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View Poll Results: How do you think the bailout should be addressed?
Let Congress do the heavy lifting. They know more than we do and will have the best solution. 3 11.54%
Bottom-up bailout is something to consider. Let families decide how to address the problem with a bottom-up bailout. 11 42.31%
It's all smoke and mirrors. Take two aspirin and call me in the morning. 10 38.46%
I've got my own brilliant plan and will share it, below. 2 7.69%
Voters: 26. You may not vote on this poll

 
 
Old 09-30-2008, 11:41 AM
 
Location: Barrington
41,854 posts, read 31,725,984 times
Reputation: 14078

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Quote:
Originally Posted by saganista View Post
Yes, we need to stop the bleeding, but if the patient is going into cardiac arrest, we will need to deal with that first. Once an at least relatively normal sinus rhythm has been restored, we can get back to dealing with those damaged arteries...
Good analogy. The MDs in the ER do not hold back life support while they ponder who or what is the root cause of the problem or afix blame on the evil Big Mac Machine that forced inocent people to eat the product they sold.
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Old 09-30-2008, 01:43 PM
 
878 posts, read 1,846,372 times
Reputation: 460
Quote:
Originally Posted by TristansMommy View Post
It was a bad product in the sense that it was an ARM I purchased with an NOT a fixed rate. If I had been in a fixed rate I would be fine.
So you got what you agreed to buy. I don't see the problem.

Quote:
Originally Posted by TristansMommy View Post
NOw.. why did I purchase with an ARM.. basically I wasn't offered a fixed rate.
...
I was also advised since I was putting down money on the house and if I paid my mortage on time, I could improve my score and be offered a fixed interest rate at refinance. I figured that all those thing combined with improvements to the fixer upper (new kitchen/bath) that is supposed to add value, I would be a safe bet for a refi . So.. I did all those things.. my score shot up to a decent number etc. All my ducks were in a row.. However, the market started tanking and ate up any equity I had putting me at a high LTV..and as a stated individual self employed the LTV became too high for them to give me refi .
I understand the situation, don't think that I don't. We were first time homebuyers recently. But I didn't get financial advice from the company giving me a mortgage, it was her job to make money off of me. I did research, found information about various rate structures, interest rates, etc. My wife and I knew 2 years ago that we wanted to buy a house, so we started to build our credit. I bumped up the line of credit on my VISA, she took out another credit card, etc.

But you said you figured that what you were doing was a safe bet. That doesn't mean no risk, just low risk.

Quote:
Originally Posted by TristansMommy View Post
I was told by another broker on this board that I should have been offered a fixed interest rate at a rate that was above the one that I recieved at the inial 6.95% (which was above the best rates that were being offered to those with the best credit scores,btw. What I didn't know was that brokers recieve more money for pushing ARMS on the public. So.. as a first time homebuyer, while I thought I did the best thing I could do, turns out that I didn't.
So you didn't do your homework. You didn't shop around. If all a broker had offered me was an ARM, I would have said "no thanks" and gone to the next broker down the line.

Quote:
Originally Posted by TristansMommy View Post
Stop demonizing the homeowners. Wall Street gambled with YOUR 401K's and with the financial economy. THEY are supposed to know what they are doing. Little Joe Homeowner doesn't.. not really. They couldn't figure that if things went south for them personally that the entire economy would tank.. but Wall Street could and just ignored it because they were making the big bucks.
Why shouldn't we blame people who made bad decisions? I think Fannie Mae and Freddie Mac should suffer for their bad decisions, just like the foreclosed homeowners. I'm not saying you're a bad person, but you were irresponsible. You didn't appreciate the risk you were taking with your home or find out how to minimize that risk, and you got caught because of that mistake. But I do applaud you for taking the time to sell your house, and avoid foreclosure. Because while you were irresponsible in making the choice, you were very responsible in your actions after the market crash.

You'll be rewarded in a couple years when you decide to buy again, because you'll be better prepared, not have a foreclosure on your credit report, and will have a good knowledge of what to expect.

We all take risks in our lives. Sometimes you win, sometimes you lose. But if you had made out well on this house, and made money on it, then would you take a fixed loan next time, or would you continue to gamble with an ARM? Possibly with a lower LTV?
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Old 09-30-2008, 02:07 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,112,847 times
Reputation: 908
Quote:
Originally Posted by zman0 View Post
So you got what you agreed to buy. I don't see the problem.


I understand the situation, don't think that I don't. We were first time homebuyers recently. But I didn't get financial advice from the company giving me a mortgage, it was her job to make money off of me. I did research, found information about various rate structures, interest rates, etc. My wife and I knew 2 years ago that we wanted to buy a house, so we started to build our credit. I bumped up the line of credit on my VISA, she took out another credit card, etc.

But you said you figured that what you were doing was a safe bet. That doesn't mean no risk, just low risk.

Low risk.. anything i life is a risk.. you can buy a house with a fixed rate mortgage and someone can get sick or die.. life is not without risk.. nothing is without risk..

I didn't know I wanted to buy a house 2 years before I did. I actually felt pushed into it by my circumstances. I had to move two times in 2 years from rental to rental (through no fault of my own, but owners circumstances) and that drove me crazy.. We became pregnant and wanted a stable home for our child. We had money saved, no credit debt .. and we were watching housing rise and were afraid that it would be out of our reach if we waited too long. I should mention that rentals are hard to come by here on LI..


So you didn't do your homework. You didn't shop around. If all a broker had offered me was an ARM, I would have said "no thanks" and gone to the next broker down the line.

It was my impression that the broker was the one that does the shopping around for you and tries to find the best product for you. Perhaps mortgage brokers need to have disclosure laws like Real Estate agents do to figure out where their fiduciary duties lie with. Yes.. I trusted the person I was working with.

Mortgages are extremely complicated and can make your head spin. I went to a professional whom I thought I could trust and learned the hard way that I guess I couldn't after all.. So shame on me.. won't happen again..that's for sure.


Why shouldn't we blame people who made bad decisions? I think Fannie Mae and Freddie Mac should suffer for their bad decisions, just like the foreclosed homeowners. I'm not saying you're a bad person, but you were irresponsible. You didn't appreciate the risk you were taking with your home or find out how to minimize that risk, and you got caught because of that mistake. But I do applaud you for taking the time to sell your house, and avoid foreclosure. Because while you were irresponsible in making the choice, you were very responsible in your actions after the market crash.


Thank you, first for acknowledging that I did the right thing after.. I appreciate that. Remember..hindsight is 20/20 . If we could all have a time machine to go back and help ourselves avoid mistakes we made, life would be very easy.

I don't neccesarily feel that either side deserves any bailout. I never asked for one.. what I had asked for the entire time was for lenders to work with people like myself. I really wasn't a bad homeowner.. adn it boggles my mind taht someone paying 3300/month for a small starter home on LI could end up foreclosed on. My initial rates were a health 6.95% .. they weren't interest only, I wasn't 100% finaning nor was I a really low teaser of like 2 or 3%. I had paid on time every month.. no problem. I really thought I had proven myself.. and I was dedicated to holding on to my home.. I do believe that if there is going to be some kind of bill or help it shouldn't go to just Wall Street and the lenders.. that you need to help the homeowners AND protect tax payers too.. It's important to remember that I pay income taxes too just like everyone else NOT caught in an ARM.

But. in the end I knew I couldn't.. the strain of the $800 increase was just too much.. and the fact that it could go up with no possibility in sight of getting into a refi'd fixed rate soon just meant that my losing it was inevitable. I didn't want to just abandon the house and have it all boarded up...

I do love my house.. and when it closes I will be sad. My husband put a lot of sweat equity into it and we took pride in it. His work was impeccable (he was a carpenter previous to his current business) and as a matter of fact we had two peope through here that were in the business that thought his work was beautiful.


You'll be rewarded in a couple years when you decide to buy again, because you'll be better prepared, not have a foreclosure on your credit report, and will have a good knowledge of what to expect.

We all take risks in our lives. Sometimes you win, sometimes you lose. But if you had made out well on this house, and made money on it, then would you take a fixed loan next time, or would you continue to gamble with an ARM? Possibly with a lower LTV?

I don't think I would have ever taken an ARM mortgage. I f I had been offered a fixed I would have taken that. I don't like fluctuating numbers..LOL.. seriously.

Yes.. I will be better off. I learned some very hard lessons. Anyone who thinks homeowners are not suffering are sorely mistaken. It not only beats you up financially, but emotionally. All the harsh judgement doesn't help either.. because most of you really can't say you saw it coming.. because apparently the ones in the "know" on Wall Street didn't even see it coming. People make mistakes.. and this mistake should have only affected me and my lender.. actually mostly me more adversly because the bank gets the property. The problem is, I had no idea there were so many out there that were going to default.. I had no idea that 2 years later my house would be worth $120K less than it was in 2005 (the new appraisal has it worth $120K less). Geez.. if I would only have waited then I probably would be buying a house today that I would live in forever!!

But.. the upside is that a) I've learned some valuable (although expensive ) lessons and b) It's forced me to finally detatch myself from where I grew up as I'm moving off Long Island forever (I'm the last one left of my family here!) c) the housing market will not rebound so quickly anytime soon and I will hopefull be able to buy a much better house in a few years (hoping 2-4) at a much better price (and since it's a cheaper area, much more for less) and d) I hope to buy it with mostly cash.. as I really do not want any lenders making anything off of me.. actually my secret wish is that the family i'm renting from will do owner financing after I put a nice chunk down on it if I have to finance.
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Old 09-30-2008, 07:43 PM
 
Location: Moon Over Palmettos
5,975 posts, read 17,144,848 times
Reputation: 4989
mod cut: orphaned

In English, and in any other language, signing up for an ARM loan opens you up for a definite change in terms after the fixed period is up. You are gambling that it goes down, or up only to the extent that you can afford it. There is NO other interpretation of an ARM other than that. Risk is risk. You took the risk and you lost. In the end, regardless of what you claim was bad advice, it was you and yours that put your signature on that loan. Therefore you assume full responsibility for making your mortgage payments.

Last edited by scirocco22; 10-02-2008 at 01:57 PM..
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Old 09-30-2008, 09:11 PM
 
Location: Pinal County, Arizona
25,107 posts, read 34,366,957 times
Reputation: 4893
TM - fact check time:

You did not need to take out an ARM. If you did not like an ARM - you could have easily gone elsewhere. Or, you could have simply not purchased the home.

You knew the ARM might adjust - and if it did, so would the payments.

You took the risk.

Voluntarily.
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Old 10-01-2008, 12:24 AM
 
Location: southern california
55,237 posts, read 72,415,357 times
Reputation: 47455
1 trillion give away, a reward for bad management does not work for me.
make the market responsible for its behavior.
right now the banks are playing games with buyers. right now. if they were really hurting they would not be doing this.
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Old 10-02-2008, 01:39 PM
 
5,598 posts, read 17,002,398 times
Reputation: 4709
...temporarily closed for editing.

Just a reminder, this is the Great Debates Forum. Several of you have to go back and read the Administrator's guidelines for this forum.


http://www.city-data.com/forum/5187995-post1.html


And, a word of advice before participating in another thread in this forum, please do not direct your responses directly at the member you are debating. Attack what they are presenting ...NOT them! NOT allowed will be any snide or snarky attacks which are inherently directed on a personal level instead of attacking the ideas that the member is posting.

Last edited by scirocco22; 10-02-2008 at 02:11 PM..
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Old 10-02-2008, 02:10 PM
 
5,598 posts, read 17,002,398 times
Reputation: 4709
Many posts have been deleted. Remember, you can only see your own deletion notices and you own infractions. You can't see the deletion notices of others nor infractions issued to them.

Again, please re-read the Administrator's guidelines.

No personal banter when disagreeing with one another. Stick to the substance of the writer's words rather than bantering with the member on a personal level directly.

This forum will be more heavily moderated so a word to the wise, if you have trouble with the guidelines in this forum, please limit your participation to the general P&OC Forum.

Thanks and have fun ...*laughs* yes, you can still have fun if you're a serious debater. If not, please do not participate here.
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