "Think of it this way- The term Subprime isn't referring to the loan".  That is when the lights came on for me.

[Abe]

I lost empathy when they bought a house for $600k with an annual salary of roughly $100k and a downpayment of only $60k. It's one thing to be kicked out of a house you could reasonably expect to afford, another thing if you obviously over-stretch. And to those who say "well, they didn't know any better", I think getting an interest-only loan shows poor self-education on their most expensive purchase ever. It's not like buying groceries! People have to do some modicum of research and self-reflection before committing to such an expensive contract.

[sirdoug007]

Another point not made in the articles is that one of the reasons people chose subprime, interest only, negative amortization and other bullshit loans was that these loans gave them access to the house they wanted when traditional loans did not. 

The housing market was red hot in PG county in the mid-2000s and people were trying to get as much house as possible without regard to affordability.   Affordability wasn't considered important because "real estate never goes down" and you would refi (with cash out!) a few years later when the house was worth much, much more.  The trick was just to get in while you could.  As long as you could make the payments that started next month you could worry about the balloon payment "later."   The banks should have cared but didn't because they were bundling the loans and selling them to someone else.

The only way a lot of people could afford these houses was with interest only (or worse negative amortization) where you didn't pay a dime in principle repayment.  Traditional 30 year mortgages were too expensive for the massive prices of housing people were buying.  So it's not necessarily that people didn't know enough to go with a traditional mortgage, it's that they wouldn't have been able to afford the first payment of a traditional mortgage.  So some clever banker offers them a vehicle to buy their dream home through bullshit financing and people jumped at the chance. 

All they needed to know was that signing the papers gave them the house of their dreams at a monthly payment they could handle NEXT MONTH.  You were living the dream as long as you could make your near-term cash flow work. 

[galliver]

The first article in the series asks an interesting question when they put it in a racial context...why have surrounding predominantly white counties/communties recovered more than Prince George's? And I end up wondering if they got better advice, because they had more people among them who had had experience with more money over a longer time, and could steer them away from the worst of deals. Whereas African Americans have been underpaid and underemployed in the US for generations; there's probably not a lot of experiential knowledge there about how to handle wealth. Not lack of intelligence, lack of information. While we can go to books and articles, we really trust people who are like us, who we relate to, for advice. And we cluster--racially, culturally...it's an even bigger problem, typically, for immigrants. So this family went to the people they trusted to have their best interests at heart, and to know how to operate in this country--their church community. The same way people on this site ask their questions on the forum: not just financial ones but also how to deal with depression, how to exercise, how to talk to their spouse... because there are a million books and articles on the subjects, and we trust the experiences and knowledge of this community to have distilled the best of that information.

So to those who are saying "they should have known better"...how? At the time, they have everyone around them, who is apparently doing well, telling them it will be fine, it will be great. The realtor and mortgage broker are pushing it. Online advice, at the time, was probably overwhelmingly "Buy the house! It will appreciate! Don't worry!" And if they did find come across something that said, put 20%+ down, I wouldn't be surprised if it got lost in the crazy.

[Note: my personal wtf moment was that they *needed* more than 3/2 for themselves, 2 kids and a grandma. Really? You're coming from...anywhere outside the US (in their case, obviously Ghana) and you totally forget that people can live quite happily with far less? ]

[Kyle Schuant]

$100k income and $600k mortgage is not insane, there are hundreds of thousands of households like that in Australia.

The article tells us that their first year in the US, both of them got full-time jobs and lived in an apartment with a friend, ie they had subsidised rent and living costs. And "They had spent two years saving $3,000 for the down payment." So they were saving less than thirty dollars a week.

Really this says it all. Two full-time jobs - and it was IT for one, and in a bank for the other - and they saved less than thirty bucks a week. They just don't know how to handle their money.

[sleepyguy]

Only think crazier then student loans in the US, I guess is/was mortgage loans!

They just seem like people who can't handle their money AT ALL.  The seem like well meaning people though.

2 yrs to save $3k... and crazy startup business at 15% loans.  Insane.

They actually make a decent salary as well.  Should could just stayed in the 1st townhome, save your kids education and retire...

What I found odd in the article... talking about all this and that debt... they were worried not being able to furnish their new house... WTF... like that's at the top of the list!?!

[Abe]

They were essentially speculating with their house investment, and one should know what "interest" and "principle" is before buying something for $600k. It's like saying "well I didn't know the car is supposed to have brakes" before buying the car and going on the highway. Yes it is partly the banks' fault but we cannot resolve the borrowers as this article tries to do. (Though not as strongly as other similar ones in other news outlets). They werent forced to buy a house at those terms. They voluntarily entered a contract. If we just absolve everyone of their contract responsibilities, then how can business or society function?  There is plenty of fault to go around, and we should acknowledge the financial illiteracy and lack of common sense in our society in addition to reforming lending practices.

[PEIslander]

I lost empathy when they bought a house for $600k with an annual salary of roughly $100k and a downpayment of only $60k.

And they got the $60k by refinancing the first property!! It looks like all they've ever put into these properties is the original $3k downpayment on the first property.

If you read what sirdoug007 wrote in reply #5 I think you'll agree these people aren't victims or stupid. They are scamming the system - taking the lenders for all they can.

[gooki]

And good on them, just don't complain when the system closes the doors.

[sleepyguy]

WOW, I'm surprised that still happens!  Even with our extremely low lending rates, Banks here in Canada will probably do about 3.5x to salary ratio, which I still think is quite absurd.

$100k income and $600k mortgage is not insane, there are hundreds of thousands of households like that in Australia.

The article tells us that their first year in the US, both of them got full-time jobs and lived in an apartment with a friend, ie they had subsidised rent and living costs. And "They had spent two years saving $3,000 for the down payment." So they were saving less than thirty dollars a week.

Really this says it all. Two full-time jobs - and it was IT for one, and in a bank for the other - and they saved less than thirty bucks a week. They just don't know how to handle their money.

[Jack]

This is so depressing. Yeah, part of it is that they made a string of seriously fucked up decisions. But I was mostly stunned by the fact that loans like this even existed. I also found it a distressing reminder of how people can be seriously misled by their church communities and yet they refuse to be skeptical of advice from those people (not a commentary on religious beliefs, but on the non-religious advice they were getting).

Please forgive me; I can't resist taking a whack at the hornet's nest:

People refuse to be skeptical of advice from their religious community precisely because their religion trains them not to be skeptical. Creating people who will be unthinkingly obedient to authority is exactly the goal of religious leaders, which is why "faith" is such an important religious concept.

Is it any surprise that when one is trained not to question religious authority, that that mentality carries over into non-religious issues?

[sleepyguy]

Man, you are stepping into a "no fly zone" :)

I agree with your statement though :)

This is so depressing. Yeah, part of it is that they made a string of seriously fucked up decisions. But I was mostly stunned by the fact that loans like this even existed. I also found it a distressing reminder of how people can be seriously misled by their church communities and yet they refuse to be skeptical of advice from those people (not a commentary on religious beliefs, but on the non-religious advice they were getting).

Please forgive me; I can't resist taking a whack at the hornet's nest:

People refuse to be skeptical of advice from their religious community precisely because their religion trains them not to be skeptical. Creating people who will be unthinkingly obedient to authority is exactly the goal of religious leaders, which is why "faith" is such an important religious concept.

Is it any surprise that when one is trained not to question religious authority, that that mentality carries over into non-religious issues?

[Annamal]

$100k income and $600k mortgage is not insane, there are hundreds of thousands of households like that in Australia.

In New Zealand as well (which worries me).

[rocksinmyhead]

This is so depressing. Yeah, part of it is that they made a string of seriously fucked up decisions. But I was mostly stunned by the fact that loans like this even existed. I also found it a distressing reminder of how people can be seriously misled by their church communities and yet they refuse to be skeptical of advice from those people (not a commentary on religious beliefs, but on the non-religious advice they were getting).

Please forgive me; I can't resist taking a whack at the hornet's nest:

People refuse to be skeptical of advice from their religious community precisely because their religion trains them not to be skeptical. Creating people who will be unthinkingly obedient to authority is exactly the goal of religious leaders, which is why "faith" is such an important religious concept.

Is it any surprise that when one is trained not to question religious authority, that that mentality carries over into non-religious issues?

No, you're totally right.

[Capsu78]

Don't worry about punching the hornets nest. It is permitted in polite society to laugh at the worlds religious affiliations... except for the one that wants to kill all the others.

(Now that would be punching the hornets nest.)   Gotta go affix the COEXIST and TOLORENCE stickers to my Prius now.

[Sid Hoffman]

Yeah, it's totally OK to generalize an entire class of people (religious people) in a derogatory way, even though it's not OK to generalize an entire class of people (African Americans) in a derogatory way.  Wait... what?

[arebelspy]

Yeah, it's totally OK to generalize an entire class of people (religious people) in a derogatory way, even though it's not OK to generalize an entire class of people (African Americans) in a derogatory way.  Wait... what?

This seems like a false equivalence.

Most people aren't born religious, but choose to believe it (albeit often with heavy indoctrination).  No one chooses their skin color at birth, but are instead born that way.

Many will change what religion they follow during their lifetime.  It's very rare (almost impossible) for one to change their skin color.

I'm not saying we should generalize or be negative about any groups at all.  But I don't agree with the parallel you're trying to draw.

[rocksinmyhead]

Yeah, it's totally OK to generalize an entire class of people (religious people) in a derogatory way, even though it's not OK to generalize an entire class of people (African Americans) in a derogatory way.  Wait... what?

This seems like a false equivalence.

Most people aren't born religious, but choose to believe it (albeit often with heavy indoctrination).  No one chooses their skin color at birth, but are instead born that way.

Many will change what religion they follow during their lifetime.  It's very rare (almost impossible) for one to change their skin color.

I'm not saying we should generalize or be negative about any groups at all.  But I don't agree with the parallel you're trying to draw.

I agree. And re. Jack's post, I consider myself fairly religious, although my religious beliefs don't 100% align with what I was taught as a kid. So obviously I don't think all religious people are total non-skeptical lemmings (e.g. I don't think I myself am a non-skeptical lemming :)), but I still thought Jack had a good point, that if you're in a religious community that strongly discourages questioning of anything you hear at church (as far as religious teachings go), it makes sense that you would also be unlikely to question other advice you hear at church, even if it's not religious in nature. I don't know that that's particularly offensive, and I don't think it applies to every congregation/religious community.

[Capsu78]

The issue I take with Jacks post is that the link from financial advice to religious conviction is more dotted line to me than full on black ink...Sure it could exist, but rubbing elbows with "good people just like you who want to help" is common in nearly every service group meeting I have ever attended- Can't swing a cat without running into a financial advisor, RE Broker, banker at any Rotary Club, Lions Club, Chamber of Commerce meeting I have ever attended.

[Sid Hoffman]

I agree. And re. Jack's post, I consider myself fairly religious, although my religious beliefs don't 100% align with what I was taught as a kid. So obviously I don't think all religious people are total non-skeptical lemmings (e.g. I don't think I myself am a non-skeptical lemming :)), but I still thought Jack had a good point, that if you're in a religious community that strongly discourages questioning of anything you hear at church (as far as religious teachings go), it makes sense that you would also be unlikely to question other advice you hear at church, even if it's not religious in nature. I don't know that that's particularly offensive, and I don't think it applies to every congregation/religious community.

I think it's just as easy to argue that if you're in an academic setting, you get the same thing.  The teachers are very wise, old people with PhDs and certificates, published papers, and many things saying they are super smart.  You are conditioned to accept anything they tell you as truth and never question it.  You see this all the time in politics regardless of political affiliation.  People who become political radicals of any type have very predictable behaviors: they assume anything their leadership tells them is 100% perfect while anything their opposing leadership says is 100% false.

The world is full of individuals, not just classes, and I think it's fair to say that there's some individuals who are conformists to a fault.  Once they're in a group, they'll just accept whatever the leadership of that group tells them.  That's a dangerous thing and actually part of the reason I refuse to affiliate with political parties, special interest groups, or religions.  I don't like the idea of being manipulated voluntarily and told to believe something for the sake of it being a requirement to be in that group.

For some, there's no options: The documentary expelled showed how basically Jews aren't allowed in academia because they don't conform to leadership decisions which demand uniformity among the group and expel people who question the leaders or think independently.  Basically if you want to go into certain fields of study you are only allowed to reach the same conclusions as the other members of that field or else it's assumed you're simply wrong.  This has gone on for thousands of years and I expect will never change.  It seems to be a programmed-in component common to the majority of humans.

[merula]

Another probably-ill-advised whack at the hornet's nest: I'd be curious to know what they were tithing.

[Sid Hoffman]

Another probably-ill-advised whack at the hornet's nest: I'd be curious to know what they were tithing.

Side-trip for me as well.  Tithing is under the law and no Christian should ever tithe because the NT clearly states you cannot be under both the old and new covenant.  The New Testament says only to give as your heart determines (2 Cor 9:7).  Good luck finding any religion or church that says you shouldn't tithe however - such things are few and far, FAR between!!

[galliver]

I agree. And re. Jack's post, I consider myself fairly religious, although my religious beliefs don't 100% align with what I was taught as a kid. So obviously I don't think all religious people are total non-skeptical lemmings (e.g. I don't think I myself am a non-skeptical lemming :)), but I still thought Jack had a good point, that if you're in a religious community that strongly discourages questioning of anything you hear at church (as far as religious teachings go), it makes sense that you would also be unlikely to question other advice you hear at church, even if it's not religious in nature. I don't know that that's particularly offensive, and I don't think it applies to every congregation/religious community.

I think it's just as easy to argue that if you're in an academic setting, you get the same thing.  The teachers are very wise, old people with PhDs and certificates, published papers, and many things saying they are super smart.  You are conditioned to accept anything they tell you as truth and never question it.  You see this all the time in politics regardless of political affiliation.  People who become political radicals of any type have very predictable behaviors: they assume anything their leadership tells them is 100% perfect while anything their opposing leadership says is 100% false.

The world is full of individuals, not just classes, and I think it's fair to say that there's some individuals who are conformists to a fault.  Once they're in a group, they'll just accept whatever the leadership of that group tells them.  That's a dangerous thing and actually part of the reason I refuse to affiliate with political parties, special interest groups, or religions.  I don't like the idea of being manipulated voluntarily and told to believe something for the sake of it being a requirement to be in that group.

For some, there's no options: The documentary expelled showed how basically Jews aren't allowed in academia because they don't conform to leadership decisions which demand uniformity among the group and expel people who question the leaders or think independently.  Basically if you want to go into certain fields of study you are only allowed to reach the same conclusions as the other members of that field or else it's assumed you're simply wrong.  This has gone on for thousands of years and I expect will never change.  It seems to be a programmed-in component common to the majority of humans.

I can see what you're saying but I think you're a little wrong about academia, at least in the STEM fields (which is about all I can authoritatively speak to). I say "a little" because I will be the first to admit that there *is* a strong bias toward the status quo, and against radical ideas that overturn existing dominant perspectives. I have read that it is incredibly difficult to get a study funded on, say, the benefits of saturated fat. It encounters a lot more critique and resistance on its way to publication and after publication as well. BUT, I think the key difference is that, as long as you follow the rules (support conclusions with actual evidence, etc) there *is* a mechanism to contribute your perspective and change the dominant viewpoint, which is one I see as being basically absent in religion; even if the dominant ideology changes, it will be from above, from "the authorities."

Finally, I think it's worth pointing out that *good* teachers and professors encourage critical thinking and being challenged (intelligently). The challenge may come to nothing (e.g. the teacher or professor may have additional knowledge that makes the argument irrelevant), but a good instructor will appreciate the effort. That is not to say all do this, there are definitely some that are on a power trip, or just don't care, but it seems unfair to say that academia is an authoritarian structure because of this. I like to believe it's >50% meritocracy, and of course it's easier to have merit (knowledge) when you've been in the field longer. (The other <50% may include politics, bias toward status quo, etc)

[Sid Hoffman]

Galliver, that's good to hear.  Documentaries like Expelled and the many stories similar to the one where FSU students were required to stomp on Jesus it often seems like there's some kind of separation between academia and the producer world.

Our entire civilization would be lost without teaching, but at the same time, an entire civilization can be lost with poor teaching as well.  I'm stunned at the things that are reported to happen in schools in Saudia Arabia, Iran, and so many other countries.  Outright hatred and discrimination being indoctrinated into people.  Teachers really do shape the future, so it makes me sad whenever you see stories about bad teachers.

The same really applies here to some degree - this couple seems to have consistently gotten advice that does not lead them down a good road.  I see comments saying they're gaming the system, but if that's true I'm sure they didn't come up with it on their own.  They are probably getting advice and somebody is teaching them how to game the system.  It will still end badly however.  Eventually they'll lose their home (hurting them) or the banks will lose the money (hurting society at large) as it seems clear that they're never paying back $1.3 million in debt.  That's just not going to happen here based on the information provided and their track record since 2006 or so based on the article.

[Annamal]

For some, there's no options: The documentary expelled showed how basically Jews aren't allowed in academia because they don't conform to leadership decisions which demand uniformity among the group and expel people who question the leaders or think independently.  Basically if you want to go into certain fields of study you are only allowed to reach the same conclusions as the other members of that field or else it's assumed you're simply wrong.  This has gone on for thousands of years and I expect will never change.  It seems to be a programmed-in component common to the majority of humans.

Please tell me that you are not referencing that dishonest Ben Stein movie?

[mbk]

I think it's just as easy to argue that if you're in an academic setting, you get the same thing.  The teachers are very wise, old people with PhDs and certificates, published papers, and many things saying they are super smart.  You are conditioned to accept anything they tell you as truth and never question it.

My experience was different. In my grad Quantum Mech course, the first thing the faculty told was to be skeptical of all the things we were taught before and re-look at each of them with cynical eyes. We were challenging him all the time during the semester on his explanations. And he had to convince us based on Physics, but not based on authority. At grad level, one was expected to critically evaluate what was taught, not to take the faculty's words at face value. Also by the time the PhD is finished, the grad student typically knows more than the adviser (of course only the student's research topic). So the faculty rely on students' knowledge many times.
At undergrad level things may be different. If the students intellectual capacity is not up-to the mark, the faculty tends to give up after a while and use authority. Once I spent three hours explaining a physics concept to an undergrad and finally gave up.

[caliq]

I think it's just as easy to argue that if you're in an academic setting, you get the same thing.  The teachers are very wise, old people with PhDs and certificates, published papers, and many things saying they are super smart.  You are conditioned to accept anything they tell you as truth and never question it.

My experience was different. In my grad Quantum Mech course, the first thing the faculty told was to be skeptical of all the things we were taught before and re-look at each of them with cynical eyes. We were challenging him all the time during the semester on his explanations. And he had to convince us based on Physics, but not based on authority. At grad level, one was expected to critically evaluate what was taught, not to take the faculty's words at face value. Also by the time the PhD is finished, the grad student typically knows more than the adviser (of course only the student's research topic). So the faculty rely on students' knowledge many times.
At undergrad level things may be different. If the students intellectual capacity is not up-to the mark, the faculty tends to give up after a while and use authority. Once I spent three hours explaining a physics concept to an undergrad and finally gave up.

Made me think of this: http://matt.might.net/articles/phd-school-in-pictures/

Academic research is kind of constantly challenging authority, if you think about how research is supposed to be repeatable and stand up to peer review.  Even if someone's the top guy in his field, he doesn't get to publish with impunity...

[Sid Hoffman]

My experience was different. In my grad Quantum Mech course, the first thing the faculty told was to be skeptical of all the things we were taught before and re-look at each of them with cynical eyes. We were challenging him all the time during the semester on his explanations. And he had to convince us based on Physics, but not based on authority. At grad level, one was expected to critically evaluate what was taught, not to take the faculty's words at face value. Also by the time the PhD is finished, the grad student typically knows more than the adviser (of course only the student's research topic). So the faculty rely on students' knowledge many times.
At undergrad level things may be different. If the students intellectual capacity is not up-to the mark, the faculty tends to give up after a while and use authority. Once I spent three hours explaining a physics concept to an undergrad and finally gave up.

That's fantastic!  It actually really encourages me to hear success stories like this.  What you described sounds exactly like what should be a model by which genuine learning and new discovery takes place.

[MrsPete]

Stand-out items from the article:

Their plight illustrates how some of the people swallowed up by the easy credit era of the previous decade have yet to reemerge years later.  So these things just "happen"?  No one's to blame?

Kofi stayed in Takoma Park and noticed all the foreign cars — Toyotas, Volvos, Mercedes-Benzes, Nissans — and thought the area might be welcoming to a foreigner like him.   How does this make any sense?   

Comfort worked as an administrative assistant processing loans at a local bank, but it was a low-level job that did not require her to master the intricacies of lending.   She worked with mortgages . . . yet didn't understand them?

This was more house than they were expecting to buy, but they believed it would be a good investment. They said they thought it would go up in value, like their Germantown house, and they could use that equity to finance their children’s college educations.   

“The purpose of getting the house was to get our kids through college,” Comfort said.  Yeah, evidence that they didn't understand mortgages.  If they'd stayed in thier townhouse and saved money, they'd probably be prepared to at least help their kids with college.


“I don’t think we really understood everything,” Comfort said. “It’s very difficult to deal with everything, especially when you’re dealing with this huge document that you don’t really understand. We didn’t take it too hard that this was going to be a problem. We thought we’d be able to manage it.”   These were educated people, yet they signed things they didn't understand, figuring it'd all just work out?  I can't find much sympathy for that. 

She didn’t see the loan as a risk but as a way to help the family, and she says she believed that she could earn up to $7,000 a month with Mary Kay.  Why would you ever think you could earn 7K a month selling eye shadow in people's living rooms? 

[PEIslander]

Why would you ever think you could earn 7K a month selling eye shadow in people's living rooms?

Given the rest of the story, she likely thought she'd be able to sign up lots of people from her church and then have the money would roll in.