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Old 09-17-2012, 09:40 PM
 
Location: Pluto's Home Town
9,982 posts, read 13,722,104 times
Reputation: 5689

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Well, first off, let me say this thread restored my fundamental decency in the people posting here. I sensed no partisanship in the replies at all. They were honest and helpful. And many good ideas that apply to my situation. The example is real, except for the divorce threats. I was trying to make a point, but people took it seriously, and to my pleasant surprise, were compassionate.

So...I feel a bit sheepish pointing out that my reason for posting that scenario was to evaluate whether people would somehow blame me for the erosion of equity or other such macroeconomic factors. In my view, the wife (fictional, my wife does not want a divorce, and is a very fine woman, bless her heart) was the unreasonable voter who credits a president unfairly when the sailing is good, and stabs him in the back when the bottom falls out. The comparison was not very good, upon reflection, because the buyer (me) really did overpay (in ignorance for sure, but after a year of looking with a realtor and buying at the appraised price), and so is ultimately at fault. A new president, in contrast, does not cause the overleveraging that must eventually cause a downturn, but we feel no shame about pinning the economic conditions to them, whether good or bad.

Last edited by Fiddlehead; 09-17-2012 at 10:31 PM..
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Old 09-17-2012, 09:54 PM
 
Location: Texas
14,975 posts, read 16,416,370 times
Reputation: 4586
Quote:
Originally Posted by Fiddlehead View Post
So...I feel a bit sheepish pointing out that my reason for posting that scenario was to evaluate whether people would somehow blame me for the erosion of equity or other such macroeconomic factors. In my view, the wife (fictional, my wife does not want a divorce, and is a very fine woman, bless her heart) was the unreasonable voter who credits a president unfairly when the sailing is good, and stabs him in the back when the bottom falls out. The comparison was not very good, upon reflection, because the buyer (me) really did overpay (in ignorance for sure, but after a year of looking with a realtor and buying at the appraised price), and so is ultimately at fault. A new president, in contrast, does not cause the overleveraging that must eventually cause a downturn, but we feel no shame about pinning the economic conditions to them, whether good or bad.
No one is trying to say that Obama caused the economic crisis. People are simply saying he either hasn't done a good enough job fixing it or that he's made it worse. It would be unfair to pin the economic crisis on Obama. It is entirely fair, and IMO we are obliged as responsible voters, to critique how he has handled it. He's been in office for more than 3 1/2 years now. Of course we will all critique it differently and that's perfectly fine.

As far as the housing market, the whole thing is a nightmare. My sister and brother-in-law are in a similar situation except, unlike you, they were irresponsible and bought way above their means during the bubble and my brother-in-law lost a lot of his business in the downturn to make matters worse. Now they are really in a bad position. They are underwater on their mortgage, cannot downsize even though they have to, have other financial problems, etc. I know plenty of other people who are also underwater, though they aren't in quite as bad of situations. I'm sure that we all, if we are not in the situation ourselves, have family members and/or friends who are underwater on their homes. Millions and millions of Americans are. That's reality. We will disagree on how to fix the problems, but we understand that there are huge problems and we know that most people got into terrible situations through no fault of their own. And, yes, in your case it does sound like you are not at fault at all.
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Old 09-17-2012, 10:33 PM
 
Location: My beloved Bluegrass
20,103 posts, read 16,064,294 times
Reputation: 28275
Mr. Obama didn't start the crisis but, in my ever so humble opinion, some of his policies have made it worse. To use your analogy, kind of like the person took out equity loans on their house, as the market value rose, to make the the house payments they couldn't really afford to pay in the first place. On top of that, they bought some other items that had nothing to do with the house or paying the mortagage even though that was what the money was for. The money is still going to come due, only it's going to be more expensive now, and it wasn't anything but a temporary fix.
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Old 09-17-2012, 10:46 PM
 
Location: Somewhere below Mason/Dixon
9,446 posts, read 10,740,931 times
Reputation: 15921
Many people are underwater and they did nothing wrong except not understand what was really going on. If you bought a house in 2005 and paid the going rate, never took out equity, even put 20% down and made every payment you are still likely underwater. Whose fault is this???? I say its a combination of the banks and the goverment. The goverment has made it very easy for low income people to get mortgages, even though they could not pay. Banks also went along with this, and everytime a mortage goes through, someone makes a commission. Those making a commission selling mortgages do whatever it takes to get it through. They dont care about anyting but the commission, they are not concerned about whether or not the mortgagee can pay the bill. When all these people lost thier homes because they could not pay, honest people who were paying thier bills all along were dragged down with the guilty. If you are a victim of a situation like this you are still responsible for your debt, but then again if you cant pay it I wouldnt lose any sleep over letting it go back to the bank. The same bank who's actions helped put you in that postition. They made alot of bad investments in shakey mortgages, and now they have screwed up the entire market, likely for a whole generation. If they end up holding the bag here then they deserve it.
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Old 09-18-2012, 12:25 AM
 
47,525 posts, read 69,526,661 times
Reputation: 22472
Quote:
Originally Posted by afoigrokerkok View Post
No one is trying to say that Obama caused the economic crisis. People are simply saying he either hasn't done a good enough job fixing it or that he's made it worse. It would be unfair to pin the economic crisis on Obama. It is entirely fair, and IMO we are obliged as responsible voters, to critique how he has handled it. He's been in office for more than 3 1/2 years now. Of course we will all critique it differently and that's perfectly fine.

As far as the housing market, the whole thing is a nightmare. My sister and brother-in-law are in a similar situation except, unlike you, they were irresponsible and bought way above their means during the bubble and my brother-in-law lost a lot of his business in the downturn to make matters worse. Now they are really in a bad position. They are underwater on their mortgage, cannot downsize even though they have to, have other financial problems, etc. I know plenty of other people who are also underwater, though they aren't in quite as bad of situations. I'm sure that we all, if we are not in the situation ourselves, have family members and/or friends who are underwater on their homes. Millions and millions of Americans are. That's reality. We will disagree on how to fix the problems, but we understand that there are huge problems and we know that most people got into terrible situations through no fault of their own. And, yes, in your case it does sound like you are not at fault at all.
Yes -- that is a lot of the problem. People should have realized that they could afford a $200,000 house but instead went for the big $400,000 house - and often the reason was so they could impress everyone with their big expensive house.

Anyone who bought a house in 2003 and put a good down payment in and wisely got a fixed interest mortgage and has made 10 years of payments and never used the equity to take out more loans, is not underwater. If the payments are higher than they like, they can refinance for another 30 years and get their payments down and take advantage of the lower interest rates. That can make sense -- but to refinance it for a great 2 week Mediterranean cruise is foolish.

I have a family member underwater on their mortgage also. The house was affordable but they took out loans against it so they could do some remodeling and other projects. It's only because of those loans that the mortgage is now more than their house is worth, otherwise they'd be at least a little ahead.

Also if it's any consolation for those who find themselves underwater on their mortgages, other people aren't underwater on their mortgages but find themselves with high credit card debt that will take them years to pay off. The problem was just taking on too much debt. If you are $30,000 too high on your mortgage, many others have that same amount on credit cards and the interest rates are higher.

Last edited by malamute; 09-18-2012 at 12:35 AM..
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