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These threads are tiring. How can anyone assume that people weren't doing good until the economy slumped? Foreclosures aren't all going to have the same story behind them. Many people hung on with everything they had, even when the economy was so sluggish, no customers can be found regularly. For small business owners, it meant losing their business and home. Even if it was all they had done their whole working life. Many people have been forced to try to find totally different kinds of jobs because their previous work isn't cutting it.
Many grandparents tried to help siblings who were in economic trouble and ended up losing homes that were almost paid off. There are a million different reasons why people have been losing their homes. Open your eyes.
Low income jobs or blue collar jobs don't have security for their workers most of the time. Those people only have the option of buying an extremely overpriced home and getting by week to week, or their family lives in a bad area with poor schools so they can save money for twenty years.
There are towns all over the country that are like ghost towns. Beautiful towns in California where the towns are almost empty because no one can afford them. Its not limited to the vanity areas either. Everyone is feeling the squeeze and its causing a chain reaction. Many people lost everything they own during the last ten years.
Go to the northeast and a one bedroom apartment is $800 dollars. Its just ridiculous. There are places where construction went completely belly up and nothing is being built anymore. Where do you think those trade skill workers are all going to go? Well many are forced to find another state where there is growth. Even in those places growth is stagnating. This isn't a small number of people we're talking about either. Its is the backbone of the nation, the blue collar workers, that are competing with a massive influx of illegals that work for less and huddle up in housing, and decent growth is hard to find anywhere.
It isn't only foreclosures that are scary, there are millions of people just barely hanging on at all. People are having to move to entirely different states to broader there prospect of finding a job that will pay the bills. This market isn't only affecting recent home buyers or people who live beyond their means.
Last edited by the_pines; 07-10-2008 at 07:21 PM..
How about a solution that will put the fault where it lies? When any stated income, subprime or ALT-A borrower requests a loan modification, bailout or deed in lieu, they must provide tax returns for at least the year of loan origination. If they lied about their income, that's fraud and they pay the full price of their actions. No bailout, no leniency and they better get a good attorney... on their own dime. The lender can garnish their wages until the entire amount is paid in full. And if they can make a case for damages, they can demand reimbursement, too.
If the borrower can prove that the lender knew that they were lying or told them to lie, then the lender must modify the loan and cannot claim restitution or damages. The borrower and lender must collaborate to work it out.
If the borrower didn't lie-- and their income was as stated-- then the lender must modify the loan and take the necessary steps to help the borrower keep their home until they are able to sell. These borrowers get lender-- not taxpayer-- assistance.
Let the borrowers and lenders hash it out and keep the Fed and the taxpayers out of it. Those who weren't involved in creating the problems shouldn't be involved in solving them now.
Actually, upon reflection, the problem with the plan is that there is a middle man. Many of the fly by night mortgage brokers have already gone out of business because they only made money during the hey day.
The people who lend the money are banks - they are the ones stuck holding the bag. But, they are still responsible - IMHO... they were the ones who stood to gain or lose from the transactions. They took the risk. They should be the ones bailing themselves out - instead of foreclosing and just walking away.
How about a solution that will put the fault where it lies? When any stated income, subprime or ALT-A borrower requests a loan modification, bailout or deed in lieu, they must provide tax returns for at least the year of loan origination. If they lied about their income, that's fraud and they pay the full price of their actions. No bailout, no leniency and they better get a good attorney... on their own dime. The lender can garnish their wages until the entire amount is paid in full. And if they can make a case for damages, they can demand reimbursement, too.
If the borrower can prove that the lender knew that they were lying or told them to lie, then the lender must modify the loan and cannot claim restitution or damages. The borrower and lender must collaborate to work it out.
If the borrower didn't lie-- and their income was as stated-- then the lender must modify the loan and take the necessary steps to help the borrower keep their home until they are able to sell. These borrowers get lender-- not taxpayer-- assistance.
Let the borrowers and lenders hash it out and keep the Fed and the taxpayers out of it. Those who weren't involved in creating the problems shouldn't be involved in solving them now.
To be fair we would have to do that with everything then. We could put little camera's on everyone and charge the people more to repair the roads if they drove more than someone else. If someone has a handicaped kid at school then they pay more because my kid is normal and doesn't need the extra accomidation. I mean, this really is just bitter and not a solution that has any merit to me.
I bought right before the boom, didn't do a second, and had a ARM that I didn't know I didn't have to have because I owned my own business in construction plumbing. I was fine and going to refi once I proved myself worthy of a normal loan but at 2 years we lost the company because of the market, had to switch jobs to a large corp. pay was 1/2 of what we made and couldn't qualify to refi because during the job switch we were a month late. During the last year our mortgage has increased by 600 dollars and about to climb again and our equity has flown out the window and our house (which was before the inflate) is now 40,000 dollars in the red! It's not just people who bought during the boom and it's not just people who were greedy. It's way past that now and getting worse. We work extra hours and have 3 kids to take care of. I'm tired of people treating us like we lost a gambling bet.
You never know what is going to happen down the road, you can get ill, or someone can die, you can loose your job, or you could've just made a mistake somewhere, you all make mistakes, you just didn't make this one.
What about people who voted for this war? People are dying for this mistake. What about people who just had their house flooded in the mid-west, they didn't think that would happen yet there was hidden truth about it. Why are people so hard on others in less fortunate positions. For that matter, who in their right mind would live in New Orleans, it was a disaster waiting to happen but we all make mistakes or have a turn of events and that we pay for. And lets not get started on Florida!
Why are we so hard on people? There can't be this many people who have never had a problem they didn't see coming. I have a hard time believing everyone else is this prepared out there. It's ugly to kick people when they are down, even if you think they fell down on their own. It's ugly!
Why is it so hard to get a little unity in this country? It's suppose to be 80% christain here? Go figure!
How about a solution that will put the fault where it lies? When any stated income, subprime or ALT-A borrower requests a loan modification, bailout or deed in lieu, they must provide tax returns for at least the year of loan origination. If they lied about their income, that's fraud and they pay the full price of their actions. No bailout, no leniency and they better get a good attorney... on their own dime. The lender can garnish their wages until the entire amount is paid in full. And if they can make a case for damages, they can demand reimbursement, too.
If the borrower can prove that the lender knew that they were lying or told them to lie, then the lender must modify the loan and cannot claim restitution or damages. The borrower and lender must collaborate to work it out.
If the borrower didn't lie-- and their income was as stated-- then the lender must modify the loan and take the necessary steps to help the borrower keep their home until they are able to sell. These borrowers get lender-- not taxpayer-- assistance.
Let the borrowers and lenders hash it out and keep the Fed and the taxpayers out of it. Those who weren't involved in creating the problems shouldn't be involved in solving them now.
So true!! Why didn't sign most people not ARM mortgages, because they knew that if "something" happened they couldn't afford these ARM's any more.Other just signed and never thought anything could happen.
At first I thought it was only the scumbags at the mortgage brokers and the sales offices at the builders...
I was there when a sales rep. tried to get aperson into an ARM which would have put him staraight into foreclosure after closing, Countrywide had denied them (and nothing was wrong with that because they couldn't afford it), than the sales rep. came up with a small mortgage broker company who give any one a mortgage and told the people that since the homes would for sure be worth 30 % more in the '06 than in '05, they should sign the papers...they people got out of their contract and lost a little bit of money but were smart enough not to go forward....so why did others sign these mortgages and others took even higher mortgages to take the equity out that wasn't even there...is it only the fault of the appraiser would filled out a wrong appraisel or aren't the greedy home owners just as much to blame.
Is it so wrong to rent until you really can afford a house. IMO if you can't put 20% down in cash, you can't afford that house, and you should buy a cheaper house or keep saving longer.
How many people have aside from the mortgage a 100% car loan on a car that is too expensive for them....are we to blame for their decisions to live the life they can't afford and only could afford if nothing changed.
What if the roof started to leak, or the frigerator would break down, would they have taken another loan....most of the mess is their own mess and I don't want to pay for them.!!!!!
I'm tired of people treating us like we lost a gambling bet. You never know what is going to happen down the road, you can get ill, or someone can die, you can loose your job, or you could've just made a mistake somewhere, you all make mistakes, you just didn't make this one.
Why is it so hard to get a little unity in this country? It's suppose to be 80% christain here? Go figure!
I'm sorry, but taking an ARM is gambling, no matter why someone does it. Taking any kind of adjustable rate product is risky and it always has been. You know the rate is going to escalate, you know it's going to cost more and you know it's going to be hard to make that higher payment in a year or two or three. You're betting that nothing will go wrong, the market will go up, your income will rise and your future will be brighter than your present. And if not, you're betting that you can refi out of it. Most people choose to take this high-risk product, fully informed of the possible consequences, because a fixed rate is unattainable. That, right there, is a big red flag that the borrower is buying a home that s/he cannot readily afford or is taking on more risk than is prudent.
I'm not kicking you while you're down. I'm not being ugly. Or bitter. I'm simply stating the truth. Homeowners in trouble seldom think it's their fault. They always point out that the lender duped them/cheated them/deceived them or that something/someone went against them. That may be true. And it's regrettable and unfortunate and lousy luck and it happens to all of us at some point. But since when is it everybody's problem? We've been in bad economies, wars, bear markets, recessions, corporate meltdowns and banking/S&L crises before, and defaulting homeowners didn't expect the rest of the country to bail them out. Well, this time, there are too many people who made too many bad choices for the taxpayers to ride to the rescue.
Everybody in this predicament wants everyone to share responsibility for their unfortunate choices. While a lot of us are sympathetic and feel for you, we do not feel responsible. We only want to be responsible for our own choices, because we can control that outcome. We can't control yours. This is a problem created by a borrower and a lender and that's exactly who should solve it.
As for being Christian, that again is your choice and it has nothing to do with real estate. I'm sincerely sorry for your misfortune and I wish you better days ahead, but your situation shouldn't involve the taxpayers.
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
yes! anytime you take out a loan you should plan for contingencies ie what happens if i lose my job? what happens if interest rates go up? what happens if i am disabled and not able to work? what happens if i or any of my family become ill?
the answer to the first question should be that you should have a certain number of months expenses saved up or be insured against job loss. you should at least be prepared to pay a few percent higher interest rate. you should have insurance against death, disability and health insurance.
imo if you don't have these things you should rent instead
Imo it has to do with greed. People wanted what they thought others had, without knowing how much debt the others had...a bigger house, a more luxurious car, etc...and were willingly taken a risk to buy houses they couldn't afford and taking risks and are now blaming others.
My parents always teached me that what you owe straight out, you are more carful about than things that are borrowed or owned by others and that is why people are so easy about walking away from homes they didn't pay one penny down on. They don't even think it as it as their own.
The 'loose' lending/mortgage practices did work fine...for a while. There was no problem till the market/economic downturn hit, taking jobs, budgets, investment income, and equity with it. I think lenders knew that a bubble was building, yet who knew for certain how long it might last. A year? A decade? No crystal balls there. So i feel that the practices were appropriate for the times and that set of existing conditions. The problem being that they don't work well at all in today's changed economic environment.
On homebuyers...See above. They, too, had no crystal ball. I believe that most did have a plan, that plan was shredded by the current economic upheaval. Yes, i agree that many of today's troubled homebuyers shoulda/coulda left more margin, too many went to the max of their ability to repay and left little or no room at all for the possibility of reduced income and increased expenses. The perfect storm in short. They saw and acted on the opportunity they perceived, yet failed to anticipate the risk.
Serious and in-depth Financial/Investment education should really be required in our schools. Thankfully i had frugal parents that taught and practiced financial responsibility. And i was a very good learner.
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