Gurney's Inn
September 26, 2007

Kiss & Tell

Sub-Prime Relationships

We have been inundated in the press with stories about the collapse of the housing market but has anyone noticed that at the same time we seem to be experiencing a downward trend in the love/life sector as well?

Like the 30-year fixed rate mortgage, "'til death do us part" is really only a three-to-five-year commitment which will be flipped or emotionally refinanced. Hedge fund managers aren't the only ones hedging bets and many people are purchasing a home or entering a relationship with an adjustable ARM. What this does is give them an out to go find a younger, prettier interest rate or just give the devalued house of love back to the bank.

We live in an interest-only culture where we want to enjoy the finest things without any work. People can coast in new love when everything is new and romantic and you shave your legs every day but without doing the hard work of addressing your, mine, and our issues you're never building equity in the relationship, and if you hit the skids have very little of an emotional cushion.

Financial analysts have looked at the failure of certain mortgage companies and blamed poor loan practices. Now, as a no income verification sort of girl, I understand that we all want to put on our best face like, "hey, look at my super-sexy 795 credit rating," while hiding our tax return in our back pocket. When we look for a mate we are attracted to his charm without necessarily delving into every nook and cranny of his personality and in truth, very few of us could stand up under that sort of microscopic inspection. It takes time to know who someone really is. The same thing happened in real estate where both lenders and borrowers were caught up in the intoxication of the deal and probably needed to do more homework before jumping into bed together.

What we tend to do in sizing up a love investment is to engage in the game of "comps." Here we look at our romantic options to see if our guy or gal is better than the next comparable person. "Well, he's better-looking than Sam, but Sam has that power boat and great sense of humor," or "Sherry's not quite as hot as Jennie, but she's got this total thrill for adventure." What most of us want is what will hold value or what we call the "total package," whether it is a relationship or property. Waterfront quality construction is a good bet while the fixer-upper person or ranch in the woods is a dicey prospect.

Another evaluation tool is to look at each other's romantic credit histories. We all have at least a few late payments due to circumstances just as break-ups and divorce are a part of life but what is a true emotional bankruptcy waiting to happen? No credit history, like the fifty-year-old bachelor who has never been married is equally scary.

Just as a house is a home in which you live as well as an investment, you want to know your relationship while fun in the moment will also ultimately be something you're glad you invested your time and love in to grow its value.

At least in this current sub-prime crisis, the chairman of the Fed is coming in as the couples' counselor to try to stave off a massive lender-borrower break up. But it makes me wonder who is going to give us back faith in the love market? Ben, could you coach Cupid?

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