Is Matheny’s Foreclosure Important?

I’m troubled. 

Some days I really like the hiring of Mike Matheny as the Cardinals next manager, but I can’t tangibly justify why. Other days I kind of don’t like the hiring of Mike Matheny as the Cardinals next manager, but until Saturday, I had no tangible justification for this stance either.

The Post-Dispatch broke the story that Mike Matheny has recently had his house foreclosed on and is currently listing his in-laws residence as his address. (READ WHOLE STORY HERE)

The tanking economy has snarled many decent and honest people in the past 4 years. It has changed completely the lens of how we view banks, government and commerce as a whole. We’re probably more educated about how the housing market works than many companies would like us to be. And when Mike Matheny built a 17 room house in Wildwood back in the early 2000’s, it didn’t show much prudence, but it wasn’t necessarily a horrible decision, per se.

After all, Wildwood (nee Grover) was a burgeoning St. Louis suburb and even if Matheny was traded, he’d be able to find a buyer for the house and probably even make a little profit on the investment.

I remember about 2004, a good buddy of mine, calling me and telling me that something was F’d up with the mortgage industry. He was working right out of college at what we now know was chop shop for loans. Basically approving any amount of money for a loan as long as you had a job and pulse.  He had gone to college and studied economics and finance. He knew that giving 300,000 loans to people making 10 dollars an hour wasn’t going to last… but he was also making more money than he’ll probably make in the next 20 years.

Eventually, he quit. But he’s one of the few that actually questioned what the hell was going on. I don’t want to say that they’re weren’t others, but the vast majority of people knew that shit was going to hit the fan eventually, but decided to ride the gravy train until it de-railed. Hell, I went to college to study English and PR and I knew something was fucked up. Luckily, I just kept renting and trying to grind out the start of my career.

The bubble burst in a big way, in 2008, collapsing a vertical market worse than most people alive had ever seen. Comparisons were made to the Great Depression. And Mike Matheny was left personally guaranteeing over 11M worth of loans for property investments in St. Louis and beyond.

Recently the new Cardinals skipper stopped making house payments and decided to move back in with the in-laws. He was like millions of other Americans – underwater on his house and not getting a life preserver. It was the better financial decision to walk away.

Here’s where it gets sticky.

As a pretty responsible guy with minimal debt, a big part of me wants to know why Mike decided to leverage himself against a sum of money that was a little bit less than his total career earnings.  Even in rip-roaring times, it’s not a great idea.  So why did Mike do it?

That’s the question that I’ve been struggling with for the past couple of days. Even a big dummy educmucated in English from a public college in KY knows that A) you don’t want to personally guarantee loans and B) it’s not responsible to guarantee loans for what your projected to make… so why did it happen?

Greed? Bad advice? Irresponsibility?

Frankly, it’s none of my business. And I don’t expect Mike Matheny to have to answer questions about his personal finances. He’s done what he’s done and only him and the bank need to work out a plan to get square.

But It does give us a bit of insight into the decision making process of a grown man. Frankly, I’m disappointed.

Obviously, I wasn’t in the same position as Mike.  I didn’t have a multi-million dollar contract in 2004 or 2005. Maybe I would have made the exact same mistakes as Mike. But I wonder, at least a little, about the people like Mike that were so thoroughly beaten up by the housing and real estate market. Because I am sure that I could have gotten a loan for 200 or 300 or even 400 thousand dollars back then with very little effort.

I also knew that if something was too good to be true, it probably was. So I stuck to what I felt was right and didn’t get greedy.

Where was the same judgment for Mike? Did at any point did he think that all this was just a bit too easy? What is he learning from the position that he’s in? That’s what I’m curious about.

It’s easy to sweep this under the rug. I know that many people won’t think that this has a iota of meaning to how he manages. And perhaps it doesn’t. But as a dude that controlled himself during these crazy times, it’s always unsettling to hear the stories of the people that didn’t.

Just so happens that one of those guys is managing the Cardinals now. And frankly, we don’t have anything else to go off of.