Do they need help, or were they just stupid?

The Dallas Morning News has a column called "Problem Solver." People who have problems with utility companies, the city, banks, travel agencies, etc., write in with their issues and "Problem Solver" tries to help. Some of these people really don't need help -- they're just stupid.

Take David and Patricia Seizer. David and Patricia took out a home equity loan for $209,000. That was mistake number 1 -- you should never endanger your home. It was a balloon note. That was mistake number 2 -- a big chunk of money will come due sooner than you may be prepared for. They have "high-end modern furniture," and David enjoys buying and selling exotic cars. He currently owns a Lamborghini. That's mistake number 3 -- living beyond your means.

The Seizers say they understood the terms of their loan to be 2% interest each month for 30 years with the balloon coming due at that time. That's mistake number 4 -- Did they really believe they could get a 30 year balloon at 2% interest?

The actual terms of the Seizers loan are 2% interest per month for 5 years with the principal payments kicking in at that time. When that date rolled around, their monthly payment rose from $217 to $1,377. The Seizers claim they are victims of a bait and switch.

The Seizers admit that those are their initials on the relevant parts of the loan agreement, but, David says, "everyone initials or signs and never reads during a loan closing." That's mistake number 5. The couple say they have done everything to try to keep their home, valued by Denton County Appraisal at $620,000. They've tried to renegotiate their first mortgage of $650,000, but they've been unable to. Add up their debt, and they are underwater on this property by about $239,000. David still insists they will sell it for no less than $1.2 million. And that's mistake number 6.

Some people need help, and some people are just stupid.

"Ballooning loan cost startles couple."  The Dallas Morning News; May 11, 2012; p. 1B.