Is Addie Polk Responsible for Her Situation?

by Kevin on October 5, 2008

For the uninitiated, Addie Polk is a 90 year old woman that shot herself in an attempt at suicide over her home being put into foreclosure. She is in the hospital in critical condition, and Fannie Mae is forgiving the amount of the mortgage (a bit more than $45,000) and letting her keep the house. She took out the 30 year mortgage in 2004 even though she and her late husband bought the house in 1970.

This brings up all kinds of ethical questions:

  • Was Mrs. Polk, at the age of 86, of sound mind when she took the mortgage out? Should she have been allowed to take out the mortgage?
  • Was she taken advantage of by Countrywide? That is, did some unscrupulous broker convince her she needed $45,000 plus an $11,000 line of credit?
  • Are we at risk of a moral hazard by forgiving mortgage holders that try to commit suicide and fail? Will this result in more people trying to kill themselves?

I don’t know the answers to these questions. I do think it makes for an interesting discussion. At some point we have to hold people responsible for their actions. At the end of the day, she signed the mortgage papers. She also tried to commit suicide. These things are a result of her actions (regardless of who convinced her to get the mortgage).

It’s a sad story any way you cut it. The sad thing is, she may not live to see her mortgage-free home again.

{ 5 comments }

Steve in Denmark October 5, 2008 at 8:46 am

Sound mind? Yes, if she thought ‘what the hell? At 86 I ain’t gonna be seeing the end of a 30 year mortgage and if they’re daft enough to go lending me the money, then let’s go for it.’ Yes, if she told them she had twoppence and a pickled egg a month in terms of pension from which to pay back the mortgage (which I’m guessing was the situation). No, if she thought about both the earlier points and didn’t sniff a large, furry, brown rodent in the Countrywide offer but still said ‘ok then’. Something that sounds too good to be true, often IS. Should she have been allowed to take out the mortgage? No. No, and then again, no. I can’t see any reason someone would, in their right mind consider that giving an 86-year-old a 30 year mortgage (unless she got zillions from her old man’s insurance) made financial sense for ANYONE. Countrywide could save themselves some of the costs of her mortgage by sacking the chump who sold her the thing and then sacking his chump of a boss, and then HIS boss and so on all the chumps all way up the line.

Was she taken advantage of by Countrywide? Yes. The second part of that point is dependent on the first part. They might just as well have said ‘just grab as much money as you can carry on the way out, eh? And here’s a free Countrywide bag to put it all in’.

Are we at risk (etc)? Yes. And; no I doubt too many people are stupid enough to try killing themselves to get out of mortgages. Unless they’re bosses at Countrywide.

As I know the situation in the UK best, my two Kroner’s worth is: The mortgage lenders’ and banks have got themselves into the housing mess. In the old days, you only used to be able to borrow something like 1.5 times one person’s salary (if you were a married couple). AND you scraped together a down-payment. Nowadays, because house prices rose so much, the banks/building societies had to lend people more and more – more and more times TWO peoples’ salaries AND give them 100+% mortgages! Unbelievable stupidity. The banks weren’t lending more because house prices rose independently. House prices rose like they did because banks lent people more money. If they’d stuck to the 1.5 times salary rule, house prices would have risen with inflation or with the average wage.

(I bough my last house in the UK in ’94. I sold it in 2004 and BOTH people’s share of the mortgage needed to buy the house, was £25,000 MORE than my original mortgage just 10 years before. I doubt even the UK’s inflation rate went up that much over the 10 years).

With the financial crisis – we plebs should have been picking up the tab in terms of paying proper amounts for our mortgages and loans years ago. We’re gonna be picking up the tab now anyway, as our tax money gets used to pay off the banks and our hospitals, roads, social services can’t have that money.

Sorry to take up so much space.

Mrs. Accountability October 5, 2008 at 11:09 am

What comes to mind for me is Addie Polk must have had a child in trouble, so she took out a loan. The child of course, promising to make the payment. It just seems odd to me that a woman who was alive during the depression would take out a loan like that. Or maybe someone stole her identity and she started getting the bill in the mail and just paid it because it came in her name, and obviously had a hard time making those payments. I have known of folks in their late 70s getting a new 30 year mortgage and wondering how can they be approved? Why not limit the mortgage to 15 years? Then I’m told I’m being prejudiced against the elderly, they have rights, too. But goodness, if your loan will be paid off when you turn 105, what are the chances you’ll actually live to be that old? Knowing how thrifty, frugal and “green” my Grandma was, I can’t imagine this woman, 4 years younger than my Grandma, would have had a “what the he77” attitude about taking on debt unless there was an incredibly good reason. Do mortgage brokers now go door to door preying on the elderly? One more thing, my boss has loaned so much money to her children over the years, and still things come up and she puts another thousand or two on her credit card, “This one ALWAYS pays me back on time” and she’s left with tens of thousands in debt. She had to take out a new mortgage on her home just to stay afloat. She’s 68, would like to retire, but can’t due to all the debt she’s racked up between her own spending and her children and now grandchildren.

Philip October 7, 2008 at 8:35 pm

Yes she is responsible, as I have made clear other places in my comments, a person taking extreme measures does not make them any different than the next person. She should have seen, or at least talked with someone she trusted, possibly children before they did this.

I am completely against what is being done by the government with the bailout and this is part of their work too.

Kevin October 12, 2008 at 12:48 am

Some interesting ideas from you guys. I think Mrs. Accountability must be right with the child in trouble type issue, otherwise I just don’t see this little old lady going on a spending spree.

I think everyone has a piece of responsibility in it. Now we all (even the responsible ones) have a piece in fixing it whether it be higher taxes or whatever.

Maya M January 5, 2010 at 12:53 am

Sources report Addie Polk has never had any children.
I bet she wasn’t in her right mind. Everybody who has been around people that age knows that their cognitive abilities decline and they are able to do all sorts of follies. However, it would be difficult to spin a safety net around them to protect them from their own follies. The same aged citizens who have blamed everybody and everything for the Polk case would be outraged if somebody suggests for them to be put under “special needs trust” and banned from dealing freely with their own property.
I admit I am too wicked to understand why so much sympathy has been given to a person who, basically, insisted at all costs to live in a house after selling it. If somebody is depressed and suicidal because of sinking into poverty, I think he should receive counselling and treatment, instead of taxpayers stepping in and filling the gap between his current situation and his former living standard to which he, for mysterious reasons, still feel entitled.
I guess the Countrywide people who gave Addie the loan figured out that she wouldn’t be able to pay it off and they would snatch the house. This isn’t too pretty, but at the market you aren’t obliged to care for the interests of your counterparty.

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