Jax Housing Crash: FHA and VA Loan Team Up with Student Loans and Auto Loans

With 14% of FHA loans and 5% of VA loans in default, the housing market is about to lose even more value, especially if the FHA loans are allowed to go into foreclosure. Apparently, the government has been artificially helping FHA borrowers, but when that ends, hundreds of thousands of homes will become available across the country, including in Jacksonville.

The government has also been artificially allowing recent college graduates to take vacations rather than pay their student loans, which has resulted in about 15% of student loans being in default. 

On top of the FHA and student loan problems, 7% of auto loans are in default along with the 5% of VA home loans. 

The households in default may overlap, like a recent college graduate who bought a house and car with no understanding about how loans work (and is in default with housing, auto, and student debt). That's bad. But just as bad would be if it's all different borrowers who are in default in at least one of the categories, as that would be a larger percentage of the total population. 

Basically, everyone currently in the situations had options: choose a less expensive college, sell your house while the market is still up, and buy a cheaper used car. The problem is that home and auto values have declined, so a lot of people are underwater on those loans, and anyone who isn't pulling in six figures is probably underwater on fancy-college student loans.

A lot of people were underwater in 2008 with all the sub-prime loans. Many of them got bailed out by me (and other responsible Americans). I kind of hope that we don't repeat that once again.

I hope that homes are foreclosed and cars are repossessed. The housing and used auto market can then correct themselves. Recent grads might have to move back home to pay off college and use Mom's car. Sure, if you also took out a home equity loan on the inflated value of your home, you'll also be underwater for a time, but it's better than continuing to pump air into a bubble that has to explode.

However, if we decide that we are going to pay for the mistakes of irresponsible borrowing again, then the rest of us will once again be paying for others to live beyond their means for the next 15 years before it happens to the next generation.

Parents of a High School Senior Getting Offers to Sell Kid into Navery

Maybe your high school senior underperformed or has acted a bit too entitled for your liking. Maybe you've realized that the kid, the federal government, and your parents all think you should foot the bill for college. Maybe your kid wants to major in Female Latinx Studies. Well, the Navy has you covered, as can be seen by this recruiting text I received (above).

I asked my daughter if I should contact the recruiter to see if she would get the $5,000 or if I could get it for convincing her to join up. No, I wouldn't sell my daughter into Navery, but I bet it's tempting for parents to unload the kid and all the expenses associated with paying for several more years of school and insurance (health and auto) when the Navy is offering cash. 

In all honesty, if your child has said he might try college or might try a career soon after high school but has yet to commit to anything, getting the one-time high school senior bonus might be the right choice. Or the right warning.

Also, how did the Navy get MY number as a parent of a senior in high school? And if the armed forces in general have access to parents' phone numbers, why is only the Navy sending offers?