Get back to basics on homeownership

It was the home of their dreams. It was also sheer fantasy to believe they could afford it.

But, aha, there was a way to buy it after all. They found out about these new mortgages. So they took the unconventional way to homeownership. No money down. No income verification.

Then the low teaser rate ballooned into a payment they couldn't afford. They were banking on home prices continuing to soar, and they collapsed. Or they were duped by predatory home lenders. Their American dream became a nightmare when they had to exchange the keys to the home for a foreclosure notice.

The suburbs have been hit hard by this mortgage crisis. June foreclosure filings - including default notices, auction sale notices and bank repossessions - increased by 76 percent in Lake County, 53 percent in Cook County, 36 percent in McHenry County, 31 percent in Kane County and 30 percent in DuPage County compared with the same month a year earlier, according to statistics from RealtyTrac Inc.

But some of those who let out a whoop when they got their risky mortgages to buy a home they clearly couldn't afford over time are now breathing a sigh of relief that they might be able to avoid foreclosure after all. Over the weekend, Congress approved a new bill that offers mortgage relief for about 400,000 homeowners, a bill President Bush says he will sign. They will be able to stay in their homes by refinancing what they owe into more affordable, government-backed loans.

Members of Congress will say the bill is needed to boost an ailing housing market that is dragging down the economy. They are right about that, as imperfect as this bailout might be. What they won't say, as clearly, is that rescuing an ailing housing market is good for votes in an election year.

And people who bought their homes the responsible way, who struggle to make their monthly mortgage payments but pay the bills, have every right to be angry that those who creatively but ultimately recklessly financed their homes, can grab onto the loan life preserver from Washington.

Certainly not all homes are being lost due to fiscal imprudence. Some are in foreclosure because of job loss, illness or divorce. And some homebuyers were scammed by mortgage con artists.

But if there is a lesson to be learned from all this, it is that honesty and the basics of finance usually don't let you down. If you can't afford a home the conventional way, don't buy it. And reforms have to mandate, without latitude, that mortgage brokers lend on the basics. Income is verified. Loans are made on the ability to pay. Risks have to be acknowledged, not minimized. There is such a thing as saying no to a prospective homebuyer. There must be better scrutiny and unrelenting prosecution of unscrupulous lenders.

There shouldn't be another time when it becomes the federal government's responsibility to bail out the lenders and the loan holders for their irresponsibility.