Foreclosures-Is it their fault they wanted a dream? (cost, fee, closing)
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Hold the phone. What nobody talks about is the Federal pressure brought to bear on Mortgage Lenders to approve loans for low-income earners and minorities.
The Federal pressure as you call it, didn't mean to lie on an application or to buy houses that were too expensive... it seems many people only looked at houses that were either too big and/or very high priced, what is wrong with starting with a small home and later sell it and move to a bigger home. That is how I started and most people I know, but it seems all of a sudden first time buyers some who just got a job bought houses over $ 250 K (FL) and there were also houses in the mid $ 150 K for sale...
The Federal pressure as you call it, didn't mean to lie on an application or to buy houses that were too expensive... it seems many people only looked at houses that were either too big and/or very high priced, what is wrong with starting with a small home and later sell it and move to a bigger home. That is how I started and most people I know, but it seems all of a sudden first time buyers some who just got a job bought houses over $ 250 K (FL) and there were also houses in the mid $ 150 K for sale...
Yep. You're absolutely right. What I'm talking about is that if a loan application was marginal at best, and the lender had not met some arbitrary lending benchmark set by the Feds, that lender was far more likely to approve the loan. It's pretty simple.
While there certainly were people out there who took out loans knowing they couldn't afford them, there was also almost collusion to defraud on the part of mortgage brokers, lenders, real estate agents, and appraisers, and it was very short sighted. A lot of people who are looking to buy a house aren't very savvy, and rely on the honesty of the real estate agents, mortgage brokers, etc.
So when these ARM loans are being pushed by lenders, very little emphasis was paid to what happens when they reset, and mortgage brokers, bankers, etc. just assured people that they had the income to qualify. Lenders pressured appraisers to come up with certain numbers or they wouldn't get business from them again....And real estate agents?
A lot of them would direct their clients to certain lenders whom they had sweetheart deals with, assuring them that they'd be well taken care of.
There's a lot of blame to go around. But who's the most at fault? Who had the most to gain?
the ultimate decision sits with the purchaser. if i buy a $200 piece of equipment i do a little research. i go online search the product description, read reviews, check out similar products, read their reviews etc. talk to people, parents, grandparents, friends, kids etc.
if i am spending 20x my annual income then i am going to want to do a little research. maybe a little more than if i were buying a $200 piece of equipment.
if nowhere in your research do you come up with the fact that interest rates go down and UP then you obviously weren't very thorough. if you also don't give two seconds thought to the possibility that you could lose your job, then you deserve whats coming to you. maybe a little stint on the street will teach to understand all this. years ago it did wonders for me!
as far as i am concerned, with interest at between 1%-5% there was only one logical place for rates to go! fair enough they have come down now but that was only under extreme duress. now they are at 2%, 3 guesses where they will be in 5 years time!
While there certainly were people out there who took out loans knowing they couldn't afford them, there was also almost collusion to defraud on the part of mortgage brokers, lenders, real estate agents, and appraisers, and it was very short sighted. A lot of people who are looking to buy a house aren't very savvy, and rely on the honesty of the real estate agents, mortgage brokers, etc.
So when these ARM loans are being pushed by lenders, very little emphasis was paid to what happens when they reset, and mortgage brokers, bankers, etc. just assured people that they had the income to qualify. Lenders pressured appraisers to come up with certain numbers or they wouldn't get business from them again....And real estate agents?
A lot of them would direct their clients to certain lenders whom they had sweetheart deals with, assuring them that they'd be well taken care of.
There's a lot of blame to go around. But who's the most at fault? Who had the most to gain?
I remember them labeling the "agreements" in things like loans and credit cards @ a grade level of 27 who here has a couple of phd's in accounting?
Lot's of blame.....why not everyone wants to be rich....even if reg. joe get's thrown under the bus to do so.
What get's me is things like reverse mortage aimed at older folks. here let just just take everything you have a leave you with nothing on your death bed.
The mortgage rates should have never been allowed to be driven so artificially low.
Mortgages should not have been underwritten for people with large debt loads and NO MONEY.
A minimum of 10% should be required on a home purchase. If one can't scrimp and save for a few years to accumulate $20,000 to $30,000 to purchase the average home then they have no business owning one.
If they can't save the money for the down deposit they won't have the $4,000 when the furnace needs replacing or the $7500 for the roof, etc.
I've owned many properties over the years and have looked at too many HUD properties that were ruined in rather quick order by the "buyers" who bought them with little or no money courtesy of the Federal Government.
Many of the "buyers" can't come up with a dime for a deposit but have the 60" LCD TV ready to jam into the 10' x 12' living room along with the huge leather sofa, love seat, recliner package from the local discount furniture store on move-in day.
Who do you think is left holding the bag for these bad decisions? All of us. It is not free to society since it compromises our financial institutions which compromises their stock which compromises our pension plans which compromises our economy which compromises our jobs.
Take the rates back up to 7 to 8% and cool the market, burn off the inventory, and give savers a decent return on their savings.
The mortgage rates should have never been allowed to be driven so artificially low.
Mortgages should not have been underwritten for people with large debt loads and NO MONEY.
A minimum of 10% should be required on a home purchase. If one can't scrimp and save for a few years to accumulate $20,000 to $30,000 to purchase the average home then they have no business owning one.
If they can't save the money for the down deposit they won't have the $4,000 when the furnace needs replacing or the $7500 for the roof, etc.
I've owned many properties over the years and have looked at too many HUD properties that were ruined in rather quick order by the "buyers" who bought them with little or no money courtesy of the Federal Government.
Many of the "buyers" can't come up with a dime for a deposit but have the 60" LCD TV ready to jam into the 10' x 12' living room along with the huge leather sofa, love seat, recliner package from the local discount furniture store on move-in day.
Who do you think is left holding the bag for these bad decisions? All of us. It is not free to society since it compromises our financial institutions which compromises their stock which compromises our pension plans which compromises our economy which compromises our jobs.
Take the rates back up to 7 to 8% and cool the market, burn off the inventory, and give savers a decent return on their savings.
Rant over!
i'll add to that. i went around several short sale listings recently. the one thing that they all had in common. new cars, 60 inch lcd, new bicycles(the really expensive kind), i saw a few new ski-boats and jetskis, all were recently remodeled. the funny thing is that many of the foreclosures i saw were the result of home equity loans. some of them owed triple their initial purchase price. very irresponsible and i can't bring myself to feel sorry for them.
(highlighted the things that they ALL had in common)
i'll add to that. i went around several short sale listings recently. the one thing that they all had in common. new cars, 60 inch lcd, new bicycles(the really expensive kind), i saw a few new ski-boats and jetskis, all were recently remodeled. the funny thing is that many of the foreclosures i saw were the result of home equity loans. some of them owed triple their initial purchase price. very irresponsible and i can't bring myself to feel sorry for them.
(highlighted the things that they ALL had in common)
Many people are pulling the short sale lever on their investment properties and second homes.
Before they do so they are putting their primary residence into an LLC and shielding their other important assets.
After that they are just flipping the keys over to the bank and telling them you worry about it.
The banks are shell shocked and don't even know what to do. I made a decent offer considering the market conditions on a property that had been considerably neglected recently. The bank came back with a counter that was $5,000 below the list price. Well there are tons of properties in good condition available at similar list prices so who in their right mind would ever buy a rehab property near list price?
The banks are so ill equipped to deal with the massive volume that they just stare at the offers on the table and do nothing except amass holding cost losses as the wait.
Someone has to go after the owners that have the ability to pay but just don't want to because their equity evaporated in the property.
If the Fed telegraphs that it will steadily be increasing the Fed Funds Rate upward and the banks start auctioning off the inventory to financially capable investors then we could see an end to the hemorrhaging of our financial system.
I'm not confident that our leaders are astute enough to follow this advice. Especially when there is still plenty of money to be made by the short sale lawyers, financial short sellers, and currency and commodity traders.
Many people are pulling the short sale lever on their investment properties and second homes.
Before they do so they are putting their primary residence into an LLC and shielding their other important assets.
After that they are just flipping the keys over to the bank and telling them you worry about it.
The banks are shell shocked and don't even know what to do. I made a decent offer considering the market conditions on a property that had been considerably neglected recently. The bank came back with a counter that was $5,000 below the list price. Well there are tons of properties in good condition available at similar list prices so who in their right mind would ever buy a rehab property near list price?
The banks are so ill equipped to deal with the massive volume that they just stare at the offers on the table and do nothing except amass holding cost losses as the wait.
Someone has to go after the owners that have the ability to pay but just don't want to because their equity evaporated in the property.
If the Fed telegraphs that it will steadily be increasing the Fed Funds Rate upward and the banks start auctioning off the inventory to financially capable investors then we could see an end to the hemorrhaging of our financial system.
I'm not confident that our leaders are astute enough to follow this advice. Especially when there is still plenty of money to be made by the short sale lawyers, financial short sellers, and currency and commodity traders.
i am sorry but i have to disagree with you there. if the banks didn't take other security then they only have themselves to blame.
there are reasons that the banks are holding on to all of their foreclosures. the first is because they don't want to devalue the values of the other properties where they hold mortgages and the second and biggest reason is that they don't have to. the federal reserve and the treasury have made it absolutely clear that they will give them as much cash as it takes to get them out of this mess. even if it at the expense of the taxayer and anyone who has money in the bank!
i don't believe that the fed and treasury should bail them out at all but if they do then they should insist that the banks liquidate their reo assets to the highest bidder and get rid of all their excess inventory
The banks do hold some responsibility but the people who signed their names to the mortgages, who didnt put down one red cent, who just didnt research anything ; they need to take 90% of the blame.
I have always had to put down 20% ; not because my credit is bad, it is very good, but I am self employed and have been for 18 years. From day one on a mortgage, I have had an interest in my home ; my hard earned money went into it.
those who didnt put down one penny, have bad credit, but yet they have the hummers, the 60inch tv, the kids have all the toys ; why are they do special that they can get a bailout on their mortgage?? What about the good guys who always pay on time, dont have all the toys, work very hard and keep their heads above water ; what about us??
I remember them labeling the "agreements" in things like loans and credit cards @ a grade level of 27 who here has a couple of phd's in accounting?
Lot's of blame.....why not everyone wants to be rich....even if reg. joe get's thrown under the bus to do so.
What get's me is things like reverse mortage aimed at older folks. here let just just take everything you have a leave you with nothing on your death bed.
That is so sick...to pray on the elderly and the weak, who are not used to the internet and are an easy target. These vulgers should be punished twice as hard. Dateline had a hidden camera program about these scumbags and I hope they will make many more programs to show these scumbags faces.
The kids can't be at every conversation and there should be a law that signatures of elderly can be reversed even after months when the family members finding out their old parents are scammed...maybe a new law?
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