Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
But have you seen what Edwards, Obama or Hillary are proposing?
The last plan I looked at coming out of Hillary's camp proposed throwing BILLIONS of dollars of taxpayer money at this thing.
Here's her response to the current plan:
Sen. Hillary Clinton, D-NY, criticized the plan for not going far enough.
Clinton called for a moratorium of at least 90 days on subprime mortgage borrowers facing foreclosure and a five-year rate freeze on all subprime loans.
Clinton said, "Although the administration is finally giving the foreclosure crisis the attention it deserves, it seems that President Bush is going to give struggling homeowners far less than they need."
But have you seen what Edwards, Obama or Hillary are proposing?
The last plan I looked at coming out of Hillary's camp proposed throwing BILLIONS of dollars of taxpayer money at this thing.
Here's her response to the current plan:
Sen. Hillary Clinton, D-NY, criticized the plan for not going far enough.
Clinton called for a moratorium of at least 90 days on subprime mortgage borrowers facing foreclosure and a five-year rate freeze on all subprime loans.
Clinton said, "Although the administration is finally giving the foreclosure crisis the attention it deserves, it seems that President Bush is going to give struggling homeowners far less than they need."
Axiom, I am not suggesting that any of the socialists running for president are proposing anything better then what Bush has done. In fact, it bothers me when the Clinton mafia agrees with Bush. My comment is simply that Bush has disappointed me by being a big government proponent that is no different from a typical Demo. All of these clowns including Bush believe that Americans need big government to take care of them. In fact, its all about stealing more of your hard earned dollars and giving it to people that don't deserve it.
The next step is for the attorneys to step in with class action lawsuits.
Say Mr. Jones took out a no-doc liar loan to buy a McMansion that cost six times his annual income and Mr. Smith took out a full-doc loan on a fixer shack that cost two times his annual income, even though he REALLY wanted a McMansion like the Joneses. Mr. Jones would have lost his ill-gotten McMansion, if the teaser freezer didn't enable him to keep it at a discounted rate for five more years. So Mr. Smith is paying a higher interest rate for being honest, while Mr. Jones gets a lower rate for defrauding his lender. Not exactly a level playing field, is it?
That's what this is. When the home prices go up again -- Mr. Jones will make out like a bandit -- thanks to the government help -- and likely feel he's quite superior to the chump Mr. Smith who was responsible and living in a smaller but more expensive house after the "fixing" by the government.
If it doesn't come from federal taxes (or state) why is everyone so upset?? Are you upset that you played by the rules and jealous that you could have gotten a bigger house? Are you just as upset at the people who played the market for years (the low rates have been around for what - 4 or 5 years now, so this didn't just happen) - and made MILLIONS (bought a house at 4.5% for 200,000 - sold 2 years later for $600,000, pocketed $400K cash!... bought another house, etc..)...
You just seem to be mad at the people who were LATE to the party and got caught. It sucks. That's the way it is. You chose to play by the rules, you have a nice house that you love (supposedly) - why be mad at them for facing foreclosure? If this plan goes through - it just holds steady their ARM rate a little longer (for a limited period of time) - they still have to sell the house they know they can't afford at higher rates, or refinance to a reasonable rate (which they may not be able to do). It just takes a little pressure off and stems the bleeding.
Why are you so angry?
Do you want house prices to plummet - so that you can buy a new McMansion for
$50K?? Cause the prices are never going to drop that low. Prices will probably retract to about 1998, 2000 levels. They're now predicting they could drop as much as maybe 15%. Well, for a $500K house, that's only a $75K drop. So yeah - if that was the difference in affordability for you - then go ahead and wait for the crash. But honestly, if all of you who are preaching that you don't have debt and your house only takes up 20% of your income, and you stayed well below your means --- you'd still have to have one heck of a salary to buy a $400+K house.
To get average incomes (under $50K) into these homes - you'd have to have them retract from $500K to under $200K. That's not going to happen. Just isn't.
People under $50K will go back to buying "starter" homes (under 1000 sq feet), and people making more will continue to buy bigger "upgrade" homes (2000-3000sq feet) and people making a lot will still buy BIG homes (4000 sq feet +). Now, they may pay a little less for a few years, but you're not going to suddenly see mansions being liquidated for 50,000 --- unless those mansions need to be bulldozed.
If the bailout doesn't come out of my taxes, or even if it did, but the overall harm to the economy is less than it otherwise would be - I don't care. Just stop yelling that these people all were liars and defrauders and horrible. Some of them were ignorant (like the people who vote every year and are suprised when the politicians lied) and thought they were doing the best for their family and now they are scared and panicked and facing homelessness. I see nothing wrong in trying to cushion that descent.
If "values" plummet because of a situation like this, then a house was never worth whatever it was "valued" at to begin with. All that's happening is people manipulating a "market" to levitate "values".
The quotes are sarcastic in meaning, but indicative of the situation we're in. NOTHING can stop revaluation of property. Even a bailout by the taxpayer.
If it doesn't come from federal taxes (or state) why is everyone so upset?? Are you upset that you played by the rules and jealous that you could have gotten a bigger house? Are you just as upset at the people who played the market for years (the low rates have been around for what - 4 or 5 years now, so this didn't just happen) - and made MILLIONS (bought a house at 4.5% for 200,000 - sold 2 years later for $600,000, pocketed $400K cash!... bought another house, etc..)...
You just seem to be mad at the people who were LATE to the party and got caught. It sucks. That's the way it is. You chose to play by the rules, you have a nice house that you love (supposedly) - why be mad at them for facing foreclosure? If this plan goes through - it just holds steady their ARM rate a little longer (for a limited period of time) - they still have to sell the house they know they can't afford at higher rates, or refinance to a reasonable rate (which they may not be able to do). It just takes a little pressure off and stems the bleeding.
Why are you so angry?
Do you want house prices to plummet - so that you can buy a new McMansion for
$50K?? Cause the prices are never going to drop that low. Prices will probably retract to about 1998, 2000 levels. They're now predicting they could drop as much as maybe 15%. Well, for a $500K house, that's only a $75K drop. So yeah - if that was the difference in affordability for you - then go ahead and wait for the crash. But honestly, if all of you who are preaching that you don't have debt and your house only takes up 20% of your income, and you stayed well below your means --- you'd still have to have one heck of a salary to buy a $400+K house.
To get average incomes (under $50K) into these homes - you'd have to have them retract from $500K to under $200K. That's not going to happen. Just isn't.
People under $50K will go back to buying "starter" homes (under 1000 sq feet), and people making more will continue to buy bigger "upgrade" homes (2000-3000sq feet) and people making a lot will still buy BIG homes (4000 sq feet +). Now, they may pay a little less for a few years, but you're not going to suddenly see mansions being liquidated for 50,000 --- unless those mansions need to be bulldozed.
If the bailout doesn't come out of my taxes, or even if it did, but the overall harm to the economy is less than it otherwise would be - I don't care. Just stop yelling that these people all were liars and defrauders and horrible. Some of them were ignorant (like the people who vote every year and are suprised when the politicians lied) and thought they were doing the best for their family and now they are scared and panicked and facing homelessness. I see nothing wrong in trying to cushion that descent.
The scariest words you could hear:
"I'm from the government and I'm here to help"
Seriously though, Lenin inspired solutions such as this would only deter future securitized lending. As an investor, why would I even consider buying ARM packages when my returns could be capped at a later time? It will amplify the credit crisis and cause prices to fall further. Also, why would someone stay in a house that was mortgaged at $500K and now worth $300K (or less). Better to mail the keys back to the bank and get a fat $200K tax free return on investment in exchange for a 7 year credit ding.
Remember, in Soviet America, teaser rate freezes YOU!
Not all people were irrepsonsible or bought beyond their means. Some had no choice but to get an ARM because they were stated and self employed. Found out mine was NOT subprime but was Alt -A. I'll admit, I didn't much pay attention to what an ARM really was.. just thought I could refinance if I got my score up, which I did, to qualify as stated with a fixed rate. Paying a hefty 6.95% to start..NOT low teaser. BUT becasue others foreclosed on the home who pruchased AT low teaser rates (and never could have afforded a NORMAL rate) the market has come down AND the mortgage industry has locked out most from refinancing into a fixed rate. SO.. I lost ALL the equity in my home (from the amount I put down AND the amount of money I used to fix up the fixer upper.. VERY MODEST smal lhouse I purchased). I may end up having to short sell the house if I can't get my mortgage company to re-negotiate hte loan. I found out when I called my lender ISN"T participating.. and mine wouldn't count anyway because it's an ALT-A (whatever that means) as opposed to a Subprime. So I will have lost my life savings AND have to go back to renting with a mark on my credit! Totally sucks and I'm severely depressed.
Not all people were irrepsonsible or bought beyond their means. Some had no choice but to get an ARM because they were stated and self employed. Found out mine was NOT subprime but was Alt -A. I'll admit, I didn't much pay attention to what an ARM really was.. just thought I could refinance if I got my score up, which I did, to qualify as stated with a fixed rate. Paying a hefty 6.95% to start..NOT low teaser. BUT becasue others foreclosed on the home who pruchased AT low teaser rates (and never could have afforded a NORMAL rate) the market has come down AND the mortgage industry has locked out most from refinancing into a fixed rate. SO.. I lost ALL the equity in my home (from the amount I put down AND the amount of money I used to fix up the fixer upper.. VERY MODEST smal lhouse I purchased). I may end up having to short sell the house if I can't get my mortgage company to re-negotiate hte loan. I found out when I called my lender ISN"T participating.. and mine wouldn't count anyway because it's an ALT-A (whatever that means) as opposed to a Subprime. So I will have lost my life savings AND have to go back to renting with a mark on my credit! Totally sucks and I'm severely depressed.
Alt-A loans are generally stated income, stated asset loans, which are low doc, often with higher DTI ratios. You usually need good credit, which you must have had, since you're not subprime.
I, too, am self-employed and know many other self-employed people who have gotten fixed rate loans, even in today's tighter lending environment. ARMS are always a gamble, and there is never a guarantee that you can refi out of them. If you really didn't buy more of a house than you can afford, you should still be able to get a loan to keep you in it. You'll only lose your equity if you sell. So find a lender who will help you find a way to hang on.
Not to make light of your situation, but why would you take an ARM with a higher start rate than a fixed? And why would you sign legal documents involving a huge financial transaction without understanding exactly what you're committing to?
Alt-A loans are generally stated income, stated asset loans, which are low doc, often with higher DTI ratios. You usually need good credit, which you must have had, since you're not subprime.
I, too, am self-employed and know many other self-employed people who have gotten fixed rate loans, even in today's tighter lending environment. ARMS are always a gamble, and there is never a guarantee that you can refi out of them. If you really didn't buy more of a house than you can afford, you should still be able to get a loan to keep you in it. You'll only lose your equity if you sell. So find a lender who will help you find a way to hang on.
Not to make light of your situation, but why would you take an ARM with a higher start rate than a fixed? And why would you sign legal documents involving a huge financial transaction without understanding exactly what you're committing to?
Well.. this is where I"m confused about why i'm suddently lumped into an "Alt A" . My score was NOT great.. BUT I did work it up so that I COULD get a fixed rate loan later on. (which would have been this summer) The reason my score was NOT great was because I didn't have open lines of credit.. because I spent a lot of time clearing up and payng old debts from my early twenties. .then swore off credit cards, thinking that was the smart thign to do. My husband and I had been renting and watching prices just climb and climb. Our landlord wanted to sell (he was holding on to his house we rented until he knew that his new marriage would work. . after 1 year he decided he didn't want to be a landlord and wanted to sell..and cash out of that home). We would have purchased that home , but the price was a little above and beyond. We were going to have a baby and were tired of moving every year, year and a half and really wanted to make "roots" for our kid.. sohe can grow up like I did..in one home for a long long time.
So.. we found a home through a friend and went for a mortgage. All I could obtain was an ARM.. because I was stated with a score that wasn't fabulous. Oh.. and I did put money down and bought a fixer upper. Then, 6 months later, we needed just a little more to complete and refi'd again.. but didn't take out much at all.. the home was appraised then at $450.. we got a new mortgage for $400. Score was better so my starting interest went down to s6.95 from 7.95 on the previous..but again..was only offered an ARM mortgage. Was told that if I get my score up, I would simply be able to refinance the house in 2 years time. Now, I certainly wasn't banking on the market rising at the rates it was.. BUT I certainly didn't expect the prices to go DOWN. So we refi'd.. and mys core continued to climb to levels that would have been just right for a fixed rate.. BUT.. then the industry stopped giving out mortgages to people like me.. wouldn't have been so bad.. BUT I think my house value has declined so that if I did refinance I would be in a 100% LTV situation AND stated with a score that , while in 2005 would have been good, now it's not good enough.
I was told the ARMS were not the best scenario and because I planned on refinancing and never planned on staying IN it, I didn't really look at where the payments would go. It just never really occurred to me that this situation could arrise and I would get trapped.
And.. I have been affording my payments at a 6.95% interest rate.. which is ABOVE the prime rate on a 30 year fixed back in 2005 and today. Plus, I've been paying that on time. Which I'd say pretty much says that I can afford my home.. What I can't afford is the interest rate that I'm not trapped into..
I didn't buy a McMansion.. I bought a modest starter home.. a fixer upper in a blue collar neighbhorhood on LI. My mortgage paymetns have been $3300 with my taxes.. I'd say that I make a pretty nice income to afford to pay that. However, my payments will adjust up $800 at the first adjustment and will eventually reach to probaly around $5000/ month for this house. THAT I can't afford.. ALL my basic bills (all insurances, etc.) costs me $6000 /month WITH mycurrent mortgage payment.. that will jump to somewhere around $8,000 - 9,000 a month.. I just can't sustain that.
I have been pestering my mortgage company since August, when I realized I would be trapped, about re-negotiating.. out right telling them that i can't afford the adjustments. I think that it would make more sense for them to keep me in my home rather than foreclose.. there are over 200 homes onthe market right now where I live... and buyers are well.. staying away from buying. When Bush announced this rate freeze.. I was onthe phone like the next day. Finally got to speak to someone and they told me that I'm NOT a subprime (news to me) so they are not participating..which I think they are lying and isn't really true.
I haven't given up.. funny .. everytime you call the mortgae company they say "are you committed to staying in yoru home" . My answer is, of course, yes.. BUT .. next time it will be "well yes, but if you won't work with me all the commitment in the world won't keep me in my home!".
I think the ones that really ruined it for the rest of us are those that purchased at low rates of 2 or 3 percent that could never have affforded a real interest rate to begin with.. It has caused ripples int he industry that have locked the rest of us OUT of a refi because of the lockdown AND it has caused panic in the marketplace.. a snowball effect really because now all of us in ARMS that can't refi or get the mortgage companies to renegotiate the terms with us, will have to put hte homes on the market and obviously that has resulted in huge supply.. little demand..
It just sucks.. you think you are doing something positive for your future. Sad, that as much as I make I'm still going to end up out on my ass. Even if I had read and understood how high the payment COULD go..I probably would have done it anyway because I simply didn't know that I would be locked out of a refi. I think while some of the people in this mess ARE truly irresponsible and bought more house than they could afford, some of them are like me and simply got trapped... AND those like me are usually first time homebuyers.
I'll just have to keep trying and see what will happen. I would lose my life savings that I put into this hosue and have to start all over again.. and itwon't be on LI..that's for sure.. cost of living here is insane!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
