Wah......Obama isn't helping me.....Classic IDIOT!

[JupiterSunsation]

My first house was a 3/2 w/pool in Boca Raton, FL (a very overpriced area) about a mile west of the beach. I paid 94K in 1996. My fiancee and I had a combined income of about 75K. We went FHA with 3% down, 30 yr fixed (8%). House needed everything and we dumped in 25K in the first three months of ownership hence the low down payment. Payment including taxes/insurance was $908 a month. We enjoyed that house for 5 years and sold it for almost 2 1/2 times what we paid for it (3+ years before the boom took off). Never refi'd, no 2nd mtg and walked from the closing with a healthy check which was our 25% down on the next house.......

FHA program was a help on the first house and was the better option for us even though we had a downpayment available the house needed work. I couldn't rent that house for $900 a month at the time so it was a good opportunity. Anyone buying with 100% financing through two different mortgages and mom co-signing shouldn't be buying a house. This woman also has a low salary and 3 kids to raise. At what point did this make sense to her? She was looking at everyone making money flipping houses and she jumped on the bandwagon.....only to lose in the end. She will be more comfortable renting for less with less headaches!

 

[Trim'd Up]

I dealt with a bunch of people just like her when I was in residential construction. Hell, we were selling $300,000 houses to people with mid 500 credit scores and no money down. I went in quite a few houses at the one year warranty walk and they still wouldn't have curtains or furniture. These people deserve what they get living that far beyond their means. And the banks deserve to lose their ass for loaning them the money.

 

[phragle]

making 36k and you buy a 200k house????????

 

[Ratickle]

I dealt with a bunch of people just like her when I was in residential construction. Hell, we were selling $300,000 houses to people with mid 500 credit scores and no money down. I went in quite a few houses at the one year warranty walk and they still wouldn't have curtains or furniture. These people deserve what they get living that far beyond their means. And the banks deserve to lose their ass for loaning them the money.

Don't know that I agree with the people part of it.

The banks should have been allowed to fail and the investors in the Banks covered.

 

[JupiterSunsation]

I dealt with a bunch of people just like her when I was in residential construction. Hell, we were selling $300,000 houses to people with mid 500 credit scores and no money down. I went in quite a few houses at the one year warranty walk and they still wouldn't have curtains or furniture. These people deserve what they get living that far beyond their means. And the banks deserve to lose their ass for loaning them the money.

I had similar experiences with Haitians buying 600K houses, no money down and 10 people living there. Their cars leaked oil all over the brand new paver driveways and you could watch the pool turn from blue, to green to black in 3 months if the overgrown lawn didn't cover the view from the neighbor's house. The builder's didn't care since it was another unit sold, the lender's got paid all their fees and the neighbors got sucker punched into buying their dream home next to Francois the Haitian sensation!

 

[Ratickle]

I had similar experiences with Haitians buying 600K houses, no money down and 10 people living there. Their cars leaked oil all over the brand new paver driveways and you could watch the pool turn from blue, to green to black in 3 months if the overgrown lawn didn't cover the view from the neighbor's house. The builder's didn't care since it was another unit sold, the lender's got paid all their fees and the neighbors got sucker punched into buying their dream home next to Francois the Haitian sensation!

But, the Haitains fault, or the lenders fault?

 

[cigdaze]

Welcome to the real world, sweetheart. Should have thought a little harder about your life before making unfulfillable commitments. Maybe those 3 kids weren't such a good idea after all. Maybe that 190K house wasn't too smoth of a choice either. WTF do these people think is going to happen? Good for her, hope she loses the house and someone qualified moves in; someone who'll pay their mortgage and pay their taxes. We don't need another deadbeat living off of our monies.

 

[Tony]

These people deserve what they get living that far beyond their means. And the banks deserve to lose their ass for loaning them the money.

I agree. The downside of this is that since many of the banks took a huge hit it is now tougher for the person who does live within their means and does pay their bills to secure a loan.

 

[Trim'd Up]

My comment about the people deserving what they get is directed at people that are living way beyond their means just because they were able to get a loan. It is as much the homeowners responsibility as the banks to realize they can't afford the house.

I have all of the sympathy in the world for people who are losing their houses, cars etc. because of job loss in this economy. That can happen to anyone.

 

[phragle]

I agree. The downside of this is that since many of the banks took a huge hit it is now tougher for the person who does live within their means and does pay their bills to secure a loan.

that will change evetually. they make money by lending money that gets repaid, if they arent lending money, they arent making money. sooner or later they will want to make money again.

 

[Ratickle]

I understand what you're saying. I'm saying it's our governments fault and our banking/loan industey's fault.

I have very good friends in real estate in both Florida and California. The lending practices the BANKS and S&L's were using were crazy. My friends in both states were predicting this collapse for a couple years before it happened. We moved 1/3 of our assets to cash because of what they had said. I wish we would have moved it all .....


Example, they would qualify a person looking to buy a house for X amount of money, they'd show them houses in their range and of course some above that range. Then they'd go to a loan officer for approval.

Time after time the loan facility, bank or S&L, would say "We can get you this much more so you can qualify to buy this big of house.....

You know how??????

They would loan 120% of the value, knowing full well the person could not make the payments EXCEPT BY USING THE EXTRA LOAN MONEY. Convince them that was okay, because WHEN THEY RAN OUT OF MONEY, they could come back, get a new loan for 120% of the new value (some areas were being appraised as high as 5% per month increases by the loaners appraisers:ack2: ), and make the payments with the new loan money. And on and on.

Those loan officers should be in jail.

The companies who made the loans should be closed or put under the ownership of banks who did not do those practices.

The companies who rated these packages mortgages as Triple A should be removed from the lists of approved companies to do such, and their approvers should be prosecuted for fraud.

Those responsible for the government oversight of these businesses should also be fired and prosecuted for fraud.

Etc., etc.

But we haven't done a damn thing except give money to the businesses, and people, who got rich off these scams. And that's because they are the ones who got this group of people elected.:cuss: :boxing_smiley: :cuss:

 

[VtSteve]

The banks have been in control since the late 90's, then were given free reign to go bigger. From 2001 until 2004, it accelerated and the banks got more. After that, it just got downright piggish. The last eight years were virtually a writeoff for the middle class. But without the bubble, it would have been in flatline for years.

The person's story above is exactly the point. They said she didn't get a sub-prime loan. Well she did get the mortgage anyway. There are many so-called prime loans in default. The ratings agencies haven't gotten theirs yet, and neither will the regulators in charge at the time.

Interestingly, the same banks and companies that needed bailing out, are the same ones that took full advantage of their lack of oversight by the previous administration(s). We've not had anything resembling character or responsibility in these institutions in well over 20 years. Goldman was fully entrenched in, what is now, three administrations.

 

[cigdaze]

I'm saying it's our governments fault and our banking/loan industey's fault.

I beg to differ. I place blame on individuals that can't do the simple math on their finances. $IN shall be >= $OUT

 

[Sea-Dated]

My comment about the people deserving what they get is directed at people that are living way beyond their means just because they were able to get a loan. It is as much the homeowners responsibility as the banks to realize they can't afford the house.

I have all of the sympathy in the world for people who are losing their houses, cars etc. because of job loss in this economy. That can happen to anyone.

I have to agree here. When we bought our house 5 years ago we were approved for a $280K loan but I knew that the only way we could afford that would be to cut back everywhere else. We bought a house for $150K and have not had an issue making the payments even with my wife getting laid off and taking a 40% pay cut to get another job.

Being responsible is just as much the home buyers job as it it the banks.

 

[THEJOKER]

Her mom pays 300 bucks a month rent. There's the problem.

 

[clayinaustin]

Most Americans want to blaim big goverment and big banks for their own financial problems. However, I see the problem as simple greed. Greedy banks wanting money, greedy renters wanting to be homeowners, and greedy politicians wanting to be re-elected.

Yes, the corrupt government and questionable lending practices are a major contributor to our current financial meltdown, but I place the blame squarely on the one segment that could have actually done something right before the problem happened. The American consumer!

If the American consumer was smarter and a better manager of their own money, then none of this would have happened. The housing bubble would not have existed and the economy would have grown at a more reasonable rate.

It's these idiots that make the government want to protect us from ourselves.

 

[Ratickle]

Most Americans want to blaim big goverment and big banks for their own financial problems. However, I see the problem as simple greed. Greedy banks wanting money, greedy renters wanting to be homeowners, and greedy politicians wanting to be re-elected.

Yes, the corrupt government and questionable lending practices are a major contributor to our current financial meltdown, but I place the blame squarely on the one segment that could have actually done something right before the problem happened. The American consumer!

If the American consumer was smarter and a better manager of their own money, then none of this would have happened. The housing bubble would not have existed and the economy would have grown at a more reasonable rate.

It's these idiots that make the government want to protect us from ourselves.

Gotta disagree with you some there.

No matter what, crooks and those who want something for nothing to better themselves will always be there. If the #1 priority of government is not to protect the honest, law-abiding citizen from these types (whether home grown money thieves, or foreign warlords), then what is their #1 purpose?

And, if I told you today I could sell you a brand new 50 Cig for $500 a month, would you buy it? Someone would, even though you would suspect there may be a catch, I'm a bank or S&L and tell you otherwise......

 

[clayinaustin]

Gotta disagree with you some there.

No matter what, crooks and those who want something for nothing to better themselves will always be there. If the #1 priority of government is not to protect the honest, law-abiding citizen from these types (whether home grown money thieves, or foreign warlords), then what is their #1 purpose?

And, if I told you today I could sell you a brand new 50 Cig for $500 a month, would you buy it? Someone would, even though you would suspect there may be a catch, I'm a bank or S&L and tell you otherwise......

Yes, I would suspect that there was a "catch". It might be $500 a month for the first year, but then the payments would jump to $2000 a month!

However, if this fact was known before the deal was signed, then who is at fault? Are you tell me that these homeowners did not know that their payments would go up after the "teaser rate" was over? The banks may have knowingly used its customers to line its own pockets, but come on! These new homeowners are idiots!

I just wish that the Federal Government would have allowed the "evil" banks to fail. Instead the "evil" banks were given billions of taxpayer dollars, and the taxpayers are footing the bill!

 

[JupiterSunsation]

The issue is really just simple math........ A at B% X C term = Monthly Payment. Your income - your debts = discretionary income.

I tell my employees it isn't the first or second payment that will squeeze you it is the rest of them! Just had a guy who makes 32K a year go look at a car. Payment was going to be $450 a month for 66 months. I told him it was too much and he wouldn't want the car after a couple years anyway. Luckily his parents intervened and convinced him a Scion with a $250 payment would be a better fit and he bought it.

Housing is the same, if the payment is tight in the beginning and you have the added bonus of an ARM then you are going to get killed after the first year or two........

 

[Geronimo36]

Being responsible is just as much the home buyers job as it it the banks.

The issue is really just simple math........ A at B% X C term = Monthly Payment. Your income - your debts = discretionary income.

Thank You!!!!

I remember living in my condo, life was easy and everything was cheap! Heck our monthly expenses were about $1K, soup to nuts!!!

When my wife and I started looking at houses... I went over our numbers over and over and over again.. I had multiple spreadsheets and ran assumptions etc... I based everything on my take-home salary, not including my comission.. My goal was to have our mortgage/taxes be less than 20 something % of combined income.. Then let it all sit for a day and went over the same numbers again and again....

The bank said yes but I didn't take their word for it and I wanted to be sure I could live instead of working to live!