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Master Sergeant Joe Doakes USAF buys a home in mid 2006 in Astoria Tapestry...He uses a conventional mortgage and pays 20% down. Price is $395K. He and his wife and two kids move in.
Doakes knows that he will be reassigned in 2010/11 and will have to leave Las Vegas.
The same home on the same block is now selling for 190K REPO and by the builder new for $225K.
What would you tell Doakes to do?
[Real by the way...name and price changed to protect privacy]
I also went through the Las Vegas REPOs a while back. over 60% were owner occupied prior to foreclosure and 90% were locally owned.
So about 40% were likely investments or second homes. The majority were simple owner occupants. Now I can't tell how many were unreasonably leveraged and there were certainly some....but I would think the majority simple went with the advice of lenders and did the wrong thing.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,591,098 times
Reputation: 677
Quote:
Originally Posted by olecapt
Master Sergeant Joe Doakes USAF buys a home in mid 2006 in Astoria Tapestry...He uses a conventional mortgage and pays 20% down. Price is $395K. He and his wife and two kids move in.
Doakes knows that he will be reassigned in 2010/11 and will have to leave Las Vegas.
The same home on the same block is now selling for 190K REPO and by the builder new for $225K.
What would you tell Doakes to do?
[Real by the way...name and price changed to protect privacy]
Tell him to rent his house out until the market turns around. That's what a good number of USAF folks are doing down here at Robins Air Force Base that can't sell for whatever reason.
Of course while the prices have declined somewhat in the area, Warner Robins hasn't taken a drastic hit like that pricewise.
Personally, if I were upside down that's what I'd do if I could. I would exhaust EVERY option I had until foreclosure was my very last and desperate action. My credit is important to me, maybe not so much to other people. (And I have been a desperate home seller, so I know how it feels, and quite rightly it sucks to be selling in this market.)
But, I don't think the majority of the people you're talking about is in the same boat and NEEDING to relocate. They're just dumping because they have this "imaginary loss." The loss doesn't become real until they HAVE to sell. You have people who don't HAVE to sell contemplating doing this. If it's okay for one, that's saying it's okay for everybody, no matter what the circumstances are. And that's why I don't agree with it. There's no line to be drawn...
Last edited by PotterGeek; 06-18-2008 at 09:15 AM..
Tell him to rent his house out until the market turns around. That's what a good number of USAF folks are doing down here at Robins Air Force Base that can't sell for whatever reason.
Of course while the prices have declined somewhat in the area, Warner Robins hasn't taken a drastic hit like that pricewise.
Personally, if I were upside down that's what I'd do if I could. I would exhaust EVERY option I had until foreclosure was my very last and desperate action. My credit is important to me, maybe not so much to other people. (And I have been a desperate home seller, so I know how it feels, and quite rightly it sucks to be selling in this market.)
But, I don't think the majority of the people you're talking about is in the same boat and NEEDING to relocate. They're just dumping because they have this "imaginary loss." The loss doesn't become real until they HAVE to sell. You have people who don't HAVE to sell contemplating doing this. If it's okay for one, that's saying it's okay for everybody, no matter what the circumstances are. And that's why I don't agree with it. There's no line to be drawn...
Nothing imaginary about it. After the manuever they are likely to be ahead a thousand dollars or more a month. And any appreciation goes to them rather than paying down their "imaginary" loss. A move every 5 to 7 years is pretty common. These people are going to have to hold for ten.
You really think our Airman can support his family reasonably while dumping $1200 a month down a rat hole? Would that be consistent with taking proper care of his family? That is a lot of money for a guy with a $50K or so income...
What our Airman did is hold still to see if relief comes from the present legislation. If not he is going to walk. If you think about it he really has no other option.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,591,098 times
Reputation: 677
Quote:
Nothing imaginary about it. After the manuever they are likely to be ahead a thousand dollars or more a month. And any appreciation goes to them rather than paying down their "imaginary" loss. A move every 5 to 7 years is pretty common. These people are going to have to hold for ten.
You really think our Airman can support his family reasonably while dumping $1200 a month down a rat hole? Would that be consistent with taking proper care of his family? That is a lot of money for a guy with a $50K or so income...
What our Airman did is hold still to see if relief comes from the present legislation. If not he is going to walk. If you think about it he really has no other option.
So again, I ask...if he has only 50K income, how in the world is he getting approved for a second home loan before selling his current home? Debt to income ratio won't allow it. Bridge loans, yes. But I assume you are not talking about a bridge loan?
Sounds like you are condoning this action. Now if everybody in the country did this, where does that leave our nations economy? I guess this airman is griping about the cost of fuel, too...
If they rent the house for $1200/mo, there won't be any loss.
It sounds like a copout to me. An excuse. Not a business decision at all.
This is symptomatic of the new world religion: the worship of money. Any dishonesty or mashcination required to fatten the bottom line is justified. Also any human cost.
If I read one more thing about 'people should have known what they were signing.' I am going to lose my ever loving mind. I have posted this to a few web sites and, of course, (much like Danielson's 'Crane' kick) no can defend.
I love how every broker or lender is so quick to point out that the 'average consumer' should "read and understand" what they are signing. If the average person was capable of that - what would we even NEED a broker for? WE (speaking for almost ALL consumers) rely on YOU (speaking to the brokers / agents and other HOME INDUSTRY PROFESSIONALS) to put us in the best possible situation given the information we have provided about our personal and financial situation.
It is absolutely ASSinine to ASSume that the average person could possible understand all that mumbo jumbo. If it was really that easy to understand (again we wouldn’t need a broker) and in addition, everyone could just use the same paperwork and change the address and numbers. There would only be a need for a contract two or three pages not 70 pages.
I am a computer consultant and I would NEVER expect my clients to do my job for me and research the computer market – figure out what the best OS – Hardware – Software and/or databases are for them. If they could do that, they wouldn’t need me. In return, I know my business very well, as I am a PROFESSIONAL and (just like a broker) people rely on my years of experience so that I am able to provide the correct advice and consultation based on their situation.
Could you imagine the response I would get if I ever made a similar statement to one of my clients. “You knew you were getting a Linux box without a Xeon processor without dual channel capable memory. You knew the front bus was only 512MB on the motherboard. It was all written on the invoice you wrote a check for.” You signed it - you should have read everything before signing.
For that matter, put that into any other profession and see how stupid that even sounds. “You should have known that our fries were cooked in motor oil before you ordered them. It is in the fine print on our website. You should have researched our fry oil before eating here.”
Face it – YOUR WRONG – the only people who NEED to understand the constantly changing laws, programs and loan options are PROFESSIONALS in the loan and housing industry. Just like everything from a burger flipper to a doctor – it is up to the PROFESSIONAL to provide the correct service based on the general information provided. That is what they do for a living. If you don’t do a lick of research, it makes you uninformed, but not negligible for the treatment you received. That is on the doctor. In the new world of information technology you can watch an appendectomy on YouTube if you want – it doesn’t qualify you to diagnose your own situation; THIS IS THE PROFESSIONAL’S job that is why doctors exist.
If I need a home loan, I go to a LENDING PROFESSIONAL. If I hear one more ‘lending PROFESSIONAL’ push the blame from themselves (where it belongs) back on the consumer, (who relied on their PROFESSIONAL advice) I am going to spew. Get over it and accept responsibility for being, if not THE PRIMARY, at least a MAJOR contributor to the problem. You need to stop – take a deep breath and use some logic. You screwed up and hurt all of your clients, yourself, in turn your own families and countless others, not to mention jacking up the already dragging economy. STOP blaming the people who provided you with the money to purchase the home and computer you dare to have the audacity to sit on and criticize them from.
To quote RedEye – if you can’t even see that - then you sir, are worse than Hitler.
Last edited by tsmude; 06-18-2008 at 12:24 PM..
Reason: HTML codes.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,591,098 times
Reputation: 677
Quote:
Originally Posted by tsmude
If I read one more thing about 'people should have known what they were signing.' I am going to lose my ever loving mind. I have posted this to a few web sites and, of course, (much like Danielson's 'Crane' kick) no can defend.
I love how every broker or lender is so quick to point out that the 'average consumer' should "read and understand" what they are signing. If the average person was capable of that - what would we even NEED a broker for? WE (speaking for almost ALL consumers) rely on YOU (speaking to the brokers / agents and other HOME INDUSTRY PROFESSIONALS) to put us in the best possible situation given the information we have provided about our personal and financial situation.
It is absolutely ASSinine to ASSume that the average person could possible understand all that mumbo jumbo. If it was really that easy to understand (again we wouldn’t need a broker) and in addition, everyone could just use the same paperwork and change the address and numbers. There would only be a need for a contract two or three pages not 70 pages.
I am a computer consultant and I would NEVER expect my clients to do my job for me and research the computer market – figure out what the best OS – Hardware – Software and/or databases are for them. If they could do that, they wouldn’t need me. In return, I know my business very well, as I am a PROFESSIONAL and (just like a broker) people rely on my years of experience so that I am able to provide the correct advice and consultation based on their situation.
Could you imagine the response I would get if I ever made a similar statement to one of my clients. “You knew you were getting a Linux box without a Xeon processor without dual channel capable memory. You knew the front bus was only 512MB on the motherboard. It was all written on the invoice you wrote a check for.” You signed it - you should have read everything before signing.
For that matter, put that into any other profession and see how stupid that even sounds. “You should have known that our fries were cooked in motor oil before you ordered them. It is in the fine print on our website. You should have researched our fry oil before eating here.”
Face it – YOUR WRONG – the only people who NEED to understand the constantly changing laws, programs and loan options are PROFESSIONALS in the loan and housing industry. Just like everything from a burger flipper to a doctor – it is up to the PROFESSIONAL to provide the correct service based on the general information provided. That is what they do for a living. If you don’t do a lick of research, it makes you uninformed, but not negligible for the treatment you received. That is on the doctor. In the new world of information technology you can watch an appendectomy on YouTube if you want – it doesn’t qualify you to diagnose your own situation; THIS IS THE PROFESSIONAL’S job that is why doctors exist.
If I need a home loan, I go to a LENDING PROFESSIONAL. If I hear one more ‘lending PROFESSIONAL’ push the blame from themselves (where it belongs) back on the consumer, (who relied on their PROFESSIONAL advice) I am going to spew. Get over it and accept responsibility for being, if not THE PRIMARY, at least a MAJOR contributor to the problem. You need to stop – take a deep breath and use some logic. You screwed up and hurt all of your clients, yourself, in turn your own families and countless others, not to mention jacking up the already dragging economy. STOP blaming the people who provided you with the money to purchase the home and computer you dare to have the audacity to sit on and criticize them from.
To quote RedEye – if you can’t even see that - then you sir, are worse than Hitler.
OMG, you have got to be kidding me...
Does anyone have a violin I can borrow??
(I won't even go there. Nope, I can't. He's a newbie)
So again, I ask...if he has only 50K income, how in the world is he getting approved for a second home loan before selling his current home? Debt to income ratio won't allow it. Bridge loans, yes. But I assume you are not talking about a bridge loan?
Sounds like you are condoning this action. Now if everybody in the country did this, where does that leave our nations economy? I guess this airman is griping about the cost of fuel, too...
If they rent the house for $1200/mo, there won't be any loss.
It sounds like a copout to me. An excuse. Not a business decision at all.
Carrying costs on the house is at least 2200...maybe as much as 2500. Rent above 1200 is unlikely. You do the math.
He will claim the existing place as a rental. Active duty military is unlikely to have a whole lot of trouble getting a VA even if they think he may walk from the other. He also has significant cash available.
Of course I condon his action. Have you not paid any attention? Any rational individual would condon his action. Only the right wing libertarians are bothered by it. He is terminating a contract in an allowed way. Why on earth would I disapprove?
Of course I condon his action. Have you not paid any attention? Any rational individual would condon his action. Only the right wing libertarians are bothered by it. He is terminating a contract in an allowed way. Why on earth would I disapprove?
If you borrow, you pay. It's called integrity.
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Wow-
