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And if the market had continued to grow, she would have sold her house for a hefty profit. She gambled, she lost. I waste no tears for her or her predicament.
That said, I do agree with the financial expert in the video, that by allowing idiots to crash and burn we would be harming the entire market. My question though, is how did so many clearly unqualified home buyers purchase houses they could never afford? Just who is responsible for that lowering of the financial bar to begin with? Surely it could not have been a bank acting on its own as the problem is so widespread --- just why were these decisions made?
Pure greed on the part of the banks? Then let them absorb the bad loans they themselves made.
Politicians putting pressure on banks to give loans to the 'underserved'? If so, then man up and admit that a grand social experiment has failed.
I think we are owed a thorough explanation, and I bet that the blame would go across political ideology. The question is - are people ready to put aside party loyalty to hear the truth?
Location: Huntersville/Charlotte, NC and Washington, DC
26,701 posts, read 41,827,498 times
Reputation: 41403
Quote:
Originally Posted by camping!
And if the market had continued to grow, she would have sold her house for a hefty profit. She gambled, she lost. I waste no tears for her or her predicament.
That said, I do agree with the financial expert in the video, that by allowing idiots to crash and burn we would be harming the entire market. My question though, is how did so many clearly unqualified home buyers purchase houses they could never afford? Just who is responsible for that lowering of the financial bar to begin with? Surely it could not have been a bank acting on its own as the problem is so widespread --- just why were these decisions made?
Pure greed on the part of the banks? Then let them absorb the bad loans they themselves made.
Politicians putting pressure on banks to give loans to the 'underserved'? If so, then man up and admit that a grand social experiment has failed.
I think we are owed a thorough explanation, and I bet that the blame would go across political ideology. The question is - are people ready to put aside party loyalty to hear the truth?
It was irresponsibility like this that drove up prices in the DC area to relentless prices. All I will say to this lady is you win some and lose some, no sympathy whatsoever. A family i know got put out not even after 3 months of living in an apartment due to it being converted to a condo back in 05. The condo conversions were due to pure greed thanks to the skyrocketing prices. Her house only lost $125k worth of value, not even a few miles of her houses are losing over twice that amount of value or some homes have lost over 50% of their peak value.
The bank should never have approved this loan, the family should not have got this house if they even questioned that they could afford it, and we should not help bail out people who make stupid decisions. End of discussion.
It was not her irresponsibility. Anyone in the housing hotspots can tell you that a 800k house at one point was "average". Even "cheap" areas of CA, for example, had upper-mid scale homes selling in the 800k range. Imagine the situation...a fast rising housing market, reports that houses will rise even more, and an attractive interest rate. Her responsibility to her family was to take the offer to give them a good life. The house seemed like an average house. It did seemed like a regular ticky-tacky suburban subdivision, not a mansion on the hill. Prior to the ridiculous bubble, the house probably sold for around 200k in 1996. A construction worker and a bus driver would make roughly 40k on the low end and up to 90k/100k on the high end. I'm guessing roughly 60-80k for this family. In 1996 roughly 60k or so. This would make a 200k house an option, but still a stretch (180k would be where she would want).
The thing is that the market went out of control. People thought that the market would continue its upward spiral. In my parent's neighborhood in the Inland Empire, our subdivision was selling between 360-420k for homes ranging from 1300sq to 2000sq ft. The homes on the hill were selling for 700/800k at 2500-3000 sq ft. Now, our home (1600sq ft. 30 yrs old) went from 410k to roughly 180k (closer to 120k really considering all the competition). My mom's friend bought at 500k (near our tract...brand new) and now worth about 190k (new tract more competition). Had she known the about the impending crash she would not have bought. I guess my point is that it's not ALL her fault.
Okay, some of it her fault. She could have gotten a condo or rented. But, can you really blame a person who most likely was told that housing prices will rise even more if you wait? Can you blame a person who, most likely, wanted to create a better environment for herself and family? Can you blame a person who has no control of the markets and sound like she was duped by a predatory lender? You can fault her for only so much.
What in the world did the lender find to see the person as qualified for the loan?
What did loan originators care. The loan itself was quickly bundled with other and sold. Buyers of these bundled loans didn't care and due diligence was never performed but what did that matter anyway since the bundled loan were then backed by credit swaps and hedge funds. The more paper that was sold the more profit was made by wall street.
So who do we blame? The ******* who bought into the original sales pitch by companies like Countrywide who didn't give a damn one way or another. The CRA, Fannie Mae or Freddie Mac didn't build this house of cards, private firms did it all on their lonesome own.
Location: Huntersville/Charlotte, NC and Washington, DC
26,701 posts, read 41,827,498 times
Reputation: 41403
Quote:
Originally Posted by that1guy
It was not her irresponsibility. Anyone in the housing hotspots can tell you that a 800k house at one point was "average". Even "cheap" areas of CA, for example, had upper-mid scale homes selling in the 800k range. Imagine the situation...a fast rising housing market, reports that houses will rise even more, and an attractive interest rate. Her responsibility to her family was to take the offer to give them a good life. The house seemed like an average house. It did seemed like a regular ticky-tacky suburban subdivision, not a mansion on the hill. Prior to the ridiculous bubble, the house probably sold for around 200k in 1996. A construction worker and a bus driver would make roughly 40k on the low end and up to 90k/100k on the high end. I'm guessing roughly 60-80k for this family. In 1996 roughly 60k or so. This would make a 200k house an option, but still a stretch (180k would be where she would want).
The thing is that the market went out of control. People thought that the market would continue its upward spiral. In my parent's neighborhood in the Inland Empire, our subdivision was selling between 360-420k for homes ranging from 1300sq to 2000sq ft. The homes on the hill were selling for 700/800k at 2500-3000 sq ft. Now, our home (1600sq ft. 30 yrs old) went from 410k to roughly 180k (closer to 120k really considering all the competition). My mom's friend bought at 500k (near our tract...brand new) and now worth about 190k (new tract more competition). Had she known the about the impending crash she would not have bought. I guess my point is that it's not ALL her fault.
Okay, some of it her fault. She could have gotten a condo or rented. But, can you really blame a person who most likely was told that housing prices will rise even more if you wait? Can you blame a person who, most likely, wanted to create a better environment for herself and family? Can you blame a person who has no control of the markets and sound like she was duped by a predatory lender? You can fault her for only so much.
Actually i live close to that hotspot and they told us that same thing in my neighborhood. Actually a few miles east of my block, 800k is cheap for TOWNHOMES let alone SFH. That house did look like a mansion to me (maybe b/c i live in a 2 bed condo.)
I cant blame someone for wanting a nice house. I just do not think that if someone buys a house and said house loses value and about to be foreclosed John Q. Taxpayer should be left holding the bag when it was that someone took that risk. Real estate is a roll of the dice, you buy and hope for the best but prepare for the worst.
John Q. Taxpayer should be left holding the bag when it was that someone took that risk. Real estate is a roll of the dice, you buy and hope for the best but prepare for the worst.
Here's is the unsaid truth. The banks are not taking back foreclosed homes, they are leaving them in the name of the borrower who simply walks away, once the original borrower walks away the vandals come, the house is stripped and left such a condition where the only thing to be done is to bulldoze it.
So who gets left paying the tab, the same John Q. Citizen in taxes paid to remove these soon to be blighted homes and the loss in property taxes due to the deteriorating condition of the home and reduced property value of the adjacent properties.
Make the banks or mortgage holder sell it in a timely manner in an auction. If it gets 50% of what it sold for, thats its value. If they don't agree to sell it in a timely manner, refuse their insurance claim if anything happens to it or charge them a substantially higher insurance premium.
Make the banks or mortgage holder sell it in a timely manner in an auction. If it gets 50% of what it sold for, thats its value. If they don't agree to sell it in a timely manner, refuse their insurance claim if anything happens to it or charge them a substantially higher insurance premium.
Ah, here's the catch to that, homes aren't even being bought at auction.
"The foreclosure crisis, however, is changing the REO process, with some banks holding off on following though with foreclosures or letting empty houses sit in limbo - where they deteriorate further - instead of selling them. Some banks can’t keep up with the sheer volume of foreclosures. But others are waiting for a better deal from the government for their toxic mortgage assets, avoiding booking losses so they can qualify for more bailout funds, or neglecting homes with little value, some charge - leaving the properties vacant and vandalized. And neighborhoods pay the price for it."
HAGERSTOWN — Up for auction: Two-story house assessed last year at $302,090.
Minimum bid: $444,000.
Any takers?
The answer Wednesday was a resounding no. Out of 14 foreclosed-upon homes up for their requisite auction on the steps of the Washington County Courthouse, not one received a single bid,
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