Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Could you expand a little how Countrywide was able to change the rate without your permission? I think this information would be interesting to all on board.
Would you also tell us the "process of rebuilding" your credit rating?
I've read some of your posts on other forum boards and I am intrigued as to how (with bad credit) one might be able to rent at $1200/month or buy another house.The information might be helpful in those in a similar situation.
I guess after 5 weeks she still can't come up with the answer. I need to learn patience that's all. I'll give it another 3 or 4 months and we'll go from there.
I guess after 5 weeks she still can't come up with the answer. I need to learn patience that's all. I'll give it another 3 or 4 months and we'll go from there.
Well the problem with this statement is inflation. My forst home back in '99 was $90K and it was an old fixer upper in Cornelius. Today it is worth in the $150's. If you want in a starter neighborhood around here your looking at $160K easy.
I would recommend saving 15-20% down and getting a 15 year mortgage if you could afford it.
If wages have gone up at the same pace as house prices, it shouldn't be any harder to put together a down payment now compared to then - whenever you decide "then" was.
If wages haven't kept up, then there is an affordability problem. Those tend to be worked out as well as you get imbalances between the number of buyers and sellers that cause prices to drop.
Good advice to get pre-qualified and then look. And don’t tell the seller’s agent how much you are pre qualified for until a price is agreed upon.
Even better - ask your mortgage broker / lending agent to draft several pre-qualification letters in various amounts.
When I went shopping for my first home, we were pre-qualified for well over our researched maximum purchase price of $400k.
We got letters saying we were prequalified for $275k, $300k, $325k, etc. up to $400k.
This way, we could produce the letter closest to the purchase price of the property we were interested in, and they wouldn't know we were pre-qualified for more.
Re:
"Borrowers are more at fault". There's no doubt in my mind that this augument could be won at every turn.However, why "more"? (Note that I am not defending irresponsibility). Didn't the lending participate in "fraud"-ie: enabling a weak buyer to buy a house that he was damn sure the buyer would never be able to afford? I know you know what an ARM loan is. I know. Probably 98% of this board knows. But how many first-time buyers know what it means? I'm not quite sure.I'm serious.
Like 98% of the board would know what it is, I suspect 98% of them also know what an ARM mortgage is but plead ignorance because they want to make "excuses" for the state they are in, foreclosure. I don't know anyone that has taken up an ARM loan and "not" know that it would reset at a higher interest rate a couple years later. They all knew it... I don't know any lenders that don't SAY it when the ARM was being guaranteed... some of these homeowners even planned to "sell" their home to make a profit (cause other people were doing it) before their ARM resets but then the housing bubble popped and they lost. Now, if you listen to them, they are demanding to pay LESS principal than the loan they took out.. who borrows 100k and say well I pay back only 70k and you have to accept it... is that your idea of the "innocent" homeowner? The innocent homeowner with terrible credit scores is demanding to pay a LOWER INTEREST rates than a responsible homeowner with excellent credit scores, how is that fair? When it comes down to it, it isn't about "home", its more about "money"... they weren't trying to fulfill a dream of living in a home... if they were they wouldn't oppose to losing all the profits from the home except what they took out to buy the house... meaning if they should ever sell the house, they only get back what the reset principal was and lose whatever profit to the bank... no, you don't see them accepting that deal in exchange for the lowered principal AND lowered interest rate... they want it all and to pay none of the penalties, it was always about the money...
People who lend money are always looking out for their own best interests. They're not your parents, not your friends, not your accountant-- they are salespeople trying to make money on your business. It's always been that way, from the time you bought your first car... got your first credit card... took out your first loan. Why, now, are we so intent on blaming them for doing what they've always done-- selling something to make a profit? Borrowers used to exercise a little common sense, judgment and restraint when making big ticket purchases. They used to say, "Wow, I only make $50,000 a year; I can't afford a $700,000 home and lying about it is illegal." Then they stopped and now it's supposed to be someone else's fault? Caveat emptor has only been around for centuries now.
Last edited by goodbyehollywood; 07-10-2008 at 10:36 AM..
I thnik the governamnt encourage thyis innovative financing to allow peole that didn't have the resoutce for home pwnership;the lenders went along and the buyers got into a worry later and its the best investment attitude. Its all three fault and they should reap the risk results. The problem is tht even the local governamnt who gained so much tax revenue are pushing for a bailout much of which they will control it seems. With estimates that 35% will face foreclosure again even witrh ther planned baiout ;it is a very bad thing for the tax payer and bad presidence to set. The same peole have high credit debt of the same reason they have foreclosure problmes in most cases.Too many were also subsidsing their income by their mortgage equity that was growing faster than any other markets .
Five years ago, special interest groups were making a huge issue that there was a desparity in the frequency of issueing mortgage loans to certain individuals and that these certain individuals were in fact being descriminated against. It was an issue that was constantly on the news. It became neccessary for mortgage companies to lower the qualifying standards to allow more poor risk borrowers to have an opportunity to purchase a new home. Most of these homes were purchased with a loan that would baloon in three or five years. When this happened, the defaults began. It continued at an alarming rate and is still going on. The problem now is that many fingers are pointing the blame on the mortgage companies for giving out these unqualified mortgages (which they really had no choice), and many individuals that got them are getting a free ride without making loan payments. In many cases the mortgage companies refrain from taking the house away from these individuals to avoid the horrible publicity they would receive.
There are many other reasons that exist some valid, some not, but they are not part of a new trend as aforementioned which accounts for approximately 80% of the existing problem.
It is my opinion that if we continue to drop standards to make everything equal for people that are not equal we will continue to sink. No offence to Obama supporters, but he wants to invest billions to bail out the irresponsible individuals that didn't really qualify for loans and should have never been them. I have worked way too hard to support his idea that will probably "change" anyway.
I had a lively discussion last nite over dinner concerning "whose fault is it that we have 2 million (?) foreclosures. One one hand first time home owners were handed a ticket to fullfill the "American Dream". "step right up, sign right here...no I don't need any money...here are the keys to your house".
On the other hand generations of people before them bought millions of homes with due deligence, their life savings at stake and a clear understanding of the consequences of their purchase.
So, who is at fault here? Greed on behalf of the money lenders? Gov. agencies that allowed "rules" to flow right down the toilet? Mothers and fathers that wanted the best for their familys? And...?
Quite honestly, I'm not quite sure myself and this is my business as a real estate investor.
What do you think?
je
I admit that I am not terribly sympathetic to any of the parties in this fiasco.
When we bought our home two years ago, the lenders looked at the equity from our first home's sale and looked at our financials and said, "Why, you two could buy a house with twice the value you're currently purchasing."
For about a nanosecond, I thought to myself, "Why wouldn't that be great to have that really swank dream house?" Then my wife and I looked at each other and said, "No way." After all, we were buying a very nice home in an extremely good school district, and the last thing we wanted to do was kill ourselves trying to meet a huge house payment. What if one of us lost our jobs? As it stands, our house was so undervalued (because the couple sold at a fire sale price to escape money troubles), that we've been able to accumulate equity even in a tough real estate market.
And, 3-4 years ago, I remember we talked about people we knew who were buying these huge houses on Interest-Only loans, 0% down financing, ARMs, and whatever other convoluted loans schemes they could find. And we both realized that if interest rates went up, if anybody had employment issues, or if property values just went down, then these people were totally, completely screwed. What's more, we were not along. Plenty of of financial experts and bankers were saying this at the time. We know two different couples who have been foreclosed on. One was an attorney. The other was a pharmaceutical rep.
What's more, both when you're being offered the loan terms and at your real estate closing, you have the terms of the loan explained to you very carefully. So if interest rates change, you know what the consequences are. Yet these people just tuned out and blithely signed on the dotted line.
So what you're really doing is expressing sympathy for people who put their appetite ahead of their common sense, who blew off a lot of expert advice, all so they could play Keep Up With The Joneses. And now they're paying for it. I take absolutely no pleasure in their troubles. At the same time, I don't think I should be paying for the mistakes of the borrowers or the lenders in this situation.
People who lend money are always looking out for their own best interests. They're not your parents, not your friends, not your accountant-- they are salespeople trying to make money on your business. It's always been that way, from the time you bought your first car... got your first credit card... took out your first loan. Why, now, are we so intent on blaming them for doing what they've always done-- selling something to make a profit? Borrowers used to exercise a little common sense, judgment and restraint when making big ticket purchases. They used to say, "Wow, I only make $50,000 a year; I can't afford a $700,000 home and lying about it is illegal." Then they stopped and now it's supposed to be someone else's fault? Caveat emptor has only been around for centuries now.
Hmmm... lenders doing what they've always done-- and what is widely known and accepted that they're going to do-- vs. borrowers, who sign legal, binding contracts without reading or understanding them to buy homes that they know are way beyond their means, then cry "foul" when the predictable happens. Gee, who's at fault?
Our country's dumbed down public education systems are at fault. An entire generation pumped up on unearned self-esteem, a false sense of entitlement, situation ethics (end justifies means), and dumbed down curricula (rendering them incapable of understanding the consequences of ARM, IO, 0%-down, etc. loans) have been running rampant, wreaking the havoc we now see.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
