K, so 3 years ago I go out, pre-qualify, and responsibly buy a home. Wife and I were slightly under 6 figures at the time, and SEVERAL lenders tried to loan me 500+ for a house. Not being a complete dumbass, I went out and bought a house for much less than half that. Something that wasn't our "dream home", but would be very nice for the first one, big enough for some kids, etc.
Local story on the news has a homeowner about 3 blocks from me, who over extended themselves with a 450K house on a 75K a year income. Now one of the buyers is out of work, so the loan/bank has adjusted their mortgage on their 450K home down about 150k.... SO....now when the market comes back, they have a free 150k of equity in the house, because THEY WERE STUPID and overextended themselves.
Me on the other hand, can't re-fi because I owe about 20% more than the worth of the house, and because the payment is only 20 something % of my income, can't modify the mortgage. So, when the market comes back, I'll break even on my house, while Mr. Dumbass will be sitting on 6 figures equity. Why should I bother to work harder or smarter, if idiots get a handout and someone responsible gets the shaft.
To add insult to injury, the homeowners of the aforementioned house have 3 brand new BMW's in the driveway....
Lets reward morons, while people with half a brain get the shaft. Well, I'm not having any more of it.... how long will a foreclose F up my absolutely perfect credit?
somehow I doubt the bank just gave them 150K, and I would never trust the local news to get it right...
but look at it another way...their story or issues don't effect you at all. You do what's right and what other people do isn't your issue. You borrow money under terms you agree to and you pay it off as you were planning on and live your life happy...what your neighbors do is their issue and shouldn't make you miserable. Life is too short.
I used to get pissed at all the sad drama stories in our local paper. Then I realized those people won't be happy no matter what, so I'll just do my thing and let it go. Sometimes living life in a vacuum and ignoring what others do is a great thing.
(I allways thought 2 to 2 1/2 times annual income was max for borrowing for a house...so when people do more and get bailed out I used to get frustrated too....but now I realize I personally can't fix that, so after one letter to my representative voicing my displeasure I let it go and just live happy)
Ya know Chris,
You really ruin a perfectly good ranty thread when the first thing you do is go and be all reasonable and stuff.
Yeah, you and your logic.
+1 to what statler said.
also, i think its going to be a while before the market is favorable for anyone in the position your neighbors are in. Not to mention how bad their credit is going to look.
in other words, free equity means nothing if you cant capitalize on it it.
I feel the disappointment in having done the right thing. I have one of the "cadillac health plans" that looks like it's going to be taxed. My union has sacrificed wage increases for years to keep excellent benefits. Ranting on this and venting would quickly turn political so I won't. I just understand the emotional punch in the gut.
You can go down and pee on the bmws?
mitt
The bank keeps that equity, if or when it comes back. I've never seen a contract written by a bank that benefits the home owner.
The sad thing is that it's always someone else who is at fault. Any idiot knows you can't afford a $500K home on $75k/year in income. One thing goes wrong and you're done unless you saved a lot of money before-hand but somehow I doubt they did. Both lenders and buyers are at fault for getting greedy and I'm with you, we should NOT pay the price for being reasonable ourselves. Everyone wants that dream home but it takes time.
Quote from: muskrat on January 12, 2010, 06:19:04 PM
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The sad thing is that it's always someone else who is at fault. Any idiot knows you can't afford a $500K home on $75k/year in income. One thing goes wrong and you're done unless you saved a lot of money before-hand but somehow I doubt they did. Both lenders and buyers are at fault for getting greedy and I'm with you, we should NOT pay the price for being reasonable ourselves. Everyone wants that dream home but it takes time.
Depends on where you live. Here in NYC, young folks starting out have a choice of buying a house or apartment you can't afford or paying rent you can't afford. You will be hard pressed to find a house for less than 500K (in the boroughs, think over a million in Manhattan) or a family sized apartment for under 1.5K a month.
This thread belongs in the debunkt political section.
On a side note, don't borrow more than you can currently afford.
Here is a good read from the NYT
http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?em (http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?em)
It may make sense to walk away from the mortgage.
Quote from: howie on January 12, 2010, 06:33:28 PM
Depends on where you live. Here in NYC, young folks starting out have a choice of buying a house or apartment you can't afford or paying rent you can't afford. You will be hard pressed to find a house for less than 500K (in the boroughs, think over a million in Manhattan) or a family sized apartment for under 1.5K a month.
sounds like oahu, too.
2x my annual income? that would get me a shit apartment in probably a sketchy part of town, and I'd be worried about my shit getting stolen
They rewarded my friend who bought a house he couldn't afford with a 2.7% refinance while me who pays my bills on time had to fight to refinance for a little over 4.
I fall into the catergory of those who get the shaft because they do the right thing. I have no payments on anything I own. I pay all of my bills that I do have on time. I have a credit card I only use for emergencies and if I do use it pay it off when the bill comes.
And the last loan I applied for was refused because, and I quote, "Not enough open revolving credit accounts."
I have NO negatives on my credit for the last 10 years. I have had loans as recentas 3 years ago. Granted, I paid those off rather quickly ahead of schedule but still...
And it irks the living shit out of me to go to a neighborhood where the houses are falling apart ith trash on the lawns and see new Cadillacs and Mercedes and BMWs parked in the driveways.
But I will agree with Chris on one part of this...make the beast with two backs what THEY are doing. Do what you are doing and just be happy with your life.
The idea that the value of your house went down is the wrong thought process. You bought the house for your family to live in. So live in it. The whole Idea that your supposed to make money on a home is a big part of the reason why everyone is in this predicament in the first place. And you are not the only one getting shafted by the system BTW.
This is a tough one. I ran into this myself. My experience is thus:
We purchased a house that we could afford here in north Idaho. Small house in a small town for
$78K. We financed for 15 years at 5.5%. This last summer my wife lost her job and we were reduced to my
income of $30K per year. We couldn't make the house payment and all the bills.
We missed 5 payments. I kept calling the bank (Wells Fargo) and they kept saying there was nothing
they could do. They wouldn't change the terms of the loan. Nothing. They said the only way to avoid
forclosure was to sell the house or pay the past due amount. Sarah finally got another job and we are back
in business but the bank still won't budge on a solution. No I don't live outside my means. I drive an
old 92 VW and a 78 Chevy. The bike is paid for years ago. You do hear of instances like above where
someone buys way bigger than they can afford and have new cars etc and get a bail out.
I am irked that I fell on hard times and live well within my means and can't get help.
I asked the bank if they could just tack on the amount due to the backend of the loan so I would be current
and just continue making payments with no luck. I think we'll get enough back for a tax return next month
and be able to pay the past due amount before the house is sold out from under us in March.
Ah such is life.
Quote from: VisceralReaction on January 13, 2010, 08:33:48 AM
This is a tough one. I ran into this myself. My experience is thus:
We purchased a house that we could afford here in north Idaho. Small house in a small town for
$78K. We financed for 15 years at 5.5%. This last summer my wife lost her job and we were reduced to my
income of $30K per year. We couldn't make the house payment and all the bills.
We missed 5 payments. I kept calling the bank (Wells Fargo) and they kept saying there was nothing
they could do. They wouldn't change the terms of the loan. Nothing. They said the only way to avoid
forclosure was to sell the house or pay the past due amount. Sarah finally got another job and we are back
in business but the bank still won't budge on a solution. No I don't live outside my means. I drive an
old 92 VW and a 78 Chevy. The bike is paid for years ago. You do hear of instances like above where
someone buys way bigger than they can afford and have new cars etc and get a bail out.
I am irked that I fell on hard times and live well within my means and can't get help.
I asked the bank if they could just tack on the amount due to the backend of the loan so I would be current
and just continue making payments with no luck. I think we'll get enough back for a tax return next month
and be able to pay the past due amount before the house is sold out from under us in March.
Ah such is life.
Yep, that doesn't seem right either. It really seems like that bailouts are for people who just don't care.
Your bank probably knew from your history that you would make things right eventually, and thus played hardball versus someone they knew had no chance in h3ll of ever paying anything and likely trashing / gutting the house along the way.
The foreclosed house on our block, which was way ahead of the curve, like early 2006, sat un-touched for 1.5 years through 2 bitter winters and 1 really hot and wet summer with no heat or sump pump. It flooded a couple times and was basically a complete tear-out by a flipper and an eventual sell to some idiots, but at least they mow and shovel sometimes.
mitt
if the government (our taxes) bailed them out, can't we move into a bedroom (it was our money anyway!!). [laugh]
The government missed an opportunity. If they needed money, lend it to them - against their social security, estate taxes, whatever. They SHOULD be responsible to pay it back.
(rant over)
Quote from: VisceralReaction on January 13, 2010, 08:33:48 AM
This is a tough one. I ran into this myself. My experience is thus:
We purchased a house that we could afford here in north Idaho. Small house in a small town for
$78K. We financed for 15 years at 5.5%. This last summer my wife lost her job and we were reduced to my
income of $30K per year. We couldn't make the house payment and all the bills.
We missed 5 payments. I kept calling the bank (Wells Fargo) and they kept saying there was nothing
they could do. They wouldn't change the terms of the loan. Nothing. They said the only way to avoid
forclosure was to sell the house or pay the past due amount. Sarah finally got another job and we are back
in business but the bank still won't budge on a solution. No I don't live outside my means. I drive an
old 92 VW and a 78 Chevy. The bike is paid for years ago. You do hear of instances like above where
someone buys way bigger than they can afford and have new cars etc and get a bail out.
I am irked that I fell on hard times and live well within my means and can't get help.
I asked the bank if they could just tack on the amount due to the backend of the loan so I would be current
and just continue making payments with no luck. I think we'll get enough back for a tax return next month
and be able to pay the past due amount before the house is sold out from under us in March.
Ah such is life.
5.5% is a good interest rate.
I just re-financed to 5.0%, was at 6.3% fixed and I refinance a few years ago.
theo just fire up that S4 and rip by their driveway everyday in 1st about 9k.
keep reminding them that their fancy beamers have alarms [thumbsup]
people like that ... sooner or later their lifestyle always catches up with them. it may take a while - like when they're ready to retire and they don't have any savings, or when they try to get financing for anything else and can't due to this blemish on their credit report - but it will happen.
for now, just enjoy the ability to sleep at night.
i work with a guy who's sort of my financial role model. i'm in my early 30's, he's in his 50's. he's made good money for a long time, but he's spent very little of it. still lives in the house he and his wife bought when they were newlyweds. drives a 20-yr old pick-up truck. over the years he's bought up real estate and now owns about 6 rental properties. if he got fired tomorrow, he'd be fine. and now that he's older he can afford some toys. last year he bought a '90s era porsche. year before that he bought a '65 mustang. says he's never had a loan other than his mortgage, which is now all paid off. that's a bit extreme if you ask me, but if i can do half of that, i'll be happy. much easier said than done.
Quote from: VisceralReaction on January 13, 2010, 08:33:48 AM
This is a tough one. I ran into this myself. My experience is thus:
We purchased a house that we could afford here in north Idaho. Small house in a small town for
$78K. We financed for 15 years at 5.5%. This last summer my wife lost her job and we were reduced to my
income of $30K per year. We couldn't make the house payment and all the bills.
We missed 5 payments. I kept calling the bank (Wells Fargo) and they kept saying there was nothing
they could do. They wouldn't change the terms of the loan. Nothing. They said the only way to avoid
forclosure was to sell the house or pay the past due amount. Sarah finally got another job and we are back
in business but the bank still won't budge on a solution. No I don't live outside my means. I drive an
old 92 VW and a 78 Chevy. The bike is paid for years ago. You do hear of instances like above where
someone buys way bigger than they can afford and have new cars etc and get a bail out.
I am irked that I fell on hard times and live well within my means and can't get help.
I asked the bank if they could just tack on the amount due to the backend of the loan so I would be current
and just continue making payments with no luck. I think we'll get enough back for a tax return next month
and be able to pay the past due amount before the house is sold out from under us in March.
Ah such is life.
From what you describe, I'm guessing that you're only behind by about $3,000 or maybe even less. And they're looking at foreclosure??? Bastards. I'm sure you've gone all over this, but there ought to be some way to restructure that. It would probably cost the bank way more to foreclose. Good luck.
Quote from: cyrus buelton on January 13, 2010, 10:00:13 AM
5.5% is a good interest rate.
I just re-financed to 5.0%, was at 6.3% fixed and I refinance a few years ago.
It's the time to do it. I just signed the paperwork yesterday to refi from 5.75% to 4.625% fixed 20-yr (no points.) More red tape though, with new lending rules.
yeah exactly!! just about $3900 and they want to foreclose.
I hear of people that haven't made a payment in a year and a half and the bank is finally doing something about it.
You know I don't need restructuring or anything. I dont' need a lower payment now.
I just need to be current and come up with the past due amount.
I'm pretty sure I'll be fine, or next month I have an electrical fire [evil]
I'd suggest a HAZMAT spill........ or better yet find some asbestos in the house.
I hope your situation works out. It's heartbreaking to see people go through such hardship when they've done the right thing.
i want to relate this to airport security.
it's another example of people coming to work just to run machines.
there is no personal attention to wtf is going on, they are just there to enter numbers into spread sheets.
if you numerically qualify, you get the money/equity.
these people should be coming to the homes, investigating the situation, seeing those BMW's, seeing the irresponsibility, seeing you down the street doing it the right way.
i salute you my friend, you are living the REAL american dream.
you are working hard to be able to live the best life you can, and to provide for those you care about.
That was a pretty good analogy. ^
I have worked in the travel industry for 15 years and something came across my desk today
A child is on the watch list due to having the same name as someone on the list.
He's being patted down at the airport by TSA at 2 years old due to his name.
idiocy in the most extreme form >:(