short sell and rent to get out of other debt or hold on and wait it out? - Page 5 - Mothering Forums

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#121 of 210 Old 01-18-2009, 01:14 AM
 
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Originally Posted by acegmom View Post
And the borrower doesn't need to be held accountable for the contract they sign?

Honestly, I don't understand. Banks are a business. They exist to make a profit for their share holders. What about that don't you understand? They are not your friend, not your advisor, not your consultant. They aren't even necessarily on your side.

Maybe more buyers need to not ignore what they learned in basic finance. And if one has never had a basic finance class, perhaps one should hire legal help. It's WAY less than a 20% down payment -- guaranteed.

Jill H.

(lucky mom to Amelia 18, Camille 16, Evan 13, and Gracie 11)
With all the foreclosures going on, I'm not sure where you think homeowners are not being held accountable. It seems that while we are being forclosed left and right, the banks are getting a huge bailout and a cup of hot milk for beddy-byes.

The lawyers hired are often more on the lenders' side than yours, so there you go. I personally think finance should be mandatory in public schools- sadly it is not.

As for making a profit for share holders, I'm sorry, but where has that been happening recently with the banks? Because when I watch the DOW it always seems that the numbers are written in red lately. It seems that the banks have lost money for their share holders. They are supposed to invest in areas where they are likely to win- not make loans out to people who won't be able to repay. That would be losing money, you see. The banks were not thinking of the share holders; they were thinking of their immediate bonuses coming up.

Just the way a doctor has to wisely decide what medicine a person should take, how much of it, and for how long, the banks should have known how much debt a person could afford, using their expertise. It shouldn't have been rocket science, here. It seems like they didn't fully understand what their jobs were.

How come the consequences are only one sided? The homeowners are paying the consequence. The American tax payers are. The share holders are. The crooked CEO's are getting golden parachutes.
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#122 of 210 Old 01-18-2009, 01:20 AM
 
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I would not feel good about buying anything without at least 20% down, especially a house. There is a reason for PMI insurance. Did you ever wonder why there needed to be insurance for people who didnt have the 20%? Because they shouldnt be buying houses!

I'm sorry, I just dont buy all the bull about "the lender talked me into it" "I thought the real estate would go up" Only YOU are responsible for your actions. You shouldnt be buying a house that you cant afford, and by cant afford I mean dont have 20% down, and have at least 4-6 months worth of money in an emergency fund.

If you dont meet those requirements you have no business buying a house. Ever watch Suzie Orman!?!?!?
Okay, if my doctor prescribes me something, I take it, and I have a bad reaction to it and get seriously ill because the doctor screwed up, I am responsible?

The lender, I presume, has a duty to the share holders not to waste money by loaning it out to people who can't pay. I would think it would not be in his interest to lend me too much money. Well, with deregulation, the lender could run wild. And apparently did. People were not treated honestly, and their ignorance was preyed on.

Like I said, I would prefer high schoolers to get four years of solid personal finance courses rather than learn trig and calc. It would serve them better in the long run, it seems. As it is now, I don't see why the banks get some kind of pass for screwing up the economy.
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#123 of 210 Old 01-18-2009, 01:32 AM
 
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Honestly, I don't understand. Banks are a business. They exist to make a profit for their share holders. What about that don't you understand? They are not your friend, not your advisor, not your consultant. They aren't even necessarily on your side.
That is exactly what I was thinking when reading this thread. I expect the bank people to tell me about the products they're trying to sell me, but I don't expect them to steer me towards what's in my best interest. When you sign on the dotted line that's your commitment to paying off the mortgage according to the terms described.

And I know this is an unpopular opinion, but I think if you can't put down a good size down payment (ideally 20%) you can't afford to buy a house. I'm sorry, but home ownership is expensive, there's no way around it. I guess I belong to the older generation (I'm 28).
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#124 of 210 Old 01-18-2009, 01:37 AM
 
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As it is now, I don't see why the banks get some kind of pass for screwing up the economy.
I don't think any of us are saying the banks should get a pass, really (or maybe i"m just speaking for myself)...I just think us 'hardasses' are saying that the lenders and the borrowers share responsibility in this mess.

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#125 of 210 Old 01-18-2009, 01:37 AM
 
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That is exactly what I was thinking when reading this thread. I expect the bank people to tell me about the products they're trying to sell me, but I don't expect them to steer me towards what's in my best interest. When you sign on the dotted line that's your commitment to paying off the mortgage according to the terms described.

And I know this is an unpopular opinion, but I think if you can't put down a good size down payment (ideally 20%) you can't afford to buy a house. I'm sorry, but home ownership is expensive, there's no way around it. I guess I belong to the older generation (I'm 28).
I do expect them, though to have the common sense not to loan money they won't get back. That shouldn't be in their best interests, or if it is, something's quite wrong.
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#126 of 210 Old 01-18-2009, 01:39 AM
 
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I don't think any of us are saying the banks should get a pass, really (or maybe i"m just speaking for myself)...I just think us 'hardasses' are saying that the lenders and the borrowers share responsibility in this mess.
Ah, but the banks are getting bailouts now, aren't they? Are the borrowers? Nope. Therein lies the difference.
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#127 of 210 Old 01-18-2009, 01:41 AM
 
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Just the way a doctor has to wisely decide what medicine a person should take, how much of it, and for how long, the banks should have known how much debt a person could afford, using their expertise. It shouldn't have been rocket science, here. It seems like they didn't fully understand what their jobs were.
The bank has NO interest in your well being. They want their payment. On time. I don't know who sold you a bill of goods, but banks, and the banking system, are not there to take care of you. The only mistake the banks made was to think that people would actually honor their obligations, instead of feeling "entitled" to decide that the terms of the agreement simply didn't apply to them anymore.

We live in a free market system. I repeat - Caveat Emptor. You're an adult. Act like one.

And I am bothered by your insinuation regarding lawyers. (No, I am not a lawyer. Nor is my husband.) You are starting to sound like a conspiracy theorist. I HAVE hired real estate lawyers for complicated closings, and despite your misgivings, they are not "all on the take." Every RE lawyer I have used has been invaluable, and for you to trash them is unnecessary.

Obviously, this thread has run it's course. Many of us were responding to the original question of a short sale for convenience. No one here will justify that, no matter what the protestations and excuses. True need, yes. But other than a catastrophic economic event - no.

I'm sorry that those seeking confirmation for their "choices" feel unsupported. But, it is never right to just walk away from a responsibility. Especially one of your own making (I assume you DID sign the contract.) What example does this kind of behavior teach your children?

Jill H.

(lucky mom to Amelia 18, Camille 16, Evan 13, and Gracie 11)
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#128 of 210 Old 01-18-2009, 01:45 AM
 
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Ah, but the banks are getting bailouts now, aren't they? Are the borrowers? Nope. Therein lies the difference.
Right, which sucks. I don't think the banks should be getting bailouts. I don't think individuals should be getting bailed out. But I don't think banks getting bailouts negates the shared responsibility/blame of people signing on to loans that they had no business committing to, or that banks getting bailed out means that individuals should be able to walk away since the bank is gettign bailed out.

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#129 of 210 Old 01-18-2009, 01:48 AM
 
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The bank has NO interest in your well being. They want their payment. On time. I don't know who sold you a bill of goods, but banks, and the banking system, are not there to take care of you. The only mistake the banks made was to think that people would actually honor their obligations, instead of feeling "entitled" to decide that the terms of the agreement simply didn't apply to them anymore.

We live in a free market system. I repeat - Caveat Emptor. You're an adult. Act like one.

And I am bothered by your insinuation regarding lawyers. (No, I am not a lawyer. Nor is my husband.) You are starting to sound like a conspiracy theorist. I HAVE hired real estate lawyers for complicated closings, and despite your misgivings, they are not "all on the take." Every RE lawyer I have used has been invaluable, and for you to trash them is unnecessary.

Obviously, this thread has run it's course. Many of us were responding to the original question of a short sale for convenience. No one here will justify that, no matter what the protestations and excuses. True need, yes. But other than a catastrophic economic event - no.

I'm sorry that those seeking confirmation for their "choices" feel unsupported. But, it is never right to just walk away from a responsibility. Especially one of your own making (I assume you DID sign the contract.) What example does this kind of behavior teach your children?

Jill H.

(lucky mom to Amelia 18, Camille 16, Evan 13, and Gracie 11)
I am not saying that the bank has a duty to take care of me. Quite the opposite, in fact. If someone approached me for a loan I knew they could likely not pay back, I would not loan him money. That would not be in my interests. The answer would be no. These lenders and CEO's who encouraged the practice of foolhardy loans let the company down and the shareholders as well.

I am soooooooo sorry if I have oppressed any lawyers on this thread. And don't worry- my kids will be fine. I will teach them to be skeptical and to cross-reference, cross-reference, and cross-reference. I will teach them not to assume that a well established, major company has a CEO with basic knowledge of his field.
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#130 of 210 Old 01-18-2009, 01:54 AM
 
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Right, which sucks. I don't think the banks should be getting bailouts. I don't think individuals should be getting bailed out. But I don't think banks getting bailouts negates the shared responsibility/blame of people signing on to loans that they had no business committing to, or that banks getting bailed out means that individuals should be able to walk away since the bank is gettign bailed out.
In theory, but the economy needs a tourniquet right now. I'd rather go through a bad recession than a depression. I would rather individuals get bailouts; since we have stopped consuming the results have been catastrophic for other businesses. Believe it or not, banks do have the resources to help themselves out more than they have. With a little frugality, that is. No bonuses, no wild parties that could buy me eight condos, no raises for a while.
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#131 of 210 Old 01-18-2009, 02:31 AM
 
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Just the way a doctor has to wisely decide what medicine a person should take, how much of it, and for how long, the banks should have known how much debt a person could afford, using their expertise.
I will disagree here - I think the person most qualified to judge that is the borrower, not the lender. Sure, the bank knows how much income you have, but they don't know that you have a shoe obsession or a bad Starbucks latte habit you can't kick. Even in this forum I can see that people are able to manage their money really efficiently while others I know in real life, who make much more, can barely make ends meet.

The bank can only approximate what you should be loaned based on some of the figures they have. They know nothing about how committed you will be to paying it off or if something is going to happen down the line that prevents you from being able to. If they only loaned money to people who they knew could pay it off 100% then I have a feeling no one would qualify. Using the doctor analogy, they have knowledge of the medication and how it worked on others, but only you know your medical history, if you have any allergies, and there is still no guarantee that the prescribed medication will work for you.

Don't get me wrong, I'm not saying that the banks did nothing wrong, because I think they certainly did. I just think the borrower needs to be responsible for their end of the bargain.
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#132 of 210 Old 01-18-2009, 02:37 AM
 
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I will disagree here - I think the person most qualified to judge that is the borrower, not the lender. Sure, the bank knows how much income you have, but they don't know that you have a shoe obsession or a bad Starbucks latte habit you can't kick. Even in this forum I can see that people are able to manage their money really efficiently while others I know in real life, who make much more, can barely make ends meet.

The bank can only approximate what you should be loaned based on some of the figures they have. They know nothing about how committed you will be to paying it off or if something is going to happen down the line that prevents you from being able to. If they only loaned money to people who they knew could pay it off 100% then I have a feeling no one would qualify. Using the doctor analogy, they have knowledge of the medication and how it worked on others, but only you know your medical history, if you have any allergies, and there is still no guarantee that the prescribed medication will work for you.

Don't get me wrong, I'm not saying that the banks did nothing wrong, because I think they certainly did. I just think the borrower needs to be responsible for their end of the bargain.

I disagree. These lenders are experts in their field. When they run your credit, look at your accounts, they can easily infer what kind of person you are. Hhhhhmmmm, she makes this much money and she has a maxed out credit card? Why would she have eight cards in total? Why has she saved so little over the years? Bought herself a brand new VW Bug, eh? Not hard at all. They might not be able to see your divorce coming, but they can tell if you have a habit of living beyond your means.
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#133 of 210 Old 01-18-2009, 04:01 AM
 
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So I am glad you have good luck with renting. I don't enjoy being taken advantage of, I don't enjoy paying someone else's mortgage, we couldn't save when rents were HIGHER than a mortgage on a compbrable property (by several hundred dollars/month), and we were victims of terrible landlords.
But you are okay with other people paying your mortgage, apparently.

Today I had to listen to somebody at a party boasting about how she was glad she'd bought an ARM because with the released TARP funds, she was going to get "such a deal" on her house now and how she always knew ARMs were the way to go and that fixed-rate mortgages were basically for suckers. :

As somebody who rented and scrimped and saved until I could afford a fixed-rate mortgage (and I too have been the victim of terrible landlords), I certainly feel like I'm being punished for that decision at this point. And yes, I admit it makes me resentful.
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#134 of 210 Old 01-18-2009, 11:07 AM
 
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But you are okay with other people paying your mortgage, apparently.

Today I had to listen to somebody at a party boasting about how she was glad she'd bought an ARM because with the released TARP funds, she was going to get "such a deal" on her house now and how she always knew ARMs were the way to go and that fixed-rate mortgages were basically for suckers. :

As somebody who rented and scrimped and saved until I could afford a fixed-rate mortgage (and I too have been the victim of terrible landlords), I certainly feel like I'm being punished for that decision at this point. And yes, I admit it makes me resentful.
Absolutely. Anyone who was responsible with their mortgages will get punished. The wider picture, though, is that if something isn't done to stop these foreclosures, our economy goes bankrupt, in which case, every single citizen will suffer. It just really sucks that those who are going to basically get their mortgages paid with tax payer's money are crowing about it instead of feeling humble and ashamed, as they should be. They won't learn their lessons and neither will their children.
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#135 of 210 Old 01-18-2009, 12:12 PM
 
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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)
We could afford our ARM if my husband had a job. And he would have a job if the banks didn't stop lending. He is a carpenter. His company had many jobs going and then the investors couldn't get money from the banks and the jobs came to a screeching halt in the middle of construction. Come to the Detroit area and drive down Telegraph road sometime. You'll see countless construction jobs that are just half built and empty now. They should be teaming with skilled tradesmen earning a decent wage so that they can pay their bills. But my husband who is a very hard worker hasn't worked in months and can't find work anywhere. Since he got his first job in highschool he's never gone this long without working.

And in the past I've picked up extra hours at work when his work has slowed. Well guess what, my work is cutting everyone's hours and I can't pick up an extra hour. Not to mention all of this happened when I was seven months pregnant. It's a little difficult to find a second job when you're obviously weeks away from giving birth. And yes I took some time off after I had a baby. I suppose I should have gone back to work the day after I gave birth so as to not let the banks down.

Do I wish we didn't have an ARM? yep. We certainly made a mistake there. But we could pay it if there were jobs. We were never even late on a payment until this fall. I mean does everyone think the banks really did a responsible job all along and then suddenly there has been a wave of collective irresponsibility on the part of homeowners? I just don't get it.

People on this thread keep saying that they don't support just walking away without reason but true hardship is different. It is real hardship that is the cause of this. Does anyone hear the news about unemployment? People are not losing their homes because they just changed their minds about living in them. The banks will not agree to a short sale if there isn't good reason. Trust me even if there is a good reason they do their very best not to agree to anything.
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#136 of 210 Old 01-18-2009, 12:41 PM
 
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Do I wish we didn't have an ARM? yep. We certainly made a mistake there. But we could pay it if there were jobs. We were never even late on a payment until this fall. I mean does everyone think the banks really did a responsible job all along and then suddenly there has been a wave of collective irresponsibility on the part of homeowners? I just don't get it.
What a perfect way of saying it. The banks were incredibly irresponsible, like monkeys that had escaped the zoo. The deregulations allowed them to run wild. They were given an absurd amount of trust and they abused it.

I will agree that many people wanted bigger, better, more awesome houses. But plenty of others were content with humblers homes. I own a 1 bed room condo, for instance. But even humble homes were greatly over priced during the bubble. If you wanted to own, you had to pay an arm and a leg. And I understand not wanting to rent- you can't build equity, and in plenty of areas rent is as high as a mortgage. I am paying less for a mortgage than what I would have in rent.
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#137 of 210 Old 01-18-2009, 01:33 PM
 
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I think the person most qualified to judge that is the borrower, not the lender. Sure, the bank knows how much income you have, but they don't know that you have a shoe obsession or a bad Starbucks latte habit you can't kick. Even in this forum I can see that people are able to manage their money really efficiently while others I know in real life, who make much more, can barely make ends meet.

The bank can only approximate what you should be loaned based on some of the figures they have. They know nothing about how committed you will be to paying it off or if something is going to happen down the line that prevents you from being able to. If they only loaned money to people who they knew could pay it off 100% then I have a feeling no one would qualify. Using the doctor analogy, they have knowledge of the medication and how it worked on others, but only you know your medical history, if you have any allergies, and there is still no guarantee that the prescribed medication will work for you.

Don't get me wrong, I'm not saying that the banks did nothing wrong, because I think they certainly did. I just think the borrower needs to be responsible for their end of the bargain.
ITA with this.

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Do I wish we didn't have an ARM? yep. We certainly made a mistake there. But we could pay it if there were jobs. We were never even late on a payment until this fall. I mean does everyone think the banks really did a responsible job all along and then suddenly there has been a wave of collective irresponsibility on the part of homeowners? I just don't get it.
I have to point out to you that the OP actually can afford their home and their current situation; they are not in a situation like yours with job loss and sudden unfortunate situations thrust upon them. Situations like yours are not the kinds of situations most of us on the 'personal responsibility' side are talking about. And I know that the banks are partially at fault, but I also know borrowers were partially at fault in many (not every) situations, too.

Heather, WAHM to DS (01/04)DD (06/06). Wed to DH(09/97)
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#138 of 210 Old 01-18-2009, 02:34 PM
 
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I have to point out to you that the OP actually can afford their home and their current situation; they are not in a situation like yours with job loss and sudden unfortunate situations thrust upon them. Situations like yours are not the kinds of situations most of us on the 'personal responsibility' side are talking about. And I know that the banks are partially at fault, but I also know borrowers were partially at fault in many (not every) situations, too.
I agree, the OP should not short sell her home. For many reasons. But this thread did take the tone of "the borrowers are to blame, the banks not so much."
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#139 of 210 Old 01-18-2009, 02:42 PM
 
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Absolutely. Anyone who was responsible with their mortgages will get punished. The wider picture, though, is that if something isn't done to stop these foreclosures, our economy goes bankrupt, in which case, every single citizen will suffer. It just really sucks that those who are going to basically get their mortgages paid with tax payer's money are crowing about it instead of feeling humble and ashamed, as they should be. They won't learn their lessons and neither will their children.
I mostly agree. I'm pretty resentful about it, and hearing somebody openly brag about how glad they are they're going to be able to essentially swindle the government and fellow taxpayers is infuriating.

I know there must be genuine hard-luck cases out there, but in my personal life, the only people I know who have had ARM resets and have arranged rate resets or are talking about walking away haven't lost jobs, haven't had any catastrophes, don't have health problems, and haven't really had any bad luck at all. They're just greedy. They don't feel like paying the higher rate because it affects their consumer lifestyle. They want to keep the McMansion and the expensive car, and see the government bailout as a way of continuing that lifestyle courtesy of the taxpayers. I don't know a single person who is asking for a rate reset because there has been job loss or anything truly difficult.

So, while I can appreciate at a theoretical level that some homeowners might justifiably need bailouts, at a personal level, all I see is greed, laziness, and unbelievable entitlement.
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#140 of 210 Old 01-18-2009, 02:48 PM
 
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But you are okay with other people paying your mortgage, apparently.

Today I had to listen to somebody at a party boasting about how she was glad she'd bought an ARM because with the released TARP funds, she was going to get "such a deal" on her house now and how she always knew ARMs were the way to go and that fixed-rate mortgages were basically for suckers. :

As somebody who rented and scrimped and saved until I could afford a fixed-rate mortgage (and I too have been the victim of terrible landlords), I certainly feel like I'm being punished for that decision at this point. And yes, I admit it makes me resentful.
Ooops, again, you know NOTHING about me. I have a house that is worth oops, a little MORE than I paid for it. With a fixed rate loan. Why? Because I bucked every single PROFESSIONAL advising us and bought a house on LAND out in the country, that was over 10 years old. I have a fixed rate loan and I assure you, my husband is the only 'someone else' paying my mortgage.

But it was so difficult for me to buck the trend, we were shown SO MANY cookie cutter houses in neighborhoods now filling up with foreclosures, that I can't help by have EMPATHY for those that gasp, listened to the professionals (real estate agents and mortgage brokers and banks) advising them.

No one wanted us to buy this house, not my parents, not the bank, etc. Yet it was the smartest move we could have made. The point is, I was in the 98% all through school, I'm a smart cookie and I don't condone a system that would eat everyone below me alive as an acceptable one. I think the GUILTY should be punished and those are the ones who tried to talk people into bad deals, that overbuilt terrible houses with shoddy materials and illegal labor, etc. They are the ones who really knew what they were doing and guess what? No one is making them give that money (from bonuses, commissions, profit) back. And their companies are getting bailed out. I just think if you have some vitriol, try focusing it on someone other than your fellow families.
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#141 of 210 Old 01-18-2009, 03:20 PM
 
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The point is, I was in the 98% all through school, I'm a smart cookie and I don't condone a system that would eat everyone below me alive as an acceptable one.
Wow. I mean wow. But anyway, plenty of people in the 99th percentile in school still made mistakes for different reasons. Land is not the only need they have- they need to be in an adequate school system, as not everyone can homeschool or private school. They need to be reasonably close to work, perhaps family, in a safe area as well. It wasn't the houses they were often going for, it was the location. Glad you are happy with your choices, though.
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#142 of 210 Old 01-18-2009, 03:24 PM
 
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Wasn't trying to be offensive, just pointing out that not everyone has all the same education/advantages, etc and I don't condone a system that throws you under a train because you listen to a banking/real estate/building professional advising you. And holds those professionals blameless, because hey: trying to trick people is how you make money. Just saying that such a system is fundamentally unjust and more than that, horrific, and I don't understand the posters who condone it.
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#143 of 210 Old 01-18-2009, 03:30 PM
 
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Originally Posted by dinahx View Post
Wasn't trying to be offensive, just pointing out that not everyone has all the same education/advantages, etc and I don't condone a system that throws you under a train because you listen to a banking/real estate/building professional advising you. And holds those professionals blameless, because hey: trying to trick people is how you make money. Just saying that such a system is fundamentally unjust and more than that, horrific, and I don't understand the posters who condone it.
No, I agree, and I'll repeat myself over and over again, I think public schools should have personal finance courses for all students.
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#144 of 210 Old 01-18-2009, 03:49 PM
 
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I really don't think it's fair to cast personal business decisions in moral terms, so long as they are legal (ie part of the rules of the game that you and the bank agreed to). The bank is a business. If the time comes when it makes financial sense for the bank to default on its debts and go bankrupt, or work out a reduction in terms on its debts, it will by all means do so without regard to "taking personal responsibility." It doesn't make sense to hold one party to the "business rules" of morality and the other party to interpersonal/family rules.

Our legal and financial system makes this possible on purpose, through bankruptcy and breach of contract provisions, because having people and businesses be stuck with the mounting consequences of bad decisions forever is not in society's best interest.
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#145 of 210 Old 01-18-2009, 04:05 PM
 
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I don't condone a system that throws you under a train because you listen to a banking/real estate/building professional advising you.
laughup

Under this reasoning, the salespeople in the furniture store, condo sales office, and remodelling center are my advisors owing me a fiduciary duty, too.

Wrong.

Commercial bankers are in the business - a very competitive business - of selling loans (we all understand that banks MAKE MONEY by loaning money, right?). Their fiduciary duties are limited to their investors. No, they can't lie, and no, they can't go outside of the restrictve federal banking regulations governing consumer and home loans, but yes, they are trying to SELL you something that will make THEM money, same as any other salesperson, and yes, they are representatives/employees of the bank rather than you. If you want a professional advisor, you pay for it: go get a real estate lawyer, who will represent YOU. Otherwise, when you buy things from salespeople - even if the salesperson has a fancy name like "Sales Associate" or even "Third Assistant Vice President" you must understand that their "advising you" serves their own purposes, not necessarily yours, and that you have the sole responsibility to decide whether the product/loan offered is really right for you. Same as in a furniture store.

The only thing you owe to others is to behave with integrity.
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#146 of 210 Old 01-18-2009, 04:07 PM
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I really don't think it's fair to cast personal business decisions in moral terms, so long as they are legal (ie part of the rules of the game that you and the bank agreed to). The bank is a business. If the time comes when it makes financial sense for the bank to default on its debts and go bankrupt, or work out a reduction in terms on its debts, it will by all means do so without regard to "taking personal responsibility." It doesn't make sense to hold one party to the "business rules" of morality and the other party to interpersonal/family rules.

Our legal and financial system makes this possible on purpose, through bankruptcy and breach of contract provisions, because having people and businesses be stuck with the mounting consequences of bad decisions forever is not in society's best interest.
I totes agree with this.

OT: OMG, I just read your birthstory.
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#147 of 210 Old 01-18-2009, 04:23 PM
 
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OT: OMG, I just read your birthstory.
OT: Me, too! drop and wow! But I was gonna double-jawdrop after lalaland42's post, because I thought she meant that you had JUST given birth - and yet were on MDC making cohesive arguments about the social justice system! I was all :: after I gave birth, so people with brainpower shortly afterwards impress the goddess outta me....

Back to fighting, I mean respectful-but-disagreeing discussion.

The only thing you owe to others is to behave with integrity.
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#148 of 210 Old 01-18-2009, 04:29 PM
 
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laughup

Under this reasoning, the salespeople in the furniture store, condo sales office, and remodelling center are my advisors owing me a fiduciary duty, too.

Wrong.

Commercial bankers are in the business - a very competitive business - of selling loans (we all understand that banks MAKE MONEY by loaning money, right?). Their fiduciary duties are limited to their investors. No, they can't lie, and no, they can't go outside of the restrictve federal banking regulations governing consumer and home loans, but yes, they are trying to SELL you something that will make THEM money, same as any other salesperson, and yes, they are representatives/employees of the bank rather than you. If you want a professional advisor, you pay for it: go get a real estate lawyer, who will represent YOU. Otherwise, when you buy things from salespeople - even if the salesperson has a fancy name like "Sales Associate" or even "Third Assistant Vice President" you must understand that their "advising you" serves their own purposes, not necessarily yours, and that you have the sole responsibility to decide whether the product/loan offered is really right for you. Same as in a furniture store.

The difference is, though, that car salesman, furniture salesman, etc, should not loan you money if they have good doubt you'll pay it back. Two years ago, the father of one of my former students tried to purchase a BMW. I was floored by that because we are a very, very low income area. The dealership took one look at his credit and said NO. They had good reason to believe he would not be able to pay. You can't make money on a loan if the principal doesn't get paid and you take a big loss. Well, the lender might make a good bonus, but the shareholders are S.O.L. The shareholders must be super-pissed that banks were making loans to people who obviously could not pay them back.
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#149 of 210 Old 01-18-2009, 04:36 PM
 
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The difference is, though, that car salesman, furniture salesman, etc, should not loan you money if they have good doubt you'll pay it back.
Well, no business "should" make stupid decisions.

Many businesses do, just as many people do (possibly because businesses are made of people).

If your business is a restaurant or a one-woman cloth-diapering manufacturer, and you make bad business decisions, your business fails and it doesn't make headlines and you suffer. And other businesses look at your example and hopefully learn something, and if not, well, justice has been served. Natural consequences, as effective for grownups as it is for toddlers.

BUT if your business is huge enough that folks think your demise will negatively effect the country - you are an auto manufacturer or large bank - then you get bailed out and we ALL pay for the bailout and nobody - businesspeople or clients - learns anything except how to avoid responsibility.

The only thing you owe to others is to behave with integrity.
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#150 of 210 Old 01-18-2009, 04:38 PM
 
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I mostly agree. I'm pretty resentful about it, and hearing somebody openly brag about how glad they are they're going to be able to essentially swindle the government and fellow taxpayers is infuriating.

I know there must be genuine hard-luck cases out there, but in my personal life, the only people I know who have had ARM resets and have arranged rate resets or are talking about walking away haven't lost jobs, haven't had any catastrophes, don't have health problems, and haven't really had any bad luck at all. They're just greedy. They don't feel like paying the higher rate because it affects their consumer lifestyle. They want to keep the McMansion and the expensive car, and see the government bailout as a way of continuing that lifestyle courtesy of the taxpayers. I don't know a single person who is asking for a rate reset because there has been job loss or anything truly difficult.

So, while I can appreciate at a theoretical level that some homeowners might justifiably need bailouts, at a personal level, all I see is greed, laziness, and unbelievable entitlement.
*Where* on here did you hear someone *brag* about how glad they are that they're going to be able to "essentially swindle the government and fellow taxpayers"?! Are we reading the same thread?!

Even OP, who so many seem to agree should not be considering foreclosure/short sale, did not seem DELIGHTED at the idea of leaving her family's home behind, but rather quite frustrated at her lack of options.

Wow. I don't even know even know what to say, so I'll just ignore that statement altogether and say: I'm sorry to all of you reading this that are hurting now and understand the agony of losing options, losing hope and going through foreclosure. I hope you know that there are many of us out here with sympathy for you and hopes for your economic future, and the future economic health of the country!

Mama to a beautiful girl since May 2007 and a beautiful boy since August 2010! :
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