America the New Pottersville

We have heard about big surges in home sales. Hmmm. But there are all those For Sale signs and people are still upside down . So what is going on. Well. Like the stock market, the one percent is making a play and what they are doing is creating a new Pottersville. Lets go back to the movie It's A Wonderful Life. It was wonderful because George kept the Building and Loan going and they made loans to middle class people nobody else would lend to. In other words they developed a middle class.

But Pottersville owned by Mr. Potter were all renters. Nobody owned. Everyone "kept paying the rent in Potters slums" and that's why the Building and Loan drove Potter crazy because it  cut into his business. Potters renters became Georges buyers. Now. Lets take today. We have an incredibly depressed housing market (sans LA) with prices scraping bottom. Now a lot of middle class people cannot get a loan still. Bad Ficos. Homes upside down. But yet houses are being bought. They are being pot by our modern Potter.

Big companies. Investors from other countries are buying up homes at the clip of three hundred a day. Why? Because they are going to create  a vast rental market for  Americas beaten down middle class. People have to live somewhere and they will rent. And large conglomerates will rent them the  homes until the market moves up and they decide to sell or maybe they will just keep renting. Maybe the new normal is a Potterville where no one can buy but they rent.

A new twist on the American Dream turned upside down. Remember in the movie when George gets his wish and the world has turned into Pottersville? At least he could wake up and return to the old world before Potter. We are not so lucky

www.williamhazelgrove.com
 

Fort Apache: Still Can't Move

They say the housing market is getting better but most people still cant move. Unless you want to walk out of your home and start over. A lot of people are doing that. Well some. But you have to be ok with taking nothing with you and maybe wrecking your credit. But the bottom line is the normal process of taking some money with you for your next house has been obliterated. Not only was lending destroyed in the Great Recession but Real Estate has pretty much ceased to function. At least for people who now own

Even if you can get a little out of your house then you have to find a house where the new numbers ill work. The fact of the matter is most people are so upside down in their homes they cannot move. In this way people are stranded. There is no mobility anymore in the upward mobility of Americans. We always prided ourselves on being able to move on if things don't work out. Now we have to just hunker down. The problem is we have been hunkering down for five years.

And they say real estate is up. But for who? First time home buyers. They can come at it fresh with no loss on their current home. Lets face it....it is freaky to walk away from hundreds of thousands of dollars worth of equity. Poof. Gone. Intellectually you know it. Of course the real problem is bad credit. A lot of people cant qualify for a new home or they don't have the income anymore. Fort Apache. That is where we are now.

We have to just hide out in our fort until....

Rocket Man....the novel of the Upside Down Generation

Book Clubs Get Fiery

Just did a ladies book club for Rocket Man and I expected it to be the normal give and take of any book club with questions about the writing process and themes. I don't know if it was the wine or what but these ladies came at me with both barrels. Why did I write a book about someone losing their home?  A lot of people keep their homes and don't shortsale them away they pointed out. True. True. It's fiction. But your character just keeps doing all the wrong things! He is so immature!

Now you may think fiction gives you a sort of bye on the I made it all up front. It doesn't. These ladies saw the main character ( a man hanging on the edge of a cliff financially, morally, losing his home, marriage_ as myself and they asked me if I was getting a divorce, if I really hated my father, if I was losing my house. I told them that I see things going on write about it and that I saw the American Dream in trouble and that was my theme. Huh!

Which brings the whole thing of suspension of disbelief. Rocket Man is about what is happening right now to people in their homes and so there is a natural inclination to say that is me! But in fact it is fiction but I think reality television has blurred the world in terms of what we think is true. The ladies at the book club never for a second believed I had made up this story of woe. "It is just too much like what is going on," one lady told me, pointing out that real fiction takes places in different times and different places. The novel of social commentary really didn't compute with her.

Anyway, it was a great time. But man, those book clubs can get rough!

http://www.billhazelgrove.com/

Our Gatsby Middleclass Shame

There is lots of middle class shame to go around these days. There are people who cant pay their mortgages, are on food stamps, Medicaid, assistance programs at schools. Middle class people don't talk about these things and this goes back to our Purtian work ethic that says failure is nothing less than losing God. Rich people are people who have served HIM and poor people need not apply. The gospel of the United States is one of shaming people who don't have jobs or who cant find jobs or who are homeless. We just don't really believe people can fail through no fault of their own.

But there is another kind of middle class shame. Almost a Gatsby shame evident in Fitzgerald's novel of course, The Great Gatsby. In the novel Gatsby refers to his home as something of a prize, saying it only took him a month to earn the money to buy the mansion. But at the end after his death we meet his father who said Gatsby used to chastise him because he "ate like a hog" and his father bragged about how Jimmy had pulled himself up and left the dirt poor farming existence of his childhood.

And like Gatsby there is a group of people who are ashamed of where they came from because during the boom they bought mansions. These are middle class people who do not believe they deserve their homes but are now stuck in them. Many are just hanging on in a sort of golden handcuffs perpetual state of illusion. The dream they saw when times were good and middle class people believed they could  be like rich people is now a nightmare where they cant get rid of the costume.

And like Gatsby, who at the end reverted to his roots, unable finally to pull it off for the Daisy Buchanan's of the world, these people are no longer able to pull it off for their neighbors, their friends, and ultimately, themselves.

http://www.billhazelgrove.com/
Rocket Man...one word...one word...plastics.

Buying Eggs

I needed eggs the other morning and so I jumped in the car and started driving for a local farm where they sell eggs off the back porch for a buck seventy five. I had scratched up the money from my pants pockets (times being what they are) and set off on my Sunday morning drive back into the rural America. The far west suburb of Chicago I live in is ground zero for where the boom died. On my drive toward the farmer I saw old stone entrance posts and gates of STONEHAVEN  or CREST FARMS with bright red flags advertising luxury homes. On the other side was only corn fields.

And I drove feeling more anxious. Hadn't these morons learned yet? That Americans could no longer afford luxury homes and that the market nay the culture for these type of homes had passed. In these high weeded lots sat several desultory McMansions that someone had taken a flyer on and like the pioneers of old found themselves isolated in a country they knew not. Like a wave retreating these fields will return to the Prairie grass. 

But I felt anxious. Something seemed terribly wrong. America seemed to have bet on all the wrong things. The thought that a million dollar home could make you feel better about yourself seems so delusional now after four years of super recession. And yet the red flags are new and the sign is freshly painted. COME PICK OUT YOUR DREAM HOME. I slowed down to look and then I stopped and just stared at the lonely landscape of American capitalism gone bad. I saw no American dreams here.

And so I finally reached the old farm house with the swinging sign EGGS and pulled up to the back porch. I crunched across the drive and swung open the door to the nineteenth century home. The cooler whirred and the box for money sat there open. I threw in my dollar seventy five and fished out a dozen eggs. No one was up in the house and I shut the door quietly and walked back to my car. Then I drove back toward home with my eggs and I felt strangely peaceful.

Funny that just a simple task like buying eggs off a farmers back porch should give me such serenity. But maybe I had just touched a time when all the choices were simple. A man produced eggs and sold them to his neighbors and expected the money to be left behind. Simply amazing.

http://www.billhazelgrove.com/

The New American Dream: Downsizing

It is the first thing off someones lips who is selling their home now. I'm downsizing. Used to be people whose kids had gone off to college would downsize, now everyone is doing it. Apologies to all those still in search of the perfect McMansion, but everyone I bump into including myself talks about one thing: getting into something smaller with less taxes and less mortgage. It has become the new American Dream.

In my last novel, Rocket Man, the main character finally  gets his dream and is able to short sale his house away and go back toward the city and live in a bungalow. This is the polar opposite of the steady march of America which probably began with the first Puritans who decided a bigger log cabin was better and from then on the implied assumption was that materialism was next to Godliness and a big house put you into the Big Mans Favor.

Gatsby, right? Jay Gatsby's pride and joy, his magnet for Daisy was his home. A mansion he resurrected on the Long Island sound to show the world he had made it. The American Dream was at its zenith during the twenties and there was nothing more American than a bigger home. Bigger does not only belong to Texas, it is wrapped up in the swagger of American prowess. Let the Europeans live in their bungalows and row houses...we live in Giant Homes. We live in mansions.

But then of course that all came crashing down much like the Hindenburg with all the concomitant horror. Suddenly the big house no longer represented prosperity or at least upward mobility, now it had become an albatross around our neck...a prison of debt and sinking good fortune. Our homes could literally make us homeless now with the specter of upside down mortgages and foreclosure.

So the race is on to downsize. Who knows where it will end, but like Dale Hammer says at the end of Rocket Man  and is sitting in the small yard of his new home: I was finally where I was meant to be.

Lucky him.

http://www.billhazelgrove.com/
Rocket Man


http://www.bi/

The Great Secret of the Suburbs

I was was talking to a friend the other day who said his kid had lost their food card. I stared at him and said your food card? He shrugged and said yeah. Our food card. We’ve had it for a couple years now. And then it hit me. Food stamps. This friend lives in a comfortable five hundred thousand dollar suburban home but his kids are on food stamps and he is on medicaid. He had been a realtor and basically lost his job. But then it go me to thinking, how many other people in the land of wide lawns are on food stamps?


It turns out a lot. Forty six million people or fourteen percent of the population is now on food stamps. That is an amazing amount of people depending on the government so they wont go hungry. And here is the kicker, half of them are in the suburbs. The suburbs are no longer the place where people go to raise their kids. For a lot of people it is where they went to go into debt and lose their homes. And what has happened now is we have created a huge subclass of people living under the radar.

This type of family is probably your neighbor or lives down the street. They drive old cars because they can’t afford the payment of a new one. They are on food stamps because they need every nickel to pay utilities and keep their kids in clothes. They are on medicaid because there is no health care when you are broke in America. They might or might not be in foreclosure or in a loan modification. They are living in a twilight land of the American nightmare.

It now takes years to get someone out of their home. If they know how to file in court they can stretch it out indefinitely. This is exactly what is happening. There are now squatters in their own homes. The American Dream depends on a vision if not a mirage and this must remain intact for the kids and the neighbors. And outwardly everything seems normal. The lawn may not get cut and the cars may be old but it is all stitched together with rubber bands and paperclips. One catastrophe can bring the whole thing down.

Yet there are millions of families living this way. We have a huge underbelly of people who have fallen out of the middle class but like a ship that refuses to sink, they can keep pumping out just enough water to keep the mirage in place. But eventually they will take water. Once the banks catch up with them or someone slashes entitlements then it is game over.

Until then, the dirty little secret of the suburbs remains just that.
http://www.billhazelgrove.com/
Rocket Man...one mans struggle to find the American Dream

The I Can't Move Generation

Everyone has their cross to bear and for the recession generation of homeowners it is this: they can't afford to move. It used to be you moved to improve your situation. In the old paradyme one moved to a bigger home to take advantage of the increase in equity from the market. Trading up. This was a no brainer. You found out your house had appreciated by a hundred grand and went house shopping. You  found your next dream home then sold your current home and took on a bigger payment but it all came out in the wash because you would get a bigger chunk of equity as the market moved again. Then it all came crashing down.

In the smoking ruins of the bust the housing market is on it's head. Take the homeowner today who wants to sell. He can't because his house is now in a negative equity situation. He owes more than it is worth. There is nothing to plunk down on the next house. But let's say the house is not underwater and he wants to sell. There is still no guarantee it will sell and worse there is no guarantee there is another house out there. This is the kamikaze element to moving now. You might find yourself out in the street because you cant qualify for the next house.

So nobody moves now. People move for a variety of reasons. The big one now is downsizing. No one wants the big house anymore. Most people want to cut costs, but here is the irony of the housing bust: you can't afford to move to a smaller home. The smaller home might cost you more because you will lose all the evaporated equity in your current house. Much like a stock you don't lose until you sell. There is a chance it might come back right? Right.

But lets say you are going full speed ahead. You literally have to proceed like a blind man. You don't even look at the new house. You can only concentrate on selling yours and make peace that you may not get a penny out of it. Then you look for a new home and you have to make peace with the fact you could well end up renting. Because qualifying with no down payment is just about impossible now. So nobody moves.

Who is moving then? The people who get foreclosed. The strategic defaulters who quit paying. The wealthy who walk from their home and buy the next one with cash. The rest of us sit and wait for the next bubble.

http://www.billhazelgrove.com/
Rocket Man...keeping your house shouldn't be this hard

The President Has One Shot Left to Jump start Housing

The American Jobs Bill is taking water fast since the Speaker and the boys have already said they won't increase taxes for nuthin. Uh Uh. Not going to do it. The fourteen month countdown is here and like the wrestler ahead by two points all they have to do is hang on and let the economy tank and it's game over for Obama and crew. But the President does have one bullet left and it will be his last shot. It could save the economy and his Presidency.

Here it is. Forget about the Jobs Bill. It is too scatter shot anyway. What he should do and really has to do is give the American people back their homes. He can do this and he won't need congress. He can order Fannie and Freddie to immediately change their guidelines and refinance anyone with good credit regardless of the the value of their homes. Anyone. Millions would move to lower rates and get two months off in the process and get their escrow money back. Massive cash infusion for the middle class.

Secondly. Give a ten thousand dollar incentive for anyone buying a new home. It worked before and it will work again. Get people buying homes again. Third. Order all the banks who hold second mortgages to subordinate to the first lien position. The second loans are strangling homeowners by not allowing them to refinance. Third. Give the market back it's equity. Make it illegal to count foreclosures and short sales in comps for appraisals. These should not be counted. They are aberrational and taking away the value for homeowners who have been paying their mortgages on time.

Why do this? Because the crash started with housing and it will end with housing. This was not a normal boom and bust cycle. The crash occurred because lending was broken when the derivative market blew. The middle class backs their hand with their homes. Everything they do comes from this asset. Give the housing market back it's value and middle class people will start to buy again. Hiring will follow. But here is the real reason: The effect would be immediate.

Forget about tax cuts for businesses. Nothing will trickle down. It has to go up. This is what the economists don't get. This is what mortgage brokers and real estate agents know. The President could save his Presidency by doing this. But he has to do it now. He has to focus. Because this is his last shot.

http://www.billhazelgrove.com/

Rocket Man...sometimes a house is not a home

I Think It's Going to Be A Long Long Time...

I don't know if anyone cares about housing anymore but it is the problem. Middle class people have no value in their biggest asset and they can't do anything about it. They can't refinance or buy a house or sell a house and they can't get an equity loan. In Rocket Man I put forth the idea our best days our behind us because we were sold a bill of goods. We really didn't want all of this, we just wanted the middle class childhood that slipped through our fingers like the contentment that eludes us now.

And you really have to wonder when it will come back. Nobody even talks about housing anymore. It just is. But the reason there is no demand is there is no backbone to the middle class anymore. There is no nest egg. It all vanished in the crash. And now you have people who don't want to spend a nickel and worse they are losing their home or walking from their home or thinking of walking. And no one in either party even talks about the problem anymore.

As Dale Hammer says in Rocket Man. "This is what I always imagined my childhood should be, a car parked by a modest home on a snow covered street with everyone safe and warm in middle class slumber. I realize now that is what eluded us in our drive to have it all....our contentment, our happiness."  And the way things are going I think it's going to be a long long time until we see that again.

Rocket Man Paperback or Download

 

Imprisoned in McMansions

I haven't paid my mortgage for three years the woman said outside foreclosure court. I had gone for my normal three month meeting over an investment property short sale and the woman had sought me out in the hallway. You look like you know what you are doing she said. I didn't but I listened to her tail of McMansion woe. She had bought in the boom and ran up a mortgage to about 450k with a second tacked on. Her house was now turtle to the tune of about one hundred grand. Her job imploded and she went into a loan modification that never happened and started going to foreclosure court staving off the inevitable. Three years later she had not paid a dime.

But it sucks. I feel like such a loser still living in my house, but I cant afford to move, she went on. It's like I'm in prison. True. Her four thousand square foot monster is her prison. McMansions became pretty standard in the boom for the most egregious debtors in the move into upper middle class mobility. And why not? Money was cheap and the houses were amazing but now these Tyrolean haunted houses are prisons for thousands of people who cannot afford to move.

I can't afford to downsize because obviously I cant sell and I wont have a down payment and my credit is shot the woman said fearfully. All I can do is keep coming here and hope they wont foreclose. And they probably wont with foreclosure projections sixty two years in New York to clean up the mess and ten years in Illinois. The McMansion prisons start to fall down because people cant afford the maintenance, but like the golden handcuffs of a job we hate ,the person simply cannot afford to move.

It's schizoprhenic. I pull up to this big beautiful house everyday and I'm so broke I couldn't afford a bungalow. She paused and shook her head.  I'd like to afford a bungalow. That would be heaven to live in a small house.

http://www.billhazelgrove.com/
Rocket Man comes out July 26th

http://www.billhazelgrove.com/
Rocket Man in July

I want to talk to the President....

And tell him trickle down has killed all the middle class lawns. And that the credit faucet has been turned off for anyone not in the one percent and the lawns have become dormant and are in danger of dying. I would tell him middle class people are  no longer represented in Washington and he has let a group  of people choke off all the water under the lie of fiscal conservatism. I would tell  him middle class people are not dressing as well and their cars are getting older. I would tell him that their houses are worthless and that unless he restores their value the economy is doomed to sputter.

I would tell the President the banks do not want to lend to the middle class anymore. I would tell him they have upped the requirements for a loan that nobody can qualify. I would tell him that credit is being withheld and it is starving the very people he needs to bring about a recovery. I would tell him he should allow people with good credit to refinance regardless of the value of their home. He should tell the appraisers to stop using foreclosures and short sales for comparables. I would tell him to pass a law making it mandatory for holders of second mortgages to subordinate to the first loan and allow people to refinance their home.

I would tell him that the banks will  not lend anymore and he has to establish a National Bank to lend to the middle class. I would tell him to walk through Home Depot or Starbucks or Target and see all the people working there who used to have white collar jobs. I would tell him to notice there are no customers. I would tell him that unless he gives buying power back to the John Q Middle class our economy is doomed. Maybe our republic. I would tell him he has to fight the bad guys now even if he loses. He has to fight the one percent, the banks, the corporations. He has to fight for the little guy who elected him.

I would tell the President time is running out. That it is going to be a long hot summer. I would tell him it is not too late. I would tell him to start on housing. Start with the middle class's biggest asset. I would tell him if he restores housing then he can grow the economy from the bottom. That is where the grass has to be watered. I would tell him to call me or any middle class person and find out what is really happening in America. I would tell him this could be his greatest moment, but he has to act now.

http://www.billhazelgrove.com/
Rocket Man will blast off in the summer

Maybe we need to set a restore point for the economy

You know when your computer crashes you go back and set a restore point. This is a point where the problem did not exist. It has gotten me out of many tight spots in computer land. But maybe we need a restore point for the economy. Maybe we need to go back to a point before the big crash when everything still worked. Well, here is my Restore Point Solution for our sputtering credit market. The Restore Point Solution is based on four suppositions.


One. The economy is dead in the water because the middle class lost their largest asset--their house.

Two. The economy worked before the mortgage crash broke the housing market.

Three. The mortgage crash broke the back of housing because it wiped out the basics of lending.

Four. If we fix the broken mechanism, then the housing market will return and the economy will start moving again. This will work because the housing market worked before. Not unlike a restore point on a computer, we go back to when the economy worked before.

The Restore Point Solution

One. every second mortgage by law has to be subordinated regardless of Loan to Value ratios if the borrower is credit worthy. Why this? Because the second mortgages are bricks on the first loans. They are strangling the primary mortgages because the banks have not adjusted CLTV Combined loan to value requirements. This is stopping millions of people from refinancing who are credit worthy. Refinancing is the way the middle class clears the board. It is the way they pay down debt, send kids to college, buy cars, do home improvements, buy boats, motorcycles, appliances, give themselves breathing room to catch up. Refinancing is critical to the middle class because it reduces their payments and gives them cash flow. It gives them what the rich have with their reserves, an emergency fund.

Two. You allow credit worthy people to refinance regardless of Loan to Value. One in four mortgages are under water. Again, high combined loan to value ratios are killing loans. People with eight hundred FICO scores are not being allowed to refinance because their homes are upside down. This is wrong. These people will stay in their homes if allowed to go to a lower rate. This is squeezing off the credit market for the middle class homeowner who has done everything right. Tying a loan to an asset that has depreciated due to extraordinary circumstances is bad banking. You must get the money moving around again. This would ignite a boom in refinancing. A literal boom of cash would be unleashed.

Three. Allow people to take money out of their homes and tie it to fifty percent of pre crash levels. In other words, we give people equity again in their homes. This would allow people who truly have equity but because of the extraordinary downward pressure of foreclosures it has artificially pushed the value of their homes down. This would free up millions of dollars and inject it back into the economy. Fifty percent of pre cash levels would give the banks protection.

Four. Credit Amnesty. Millions of people who had perfect credit have been wiped out by the Crash. They were good payers and never had a late. Now because of extraordinary circumstances their credit scores have fallen and they can no longer enter the credit market. This is wrong. The Crash is as much a catastrophe as 9/11 in that it was not the fault of the people. The middle class had no hand in the terrible decisions of the banks. They were the victims. And the victims need to have credit amnesty. If people had good credit before the crash then they should be forgiven and allowed to re enter the credit market. You can not have an economy when only one third of the people can participate.

Five. A permanent buyer credit of ten thousand dollars. Not first time buyer credit, but any buyer credit that will come off their taxes. This will jump start buying again. But it must be permanent until the housing market returns to boom levels. Then it can be stopped. The pump must be primed to get the machine rolling again. This will address the housing market wiped out by the crash.

Ok. That's it. Now, all we have to do is go and set that restore point on the computer. Let's see what button does that....

Bestselling author William Elliott Hazelgrove is the Hemingway writer in residence for the Ernest Hemingway Foundation. He has written four novels, reviews and features for USA TODAY and been the subject of stories in the NY Times, LA Times, Chicago Tribune, USA Today, and NPR'S All Things Considered. His forthcoming novel is Rocket Man. More information can be gathered at
http://www.billhazelgrove.com/

The Face of Foreclosure

A house went into foreclosure in my neighborhood last week. It is the first one we know about. I never knew much about the man who owned the house except that he owned a Hummer, installed a swimming pool, had Grecian urns banking his driveway on both sides. He had full time lawn care and his grass and shrubs and trees were always immaculate. In the land of the upper middle class he seemed to be doing very well. His house hovered around seven hundred thousand.

The first sign of trouble was the For Sale by Owner signs that kept appearing. One week the sign would be in the middle of the yard then it would be by the curb. Then the sign with sticky letters would disappear and a Realtor sign would appear. That would last for a month and then the original sign would come back. There seemed to be indecision or desperation. Sometimes the signs just went away and we wall assumed he had given up on selling his house. But then they would come back and another realtor would take a stab and the whole cycle would start over again.

Then we noticed the For Sale sign by Owner was just laying up against one of the urns. It seemed a sort of casual bon-viant way to sell a house. If someone really wanted it then they would find the sign. Then one day two white nondescript trucks pulled up. They were in the shape of moving vans but with no logo. Sort of undercover moving vans. The trucks dieseled outside of his house all day and we saw men moving silently through the morning hours hauling furniture into the sides of the trucks. Then the trucks pulled away.

Garbage night is on Monday morning and we all noticed his cans weren't by the drive. The black Hummer came and went a few times and then we didn't see any activity at all at the house. No one could confirm or deny if in fact he and his family had moved away. The smoking gun came from mother nature. Our neighborhood used to be farm fields as most neighborhoods in Illinois take purchase on the fallow fields of an agrarian past. Slowly the weeds that had been dormant for over ten years under the reign of agent orange the lawn service had been administering. But then reality began to creep up through the fine Kentucky green.

The first dandelions came as early soldiers and then all sorts of crab grass and prairie flowers followed suit. It was amazing. Within two weeks the diagonal landscaper cut administered by zero turn mowers and men in tan uniforms had been replaced with the rangy ragged undergrowth of our indigenous flora and fauna--weeds. The weeds came on like a plague. The grass grew wild. The trees drooped under the lack of nitrogen. The whole lawn went to hell.

Errant trash blew across the front yard. A water bottle. A clear plastic package of mulch. Flyers. Old newspapers. One of the urns fell and cracked. The For Sale by Owner sign lay flat on it's back. His custom bricked drive became a smorgasbord of grass and sedge. The garbage cans remained against the garage. No cars were ever in the drive anymore. The house had turned into a shell. No human spirit transformed the rude elements of construction into a home anymore. Foreclosure had come to the hood.

http://www.billhazelgrove.com/

And Here's To You Mrs. Robinson--end of the big suburban home

I have one word...just one word, Ben...plastics. This line by the pool of a large suburban home summed up the prosperity of an era or the mass consumption that Dustin Hoffman would rail against. The Graduate could be shot today by a pool in a large suburban home, but there would probably be For Sale sign in the front. The booming economy that produced those homes in the sixties seventies and eighties and nineties is gone and so is the dream of the big suburban home. Mrs. Robinson drinks from a large bar that spills out to a patio that spills out to a pool. Ben runs from one monster house to another.

Cut to 2009. The very people who now own those homes...one word, just one word Ben...cant find that one word anymore. What is the new thing? What is the plastics of our new era. It is not cars and it won' t be large suburban homes. Maybe ...solar panels...or hydrogen...or...fuel cell technology. Whatever it is the next generation will not be looking at large homes. For many reasons, but the biggest one will be that the banks will never make those loans again.

I'm sorry Mrs. Robinson but your debt to income ratio is out of whack. Mr. Robinson you don't have six months reserves and a job of two years with a W2 that shows you make two hundred and fifty thousand a year. I'm sorry Mrs. Robinson, but you don't have the twenty percent to put down. Mrs. Robinson, you were late on a credit card and your credit score dropped to 650...we only lend on 700. No, I'm sorry, we don't do stated income anymore or interest only loans.

The only reason big homes were able to be built in the first place was that the banks would give people loans on stated incomes and qualify them under teaser rates or adjustable rate mortgages that started out in the three percent range. Or the famous NO DOC loan that required nothing but a social security number and a FICO score. Then you could put Mrs. Robinson in her home. But not anymore.

Out where I live there are many large empty homes. I don't know what they will do with them. They will never sell. Why? Because middle class people will never qualify for them and whats more people don't' want them. The utilities alone on Mrs. Robinson house today runs a cool six hundred a month. And that's with Voice over IP. These are not energy efficient homes. They were not built that way. These monsters cost an arm and a leg to heat and cool and throw in that electric bill (do you know what it costs to keep Mrs. Robinson's pool warm?) and you are headed straight for the poor house.

Taxes. Nobody wants those taxes anymore. Out where I live (suburb of Chicago) taxes start around ten grand and on the big homes we are talking twenty four thousand dollars. That's a cool two grand a month without the mortgage. Don't forget maintenance and filling large homes with furniture Mrs. Robinson's home was magnificently appointed. The scuttlebutt among realtor's for a long time has been that a lot of the McMansions are empty. People would move in and didn't' have the money for the furniture. Many a cable guy has told me this story as well.

When the banks return to health they are going be loathe to make those jumbo loans. Only the truly rich will qualify and they probably won't want them either. All those spec homes you see out there are now owned by banks who got them from builders who couldn't make the note--that will be a painful reminder that they won't forget. So if your dream is to throw your money away on a house, then you better be hauling it in.

But the biggest reason is simply that the era of the big home is over. Conspicuous consumption has given everyone a nasty headache and culturally we have moved on. Greed is out and what was that thing called the American Dream? Maybe a big house won't make us happy. Green homes. Green cars. Waste not. Want not. We are truly moving into a different world.

So here's to you Mrs. Robinson...and Ben I have just one word...one word...downsize!
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