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I was reading an article that said TX,CA and two other states ( I forget the other 2) have the highest rates of foreclosures. But when I looked at the homes in TX, they were mostly in the 100k range.
So my question is..what the heck is going on when people can't hold on to a 100k mortgage thats probably $700 a month with tax and insurance??? is the job market so bad that they can't get another job or are the pay out there so low that a 100k mortgage in TX is like a 300k mortgage in CA?
I'm not being a snob. I know no one wants to walk away from a house unless they have no choice, so I'm trying to figure out whats going on before I get myself into serious trouble. I know in CA, people were getting ARMs and couldnt make the payments when they adjusted up..but thats for mostly 500k+ homes. I cant imagine that they overpaid for their homes by paying 100k so they'd rather let the bank have it back...it must be something else and not knowing what is really making me nervous.
I'm nervous that I'm going to jump from the fire into a frying pan since I dont have a job lined up. So do you think relocating to TX be an insane move without getting a job first? especially since I'm a recruiter and it looks like finding jobs out there must be difficult.
I'd be much obliged if I could get some clear headed thinking from y'all
As far as I understand, we are seeing the lower range of houses being foreclosed upon simply because the banks were not judicious in their lending practices. They were lending to just about anyone who came through the door, weren't doing solid credit checks, and the results speak for themselves. It happened across the board, even in million dollar neighborhoods, but some in that range managed to extricate themselves before being foreclosed upon.
Meanwhile, you can see the $$$ banks were gaining while they were not adhering to lending standards, as evidenced by the "Bank on every corner possible in Dallas, TX". I live in Lakeood, and if I see another bank go up I am going to hurl!!
Anyway, those are my thoughts on why you see so many in that price range.
This is total crap. Everyone does not "deserve" to buy a home. As adults we are responsible for our own decisions. That includes people like me who do not drive BMW's. I do not own a house because I cannot afford one right now. That some lender might be willing to give me a risky loan does not absolve me of the final responsibility for my own decisions. Quit blaming the banks and lendors. Figuring out that one can or cannot afford a house is not rocket science. It's just people being greedy and stupid with their decisions wanting things they cannot afford. It sure as heck is not up to the lenders to then take a financial hit by letting someone slip by on payments they cannot afford when that person should not have taken out a mortgage to begin with.
It is so tiresome to listen to people try to make excuses for those who make stupid decisions in their life, and it is outrageous that the government would swoop in to help these people while smart, responsible people like myself get stuck with the tax bill.
The banks are just as responsible as the buyers. No one deserves to be let off the hook here. Those taking out loans should be figuring out ALL the costs involved and deciding if they can truly afford it. Those giving out the loans should know their industry quiet well and be intelligent enough to NOT loan money to risky buyers.
Both sides should be equally blamed and a lesson learned by both ends of the spectrum.
Me and my wife have been renting since we were married because of various reasons. If we would have went to buy a home 2 years ago, we would have EASILY qualified with the easy credit loans being served high on silver platters. But today we would likely be just another foreclosure. So while we were responsible in our choices, the banks would have GLADLY assisted us in making an irresponsible decision. Now that the banks have tightened up all their qualifications for a loan, maybe we will see just a touch of common sense return to the whole process for everyone.
BTW, our idiot politicians are running to the aid of the banks to keep them from going belly up due to ignorant lending practices.
"The banks are just as responsible as the buyers. No one deserves to be let off the hook here. Those taking out loans should be figuring out ALL the costs involved and deciding if they can truly afford it. Those giving out the loans should know their industry quiet well and be intelligent enough to NOT loan money to risky buyers.
Both sides should be equally blamed and a lesson learned by both ends of the spectrum.
Me and my wife have been renting since we were married because of various reasons. If we would have went to buy a home 2 years ago, we would have EASILY qualified with the easy credit loans being served high on silver platters. But today we would likely be just another foreclosure. So while we were responsible in our choices, the banks would have GLADLY assisted us in making an irresponsible decision. Now that the banks have tightened up all their qualifications for a loan, maybe we will see just a touch of common sense return to the whole process for everyone.
BTW, our idiot politicians are running to the aid of the banks to keep them from going belly up due to ignorant lending practices."
This is the best response on this entire thread and he is spot on. There is enough blame here to go around..
The banks are just as responsible as the buyers. No one deserves to be let off the hook here. Those taking out loans should be figuring out ALL the costs involved and deciding if they can truly afford it. Those giving out the loans should know their industry quiet well and be intelligent enough to NOT loan money to risky buyers.
Both sides should be equally blamed and a lesson learned by both ends of the spectrum.
Me and my wife have been renting since we were married because of various reasons. If we would have went to buy a home 2 years ago, we would have EASILY qualified with the easy credit loans being served high on silver platters. But today we would likely be just another foreclosure. So while we were responsible in our choices, the banks would have GLADLY assisted us in making an irresponsible decision. Now that the banks have tightened up all their qualifications for a loan, maybe we will see just a touch of common sense return to the whole process for everyone.
BTW, our idiot politicians are running to the aid of the banks to keep them from going belly up due to ignorant lending practices.
The banks may be complicit, but you and I will have to agree to disagree. I believe that for adults, "the buck stops here" with the decisions we make. We're not children. I appreciate that banks may have gladly given you a risky loan, but at the end of the day it was your choice to say no, which you did. Others said yes where they could have been responsible like you and me.
I agree that our politicians are idiots. Neither bank nor borrower should be shielded from the consequences of their bad decisison.
The consumer is responsible for their loan. Shame on them if it was a bad choice.
The bank is responsible for their investment decisions. Shame on them if it was a bad choice.
But in no way is the bank responsible for a bad consumer choice.
Brian
Absolutely you and rb4browns hit the nail on the head.
Blaming banks for consumers failing to educate themselves and making bad investment decisions is crazy.
Blaming the borrowers for the banks being to stupid to realize that if you loan people money for a house they can't afford you'll end up with no money and a lot of foreclosed houses would be just as crazy.
The unforeseen can always happen, and I understand foreclosures caused by someone loosing their job, and being unable to get another. Things like that do happen in economic downturns, but how people thought they could afford houses costing more than 4 times their annual salary, or how banks thought someone could make payments on a loan for four times their annual salary, I just can't understand
I work for a major bank and I can promise you that the lenders play a major role in this mess. Add lenders who relaxed there underwriting guidelines with mortgage officers and brokers who get paid commission and it equals disaster. Many buyers were told to take a ARM loan and they could refi down the road. I believe a individual should be responsible for their own actions but giving him false information does not make the decision easy. Add the flippers who were in it to make a quick buck the problem is magnified. The borrowers certainly share a large part of the responsibility. For most people a house is the largest investment you will ever make and to sign your name to something you know you can't afford is just stupid. Everybody has to shoulder some of the blame for this mess. It's no different than a shady contractor taking advantage of a elderly person. You simply can't put all the blame on the elderly person although they are ultimately for signing on the dotted line.
I work for a major bank and I can promise you that the lenders play a major role in this mess. Add lenders who relaxed there underwriting guidelines with mortgage officers and brokers who get paid commission and it equals disaster. Many buyers were told to take a ARM loan and they could refi down the road. I believe a individual should be responsible for their own actions but giving him false information does not make the decision easy. Add the flippers who were in it to make a quick buck the problem is magnified. The borrowers certainly share a large part of the responsibility. For most people a house is the largest investment you will ever make and to sign your name to something you know you can't afford is just stupid. Everybody has to shoulder some of the blame for this mess. It's no different than a shady contractor taking advantage of a elderly person. You simply can't put all the blame on the elderly person although they are ultimately for signing on the dotted line.
As I wrote earlier, that the banks/lenders are complicit does not mean they are to blame. Most of the foreclosures we are seeing are not happening to the elderly or those unable to properly care for themselves. They are happening to irresponsible adults who made poor life choices out of greed, envy or as you so aptly wrote, stupidity. Nevertheless, adults are still 100% responsible for their stupid choices.
IMO--most of the people who want to disengage the banks/mortgage co/fed from any responsibility for promoting/aiding/abetting people who were working the system and running a HUGH scam--are republicans who always want to blame individuals and never big govt--although that is supposedly the party that abhors big govt intervention and taking over aspects of american living
sure--some of those people caught in the mortgage crunch were trying to beat the system--they used mortgage properties to buy other mortgaged properties planning to sell and pay off everything or pass it along to the buyer and make a profit--most of them got caught holding the bad and screaming about how they were mislead...but the people who made MONEY were the lenders and people who packaged the sub-prime mess of mortgages and had no moral conscience about what they were going to be leaving behnd--
do you think it is irresponsible to sell teens beer or liquor--they certainly want to buy it even if they should know better--according to most of the let-the-buyer-beware rationals--it is their fault if they buy what I sell and get into trouble--how good is that justtification--not very--which is why there are laws preventing it and punishment when people break the law--
but for every person like the "investor trying to get rich" there is probably another story====a couple----a young family who had always lived in rentals--a single mom with kids--people who wanted someplace to call their own--someplace that would give them a piece of the American dream--yes, they should have known they could not afford what was being advertised as affordable--but many of these people are not well-educated, have little exposure to long-term planning since they live paycheck to paycheck--they heard what they wanted to hear--
they were sold a bill of goods--the people selling them that loan KNEW that there was no way those people could manage in the future when the interest rates when up--and frankly when the contract was signed, they could have cared less what happened to those people--they took their bonus money--sold the loan for another profit to some investment arm who also could have cared less---
the same govt that brought you the savings and loan scandle in the 80s has contrived to create a situation that allowed the sub-prime debacle to blossom--
excess money in the system is just a siren's call for excess behavior--someone will work out a way to take advantage of it...
Last edited by loves2read; 07-22-2008 at 07:32 AM..
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