Another Side of the Foreclosure Crisis (parties, financial, money, government)
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Myself and others have been talking about this months ago so this is not no new news to us it was as predictable as the sun rising in the east. That it why we just flushed 9 billion down the toilet with the homebuyers tax credit because it did not do anything to keep home prices steady or to stop foreclosure.
After the tax credit ended the market spoke and home sales dropped off a cliff which again was predictable,do not think myself or others have a psychic gift it is just plain common sense.
The morale of the story is do not beat a dead horse expecting him to get up,and Obama does not know what he is doing because he beats dead horses.
Did the OP actually read the story? It is a story of irresponsible decisions!
Yes and No. It is a story of people going along with the groop as everyone road a real estate bubble up then down. I hind sight it is easy to say how irresponsible they were. But it is another thing to do it in real time going in. From 2002 until about 2006 I paid off $8K of $11k worth of personal debt. I was going in the reverce direction of everyone else. That was just me.
From my personal point of view a continuation of the housing crash may actually benefit my family. I nearly have the condo paid off and the credit cards are empty (at 30% damn straight they are paid off every month). I housing prices continue to crash we may be able to sell this condo for enough to buy a small house where we want to retire. This is based on the observation that although the more expensive houses are decreasing faster than the low cost stuff the bottom end is also dropping. I figure all the money we spent on the mortgage is lost so selling the place would be the same as a lottery win.
I still believe in sharing the pain and stand by my suggestion that anyone that has paid their mortgage for half of its length should have the rest of the debt forgiven. The bank has already collected more interest than the mortgage was worth. this will make future mortgages difficult (20% down, 5% for 20 years) to get but that will also avoid future housing speculation. If people want to speculate let them do it in the equities or insurance markets.
The house always belongs to the lender until the loan has been paid off. People who purchase homes using a mortgage as a finance tool often forget this little detail. It is in the mortgage papers and title. More people should read what they sign.
Did the OP actually read the story? It is a story of irresponsible decisions!
yes, I actually read the story, and the writer and her husband bought their home 12 years ago, before the housing bubble.
It's a story of loss. The writer took a serious downturn in income. Read past the first couple of paragraphs.
During the housing boom people were assured by the lenders that nothing was beyond their reach. Too many believed the self serving advertizing. As far as I am concerned anyone that had paid the mortgage for at least half the time of the loan has paid so much interest they should have the rest of the mortgage forgiven. Let's have the lenders share some of the pain. Hell, let them suffer the most. They made the boom so let them experience the crash. Teach them a lesson.
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Agreed! This forum is full of people saying, "why rent and throw money away?" and other variations on that theme. Many people believe this, and think "you can't go wrong" with buying, no matter what.
The truth is that anyone with a mortgage is probably only a pink slip away from losing their home. People can talk about how clever they played it, how they paid cash or have zero debt, but that isn't how the majority of homes have EVER been sold. It's not all just a housing crisis issue, sometimes it's a lost job issue. And it happens all the time, just not on as large a scale as we have now.
I still believe in sharing the pain and stand by my suggestion that anyone that has paid their mortgage for half of its length should have the rest of the debt forgiven. The bank has already collected more interest than the mortgage was worth. this will make future mortgages difficult (20% down, 5% for 20 years) to get but that will also avoid future housing speculation. If people want to speculate let them do it in the equities or insurance markets.
Classic example of someone not understanding what happens when debt is not paid back according to the contractual obligation. The debt-financiers, in many cases investors such as individual 401k accounts and various private and public pension funds, get screwed. POOF! ...There goes their retirement income. Now what are they going to do?
The truth is that anyone with a mortgage is probably only a pink slip away from losing their home. People can talk about how clever they played it, how they paid cash or have zero debt, but that isn't how the majority of homes have EVER been sold. It's not all just a housing crisis issue, sometimes it's a lost job issue. And it happens all the time, just not on as large a scale as we have now.
I agree. People usually do buy a home that they can afford but one job loss or a big medical issue can send you over.
I had a friend that lost there home that they lived in for 11 years. They both worked had cars that were paid off when the purchased (still had when they left). She lost her job so she started a day care. He lost his job. She still had the day care but kids she was watching weren't coming back because of their parents losing their jobs. After about 1 year and their saving gone they lost their home. They couldn't sell it not because it was overpriced but because there were so many on the market. They had purchased way before the bust or bubble. They never refi'd. They seemed to do every thing right but lost any way. They went to stay with their daughter in another state hoping to find a job. I have a few others like that and I have a few others that used their homes as a debit machine. The later I don't feel sorry for at all.
I agree. People usually do buy a home that they can afford but one job loss or a big medical issue can send you over.
I had a friend that lost there home that they lived in for 11 years. They both worked had cars that were paid off when the purchased (still had when they left). She lost her job so she started a day care. He lost his job. She still had the day care but kids she was watching weren't coming back because of their parents losing their jobs. After about 1 year and their saving gone they lost their home. They couldn't sell it not because it was overpriced but because there were so many on the market. They had purchased way before the bust or bubble. They never refi'd. They seemed to do every thing right but lost any way. They went to stay with their daughter in another state hoping to find a job. I have a few others like that and I have a few others that used their homes as a debit machine. The later I don't feel sorry for at all.
That's another piece that is making things extremely hard today. In the past when someone couldn't keep their home because they lost their job it was just a matter of selling it, which often could cover all debts, or even let them have some cash in the bank, but put them back to square one home ownership wise. Now it's underwater mortgages, a glut of homes on the market, REO's, short sales, etc. It's no longer an easy situation to get out of even if you didn't do a damn thing wrong.
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