What happens when you're foreclosed on? (to rent, appliances, loan)
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I am amazed at the folks on here talking about personally responsibility when the mortgage crisis in metro atlanta is primiarily linked to an excess suppy of homes (i.e. Ronald Reagan thinking on the suppy side stuff) that was approved via building permits by republican-conservatives (i.e, Gwinnett, Cobb, N. Fulton, Forsyth. etc....). IDIOTS. And now they want this poor gal to walk the walk of personal responsibility. F- That!!!. I recently spoke to a realtor in a subvision with homes that once sold in to $600k-$700k range and she told me that the banks FORGAVE the builders who could not sell the homes and defaulted on the loans - and then took possession of the properties. That bank was then taken over by another bank. NO CREDIT DING; NO DEFICIENCY BALANCE; NO NOTHING. And I'm sure the original bank executives/board (which was local to GA) walked away with there retirement $$$, cash, and houses. So you idiots are going to lecture this poor women about personal responsibility. Well it is personal responsibility. She is responsible for herself. Just like when a bank forecloses on a property and the sells/auctions it off it .50 cents on the dollar, negatively effecting entire neighborhoodss/subdivisons while receiving taxpayer money. IDIOTS!!!!
Let's not forget that fractional reserve bullsh*t running the banks. Banks create money out of thin air with this principle. Also, what about stocks. You NEVER hear anyone say "oh, that company lost a lot of money. Now the stock is worthless. They need to pay back the investor every penny." No, you hear that the investor took a risk, and they came out negative. They cut, run, start over, and invest in something else. That's all a bank is doing. They're making an investment. They think that people will pay back these loans for 1 million dollars when they make $30K/year. The banks made a risky investment (and knew it) and lost. The people accepting the terms to these loans aren't financially savvy; they are told by a banker that they can afford a home that they can't. All in the long run, they increase the money supply and inflation. So, I advocate personal responsibility. Banks need to make better investment choices, consumers need to become financially savvy, and both parties should count their losses and leave.
No one from Harvard, Wharton, etc... would continue to throw good money after bad. The ship is sinking and some home prices (for some people) will never recover.
I'm going to have to disagree with you there. Our Congress is full of Ivy Leaguers throwing good (loaned) money at bad. LOL
They cut, run, start over, and invest in something else. That's all a bank is doing. They're making an investment. The banks made a risky investment (and knew it) and lost.
Huh? You're comparing transactional pieces of paper to human beings? Gold that you dig out of the dirt is an investment. Human beings make contracts with one another.
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Originally Posted by runningcircles1
The people accepting the terms to these loans aren't financially savvy; they are told by a banker that they can afford a home that they can't.
How many times are folks going to try to pull that excuse? Question: You know how much money is in your check at the end of the month, so can you give me $1000 each month? 'Yes, you can', or 'No, you can't'. It's as simple as that. Banker doesn't have to tell you whether you have $1000 left in your paycheck. The only bank needed to do is say "OK, you 'do' have $1000 at the end of the month - GREAT. Now, Mr. Jones - since this is an adjustable rate mortgage will you ALSO be able to afford a monthly payment of $1600 each month if interest rates adjust up?" And Mr. Jones knows either "Yes, I have that much in my paycheck each month", or "No, I don't have that much for when rates go up". I mean, did some lenders try to paint a pretty picture to make the loan? Sure. But that excuse about folks not knowing what they can afford is cricket sh#t. It ain't not ain't rocket science.
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Originally Posted by runningcircles1
Banks need to make better investment choices, consumers need to become financially savvy, and both parties should count their losses and leave.
Didn't you mean all parties should count their losses? As in YOU too!? 'Cause if you own property, due to so many people walking away from properties and so many foreclosures, you have lost several thousand dollars too. Hope I'm not the first to break that news to you.
I am very serious and I think it would have been a great idea. BTW - one would never put the money in an account with my name. Nor would I buy a house and deed it in my name. The best thing to do would be to 1) buy the properties, get the equity and jump ship 2) do not put the money in account in your name 3) get a job at minimum wage and file for bankruptcy. 4) also claim mental disabilities - depression, etc... 5) and laugh on an island - Puerto Rico, Dominican Republic. Years will past, and one could pass this money onto their kids. IT IS THE AMERICAN WAY.
AGAIN I AM SERIOUS. As you thankfully go to work everyday you began to realize that the only to get ahead is to get ahead.
OOooohhhh...now I get where you are coming from. You mean...wait...hold on...let me look it up in my dictionary...oh here it is...."fraud"!!
Now I think you are a troll. I thought a little before, but now it's obvious. Nobody seriously thinks like this.
Huh? You're comparing transactional pieces of paper to human beings? Gold that you dig out of the dirt is an investment. Human beings make contracts with one another.
The bank is BETTING that you will be able to pay that contract, with interest. Just like when you buy a stock, you're betting the company will do well and give you some of their profit. In either case, though, you're taking a risk. To a bank, that loan is an asset. The safer risks yield lower returns (high credit scores with reasonable home prices got the lower interest rates, while riskier, lower credit scores got higher interests rates, and folks that SHOULD NOT be trusted with loaned money got ARMs that adjust). More risk means more reward. However, a savvy investor/banker will know when not to take on risk anymore (it makes a parabolic graph... best to stop BEFORE getting to the top of that parabola). Saying that a loan contract isn't an investment is naive and shows a lack of financial education. Read the publication "Money Mechanics" published by the federal reserve some time.
Another broken contract example would be with labor unions and insolvent companies that file for bankruptcy. There may be a contract there, but the circumstances have changed. So do contractual obligations. If a contract can never be fulfilled under current circumstances and would lead to a perpetual cycle of one party making out better than another, with no end in sight for one party, a contract can become null and void. By filing bankruptcy, a business or individual is declaring financial insolvency with the inability to pay his or her bills. If the contract cannot be fulfilled, it can be nullified.
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How many times are folks going to try to pull that excuse? Question: You know how much money is in your check at the end of the month, so can you give me $1000 each month? 'Yes, you can', or 'No, you can't'. It's as simple as that. Banker doesn't have to tell you whether you have $1000 left in your paycheck. The only bank needed to do is say "OK, you 'do' have $1000 at the end of the month - GREAT. Now, Mr. Jones - since this is an adjustable rate mortgage will you ALSO be able to afford a monthly payment of $1600 each month if interest rates adjust up?" And Mr. Jones knows either "Yes, I have that much in my paycheck each month", or "No, I don't have that much for when rates go up". I mean, did some lenders try to paint a pretty picture to make the loan? Sure. But that excuse about folks not knowing what they can afford is cricket sh#t. It ain't not ain't rocket science.
Unfortunately, it isn't as simple as you're making it. Using savvy language and broken promises, I can sell an overpriced loan to someone who shouldn't have one. "Right now, you'll be paying $1000 per month for this mortgage. In 3 years, the rate will adjust according to the prime rate or LIBOR index. However, the fed and Bank of England have kept rates low and will probably continue to do so, so you most likely won't need to worry about the price going up. It might go down, actually, with the way the central banks are manipulating interest rates. And, if you do worry, you can always refi later at a fixed interest rate." That line was used by many mortgage brokers to sell these loans. They thought the risk would be worth the reward. They told the truth, but in a way that home buyers wouldn't be alarmed. If you didn't know, many banks have philosophy and psychology majors working for them. Hmmm, isn't that convenient? Who better to make you feel calm about something scary than a psych major using neutral language.
They took a huge risk and lost. Bad government regulation, bad monetary policy, and misinterpretation of economic data by the masses caused this borrowing epidemic and caused banks to loan money to risky borrowers. I can't say I feel bad for them.
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Didn't you mean all parties should count their losses? As in YOU too!? 'Cause if you own property, due to so many people walking away from properties and so many foreclosures, you have lost several thousand dollars too. Hope I'm not the first to break that news to you.
Lucky me. I don't own property. It's a bad investment really. It's nothing more than a consumer good made of ticky-tacky, costs too much in maintenance costs. Not really an investment at all after all the costs. I view a home as a domicile to live in, not as a tool for making money as so many in America do. Again, I'll go back to my stock example. Those collapsing banks and failing industries caused a huge loss in hedge funds, pensions, 401k's, etc. It was caused by massive sell offs due to the perception that the investments weren't safe. What happens when you have too many sellers and not enough buyers? Clearance sale! Same thing now. Everyone decided to take a chance on "investing" in their homes. They thought real estate could go up and up and up at 25% per year infinitely. Unfortunately, this is not economically sound. They were wrong, had a massive sell-off with no buyers or cheap credit to continue that cycle. Should those folks who invested in stocks get their money back for taking a risk? Most would say "no" just like they would say underwater homeowners shouldn't get a bailout. They took the risk, it went down. Those other folks who own property also took a risk. Their "investment" went down. Wouldn't be the first time in economic history for that to happen. People who buy new cars know this feeling all too well, and that's why no one invests in their new car. I wish folks would view home ownership the same way.
Most of the personal responsibility people are financially enept. There are two ways in every investment, both involves risk. I can't for the life of me understand why ordinary people would side with banks who sold bad loans repackaged them into complex securities with no way to value them, took out swap insurance against said securities, and thought they have all bases covered. Who would thought the insurance company wouldnt pay up, say hello to the bad guy everyone. It's the bank executives.
Lucky me. I don't own property. It's a bad investment really. It's nothing more than a consumer good made of ticky-tacky, costs too much in maintenance costs. Not really an investment at all after all the costs. I view a home as a domicile to live in, not as a tool for making money as so many in America do.
Too bad you weren't around to convince all those fools of the last 500 years that real property is NOT a good investment. Oh wait, my mistake, the VAST MAJORITY of wealthy people AND wealth experts of the last 500 YEARS will still tell you that one the BEST investments for personal wealth, and the MOST common source of millionaires has been real estate.
After 20 years of renting @ $800/month, I guess you can leave your kids..ummm some photos of the place. ? .
After 20 years of paying $800/month mortgage, I'll be leaving my kids.... well, about $300 thousand dollars.... yes, that's net value - after all the maintenance costs, property taxes, and insurance.
Oh, wait! Now that I think about it, maybe you do have a point: I do have to spend about $1.99 once every 3 years for oil to keep the gate from squeaking. So, I stand corrected. If I go tomorrow, I'll only be leaving my kids about TWO HUNDRED NINETY-NINE THOUSAND, NINE-HUNDRED AND NINETY-EIGHT DOLLARS ($299,998.00)....and a penny.
Most of the personal responsibility people are financially enept. There are two ways in every investment, both involves risk. I can't for the life of me understand why ordinary people would side with banks who sold bad loans repackaged them into complex securities with no way to value them, took out swap insurance against said securities, and thought they have all bases covered. Who would thought the insurance company wouldnt pay up, say hello to the bad guy everyone. It's the bank executives.
Which is why I would mail in the keys if I was in a tough situation.
BTW - I love the rep points I keep getting from my posts
Most of the personal responsibility people are financially enept. There are two ways in every investment, both involves risk. I can't for the life of me understand why ordinary people would side with banks who sold bad loans repackaged them into complex securities with no way to value them, took out swap insurance against said securities, and thought they have all bases covered. Who would thought the insurance company wouldnt pay up, say hello to the bad guy everyone. It's the bank executives.
There are 2 sides to every story. Yes the banks behaved badly in some instances and they should suffer. But there are millions of people out there who bought homes way beyond what they could afford with the hopes of selling their homes for lots more money in the future. Yes there are exceptions but if there weren't suckers out there the banks wouldn't have any customers. Ignorance is no excuse.
Too bad you weren't around to convince all those fools of the last 500 years that real property is NOT a good investment. Oh wait, my mistake, the VAST MAJORITY of wealthy people AND wealth experts of the last 500 YEARS will still tell you that one the BEST investments for personal wealth, and the MOST common source of millionaires has been real estate.
You mean the bankers who want to give you a mortgage so you can pay interest on it? Or the real estate broker who wants to sell you the house? Yeah, I wonder why they say that. Most of the people who become wealthy from real estate do so because they SELL it or finance the sales.
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After 20 years of renting @ $800/month, I guess you can leave your kids..ummm some photos of the place. ? .
After 20 years of paying $800/month mortgage, I'll be leaving my kids.... well, about $300 thousand dollars.... yes, that's net value - after all the maintenance costs, property taxes, and insurance.
Oh, wait! Now that I think about it, maybe you do have a point: I do have to spend about $1.99 once every 3 years for oil to keep the gate from squeaking. So, I stand corrected. If I go tomorrow, I'll only be leaving my kids about TWO HUNDRED NINETY-NINE THOUSAND, NINE-HUNDRED AND NINETY-EIGHT DOLLARS ($299,998.00)....and a penny.
Yes, you'll be leaving your KIDS with it. If YOU sell it and get money from it, you will take a loss. And, I doubt your maintenance costs are that low. Don't forget property taxes, interest from mortgage, painting every few years, homeowners association fees, broken appliances, plumbing problems, etc. etc. etc.. You've forgotten that your kids will pay all that if they keep the house. In the end, it isn't really an investment since you keep pouring money into it. If you sell it, it will be a net loss with all of those costs on top of it usually. One way it's an investment is if you have paid it off, and if you lose your job, you won't have to worry about housing despite having no income stream. Which is why I do plan on having a home one day, just not now. Prices haven't reached their bottom yet, I'd like to be a bit more financially stable, and I think I'm too young to do so. So, I'm riding out the rental train and letting a landlord take care of maintenance costs for now.
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