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Tonight they showed a city in California that sold 30,000 homes in the past six years. 11,000 of those have been repossessed in the past 18 months. They showed an auctioneer at the courthouse trying to give away the homes, two people where there. They weren't bidding!
Times are getting really scary. This is nothing compared to the recession in the 70's-80's.
Tonight they showed a city in California that sold 30,000 homes in the past six years. 11,000 of those have been repossessed in the past 18 months. They showed an auctioneer at the courthouse trying to give away the homes, two people where there. They weren't bidding!
Times are getting really scary. This is nothing compared to the recession in the 70's-80's.
Anyone remember the The Great Depression?
Pay your crap off now.
What does this post have to do with the Triangle? It may be a better fit for this forum:
LKN, lets pretend that you operate a loan company and I take a $300,000 loan
out for a home in San Diego, California. Everything is going great for years. Well, in 2006 things start to get shaky with the employment in San Diego. So I start to look elsewhere and find a position in NC paying a little less. However, my $65,000 salary will go really far in NC. So, eventually my family finds another house in NC. We purchase the home and put the San Diego house up for sale. Well, there are 500 other homes within a two mile radius. A few months go by and I am burning my nest egg up. Eventually I have no more funds to pay for both homes, so I default on the loan with your company. I throw the home in your hands, you can't sell it, the market is dead. You have no choice but to foreclose. Steadly, house by house defaults, people are bailing from CA. Very soon, your company no longer exists.
However, if congress passed a law requiring residents to be responsible for the negative equity. We do it for vehicles, why not homes. There could be an insurance taken on the home, like PMI. If you default, the loan company sells the home for a reasonable value, you pay remainder through your insurance company. Then the responsible party would pay the insurance carrier.
out for a home in San Diego, California. Everything is going great for years. Well, in 2006 things start to get shaky with the employment in San Diego. So I start to look elsewhere and find a position in NC paying a little less. However, my $65,000 salary will go really far in NC. So, eventually my family finds another house in NC. We purchase the home and put the San Diego house up for sale. Well, there are 500 other homes within a two mile radius. A few months go by and I am burning my nest egg up. Eventually I have no more funds to pay for both homes, so I default on the loan with your company. I throw the home in your hands, you can't sell it, the market is dead. You have no choice but to foreclose. Steadly, house by house defaults, people are bailing from CA. Very soon, your company no longer exists.
However, if congress passed a law requiring residents to be responsible for the negative equity. We do it for vehicles, why not homes. There could be an insurance taken on the home, like PMI. If you default, the loan company sells the home for a reasonable value, you pay remainder through your insurance company. Then the responsible party would pay the insurance carrier.
If every business had a safety net like that everyone could go into business for themselves and never have to worry about losing money.
Unfortunately that is not how capitalism works. With risk there is reward.
No one made the lenders give out 100% loans but they got greedy, wanting to give anyone a loan whether they has terrible credit or not.
If someone has 20% down on a home there is alot less chance of them walking away.
The lenders have to deal with it now.
There could be an insurance taken on the home, like PMI. If you default, the loan company sells the home for a reasonable value, you pay remainder through your insurance company. Then the responsible party would pay the insurance carrier.
That's why there IS PMI......
As said above, people who put 20% down (thereby avoiding PMI) are less likely to default. It's not the people with big downpayments who are letting their houses get foreclosed- it's the people who got suckered into payments they can't afford. IMO, the mortgage companies are getting what they deserve for being so loose with their money.
Bob
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I wonder how many of those defaults were due to residents abandoning
