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Old 02-19-2009, 10:33 AM
 
Location: Waterford & Sterling Heights, Michigan
340 posts, read 823,057 times
Reputation: 338

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Quote:
Originally Posted by elikhom View Post
Why is it so hard to understand for some people that everything in life involves risk and sometimes you have to lose?
Some of the responses here are incredible, it's like they feel that they are entitled to receive a bailout from the government. Some of you really think that buying a house was a win-win situation and if it's not happening uncle sam should come to the rescue.
We did not buy our house to get rich and we were never expecting rapid appreciation, we are in MI, here those type of things do not happen. This is our third house and all of them we put 20 % down because we knew prices could go down ( As it happened here in the 80's).

We have never refinanced any of our properties to take cash out. When we sold our previous house and bought the new one we made sure that we could cover all of our expenses with just one income ( My spouse and I are both Engineers).

My husband lost his job last year when the company he was working for went bankrupt and pretty much disapeared.
Since we were cautious we still can cover all of our expenses with one income.
I will get a paycut next May because my company is about to go bankrupt too. And if after May I still have a job we will be able to cover all of our expenses with what's left of my income.
On top of that my husband started his own business last year(after he lost his job) and because we saved we can still cover all of our expenses and he still has working capital.

But after all of this is still going to be shocking a 40 to 50 % drop in the value of your home. Specially when you did not bought in an over inflated real estate bubble.
Gosh I "only" lost about 29 % in the stock market.
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Old 02-19-2009, 10:43 AM
 
Location: Houston
529 posts, read 1,142,314 times
Reputation: 373
^I'm sorry, it was mostly targeted for a poster earlier in the thread, I posted this in another thread and you imho should be one of the ones receiving help.

Quote:
I agree. I'm all for helping the people who actually need it. Those who made a considerable down payment (it can be less than 20%), their income at the time the mortgage was signed was verified and was enough to cover the payment, but due to recent circumstances cannot pay anymore, those are the people who need help not the guy who thought this was a good investment and now doesn't want to pay for the losses even if he is able.
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Old 02-19-2009, 10:58 AM
 
Location: Durham, NC
1,049 posts, read 3,346,292 times
Reputation: 727
Quote:
Originally Posted by Houston3 View Post
If you are renting the house out they said this morning you get no help with that house. Only the home you live in can you get help with.
Oh that's quite alright.. I'm not looking for government assistance I was just venting because it was topical!
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Old 02-19-2009, 11:04 AM
 
Location: Durham, NC
1,049 posts, read 3,346,292 times
Reputation: 727
Quote:
Originally Posted by DNaomi View Post
I wish them good luck too, and wish that the housing plan would help them (although, I don't think it will directly, maybe indirectly by helping the markets).

However. I think we need to get out of this mentality that people in this situation didn't do anything wrong. It's okay to say someone did something wrong but that they still deserve help. It's NOT SMART to take on a 185K mortgage, no money down, with an adjustable rate, when you already have 300K in student loans and no savings. Even if the house was cheap, even if they had good jobs, they were taking on major risk. It sounds like they meant well, have been responsible since then, but their original decision to buy was bad.

And that is okay. A lot of people make bad decisions every day. It just happened that a lot of people made the SAME bad decision at the SAME time. In America we give people second chances. We pick up those who are down not only because it helps all of us, but also because it is the right thing to do. But, we really need to collectively learn from these mistakes and take personal responsibility while helping others out.
LOL... I didn't take on the mortgage with $300k in student loans I married my husband about a year after I bought the house, and he brought $200k with him I was able to shoulder the cost of the mortgage and my own student loans on my own. It actually wasn't a terrible decision. My mortgage cost was just below what my rent was at the time. I'm a lawyer, and my husband is a doctor. We are well prepared to shoulder the cost of the mortgage. What we weren't prepared for was having to leave Michigan to find work, and we also weren't prepared for the possibility that prices would plunge, putting me upside down so far. We've since bought another home in NC (I'm not a fan of renting longer than you have to, and we're settling here for at least 5 years). We can carry both mortgages with a tenant. We can probably carry both mortagages if we lose our tenant. But we probably are going to have a REALLY hard time when the ARM resets if we have no tenants, and that is my frustration, because there's no way to avoid that since we can't refinance or sell. I didn't take that into account when I bought the place.

Now, I'm not saying we made the smartest decision, but we certainly didn't make stupid decisions either. I'm not asking for help, and as I posted above, I'm not looking for government subsidies. I was simply posting to vent and add another situation into the mix. I'd be interested in how to better manage the tax ramifications of my rental property.
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Old 02-19-2009, 11:06 AM
 
1,592 posts, read 3,004,449 times
Reputation: 1152
Quote:
Originally Posted by darstar View Post
Pray for inflation , that will be the sign that the spiral down has been broken. All the efforts by the Government are directed , right or wrong , at doing that. They will continue to throw money at the problem , at all costs . Will it work ? No one knows , its a new world out there , and its scary.
NEW WORLD?? This has been tried and failed numerous times before. Pick up a history book -- oh, and while you're at it, an Econ 101 book.
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Old 02-19-2009, 01:44 PM
 
2,258 posts, read 4,324,814 times
Reputation: 3731
What about those of us who have been scrimping and saving in hopes of buying a house who did not-- despite lenders and banks insistence that we could afford it-- take that plunge and land in the club all these distressed homeowners are in? In hindsight I almost feel stupid for not doing that but I had no interest in living on the edge of disaster.

Some news article said today "we need to keep the prices of houses from going down." If they don't go down, all of us who have been saving and waiting on the sidelines will never be able to get in while people who can't pay for what they have will get a handout to help them.

What about a renter who loses their job and can't pay the rent? It's okay to put them out in the street but if you're a homeowner you get help.

This is fair?
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Old 02-19-2009, 02:11 PM
 
1,367 posts, read 4,982,528 times
Reputation: 867
Quote:
Originally Posted by tabbcat View Post
LOL... I didn't take on the mortgage with $300k in student loans I married my husband about a year after I bought the house, and he brought $200k with him I was able to shoulder the cost of the mortgage and my own student loans on my own. It actually wasn't a terrible decision. My mortgage cost was just below what my rent was at the time. I'm a lawyer, and my husband is a doctor. We are well prepared to shoulder the cost of the mortgage. What we weren't prepared for was having to leave Michigan to find work, and we also weren't prepared for the possibility that prices would plunge, putting me upside down so far. We've since bought another home in NC (I'm not a fan of renting longer than you have to, and we're settling here for at least 5 years). We can carry both mortgages with a tenant. We can probably carry both mortagages if we lose our tenant. But we probably are going to have a REALLY hard time when the ARM resets if we have no tenants, and that is my frustration, because there's no way to avoid that since we can't refinance or sell. I didn't take that into account when I bought the place.

Now, I'm not saying we made the smartest decision, but we certainly didn't make stupid decisions either. I'm not asking for help, and as I posted above, I'm not looking for government subsidies. I was simply posting to vent and add another situation into the mix. I'd be interested in how to better manage the tax ramifications of my rental property.
Oh, okay... figured you must have gone to med/law school to rack up that kind of debt. It's too bad there can't be a distinction between actual investment property and "investment" property that became so due to inability to sell. I do think it would be good for the gov't to help people in your situation, simply because the impact of a foreclosure/more debt extends beyond you & your husband. You should really spend time now researching tax ramifications and options before the ARM resets... I know that if you haven't lived in the house for a certain amount of time, the taxes could be bad if/when you are able to sell.

The student loan debt is killer... have you looked into any career options that offer loan forgiveness, even if the paychecks are smaller?
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Old 02-19-2009, 02:53 PM
 
15,208 posts, read 16,097,414 times
Reputation: 25165
I'm not unsympathetic to anyone who bought a house with good intentions and believing they could pay for it.

But, if the value of the house had risen greatly and you sold it and made a killing, would you give part of that money to the government? No, because the gain in value isn't taxed, at least up to a certain amount. Now that the house has lost value, I have a hard time seeing the government step in to make it better. But I guess it's something we need to do to keep the economy from collapsing further.

Sometimes it's hard to take though, as I sit in my 60-year-old, 1,300 sf house that cost only $69,500 because it was old and needed so much work. We bought it because we could easily afford it and I'm glad we made that decision. But it would have been nice to spend the last few years admiring my granite countertops and great room, instead of my cracked tile and 1940's era floor plan.
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Old 02-19-2009, 03:14 PM
 
630 posts, read 1,643,524 times
Reputation: 287
Quote:
Originally Posted by Marlow View Post
But, if the value of the house had risen greatly and you sold it and made a killing, would you give part of that money to the government? No, because the gain in value isn't taxed, at least up to a certain amount.
Exactly. People **** and moan that they had to pay capital gains tax when they sold a home (investment) for a profit. But when their investment loses money they get all bent out of shape and are so quick to blame and ask for a handout.

How about if you get a handout from the government now, if you ever sell that home for a profit, you have to pay capital gains tax. Seems fair to me.
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Old 02-19-2009, 03:19 PM
 
Location: Fort Myers Fl
2,305 posts, read 2,633,208 times
Reputation: 916
Nope. I did not buy more house than I could afford and during the housing boom when my trucking company was making alot of money I paid my mortgage off. Been through a couple boom and busts so this was not new to me. Thirty years ago it might of been a different story, probably would of bought a boat, a couple of tv's, mabe a car or two, but I learn from mine and other peoples mistakes.

Did not read through the whole thread but personaly I don't care if they bail out irresponsible people. I am not perfect and I don't worry about everyone elses affairs. As long as I am happy and I treat people right that is all that concerns me.
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