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Location: central, between Pepe's Tacos and Roberto's
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Quote:
Originally Posted by sam_i_am
Thank you Olecapt and Daddy for the information. I read the stats from a recent RJ article. Of course the person being quoted does not substantiate his claim with anything other than anecdotal evidence, but I do not dismiss it entirely. Here is the exact quote:
There is one obstacle looming for housing recovery, Mark McGarry of First United Mortgage said. Although sales have increased, 80 percent to 90 percent of those purchases were made with down-payment assistance that will become obsolete in October, he said. The Federal Housing Administration has distorted the numbers, claiming that only 40 percent of FHA-insured loans use such assistance, McGarry said. He's talked to appraisers, Realtors and title company officers and they all come up with much higher figures.
Olecapt, I have heard of people buying REO's with FHA+ameridream.
I certainly don't dismiss it entirely either, at least not on the local level. However, I will say that HUD has had a vendetta against seller funded down payment assistance programs for some time now, so I feel that if FHA were to distort the numbers they would skew them in favor of their agenda like they have with the foreclosure numbers regarding DPA's. Unless this LO has reviewed every closing package for every purchase transaction closed in Clark County in the last 3-6 months he is speculating based on third party "information" which is likely more speculation based on some first hand experience and much more third party "information".
Perhaps common sense will rule and the banks will bring back red-lining. There was a good reason they discriminated against the poor and uneducated. Fannie and Freddie made it riskless to do so and now the "moral hazard" must be paid-with your taxes.
You're right, I meant to say "poor people with bad credit". Folks who don't have any money but aren't looking to live beyond their means aren't the problem. Folks who wanted to live beyond their means were the problem. Getting a Cadillac when you can't afford a place to park it is one thing. Getting a house to park your Cadillac when you can afford neither is something the banks should never have allowed you to do.
And the folks who you say aren't poor but are working to support endless debt are actually poor. House poor, car poor, or whatever they are working to pay for. They clearly own less than they owe and are in worse shape than someone that makes less money but has no debt.
How true! My dh & I moved out here a few years back and knew people who did exactly this. Got themselves in trouble with ARMs and brand new leased BMWs, other toys, etc. They worked endless hours and had no down time.
They scoffed at us for living within our means, renting, and paying our bills on time. Now whose laughing? We just put our EMD on a home and have been treated very well by our mortgage lender and prospective sellers because of our great credit scores and very good DTI ratio. I'm happy to say, that after more than a year of looking and waiting and trying to decide exactly what we want, can afford, and how much work we want to put into a home we found an awesome deal and hopefully will close sometime in October .
The home is well within our budget and has a large lot in the part of town we were most interested in. All our closing costs are paid and we are getting extra incentives too. We couldn't be happier. I know alot of people get on the LV forum and trash this town but we absolutely love it here. There's always something to do or see, everything is open all the time, you have mountains to hike, a lake to visit, Cali is a short drive away. Viva Las Vegas!
Perhaps common sense will rule and the banks will bring back red-lining. There was a good reason they discriminated against the poor and uneducated. Fannie and Freddie made it riskless to do so and now the "moral hazard" must be paid-with your taxes.
The areas that the banks classically redline are not involved in the present problems. They pretty much go along better than most neighborhoods.
How true! My dh & I moved out here a few years back and knew people who did exactly this. Got themselves in trouble with ARMs and brand new leased BMWs, other toys, etc. They worked endless hours and had no down time.
They scoffed at us for living within our means, renting, and paying our bills on time. Now whose laughing? We just put our EMD on a home and have been treated very well by our mortgage lender and prospective sellers because of our great credit scores and very good DTI ratio. I'm happy to say, that after more than a year of looking and waiting and trying to decide exactly what we want, can afford, and how much work we want to put into a home we found an awesome deal and hopefully will close sometime in October .
The home is well within our budget and has a large lot in the part of town we were most interested in. All our closing costs are paid and we are getting extra incentives too. We couldn't be happier. I know alot of people get on the LV forum and trash this town but we absolutely love it here. There's always something to do or see, everything is open all the time, you have mountains to hike, a lake to visit, Cali is a short drive away. Viva Las Vegas!
D
Some truth but mostly a misconception. Everybody who bought between mid 2004 and early 2007 got hosed. Made no difference whether they were buying inside or outside their means...they still got hosed.
Now some subset will survive because they had sold a property at that time in that environment...so they lost nothing. But all the first time buyers and many of the move up buyers lost their shirt and often past the point that they can simple outwait it.
So yeah there are some transgressors who bought or refinanced themselves into trouble. But the vast majority just got screwed for bad timing. And it actually makes little difference if they could afford it or not. As a practical matter almost anyone subject to a 1/3 or more loss of value in their home will have little recourse but a short sale or foreclosure.
Some truth but mostly a misconception. Everybody who bought between mid 2004 and early 2007 got hosed. Made no difference whether they were buying inside or outside their means...they still got hosed.
Now some subset will survive because they had sold a property at that time in that environment...so they lost nothing. But all the first time buyers and many of the move up buyers lost their shirt and often past the point that they can simple outwait it.
So yeah there are some transgressors who bought or refinanced themselves into trouble. But the vast majority just got screwed for bad timing. And it actually makes little difference if they could afford it or not. As a practical matter almost anyone subject to a 1/3 or more loss of value in their home will have little recourse but a short sale or foreclosure.
I'm just speaking from what I've seen with my social circle which I know is limited. But basically alot of those people got sucked into ARMs and thought they would be able to refinance into a conventional loan once the value of thier home went up but alas that didn't happen. They all ended up losing their homes because they basically opted for the most expensive home they could get with an ARM. I only have one friend who did not do this. She did buy during the peak but did a conventional loan and even though her home value plummetted she is still ok financially because she opted for a payment that would always be permanently within her means. She's a bit upset of course, but she's planning on living here for quite awhile so she knows she'll be able to at least break even when she does move. I think my bias is that I'm pretty conservative financially. I'm sure those ARMs work for some people and make sense, or buying a house at the upper end of your budget makes sense for others. It's just not my cup of tea. I like to put money away for retirement, have vacations, be able to go out to eat at a nice restaurant when I want. I also believe credit cards are inherently evil. We only have then for emergencies. I think it really sucks for the people who need to sell because they lost their jobs or are moving to relocate for work or family. I really feel for them. Most of my friends were not in that boat. They simply took a gamble and lost.
I'm just speaking from what I've seen with my social circle which I know is limited. But basically alot of those people got sucked into ARMs and thought they would be able to refinance into a conventional loan once the value of thier home went up but alas that didn't happen. They all ended up losing their homes because they basically opted for the most expensive home they could get with an ARM. I only have one friend who did not do this. She did buy during the peak but did a conventional loan and even though her home value plummetted she is still ok financially because she opted for a payment that would always be permanently within her means. She's a bit upset of course, but she's planning on living here for quite awhile so she knows she'll be able to at least break even when she does move. I think my bias is that I'm pretty conservative financially. I'm sure those ARMs work for some people and make sense, or buying a house at the upper end of your budget makes sense for others. It's just not my cup of tea. I like to put money away for retirement, have vacations, be able to go out to eat at a nice restaurant when I want. I also believe credit cards are inherently evil. We only have then for emergencies. I think it really sucks for the people who need to sell because they lost their jobs or are moving to relocate for work or family. I really feel for them. Most of my friends were not in that boat. They simply took a gamble and lost.
D
You are still working on the assumption that everybody took out an excessive ARM...and that people with an ARM can't make the payments. Neither is particularly true. The truth is that everybody who bought in the period took it badly. And those who bought new took it far worse.
Your friend with a conventional mortgage is likely done for...just not admitting it. If your place has lost 40% of its value...which is in fact conservative on new build at the peak...with costs you need your value to double to break even. That is going to take likely 10 years. The probability of anyone staying in a given home 10 years is quite small. If in fact you are likely to have to take a foreclosure or a short sale you should likely do it sooner rather than later. Start the credit recovery clock ticking. It makes no sense to recover part of the short fall and then take the credit hit.
Note that the modification programs may save a lot of folk if they ever get off the ground. We hear a lot of anecdotes about the banks doing these but the big push is still off a bit. That may help a lot of the more rational recover.
Some truth but mostly a misconception. Everybody who bought between mid 2004 and early 2007 got hosed. Made no difference whether they were buying inside or outside their means...they still got hosed.
Now some subset will survive because they had sold a property at that time in that environment...so they lost nothing. But all the first time buyers and many of the move up buyers lost their shirt and often past the point that they can simple outwait it.
So yeah there are some transgressors who bought or refinanced themselves into trouble. But the vast majority just got screwed for bad timing. And it actually makes little difference if they could afford it or not. As a practical matter almost anyone subject to a 1/3 or more loss of value in their home will have little recourse but a short sale or foreclosure.
So, between, 2004-2007, you didn't represent any buyers? To date, only the "lenders" have been seen as the villian; when, in fact, lenders, buyers, and realtors all carry equal weight in the gluttoness RE cycle that theatens our economy. The "piper" must ALWAYS be paid---only a matter of time.
So, between, 2004-2007, you didn't represent any buyers? To date, only the "lenders" have been seen as the villian; when, in fact, lenders, buyers, and realtors all carry equal weight in the gluttoness RE cycle that theatens our economy. The "piper" must ALWAYS be paid---only a matter of time.
Some buyers...but not most, Most lenders but only on some deals, Some RE Agents though not many and virtually all builders have some guilt.
We have a client that crashed. Did not need to....but they kept their mouth shut until past help. We service very few marginal clients. The majority of our buyers pay cash or large down. .
You are still working on the assumption that everybody took out an excessive ARM...and that people with an ARM can't make the payments. Neither is particularly true. The truth is that everybody who bought in the period took it badly. And those who bought new took it far worse.
Your friend with a conventional mortgage is likely done for...just not admitting it. If your place has lost 40% of its value...which is in fact conservative on new build at the peak...with costs you need your value to double to break even. That is going to take likely 10 years. The probability of anyone staying in a given home 10 years is quite small. If in fact you are likely to have to take a foreclosure or a short sale you should likely do it sooner rather than later. Start the credit recovery clock ticking. It makes no sense to recover part of the short fall and then take the credit hit.
Note that the modification programs may save a lot of folk if they ever get off the ground. We hear a lot of anecdotes about the banks doing these but the big push is still off a bit. That may help a lot of the more rational recover.
Sorry, think perhaps I wasn't quite clear in my post. I'm not generalizing my assumption to everyone. I was just making an observation based on my limited social circle. I recognize that it is a very small circle and not representative of all those who bought during the boom. My friend will be ok actually. She's an LV native and has no plans of ever living anywhere but here. My thought is that if I had bought during the boom and made sure I could afford the payment with a conventional 30 yr fixed then even if I took a 40% loss on value I could still make the payment and stay in my home. Yes it would take a very long time to get back to that break even point but I would maintain my home and my integrity. I was raised that when you make your bed you lie in it. That's what my friend is doing. She's content in the knowledge that even though she got hung out to dry through no fault of her own at least she can afford to keep her home and her self respect. Like I said, just and observation and an opinion.
D
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Got themselves in trouble with ARMs and brand new leased BMWs, other toys, etc. They worked endless hours and had no down time. 
. 
