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Where's the personal responsibility when you buy something you know you can't afford? Just because Joe Realtor gives you a line, that gives you a free pass to make the biggest mistake of your life?
Again, this is typical of America today. Everyone wants to shift blame and no one wants to take personal responsibility for making mistakes. Yes, there were pressure to buy back then, but there is pressure EVERY DAY to buy things and do things that are not right. People buy new cars every day that shouldn't because they can't afford it. But should we blame the dealers? I don't know, you tell me.
I don't need a lecture about personal responsibility. And I didn't commit any mistakes, thank you. I didn't say I bought something I couldn't afford. In fact I bought something WELL within my means that I knew I could still pay the bills on even if I lost my job (which I did). Still, after I bought it in 2002, the price soared by 2005 to nearly 70% more than I paid three years earlier, but then by early this year had plummeted to 30% less than what I paid (and only 45% of what it was at its peak in 2005). It has rebounded since hitting the bottom in April and is now worth 10% more than I paid for it.
Oh, and by the way, I will be paying off the balance of the mortgage either today or tomorrow.
I don't need a lecture about personal responsibility. And I didn't commit any mistakes, thank you. I didn't say I bought something I couldn't afford. In fact I bought something WELL within my means that I knew I could still pay the bills on even if I lost my job (which I did). Still, after I bought it in 2002, the price soared by 2005 to nearly 70% more than I paid three years earlier, but then by early this year had plummeted to 30% less than what I paid (and only 45% of what it was at its peak in 2005). It has rebounded since hitting the bottom in April and is now worth 10% more than I paid for it.
Oh, and by the way, I will be paying off the balance of the mortgage either today or tomorrow.
brichard, didn't you realize I wasn't talking about your personal situation? That post was a general statement regarding people who got in trouble over the years.
Absolutely. This is probably the only legal way to stop this, or slow it down and sandbag it...at least until unfortunate people start griping that they can't get a loan and the restrictions are loosened again...wash, rinse, repeat.
All I know is that I'm a "survivor" of the Central Florida housing insanity--survivor in the sense that I was lucky enough to not get loaded with the baggage of an extremely overpriced house--and I saw it all first hand...and was laughed at when I told people those prices were ridiculous. In fact, I was not only laughed at, I was berated and made out to be a moron for questioning it!
I experienced the flipside of it. My mom sold her home in NY during the bubble and got a nice fat check since her home was paid off. I remember the agent saying there would be a bidding war on the house (and there was). While the home was nicely maintained, it was dated. 70s cabinets, laminate countertops, blue bathtub and blue tile in the bathroom, etc. Only the vanity was updated in the half bath! A couple of my friends were ready to buy then, and they were freaking out because it was so expensive and they just thought it would continue to go up. They weren't sure whether to continue to save or just buy. I kept telling them just save your money because prices will either fall or flatline. It's not possible for it to continue to rise exponentially. Unfortunately they didn't listen and bought and stretched themselves. They're still ok since they are engineers and have good jobs, but who knows how far underwater they are. I feel bad for some of them though, one couple bought right at the peak in 2006. We were all just around that age of recent grads, then getting married and then ready to buy. I think partially it was due to bad timing. I'm so thankful I wasn't ready then or looking.
I have many many many friends and family who did get snared in the trap and bought during the boom. Some are filing for bankruptcy...others sit and watch their once $250k+ neighborhood get auctioned off $80k at a time. It's really sad. Heck, we were an offer away from buying a house ourselves down there. We'd be so screwed we wouldn't know which way is up right now if we did!
brichard, didn't you realize I wasn't talking about your personal situation? That post was a general statement regarding people who got in trouble over the years.
I'm glad you're paying off the mortgage.
Um, no, obviously I didn't realize you weren't talking about my personal situation. That wasn't clear at all. Your opening statement was "Where's the personal responsibility when you buy something you know you can't afford?" How am I supposed to deduce from that you're not talking about me? Besides, I was fortunate to have bought when I bought. If you were living in Charlotte thoughout that period, where the growth in real estate prices was relatively steady, then you wouldn't understand the pressures a lot of people were under in places like San Diego, where they were soaring. Sure, there were some irresponsible people, but there were an awful lot who were worried after things were getting out of control that, if they didn't hurry and buy, they'd never be able to because the so-called experts there were saying prices would keep rising indefinitely and never fall. And I'm talking about real estate experts who were brought onto local talk shows and in the newspaper to address the local market. Back around 2003 and 2004, hardly anyone there was saying it would crash. It was all about, better hurry now and find a way to buy or you'll be locked out forever.
I have a friend in Miami, which had a somewhat similar market. He had his own business and bought a condo. Then he had a run of bad luck and had to close the business as it began losing money right and left when the economy started going south. He was going bankrupt. Suddenly, he was in a situation where he couldn't pay the bills anymore, bills he previously could well afford. But he couldn't sell the condo, either, because of the real estate crash that dropped the value of his home way below what he had paid for it. Another consequence was he couldn't afford health insurance anymore. Then early this year, he got very ill with TB. He started e-mailing his "goodbyes" to all his friends. But thank God he's a French national where everyone has health coverage. His family back in France got him a plane ticket home to Paris and he was immediately put in the hospital there, and they kept him there a couple weeks after the surgery so he could gain his weight back (unlike here where the insurance companies would kick you out of the hospital after a day). Healthwise, he's now alive and very well (would be dead had he not been French). And the Miami real estate market is starting to come back, so he's recovering the value on his property now. He also recently was reemployed after nearly two years without a job. Bottom line: bad and unexpected things can happen even to people who are trying to do the right thing.
The only thing I agree w/you on is that there should be some rules in place. However, (and we can get Chicago Cubs to chime in on this). MAKE IT TOUGHER TO GET APPROVED FOR A LOAN. Like the way things used to be 40+ years ago where you couldn't get a loan w/o a vg credit score or spend more than 2 1/2 times your income. Once you do that, then irresponsible people won't get approved for a loan and then they can't foreclose.....
I will agree with this as well. But then the eventual problem, like Metallisteve pointed out, is that you will wind up with a segment of society that simply cannot qualify for a loan - and the end result will be a loosening of restrictions, or maybe some new type of creative financing plan, because there will be complaints that the current lending system is discriminatory and is preventing people from being able to buy that first home. And heaven forbid an elected official suggest that some people simply cannot have what they cannot afford - someone else will come along and tell them that they hate poor people.
^I agree with everything you said and it is unfortunate. There was a time, and not so long ago, that people had to prove they could pay for the credit they were being offered. Somehow in the last 30 years this has been turned into some kind of civil right. I suppose this is what happens to an economy that was once based on production to one that is based on consumption. It's unsustainable of course and we are seeing the first pains of that now.
What needs to happen is that money supply should be linked to industrial production but this is unlikely to happen because it hurts the one group that controls almost everything, the bankers. This is the way it used to be however. People need to look at what they can afford and not what they can finance. Completely different way of looking at things.
In an article today in the Observer the developer says...There's "no way" the Vue condo tower will convert to rental units, as other uptown projects have done.. I'm sure the current buyers hope he had a bible under has hand when he said that.
Article: CEO sees clear sailing for Vue condo project - CharlotteObserver.com (http://www.charlotteobserver.com/breaking/story/1017002.html - broken link)
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