save the financially irresponsible (Sacramento, companies, money, government)

[emjbulls]

Owning a house is a privilege, not a right. Neither the companies or the individuals should be bailed out. They should face the consequences of their bad actions.

People who did the right thing and got the mortgage they could afford, and with proper terms, shouldn't be penalized for the irresponsibility of others.

[Rita Mordio]

Originally Posted by emjbulls

Owning a house is a privilege, not a right. Neither the companies or the individuals should be bailed out. They should face the consequences of their bad actions.

People who did the right thing and got the mortgage they could afford, and with proper terms, shouldn't be penalized for the irresponsibility of others.

As is the original phrase by John Locke "Life, Liberty, and Property" But that's not what was written into the constitution. To get a proper mortgage requires a certain amount of credit and a good amount of money upfront. 10% is what they usually ask for.. But who are the people who can fork up 10% of 200K? (Yes, that's the lower-end of decent houses in decent areas around here)

Because people cannot come up with this, they accept ARMs and other loans. They can afford it for a few years... but when the companies get greedy and start lifting the interest rate.. is when people can't afford it. I think a limit on interest rates would help this problem.

Originally Posted by baystater

Didn't your friend have a lawyer read over the contract first and explain to her what the conditions of the contract were? I heard that there are some in government that say they would like to see more financial education in the country. Well here's our chance to get a real good financial lesson, the hard way.

To steal a quote from Rome: "The ram must touch the wall." "No mercy."

You should have a lawyer read over a contract.. but most people getting sub-prime loans really don't have the $1,000 to spend on a lawyer to read over the contract. They're trying to make sure they have enough to get utilities turned on, get curtains, etc.

However, through her job, yes, she did. Contract was re-printed so that it said that the new interest rate would coincide with current interest rates within the company. Well, in front of a judge they gave over 20 examples of people who, because of this being one of the only things on their credit report, received the same rate because it was a current I/O refinance rate for low credit scores in the company.

As the article said, if we can bail out big companies like Chrysler, then why not help the average american? Those who have worked hard and did it on their own, great for them. I applaud you actually, katzenfreund. I decided to wait a year and save up to get a normal mortgage. Sure, my rent is about the price I would have paid to get into a house... (anything decent around here... is expensive) but that would have been with a sub-prime loan, which are what's causing a lot of problems.

Off the topic.. but a moderator could probably move this into the Mortgage Forum.

Oh, and for all here reading what I say. I might not have had the same view point if I'd gotten the mortgage I was shooting for. But because I've been lucky enough to be handed terms for a sub-prime mortgage, I can feel a little sorry for people who are foreclosing.

Here's a good thing, IMO, my mother just closed on her new house. Because of her years in the military, she got a VA loan with an excellent interest rate, no money down.. and her MORTGAGE costs less than MY RENT. She's not going to foreclose anytime soon.

[DontH8Me]

Originally Posted by RedNC

According to the OP it assumes that there is some kind of choice involved. When it comes to bailouts there has never been a “choice”. The savings and loan problems a while back were a prime example.
Am I “willing”? No. Am I going to put up a fight? No. Will I vote for a tax increase? Assuming there is and option on the ballot, he11 no.

Do I have a solution everyone could agree on? Probably not everyone, but here it is.

Take a look at all these loans looking for the following.
Anyone that is in trouble on their primary home would be eligible for assistance, as long as that is the only home they own. If they own other property they are not eligible for any assistance.
Anyone that is in trouble on any home that is not their primary home can suck eggs.

I've given out too much rep in the last 24 hours, but I could not have said it any better myself so I'll pass along my brownie points to you this way.

[TimtheGuy]

Originally Posted by Kuharai

It's not just saving the financially irresponsible. Adjustable rate mortgages, sub-prime mortgages, and especially the interest-only (for like the first 3 years) are some of the only mortgages that people can actually get into. A traditional mortgage requires so much upfront money and excellent credit to get into.

Earlier this year, I was going to try and get a home for myself (yes, I'm young, but ambitious) and I was rejected for the flat-rate mortgages because my credit wasn't mature enough (only about a year of credit with the only big thing on was a car loan) so I was offered these sub-prime mortgages that are getting people into trouble.

So, in a choice between a sub-prime mortgage and an apartment, most people took the mortgage because it got them into a house. Something they could be proud of. However, when it came time to make REAL payments, they'd gotten so used to the small payment that now they're in trouble.

Foreclosures are through the roof (literally, haha) and this ruins people's lives. It's very hard to get into a good apartment after a foreclosure... in fact, it takes a LOT to get out from under that.

So yes, I would rather pay a little more to help people out.. They're not financially irresponsible. But rather have less upfront funds and less of a credit score than somebody else.

Kuharai, you are not talking to the right people. There are excellent fixed rate "traditional mortgage" (A-paper) options for people with little or $0 down and limited or no credit history.

FYI-the subprime loans these people took out had an option of a slightly higher fixed rate as well. When they choose the house over the apartment, they made a choice. We cannot bail everyone out of this. We all make choices...some good...some bad and have to live with the consequences.

Some of these choices invoved getting a loan through someone who was only interested in their commisison. If you are an uniformed person with respect to finance you need to work with someone who has your best interests in mind. If you don't know what kind of deal you are getting into, you had better find out from someone who does (eg. relative, freind, attorney...)

[TimtheGuy]

As is the original phrase by John Locke "Life, Liberty, and Property" But that's not what was written into the constitution. To get a proper mortgage requires a certain amount of credit and a good amount of money upfront. 10% is what they usually ask for.. But who are the people who can fork up 10% of 200K? (Yes, that's the lower-end of decent houses in decent areas around here)

Because people cannot come up with this, they accept ARMs and other loans. They can afford it for a few years... but when the companies get greedy and start lifting the interest rate.. is when people can't afford it. I think a limit on interest rates would help this problem.

As stated above...you are mis-informed. 10% down is not required. You only need low to decent credit (620+ credit score) to qualify for an excellent fixed rate mortgage. Say in the 6.375%-7% range. You can also qualify for these same loans with no credit history what so ever!

You should also inquire as to whether there are any bond programs for 1st time homebuyers in your area. These loans in conjuction with a bond program can get that $0 down fixed rate down to the 5.75%-6.25% range.

Almost all ARM loans have interest rate caps on them. The companies don't get greedy and start lifting interest rates. ?? It has nothing to do with greed. These are different variables and these loans revolve around the market. Did you know that many people saved THOUSANDS of $ of interest by taking out ARMS from say 2000-2005?? Just because it is an ARM does not mean your payment is automatically going to go up! It follows the market.

Now, IMO when fixed rates are low like they have been for the past few years...why would you take out an ARM?? Especially in the last 2 years when an ARM rate is going to be almost as high as the fixed rate????

[fishmonger]

"Every time something bad happens to you, it's always your fault unless the government was involved somehow, in which it's their fault because the government is the only thing more worthless than you, loser."

-- Nel Carbunkle, famed inventor of conservatism

Words of wisdom from the originator!

[Rggr]

Originally Posted by Kuharai

As is the original phrase by John Locke "Life, Liberty, and Property" But that's not what was written into the constitution. To get a proper mortgage requires a certain amount of credit and a good amount of money upfront. 10% is what they usually ask for.. But who are the people who can fork up 10% of 200K? (Yes, that's the lower-end of decent houses in decent areas around here).

You can always rent.

Originally Posted by Kuharai

Because people cannot come up with this, they accept ARMs and other loans. They can afford it for a few years... but when the companies get greedy and start lifting the interest rate.. is when people can't afford it. I think a limit on interest rates would help this problem

Companies do not just get greedy and raise interest rates. It's more complex than that. I do think they're greedy, but rates are influenced by more than that.

Originally Posted by Kuharai

I decided to wait a year and save up to get a normal mortgage. Sure, my rent is about the price I would have paid to get into a house... (anything decent around here... is expensive) but that would have been with a sub-prime loan, which are what's causing a lot of problems.

Off the topic.. but a moderator could probably move this into the Mortgage Forum.

Oh, and for all here reading what I say. I might not have had the same view point if I'd gotten the mortgage I was shooting for. But because I've been lucky enough to be handed terms for a sub-prime mortgage, I can feel a little sorry for people who are foreclosing.

Here's a good thing, IMO, my mother just closed on her new house. Because of her years in the military, she got a VA loan with an excellent interest rate, no money down.. and her MORTGAGE costs less than MY RENT. She's not going to foreclose anytime soon.

By being smart, you were able to avoid making a bad decision and ending up in foreclosure. If you had been impulsive, you would have been with those that made a poor decision.
Congratulations to your mother.

[Rita Mordio]

Originally Posted by TimtheGuy

As stated above...you are mis-informed. 10% down is not required. You only need low to decent credit (620+ credit score) to qualify for an excellent fixed rate mortgage. Say in the 6.375%-7% range. You can also qualify for these same loans with no credit history what so ever!

You should also inquire as to whether there are any bond programs for 1st time homebuyers in your area. These loans in conjuction with a bond program can get that $0 down fixed rate down to the 5.75%-6.25% range.

Almost all ARM loans have interest rate caps on them. The companies don't get greedy and start lifting interest rates. ?? It has nothing to do with greed. These are different variables and these loans revolve around the market. Did you know that many people saved THOUSANDS of $ of interest by taking out ARMS from say 2000-2005?? Just because it is an ARM does not mean your payment is automatically going to go up! It follows the market.

Now, IMO when fixed rates are low like they have been for the past few years...why would you take out an ARM?? Especially in the last 2 years when an ARM rate is going to be almost as high as the fixed rate????

Well, for my personal buying. My credit is "too young" for their preferences, so the max that I was approved for is $100K. This is after checking out Wells Fargo, BofA, Countrywide, and several independent places. $100K is all. I was told that with the vehicle on my credit report, if everything continues to be paid on time, I'll be able to get approved for more in about a year.. so I'm waiting.

And before somebody says "why not get a $100K house?" check out the housing markets in Chesapeake, Virginia Beach, and Williamsburg (the only 3 cities around here I'd actually live in.. due to crime and other factors). You'd be lucky to find a decent home (in a decent part of these areas..) for under 150K.

Where do you supposed I should look for a Zero Down mortgage? (as for bonds in the area, they're set aside for Military and Low Income.. which I'm neither)

[TimtheGuy]

The $100k approval must then be limited by debt to income ratios and not your limited credit history. The $0 down program I use most often is called My Community Mortgage (Fannie Mae). Even if you have no credit history they will go up to a maximum debt to income ratio of 43%. This means if you add the new proposed housing payment to you other debts(car payment, minimum monthly payments for credit cards, etc.), the number can not exceed 43% of your gross income.

Have you checked to see what the income limits are on the bond money programs? The two I work with here in Minneapolis have maximum incomes allowed of $63,000 (state wide program) and $77,600 (county program). These are both for a single person and go up a little for familys. They may not be as restrictive as you think.

[Rita Mordio]

Originally Posted by TimtheGuy

The $100k approval must then be limited by debt to income ratios and not your limited credit history. The $0 down program I use most often is called My Community Mortgage (Fannie Mae). Even if you have no credit history they will go up to a maximum debt to income ratio of 43%. This means if you add the new proposed housing payment to you other debts(car payment, minimum monthly payments for credit cards, etc.), the number can not exceed 43% of your gross income.

Have you checked to see what the income limits are on the bond money programs? The two I work with here in Minneapolis have maximum incomes allowed of $63,000 (state wide program) and $77,600 (county program). These are both for a single person and go up a little for familys. They may not be as restrictive as you think.

Actually, I have no debt (there's a car on my history, but we have documentation from both Wells Fargo and my mom that states I have no financial burden for it. So mortgage companies have to disregard it as terms of debt.) but make decent money. I was limited in amount due to my credit history. That is what the letter in the mail stated, that is what the company (CountryWide) stated. It is because I haven't been using credit long enough to be "qualified" for a higher mortgage. Kind of like a "trust" thing, I think.

I will check out the program you mentioned next year when I go to purchase my home.