This could have been a mildly interesting story. US house prices are falling and credit is becoming more expensive, which is not exactly the way many consumers bet a few years ago. They were taking a calculated gamble that their asset value would reliably go up, and interest rates would remain low, thereby covering a home loan they wouldn’t otherwise be able to afford. They bet wrong. Result? Foreclosure. And the result of a spate of foreclosures? Many unoccupied houses, repossessed by banks, now find themselves going cheap in a buyers’ market.
So far, this is elementary stuff, although Democrats are trying hard to complicate matters by outbidding each other with dumb populist promises, funded with money they expropriate from responsible borrowers who didn’t bet wrong.
But now, what happens to these empty properties, besides depressing market prices? As you can imagine, vandalism and looting is becoming a bit of a problem. Metals and expensive fixings such as airconditioner units left in empty houses are tempting targets, after all.
Here’s how one Jason Szep from Reuters spins the story:
Some homes worth less than their copper pipes
BROCKTON, Massachusetts (Reuters) – Shards of broken glass outside the basement window of 31 Vine Street hint at the destruction inside the three-story home.
Thieves smashed the window to break in and then gutted the property for its copper pipes — a crime that has spread across the United States as the economy slows and foreclosed homes stand empty and vulnerable.
Perhaps the looters figured that the house would be slightly harder to fence than copper. Which makes them smarter than this reporter.
It should be noted that this article was published on 1 April. However, the feature’s length, the perfectly serious vein in which the rest of it continues, and the Massachusetts dateline suggests this is mere coincidence. Jokes only work if you consciously intend to make them.
The story talks about houses being sold for “$100”. Granted, that would be less than their copper pipes, assuming that they had any. It’s not like the story gives further detail on such bargains, such as what condition the house is in, where it is located, whether there are any buyers in the market, whether it was sold in a firesale at auction, or whether it includes the mortgage. If it’s a gag, it’s braindead. My bet is that it’s either a misprint or a misquote, and if I had to choose, I’d wager it’s a misquote.
If that was the basis of a joke, however, consider this:
In Brockton, which suffered 400 foreclosures last year, blamed largely on predatory lending [sic], and which is bracing for another 400 this year, Charney said the thieves inflicted about $15,000 of damage on the home on Vine Street. […] After haggling, the bank shaved $5,000 off the $105,000 price.
Clearly, Reuters reporters are not beyond parroting partisan political rhetoric, such as “predatory lending”. Last time I checked, predators use force against prey, but mortgages are voluntary contracts in which one party stumps up a great deal of cash, and the other party vouches for their ability and intent to pay off the loan. If one party were to breach that contract, the other party can only make the best of a bad situation, and exercise whatever rights they have to compensate for their losses. Reuters calls it “predatory lending”. I’ll see them and raise them “greedy borrowing”. And I’m not bluffing when I say I might throw in “fraud”.
Not that Reutervillians would understand elementary economics, to judge by their arithmetic. Not that Reutervillians understand the difference between reporting and editorialising, judging by their ability to draw sweeping conclusions from a sample of one. Not that Reutervillians grasp the complex nuances of the conditional value and positional magnitude of the zero digit in our numerical notation, judging from the fact that the very house used in the example is worth $105 000, which, according to the headline, is less than the $15 000 in damage caused by the looters. Perhaps they were referring to the actual price of the stolen copper, but then they’d surely report on the fellow walking down the street with 13.5 tons of copper wiring in his hands. And that would be funny.
Thanks to some straight-up, hard-nosed, unbiased reporting, we now know that when it suits the political leanings of the reporter, $15 000 exceeds $105 000. Nice to know Reuterville still has its share of village idiots.