High housing payments: the new American nightmare (bank owned, foreclosures)

[EscapeCalifornia]

Originally Posted by novaman

I live in the DC area and have been California dreaming for over half my life. I've always been mystified as to how Californians can afford their homes. Now I know. Yikes!! I would never want to live like that.

Californians virtually invented the term "house poor". Been there, done that, not doing it again.

[tickyul]

Fannie and Freddie artificially inflates housing prices....in some cases tripling the price of a home.

So the politicians get more and more power while at the same time making housing less and less affordable...............and, oh yeah......their buddies get ooodles of cash.

[NewToCA]

This is just a California issue, and in many parts of California the homes are very inexpensive.

Housing prices have significantly declined, property taxes have significantly declined and interest rates have significantly declined...not exactly a formula for folks having house price challenges.

Now, if you want to discuss the early 1980's with their super high interest rates...

[MotleyCrew]

Originally Posted by ducviloxi

Good article:
'High housing payments the new 'American nightmare' | - Business - The Orange County Register

about how an increasing percentage of people are paying upwards of 50% of their available income on housing in California.

The Garcias have a lot of company. Unnoticed amid the housing boom and bust, millions of California families entered risky territory, paying once unthinkable shares of their income for housing.

I must wonder if suddenly people have lost their mind and become insane? Or is there a new wave of stupidity that has besieged Californians in the past decade?

"I fell in love with it," the editor and writer said, "which was why I went against my Realtor's advice and bought it when she said it was overpriced."
Knight, 43, also ignored the implicit advice of her lender, who rejected her first two loan applications.
The loan she finally got was a five-year, interest-only adjustable for $390,000. She borrowed the remaining $90,000 on a line of credit. The seller refused to wait for Knight to sell her condo. It would take Knight nearly a year to sell the condo.

The above is the textbook definition of the term "Financial idiot"

You can't fix stupid and this moron will be crying in front of some camera in the future blaming the mortgage company.

[ryuns]

Hard to know how true it is, but how many times have we heard stories from an older generation about how they scrapped and scrambled to afford their first house, and plunked down half of their income to afford the payments? It wasn't wise then, nor is it now--the only difference is that the gamble didn't pay off when housing prices plummeted. This isn't a new breed of financial idiot, it was a lot of people who didn't understand the scope of the gamble they were taking and got caught holding the bag.

[DMenscha]

Originally Posted by tickyul

Fannie and Freddie artificially inflates housing prices....in some cases tripling the price of a home.

Love to see how they do that. Sources?

[EscapeCalifornia]

Originally Posted by DMenscha

Love to see how they do that. Sources?

Uh, by buying loans given to anyone with a heartbeat. Sure, Mr. and Mrs. Min Wage, you can get a loan for $700k for a house!

[tickyul]

Originally Posted by DMenscha

Love to see how they do that. Sources?

Fannie and Freddie has injected Trillions upon Trillions of dollars into the mortage markets.

Of course this artificially drives up the pool of money available for loans and demand for homes. If the demand for homes is artificially driven up......well, of course the prices of homes are going to go up and up and up way above and beyond what they would be if the "noble" government would have kept its filthy hands off of the mortgage markets.

And guess what, the above illustrates just a small portion of the harms F&F has done. No mention of Speculation driven by filthyFannieFreddie or the shakedowns done via the Community Reinvestment Act.

Oh yeah, when all is said and done, the taxpayers will probably be on the hook for 1/4 of a Trillion to cover filthyFannieFreddie's loses.

[mysticaltyger]

Originally Posted by nullgeo

The return of Feudalism ... been predicting this since I was a kid ...

I'm not sure what makes me angrier, the greed of the lenders or the fact that people are so eager to turn themselves into serfs .

[mysticaltyger]

Originally Posted by ryuns

Hard to know how true it is, but how many times have we heard stories from an older generation about how they scrapped and scrambled to afford their first house, and plunked down half of their income to afford the payments? It wasn't wise then, nor is it now--the only difference is that the gamble didn't pay off when housing prices plummeted. This isn't a new breed of financial idiot, it was a lot of people who didn't understand the scope of the gamble they were taking and got caught holding the bag.

I'm not so sure about that. Prior to ~ 1980, it was almost impossible to be paying 50% of your income toward your mortgage; and the mortgage craziness didn't really start going off the rails until the 1990s.