save the financially irresponsible

[Karla with a K]

Originally Posted by TimtheGuy

At 615 there is something knocking it down.

One of my frequent statements is " Just because you pay your bills on time doesn't guarantee good credit."

Kuharai
How many open lines of credit did your report show?
What a lot of people don't realize is having 7 pr 8 small accounts with balances can be a negative effect on your credit score. Especially if the balances total more than 50 % of the available credit.

As an example I have a friend who always said "I have good credit"
When he pulled his score it was under 650, he was very upset because he payed his bills on time. Reviewing his report I found 23 open accounts many with limits under 1000 and small balances. He paid off the small balances closed the accounts opened in the last 6 months left the long standing higher limit accounts open and in about 7 months his score was over 700.

If it has been a couple years I would recommend getting new reports pay the few dollars to get the scores and really go over it looking for the above items.

Back to the original question :
No I don't feel the government should bail out folks that went for the "buy a $400k house for $900 a month.
Actually I think the government should crack down on the many ads for this.
Even with all of the press about higher foreclosure rates and adjustable mortgages going skyhigh so on and so on. People are still wanting to "press the magic button" to get as much house as they can without worrying about the future.
One of the things I recommend to folks looking to buy is to pretend your paying what the mortgage would be on a house, put this money in a money market or short term CD. If you can live comfortably on this amount for 6 to 9 months then go house hunting. The upside is they could have a nice chunk of change for closing costs, down payment or what ever.

[dgz]

I don't want to bail out people who buy more house then they can afford. I don't want to bail out mortgage companies and other corporations. There information all over the net and the media where you can learn how much house you cana actually afford.

I've heard people in their 20s complain that they can't get a mortgage. I could not afford a house until I was in my late 30s (and making more money). Many of my friends could not either. Up until then, like many people, we all rented. Everyone should have a place where they can live that is safe and provides shelter. That doesn't mean that everyone is 'owed' a house coming out right of school. I think this is part of the problem... People expect that coming out of school, they're going to walk into the same lifestyle that their parents have.

[briarwood]

Originally Posted by dgz

I don't want to bail out people who buy more house then they can afford. I don't want to bail out mortgage companies and other corporations. There information all over the net and the media where you can learn how much house you cana actually afford.

I've heard people in their 20s complain that they can't get a mortgage. I could not afford a house until I was in my late 30s (and making more money). Many of my friends could not either. Up until then, like many people, we all rented. Everyone should have a place where they can live that is safe and provides shelter. That doesn't mean that everyone is 'owed' a house coming out right of school. I think this is part of the problem... People expect that coming out of school, they're going to walk into the same lifestyle that their parents have.

There is a difference between owning a Toll brothers mansion in the rich part of town a buying a bungalow to get your foot in the door. Back in the day, someone could go to the factory and in a few years rub enough pennies together to have their first starter home. I'm not talking about 4 bedroom monstrocites with viking ranges. I'm talking about bungalows and rowhomes in places like Back-of-the-Yards and Brooklyn. Homeownership is a bedstone of democracy and finacial stability/success. We should try to encourage it.

Sadly, those types of homes aren't built anymore. When things like that are built, they're so ****ty, it's no better than living in a tenement in terms of space and noise. And as for those bungalows and rowhomes, we abandoned them becuase of our blind racism and now the cities have been seized by the savages and illegals.

[mhouse2001]

Originally Posted by ParkTwain

G-R-E-E-D, say it with me, G-R-E-E-D

Oh, America, thine GREED IS GOOD! It must be UNCONSTRAINED and COURAGEOUS! It must GROW LARGE ENOUGH to THREATEN THE WORLDWIDE FINANCIAL SYSTEM! GOD BLESS AMERICAN G-R-E-E-D!

Why is interest on debt acceptable to people? Why don't people complain? You buy a $200K house and after 30 years pay >$400K on it. Did the bank do ANYTHING to justify it charging you >$200K in interest? What did you get for that money? NOTHING.

The people who are in these tough mortgage situations should be given assistance...from the lender! The interest rate should be renegotiated to a point where they CAN afford to make payments. The bank is charging the interest which is PURE GREED. No one is forcing them to charge the interest except for their shareholders who are intent on profit, profit, PROFIT. Why can't the lender just cut its customers some slack and let them have their homes? Any bank that would admit it made some risky lending mistakes and would actually let its customers off the hook (in a manner of speaking) would then RAKE in future customers, thus ensuring its market survival. Everybody wins in my view.

Question from the left field bleachers: Other religions (Islam in particular) regard interest on debt (usury) as wrong. Any wonder why they are the enemy of Western capitalism? Could it be that we need to 'democratize' them so our banks can make a profit in an environment where such profit is forbidden? Just curious.

Again: Why do we allow banks to charge us the cost of house to loan us money to buy a house? Why do people put up with it? Is capitalism just too big a truck to pull off the road so we just choose to wave it on through?

[NewToCA]

Originally Posted by mhouse2001

Why is interest on debt acceptable to people? Why don't people complain? You buy a $200K house and after 30 years pay >$400K on it. Did the bank do ANYTHING to justify it charging you >$200K in interest? What did you get for that money? NOTHING.

The people who are in these tough mortgage situations should be given assistance...from the lender! The interest rate should be renegotiated to a point where they CAN afford to make payments. The bank is charging the interest which is PURE GREED. No one is forcing them to charge the interest except for their shareholders who are intent on profit, profit, PROFIT. Why can't the lender just cut its customers some slack and let them have their homes? Any bank that would admit it made some risky lending mistakes and would actually let its customers off the hook (in a manner of speaking) would then RAKE in future customers, thus ensuring its market survival. Everybody wins in my view.

Question from the left field bleachers: Other religions (Islam in particular) regard interest on debt (usury) as wrong. Any wonder why they are the enemy of Western capitalism? Could it be that we need to 'democratize' them so our banks can make a profit in an environment where such profit is forbidden? Just curious.

Again: Why do we allow banks to charge us the cost of house to loan us money to buy a house? Why do people put up with it? Is capitalism just too big a truck to pull off the road so we just choose to wave it on through?

Interest isn't pure greed, you are paying for the time value of money. Now certain elements of closing cost are pure greed, but that is a separate issue.

If the bank forgives some of the interest then your neighbor, who paid the same price as you for an identical house, is being treated unfairly. I think that we need to keep this in mind during this discussion, the neighbor who was "responsible" and took a higher initial interest rate in a fixed rate mortgage is actually being penalized. Your proposal rewards inappropriate extravagance.

[GregW]

Philosophically I have always questioned the “time value of money”. It is a useful concept but does it have any real meaning? I think not unless you consider interest to be the cost of renting the money. Not sure about any of this. I actually consider capitalism and the joint stock corporation to be an institutionalized fraud that is a very useful fraud.

My wife and I stared our housing odyssey with a small (really small) house trailer. Then we bought some land to build a house, then moved and rented in NYC. Eventually sold the land and put 15% down on our current condo. We never expected to get a zero percent loan or to speculate with our housing. Apparently a lot of people do this and have “made” a lot of money. The trouble is simple – this speculation is a Ponzi scheme and requires a continuous expansion at the base. When the new sales stop the whole thing just collapses.

I wonder what the financial community is going to do with all the foreclosed and devalued houses? Sell them to the speculators that cashed out before the collapse or just let the buyers keep the things for far lower payments. Interestingly, banks lend money not rent houses.

[TimtheGuy]

Originally Posted by Karla with a K

One of my frequent statements is " Just because you pay your bills on time doesn't guarantee good credit."

Kuharai
How many open lines of credit did your report show?
What a lot of people don't realize is having 7 pr 8 small accounts with balances can be a negative effect on your credit score. Especially if the balances total more than 50 % of the available credit.

As an example I have a friend who always said "I have good credit"
When he pulled his score it was under 650, he was very upset because he payed his bills on time. Reviewing his report I found 23 open accounts many with limits under 1000 and small balances. He paid off the small balances closed the accounts opened in the last 6 months left the long standing higher limit accounts open and in about 7 months his score was over 700.

If it has been a couple years I would recommend getting new reports pay the few dollars to get the scores and really go over it looking for the above items.

Back to the original question :
No I don't feel the government should bail out folks that went for the "buy a $400k house for $900 a month.
Actually I think the government should crack down on the many ads for this.
Even with all of the press about higher foreclosure rates and adjustable mortgages going skyhigh so on and so on. People are still wanting to "press the magic button" to get as much house as they can without worrying about the future.
One of the things I recommend to folks looking to buy is to pretend your paying what the mortgage would be on a house, put this money in a money market or short term CD. If you can live comfortably on this amount for 6 to 9 months then go house hunting. The upside is they could have a nice chunk of change for closing costs, down payment or what ever.

My credit score was a measley 615. There are no late payments on the car loan. The only thing on my credit is my zero balance credit card, the car, and I think my rent is. And the courtesy thing is because of my father (they're friends as well.. so he weaseled it into the system....). Initially I was denied due to credit by Countrywide.


It sounds like she has had the auto loan (installment) for 1 to 2 years and a $0 balance credit card. So, as I stated something derogatory is knocking down her score.

[Rita Mordio]

Originally Posted by dgz

I don't want to bail out people who buy more house then they can afford. I don't want to bail out mortgage companies and other corporations. There information all over the net and the media where you can learn how much house you cana actually afford.

I've heard people in their 20s complain that they can't get a mortgage. I could not afford a house until I was in my late 30s (and making more money). Many of my friends could not either. Up until then, like many people, we all rented. Everyone should have a place where they can live that is safe and provides shelter. That doesn't mean that everyone is 'owed' a house coming out right of school. I think this is part of the problem... People expect that coming out of school, they're going to walk into the same lifestyle that their parents have.

Why can't I walk out of school and not be able to get a mortgage? I make as much as both of my parents combined (lucky break..).

TimtheGuy, I received a credit report like you stated I should. And I have to thank you. Some person (probably an ex..) opened a credit card account in my name and ran it up past the limit. I'm working with a lawyer and that company to attempt to trace it/get it off my credit. Once it's done and over with, my credit should be MUCH higher.

When it comes to bailing people and companies out from these massive debts... The companies should not have advertised that people can get into an expensive house for really cheap without explaining everything in detail. People should have realized that if you get a $400K home for $900/month or so now.. they need to be prepared for the BIG jump after that "interest only" period is over.

People have made mistakes in this. I'm just a little concerned, at this point, what the housing and mortgage markets are going to do with all of these foreclosures. It could backlash to where mortgage companies become SUPER SUPER selective in who gets a mortgage. People who have refinanced for a lower interest rate might find themselves with negative equity as house prices plummet due to a lack of people buying.

Those who have bought their house and have either paid it off or are close to won't be affected. Around here, businesses are being forced to move to make room for more apartments and condos. I can almost see them getting rid of a neighborhood for a BIG apartment complex (tax dollars!!). And for people that say that it won't happen. I watched TWO neighborhoods get demolished right near my father's house because they were "eye sores."

[TimtheGuy]

Originally Posted by Kuharai

Why can't I walk out of school and not be able to get a mortgage? I make as much as both of my parents combined (lucky break..).

TimtheGuy, I received a credit report like you stated I should. And I have to thank you. Some person (probably an ex..) opened a credit card account in my name and ran it up past the limit. I'm working with a lawyer and that company to attempt to trace it/get it off my credit. Once it's done and over with, my credit should be MUCH higher.

"

That's great (pinning down the issue)! Once you get that repaired I think you will find that you can qualify for what you are looking for.

Good luck and feel free to post/PM any questions.

Tim

[mrsengle]

Originally Posted by Kuharai

When it comes to bailing people and companies out from these massive debts... The companies should not have advertised that people can get into an expensive house for really cheap without explaining everything in detail. People should have realized that if you get a $400K home for $900/month or so now.. they need to be prepared for the BIG jump after that "interest only" period is over.

And there's only part of the problem. Do we have this mess because loan officers/mortgage brokers didn't explain things, and lead the buyer down the garden path? Or did the buyer not take the time to educate themselves and fully understand what they were getting themselves into? I suspect it's a little of both.

People have made mistakes in this. I'm just a little concerned, at this point, what the housing and mortgage markets are going to do with all of these foreclosures. It could backlash to where mortgage companies become SUPER SUPER selective in who gets a mortgage. People who have refinanced for a lower interest rate might find themselves with negative equity as house prices plummet due to a lack of people buying.

The market is correcting itself, IMHO. Mortgage companies can't afford to be SUPER SUPER selective - just like they couldn't afford to make exotic loans to high-risk buyers. The pendulum will swing the other way, and we'll find a happy balance again. It's the same with prices and equity - it's a cycle. And this is why I harp: A home is, first and foremost, a roof over your head. THEN it's an investment. The market may not be fair, but it can be predictable.

As for the credit card account opened in your name.....that seriously blows. I hope that comes out with a quick and painless fix.