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Actually HOA fees are a liability that the banks need to clear up before reselling the homes. It does nothing to make your HOA fees higher, it just delays when they get paid. (technically it would make them lower because one would presume that HOA fees have late fees associated with them for failure to pay on time).
That is what the HOA is hoping for but by the time the foreclosed homes are sold, the HOA keeps telling us that in Florida there might be a change in the law so the HOA will end up with nothing and right now the funds are not paid and the HOA fees went up. More people stopped paying and the basic cable which the HOA has a contract with, has to be paid also for the home owners who don't pay and they still are able to watch because the cable provider is saying that they can't close home owners down who aren't paying their dues. This makes me and a lot of other homeowners very mad to say at least.
Right now it seems there are foreclosures coming up in our community and the people don't even put their homes up for sale. They have lis pendens for months, liens of the HOA and the year time line is coming up, so IMO they just lived almost a year for free (no mortgagepayments) and than walk off! Letting us stuck with higher HOA fees, so I'm getting to the point to be so mad. In the beginning I felt sorry for them, but now it isn' just the innocent people anymore, these are calculated home owners who know they can live for free until the have to leave and didn't try to sell there home. This should be criminal looked at since IMO this is intend!
And some of them are the loudest as it relates to not being told they had to repay the money they borrowed, when in reality, some never made a single payment. It was easier to use what money they had for a nice flat screen TV and new furniture for the LR.
70k a year is a good paying job. 2500 a month mortgage is alot, but prices increased so much in southern california that it takes that much just to not live in slum. While many of you may not think it was a good mortgage/income ratio there is nothing in the article that says she could not pay it when she still had a job. There is also no change in here status becuase of a change in the loan terms.
She lost her job. Well when you lose your job you source of income is gone and making ANY payment is hard. She has been hanging on trying not lose the house, but it may not happen. In brighter days people would lose their jobs and if needed could sell the house and downsize. Now she probably owes alot more than what is is worth.
This very different from some who still has their 70k a year job, but can not longer make payments. It is one thing to buy a housing making 70k a year and paying 2000 a month knowing full well that you would never be able to make the payment once it resets. That is very risk and a result of poor moeny managment. This woman simply lost her job and probably would have a hard time making $1000 month mortage these days. The fact that it is interst only really has no bearing on this. Given the price drops any equity she had or put down is probably gone anyway. Does it matter to be in hole 10k or 100k with your house when you don't have a job? You are still in the hole can simply can't use the house to get out from under it.
Sad, but if we start having alot of layoffs from this downturn stories like this will be ever more common. How many of you can lose your job and still afford to live in your "modest" home? That is the real danger in this crisis. Equity accross the board has dropped so much that good people will have a hard time using even being able to sell their home as an en emergency cash reserve to cover things like layoffs. This means the impact of layoff is much greater now than it was years ago.
70k a year is a good paying job. 2500 a month mortgage is alot, but prices increased so much in southern california that it takes that much just to not live in slum. While many of you may not think it was a good mortgage/income ratio there is nothing in the article that says she could not pay it when she still had a job. There is also no change in here status becuase of a change in the loan terms.
She lost her job. Well when you lose your job you source of income is gone and making ANY payment is hard. She has been hanging on trying not lose the house, but it may not happen. In brighter days people would lose their jobs and if needed could sell the house and downsize. Now she probably owes alot more than what is is worth.
This very different from some who still has their 70k a year job, but can not longer make payments. It is one thing to buy a housing making 70k a year and paying 2000 a month knowing full well that you would never be able to make the payment once it resets. That is very risk and a result of poor moeny managment. This woman simply lost her job and probably would have a hard time making $1000 month mortage these days. The fact that it is interst only really has no bearing on this. Given the price drops any equity she had or put down is probably gone anyway. Does it matter to be in hole 10k or 100k with your house when you don't have a job? You are still in the hole can simply can't use the house to get out from under it.
Sad, but if we start having alot of layoffs from this downturn stories like this will be ever more common. How many of you can lose your job and still afford to live in your "modest" home? That is the real danger in this crisis. Equity accross the board has dropped so much that good people will have a hard time using even being able to sell their home as an en emergency cash reserve to cover things like layoffs. This means the impact of layoff is much greater now than it was years ago.
If she had put money down? I have seen so many zero down and people who have a higher mortgage than they bought the home for. Isn't that stupid on both sides? I hope the zero down is soon over and people have to save before they can buy a home, makes them more responsible an aware of what it is to be a home owner. Just my opinion.
If she had put money down? I have seen so many zero down and people who have a higher mortgage than they bought the home for. Isn't that stupid on both sides?
She is likly unwater if she put money down or not. In my part of the county (not even california mind you) I see people who bought a house for 490k in 2005. Now the same house is going for 325k in 2008. There is another (2100 sqft and hardly a mansion) bought for 420k in 2006 and now on the market for 259k. That is ALOT of money to lose in a couple years and unless you put a huge amount down being upside down is very likely. If you still have your job and can afford to make the payments not that much has changed except on paper. However be forced to sell or lose a job and the situation is much more dire.
70k a year is a good paying job. 2500 a month mortgage is alot, but prices increased so much in southern california that it takes that much just to not live in slum. While many of you may not think it was a good mortgage/income ratio there is nothing in the article that says she could not pay it when she still had a job. There is also no change in here status becuase of a change in the loan terms.
It cost a lot to BUY in Southern California during the bubble. But there were always plenty of affordable rentals available and not in slums either. She could have rented a perfectly nice place in a nice neighbourhood well within her means. There was a choice involved.
Quote:
Originally Posted by JoePAz
This very different from some who still has their 70k a year job, but can not longer make payments. It is one thing to buy a housing making 70k a year and paying 2000 a month knowing full well that you would never be able to make the payment once it resets. That is very risk and a result of poor moeny managment.
At 70k, $2500 a month is FAR too much, and she would NEVER have been able to make the payments once the mortgage reset (and actually feed and clothe her family). She DID demonstrate poor money management. The fact that she lost her job (which is sad and I sympathize with her on that score) is irrelevant to fact that she could never afford the house that she bought and was at risk of losing it from the day she moved in.
Losing a job is a traumatic and difficult event. This woman stands as a reminder that "stretching" to get the things people want isn't always a good financial move and that planning for unknowable eventualites - job loss, divorce, death, injury is a PART of good financial planning.
At 70k, $2500 a month is FAR too much, and she would NEVER have been able to make the payments once the mortgage reset (and actually feed and clothe her family). She DID demonstrate poor money management. The fact that she lost her job (which is sad and I sympathize with her on that score) is irrelevant to fact that she could never afford the house that she bought and was at risk of losing it from the day she moved in.
How do you even know what the reset period is? What if the reset is in 10 years. Alot can happen in 10 years and maybe her income would be much higher then. Again there is nothing in the story that said she could not afford 2500 on 70k a year. Yeah it may be tough, but that was not her problem. She could have been making a 170k a year and still be in jam she is now having lost that job. Some you her really are quite angry with her for getting and intest only loan when her real issue was losing th job. Don't forget she is divorced too. Maybe her deat beat ex make 100k a year and combined they could afford 2500 a month. Then he leaves putting her in bad spot. She likes the house and tries to work things out as. Then gets laid off a year later.
Point is that so many you here just want to blame her as one of those idiot trying buy more house than they could afford and yet NOBODY her knows if she really could afford it or what drove her into that spot. If this was a story about her making 70k and not being able to afford a 2500 a month mortagage that was going to reset to 3k a month in June yeah... it would be a story about poor management. Their may be plenty of stories like this out there, but this one is one of simple job loss induced issues exacerbated by a severe drop in housing values. Her former income, interest only loan and current paymet are just red herrings. How many of YOU out who have lived in your home less than 3 years can lose your job and not be a world of hurt trying to pay the bills?
I saw a story on tv once about a couple that was divorced but had to live in the same house until they sold it. The irony of the story was that the divorce was quick but selling takes forever in todays market. These people had a horrible time but couldn't afford 2 houses and were sticking it out together since they both were responsible for the mortgage. I have respect for these people and feel awful that the kids have to be in a surrounding like that, but at least the kids learn what responsibility is!
I can relate to what she was going through. I got a layoff notice in Feb just like that lady. The difference was I got about a one month heads up and got on every careers website I could think of and got interviews and offers before I even got my layoff notice.
Granid I didn't have an interest only loan eating up half my income but between groceries, car payments, pre-school tuition, utilities and other misc expenses that's pretty much all the money I made....and some months....that's more than all my money. There's more to you financial story than your mortgage payment. She must have been scraping the bottom of the barrel even before she was laid off. I don't know how she got by in that area on that income with that mortgage payment!
Well, she actually does get at least some sympathy from me. Yes, she made a very foolish decision to buy her house on an interest-only loan. Yes, as a loan processor she certainly should have known better.
Here's where she has my sympathy, though. She'd probably LOVE to sell her home and rent something less expensive. In the California market, though, that house (which I'm sure was 100% financed when she purchased it) is probably worth about a 1/3 less than what she paid for it. Also, what might seem like a very pricey home to most of us, in Cali two years ago a $500k-$700k home was probably the price for a very modest home. But now, how's she going to sell it? IF she can find a buyer for it, will the bank accept the short sale? I give her credit for trying to keep up the payments on it instead of just walking away and letting the bank have it (which means all the rest of us eventually pay the price for that).
Also, a single mom with 2 kids who's lost her job has got to be a tough situation. Sounds like she really wants to work. The kind of jobs she'd probably be qualified for (banking, bookkeeping, etc) usually have 100's of applications for each opening.
I don't know, but I don't think I'll hold her stupidity against her. We all make mistakes - hopefully not such costly ones.
...and we have to pay for our mistakes, not have someone else pay for them.
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