Todays newsday (Clinton, Rush: foreclose, mortgage, credit)

[lialleycat]

Originally Posted by newtoli

When we bought in 2006 - My credit was ok, but not stellar due to some issues when I was younger (collections on there, that were paid but still affecting my score). My husband is self employed, so I believe we also had to go stated. We pay a higher interest rate due to this.

I guess the difference is, even though the broker was pushing us to fudge the stated income and buy much, much more house than we could afford on an ARM, we refused. We bought a house at 3x annual salary, which was the max we were willing to go. Brokers were offering us loans up to 6x annual salary! We insisted on a fixed rate mortgage as well. I can remember the broker offering us super low payments on an adjustable rate and thinking "Why on Earth would anyone get a loan where their payment could go up!"... the whole point of buying a house (to me) was knowing you'd always have the same payment.

Well, our mortgage has never been late, we pay on time every month, my credit score has improved, and we feel like suckers watching people not pay their mortgages, then get their principal reduced into a lower payment, or get a short sale, or get a refi into a REALLY low rate... while we just keep plugging along. We called our bank to look into a low cost refi, and they told us they couldn't do anything until we were LATE on our mortgage. Unbelievable.

I was in a similar situation and also took the fixed loan for an amount I could afford. I too feel like the sucker because the people who took loans they couldn't afford are getting handouts and now that I'm divorced (not something I could have predicted back then), it's hard for me to make my payments, but I'm still doing it. It means going without a lot of luxuries and keeping up my over 10 year old car, but I signed a 'promise to pay' on my mortgage and I intend to keep that promise!

My life has taught me to examine the motives of anyone trying to sell me something. The mortgage brokers make more if they can get you to borrow more, so they do not work in your best interest. I guess some people were so blinded by the house they wanted and they got into situations they couldn't afford. I feel bad they made a rotten decision, but that doesn't mean my taxes should bail them out! They have to take the consequences of their actions and move on. It's a hard lesson, but it is one that needs to be learned or they will continue to make unsound financial decisions their entire lives.

Life has consequences and some of them aren't fun. These later generations are so sheltered and protected from harm that they think they are entitled to things the easy way. It makes me angry.

[sickofnyc99]

Those "later generations" will be choosing your nursing home so be nice!!!

[maisy123]

Originally Posted by TomMoser

I'm not so sure that people in the towns you mentioned were flipping. I think that they saw an opportunity to own a home.

Keep in mind that the housing mess is a direct result of the Democraticly controlled congress attempting to socially engineer using the banking system. Banks were mandated under the "Community Reinvestment Act" to lend money in poorer neighborhoods. In order to accomplish this, they needed to lower their underwriting standards. In addition FNMA and Freddie Mac were mandated to purchase lower quality loans.

The net result of all this was that marginal loans were made in marginal communities to financially unsophisticated borrowers.

Tom is dead on. I completely agree. Don't forget about the hedgies that were demanding more of the mortgages that were so lucrative in a booming market. They practically gave lenders marching orders to produce more mortgages. There is plenty of blame to go around. I do however feel for the homeowner struggling to pay a mortgage they got from a predatory lender on a home now worth 30% less than when they bought it.

[nancy thereader]

I totally agree with you, omg. That took such advantage of very gullible & naive people.

[totallyfrazzled]

Originally Posted by lialleycat

These later generations are so sheltered and protected from harm that they think they are entitled to things the easy way. It makes me angry.

I agree. My 25-yr-old nephew has always had a good head on his shoulders compared to most of his age that I've seen... has ZERO debt...makes 60K/yr gross... pays his credit card bill in full each month... and yet he is completely unwilling to buy what most people would consider a "starter house". He grew up in a 3500 sq ft house, then his parents moved into a 4500 ft one, his friends' parents all have large homes; and so that is what he has always been used to. He says that he "just couldn't stand living in a place he'd hate" (i.e., something like an 1800 sq ft house on 1/4 acre) and so he rents an apt for $2000/month while moaning about the stock market now making it impossible for him to afford the $625K turnkey house (with pool, of course) that he wants, until "things turn around." Meanwhile he gripes and moans and groans about how "unfair" and "unlucky" it is: "Why me????"

They want it all and they want it NOW.

They also assume that things (job, income, health) will simply get better over time, and that no unexpected disasters will befall THEM. Other people, yes. But not them.

I see and hear these attitudes from so many twentysomethings, and I'm not sure whether to laugh or cry.

[lialleycat]

Originally Posted by totallyfrazzled

I agree. My 25-yr-old nephew has always had a good head on his shoulders compared to most of his age that I've seen... has ZERO debt...makes 60K/yr gross... pays his credit card bill in full each month... and yet he is completely unwilling to buy what most people would consider a "starter house". He grew up in a 3500 sq ft house, then his parents moved into a 4500 ft one, his friends' parents all have large homes; and so that is what he has always been used to. He says that he "just couldn't stand living in a place he'd hate" (i.e., something like an 1800 sq ft house on 1/4 acre) and so he rents an apt for $2000/month while moaning about the stock market now making it impossible for him to afford the $625K turnkey house (with pool, of course) that he wants, until "things turn around." Meanwhile he gripes and moans and groans about how "unfair" and "unlucky" it is: "Why me????"

They want it all and they want it NOW.

They also assume that things (job, income, health) will simply get better over time, and that no unexpected disasters will befall THEM. Other people, yes. But not them.

I see and hear these attitudes from so many twentysomethings, and I'm not sure whether to laugh or cry.

Yup, I was so happy to get my starter house (1200 sq foot on .21 acres) and I had saved and saved so that the payment wasn't much more than what I was renting for. I was so proud. Is it my dream house? Heck no! But it was a place I could afford until such time as I could scrimp and save to get something else. Your nephew may find that the house of his dreams won't ever be in reach since he's trying for the top of the hill without starting at the bottom. Climbing is more effective than trying to jump straight to the top! My house was bought for under 100K. It's worth a lot more than that now. Without that step, I'd never be able to afford a house in today's market!

[newtoli]

We bought when I was 26 (29 now) - not everyone from my generation is that spoiled

[TomMoser]

Originally Posted by newtoli

We bought when I was 26 (29 now) - not everyone from my generation is that spoiled

That's correct. I have worked with many responsible young people who now are home owners. Many of them bought starter houses.

[Crookhaven]

Originally Posted by totallyfrazzled

I agree. My 25-yr-old nephew has always had a good head on his shoulders compared to most of his age that I've seen... has ZERO debt...makes 60K/yr gross... pays his credit card bill in full each month... and yet he is completely unwilling to buy what most people would consider a "starter house". He grew up in a 3500 sq ft house, then his parents moved into a 4500 ft one, his friends' parents all have large homes; and so that is what he has always been used to. He says that he "just couldn't stand living in a place he'd hate" (i.e., something like an 1800 sq ft house on 1/4 acre) and so he rents an apt for $2000/month while moaning about the stock market now making it impossible for him to afford the $625K turnkey house (with pool, of course) that he wants, until "things turn around." Meanwhile he gripes and moans and groans about how "unfair" and "unlucky" it is: "Why me????"

They want it all and they want it NOW.

They also assume that things (job, income, health) will simply get better over time, and that no unexpected disasters will befall THEM. Other people, yes. But not them.

I see and hear these attitudes from so many twentysomethings, and I'm not sure whether to laugh or cry.

Echo boomers are effed.

Nice going Me Generation.

crooks

[TeamExit]

Originally Posted by totallyfrazzled

I agree. My 25-yr-old nephew has always had a good head on his shoulders compared to most of his age that I've seen... has ZERO debt...makes 60K/yr gross... pays his credit card bill in full each month... and yet he is completely unwilling to buy what most people would consider a "starter house". He grew up in a 3500 sq ft house, then his parents moved into a 4500 ft one, his friends' parents all have large homes; and so that is what he has always been used to. He says that he "just couldn't stand living in a place he'd hate" (i.e., something like an 1800 sq ft house on 1/4 acre) and so he rents an apt for $2000/month while moaning about the stock market now making it impossible for him to afford the $625K turnkey house (with pool, of course) that he wants, until "things turn around." Meanwhile he gripes and moans and groans about how "unfair" and "unlucky" it is: "Why me????"

They want it all and they want it NOW.

They also assume that things (job, income, health) will simply get better over time, and that no unexpected disasters will befall THEM. Other people, yes. But not them.

I see and hear these attitudes from so many twentysomethings, and I'm not sure whether to laugh or cry.

i cant stand many people who are born with a silver spoon.. "i cant afford to upgrade my 2006 mercedes to a 2009 range rover, why me???? why is life sooo unfair???" ..... stick it