Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Very interested in hearing thoughts on this article.... I mean really...a $500,000.00 home for 4 people....I think their priorities were in the wrong place. Does it really take that much house for 4 people?
What can I say? It's true that there really is no help for those who want to try to keep their home rather than going through a foreclosure. I know that I will never again attempt to buy a home unless I can do so without a mortgage.
I agree w/the OP. The main part of the foreclosure crisis (other than the shady loans) was people who decided to live beyond their means. That doesn't mean they deserve such a nightmare, but it was their gamble to begin with. I don't know...it's hard for me to feel sorry for these people. Fortunately my husband and I have not been affected by the financial crisis, but we still took advantage of the new rules and refinanced our house. It took one phone call, one visit to the bank, and three weeks. The attorney came to our house for closing, we got $2000 back from escrow, and our payment is now $250 less than before. I'm not sure where people run into roadblocks such as the one in the story.
What do you consider to be beyond someone's means? When your income drops from $100,000 a year to zero, and stays there, then anything is pretty much beyond your means. When your cost-of-living expenses (i.e. those expenses that you have no control over) grow to the point of where they exceed your income, then are you living beyond your means?
Probably the only way to not live outside your means is to have an entire year's salary sitting somewhere safe in case one job is lost. I don't know a lot of people who can do this.
I chalk this one up to buying what one can finance vs what one really needs. Too many make this mistake these days and hence, live so close to the edge that any change in finances spells disaster.
The whole concept that 1/2 million dollar homes became as common as water just boggles the mind. In this particular case, they should have let the bank take it. It's probably lost $200K by now.
$500K is not us. But if someone has / had a job that afforded that house and that was their "dream" I say go for it.
BUT just like everyone else--lose a job, can't make a payment it doesn't matter if it is a $75K palace or a $500K palace.
FORECLOSURE sucks and hurts everyone in the community.
I agree w/the OP. The main part of the foreclosure crisis (other than the shady loans) was people who decided to live beyond their means. That doesn't mean they deserve such a nightmare, but it was their gamble to begin with.
Agreed. I see nothing wrong with spending $500k (or more on a house), provided one has the means to reasonably afford such a place to begin with (which is not necessarily the same thing as being able to finance that amount).
What a lot of people don't seem to realize, the USA does not have an economy where the average middle class family can come anywhere close to affording a 1/2 million dollar home. We had the illusion that people could do this, but the fact was hidden constantly by reselling and refinancing. It was a huge pyramid scheme where the constant building, flipping, etc etc hid this reality. However like all pyramid schemes, it eventually collapses. We are seeing the beginning of this now.
It's pretty simply math. in late 2007 the median household income actually dropped to lower than that in 2000. Yet during the same period the median house price rose 87%. No way that can be sustained. This is why I say that anyone purchasing a home in this area for more than $250K, whether they can get financing or not, is asking to be taken to the cleaners several times over.
The government and the federal reserve are attempting to address this asset devaluation by destroying the currency. If they can destroy the currency faster than the devaluation it will make it seem that things are getting better for a while. (...as long as the other countries continue to buy the debt)
The problem is many middle-aged/younger generations never had faced a crisis like this before. They've been brainwashed from the media, government, realtors (NAR), you name it about the "benefits" of owning a home and advocating risky mortgages...
Paul Kedrosky: The Life and Lies of the National Association of Real Estate (http://paul.kedrosky.com/archives/2008/01/08/the_life_and_li.html - broken link)
Ok, so what happens when you take people who prop up the market and combine them w/the following....
-slippery people in the mortgage industry (promoting liar loans....ask CCubs about this one)
-delusional potential homeowners who think that they can afford a 500K loan making 10K/year flipping friggin burgers at Mickey D's.
You get the mess we are in now. Problem is these suckers (ie homeowners) are left holding the bag. Now Govco wants forgive financial bad behavior to make everything all right....
Gotta love the USA!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Foreclosure has no respect
