[Sparrow_temp]

You want the mortgage company to take the hit instead of yourself. You say the tax payer's are bailing out the mortgage companies. You can't following this link? Mortgage companies are only having difficulties because all of the homeowners are not paying their bills or walking away from property.


You wanted GMAC to work with you? What does this mean if not forgiving debt? What do you want them to do? The bankruptcy comment come up because it appears you were having problem with your mortgage -- ie can't pay your bills. I'm not sure how else to read what you said since you wanted a lower mortgage payment to reflect the lowered value of your home.

You want to educate me on what I don't understand about owning a house? You claimed to have lost over 100K in value and you think I lost my ass??? I can tell you I didn't lose anything close to that. I sold my house to get out of the state and am glad I did. I could get some good deals on houses here in NM now but see no reason why not to simply rent a house rather than own in this employment market. I can move for some other job opportunity with 1 month's notice and have a lower monthly rental payment than I would a mortgage payment. I get the advantages of a house with very little of the responsibility of a home-owner.

Originally Posted by Crustedfilth

Bad investment on a house? LOL

Now as a tax payer you bailed out the mortgage company.

The tax payers are not helping anyone who has lost money on their houses other than the actual mortgage companies. You must have been living under a rock when all the bailout news was happening. I'm not asking for forgiveness of debt. Not sure where your off the wall bankruptcy comment came from either. Keep renting because you obviously don't understand much past the lease agreement you signed. If you did you wouldn't have lost your ass when you sold your house.
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Very true indentured servant. The cost of living is dropping from a housing standpoint anyway. Now lets get our mortgage companies on board to lower our monthly payments to reflect the lowered value of our homes. Who knew buying a house would ever be a bad investment. I'm trying to work with my mortgage company and its a big damn fiasco. My house has lost over 100k in value. Now GMAC won't work with me. Yeah I said it, you bastards. LOL

[NewYorkBorn]

It was the banking industry (Wall Street) and their GREEDY practices that caused this recession in the first place.....so why should the poor homeowner that is not sitting on millions of dollars take the hit by having to file bankruptcy or go into foreclosure

Years of bank (financial industry) corruption & greed > recession > thousands across the country losing jobs > now people have no money to pay their mortgages and other bills....totally unfair!

Now here is what happened to the bank:

Years of bank (financial industry) corruption & greed > near financial industry collapse > recession > federal government gives banks billions of taxpayer money to keep recession from getting even worse > many of these banks have already paid the bailout money back to the Feds early and are now back in a strong financial position. But not the average homeowner.....no the average homeowner is in foreclosure across the country being punished for being LAID OFF from their jobs due to a recession that was not caused by them. Anyone see something wrong with the way this whole thing has played out?

Meanwhile banks like JP Morgan Chase have gotten billions of dollars, are now strong again, have repaid their bail out money early and are now opening up new branches all over NYC with their new found wealth.

The American consumer (average Joe) gets screwed again!!

[canudigit]

Does anyone else besides me think that maybe this whole housing crisis started because of the way that banks calculate how much of a loan to give someone? When we applied for a mortgage loan this past summer when we had moved to AZ and assumed that we would be staying there for a while for dh's job and would need to buy a house, the only thing that the lending institution looked at was how much money we had coming in vs. our obligatory monthly expenses such as car payment, tution payment, etc. They were prepared to give us a loan in which the house payment would have taken half of our monthly income, for crying out loud!! I actually called our loan officer and told him that I felt that the mortgage would be too big for us under the circumstances and, instead of saying, "Okay, you know your spending habits. You probably need to find a less expensive house so that we can give you a smaller mortgage", he began arguing with me on the phone about how we could easily make the house payment, even if it did take half of our monthly income. Does anyone else here think that a mortgage that takes 50% of your income is out of line and might cause financial issues down the line?

When approving a mortgage, I think that banks need to ask you not only what your actual income is and what your obligatory bills are, but also what your spending habits are like. Now, dh and I live very frugally by most peoples' standards. We shop at discount stores, eat fast food 90% of the time that we eat out, don't drive brand new cars, don't have any "toys", don't carry a credit card balance, and when we take a vacation, we load up the minivan and drive to our Priceline hotel. Now take someone who has the exact same income as us and the exact same obligatory expenses but shops at Nordstrom, eats at expensive restaurants 3-4 times a week, gets their nails done, drives late model cars, has a bunch of credit card debt, and takes exotic vacations. See what I'm getting at here? Because of our personal spending habits, something that no bank that I am aware of takes into consideration, one of us could, in all likelihood, make the house payment without a problem and one of us would be in foreclosure. But on the loan application, it would look like we had an equal chance at affording the same amount of mortgage, just based on income and obligatory expenses.

It's a stupid system, and personal spending habits have gotten many, many people into hot water with their mortgages. IMHO, the banks should sit someone down when they apply for a mortgage and go over figures like this: actual income vs. obligatory spending + nonobligatory spending, such as dining out, vacations, etc. They don't need to get nosy, just point out to people that if they spend, for example, $1,000/month dining out, then the bank will need to recalculate the loan amount. I realize that people wouldn't always be honest, especially if it meant being able to afford their dream house or not, but at least it might actually put the thought into their heads that they may be biting off more than they can chew, right?

[NewYorkBorn]

Canudigit, what you describe are people who were irresponsible, brought more home than they could afford and now they are in trouble and can not pay their mortgage.....not disagreeing with you because I know that at the beginning of the recession these were the people who were being affected.

The problem is that now the people who are ending up in foreclosure are those who were responsible and only purchased a home that they could afford (lived within their means) and now because some company decided to take their job (lay off) they are having trouble paying their mortgage.

These people are totally different from the first group of people! In other words the demographic of those that have been victimized by this recession has now changed.

[Indentured Servant]

There has historically been an inverse relationship/correlation between interest rates and home prices. Lowering interest rates increases the amount of home that people can afford (in the very short run...as ..I will demonstrate later) and hence increased demand for housing, which in turn puts pressure on the free market to raise the cost of housing when demand cannot keep up with supply. It’s important to note that the true beneficiaries of expanded credit (via low interest rates), are those who get the cheap money first and spend it on an asset class before that asset class experience inflation, which will result from low interest rates. A $100,000 home at 13% interest (yes…in the 70’s interest rates were this high) , assuming no money down, has about the same monthly mortgage as a $200,000 home at 6% interest. Hence, in the long run Home affordability really has not changed from low interest rates because it is just offset by higher prices for those who purchase on the tail end of the trend.

Anyway, the entity that is most at blame for the housing crisis is the Federal Reserve. The Federal Reserve interest rate policies created the inflated prices in real estate. Through their open market operations, the FED effectively lowered interest rates to historical lows and kept them there for extended periods of time. This is the DIRECT cause of the inflation of the housing market…..and the stock market. Then the stock market created securities and investments buy buying up all these new mortgages from their originator and using them as investments. Everything was predicated upon a continuing rise in housing prices. Mortgages were made on this flawed assumption of the entire real estate industry all resulting from the liquidity being pumped into the economy via low interest rates. If you take away the low interest rates……NONE of this would have happened.

[Guineas]

Originally Posted by NewYorkBorn

The problem is that now the people who are ending up in foreclosure are those who were responsible and only purchased a home that they could afford (lived within their means) and now because some company decided to take their job (lay off) they are having trouble paying their mortgage.

If you can't afford your mortgage, you should sell and rent. This is obvious. What about the people who were responsible and rented? Should they also get rental assistance?

If you can't afford your car payments anymore, should the government also help pay them? Why not get rid of the car, buy a cheaper used car or ride a bike or bus?

Your kind of attitude would bankrupt the nation. It's not the government's job to ensure you live in your 4 bdrm $400,000 house when you can't afford to. What you're asking is for the government to continue propping up overinflated asset prices, thereby robbing the next generation of affordable places to live since wages remain stagnant. More and more so, today's children would not be able to afford to buy a house in the neighborhood their parents lived in.

[NewYorkBorn]

Originally Posted by Guineas

If you can't afford your mortgage, you should sell and rent. This is obvious. What about the people who were responsible and rented? Should they also get rental assistance?

If you can't afford your car payments anymore, should the government also help pay them? Why not get rid of the car, buy a cheaper used car or ride a bike or bus?

Your kind of attitude would bankrupt the nation. It's not the government's job to ensure you live in your 4 bdrm $400,000 house when you can't afford to. What you're asking is for the government to continue propping up overinflated asset prices, thereby robbing the next generation of affordable places to live since wages remain stagnant. More and more so, today's children would not be able to afford to buy a house in the neighborhood their parents lived in.

What you are saying is complete BS! You are attempting to simplify a complicated problem. Everything that people decide to do INVOLVES MONEY!

If there is a recession, people can not get any credit because of this economy then where are the buyers coming from to purchase the homes? If there are no buyers then sellers can't sell....makes sense doesn't it?

Not everyone lives in a $400,000 home, stop assuming that you know what's going on behind closed doors. As far as the ridiculous car statement.......if someone has lost their job, receiving unemployment and can no longer afford their car payment then where are they going to get the money to buy a used car....also some people live in places like the southern states where there is either no bus service or limited bus service......should the person take your advice and ride their bike 10 miles to the store and then hang their grocery bags on the handle bars of the bike?

[canudigit]

Originally Posted by NewYorkBorn

Canudigit, what you describe are people who were irresponsible, brought more home than they could afford and now they are in trouble and can not pay their mortgage.....not disagreeing with you because I know that at the beginning of the recession these were the people who were being affected.

The problem is that now the people who are ending up in foreclosure are those who were responsible and only purchased a home that they could afford (lived within their means) and now because some company decided to take their job (lay off) they are having trouble paying their mortgage.

These people are totally different from the first group of people! In other words the demographic of those that have been victimized by this recession has now changed.

I understand what you're saying, and you're right. And another pp stated that if you are having trouble paying your mortgage you should just sell and rent, but what if you can't sell the house, as so many people, both in Michigan and all over the country, are experiencing right now? Then you are stuck with a house that you can't pay for, and eventually, foreclosure will follow.

Some neighbors in our subdivision lost their house and had to move out over the Thanksgiving weekend because of job loss. It was so sad.

[Guineas]

Originally Posted by NewYorkBorn

As far as the ridiculous car statement.......if someone has lost their job, receiving unemployment and can no longer afford their car payment then where are they going to get the money to buy a used car....also some people live in places like the southern states where there is either no bus service or limited bus service......should the person take your advice and ride their bike 10 miles to the store and then hang their grocery bags on the handle bars of the bike?

Yes, decisions have consequences. If you live in a place where you can't get around without a car, and you can't afford a car, maybe it's time to move somewhere else.

Instead of propping up a dysfunctional system with money the government doesn't have, maybe we should let the system work itself out.

[NewYorkBorn]

Originally Posted by canudigit

I understand what you're saying, and you're right. And another pp stated that if you are having trouble paying your mortgage you should just sell and rent, but what if you can't sell the house, as so many people, both in Michigan and all over the country, are experiencing right now? Then you are stuck with a house that you can't pay for, and eventually, foreclosure will follow.

Some neighbors in our subdivision lost their house and had to move out over the Thanksgiving weekend because of job loss. It was so sad.

I know exactly what you mean, the things that are happening around the country to people because of this recession is horrible. A friend of mine who is in South Carolina called me last Friday......he has an eviction notice from the courts. Landlord trying to put him out on the street because he was laid off, unemployment benefits are finished and now he has no money to pay his rent!

People have stopped being human!!