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No one uttered the phrase "Subprime mortgage" during our mortgage application process. However, the mortgage officer did say things like "Don't worry about the appraisal. Those always come in at just what you are offering for the house" and "Don't worry about the adjustable rate. We can put you in a fixed rate once you have two years on this new job." That second one should have raised flags when coupled with another of the officer's statements, "We'll be sending you a payment coupon book within a month, but your mortgage will probably be sold off to another bank before you get it." No alarm bells went off, though.

Only after the subprime meltdown hit the news did I realize that our mortgage was one of the ones that the media pundits were talking about, and I was shocked. We were solidly middle class, good credit ratings, and considered ourselves financially literate. As first time home buyers, though, mortgages were uncharted financial waters, and we were in love with the sunken split on two acres, the only one of 21 houses we looked at that felt like home when we walked in. Through our own ineptitude, we found ourselves part of The Mortgage Meltdown.

As the mortgage officer promised, our mortgage was bundled and sold to another bank before we had even moved in to the house. Also as promised, the appraisal came in at exactly, down to the penny, the amount we had offered for the house. That was the last appraisal that did, though. Every appraisal since has been hamstrung by the fact that there are no comparables for the appraisers to consider. None of the half dozen houses up for sale within a mile of us have sold in the three years since we bought ours.

As subprime borrowers go, we are among the lucky ones. We are not in danger of losing our beloved home just yet. When our payment adjusted, it did not adjust by much, at least not this year. We still have the specter of a potentially much larger increase in 12 months, so we are pulling out stops we never thought we would pull, raiding our retirement nest egg, to make ourselves as attractive as possible to a mortgage broker next time we try to extract ourselves from this mess borne of our own naivete. We are young, though, and have time to rebuild the nest egg. Investment portfolios are easier to rebuild than a credit rating trashed by a foreclosure.

Learn more about this author, Janet Harriett.
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