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I don't understand what the big surprise is. I have no trouble whatosever getting a loan for WAY more than I need, way more than I'm comfortable paying back on my income. All courtesy of the taxpayer.
I'm in my 20's , I have no trouble whatosever getting a loan for WAY more than I can possibly pay back. More money than I need.
Difference between me and her, I'm not an idiot. I like how you can hear police sirens wailing in the video. Just perfect.
Not surprised really but more pissed off that a bank in todays climate/enivornment would still ALLOW this to happen. But I guess when you have the Gov't to bail you out what is the harm right?
Not surprised really but more pissed off that a bank in todays climate/enivornment would still ALLOW this to happen. But I guess when you have the Gov't to bail you out what is the harm right?
What do you mean "banks allow this to happen" ?
Its the job of the banks to make loans, and pass them down the line, ultimately ending up as federal liabilities under the smorgasboard of TARP, TALF, FHA, PPIP, FDIC, FNMC, FNMA. That's how our economic system works. I don't blame the banks.
Its the job of the banks to make loans, and pass them down the line, ultimately ending up as federal liabilities under the smorgasboard of TARP, TALF, FHA, FNMC, FNMA. That's how our economic system works. I don't blame the banks.
Not a bad deal if the banks can borrow unlimited funds at 0% from the taxpayer and lend same out at 6% with absolutely no risk to their balance sheet...others should be so fortunate....
Not a bad deal if the banks can borrow unlimited funds at 0% from the taxpayer and lend same out at 6% with absolutely no risk to their balance sheet...others should be so fortunate....
Contrary to popular belief, the lenders do not receive the interest on the FHA, FNMA, Freddie loans. They are just a pass through.
As a recent homebuyer (2-1/2 months!), I knew not to bite off more than I can chew. I worked hard to save for the downpayment, my monthly payments are within my means, I'm paying extra into the principle, and still have some "padding" in my bank account.
The oddest aspect I find is the DTI ratio; considering that practically everything is verified these days, how she ended up with that much for just the front-end ratio(!), I dunno.
FHA loans are well intended, but then, so were SISA(*) and NINJA(*) loans too before they were pawned off to the masses as their way into something beyond their means. Having a 10%, 20%, or even bigger downpayment was, and always represented a commitment that the buyer is in it to stay. Instead, they are being used (and abused) by "well-intended" folks who really shouldn't be "buying" at all but should've rented ... which is the way some end up looking at it all, personal credit be damned and all.
Sadly, the hardworking taxpayers are the ones who will ultimately be left holding the bag (debt).
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* - titles to loan classifications during the boom. Neither were verified, just backed by what was (or not) stated.
SISA = Stated Income, Stated Assets.
NINJA = No Income, No Job or Assets.
Last edited by Narfcake; 10-22-2009 at 09:42 AM..
Reason: Grammar.
The oddest aspect I find is the DTI ratio; considering that practically everything is verified these days, how she ended up with that much for just the front-end ratio(!), I dunno.
Same here. I thought FHA loans has pretty strict DTI guidelines.
The kid seems to "get it" on some level. I listened to the interview. The house was trashed. It was a STEAL in the SanFran area. It very well could be sold or rented to cover the costs. I personally have seen LOW PRICED rental home appreciate though improvement in much the same way the kid AND HER FAMILY has through periods of both boom and bust. The problem is that the houses generally get harder to find and the amount of work required to get back on appropriate return gets harder. If you don't have an exit strategy you end up trying to flip mansions and THAT does not work...
Flippers that improve a property and make a profit are not really a problem -- if this kid can't sell the "risk exposure" because if her is minute. I would like to think there are ways to CAPTURE some of the profit that she might have as windfall, but I suspect that is why the first time buyer's credit was structured to try and keep her and others in the house for a while and ultimately I dislike the POLICY of windfall taxes in general. Risk taking is needed to keep the country moving forward!
The other side of the coin is that I KNOW FROM EXPERIENCE that she will eventually get tired of fixing up low cost houses. She might wise up soon enough to make money from her experience in other ways, maybe even getting more formal education. Over the really long haul that would PROBABLY be a better thing, but part of me knows that some folks have very nice life with just a 'practical' or hands-on sort of education.
"The monthly payments on her debt amount to $1328. Her income is $2470, leaving her with just $285 a week to live on. She's paying 54% of her income to make the mortgage payments.She earns that income by holding down one full time and two part time jobs. Obviously, this woman has a strong work ethic. But it also means her income is precarious. With unemployment still rising, she obviously should be worried about losing one of her three jobs. A loss of one of them would likely leave her unable to make the debt payments."
A couple of comments on the above. $285 a week...certainly enough to survive on, though looking at her picture, I'm betting she goes through that much in food alone.
Strong work ethic? Possibly. Intelligent? Doubtful. Here is yet another classic example of what got us into this mess in the first place - overleveraging. 54% of her income is going to debt servicing, i.e. her mortgage!!! Working 3 jobs to afford the place!!! This home will be foreclosed by the end of 2010, no doubt about it.
"Tejada appears to be using imaginary numbers about the value of her house. She says that when she bought it, the house was just a “box” with no kitchen or bathroom. Now it is "gorgeous". She claims the renovation has increased the value of her home from $155,000 to $255,000.
"I bought my house for $155,000. And now, after all the fixing, after all the remodeling, my house is worth $255,000. So just within a month period, I made a $100,000,""
I MADE A $100,000!!! FLOL, even if there was some basis in reality for her ridiculous value increase claims, how much did the renovations set her back? Not to mention, you haven't "earned" or "made" anything...good luck extracting that paper gain. Jesus this is the same stupid mentality that helped land us where we are today. My God, this is madness.
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