Rent is way DOWN

[MannheimMadman]

Originally Posted by tonythetuna

Anyone that can't save at least $500 a month has no business buying a 400k condo or house.

I can't help but think that maybe if many people's spending habits changed, and their personal budgets were restructured, many of these foreclosures would be avoided provided the people were still working and making around the same amount as when they first got their mortgages.

the funny thing is that all these books by Dave Ramsey, Suze Orman, etc.. is that it's common sense. What I find to be astounding is that people find a way to graduate college, but they can't balance a check book (or err...online bank account) or set a proper budget. I know so many people who couldn't figure out that their struggles were due to their housing costs being 55% of their budget, amongst other things. All of those resourceful things that our (great)grandparents did to stick to a budget and be successful are lost upon us, for the most part.

Sorry to hear of your friend's misfortunes.

Not me!

[tonythetuna]

Originally Posted by MannheimMadman

the funny thing is that all these books by Dave Ramsey, Suze Orman, etc.. is that it's common sense. What I find to be astounding is that people find a way to graduate college, but they can't balance a check book (or err...online bank account) or set a proper budget. I know so many people who couldn't figure out that their struggles were due to their housing costs being 55% of their budget, amongst other things. All of those resourceful things that our (great)grandparents did to stick to a budget and be successful are lost upon us, for the most part.

Yes.

I learned to budget well when I was like 11 years old. I have never read one of the types of books you mentioned.

And the thing is no bank or Federal agency in their right mind should have given mortgages to people that had to spend 50% of their budget on housing costs.

Originally Posted by MannheimMadman

Not me!

I was trying to be nice. I sure am glad I did not end up buying something in the last few years.

[Hendu]

Originally Posted by tonythetuna

Yes.

I disagree. I think there will be a slight increase in homeowners becoming renters because of foreclosures, but if someone can't afford their mortgage, how is that person going to afford rent? It will be back home with mommie and daddy or bro or sis for most of these people.

The next wave of foreclosures will be due to strategic default. The people who couldn't afford their houses have already lost them. Now those who can afford their houses are wondering if it's worth it to keep throwing good money after bad with property values in the tank. Once people start walking away in force it'll catch on like wilfdfire as nobody wants to be the last person on a sinking ship. And those people will have plenty of cash on hand from living in their house/condo mortgage payment free for a year or more while the foreclosure works its way through the system.

Originally Posted by MannheimMadman

the funny thing is that all these books by Dave Ramsey, Suze Orman, etc.. is that it's common sense. What I find to be astounding is that people find a way to graduate college, but they can't balance a check book (or err...online bank account) or set a proper budget. I know so many people who couldn't figure out that their struggles were due to their housing costs being 55% of their budget, amongst other things. All of those resourceful things that our (great)grandparents did to stick to a budget and be successful are lost upon us, for the most part.

Right...
The Great Depression - Causes of the Depression (http://www.museum.siu.edu/museum_classroom_grant/Museum_Explorers/school_pages/bourbonnais/page1.htm - broken link)

[Savoir Faire]

Originally Posted by tonythetuna

If this is the case, why are they losing their homes to foreclosure?

Some people can't afford a $2,900 mortgage, plus assessments, plus maintenance, plus insurance, etc.. They however can afford $1,300 in rent.

Others are walking away and choosing to become renters. Why would you pay a mortgage of $2,900 when you could rent the same unit for $2,000. It makes even more financial sense to walk away if you are $150,000 underwater. 4 out of 10 homeowners in the Chicago area is underwater. As prices continue to fall, expect more defaults.

[MannheimMadman]

Originally Posted by Hendu

The next wave of foreclosures will be due to strategic default. The people who couldn't afford their houses have already lost them. Now those who can afford their houses are wondering if it's worth it to keep throwing good money after bad with property values in the tank. Once people start walking away in force it'll catch on like wilfdfire as nobody wants to be the last person on a sinking ship. And those people will have plenty of cash on hand from living in their house/condo mortgage payment free for a year or more while the foreclosure works its way through the system.





Right...
The Great Depression - Causes of the Depression (http://www.museum.siu.edu/museum_classroom_grant/Museum_Explorers/school_pages/bourbonnais/page1.htm - broken link)

For one, my grandmother was born in '36. So anything of value she learned was from growing up in the aftermath of the depression.

And anyhow, it would be a silly idea to think that everyone spent with reckless abandon during the roaring twenties.

[Chi-Guy]

Walking away makes sense many times. You're credit score isn't worth $90,000.

Chicago will always be a renters market....but especially now.

If you're looking for a great rental experience. I highly recommend checking out My Town Realty Group in Chicago.

[quigboto]

Originally Posted by Chi-Guy

Walking away makes sense many times. You're credit score isn't worth $90,000.
.

What is your integrity worth then?
This attitude is so prevalent these days, and it really bugs me.
I pay my bills. Period. I can understand having to walk away from a mortgage if your financial situation changes (ie lose a job, health problems) but walking away from something because it isn't worth what you thought it would be? That's BS. You don't have to pay the bank more than you owe when the house appreciates (How many people lined their pockets nicely during the boom?)
I have to question one's integrity when they justify bailing on a mortgage because they could rent for cheaper. Tough crap. People should pay their bills and honor their contracts.
The more people that do this, the more the market will go into the crapper. Would be nice if people tried to be part of the solution rather than the problem.

[tonythetuna]

Originally Posted by Chi-Guy

Walking away makes sense many times. You're credit score isn't worth $90,000.

Sure it is. A low score can deny you a job,give you high car insurance rates, and high interest rates on the credit and loans you have or will get in the future. You may also have to pay all kinds of deposits on things like electric service and cable.