"Home ownership harder to attain, retain in Levittown". (Franklin: real estate, foreclosure)

[Walter Greenspan]

According to NEWSDAY, "Home ownership harder to attain, retain in Levittown" (http://www.newsday.com/services/newspaper/printedition/thursday/news/ny-enlevi086040936feb19,0,3361689.story - broken link).

Comments???

[rocafeller05]

Same old story..people thought their real estate investment would never decrease in value. Thousands if not millions of people are in the same situtation.

[I_Love_LI_but]

Here is the description of the house in the story lead:

an original Levitt house that still has cabinetry from the 1950s and an unfinished second floor. The paint on the shutters is peeling and the house looks tiny compared to so many of its neighbors, which, in many cases, now have garages, dormers and new siding.

Here is what he bought it for in 2003: $240,000 (too much)

Here is what it was supposedly worth in 2006: the bank approved him for a mortgage that valued the house at $428,000. (WAY too much)

Here is why he supposedly refinanced: Three years later, when he was ready to build up his business and do some work on his home, he refinanced.

In the story, the man's business is as a magician. What did he do? Build himself a permanent arena somewhere with the money? Did he buy a rabbit and dove farm so that he always has enough animals for his performances? As per the lead to the story, the house still hasn't been improved, so he didn't do that with it.

The result: Now, Reid, whose business has slowed along with the Long Island economy, is in foreclosure, unable to make payments on the adjustable-rate mortgage

It is unclear whether President Barack Obama's plan announced yesterday to help millions of Americans refinance their mortgages could help homeowners like Reid

So now this magician made all this cash he took out of the house's "equity" disappear and the taxpayer should bail him out!

*********************

This is what is unfair about the whole mortgage bailout thing. Some people took advantage of the situation, got plenty of cash for themselves or bought homes they didn't put downpayments on, knew they couldn't afford and lied about their income to get and the other taxpayers out there who acted prudently now have to spend their tax money "rescuing" these crooks.

[Kbinspections]

I never considered an ARM...........this guy should have never gotten an ARM....got to greedy.

[sassieskier]

I totally agree with I_Love_LI_but. That was my first thought when I read that.

What did this guy do with all that money?

[S.I.B.]

the people that were legitmately defrauded by corrupt loan officers have my sympathy and almost certainly deserve some sort of help from the governemnt. But these idiots who got themselves into wacky interest only loans and the like deserve to have their homes forclosed on and their credit ruined. When I was buying my home, we were presented with several different options for our loan. Because I was curions, I asked to hear the terms of all the available "products" and all I did was ask one question: once the introductory rate/term expires, how much will I have to pay a month if rates rise? I'm far from an expert on finance, but the potential payments were so high that I wouldn't even consider them. Seemed like common sense to me....

[Transpl]

The magicians story really underscores the dilemma we have. How do you separate the guy who cashed out equity on boats and trips from the family who is in need through no fault of their own. The short answer is you can't. We will be subsidising both. I like Obama and his passion but am concerned we are on a slippery slope.

"When the people find they can vote themselves money, that will herald the end of the republic. -- Benjamin Franklin"

[Kbinspections]

Originally Posted by Transpl

The magicians story really underscores the dilemma we have. How do you separate the guy who cashed out equity on boats and trips from the family who is in need through no fault of their own. The short answer is you can't. We will be subsidising both. I like Obama and his passion but am concerned we are on a slippery slope.

"When the people find they can vote themselves money, that will herald the end of the republic. -- Benjamin Franklin"

Yup........can't agree more.

[I_Love_LI_but]

Here's some of the plan:

Up to 5 million homeowners still making payments who cannot qualify for conventional refinancing because their home values have dropped could refinance through Fannie and Freddie.

Separately, up to 4 million "at risk" borrowers in danger of foreclosure could get payments reduced through modifications jointly paid for by lenders and the Treasury.

Those reductions would aim to bring borrowers payments down to 31 percent of their income.

A main challenge for the government has been prodding lenders to bring down borrowers' payments to the point where they are affordable.

The plan would provide a $1,000 fee to mortgage servicers for each successful loan modification, while borrowers would receive up to $1,000 to reduce their loan principal each year if they stay current on their payments.

You and I will be chipping in to keep mortgages below 31% of the income of these homeowners. Perhaps some will quit their on the books jobs and work off the books to get more out of us. I think that if their mortgages are being subsidized by the government to keep it at 31% of their income, there should be a LIEN on their homes to repay it. If not, there's another "heads I win, tails you lose" situation for the American taxpayer to put up with like the bank bailout.

[I_Love_LI_but]

Originally Posted by Transpl

The magicians story really underscores the dilemma we have. How do you separate the guy who cashed out equity on boats and trips from the family who is in need through no fault of their own. The short answer is you can't. We will be subsidising both. I like Obama and his passion but am concerned we are on a slippery slope.

Yet it did not seem that the clueless Newsday reporter nor her editor picked up on that important implication of the story. LOL!