short sell and rent to get out of other debt or hold on and wait it out? - Page 3 - Mothering Forums
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#61 of 210 Old 01-15-2009, 10:18 PM
 
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You haven't lost (or gained) anything until you actually sell it.
This is a very good point. If you (general you, not OP) felt that the house was worth $X per month to you when you bought it, then why is it not still worth that to you?

This is also why taking "equity" out of the house is a really really bad idea. If the equity existing only on paper as an assessment, there is no guarantee that you will be able to repay that equity if you sell.
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#62 of 210 Old 01-15-2009, 10:25 PM
 
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Bought our condo about 2 years ago. Put nothing down. THe place across from us is selling for 150,000 less than what we paid for ours. We have student loan debt and 2 cars to pay off.

Our main goal is to move to a city about 1.5 hours away from here. We have friends there and Love the environment (very crunchy haha) There is also a school there we would love dd to go to and I have some work ops there as well.

Is it a good idea to short sell, deal with the credit loss and rent for a lot less than our current payment? and pay down debt?

Or should we hold on and wait it out a year or two?

We are currently making our payments and stable but not doing well at all - no savings, life insurance, healthy insurance, etc. Just getting bye.

Another option I thought of is to sell for what we can get, take the debt and try to buy in the new area for cheap, then we owe less all together. But getting a loan for a place now with 0 down is almost impossible.

Also we can rent our place here out and rent there, but then we are just breaking even and is that worth it to keep this place when we can just foreclose or short sell.

just weighing the options but I feel like i am not objective enough to see clearly and this is all so out of the box for me. Things have changed so much in the past few years!

Any suggestions? Or even a yeah i would go for it or no wait it out....

so appreciative.....
I've gotten amazing advice here in the past and have really learned so much just lurking.
Well, we short-sold (because of a badly-refinanced ARM that was granted with no money down) and have had great success with it.

Our house is worth about $102k and we will be buying it back in 2010 at that price plus 1.5% minus 10% of all rent paid (clear as mud, I know)

We were stuck in a $1300-month mortgage with $113,000 outstanding balance. We now rent the same house for $1000 a month and will be able to buy from our company in 2010 with the same monthly, if not less. It also cut out the middleman as far as being able to get a loan -- we are guaranteed that.

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#63 of 210 Old 01-15-2009, 10:26 PM
 
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oh, and IIRC they bought it from the bank for about $96k.

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#64 of 210 Old 01-15-2009, 10:31 PM
 
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Ugh, the only way to reimburse anyone for your food stamps is in cash. Just because you shelve books at the library doesn't change the fact that someone else is paying for your food in any way except possibly for your personal feeling of karma. And it doesn't make you any different from any other food stamp recipient, no better no worse.

(I don't judge food stamp recipients, in fact, where I used to live almost every woman I knew was getting them. That is another important point, whether or not you receive financial assistance is LARGELY a function of where you live and the local economy, and sorry, not everyone can just up and move. Where I live now, I know tons of moms whose husbands make 150G and some moms who make 100G themselves. Back home, you were considered a high roller if you made 20G. It is the function of state law, economic trends, etc. NOT PERSONAL MERIT)

IMO, ignorance and stupidity is absolutely an excuse for getting into an ARM, we did get a fixed rate, but we had to fight tooth and nail for it. The mortgage broker (a bonafide professional who does this for a living) convinced us that the ARM was a) the best loan we could get with credit scores of 'only 700' and b) our best, most conservative financial option. How did we know, it was our first house?

People need to band together in this and not back bite each other. If you are backwards in your house, you can't make any improvements, etc. I am so sick of us blaming each other while banks, mortage brokers, building contractors, and real estate agents get off scott free. They are the ones 'laughing all the way to the bank' while we blame each other. Where did all OUR bailout money go again? 700 billion is a lot of money and it didn't go to help out all the short salers.

Also, a short sale will make the users suffer for 7 years. IMO that is incredibly unfair already, lets not make things worse for the VICTIMS of our unjust financial system.

I can't believe y'all think it is fine and dandy that for example mortgages are stacked so that you pay almost ONLY interest for the first 5-10 years. Wake up y'all! We are all getting a raw deal, the only difference is the degree. And that is mostly a matter of luck and circumstance.
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#65 of 210 Old 01-15-2009, 10:46 PM
 
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It's a tragedy that from 2004 to 2007, our income was between 62k and 64k, and now, for 2008, it's an estimated 40-something k.

If I had known this was going to happen, I would NOT have bought this damn house!

Maybe if DH and I both worked 80+ hours per week at our CURRENT pay rate, we'd be set and could afford the mortgage we are currently in among our other financial obligations.

I suppose because we are unwilling to do that, we are guilty as charged

Erica, wife to Jason (March 2002) . Mama to Ava (June 2003) , Jason Jr. [AKA JJ] (August 2004) , Lila (January 2009) , Maura (October 2010) , and a new person in December 2012!
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#66 of 210 Old 01-15-2009, 11:21 PM
 
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It's a tragedy that from 2004 to 2007, our income was between 62k and 64k, and now, for 2008, it's an estimated 40-something k.

If I had known this was going to happen, I would NOT have bought this damn house!

Maybe if DH and I both worked 80+ hours per week at our CURRENT pay rate, we'd be set and could afford the mortgage we are currently in among our other financial obligations.

I suppose because we are unwilling to do that, we are guilty as charged

Again "the only thing constant is change". It only stands to reason if your income goes down you need to make adjustments somewhere, either tighten the budget or increase you income. Making a choice not to increase your income and default on current contracts is nothing short of dishonest, immoral and dare i say, unadult. You made a legal agreement with the bank to pay X/per month for 30years. That is your committment. If you cant hold up your end of the bargain its up to you to figure out a way to make it work, get more income, sell the house for a loss and bring the difference to the closing.

Like I have said before, being an adult isn't always fun. Being a parent isn't always fun. But what you MUST be is responsible to your contracts and commitments.
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#67 of 210 Old 01-15-2009, 11:36 PM
 
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Also, a short sale will make the users suffer for 7 years. IMO that is incredibly unfair already, lets not make things worse for the VICTIMS of our unjust financial system.

The consequences of not living up to one's financial obligations are not arbitrary or aimed at making people suffer. They are natural and logical consequences. There's nothing unfair about it. There is no right to be granted credit. Irresponsible lending and borrowing are what got us into this mess in the first place. I don't think it is unfair at all for a bank to choose not to loan to someone who has previously defaulted on their obligations, and I don't believe that, barring extreme circumstances, a person who, of their own free will, borrowed unwisely and then defaulted is a victim of the financial system.
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#68 of 210 Old 01-15-2009, 11:40 PM
 
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The entire financial system is fairly arbitrary and is set by people with power in part to take maximum advantage of those without it. Having your house tank because the entire market tanked is not 'borrowing unwisely'. And let's not forget that Usury is not historically the most noble of occupations. Credit isn't a right, IMO, fair and affordable housing is. :?
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#69 of 210 Old 01-15-2009, 11:44 PM
 
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Also, the word is not 'irresponsible lending' it is PREDATORY lending. Everyone needs a place to live. Some lenders took advantage of that in order to bilk people for a quick profit. Most people don't want to have to jump at the whim of an oppressive landlord. My landlords constantly took advantage of DH&I, to the point of stealing money from us, not taking care of things like running water, and floors with splinters, etc. It is not wrong to not want to be slumlorded it is wrong to take advantage of people's human desire for dignity with predatory loan agreements.

Glad y'all love the system, write me when something bad happens to you or your family and you see the other side of it, kay? You can go around all day thinking you are too 'good and responsible' to get bit in the a$$ but you are not any more protected than the rest of us unless you own your house outright and paid cash for it.
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#70 of 210 Old 01-15-2009, 11:56 PM
 
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We didn't have arm mortgages for the most part in Canda but why ever would people use them? Was it not clear the rates would adjust up at a certain point? Was that not made clear by the banks? Did people just assume they would gain equity before it adjusted?
Yes, exactly. We got an ARM and were assured that before it expired (after five years), we would simply refinance. Who knew that in that time decades of common wisdom would be upended when the housing bubble burst, making refinancing not an option.

People. Are. Stuck. And it makes me both angry and sad to hear people here who refuse to consider the reality of this situation, the complexities, and who think that folks going through this need to simply suck it up and pull up those bootstraps and do *whatever* it takes to pay off a loan that never even represented the real value of the home! How are the banks not responsible for loaning against falsely inflated home prices--that's THEIR JOB to know that! Who wants their mamma and daddy to work 80 hours a week (and that's assuming that that would even work--for many, many families who have suffered layoffs, even working 80 hours they wouldn't make what they need to make and what they used to make) to keep a home that may not ever pay off? There ARE more important things than paying off loans and I think it's incredibly supercilious to pretend like none of those things matter, that the most important and noble thing is to pay off that loan that you promised. Please!

And, also, my heart goes out to all the families in this situation. You are not alone.

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#71 of 210 Old 01-16-2009, 12:06 AM
 
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the thing is, though, most of the people who are saying it's wrong to walk away from your responsibilities are NOT talking about major hardships forcing you into a short sale or foreclosure. Most of the pps who have stated it's wrong to up and leave by choice have specifically stated that it's one thing to choose to walk away from a house but it's totally different if you have experienced an income drop and really have no other choice.Very different situations IMO. Maybe there are some who think you should do anything and everyhing necessary to pay your obligations, special circumstances or emergencies be darned. Me personally, I think there are situations where the best or even only option is to walk away. I just think that a person shouldn't walk away if they don't absolutely have to.

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#72 of 210 Old 01-16-2009, 12:14 AM
 
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If you are backwards in your house, you can't make any improvements, etc.
Do you mean that if you're upside down (owe more than the house is worth) you can't make improvements?

That's not necessarily true. We might be upside down on our house, it's hard to know since there aren't too many comprable properties. But we can afford our payments just fine. We've done a number of smaller upgrading projects on our house, including adding a deck, upgrading fixtures and doing a minor bathroom remodel. If we decide that we want to stay in our home for several years, we will be upgrading our home to install air conditioning and finishing the basement. The fact that we're upside down doesn't preclude us from doing those things.

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Also, a short sale will make the users suffer for 7 years. IMO that is incredibly unfair already, lets not make things worse for the VICTIMS of our unjust financial system.
I don't think it's unfair. It is not arbitrary. I'm sure ShaggyDaddy could regale us with the complicated formulas that are used to determine mortgage risk. The fact is, people who have defaulted on their debts in the past are more likely to default again in the future. Mortgage companies and banks would be stupid to blindly lend money without determining who is most likely to pay back the money borrowed.

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I can't believe y'all think it is fine and dandy that for example mortgages are stacked so that you pay almost ONLY interest for the first 5-10 years. Wake up y'all! We are all getting a raw deal, the only difference is the degree. And that is mostly a matter of luck and circumstance.
No one needs to borrow money. There are posters on this board who have saved money and bought their homes outright, with no mortgage. Other people choose to rent. If you don't think mortgages are fair, don't take one out.

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The entire financial system is fairly arbitrary and is set by people with power in part to take maximum advantage of those without it. Having your house tank because the entire market tanked is not 'borrowing unwisely'. And let's not forget that Usury is not historically the most noble of occupations. Credit isn't a right, IMO, fair and affordable housing is. :?
No, the financial system isn't totally fair and arbitrary. But if you don't feel that it's fair, don't participate in the system. Rent, or buy a home outright. As for fair and affordable housing being a right, the problem with that is that the affordable housing isn't always available where people want it. It's not a right to live in a big house, close to your family, for cheap. Sometimes people have to make less than ideal choices.

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Yep. I'd love to see what happens when someone gets laid off in one of the above posters' families and CANNOT FIND A JOB, because practically no one excepting McDonald's and porn is hiring these days.

Let's see how low the high horse sinks then.
I'm not bashing people who are forced to forclose because of job loss. But I don't think it's right for people to walk away from their houses because they decide they don't like the house anymore or because they want to live somewhere else. For me, these are two separate issues.

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#73 of 210 Old 01-16-2009, 02:12 AM
 
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You got HELP from the STATE. That is what food stamps are and we ALL pay for those too.

I don't live in a big house. It was not possible for us to continue to pay someone else's mortgage and ever become homeowners. I also refuse to do that. I won't be a slave to someone slightly more middle class than me, sorry. We basically all do have to take out mortgages or have extremely unstable living situations subject to the whims of someone else. I mentioned before, while renting I had to live w/o running water, I had to fix someone else's house for free, I had to be harrassed because another tenant objected to the fact that I had a child when she thought my landlords should only be renting to students. I also had to pay MORE than my mortgage and more than my landlord's mortgage, simply because most landlords will charge the max amount they can.

Please, some one explain to me why a short sale should be held against the seller. Please. It is not the same as defaulting, why should the homeowner be responsible for the risk? IMO the homeowner should only be responsible for making the payment, and responsibly transferring the property to the next owner (in clean, reasonable condition) when their situation requires a move (job transfer, better opportunity, etc.). They should not be solely responsible for ensuring the solvency of the market while the banks work their hardest to tank it. Why should this burden fall on the shoulders of the homeowner??? please explain that to me, someone??? Why should you be locked out of the market for 7 years, doomed to slum lord hell because a factory closed in your town, there was an environmental disaster, etc. All factors completely beyond your control yet our system punishes individuals (or throws them under the train rather) for this type of event.

I personally think some of our staunchest defenders on here must be in the banking/mortgage industry in some fashion.

You can put money into your property if you are backwards in it, sure, just like you can fix up your landlord's house. But in both cases, that money would be better put into a savings account to better your situation (down payment or paying off the difference between what you owe and what your property is worth.) I don't believe in being a financial martyr. No one else is signing up for that, certainly not the bank.
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#74 of 210 Old 01-16-2009, 02:40 AM
 
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I don't want to pay more just because YOU want to stay home with your kids.
I'm not talking about staying home with my kids. I am talking about the difference between being able to have kids AT ALL, while working FT even. I will not never have children because I can't afford to if I pay my mortgage.

Again, I spent years judging recipients of government assistance. Now I am eating humble pie.

But I'm done with this thread. Peace.

Happily married to DH for 6 years, in process to foster-adopt 3 children DD4, DS3 and DS2. We may be bringing half brother age 9 one day as well! We are not infertile, we just have decided that since there are precious children who need homes there is no need for us to have biological children.

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#75 of 210 Old 01-16-2009, 12:12 PM
 
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Yes, exactly. We got an ARM and were assured that before it expired (after five years), we would simply refinance. Who knew that in that time decades of common wisdom would be upended when the housing bubble burst, making refinancing not an option.
Decades of common wisdom were NOT upended. The last property bust in the US was in the early 90s. The boom that just ended lasted 5 years longer than the average boom, but that hardly adds up to decades of common wisdom. Anyone who thought that this boom meant that house prices were going to rise wildly forever has either a very short memory or did not do their research before buying.

Bust always follow boom. If the boom is getting near the end of the cycle (average 10 years) it is time to rent, not buy.
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#76 of 210 Old 01-16-2009, 01:58 PM
 
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You got HELP from the STATE. That is what food stamps are and we ALL pay for those too.

I don't live in a big house. It was not possible for us to continue to pay someone else's mortgage and ever become homeowners. I also refuse to do that. I won't be a slave to someone slightly more middle class than me, sorry. We basically all do have to take out mortgages or have extremely unstable living situations subject to the whims of someone else. I mentioned before, while renting I had to live w/o running water, I had to fix someone else's house for free, I had to be harrassed because another tenant objected to the fact that I had a child when she thought my landlords should only be renting to students. I also had to pay MORE than my mortgage and more than my landlord's mortgage, simply because most landlords will charge the max amount they can.

Please, some one explain to me why a short sale should be held against the seller. Please. It is not the same as defaulting, why should the homeowner be responsible for the risk? IMO the homeowner should only be responsible for making the payment, and responsibly transferring the property to the next owner (in clean, reasonable condition) when their situation requires a move (job transfer, better opportunity, etc.). They should not be solely responsible for ensuring the solvency of the market while the banks work their hardest to tank it. Why should this burden fall on the shoulders of the homeowner??? please explain that to me, someone??? Why should you be locked out of the market for 7 years, doomed to slum lord hell because a factory closed in your town, there was an environmental disaster, etc. All factors completely beyond your control yet our system punishes individuals (or throws them under the train rather) for this type of event.

I personally think some of our staunchest defenders on here must be in the banking/mortgage industry in some fashion.

You can put money into your property if you are backwards in it, sure, just like you can fix up your landlord's house. But in both cases, that money would be better put into a savings account to better your situation (down payment or paying off the difference between what you owe and what your property is worth.) I don't believe in being a financial martyr. No one else is signing up for that, certainly not the bank.
Because, in short, when you sign your mortgage you are signing a CONTRACT, A FULLY LEGAL DOCUMENT. You are bound by the terms of that agreement. If you don't agree with the terms DONT SIGN IT.

And yes my DH works in banking, I had a career in finance. Long story short, people dont pay their obligations, my DH wont have a job and we wont eat. Well thats not entirely true, my DH will get another job, I will take on more daycare kids, DH can work 2 jobs whatever it takes to keep this family going. That is being Adult and being responsible.

No we dont have a mortgage on this house, we saved, sold our last home(that was mortgaged) and paid cash for this one.

There is no guarentee a property is going to go up in value, there is no guarentee to the bank that the homeowner isnt going to loose their job days after they grant the loan. There are inherit risks to BOTH parties when credit is involved.

Obviously not everyone agrees here, which is fine, but your adult choices will affect you for the next 5-10 years with your credit score, possible employment opportunities, etc. Dont cry 3 yrs from now when you cant get a loan for something or get anyone to rent to you.
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#77 of 210 Old 01-16-2009, 02:06 PM
 
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Please, some one explain to me why a short sale should be held against the seller. Please. It is not the same as defaulting, why should the homeowner be responsible for the risk?
Would the homeowner happily accept the profit if the market went up and the house sold for more than the mortgage balance? Yes? Then the homeowner is responsible for the risk when the market tanks.

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#78 of 210 Old 01-16-2009, 03:52 PM
 
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I can't believe y'all think it is fine and dandy that for example mortgages are stacked so that you pay almost ONLY interest for the first 5-10 years. Wake up y'all! We are all getting a raw deal, the only difference is the degree. And that is mostly a matter of luck and circumstance.
Also almost no loans have prepayment penalties. You can give them extra money anytime you want.

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Please, some one explain to me why a short sale should be held against the seller. Please. It is not the same as defaulting, why should the homeowner be responsible for the risk?
Because you get to the rewards too. If I buy stock and it goes down am I supposed complain to the government or the brokerage house that I should get all my money back?

Personally, I was not for the bank bailout (thanks for voting no Feingold and Kohl) and while I have more sympathy for individuals I'm not sure bailing out individuals will work the way we want it too either. Sometimes the economy just needs to sort itself out.
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#79 of 210 Old 01-16-2009, 08:20 PM
 
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Does the bank have to live in substandard housing with their children if they make a bad loan? Do they go out of business? No.

I totally understand why a homeowner would be responsible for making timely repairs, not wrecking the place, and making their payment on time. However, if the entire US enconomy tanks, the banks will get a bailout while the homeowners will get thrown under the train, together with their families. This is a risk no bank or banker ever takes. Banks don't go out of business, our government makes sure of that, they can make predaotry loans all day and get some fancy bailout. But a homeowner that chooses a promising neighborhood that turns out was financed in a shady way by unscrupulous lenders and builders they are SOL.

If you are okay with that, well then I feel sorry for your inability to see the big picture and understand economic justice.

Nice that you paid cash for your house, do you think this has anything to do with the OUTRAGEOUS salaries paid in the financial sector at all? Because I live in a Banking town and I have never in my life seen so many people with so little education (comparatively) take home so much $$$$.
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#80 of 210 Old 01-16-2009, 08:22 PM
 
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I mean it is just ludicrous: if a bank makes a bad loan, are they not allowed to make any more for SEVEN YEARS? Do the mortgage brokers who pushed ARMs get dings on their PERSONAL credit reports? The guilty go free here while the victims pay with their lives and livelyhoods, and I think everyone on here knows that on some fundamental level.
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#81 of 210 Old 01-16-2009, 09:29 PM
 
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I don't know if this discussion can ever go anywhere. The topic is just too upsetting and personal.

They did push ARMs on people who could not afford them. Everyone has told me that when you buy a house, you have to read the fine print and really think about what you are getting into. They also targeted people who did not speak English very well.

I did find it frustrating to watch people flipping houses for hundreds of thousands of dollars while we lived in a tiny apartment b/c we were too askeered to take on the risk.
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#82 of 210 Old 01-16-2009, 09:58 PM
 
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I totally understand why a homeowner would be responsible for making timely repairs, not wrecking the place, and making their payment on time.
What you are describing is renting. And if you don't want to take the risk of ownership of buying a home that is the route to go. Of course renting has it's own drawbacks, unfortunately there is no perfect solution here.

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However, if the entire US enconomy tanks, the banks will get a bailout while the homeowners will get thrown under the train, together with their families. This is a risk no bank or banker ever takes. Banks don't go out of business, our government makes sure of that, they can make predaotry loans all day and get some fancy bailout.
I definitely agree. Then again I also don't think the bailout is a good idea because as you said, we SHOULD hold them accountable. It's ridiculous to me that the banks messed up and now the taxpayers are paying to fix it. But that is a story for another thread.
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#83 of 210 Old 01-17-2009, 10:12 AM
 
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I've followed this thread but stayed out of it because I can see how emotional it is, but the news yesterday prompts me to say something.

I think it's important to mention that $100 billion has been released from TARP specifically to help the little guy... the homeowner.

It appears that what they will do (because it's the fastest route and time is of the essence) is that they will pay down the principal on mortgages where people are upside down so that their payments are lowered and the principal owed is lowered. You actually owe $250K, but can afford payments on $150K, so they will use the TARP fund to pay your bank $100K and bring your payments down.

What is going to happen is the government will pay the bank $100K to bring down your payments and upend you on your loan/worth ratio, but who is going to pay for that? The taxpayers, the taxpayers children, and the taxpayers grandchildren. And that's the best case scenario... the worst is that this bankrupts America and suddenly Chinese is a required course for all school children.

Meanwhile, someone who did their research and understood what they were doing and that buying a home isn't the same as buying a T-shirt... well, they have a home they bought for $150K. It's small and in a poorer school district, but they made sure that they bought something they could afford even when life's unexpected issues arise.

They now make the same payments as the person in the grand home in a great school district. How is it fair to the person who played by the rules?

The bottom line is that it doesn't really matter who is to blame. We now have no choice but to stem the hemorrhaging and it's no longer about what is fair. Greedy people will WIN this time and us poor, responsible, level-headed tax payers will be left holding the bill. The financial system is set up to absorb the foreclosures that are truly due to life-changes. These have happened all the time... someone loses a job and can't live there anymore. The system can handle that. What the system could not handle was people who were greedy and bought more house, agreed to the terms, then decided that when the terms didn't fall in their favor, they don't want to play by the rules anymore. Those are the people that brought the system to its knees. The system is down... now we have to fix it. It will take GENERATIONS to fix this... and beyond stopping the bleeding, they need to fix the root problem. I hope the greedy people (be it bankers or consumers) are happy that they have auctioned off our children's futures (and mine as well) to have a little more bling.

And that's all I'll say about it.
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#84 of 210 Old 01-17-2009, 12:30 PM
 
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You know I've been trying to stay away from this thread because it is really personal but I can't stay away.

Don't people realize that there's no line in the sand of us versus them? It's not lazy people who did no research who thought buying homes was the same as buying a t-shirt and are now just walking away because they don't like the paint on the walls vs responsible researched people who paid cash for their homes who are now paying for the rest of us.

I have an ARM loan that I'm upside down on. When we bought our home, we didn't buy it to make some crazy profit in a few years. We bought our home on the advice of many experts. We thought we would be throwing money away to continue renting. We planned on staying for the next ten years in our home. We thought we could refinance once the ARM reset. We didn't buy for as much as the bank was willing to lend us. We took into account that I would stay home once we had children and so we needed to afford our home on one salary.

Well we obviously made some mistakes. But we thought that if for some reason dh ever lost his job, we could sell our home and move if we needed to. Well now we can't. Dh has lost his job and the market here is DEAD and our house isn't worth nearly what we owe on it. There is a comparable house on my street selling for $20,000. We owe $127,000. So now we'll foreclose and bring down our neighbors' property values even more. But we're affected by the foreclosures too. Maybe we could sell our house if there weren't a million foreclosures on my street. We pay taxes for the bailout too. We're on both sides of the issue just like most everyone.

I realize that I have an obligation to the mortgage company. But you know what, I have an obligation to my children too. I won't leave them while dh and I both work 80hrs a week for minimum wage just to tread water. Not to mention there are no jobs here. It's not that I can't find my bootstraps people. I'm back in school so that when I'm done, we won't be in this situation again. Dh has looked for a job in half the states in this country and half of Cananda too.

I don't blame the people in my neighborhood who have foreclosed. I know that they most likely tried everything they could to avoid it just like we have. Nobody's an island.
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#85 of 210 Old 01-17-2009, 02:30 PM
 
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Thank you Shelly. It is the BANKS that have brought the system to its knees, that and the pop up homebuilders that built terrible vinyl siding stick masterpieces that aren't worth the land they are sitting on. The BANKS securitized the mortgage holdings and sold them as if they were worth something when they were worth nothing. Our loan was sold before we even signed the papers!

And now WHO gets the $$$? The banks do. They brought the market down with their shady practices and they are going to GET PAID as if they had been the most noble of public servants all along. How is that right? We just have this neuroticism in this country where it is a-ok to give billions of dollars to banks but not one red cent to help a person in trouble.

If you believe that 100 billion is to 'help the little guy' well I have news for you: Section 8 is mainly 'landlord assistance' too. Shocked? Section 8 helps landlords rent their apartments above market value for amounts that they would NEVER be able to charge in an open market. This is pretty much the same, IMO. Make the banks turn their ARMs into the fixed rate loans they should have been writing in the first place. No one FORCED them to make shady ARM deals, there isn't anyone who deserves that type of a deal.

But we have a government who will never force a big business to do anything. They would rather pay the business taxpayer money while its citizens wind up on the street.
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#86 of 210 Old 01-17-2009, 07:51 PM
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I'm returning this thread, minus a few posts... let's keep it within the UA.

Dar

 
fambedsingle1.gifSingle mom to Rain (1/93) , grad student, and world traveler earth.gif


  

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#87 of 210 Old 01-17-2009, 08:15 PM
 
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Originally Posted by dinahx View Post
No one FORCED them to make shady ARM deals, there isn't anyone who deserves that type of a deal.
And nobody forced consumers to accept shady ARM deals.

Shelter is a human right. Shelter of your choice on the terms of your choice, not so much.

Carseat-checking (CPST) and WAH mama to a twelve-year-old girl.
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#88 of 210 Old 01-17-2009, 08:41 PM
 
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Originally Posted by shelleyd View Post
I have an ARM loan that I'm upside down on.
I'm sorry. I just don't get it.

If you took an ARM, then apparently (in general, I apologize if YOUR situation is the "one" that is different) you could not, or chose not, to afford the fixed rate mortage at that time. Did you have 20% to put down?

I wonder if all the posters here that are justifying their behavior (walking away from a loan because there are better opportunities elsewhere. Or because they would like to "afford" children? And to stay home with them?) are very young. I am 44. I remember buying my first home. I remember calling EVERY DAY hoping for the opportunity to lock in an interest rate under 9.5%. In 1993. With 20% down. And with an 800+ credit score.

Honestly. I am shocked. Was anybody here raised with the idea that a legal contract was something you were free to "walk away from" because of personal desires? I hate to bring this up, because I will probably get us shut down again, but don't you have any pride? To fulfill your responsibilities? You know, those legal contracts YOU signed? And held yourself out to be capable of understanding? Were all of you just incapable? Or, are you comfortable hiding behind -- "That's what everyone told us." "That's what everyone said." "My kids needed separate bedrooms."

So, suddenly, your thoughts are supposed to merit weight among the the rest of us? (you know, those of us who will bear the burden of your "change of heart." Please note -- I KNOW there are situations described here that include true need. I'm talking about the idea of "I will not be a slave to my society.") If you were incapable or unwilling to think for yourself then, when making the largest financial commitment of your life, why, suddenly, do your decisions get to impact my bottom line?

Oh, and to the person who was so sure that when "people default on their mortgages your husband's bank doesn't lose money. Some large collection of investors -- likely pension funds, cities and counties, hedge funds and foreign investors -- lose money."

What about the pension holders? And the school districts? And the cities and counties that invest in these funds? When people feel free to walk away, and the value of these funds tank, are YOU prepared to provide for that senior citizen, or that student, or that community whose has to raise property taxes because of irresponsible behavior?

There is no such thing as a free lunch. And if a deal is too good to be true, it probably isn't. Just a little Econ 101...

Please, stop thinking only about yourself, and start thinking about the fact that you ARE part of this society. And that someone WILL PAY for your behavior. It should be you. But if not, then think about the impact your behavior will have on others.

Or not. Which seems to be the "entitled" mindset in this thread.

Jill H.

(lucky mom to Amelia 18, Camille 16, Evan 13, and Gracie 11)
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#89 of 210 Old 01-17-2009, 10:59 PM
 
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I am the one who doesn't get it: My friend bought a reasonable house in a recently built neighborhood for 130,000. Now those houses are selling for 100,000 at best and the neighborhood is full of forclosures. How is this her fault at all??? Should she have to continue to live in a crime ridden neighborhood or short sell, lose her credit and rent for 7 years because the builders and lenders did a wrong thing?

How was she to know that the builders financed her neighbors in a shady way? (When she got a fixed rate) I just don't get how y'all want to hold individuals to this super high standard, while everyone with real power (banks and those in business) are sleazing their way right to the bank with ZERO personal consequences for themselves or their families. Why are individuals supposed to think of 'society' when those that built and financed their houses have no such obligation? Does your obligation to society end at 9 and start at 5?

IMO, no one is 'forced' to take an ARM, however, when someone is a banking PROFESSIONAL who does this ALL DAY and the person across the table from them is a first time homebuyer who has never done this before in their life, I think we can all see who the deck is stacked in favor of. Banks weren't writing ARMs because there was no other way to get these people into a home, they were writing them because they COULD and because they LIKE to make the bigger interest they can get from a sub prime, an ARM or a NINJA. Builders weren't just trying to help people into homes, they overbuilt houses (around here with ILLEGAL labor paid dirt), used cheap materials and then twisted lending standards to fill the houses that the market had no real demand for.
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#90 of 210 Old 01-17-2009, 11:02 PM
 
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Also, buyers haven't been required to put 20% down since the time of the Greeks and Romans. All of a sudden we are in crisis and older folks are being all like '20% down!' Whatever, no one had a problem with our 3% down payment 2 years ago, not the state, not the most conservative banks in town. People no longer put 20% down on anything but investment property and the idea that someone has to rent until they can get up 20% of even 100,000 is just ridiculous and NOT what caused this crisis.
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