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Someone in my neighborhood is going through bankruptcy and the foreclosure process as they stop making payments. They over extended themselves by leveraging everything on houses and the taxi business. Uber/Lyft upended their business and they are struggling now as they finance the purchase of medallions that are not worth the price they use to be.
NYC is a rough and disheartening place to try to make it, some people spend 2-5 years trying to make it and throw in the towel others dedicate their life in the pursuit of trying to make it only to fail in the end. NYC is always evolving and finding out you are no longer wanted by the city is tough. For a long time I was very bitter with the process of saving for a down payment and how little my money would get me (you still have to make compromises).
Have read recent media coverage about some taxi medallion owners going through bad times.
Yes, those that are sadly extended themselves too deeply by borrowing against their medallions, but you can't blame them to some extent. Until ride sharing came upon the scene owing a yellow cab medallion was like hitting the lottery.
someone i know was asking 160k and couldn't get it . my step brother sold his for about 160-170k back in the late 1980's . in 2011 they went for a million dollars .
Btw, I'm really surprised about NYwriterdude's change in attitude. The old NYWriterdude had a sort of f u attitude towards people getting priced out of NYC and showed a lot of disdain for poor people in general--definitely a free-market type. This concern about rent regulation, affordability and those of lesser means is really surprising. I can only assume the pinch of high housing prices are hitting home on a personal level.
Very perceptive...
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I don't really understand why anyone would "need" to forclose since housing prices have gone up everywhere in the city. It's not like NYC owners are anywhere near underwater, so it would seem logical for someone to sell if they couldn't afford their home any longer.
Btw, I'm really surprised about NYwriterdude's change in attitude. The old NYWriterdude had a sort of f u attitude towards people getting priced out of NYC and showed a lot of disdain for poor people in general--definitely a free-market type. This concern about rent regulation, affordability and those of lesser means is really surprising. I can only assume the pinch of high housing prices are hitting home on a personal level.
There are many reasons why a property goes into foreclosure.
First and foremost just because property values are rising, that is not universal nor does it automatically mean they have risen enough to cover the debt.
Sadly far too many people owe far more on their property than it is now or likely ever will be worth.
You look at where foreclosures are hitting hardest and often the same areas come up in Queens, Bronx, and Brooklyn. These also are areas with high numbers of minorities and or immigrant populations where great pride is placed on home ownership, and these people often went to great lengths to make that happen. Sadly far to many took on more debt than they should have, and or built their hopes upon a very unstable finances. Things like depending upon rental income, several family members pooling together to make payments, etc...
You had no small number of "older" persons (say >50 or even 60) who bought homes (again these often were immigrants), and now are having problems keeping up payments. Then there are all sorts who pulled nearly all they could out of their homes (second mortgages, home equity lines of credit) and now are stuck with huge debts but not always means to pay.
There is also big money to be made from foreclosures, and some politicians and other elected officials talk out of both sides of their mouths. On the one hand they reap *huge* payments for assisting lenders with the foreclosure process, while at the same time talking about "helping" the middle class...
Finally you have to remember nearly all mortgage modifications or whatever to prevent foreclosures usually involve basically rearranging the deck chairs on the Titanic. That is the actual principal amount borrowed is not reduced, but fees, surcharges *might* be waived and or reduced along with stretching out payments over a longer period of time. Sometimes depending upon credit worthiness interest rates *might* be reduced. But often by the time people have reached foreclosure or even pre-foreclosure their credit is so messed up they cannot qualify for truly low rates; so refinancing isn't an option.
If someone paid $400k for a property that is only worth $350k or worse <$300k, they are pretty much screwed. Lenders are often very reluctant to lower the principle borrowed and courts have no power to force them to do so. In such cases best that can be hoped for is lender will agree to a short sale accepting a lower amount than what is owed and letting property owner holder off the hook.
Even then short sales aren't always a cure. Depending upon how things go/contractual obligations even after such a sale the debtor still may have a balance to pay off.
I had thought that lenders wouldn't make loans in excess of the value of the house (but I guess I'm wrong about that). Lenders are strict about this when you buy a house, so I thought this would be the same when taking out a loan on the equity. I have a neighbor who has been in pre-forclosure for more than 10 years (whatever pre-forclosure means). They are holding on, but their house needs so many repairs. They are probably in their late 60s, and I believe they've owned it for more than 30 years, so I'd assume the original mortgage is either paid off or insignificant. I can't imagine that their situation would have been any better in rental housing though.
He’s done a couple of flip flops over the years. Remember at one point he was supposedly working with real poor people and bragged on and on about helping them scam extra benefits?
He’s done a couple of flip flops over the years. Remember at one point he was supposedly working with real poor people and bragged on and on about helping them scam extra benefits?
I never helped anyone scam extra benefits, but I certainly directed them to the resources they needed. And they got what they qualified for. I still do that via various community organizations and activists groups that I'm a part of.
Of course, someone who got the government to pay for his college education (GI Bill) is in no position to accuse others of scamming for extra benefits. For life you have access to very generous benefits from the federal government and not to mention your benefits as NYPD (including pension).
And no, it's not about what happened to me personally. The Giuliani/Bloomberg years killed off the gay bars and much of the gay community in NYC, for starters. And I'm an advocate of people being able to do what they want to do, so if someone wants to do drugs, they have every right. All drugs should be legal. I am against mass incarceration. I'd love to see Rikers closed, the number of police officers reduced, etc.
None of this has to do with me personally, it has to do with how I've seen recent developments in the city destroy entire communities.
He’s done a couple of flip flops over the years. Remember at one point he was supposedly working with real poor people and bragged on and on about helping them scam extra benefits?
I don't remember that one, but I have noticed flip flops on different issues throughout the years, although this one strikes me as the biggest. I'm quite sure that if he has a newfound interest in the struggling and rent burdened, it's because he's one of them now.
I had thought that lenders wouldn't make loans in excess of the value of the house (but I guess I'm wrong about that). Lenders are strict about this when you buy a house, so I thought this would be the same when taking out a loan on the equity. I have a neighbor who has been in pre-forclosure for more than 10 years (whatever pre-forclosure means). They are holding on, but their house needs so many repairs. They are probably in their late 60s, and I believe they've owned it for more than 30 years, so I'd assume the original mortgage is either paid off or insignificant. I can't imagine that their situation would have been any better in rental housing though.
No, lenders usually won't go above value of home for primary or equity home loans. Usually lenders will allow up to 85% of home equity to be borrowed as a loan or HELOC.
However none of that matters if you've pulled out all you can from the value of house (home equity line of credit), and cannot pay it back, and or having difficulties doing so.
Remember after the major tax overhaul back in 1980's (IIRC) the deduction for credit card interest was eliminated. However under certain circumstances you still can deduct home equity loans or lines of credit.. So people pulled money out of their homes to pay for all sorts of things.
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