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10/07/2008 09:38:19 PM · #26 |
Affirmative action laws had a lot to do with the current problems. Banks were forced by the federal government to make risky loans or face stiff fines.
Bottom line--- It's all about greed.
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10/07/2008 09:39:57 PM · #27 |
Originally posted by MelonMusketeer:
Affirmative action laws had a lot to do with the current problems. Banks were forced by the federal government to make risky loans or face stiff fines.
Bottom line--- It's all about greed. |
why would the government force a bank to give a loan to someone who most likely cant pay for it? (just a curious question, dont beat me up about it please) |
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10/07/2008 09:41:20 PM · #28 |
Originally posted by HawkeyeLonewolf:
:):):) It's funny.
But it's not a sad but true reality. But I've seen one, ONE foreclosed house in our area.
These aren't normal, paying people who are losing their homes. It's high risk people that should never have been given a loan in the first place. Most of the problems are in certain areas where the housing bubble went unchecked. Look at reality not what the news shovels at you. |
I AM a normal paying person that is at risk of losing my home because I didn't know a thing about what I was getting into. My loan officer smelled fresh meat and dealt me a loan offer that seemed good on paper and three years later has increased to become a living nightmare. Plus it hasn't helped matters that I lost my job six months ago along with thousands in my town and have found that finding another one is the most difficult thing in the planet. So, before you talk about something maybe check your facts. |
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10/07/2008 09:50:42 PM · #29 |
Originally posted by JDubsgirl:
Originally posted by MelonMusketeer:
Affirmative action laws had a lot to do with the current problems. Banks were forced by the federal government to make risky loans or face stiff fines.
Bottom line--- It's all about greed. |
why would the government force a bank to give a loan to someone who most likely cant pay for it? (just a curious question, dont beat me up about it please) |
Linky- New York Post Article
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10/07/2008 09:55:30 PM · #30 |
Hawk is correct...people who should have NEVER been given home loans in the first place are the ones who are losing "their" homes.
Originally posted by HawkeyeLonewolf:
:):):) It's funny.
But it's not a sad but true reality. But I've seen one, ONE foreclosed house in our area.
These aren't normal, paying people who are losing their homes. It's high risk people that should never have been given a loan in the first place. Most of the problems are in certain areas where the housing bubble went unchecked. Look at reality not what the news shovels at you. |
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10/07/2008 10:02:23 PM · #31 |
I built a home almost 3 years ago. It was appraised by our local government appraiser. I paid the tax. I had the bank take escrow each month for the next year's tax.
Well guess what? My house and others in the county were "reappraised" and do I have to tell you...the value went UP ! That means I get to pay $1900 more in taxes for my home in 2008. Now of course I am short 1900 in escrow which means I have to come up with $158/month to repay the bank for paying my extra tax. BUT....I will also have to increase another $158 /month for NEXT YEARS TAX..
That my friend is $316 more per MONTH that is added to my house note this year.
If I lose my home this year it won't be because of Wall Street....it is GOVERNMENT !
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10/07/2008 10:07:55 PM · #32 |
I live in Australia and my husband and I own our own home. But this economic mess still reaches us. My husband will turn 65 next July - supposed and planned retirement age. But his superannuation fund is plummeting. The advice is hang in there, it is part of a cycle and will eventually come good. Looks like he might be working till he's 75.
I extend my sympathies to those who have lost their homes, even if they borrowed beyond their capacity. None of us has a chrystal ball, and most of us are not financial wizards either. The whole situation is just sad. |
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10/07/2008 10:17:42 PM · #33 |
Originally posted by Strikeslip:
Anybody need a Geologist/IT Specialist/Photographer ? |
Slippy
Head east or west. We (Big "Evil" Oil) need geologists/IT personnel in the Canadian oil sands (Calgary) and the north Atlantic (St. John's) offshore projects.
Tell them I sent you.
:-) |
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10/07/2008 10:17:49 PM · #34 |
The sad reality is that too many Americans, even well-educated Americans, come out of school with little if any understanding of more than the most basic of personal finance topics. Our schools do a good enough job of teaching reading, math, history and science, but few are educated in school on managing personal finances, at least in any meaningful way.
The end result of this is that people turned to their bankers for advice. The thinking was, "why would the bank want me to take a loan that I can't repay?" In a way, that made a lot of sense, and until relatively recently, it worked. Banks are not in the business of foreclosing and selling real estate, therefore they had an incentive to steer customers toward loans they could repay.
More recently, changes in securities laws such as the Gramm-Leach-Bliley Act, and loosening of regulation, have allowed banks to turn mortgages into securities (like stocks or bonds) and sell them into the open market. This had the effect of transferring the default risk (the risk that the borrower won't pay) from the bank to outside investors. This removed the lender's incentive to lend conservatively, and made it attractive to loan large amounts of money.
To be sure, some borrowers knew they were getting in over their heads, but far more truly believed they were taking loans they would be able to pay, and were not told or did not understand that their payments were likely to increase radically over time.
It is worth noting that the default rate on Community Reinvestment Act (CRA) loans remains low. The vast majority of defaulted loans were made either on high-priced homes, or on investment properties where the borrower had little reason not to walk away from the depreciated property and increased payment (since they wouldn't be losing their homes). In too many cases, though, borrowers are doing everything they can to try to make their payments and stay in their homes. They want to pay their mortgages, and the banks want to get paid on the loans, not to foreclose on the (depreciated) properties. Surely, there must be a way to make that work.
~Terry
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10/07/2008 10:53:11 PM · #35 |
| Isn't it simple enough for someone to say "hmm i have X amount of extra dollars per month, and if i buy this house i'll need XX amount of money to pay the morgage" and realsize they dont have enough to pay for it? is it like that or am i making it too simple? |
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10/07/2008 11:07:13 PM · #36 |
Originally posted by JDubsgirl:
Isn't it simple enough for someone to say "hmm i have X amount of extra dollars per month, and if i buy this house i'll need XX amount of money to pay the morgage" and realsize they dont have enough to pay for it? is it like that or am i making it too simple? |
You are. Variable-rate mortgages, and other mortgages structured for the payment to go up after the first year or two, caught a lot of borrowers off-guard. Many were structured to have negative amortization at the beginning, where the required payments were not even enough to cover the interest, and the balances went up even as the values of the homes went down.
~Terry
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10/07/2008 11:34:18 PM · #37 |
Originally posted by JDubsgirl:
Isn't it simple enough for someone to say "hmm i have X amount of extra dollars per month, and if i buy this house i'll need XX amount of money to pay the morgage" and realsize they dont have enough to pay for it? is it like that or am i making it too simple? |
_____________________________
Katherine, if only life were that simple everyone would be on a level playing field. When you have a dream in your life and it is out of reach for so long that you think it will never happen to you as long as you live and then all of a sudden there's talk of a way to achieve your dream, you can very easily loose track of the pitfalls of money and fall pray to the numbers. You must understand that a lot of people enter into agreements like a sub prime mortgage with the best of intentions and with a chance to fulfill a life long dream.
You need to understand that it is important to the banks and their shareholders to have "New Business" on the books as often as possible and this may come to pass at a less then scrupulous way from time to time and you fall pray to a smooth talking salesman/woman and before you know it you don't have a pot to piss in or a window to through it out of.
What is going on amounts to the old "bait and switch" tactic that some of your less desirable retailers use to get you in the door. They get you in the door with one thing and at the last moment they switch you to something else that's supposed to be better for you when it's really better for them.
That's when they do what Terry said, you sign on for a "Variable-rate mortgages, and other mortgages structured for the payment to go up after the first year or two, caught a lot of borrowers off-guard. Many were structured to have negative amortization at the beginning, where the required payments were not even enough to cover the interest, and the balances went up even as the values of the homes went down." Even some of the most money savvy people get caught in something like this and will have to ride it out like everyone else.
Life has lessons and this is a hard one for everyone.
MAX! |
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10/07/2008 11:41:17 PM · #38 |
Originally posted by JDubsgirl:
Isn't it simple enough for someone to say "hmm i have X amount of extra dollars per month, and if i buy this house i'll need XX amount of money to pay the morgage" and realsize they dont have enough to pay for it? is it like that or am i making it too simple? |
Actually this is what we did. We stated x amount and the fact that we couldn't go over that. Our agent found us a loan under our x amount. The day we closed on our house, (actually the moment we pulled into the title company's driveway) our agent called us and said we needed $1000 to pay her fees. Now, take into account that we've asked over and over again about fees and she said it's worked into the mortgage. Since, we thought it was taken care of we didn't have it. Our rate went up 2points increasing our payment. We then thought we'd back out of the deal to which we were told we owed them 2000 and the person we were buying the house from 2000. We were trapped. At the time it totally sucked and we were pissed but with my husbands income and mine combined we would survive. Then I lost my job and the rates started to increase and we find ourselves in a situation that is taking us forever to claw out of. |
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10/07/2008 11:50:19 PM · #39 |
Originally posted by HawkeyeLonewolf:
:):):) It's funny.
But it's not a sad but true reality. But I've seen one, ONE foreclosed house in our area.
These aren't normal, paying people who are losing their homes. It's high risk people that should never have been given a loan in the first place. Most of the problems are in certain areas where the housing bubble went unchecked. Look at reality not what the news shovels at you. |
From this shot:
[thumb]727877[/thumb]
I come to the conclusion that you live in the Snellville area? Yes?
Foreclosures in the Snellville area.
Foreclosures in the entire Atlanta area.
It appears the number is much higher than you surmised.
ETA: typo...oops!
Message edited by author 2008-10-07 23:50:52. |
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10/08/2008 01:12:18 AM · #40 |
Let me start with this; My deepest regrets for those who are affected by this calamity. It appears still to be in its infancy and may trigger hardships in areas we least suspect. The subprime fiasco was a self-perpetuating and bottomless pit of greedy exploitation. Yes there are those who maybe should not have qualified for the loans in the first place but it posed an opportunity to own a home where the opportunity may never have existed. Bless them for trying. The banks fabricated this fictitious asset category because there were ravenous appetites for the paper they were printed on. They did their job. The regulators allowed this to balloon because it validated the magnitude of their wisdom. Their wisdom was flawed.
We are all at fault for this and as a result, we are paying the price.
Mortgages are the beginning. Even if we "buy" ourselves temporary shelter from this mess, we still will suffer the Post Traumatic Stress associated with this. Banks will be overly cautious with lending, credit lines will be squeezed, factories will stall capital spending, etc, etc, etc.
Though HawkeyeLoneWolf does make somewhat of a valid statement with regards to the self-governance of debt, the chance to own a "Home" is a temptation few of us would resist. It is the impression he is being self-righteous, but I am quite certain his words fell short and concealed his compassion. How could he not have compassion when he will likely need, or know of someone who will be in need of it in the near furture.
This event is migrating across the globe like a cancer. Only one third of this financial mess resides in the US, two thirds has been exported to greedy and foolish hands abroad. Yes, two thirds. We are seeing credit events unfold in Europe and other parts of the world as well. This is big and VERY serious.
May I suggest we stop the blame and realize the blame will be much more decisive when the crisis has subsided. This is a time when we are faced with a real threat. That threat is widespread social panic. In the meanwhile, we should focus on the goodness we have with our families and loved ones. We should exercise our compassion to the fullest extent and shine a smile at those who are stricken with despair. I do not believe this just to be another event on the stock charts but rather a fundamental shift of how we live.
I am a financial advisor who is in the midst of this carnage. I am seeing my friends, colleagues, clients and family being ravaged by this turmoil. I am appauled with our own stupidity and my industry's conceit in alluding it understood the "Big Picture". I am stupified by my own lack of foresight and baffled by the conflicting solutions which seem to be failing. My punishment is faced daily and has hit my family hard.
For me, this is a paradigm shift and for many others, it will be as well.
We are all good people here who sometimes lose our way. May happiness and proseprity return to you all.
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10/08/2008 01:21:14 AM · #41 |
Originally posted by RKT:
Foreclosures in the Snellville area.
It appears the number is much higher than you surmised.
ETA: typo...oops! |
wow... 992 in Snellville alone... and that's only the ones currently listed.... yup, only one in the neighborhood. |
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10/08/2008 01:30:02 AM · #42 |
Originally posted by Quigley:
Originally posted by JDubsgirl:
Isn't it simple enough for someone to say "hmm i have X amount of extra dollars per month, and if i buy this house i'll need XX amount of money to pay the morgage" and realsize they dont have enough to pay for it? is it like that or am i making it too simple? |
_____________________________
Katherine, if only life were that simple everyone would be on a level playing field. When you have a dream in your life and it is out of reach for so long that you think it will never happen to you as long as you live and then all of a sudden there's talk of a way to achieve your dream, you can very easily loose track of the pitfalls of money and fall pray to the numbers. You must understand that a lot of people enter into agreements like a sub prime mortgage with the best of intentions and with a chance to fulfill a life long dream.
You need to understand that it is important to the banks and their shareholders to have "New Business" on the books as often as possible and this may come to pass at a less then scrupulous way from time to time and you fall pray to a smooth talking salesman/woman and before you know it you don't have a pot to piss in or a window to through it out of.
What is going on amounts to the old "bait and switch" tactic that some of your less desirable retailers use to get you in the door. They get you in the door with one thing and at the last moment they switch you to something else that's supposed to be better for you when it's really better for them.
That's when they do what Terry said, you sign on for a "Variable-rate mortgages, and other mortgages structured for the payment to go up after the first year or two, caught a lot of borrowers off-guard. Many were structured to have negative amortization at the beginning, where the required payments were not even enough to cover the interest, and the balances went up even as the values of the homes went down." Even some of the most money savvy people get caught in something like this and will have to ride it out like everyone else.
Life has lessons and this is a hard one for everyone.
MAX! |
Well said. And what a sad commentary on our education system that didn't teach them any better.
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10/08/2008 01:33:03 AM · #43 |
Originally posted by JDubsgirl:
Isn't it simple enough for someone to say "hmm i have X amount of extra dollars per month, and if i buy this house i'll need XX amount of money to pay the morgage" and realsize they dont have enough to pay for it? is it like that or am i making it too simple? |
People, and even more so with young people, are credit stupid.... I know I was when I was young. I'd go in a store and see the sign that says, "only $10 per month your credit card" and I'd think, hey, drop in the bucket... and the next month, do it again... and before I knew it... I had $35 k in credit cards. Stupid.
Today I am debt free for the most part, with the exception of my home. I bought my current house three years ago during the sub-prime push. You would not believe how hard the broker tried to get me to take a variable rate mortgage. He tried to convince me that rates were projected to remain low and I'd save thousands and thousand. I refused, and instead got a fixed rate at higher rate.
People who don't stop and think about what the future can or might bring can often get caught in that trap of thinking they'll only need $800 a month.... and here they are two or three years later, having to cough up (for instance) $1400 instead. And their electric, food, gas/diesel has risen as dramatically. All of a sudden, somebody who was comfortable with their "dream" is being foreclosed on.
This is why it touches a nerve when I hear somebody throw a blanket over the situation and say things like Hawk whatever his name is said. For the most part, this problem is outside the control of us middle class people. The other day, I heard one scumbag saying it was all the fault of the illegal aliens from Mexico who had been allowed to come and buy houses here. yeah, right. |
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10/08/2008 02:03:00 AM · #44 |
Originally posted by darnold:
The other day, I heard one scumbag saying it was all the fault of the illegal aliens from Mexico who had been allowed to come and buy houses here. yeah, right. |
And that would be one example of the "widespread social panic" that Ivo mentioned: people will start circling the wagons and insisting everyone who they always hated to begin with is somehow to blame. Ivo, your points about needing to retain our humanity and sympathy were right on target.
Someone earlier mentioned a woman who put $10,000 into a house she's now likely to lose. It would have been SO much better for her to continue renting and keep her money than get into a house with a loan she couldn't afford. And that's why my sympathy lies with her. I think Hawk is right that she shouldn't have thought she'd achieved her dream, and I sincerely wish people understood more about finance, but that doesn't reduce my sympathy. The fact is the people she relied on (lenders, brokers, etc.) weren't working in her interest.
I was absolutely shocked to learn how much mortgage we "qualified" for when we moved 5 years ago. I lucked into a solid financial understanding, mostly from my father, and I knew better than to accept. But I can definitely understand the problem caused by rapacious lenders who bore no exposure because they immediately sold the loans.
Edited to add: Hawkeye, your lack of compassion is simply stunning. You can feel for someone even if you think they're partly to blame. And if that instinct is missing in you, then you're going to be extremely lonely when you screw up.
Message edited by author 2008-10-08 02:07:26.
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10/08/2008 08:45:05 AM · #45 |
Originally posted by sfalice:
Originally posted by HawkeyeLonewolf:
Originally posted by sfalice:
[quote=HawkeyeLonewolf] |
Read what I said and quit imagining. |
I suppose I should have expected a nice little putdown. |
You were expecting more? |
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10/08/2008 08:46:05 AM · #46 |
Originally posted by chromeydome:
Originally posted by sfalice:
Originally posted by HawkeyeLonewolf:
Originally posted by sfalice:
[quote=HawkeyeLonewolf] |
Read what I said and quit imagining. |
I suppose I should have expected a nice little putdown. |
The wasting of virtual breath is not recommended here,  sfalice. Sad, but true.... |
I'm glad I wasn't holding my coffee mug when I read this.
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10/08/2008 08:58:49 AM · #47 |
i'm not sure where you're coming from here ? i was agreeing with the quoted text in my previous post in this thread ( see below ). i never mentioned a beer truck driver...
i was happy the bail out failed the first time around, and not very happy it passed the second time around. i understand what is going on and what has been going on.
Originally posted by darnold:
As far as soup.... your beer truck driver probably WILL lose his house... what gives you the idea that ANY part of the bailout is designed to keep an American in their home? You might want to read up on that... because the bailout only helps the banks and corporations rid themselves of the debt but does not protect the homeowner. It is all a part of the plan begun during the Reagan era and the beginning of deregulation and the "trickle down effect" strategy wherein all the rich people's money will filter down to us "commoners". |
Originally posted by mypreviouspost:
YEAH !
Originally posted by ambaker:
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10/07/2008 04:41:59 PM
Originally posted by HawkeyeLonewolf:
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Originally posted by posthumous:
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Originally posted by HawkeyeLonewolf:
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There have always been foreclosures and those created by hardship. But those are not relevant to the current crisis. That's all.
Of course they are. The current crisis is spreading to affect everything. But you keep whistling dixie and playing your fiddle while you do the superiority dance. (enough mixed metaphors for you?)
Nope... just looking at the reality.
I'm not sure you would recognize reality, if it hit you on the back of a semi-truck. With statements like, "And no, I'm not happy to see them lose their dreams. But they never really attained their dream, did they? They didn't need to earn it or do anything. The loan was just handed to them that they couldn't afford." Your lack of connection to the rest of the world is astounding.
What makes you think for even a minute that people who have less income, haven't earned anything? Do you think they don't get up every morning and go to work? Do you think their work is easier than others? The lady who cleans our office works seven days a week, and works three jobs. One of the jobs is loading freight trucks. Not a do-nothing-job the last time I looked. Nobody handed her a loan. She was sold a loan under the premise that she could refinance down the road. She put ten thousand dollars down, to get into her home. Should she have been more sophisticated about finance? Would have helped. But unfotunately she didn't have the money for college either. She's 58 years old, likely to lose her home the next time the rates adjust, and to this point never missed a payment in over five years. With the dropping property values, she cannot sell, cannot refinance, can only make payments till everything is lost. Oh, and to make things better, her 30 something supervisor told her that she should really look for other work because her seniority was getting so high, that they could hire two younger people for the same wage.
I don't know where you live, but the loan fairy didn't come through my neighborhood sprinkling money. The people in my town work and work hard for what they get. Your spew should be directed at the banks and loan companies who pocketed millions making this mess, not the working class.
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Message edited by author 2008-10-08 09:03:15.
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10/08/2008 09:01:20 AM · #48 |
Originally posted by darnold:
Originally posted by RKT:
Foreclosures in the Snellville area.
It appears the number is much higher than you surmised.
ETA: typo...oops! |
wow... 992 in Snellville alone... and that's only the ones currently listed.... yup, only one in the neighborhood. |
That's 991 more than Hawkeye said, it must be wrong or printed by some liberal freethinking democrat. |
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10/08/2008 09:22:43 AM · #49 |
Originally posted by darnold:
As far as  soup.... your beer truck driver probably WILL lose his house... what gives you the idea that ANY part of the bailout is designed to keep an American in their home? You might want to read up on that... |
Umm, the beer truck driver was my friend. You may want to read up on that... :)
And yes, nothing has been passed to bailout homeowners. YET! However, a lot of people are trying! If you watched the debate last night, you can add McCain to the list of people trying.
The sat night live skit on the home owners mess is a little funny but a little true too. I think you can find it on NBC.com somewhere. |
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10/08/2008 02:41:55 PM · #50 |
Originally posted by LoudDog:
Umm, the beer truck driver was my friend. You may want to read up on that... :)
And yes, nothing has been passed to bailout homeowners. YET! However, a lot of people are trying! If you watched the debate last night, you can add McCain to the list of people trying. |
Whoops, you are right, sorry soup... I'm old and senile, what can I say.
Ahhh... but  LoudDog... when you wrote that, McCain had not yet come up with his empty-promise-designed-to-attract-voters.. that will never happen anyway. |
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