Shit make the beast with two backs damn mother pregnant doges...home loan bullshit

[TAftonomos]

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? 

[Statler]

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)

[Popeye the Sailor]

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.

[Monsterlover]

Yeah, you and your logic.

[herm]

+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.

[redxblack]

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.

[mitt]

You can go down and pee on the bmws?


mitt

[muskrat]

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.

[Howie]

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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. 

[cyrus buelton]

This thread belongs in the debunkt political section.

On a side note, don't borrow more than you can currently afford.

[LMT]

Here is a good read from the NYT

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?em

It may make sense to walk away from the mortgage.

[teddy037.2]

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

[mookieo2]

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.

[ZLTFUL]

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.

[MendoDave]

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.