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That's great. But my spouse and I are teachers in private education, have no debt or loans and if we write out what we can afford (probably $200k at the very max) there is absolutely nothing available at that price. And we live in a "working class" area in New York.
The cost of rent, utilities and medical insurance eats up a lot of our income so there's not much left to save. We'll never have a downpayment, closing and moving costs on a $250k place. We'll be dead first.
That's a whole lot different than 30 years ago when a single income (not yours, I'm just saying in general) was still able to afford a mortgage payment.
So you see, there are those of us who work hard, save what we can, don't run up credit cards, buy an economy car, don't take vacations or spend on very much outside of the necessaries who sit on the sidelines waiting and hoping that prices will come down to within reach only to see people who overspent their means, speculated, made bad choices or what have you getting a bail out.
That hurts.
I'm sorry, but this comment angers me. I also live simply and I understand that houses now cost quite a bit, but I know people who bought houses several decades ago and have paid off their mortgages. They did not get a "deal" on the houses, and they also had to pay higher interest rates. Yes, it's difficult to buy a NICE house for under 200,000, but there's a reason for that: the government will continue to bail out over-extended borrowers and greedy banks to artifically inflate prices.
What that does to those of us who are waiting to buy an affordable house is in effect take money from our pockets and give it to people who are "underwater" It's late and I'm drinking some wine, so I hope this makes sense.
If these people's houses had INCREASED in value, would they give some money back? This is just a crock of poo. I now understand why all of those people left Cuba after the revolution. If you have worked hard and done all of the right things, and the government gets in your way to effectively give away what you have worked for to people who don't deserve it. Something's wrong with that.
SO the government will bailout my colleagues who bought 700K houses that they could not afford and paid 3% interest for the last 3 years for because they are too good to live in an APARTMENT? That's what people do when they can't afford their mortgages. They rent and save money, just like I am doing. I am not too good to live in apartment. Then what happens is that housing prices go down, and people with savings and good credit buy the houses at these lower prices.
At this point I am considering leaving the country.
Exactly, I think the largest problem is people didn't/don't think of what is realistic for their situation (we aren't paid off, but we're doing okay) - people today seem to think bigger is better, regardless of whether it's a NEED or if they can afford it. We aren't crazy about our house, but it works - some don't seem to have that mindset.
People complaining about being upside down: do you think ANYBODY offered the mortgage companies money when the market was great and the home appreciated? LOL
Do YOU think the banks weren't making MASSIVE amounts of money from all the closing costs? I assure you if the banks weren't making so much money off this mess they wouldn't have perpetuated such an enormous bubble. I have an interesting story.
My house is down 220k since buying in 06 and the banks actually assured me at the signing that the market would hold steady. If only I had got that in writing. I put $0 down, live in CA so the lender has no-recourse. Pre-walk away I had an 810 FICO. I can easily rent a place for half of what I pay maybe less. I could afford to struggle and keep paying for my house but I won't because I don't believe it is the responsible thing to do anymore. I'll have $40k in the bank by the time they foreclose and the lender can't touch it because I'm non-recourse. After I move I'll save $1500 a month plus I can generally put another $500-600. I should be able to save $25k a year towards a house meaning in 4 years I'll have 140k and could probably just pay cash for a place similar to my current one. Who needs financing... Maybe if i ever want to move up to a bigger place in say 10 years I can finance once my credit is back to 800+. Or I could stay in my current home and still owe $350k in 4 years... that would be the smart thing to do ? Hmm.. similar house owe 350k in 4 years or own it outright really hard decision.
If more people actually ran the numbers and realized how much better off they'd be long term by walking away banks in this country would lose $1 trillion this year. All the plans to help homeowners so far are a complete joke including the one just announced. The sad thing is people will be dumb enough to refinance their home into a full-recourse loan when they could just walk away. Housing is not going to shoot back up and will probably keep sliding for 2 more years. After it does stop values will likely appreciate 4% a year for a very long time. My house was 372k and purchased in 06. Same floor plan just went for 175k this month, but I actually estimate that it will drop to around $130-140k in 2 years. I base this on estimates from moody's and other places on inland empire trends. If housing appreciates at 4% a year it would take me 25 years just to get back to the price I originally paid. If you bought between 04-06 in a huge bubble market with nothing down staying in your home is nothing short of idiocy.
Do YOU think the banks weren't making MASSIVE amounts of money from all the closing costs? I assure you if the banks weren't making so much money off this mess they wouldn't have perpetuated such an enormous bubble. I have an interesting story.
My house is down 220k since buying in 06 and the banks actually assured me at the signing that the market would hold steady. If only I had got that in writing. I put $0 down, live in CA so the lender has no-recourse. Pre-walk away I had an 810 FICO. I can easily rent a place for half of what I pay maybe less. I could afford to struggle and keep paying for my house but I won't because I don't believe it is the responsible thing to do anymore. I'll have $40k in the bank by the time they foreclose and the lender can't touch it because I'm non-recourse. After I move I'll save $1500 a month plus I can generally put another $500-600. I should be able to save $25k a year towards a house meaning in 4 years I'll have 140k and could probably just pay cash for a place similar to my current one. Who needs financing... Maybe if i ever want to move up to a bigger place in say 10 years I can finance once my credit is back to 800+. Or I could stay in my current home and still owe $350k in 4 years... that would be the smart thing to do ? Hmm.. similar house owe 350k in 4 years or own it outright really hard decision.
If more people actually ran the numbers and realized how much better off they'd be long term by walking away banks in this country would lose $1 trillion this year. All the plans to help homeowners so far are a complete joke including the one just announced. The sad thing is people will be dumb enough to refinance their home into a full-recourse loan when they could just walk away. Housing is not going to shoot back up and will probably keep sliding for 2 more years. After it does stop values will likely appreciate 4% a year for a very long time. My house was 372k and purchased in 06. Same floor plan just went for 175k this month, but I actually estimate that it will drop to around $130-140k in 2 years. I base this on estimates from moody's and other places on inland empire trends. If housing appreciates at 4% a year it would take me 25 years just to get back to the price I originally paid. If you bought between 04-06 in a huge bubble market with nothing down staying in your home is nothing short of idiocy.
I agree. In my area prices dropped from 405K (peak) to 140K (now). I wouldn't keep my house under these conditions.
I'm sorry, but this comment angers me. I also live simply and I understand that houses now cost quite a bit, but I know people who bought houses several decades ago and have paid off their mortgages. They did not get a "deal" on the houses, and they also had to pay higher interest rates. Yes, it's difficult to buy a NICE house for under 200,000, but there's a reason for that: the government will continue to bail out over-extended borrowers and greedy banks to artifically inflate prices.
What that does to those of us who are waiting to buy an affordable house is in effect take money from our pockets and give it to people who are "underwater" It's late and I'm drinking some wine, so I hope this makes sense.
If these people's houses had INCREASED in value, would they give some money back? This is just a crock of poo. I now understand why all of those people left Cuba after the revolution. If you have worked hard and done all of the right things, and the government gets in your way to effectively give away what you have worked for to people who don't deserve it. Something's wrong with that.
SO the government will bailout my colleagues who bought 700K houses that they could not afford and paid 3% interest for the last 3 years for because they are too good to live in an APARTMENT? That's what people do when they can't afford their mortgages. They rent and save money, just like I am doing. I am not too good to live in apartment. Then what happens is that housing prices go down, and people with savings and good credit buy the houses at these lower prices.
At this point I am considering leaving the country.
Not sure if you quoted the right post. You said my post angered you but then you went to (I think) agree with me.
There is nothing in the Stimulus bill , or the Tarp that addresses a write down in the principle. The bankers are very much against it. Just like they are against a Judge in BK restructuring a mortgage.
Until the principle issues are addressed , nothing will change. Too many Fat cats making money off the less fortunate will keep anything meaningful happen.
A write down across the board , for everyone , is what needs to be done. Then , you will see the sick real estate market start to improve. I do not blame those who are under water from walking. Its the smart thing to do. Preserve your cash , its King..... Once all this is digested , there will be some golden opportunities to profit from it , but , you will need the cash to make it happen,or have a leverage opportunity where the risk is minimal.
Depending where you are in the Country , some of the better investments are to buy into unfinished houses , for Penney on the dollar. Use your sweat , your brother in law ( who is unemployed ) , and the day workers at the soup line., to finish the home. Just like an old fashion " barn razing " , it can be done , with good results , and with little debt. You are in control , you get the home you always wanted without many compromises. Shop for materials , at sales , seconds , Ebay , and from low ball offers from job sites that have been shut down. Building a house is not rocket science , but the General Contractors , and the Banks , want to make you think so. ( They work together ).
Its time to get back to the land , the victory gardens , green building , and , freedom from the money lenders........
To the people looking for government "help" with their mortgages, the government doesn't have any money, they take it from someone else to give to you! And who do you think (foolishly) lent you the money, it's the municipalities, mutual funds, and pension funds of others, they are the ones who have lost money...you have the option of walking away. If you have a problem financially, maybe you should look to your friends and family before "government".
Do YOU think the banks weren't making MASSIVE amounts of money from all the closing costs? I assure you if the banks weren't making so much money off this mess they wouldn't have perpetuated such an enormous bubble. I have an interesting story.
My house is down 220k since buying in 06 and the banks actually assured me at the signing that the market would hold steady. If only I had got that in writing. I put $0 down, live in CA so the lender has no-recourse. Pre-walk away I had an 810 FICO. I can easily rent a place for half of what I pay maybe less. I could afford to struggle and keep paying for my house but I won't because I don't believe it is the responsible thing to do anymore. I'll have $40k in the bank by the time they foreclose and the lender can't touch it because I'm non-recourse. After I move I'll save $1500 a month plus I can generally put another $500-600. I should be able to save $25k a year towards a house meaning in 4 years I'll have 140k and could probably just pay cash for a place similar to my current one. Who needs financing... Maybe if i ever want to move up to a bigger place in say 10 years I can finance once my credit is back to 800+. Or I could stay in my current home and still owe $350k in 4 years... that would be the smart thing to do ? Hmm.. similar house owe 350k in 4 years or own it outright really hard decision.
If more people actually ran the numbers and realized how much better off they'd be long term by walking away banks in this country would lose $1 trillion this year. All the plans to help homeowners so far are a complete joke including the one just announced. The sad thing is people will be dumb enough to refinance their home into a full-recourse loan when they could just walk away. Housing is not going to shoot back up and will probably keep sliding for 2 more years. After it does stop values will likely appreciate 4% a year for a very long time. My house was 372k and purchased in 06. Same floor plan just went for 175k this month, but I actually estimate that it will drop to around $130-140k in 2 years. I base this on estimates from moody's and other places on inland empire trends. If housing appreciates at 4% a year it would take me 25 years just to get back to the price I originally paid. If you bought between 04-06 in a huge bubble market with nothing down staying in your home is nothing short of idiocy.
This post is relevant and helpful if you have absolutely no integrity, but some people feel they should repay their debts.
Do YOU think the banks weren't making MASSIVE amounts of money from all the closing costs? I assure you if the banks weren't making so much money off this mess they wouldn't have perpetuated such an enormous bubble. I have an interesting story.
My house is down 220k since buying in 06 and the banks actually assured me at the signing that the market would hold steady. If only I had got that in writing. I put $0 down, live in CA so the lender has no-recourse. Pre-walk away I had an 810 FICO. I can easily rent a place for half of what I pay maybe less. I could afford to struggle and keep paying for my house but I won't because I don't believe it is the responsible thing to do anymore. I'll have $40k in the bank by the time they foreclose and the lender can't touch it because I'm non-recourse. After I move I'll save $1500 a month plus I can generally put another $500-600. I should be able to save $25k a year towards a house meaning in 4 years I'll have 140k and could probably just pay cash for a place similar to my current one. Who needs financing... Maybe if i ever want to move up to a bigger place in say 10 years I can finance once my credit is back to 800+. Or I could stay in my current home and still owe $350k in 4 years... that would be the smart thing to do ? Hmm.. similar house owe 350k in 4 years or own it outright really hard decision.
If more people actually ran the numbers and realized how much better off they'd be long term by walking away banks in this country would lose $1 trillion this year. All the plans to help homeowners so far are a complete joke including the one just announced. The sad thing is people will be dumb enough to refinance their home into a full-recourse loan when they could just walk away. Housing is not going to shoot back up and will probably keep sliding for 2 more years. After it does stop values will likely appreciate 4% a year for a very long time. My house was 372k and purchased in 06. Same floor plan just went for 175k this month, but I actually estimate that it will drop to around $130-140k in 2 years. I base this on estimates from moody's and other places on inland empire trends. If housing appreciates at 4% a year it would take me 25 years just to get back to the price I originally paid. If you bought between 04-06 in a huge bubble market with nothing down staying in your home is nothing short of idiocy.
And there folks is just another reason why our country is in the condition it is in. Should of really thought it out before you signed the papers in 06. I personally know many people who think just like this. Hate to say it but they are not doing so well financially right now.
This post is relevant and helpful if you have absolutely no integrity, but some people feel they should repay their debts.
Buying a house or a car , these days is not much different. Anyone who signs on to a front loaded home loan for 30 or 40 years , is stupid. Such practices should not be allowed. I place almost all the blame on the Banks , and , their greedy practices. They sell the paper even before the ink is dry , to China.
What we need is realistic values for homes , like we have on cars. When you see the Bankers reducing the principle , then there will be some honest effort to fix the problem. Nothing more than 15 years financing should be allowed , 10 years would be better, at affordable rates.. Just like the Credit card Companies , they want to own you , for the rest of your life , just keep making the payments , forever....... people with real integrity want to stop the criminal activity. and , the only way , for the average person to do so , is to stop paying , more power too them !
Do YOU think the banks weren't making MASSIVE amounts of money from all the closing costs? I assure you if the banks weren't making so much money off this mess they wouldn't have perpetuated such an enormous bubble. I have an interesting story.
My house is down 220k since buying in 06 and the banks actually assured me at the signing that the market would hold steady. If only I had got that in writing. I put $0 down, live in CA so the lender has no-recourse. Pre-walk away I had an 810 FICO. I can easily rent a place for half of what I pay maybe less. I could afford to struggle and keep paying for my house but I won't because I don't believe it is the responsible thing to do anymore. I'll have $40k in the bank by the time they foreclose and the lender can't touch it because I'm non-recourse. After I move I'll save $1500 a month plus I can generally put another $500-600. I should be able to save $25k a year towards a house meaning in 4 years I'll have 140k and could probably just pay cash for a place similar to my current one. Who needs financing... Maybe if i ever want to move up to a bigger place in say 10 years I can finance once my credit is back to 800+. Or I could stay in my current home and still owe $350k in 4 years... that would be the smart thing to do ? Hmm.. similar house owe 350k in 4 years or own it outright really hard decision.
If more people actually ran the numbers and realized how much better off they'd be long term by walking away banks in this country would lose $1 trillion this year. All the plans to help homeowners so far are a complete joke including the one just announced. The sad thing is people will be dumb enough to refinance their home into a full-recourse loan when they could just walk away. Housing is not going to shoot back up and will probably keep sliding for 2 more years. After it does stop values will likely appreciate 4% a year for a very long time. My house was 372k and purchased in 06. Same floor plan just went for 175k this month, but I actually estimate that it will drop to around $130-140k in 2 years. I base this on estimates from moody's and other places on inland empire trends. If housing appreciates at 4% a year it would take me 25 years just to get back to the price I originally paid. If you bought between 04-06 in a huge bubble market with nothing down staying in your home is nothing short of idiocy.
I somewhat agree with this synopsis, BUT... the problem with it is the big IF, on wether or not you'll be able to keep your incomes during your wait time.
If all the houses that are underwater (20-30%) defaulted, then the banking system will collapse or definitely get nationalized. The resulting collapse will put millions more into the jobless category which would further result in more defaults.
I guess the people most situated for the current collapse are those who are retired with safe fixed incomes... and those who have ample savings from work, inheritance, etc.
The rest, are pretty much SOL.
-chuck22b
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