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Old 06-03-2008, 10:28 AM
 
Location: Up above the world so high!
45,218 posts, read 100,394,202 times
Reputation: 40197

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Quote:
Originally Posted by johne482 View Post
Agree 100% that there are a lot of people out there that just don't know the score. It's easy for some of us to sit in judgement now and say they shoulda learned. Let's face it-how many people are smart enough or so inclined to say-yep I'm going to school tonite and take a free course at the local H.S. Yeah right, after they go to the dentist voluntarily. Just doesn't happen.

Of course they are learning a lot now ----"too little too later" I guess is applicable here.
Hey, not learning is a choice. Kids don't always get that every choice has a consequence. Adults should.
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Old 06-03-2008, 10:33 AM
 
Location: Charlotte, NC
714 posts, read 2,298,086 times
Reputation: 801
Quote:
Originally Posted by Mom2Feebs View Post
Consumers are way too dependent on others to tell them what they can and can't afford. They've lost all common sense about it, thanks to things like lines of credit. Your doctor/mechanic argument doesn't hold water, IMHO.
Well said! If you are looking at "creative" loans and don't fully understand what you're being told, or the numbers don't add up in your head, it's 100% your responsibility to do something to make sure that your money is being managed right, even if that means walking away from the transaction.

I don't do creative financing, because I don't always understand how it works, and don't trust the number of variables involved, and I like my money too much to put it into something I don't understand.

There are only 2 variables that truly matter: What you make and what you spend. If consumers would focus on those two variables only, and throw out all the gimmicks and "creative" ways to get more than they can afford, our economy would be in much better shape.
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Old 06-03-2008, 10:44 AM
 
7,126 posts, read 11,645,705 times
Reputation: 2598
Default another thing they are going to learn

Not everyone is aware of this "quirk" in the taxaction law. Thought I would bring this thought to the table. After you lose your home you then owe Uncle Sam quite a bit of tax money. I'm sure that a lot of people that have lost their homes-walked away-or did a negotiated deal with the lender-don't know they owe taxes on the difference between what they borrowed and what the foreclosure sale brought in. That is TAXABLE income on forgiven debt.

Do a friend a favor who might be considering walking and let them know that this is not the end of the road with them as far as Uncle is concerned.
je
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Old 06-03-2008, 10:30 PM
 
Location: Ayrsley
4,713 posts, read 9,665,667 times
Reputation: 3824
Quote:
Originally Posted by flexysteve View Post
I follow Suze Orman's books and advice for the most part. Her arguments make alot of sense and she is very conservative when it comes to spending money. Her show is great because she doesn't play nice and tells it like it is. Also the biggest thing you start to realize is that people with money problems have problems not money related and use shopping and buying stuff as a way to escape. Also she goes into why people spend on what they do and how financial issues can ruin marriages.

If I recall she recommends a 4 or 6 month backup fund for job loss not to be ever touched unless needed for a medical emergency and is pretty strict about the 3 to 1 for mortgage. And when you have children you better have a Revocable Living Trust.

I think every teenager should be required to read "Young Fabulous and Broke" before they even think about getting a credit card (which aren't all evil)
Suze Orman offers some good advice. Although it bothers me a bit that she has a financial deal with FICO and does not generally disclose that.
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Old 06-03-2008, 10:53 PM
 
22 posts, read 81,646 times
Reputation: 16
Quote:
Originally Posted by johne482 View Post
Not everyone is aware of this "quirk" in the taxaction law. Thought I would bring this thought to the table. After you lose your home you then owe Uncle Sam quite a bit of tax money. I'm sure that a lot of people that have lost their homes-walked away-or did a negotiated deal with the lender-don't know they owe taxes on the difference between what they borrowed and what the foreclosure sale brought in. That is TAXABLE income on forgiven debt.

Do a friend a favor who might be considering walking and let them know that this is not the end of the road with them as far as Uncle is concerned.
je
Actually, Bush recently passed a law offering reprieve on this law, Mortgage Forgiveness Debt Relief Act of 2007. This is for debt forgiven used to pay the actual house, would not apply to any equity line debt that is forgiven, however.
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Old 06-04-2008, 08:19 AM
 
Location: Charlotte, NC
2,193 posts, read 5,038,753 times
Reputation: 1075
I love Suze Orman's show. I watch it religiously every week. The information is very useful and dead on imo.

Sometimes those ppl on the shows on HGTV really make me mad. One family wanted to know how much their house was worth bc they wanted to take the equity out for a trip. I mean who does that? Have they thought of maybe saving up for a vacation instead?! Who wants a 30 year mortgage plus a HELOC till they are 80?!
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Old 06-04-2008, 08:31 AM
 
1,162 posts, read 2,101,779 times
Reputation: 360
They were talking about big trips. I thought that was nuts too. What will they have left when they retire in 20 years? Memories yes...but perhaps no money, no security and way too much time on their hands.
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Old 06-04-2008, 06:41 PM
 
41 posts, read 117,817 times
Reputation: 15
Default Foreclosures Are Not Always Your Fault

I firmly disagree that a foreclosure is always your fault. Many thousands of people have been the "victims" of company and corporate downsizing. That includes Delphi, G.M., Chrysler, Ford, American Axle etc.

I also had the horrid experience with Countrywide Mortgage changing my mortgage rate from 8% to an ARM without my permission!! My mortgage payment went from $900.00 to $1600.00 a month. If my home was in the suburbs and I had a mortgage of $230,000.00 it would be feasible. But this was in the City of Detroit and my home was only valued at $110,000.00. This is a fraudulent business practice. Now that the housing market has fallen out, Countrywide has come very close to Bankruptcy, they have fired over 15,000.00 employees and the victims of this practice have very little recourse. Oh, by the way, I was one of the victims of corporate downsizing. I had 28 years of seniority within the Financial department at G.M. I was a Salaried employee. The GNP as we have known it, is in total disparagement!! I had a very good credit rating before the above happened. My attorney says that this "foreclosure" mark will be on my credit record for a while. I am currently in the process of rebuilding my credit rating. Remember, a lost of Income is basically the main reason a person would loose their home; especially if in the past their credit rating was good!!
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Old 06-04-2008, 07:13 PM
 
Location: Indian Land
628 posts, read 2,071,141 times
Reputation: 476
Quote:
Originally Posted by Tinnie View Post
I firmly disagree that a foreclosure is always your fault. Many thousands of people have been the "victims" of company and corporate downsizing. That includes Delphi, G.M., Chrysler, Ford, American Axle etc.

I also had the horrid experience with Countrywide Mortgage changing my mortgage rate from 8% to an ARM without my permission!!

Unfortunately...the automotive business is a victim of union greed and unreasonable pay scale and benefit demands, however....that's a different thread.

Can you explain how Countrywide just decided to change your mortgage terms.....I would think you must have signed something? Did you just wake up one day and see your mortgage double?
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Old 06-04-2008, 08:01 PM
 
1,177 posts, read 2,230,537 times
Reputation: 1142
Quote:
Originally Posted by BRKLYN2CLT View Post
Unfortunately...the automotive business is a victim of union greed and unreasonable pay scale and benefit demands, however....that's a different thread.
That is a very ill-informed statement. Poor management, poor product decisions, reliance on aging technologies, "free trade" and various other domestic & global factors did more to harm the U.S automotive industry than any union ever could. I took several Labor Relations courses while completing my master's degree. The automotive industry was a frequent and hot topic. Blaming unions is easy, but it doesn't help fix the real problems. I'm sure you are aware that most every car built in Japan is built by union labor, right? They seem to be doing just fine.

And back on topic... You are gosh darn right the buyer is to blame when he or she chooses to buy an ego-boosting-shrine-unto-themselves that he/she can't afford and doesn't even know it. I have a hard time mustering sympathy for this case. These people asked for financial doom and many are getting it. That sucks, but they have no one to blame but themselves. There are many free financial calculators on the web. They should have used them!

This isn't all cases though. As an earlier post says, a lot of people have lost their jobs due to layoffs, plant closings, downsizing, etc. Many remain unemployed or under-employed. Many of these people did not live beyond their means. Their means just shrank! In these cases, I don't know if there is blame to be levied.
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