I think the older residents of Naperville are living comfortably and within their means.

The newer residents of Naperville especially those of the last 5 years seem to be living in these new McMansions beyond their means and sometimes struggling and even undergoing foreclosures.

One of my neighbors who lives in a modest house of about $400,000 just donated 2.5 million dollars to his alma mater. I would have never thought he had that kind of money. This guy definitely did not have a curtain or complex problem.

I live in a 20 year neighborhood and all curtains seem to be up in the back and front. However, no one is happy with the ever increasing taxes on their homes. Even if they can afford them, they don't like paying them, when money is wasted on unnecessary 75% pensions to public officials so they can retire at the very old age of 51.

Those McMansion owners who are missing curtains you would think would be up in arms about government waste. I guess they are too busy trying to get a second mortgage or home equity loan to have time to participate in politics or even enter a voting booth.

They need to get their priorites straight and stop trying to keep up with the Joneses. They need to unite with the Joneses and effect policy at City Hall to keep their taxes manageable.

Must get some sleep and try to catch my morning train to Chicago. Still waiting for that parking garage to be built where it is needed instead of where the city council wants it to be. Maybe, in my next life!

Good day to all my fellow bloggers and Host Ted!

Good point Ted.

I have also noticed new McMansions that have beautiful window dressings on the front of the house, and old yellow newspapers or sheets on the back. Why anyone would want to live a lie like that is beyond me.

More proof that this goes on is the advent of furniture rental stores. Throwing a big party? Just rent a house full of fancy furniture. Once you have finished impressing your friends and coworkers, the furniture goes back to the store. Then when it is time for the next party, the homeowner can tell the guests that they just bought all new furnishings, as the old stuff was too drab.

Bolingbrook Mayor Roger Claar used to say that the difference between Bolingbrook and Naperville was that Bolingbrook residents could afford furniture.

He was pointing out that homes in Bolingbrook were a great deal less expensive than those in Naperville, though of similar quality. But in Naperville, when the new homes were going up, you'd often see bedsheets or even newspapers in windows--people couldn't even afford curtains, then put every dime into buying the property and building the home.

To clarify, I wasn't taking a shot at Bolingbrook, which is a fine town. I was merely pointing out that too many people over extend themselves to live in Naperville and try to keep up to some perceived status, which is judged by how big of a house and how many new vehicles are in the driveway.

It amazes me how many would put themselves in so much debt just to impress coworkers, friends and family. For those that are on the verge of collapse, or have already done so, how impressed is everyone now? I can't feel sorry for these types that put everything they have on credit and can barely afford the payments.

Ken--ditto on your assessment. I learned a long time ago that it is politically incorrect for anyone with a Naperville address to make comparative statements about surrounding areas. Doesn't matter what it's about, it's always interpreted as Naperville folks suggesting they're better than everyone else. OF COURSE you don't have to live in Naperville or have a six-figure income to have a happy and successful life. I knew what Fred meant, but it's better to just not go there.

Host Ted,

It appears with the two big government candidates for President there is little real difference in policies, like usual.

Apparently, Cram Downs have been promised to Congress in exchange for their votes for the Bail Out. Or maybe it was the extra $4 Billion per vote that was included in the improved bill. Does anyone know what Judy got for Naperville?

Should we organize a City wide or State wide mortgage strike so that all homeowners with mortgages can benefit from the coming Federal mortgage principal reduction/forgiveness program?

Perhaps the Sun Papers could begin running a series of articles on How To Participate in the Cram Downs once the program rules are in place? Sort of a DIY bail out primer?

Okay, I see the problem, Anonymous. You took Fred's statement as a swipe towards Bolingbrook, while I saw it as saying to many people try to keep the Naperville address by living beyond their means. I didn't see it as a swipe at Bolingbrook because I know there are many nice neighborhoods there equal to Naperville at a slightly reduced price because of the zip code.

I assumed that Fred simply meant many folks would have been better off living within their means, even if it meant not having the 'coveted' Naperville address.

To: markg8, I can understand your frustration as it is being felt by many in this tough market. A few words regarding your boyhood family home. I too will be in such a situation in coming years and have discussed the selling of the family home. In our case it will be easy because it is a tear down. Unfortunately we have already received appraisals and with the changing times it is worth about 65% when compared to 2 years ago. In your case make sure you have a realistic number involved when marketing this home, and be ready for this number to surprise you, as mine did.

The logjam you speak of is complicated indeed and I fear, will take much longer than many of us expected. Hang in there as mortgage rates are still low from a historic perspective. Good Luck!

To anonymous on October 3, 2008 12:21 PM--

I know where you got your figures; I don't know where Paige Winfield got her's for the above blog. I don't really care enough to look into it, but from my experience and the folks I know, the figures Paige stated seemed more plausible. But who really knows. I guess it depends on where you get your info. Keep in mind, tho, that the government takes 1/3 of the gross for taxes, so folks in this income range are really operating with 2/3 of this amount. Big difference. You are very right about the school and local government drama in Naperville. Never a dull moment, but it would be nice to have one!

I'd like all you Biggert fans to come back here and express your outrage now that she has become the only IL Republican to change her vote on the bailout... er, "economic rescue plan." She has once again acted like a typical politician, bought by big business.

How to deal--as I wrote in my comment the numbers are from, Simply Hired--www.simplyhired.com

An average Naperville income of 123,000 sounds a little high to me, even in the best of times. I don't do the stats, but I think 98,000 would sound more in line with households that are not two professional incomes, which I'm sure still make up a large part of median Naperville.

If people can't make it on an average income of 98,000, there is something greatly wrong somewhere, IMO.

But, as I said, I only googled it and came up with Simply Hired numbers, no biggie. I'm sure surrounding community numbers could also be higher, and Bolingbrook could also be found higher in some surveys, but my numbers were from one site, apples to apples.

Show me the net worth when the dollar equals the peso. Show me the net worth if you're 70 years old and want to retire to FL or AZ and can't sell the single biggest asset you own: your house in Naperville, Bolingbrook or anywhere else because even the most qualified buyers can't get an affordable mortgage.

That's where we're all headed if we don't fix the credit crisis.

My siblings and I inherited our parents 4 bedroom, 2.5 bath colonial in DG this spring. Beautiful home in a beautiful neighborhood, 100 feet from the middle school, half a block to the YMCA next to it, a block from the grade school and a block the other way to DG's favorite park and the pool & tennis association next to it. We want to sell it to a young family with kids just like we were in 1967. I sold my place in NJ and moved back here to take care of my dad when my mom got sick in 2006. Now it's just me and my mother's cat I inherited in this big house and I'd like to get out and buy a condo or a townhouse with my share of the proceeds. That's two real estate sales right there that are logjammed until we resolve this.

To Anonymous on October 2, 2008 5:44 PM--

Taken recently from another blog site, The Political Paige:

By Paige Winfield on August 20, 2008 9:46 AM | Permalink | Comments (6) | TrackBacks (0)
"You have to make more than $250,000 to be considered "rich," according to Barack Obama and more than $5 million, according to John McCain. . . . Where do Naperville residents land? They make an average household income of $123,221--well above the national average of around $50,000 and the highest of any suburb in the Chicago area."

I don't know what her sources are, but this sounds like a more accurate average. All the same, this income is not enough to support some of the lifestyles we see around here without a lot of personal debt being involved. I know, because we are in this range and we live modestly compared to many of our friends in Naperville who we know earn about the same or less yet live much more extravagantly than we do--McMansions, more expensive cars, club memberships, etc. So you KNOW they have either a rich uncle or a lot of debt. I'll guess the latter.

Ken--according to Simply Hired, the average household income in Naperville is 93.000. The average household income in Bolingbrook is 68,000. Now, while making around 26,000 less on average than Naperville may sound like a lot, I bet the cost of housing/taxes/education makes up a lot of that difference and as "Show me the net worth" stated, show me the net worth. Happiness abounds in Bolingbrook, and guess what? Our kids get into great colleges, also, just as they do in Plainfield, Oswego, Batavia, St. Charles, Warrenville, Wheaton, Glen Ellyn, Lisle, Downers Grove...take a thumbtack stab at it, and we are all good to go! We seem to be creating less drama within our local government and school systems, as well.

Show me the net worth;

That is what I am talking about. There are also those of us who live in Naperville that live within their means. Others, are living a lifestyle that they can't afford, But hey, they look cool, all the way till the foreclosure.

Fred how about those living in Bolingbrook earning the high line NAPERVILLE salary living well with-in their means. Show me the net worth.

The insurance plan Biggert talks about is a joke. Impractical if not impossible to administer it wouldn't work.

She's been all over the map on her excuses for inaction. Last week she said the taxpayers getting anything back and limiting CEO pay sounded like "socialism" to her.

She said on the radio yesterday she voted against the bill because she wanted FBI investigations of mortgage fraud "beefed" up. This is after she said earlier that it was no time to point fingers.

One of the "culprits" Republicans are trying to finger is minority home ownership that expanded under the Community Reinvestment Act. She was all for Bush's "ownership society" before she was against it. The fact is the CRA only covers regulated banks, not mortgage brokers and companies she fought against regulating from her seat on the Financial Services Committee. Those are the sleazeballs who wrote most of the "liar loans".

In any case the Bush Administration loosened the CRA regulations with the approval of Republicans like Biggert back in 2001.

Look for Bush's Dept. of Justice to go after some hapless single black mothers in the suburbs before the election who are trapped in houses going to foreclosure because their mortgage brokers told them a few years ago they could refinance before the ARM kicked in and get into 30 year fixed mortgages with payments they could afford for the long haul.

I wouldn't be surprised to find Biggert's staff hard at work helping to locate just such "wanton criminals" for the DOJ to prosecute.

What, telling the truth is pretentious, Anonymous?

Fred says:
"It is quite common in to see people living the Naperville lifestyle on a Bolingbrook budget."

Wow, Fred, pretentious much?

It is quite common in to see people living the Naperville lifestyle on a Bolingbrook budget. As stated above, too many need to stroke their fragile egos and impress friends and family with their lavish lifestyle. Unfortunately for many, it is game over. It is really sad to think some judge their wealth by how much is left on the credit cards that they can spend.

I gotta agree with just about all that appears above. When Bush first appeared on TV announcing the bailout request, it was eerily similar to his televised appearance asking for support in the invasion of Iraq. "We believe the entire American financial system is at risk; we need to act now!" sounded a lot like "we believe Iraq has weapons of mass destruction; we need to act now!" No wonder so many Americans aren't buying it; I don't entirely buy it either.

I am far from a financial expert, but I understand my own finances and investing well enough. So far we've been mostly unscathed by what has happened. Half our 401(K) is in more secure but low return investments, the other half is in mutual funds which is involved in the stock market. This half is taking a beating right now, but since it's earmarked for retirement which we won't need for quite some time, we're going to stay on the roller coaster and ride it out; in the long run it will recover. I don't believe we are headed for another Great Depression unless the taxpayers pay for a bailout. I could be wrong, obviously, but I just don't see it. I feel this is the same kind of fearmongering the Bush administration used to get us to support the Iraq conflict.

We bought a house in Naperville that we could afford with a 15 year mortgage which is nearly paid off. Because of this and the rise in real estate in the last 10 years, we have tons of equity, so the reduction in housing values hasn't hurt us. Have we borrowed against this equity? Hell, no, and we have no plans to. We bought a new car two years ago which we just paid off and plan to keep for several more years. We have a couple of credit cards but only carry a balance on one, with kids this is hard to avoid altogether. But I keep this under control and paid down as much as possible. My oldest is starting college next year, which will cost us twice as much as expected. So I'm returning to the work force to earn the needed income instead of borrowing it.

It is not easy to live within one's means with easy credit and attractive consumer items bombarding us constantly. It's even more difficult in a town such as Naperville where conspicuous consumption runs amok. So I think those of us who do are definitely in the minority. I talk to my friends, and I'm amazed at some of the stories I hear. We know people who bring in less income than we do but still manage to live twice as large (and probably owe twice the debt as well). A family in another state who we've known for years illustrates this perfectly. Several years ago they bought a newer and much larger and expensive home. They used equity from their first home as the down payment; however, after closing they turned around and borrowed it back to make the upgrades to the home that they wanted--carpet, paint, furniture, granite kitchen, etc. It's gorgeous, but they now have two mortgage payments. They lease both of their cars because it's cheaper than buying, they put eveything, including vacations, on several credit cards. Last year it all finally caught up with them. At Christmas, she told me they had $83 in their checking account and all their credit cards were maxed out. Their only option was to cash in a 401(K) to keep things going. We have other friends who I just found out bought their house on an interest only plan for the first several years. Their balloon payment will be coming up soon, and since the housing crash, they have no equity to borrow against for this, so they're looking at other options. I didn't expect that home prices would escalate indefinitely; I'm surprised that so many people were depending on this to make future ends meet.

So yes, the greedy CEOs on Wall Street and at Freddie and Fannie pigged out, but many average Americans were eating from the trough as well. Financial institutions pushed out easy loans because they got bonuses for doing so, but many folks took them because through credit they could live more luxuriously than they could through cash. It certainly irks those of us who live with a degree of financial restraint to have to bail out those who don't, but it's just not the Wall Street fat cats we're rescuing, it's our friends with two mortgages and the maxed out credit cards, and our friends looking for ways to borrow money in a frozen credit market for a balloon payment for a house they probably couldn't afford and shouldn't have bought in the first place. A lot of these people are probably your friends and family, too, you just don't know it. There's plenty of blame to go around, Wall Street wasn't in this by themselves. So a bailout of the financial system, while galling to fiscally responsible Americans, will probably be necessary to some extent. I think some sort of plan will ultimately be approved. Probably not the one Bush wanted, but something. Hopefully Americans could learn a lesson from this, but I think that's too much to hope for.

Well said Ken. Sorry about your current situation, I wish you well.

I agree with you and the other posters about how people feel entitled to things they can't afford just because their friends/neighbors can. I haven't always been responsible with money, but I'm glad I learned my lesson years ago instead of today.

I pray to God that this crisis will finally open peoples eyes. We all need to become fiscally responsible in our own homes. I suggest watching Suze Orman and following her advice. Believe it or not, there was a day when credit cards didn't exist. Maybe we need to go back to basics and the only thing you get credit for is a mortgage or college tuition. Not what Wall Street wants to hear but screw them, they keep screwing us, now is the time to fight back. Fight for yourselves!

I for one don't want to be owned by foreign countries, and that is the direction we are currently headed in.

For the most part, I have to agree with no bailout. I say for the most part because my financial adviser says a limited bailout is necessary to avoid another depression. Even he says only a few companies need to be saved to avoid this, not all of Wall street.

I also have to agree that to many people live beyond their means. When I built my house 5 years ago, the builder kept telling me that I could afford everything I wanted as they could get me a loan. Instead of falling for that line, we stuck within our budget so our payment was, and is, manageable. We also don't keep up with the Jones on the automobile front. We have one large vehicle for when we go out as a family, and two smaller economy cars for every day driving...all paid off. We'll drive them till they die, and then buy a low mileage used car to avoid the hefty payments. The results of this? Eighteen months ago, I became disabled, and we still have managed to hang on to our house.

If I can do it without a bailout, those companies that gave the irresponsible loans should be able to sink or swim on their own too.

I'm glad the bailout failed as well. I think we should take our lumps now. The market will get better. May not be tomorrow or a month from now, but things will turnaround. Why should we saddle ourselves and our children with $700+ billion that will take the rest of our lifetimes to get back? Let the shareholders, CEO, etc. lose their money. NO GOVERNMENT BAILOUT.

I have purchased a TH in 2007 with 100% financing. I wanted a single family house in Naperville, but couldn't afford it. Yes, my mortgage may more than my house is worth right now (possibly about the same since I've been making my payments for 18 months). But I'm not about to walk away -- I've got to have a place to live. I just keep sending my check to the mortgage company each month -- on time.

I've lost 21% (maybe more because I've been afraid to look the past couple of days) in my retirement plan since January 1, 2008. But I've got another 20 years to work. That too should get better. I'm in it for the long haul.

I personally have known only 1 person that has lost their home recently. A friend that worked for Lucent for 20+ years got laid off in December 2006. She looked and looked for a job. Finally, after 18 months of struggle, the bank filed a foreclosure action on her house. She has now moved away to live with family. My friend is one of the people that I'd like to have seen our government help. Because she wasn't living outside of her means. Unfortunately, sometimes bad things happen to good people.

No bailout. I agree with the other statements here. Too many people living way beyond their means and then complaining when their lack of money management catchs up with them. Bring back saving for a house and having a down payment versus no money down loans. No wonder so many houses are in foreclosure. What do they really have to lose if they put nothing down and then walk away? Society today is about instant gratification.

It also makes me sick to think that I will pay to bail someone out that has lived the high life while I have lived a modest sometimes frugal life. They should teach money mangement skills in grade school if they don't already.
It's hard to imagine so many houses in Naperville in foreclosure. I wonder how many are due to an illness and possible job loss and how many are just from people living the high life and not paying attention to loan documents they are signing.I thought we had such a large amount of college educated residents. It just goes to show you that someone can be book smart but lack common sense or self control.

THE SOUND OF PIGS BEING SLAUGHTERED

1.
Q. Naperville's local representative, Judy Biggert, voted against the bailout. Do you agree with her vote?

A. Its great to see a Rep that didn't sell their vote for the promise of a future "earmark" for a friend or relative.

2.
Q. Do you agree that the U.S. government should rescue the financial sector, and the alternative could be worse?

A. The fear machine is in overdrive; the financial sector is pushing all the buttons and calling in every favor from every politico they ever greased. What you are hearing is the pigs squealing on the way out.

3.
Q. Hmmmm....higher taxes, or another Great Depression...which do you prefer?

A. This is a false choice, how about: *repeal the failed SARBOX law which is killing our companies inc solvent banks

*eliminate Fannie and Freddie, these are socialist piggy banks for politicos

*lower capital gains to bring money into the market

*set aside a billion for an independent special prosecutor with hundreds of little prosecutors and go after those that committed fraud big and small. This is just a start.

4.
Q. There is so much to the mess, and no easy way out of it. Are you concerned about your personal savings -- your 401(k), pensions or other retirement investments?

A. No I invested wisely and don't have any money at risk, I didn't take on high risk high "potential" return investments. When you bet everything on one number and toss the dice, expect catastrophic losses. Fools are separated from their money all the time including the gigantic pigs that bought high return investments AKA high risk.

5.
Q. What about the value of your home?

A. Bubbles have a way of popping; the Bail out would simply make the balloon bigger with a bigger bang after the elections and after the pigs stick my children and grandchildren with the bill.

6.
Q. How much equity is in your home?

A. I bought what I could afford and paid it off.

7.
Q. Have you borrowed on the equity in your home?

A. I live on what I can afford, not what I wish I could afford.

8.
Q. Did you think home values would always increase?

A. NO, they increased beyond anyone's ability to buy one. Once the prices are reset to 2000 levels, we will have affordable housing market style.

9.
Q. Do you now owe more than your home is worth?

A. NO, no mortgage, no credit cards, no auto loan.

10.
Q. In what ways is the financial crisis affecting you?

A. All doubt has been removed from my mind that our politicians simply read little 3x5 cards that the bankers write for them. I wonder how much they are offering for each vote in Congress tonight.

The problem is this sense of entitlement with many younger borrowers. They overextend themselves because they believe they "deserve" the biggest house/car/etc, then whine that they can't make ends meet. Lenders shouldn't offer 40 year mortgages or ridulously low ARM's, and people should be smart enough not to take them.

Stupid is as stupid does.

Many of us warned Suzyn Price, and the District 203 school board that this latest round of tax increases was very ill conceived. They better hope they have enough money to finish what they started because I have a feeling property tax receipts are going to fall short of what they projected. Then what? Another tax increase? It is too bad people like Thom Higgins and others supported this albatross so forcefully. They drank the koolaid for way too long.

They lived up to their 18% approval rating because they didn't act the way the editors of the Naperville Sun wanted them to? That makes sense. I contacted Judy Biggert late last week to give my overwhelming support for everyone voting NO to this ridiculous bill. The government should NOT bail out these greedy bankers who bit off more than they could chew with predatory loaning and giving hundreds of thousands of dollars to anyone dumb enough to sign the dotted line buying these trash homes built in corn fields that weren't worth what they paid for them.

It's EXTREMELY sensationalist to say the choices we face are bailout Wallstreet, resulting in more debt and higher taxes (along with rewarding banks' bad behavior) OR face another Great Depression. Give me a break. Yes, the stock market is down this WEEK. Expand any of the market average graphs to five or ten years and you will see we're still ahead. Does anyone really trust the government to start sticking their noses in to Wallstreet? I'm having a hard time thinking of anything that the government has gotten involved in recently that has improved in the slightest. Aside from voting down this bailout, our government has been largely ineffective for longer than I'd even care to admit.

What we're paying for right now is this country's complete excess, an entire generation of idiots living far beyond their means, and what happens when the ARM on their house they couldn't afford when they moved in blows up, along with paying for tens of thousands of dollars of floated credit card debt, multiple luxury car leases, and everything else. THESE are the people who are crying the sky is falling.

You won't find those of us complaining who invested intelligently, live in moderate homes we can afford, don't lease BMW's, and don't live check to check crossing our fingers that another pre-approved credit card arrives in the mail this month so we can continue our lives of excess. It is irritating to think that responsible Americans are being strong armed in to adding even more to the national debt for our children to pay for the excesses of irresponsible greedy bankers slowly floating back to earth on their golden parachutes and the former homeowners who were either too stupid or too short sighted to read/understand the fine print of the mortgages they agreed to.

Something needs to be done to curb the culture of American excess. Shoveling piles of money in to Wallstreet is nothing more than a finger wagging. Let these idiots feel the sting of terrible business decisions and even worse personal finance decisions. The lack of accountability for decisions in our society these days makes my stomach turn.

I'm sick and tired of this whole situation being played out as a bail-out of the big money Wall Street by the poor little guys on Main Street. Do you know why the guys on Wall Street are in trouble - it's not because they stole money or had big salaries (they do, but that wasn't the cause of the problem) - it's because the poor little guys on Main Street borrowed money from these guys for lots and lots and lots of cool toys, and now can't pay back their loans.

Yes there is a lot of blame to go around. Wall Street made it very easy for Main Street to borrow money. Easy money, however, doesn't mean that the banks forced consumers to borrow money to buy houses they couldn't afford, cars they couldn't afford, and vacations every year. Once again, in my opinion, this appears to be a problem stemming from our lack of personal accountability. It seems to me that the banks' biggest sin was that they didn't stop us from hurting ourselves!

All this being said, however, I do fully admit that there were a number of unscrupulous lenders out there preying on the public. If banks had enforced tougher standards then they wouldn't find themselves in such tough positions. The banks were trying to make more money and were willing to take bigger risks to do it. Now those risks are coming back to bite them in the rear.

The truly sad aspect of this whole mess is that the people out there that played by the rules (the ones that only buy what they can afford, the ones that live in houses they can afford, and the ones that save money for a rainy day) are the ones that will have to bail out the greedy banks and bail out the irresponsible consumers.

The government CANNOT and therefore SHOULD NOT bail out failing financial institutions. This will lead to inflation and a lowering of the American life style.

The government did a very fine job with WaMu and AIG. They maintained the core banking systems (AIG has many entanglements in the US economy) and the shareholders and general creditors of these companies lost most of their investment due to poor management (at least $50 billion for WaMu, AIG more). Just like Enron, Worldcom, etc.

If the bailout package was in place before WaMu was taken down, the US taxpayers would have "bought" WaMu's troubled assets (clogging their ability to raise money) and ultimately the taxpayers would have paid the $50 billion loss instead of the investors.

We should all be concerned about yeterday's BAILOUT of Wachovia. Shareholders deserved nothing, they got $2.2 billion. Bond holders with $52 billion in bonds that were trading at 50 cents on the dollar last week were assumed by Citigroup (a total windfall). So as I calculate this mess, the US taxpayers (through the FDIC) have paid $28 billion for NOTHING. And if the losses on the Wachovia portfolio exceeds $42 billion, the taxpayers could pay more.

The answer is simple. These banks need to work out the underlying mortgages either through revised terms or foreclosures. The value of these securities will become more apparent and they could be traded or simply liquidated.

The ONLY support to the financial system that I could support would be LOANS. And these loans should have first claim on the assets of the companies, not warrants to buy their worhtless stock as Paulson and the Democrats have proposed. If they are insolvent, the governement should sell the assets to recoup their loan values. SIMPLE.

And a special government loan, just like in the 1930's that borrowers could access to pay off their existing mortgages probably at a discount to the outstanding balance.

My bank accounts work, my credit cards work, everything is fine. If this problem is not addressed the AMERICAN WAY, then we will have a real disaster. The companies that have failed should be out of business. SIMPLE.