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“In June 1995, Sherrie Floyd, a clerical assistant, and her husband, Kevin Floyd, a truck driver, bought a four bedroom, 2,100 square foot home in Vallejo at auction for $170,000. After refinancing several times, their monthly payments reached an unaffordable $5,600. They stopped paying in April 2007 and filed for bankruptcy in December 2007.”
“The Floyds owe $670,000 in credit card, mortgage and auto-loan debts, according to the claim estimate from bankruptcy court. Since 1995, Mrs. Floyd estimates that they pulled roughly $100,000 out of their mortgage to pay off credit-card bills, broker fees and penalties.”
“In 2005, just as their rate was about to go up, Mrs. Floyd got pregnant with her fifth child. They refinanced again through Option One Mortgage, a subsidiary of H&R Block. At the time, their house was appraised at $610,000. They took out a $505,000 loan — roughly $452,000 went to pay off their prior loan, about $15,600 went to other outstanding debts and fees and the Floyds took out almost $23,000 in cash. Their house was recently reappraised at $470,000.”
“Mrs. Floyd says that the broker misinformed them. ‘We take responsibility for our situation. But if you don’t understand loans, a lot of brokers take advantage of you,’ she says. ‘I think my husband was talked into a lot of bad things.’”
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“‘I want to pay my debt. I pay my federal and state taxes like I’m supposed to, I go to work, and I just can’t find any help,’ said Ms. Floyd. ‘It just isn’t fair.’”
OMG! Whatever! These people make me so mad! My husband and I settled for a 3 BR 2 Bath house that cost us a little over $100,000 10 years ago when we got married and were expecting our 1 child. We knew we couldn't afford more. We still managed to get ourselves into credit card debt, but WE got ourselves out. We didn't lose our home and we sure didn't keep having babies that cost a lot of money. We worked to get ourselves secure. I'm so sick of hearing these whiny people who dug themselves into a hole asking for help. Get over it and get yourselves out. I have NO sympathy for people who continue to over extend themselves when they know they can't afford it. It's one thing to be living within your means and lose your job or have an illness hit. But to continually make stupid decisions is not a reason to ask to be bailed out.
They bought a house at 140k and 10 years later it was worth 610 k and they didn't think something was wrong? It sounds like a case of simple bankruptcy to me. Let them keep the house and start their financial lives over with a credit score of -500 or so. No credit cards, no more mortgage, no more loans of any kind. Let them live on his salary until they show they are responsible and less gullible.
No, what will be done is we the taxpayers will somehow be made to bail out those 'less fortunate' than ourselves who were 'tricked' into borrowing $500,000 against their home....
No, what will be done is we the taxpayers will somehow be made to bail out those 'less fortunate' than ourselves who were 'tricked' into borrowing $500,000 against their home....
Actually, I know a few folks in similar situations. They bought their home long ago at a very affordable price, especially by todays standards, and then kept borrowing against the "gains" in subsequent years. Today, they strain to make the payments, and a couple can no longer afford to do so.
I've argued against personal bailouts, so it isn't an issue to me. They simply lose the house and their credit rating goes into the toilet, and they can go find a rental.
Well we took out equity in our home but we actually can pay the amount,this is what I can't grasp....how do you pull out all this money,knowing how much you will have to pay a month and not realise it is beyond your means to pay???
There are so many people that have been raised pathetically with no sense at all. The overrated "baby-boom" generation (of which I am one) has raised a big batch of losers.
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