Cha-Ching – Donna Hanks’ mortgage equity ATM exposed

Kim’s excellent post earlier today perfectly illustrates why so many of us are angry about the government meddling with mortgages. But there is another similar story that Michelle Malkin has been following, and today she did the work that the mainstream media so far has failed to do — she posted a lengthy document drop concerning Donna Hanks.

Last week, ACORN engaged in a publicity stunt by breaking into Hanks’ foreclosed Baltimore home and telling the news media that the home still rightfully belonged to Hanks. ACORN then announced that they were “willing to go to any means necessary” to stop home foreclosures around the nation.

Donna Hanks’ story is complicated and stretches over a number of years, but this is all you really need to know:

According to real property data search information, Hanks bought the two-story home in the summer of 2001 for $87,000. At some point in the next five years, she re-financed the original home loan for $270,000.

Well, this is pretty important too:

In September 2006, the bankruptcy court ordered Hanks’ employer to deduct $340/month from her salary as a bartender to pay down the debt … Hanks did not comply with the plan. In December 2007, the servicer issued a notice of default on nearly $7,000 past due.

In February 2008, Baltimore City Circuit Court records show a second foreclosure action was filed.

She had two years to pay what she owed. She failed to comply.

When she told local TV station WJZ that her evil bank raised her mortgage by $300 (“The mortgage went up $300 in one month”), she’s talking about the amount in arrears that she agreed to pay back.

Cha-ching. Cha-ching. Hanks cashed at least $175,000 out of her home (assuming of course that she paid off her first mortgage’s principal in full, plus interest owed).

Where did the money go?

How could anyone be so stupid as to borrow $270,000 against a home worth only 1/3 of the loan amount? (For that matter, how could a bank be so stupid as to approve such a loan?)

She has been flirting with foreclosure for over two years. This isn’t something that just popped up unexpectedly. And it’s not the bank’s fault, either.

Why in God’s name should the government (that’s you and me, folks) get stuck paying for Hanks’ stupidity?

It’s difficult sometimes to find humor in these situations, but right now I’m chuckling about the fact that the Democrats and the news media (please excuse the redundancy) keep picking “human shields” who actually reinforce our reasons for opposing their plans. As with the infamous Frost family, used by Democrats to attack President Bush after he foiled their first attempt to massively expand Federal SCHIP insurance funding, the stories of Donna Hanks and Minta Garcia actually bolster the arguments against the additional Federal spending demanded by Democrats and President Obama.

Once again, let me make this perfectly clear — due to our current faltering economy, there is a compelling reason to offer assistance to those who have suffered from unforeseen tragedies (sudden death or crippling injuries, layoffs, etc.) that truly place their financial security in jeopardy. But bailing out irresponsible people who knowingly bought more house than they could afford, or who used home equity as an ATM to fund reckless spending, is another matter entirely.

The courts, the banks, and the real estate market are already equipped to handle the Donna Hanks’ and Minta Garcias of the world. That’s what bankruptcy, foreclosure, and auctions are for. There is simply no reason for taxpayer dollars to be involved.

Times Is Tough...
Wait, so we aren't mistreating detainees at Gitmo?