Update: Trying to avoid foreclosure by working with the bank on a quick sale #132 - Page 5 - Mothering Forums
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#121 of 256 Old 10-27-2007, 03:19 PM
 
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How did the showing go today, Jennica?
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#122 of 256 Old 10-27-2007, 03:34 PM
 
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I disagree. My commitment to my children is stronger than my commitment to any bank. I would not go to work full-time in a minimum wage job to avoid forclosure.
And what message does that send to your children about honoring committments? "Go ahead, sign any legal paperwork you want!!! Just say that your family won't let you honor them."

Civilization pretty much relies on the assumption that most of the time, most people do what they say they're going to do. If everyone had your attidude, the entire banking and legal system would come crashing to a halt.

savithny, 42 year old moderate mom to DS Primo (age 12) and DD Secunda (age 9).

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#123 of 256 Old 10-27-2007, 10:48 PM
 
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I disagree. My commitment to my children is stronger than my commitment to any bank. I would not go to work full-time in a minimum wage job to avoid forclosure.
Uh, you know how insulting this comment is, right? Look, no one is going to be scarred for life because a SAHM takes a job for a few months or a year. If it reduces the stress level at home, and gives mom a chance to interact with adults, be recognized for her competence and skills, etc., it might even be GOOD for both kids and mom.

And in any case, it doesn't sound like she'd have to work full-time. Honestly--a few hours a week with a babysitter, in day care OR WITH DAD is just not going to hurt a kid unless it's a blatantly abusive situation (which, of course, happens among stay-at-home parents all the time).

It sounds like the OP has figured things out anyway.
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#124 of 256 Old 10-28-2007, 04:31 AM
 
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I'm sorry, but where did I say that anyone would be scarred for life? And WHAT is so insulting about what I said?

[QUOTE]
If it reduces the stress level at home, and gives mom a chance to interact with adults, be recognized for her competence and skills, etc., it might even be GOOD for both kids and mom.[/QUOTE

If you work, and that's how you feel about it, then good for you. That is NOT how I would feel about it in a similar situation, and you're projecting an awful lot onto the OP. In her situation, I would NOT consider working full-time at a job that I had no interest in doing, which is what I said. I didn't say anything about anyone else.

Incidentally, my kids are all in school. My three-year-old is in preschool, and I work nearly full-time at home. If I couldn't do my job at home, I would do it out of the home. So stop making assumptions and throwing meaning that wasn't there onto my words. I'm the one who wrote them, therefore I know what I meant. If you choose to be insulted by something I didn't say, then that's your problem.
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#125 of 256 Old 10-28-2007, 10:44 AM
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Uh, you know how insulting this comment is, right? Look, no one is going to be scarred for life because a SAHM takes a job for a few months or a year. If it reduces the stress level at home, and gives mom a chance to interact with adults, be recognized for her competence and skills, etc., it might even be GOOD for both kids and mom.
.
Yep. Totally insulting to us WOHMs who manage to pay our bills. (and still be mothers! Gasp!)

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#126 of 256 Old 10-28-2007, 01:30 PM
 
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I don't see this as an ethical issue: she and her DP are obligated to pay the loan, if they don't they lose the home and face the consequences for reneging on a major financial obligation.

What is and was unethical was banks offering far more loan money than the borrowers could afford, allowing zero-down payments, allowing people to finance 100% of a home purchase. These practices drove up the price of homes, forcing people like the OP and her partner to pay more for their home (and more in interest to the banks) than they would have in a more rational housing climate. It was basic inflation at work: increase the money supply, and prices increase as buyers compete.

I agree buyers had (and have) an obligation to make rational decisions about what they can and can't afford, and to factor in likely increases in the cost of living and changes in their likely income in those decisions. But the banks were wholly complicit in misleading people about "what they could afford" by relaxing the standards and creating new loan products to attract more borrowers.
Hear, hear!

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#127 of 256 Old 10-28-2007, 03:09 PM
 
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Yep. Totally insulting to us WOHMs who manage to pay our bills. (and still be mothers! Gasp!)
Again, be insulted if you want, but NOWHERE did I say anything negative about WOHMs. Nowhere. Gasp! All my children are gone during the day! I'm a WAHM!

Again, HOW is saying that in the situation described by the OP that I would not take a full-time minimum wage job to pay back the money offensive to WOHMs? Point out where I said children of WOHP are scarred for life, please. Point out where I said you couldn't be a WOHM and still be a mother! Gasp!
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#128 of 256 Old 10-28-2007, 03:29 PM
 
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You said "my commitment to my children is more important that my commitment to a bank." This implies two things:

1. By taking a full-time job out of the home, you would be violating your commitment to your children.

2. You think it's okay to go back on your (signed, legal) word.
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#129 of 256 Old 10-28-2007, 03:42 PM
 
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I am so sorry. I would get the p/t job and hang in there till the market improves and then I would sell the house for whatever amount you can get as long as it pays off your mortgage. I wouldnt go into foreclosure unless there were literally no options left on the table.
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#130 of 256 Old 10-28-2007, 04:11 PM
 
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Uh, you know how insulting this comment is, right? Look, no one is going to be scarred for life because a SAHM takes a job for a few months or a year. If it reduces the stress level at home, and gives mom a chance to interact with adults, be recognized for her competence and skills, etc., it might even be GOOD for both kids and mom.

And in any case, it doesn't sound like she'd have to work full-time. Honestly--a few hours a week with a babysitter, in day care OR WITH DAD is just not going to hurt a kid unless it's a blatantly abusive situation (which, of course, happens among stay-at-home parents all the time).

It sounds like the OP has figured things out anyway.
You can read anything into anything w/ these online posts. As a SAHM, should I be offended because you are implying that I have a higher stress level, have no interaction w/ adults and my competence and skills are unrecognized? Of course not, I choose to believe that's not your meaning or intent, so why read so much into Mothra's post?
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#131 of 256 Old 10-28-2007, 04:31 PM
 
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You said "my commitment to my children is more important that my commitment to a bank." This implies two things:

1. By taking a full-time job out of the home, you would be violating your commitment to your children.

2. You think it's okay to go back on your (signed, legal) word.
No, actually, I was not implying that taking ANY full-time job would be violating a commitment to my children. Taking a crappy full-time job that I'm going to hate and will contribute to an already stressful living situation would be violating a commitment to my children. Sometimes that is unavoidable. If it were me in this situation, that would be my last option. Dead last. I would deal with forclosure first.

I don't think it's as cut and dried as a signed, legal word. (And you're including this in your post because you think it's offensive? I'm not sure what it has to do with this sorry attempt to stir up more contempt between WOHM and SAHM, neither of which I am, but I'll address it anyway.) I think what mortgage companies are doing, in regard to these ARMs, should be illegal. In addition, NO ONE could have anticipated the increases in gas prices, which has subsequently driven up the cost of food and everything else. Again, this has NOTHING to do with the SAHM/WOHM "debate."
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#132 of 256 Old 10-28-2007, 06:49 PM - Thread Starter
 
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Okay, so, we have figured a few things out since my last post.

First, about the showing Saturday; We cleaned the house from top to bottom. We staged it perfectly. We raked as many leaves as we could and brought them to the composter. Pretty much our life was all about cleaning from the time we found out we had a showing until Saturday when we left the house. I baked cookies. I set out a plate with the cookies on it, and some napkins, and a bowl full of ice with some cans of pop in it and I wrote a note that said "Welcome, help yourself." I sent Dh and Ds out of the house and walked through again making sure everything was perfect. We thought positive thoughts all day Saturday, saying things like "maybe they wanted a yard with trees in it", or "maybe they wanted to live right by the school" or "the church" or "the lake" or "maybe they want an older house with character". Then Saturday night we came home to a full plate of cookies, melted ice with cans of pop floating in it, and no realtor's card anywhere to be found. They didn't come : We don't know why, the realtor is still trying to reach them for feedback.

Second, I called the bank, again. Despite what has been said here, the bank has zero interest in helping us fulfill our obligation to them. Even though I decided to try to do the right thing and pay them off, they wont let me. They told me that I can not pay them back for the amount owed after we sell the house for less since we will no longer have a house as colateral to the loan. The woman I spoke to said that I would need to talk to a loan officer to get a new loan to pay off the amount owed in order to make that plan work. I told them "but I want to do the right thing and pay you, and that benefits you because then you will get your money, and that benefits me because then my credit wont get ruined." But it was no use, they said they could not do what I was proposing without taking out a new loan. No one will give me a 30 year loan for 20 - 50 thousand dollars without any colateral. Apparantly the bank wants to loose money and they want that loss reflected on my credit over taking the risk that they might get there money back if they tried working with me. It makes no sense, but big corporations rarely make sense I guess. I find it odd that everything I hear says how much banks are working with people, but I have found that they do not want to do anything for me whatsoever. :

Third, we found out that our heating bills are going to rise this winter, and the gas prices are projected to reach five dollars a gallon by next summer. Dh's job is having two phases of lay offs, one in a week or so and another sometime in 2008.

Fourth, we spoke to our realtor. We told him we were thinking of a quick sell and right away he said that he thought that might be a good idea. He said that the market where we live is saturated with newer homes and the houseing prices are falling rapidly. I told him that we never thought taking an ARM would be an issue since we never bought a house in anything except a crazy market. Everyone told us the house prices would level off, but we never ever even considered the possibility that they would go down, and so fast. He said that no one expected this and it is only the beginning. He said the marked has been stable for 20 years, and no one could have predicted this. He agreed that ARMs were pushed and that they are a bad idea for a lot of people. He said we are just entering the wave of ARMS coming up and in the next six months we are going to see massive amounts of quick sells and forclosures. He advised us to do a quick sell ASAP. He said that at a certain point banks will likely stop allowing them and simply force forclosures. He said the market is not predicted to recover in the forseable future, and if we can't make it here we must do a quick sell now.



We are packing. We wont pay rent in November and then we will start the process of the quick sell. The bank may asign us a realtor of there own, so I feel bad for our realtor, and I really respect his telling us to do a quick sell for own good, even though he likely wont make anything off of our home sale now. He is going to lower the price of the home to the minimum that we could walk away free and clear with, just on the small possibility that in the next 30 days we will generate some interest in the home. Not likely, the house prices around here are just plumeting.

I'm scared for us, and for our economy. Despite my original posts, I had sort of had second thoughts and decided to try to get out this in an honorable way, but it just doesn't seem possible. When we were talking months or a year of sticking it out, it is a question of should we stay or go. But when we are talking years and years, there simply isn't a choice. We have to go.

I'm sorry if our decision offends anyone. I hope you all understand that we are decent people that do try to do the right thing. Sometimes it's hard to balance out what is right when you have to consider so many different aspects to a situation. It's hard to explain everything that is affecting this decision in one thread, but there are a lot of reasons that we want to leave here and put this place and the events that have happened since we moved here in the past. And also the knowledge that things are just going to keep getting worse, more expensive, and we wont be able to make it much longer no matter what we try to do with the situation.

Thanks again everyone for all the ideas and advice.
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#133 of 256 Old 10-28-2007, 07:34 PM
 
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Jennica--I'm sorry the bank won't work with you. At this point, I certainly wouldn't feel guilty since you tried to do everything you could to make it "right." I just really wonder, though, if financially you guys wouldn't be a whole lot better off just staying where you are for the next couple of years (taking on whatever pt job you'd need to to make ends meet).

Your RE agent makes money even if **you** are selling at a loss--it's just a percentage of the sales price. I would strongly urge you to contact a financial advisor before making such a radical decision as ceasing payment/doing a short sale.
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#134 of 256 Old 10-28-2007, 09:42 PM
 
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I'm sorry the bank isn't working with you, you're right they aren't making any sense at all. I hope in the long run things work out for you guys
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#135 of 256 Old 10-29-2007, 01:14 AM - Thread Starter
 
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I just really wonder, though, if financially you guys wouldn't be a whole lot better off just staying where you are for the next couple of years (taking on whatever pt job you'd need to to make ends meet).
Not really, we've been over every scenario, working the numbers and trying to think of everything involved. If we move, we will be saving about $400.00 or more on mortgage/rent, about $100.00 or more on gas, and several hundred dollars over the winter months in gas and electric bills. We will likely save about $50.00 a month on misc. utilities that tend to be either included in the apt. rent, or less than if we lived in a house. With the money we save on those things, we will be able to start paying down our debt and thus our monthly credit card bills will start to decrease. I will also be able to find employment a lot easier once we move to a bigger city. We are going to look for a caretaking apartment with reduced rent first, or I can advertise in the apartment building or neighborhood to do childcare part time (which is an idea I got here). I will use this extra income to pay off more of the credit card debt (which we aquired in only three years of living here because the mortgage has always been more than we could afford). I will then start attending one of the many colleges in the area, and work towards getting a degree, or learning a skill that will help me find employment that I find satisfying and fullfilling. Dh will then be near several options for employment (now he is only close to his current company, which he may get layed off from) and he will be able to find a job that could pay more. Dh would like to continue his schooling as well. We were both raised in a religion that was against higher education, so we did not get the opportunity to go to college. We don't want to wait for years longer before we have the opportunity to go again, we are already in our early 30's, so we really want to get started in getting an education finally.

I know you mean "financially better off" as in not ruining our credit. But we have been told that a quick sell is better than a foreclosure on your credit, and that a few missed payments wont bring down an excellent credit score too low to be approved to rent. If so, my parents and Dh's Mom have room for us to move in until we can build our credit back up enough to get a place. But I really don't think that will happen. Many duplex owners don't even run credit checks, and we would be really happy with a duplex so that Ds will have a yard to play in. So, I feel it's time to cut our losses and move on before it's too late and we really get stuck here.
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#136 of 256 Old 10-29-2007, 02:25 AM
 
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Jennica, I used to work at a bank, and honestly, I don't know where the news gets off saying, "Call and work something out before you miss a payment." They completely ignore people, calls or no calls, until they miss a payment.

I was talking about this with DH today. It's not *just* the ARMs.

It's the skyrocketing gas, utility, and food prices.

It's the fact that the ARM teaser rates were so low, that even a good refi results in a higher house payment.

It's the fact a lot of the housing bubble was fueled by developing previously rural areas without solid employment nearby and no infrastructure, leading to rapidly increasing taxes and homeowner's insurance.

It's the aggressive tactics used by mortgage brokers, primarily, "Oh, buy now, before prices soar even further, and you're priced out of the housing market FOOOREEEVERRR!"

I've since moved to the U.P., but in the county I was born in in lower Michigan, and lived in or next to for most of my life, one in three homes is in foreclosure. You are not alone in this. A lot of smart people were duped.

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#137 of 256 Old 10-29-2007, 10:38 AM - Thread Starter
 
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Jennica, I used to work at a bank, and honestly, I don't know where the news gets off saying, "Call and work something out before you miss a payment." They completely ignore people, calls or no calls, until they miss a payment.

I was talking about this with DH today. It's not *just* the ARMs.

It's the skyrocketing gas, utility, and food prices.

It's the fact that the ARM teaser rates were so low, that even a good refi results in a higher house payment.

It's the fact a lot of the housing bubble was fueled by developing previously rural areas without solid employment nearby and no infrastructure, leading to rapidly increasing taxes and homeowner's insurance.

It's the aggressive tactics used by mortgage brokers, primarily, "Oh, buy now, before prices soar even further, and you're priced out of the housing market FOOOREEEVERRR!"

I've since moved to the U.P., but in the county I was born in in lower Michigan, and lived in or next to for most of my life, one in three homes is in foreclosure. You are not alone in this. A lot of smart people were duped.
Thanks for that. Everything you say is totally true in our case. We could have handled an increase in mortgage if everything else had not increased too. And the bank wants nothing to do with working with us.
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#138 of 256 Old 10-29-2007, 10:40 AM
 
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First I will say, I don't presume to know the OP or to judge her, and the following comments are general in nature.

I think it is really problematic to say things like "But the banks were wholly complicit in misleading people about "what they could afford" by relaxing the standards and creating new loan products to attract more borrowers"
and "lots of people were duped."
I don't disagree that the banks had something to do with this. But I think every borrower needs to know what they can afford to pay back. They should not count on future raises, rising home values, or falling interest rates. They should always get a fixed rate mortgage for an amount that is about 25% of their take home pay, or less. This is not a difficult guideline to locate, if one were to do one's research.
And if you can't afford to buy, you can't afford to buy. It is not as if being a homeowner makes you a real adult, or an actual American. The fact that so many people will sacrifice so much to get into a home speaks loudly about the type of society in which we live, and the type of values that society espouses.

Like I said, this post doesn't have much to do with the OP. But frankly, I'm tired of hearing excuses about the housing market and plans to help these struggling homeowners. Not everyone can buy a house. Not everyone should buy a house. Not everyone can afford they house they want. And I do not think anyone aside from those home buyers (excluding cases of fraud, etc) should be responsible for remedying the situation.

*end rant*
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#139 of 256 Old 10-29-2007, 11:20 AM
 
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It is what it is. You made a hard choice, and it doesn't make you a terrible person. Good luck with everything to come.
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#140 of 256 Old 10-29-2007, 12:19 PM
 
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Jennica--

Hugs and not much advice. I'm not really sure what I would do in your shoes. And it really stinks that the showing no showed.

I do disagree with your realtor about how the market has been stable. The twin cities real estate market has been crazy and evaluations have grown much faster than income for a long time. Some people that bought at the begining (or middle of the boom) and sold at the top did really, really well.

I think a lot of people have banked on continued appreciation to keep afloat and are in even crappier situation than your family. You just banked on a stable home value and stable expenses.

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Fourth, we spoke to our realtor. We told him we were thinking of a quick sell and right away he said that he thought that might be a good idea. He said that the market where we live is saturated with newer homes and the houseing prices are falling rapidly. I told him that we never thought taking an ARM would be an issue since we never bought a house in anything except a crazy market. Everyone told us the house prices would level off, but we never ever even considered the possibility that they would go down, and so fast. He said that no one expected this and it is only the beginning. He said the marked has been stable for 20 years, and no one could have predicted this. He agreed that ARMs were pushed and that they are a bad idea for a lot of people. He said we are just entering the wave of ARMS coming up and in the next six months we are going to see massive amounts of quick sells and forclosures. He advised us to do a quick sell ASAP. He said that at a certain point banks will likely stop allowing them and simply force forclosures. He said the market is not predicted to recover in the forseable future, and if we can't make it here we must do a quick sell now.
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#141 of 256 Old 10-29-2007, 12:36 PM
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Jennica -
I'm so sorry to hear that all your effort for the showing came to naught. How inconsiderate of the realtor, not to at least come by with an explanation.

Selesai - as I said in my post, yes, buyers also need to make reasoned decisions about taking on mortgage debt that include projected increases in other costs of living. But I do not agree that the fault lies solely with the borrowers, and that they should bear the brunt of the "blame" for this mess. I think the worst that many borrowers are guilty of is being hopeful and optimistic and believing the marketing pushed at them by the mortgage banks that are now falling apart.
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#142 of 256 Old 10-29-2007, 12:38 PM
 
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I don't disagree that the banks had something to do with this. But I think every borrower needs to know what they can afford to pay back. They should not count on future raises, rising home values, or falling interest rates. They should always get a fixed rate mortgage for an amount that is about 25% of their take home pay, or less. This is not a difficult guideline to locate, if one were to do one's research.


And if you can't afford to buy, you can't afford to buy. It is not as if being a homeowner makes you a real adult, or an actual American. The fact that so many people will sacrifice so much to get into a home speaks loudly about the type of society in which we live, and the type of values that society espouses.
Selesai- The second paragraph I completely agree with. The first paragraph troubles me, and I'll tell you why: Banks and brokers LIED to people. They didn't "mislead" anybody- they lied. This has been a Great American Swindle, just like the S&L scandal was.

Please let me explain: When banks started writing 30 year (rather than 15 year) mortgages, this coincided with masses of women, especially young moms, entering the workforce. The combination of these two factors made A LOT more people not only want to buy a house, but think that they could and should buy a house. Then interest rates fell- and fell- and fell. All of sudden, in the span of less than 40 years, a two income family and a 30 year mortgage with a single digit interest rate became the norm. So demand for a house didn't just continue to boom- it exploded.

Now, what happens when demand of a commodity increases? Prices increase. In this case, the commodity wasn't housing, per se, but home ownership, which is important distinction. (Most landlords have NOT made a killing in this latest real estate boom, which is a telltale "bubble" sign, and while rents did go up, they did not go up nearly as fast or as high as home prices did.)

At the same time that "2 incomes/30 yr note/low rate" phenomenon was happening, the fed decided that all those silly bank regulations weren't really needed. So, while banks used to be fairly tightly wedded to the "no more than 28% of your gross income goes to PITI" standard, all of a sudden it didn't matter anymore. Plus, you had all sorts of people, particularly under 40 folks in urban areas, saying, "28%? What? I pay 40% in RENT RIGHT NOW! Which is why I can't get a down payment together, and with the way house prices keep going up, I'll NEVER be able to afford anything..."

The problem with this sort of thinking is that homeownership is almost by definition more expensive than renting- besides taxes and homeowner's, maintence is a very big deal and huge responsibility, not to mention utilities.

But what did the banks do to combat this thinking? Nothing. They exploited it. Now, banks didn't control the fed's decision to lower interest rates, or loosen regulations, but they did control who they wrote notes to, and how. And the hotter the homeownership fever became, the crazier the prices got, the crazier the mortgage products became. And the fed? The cozy-with-megabanks-and-Wall-Street, part-of-a-business-worshipping administration fed did NOTHING to stop lenders from selling people interest only ARMs with beginning payments at 30% of their pay. The line in the quote that I bolded, while I think it is still a reasonable standard, all the people in the business decided that it wasn't any longer.

Lenders and brokers outright lied to hundreds of thousands, probably millions of people to convince them that those old bank regs and percentage formulas were just that- old, outdated, unrealistic.

I know because I helped them.

I got $100 cash (the bank paid the taxes for me) for my FIRST mortgage referral, and the bonuses went up from there. I was nobody, I just worked in a branch, and I made more in mortgage referral bonuses the year that I was there than I did in wages.

I have heard them all- "If you can pay in a house payment what you pay now in rent, I can get you in a house"; "If you don't buy soon, prices will just double again"; "You can refinance in a couple years, it'll be fine"; "If this house doesn't work out for you, you can just sell it and walk away with a nice nest egg"; "Oh, no, a HELOC isn't a second mortgage- it's just a line of credit to help you out if you don't have a down payment"; ad nauseum.

The fact is, lenders were speculating, only they did so on the backs of the new homeowners.

For generations, we counted on banks to lend money sensibly. Then we counted on the government to oversee the process to protect everyone after the lessons of the Great Depression. All of a sudden, in a decade's time, we are supposed to just throw that trust down the toilet and all get JDs in real estate so that we can each individually wend our way through the murky, complex waters of macro economics and societal shifts? Horse manure.

My personal responsibility is of high importance to me, but (and here's why my argument becomes admittedly philosophical in nature) I would submit to you that the whole entire reason we have institutions, figures of authority, and government is to help pick up some the slack wherein personal responsibility ends. Because honestly, how far do we take it? Do I just take all the blame if my house burns to the ground because I didn't have the foresight to buy myself a fire engine?

As I pointed out in an earlier post, another nasty consequence of the housing bubble was giant increases in property taxes and homeowner's insurance. The tax issue is usually the worst in newly developed areas, where all of a sudden communities need three times as many roads and schools, yet they have little or no commercial space to tax. The homeowner's problem is real, too- my parents bought a house in FL in 2003, and even though they are in the extreme northwest of the state, well outside the flood plane, their homeowner's has TRIPLED. When insurance and taxes go up, any bank figures regarding what PITI you should be able to afford based on your income get shot to hell. And if the bank can't control these factors, and could not predict them, you cannot expect the average homeowner to be able to.

When you take all these factors and combine them with galloping energy and food prices, this is where we end up- not with dozens of foreclosures, but millions. We currently have the highest foreclosure rate since the '30s. You cannot chalk that up to personal responsibility when clearly there were much larger forces at work.

Trying to turn hearts and minds toward universal healthcare, one post at a time.
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#143 of 256 Old 10-29-2007, 04:51 PM - Thread Starter
 
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They should always get a fixed rate mortgage for an amount that is about 25% of their take home pay, or less. This is not a difficult guideline to locate, if one were to do one's research.
Wow, you must have had some nice opportunities in life to be able to live by this statement. Dh and I got married at age 21, neither of us had gone to college, and both of us volunteered for our church and only worked part time. We have since left that religion, but we are married now with a child and the effects of of not having had those opportunities are still with us. If we had lived by this standard during our 11 year marriage, we would have lived in a crack house in the city for most of it. Honestly, I'm glad you make so much money, but we never have, even when we were both working full time. We have done some good things, like put Dh through two years of college, and payed off all of our cars early, but for the most part we have always struggled along financially.

By the above calculation, we still to this day would not be able to even rent for 25% of our take home pay. I mean we could rent, but in a very bad area, nowhere where you would want to raise children.

It's easy to say that "the information is out there so you should have found it", but the fact is, I had no idea that there was information that I was supposed to find. When we rented, one of DH's checks went to rent, and the other to everything else. When we bought our townhome, one of Dh's checks went to mortgage and one to everything else. So when we moved here and the mortgage amount came out that one of Dh's checks would go to mortgage and one to everything else, it didn't seem wrong to us or alarming or scary in any way. That is how we had been living life for the 8 years that we were out on our own and it had been going fine. Only recently has that other check of Dh's not been covering all of our other expenses. The crazy thing is that Dh makes more now than ever before (I mean after inflation is accounted for), so I still feel like I have no idea what happened. I still look at the numbers and wonder where I am going wrong and why these aren't adding up anymore.

I'm not saying we didn't make a mistake. We obviously made a very big one. I'm just saying I didn't know any better when we made it. No one told us anything that made us worry about what we were doing. Our realtor, our lender, our parents, our siblings, our friends, none of them said that our mortgage payment had to be only 25% of our take home pay. Everyone we knew was living the same way as we were. We grew up in homes were our parents struggled to make ends meet and spent half of their monthly pay on rent/mortgage too.

So, like I said, I'm glad you've had such great opportunities in life. It sounds like your doing great financially and it also sounds like you are very knowledgable about things that I never even knew that I should know or look for. But, I think there are a lot of people out there like me, and I don't think it is entirely our fault what is happening now.
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#144 of 256 Old 10-29-2007, 06:00 PM
 
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Wow, you must have had some nice opportunities in life to be able to live by this statement. Dh and I got married at age 21, neither of us had gone to college, and both of us volunteered for our church and only worked part time. We have since left that religion, but we are married now with a child and the effects of of not having had those opportunities are still with us. If we had lived by this standard during our 11 year marriage, we would have lived in a crack house in the city for most of it. Honestly, I'm glad you make so much money, but we never have, even when we were both working full time. We have done some good things, like put Dh through two years of college, and payed off all of our cars early, but for the most part we have always struggled along financially.

By the above calculation, we still to this day would not be able to even rent for 25% of our take home pay. I mean we could rent, but in a very bad area, nowhere where you would want to raise children.

It's easy to say that "the information is out there so you should have found it", but the fact is, I had no idea that there was information that I was supposed to find. When we rented, one of DH's checks went to rent, and the other to everything else. When we bought our townhome, one of Dh's checks went to mortgage and one to everything else. So when we moved here and the mortgage amount came out that one of Dh's checks would go to mortgage and one to everything else, it didn't seem wrong to us or alarming or scary in any way. That is how we had been living life for the 8 years that we were out on our own and it had been going fine. Only recently has that other check of Dh's not been covering all of our other expenses. The crazy thing is that Dh makes more now than ever before (I mean after inflation is accounted for), so I still feel like I have no idea what happened. I still look at the numbers and wonder where I am going wrong and why these aren't adding up anymore.

I'm not saying we didn't make a mistake. We obviously made a very big one. I'm just saying I didn't know any better when we made it. No one told us anything that made us worry about what we were doing. Our realtor, our lender, our parents, our siblings, our friends, none of them said that our mortgage payment had to be only 25% of our take home pay. Everyone we knew was living the same way as we were. We grew up in homes were our parents struggled to make ends meet and spent half of their monthly pay on rent/mortgage too.

So, like I said, I'm glad you've had such great opportunities in life. It sounds like your doing great financially and it also sounds like you are very knowledgable about things that I never even knew that I should know or look for. But, I think there are a lot of people out there like me, and I don't think it is entirely our fault what is happening now.
I just read your reply from the PP and I thought you needed that. I agree that I think it is fabulous that some people are so knowledgeable on mortgages, but I just bought my first home in May and I can say from experience I don't know squat about them. I do know that our mortgage is $1200 a month and we bring home, after taxes, $5000 a month. So we fit into the 'equation' of 1/4 your salary pretty well. However, when I SAH after we have a baby, our take home will be $3800. So it will be 1/3 our salary that goes towards a mortgage.

I dont think that that equation can be applied to everyone. I have friends in NYC where over half of the salary goes to housing because it is just so terribly expensive. I dont think you are wrong for wanting a house in a nice area. You were obviously willing to make sacrifices to make half your salary work for your remaining expenses. Everyone gets in over their heads at times.

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#145 of 256 Old 10-29-2007, 08:09 PM
 
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I honestly am suprised you didn't do more (at least a little!) research before taking on such considerable debt. Even just browsing on some bank websites to check out loan information you'll find "how much can I afford" calculators. Here's an example:

http://www.becuhomeloans.org/calcula...ll_maxloan.asp

While I agree that some lenders were predatory, there's also a **basic** amount of research/due diligence that should be expected on the part of the purchaser.

Finally, Jennica, I wanted to respond to your "oh it must be so great to have so many opportunities" comment. My husband and I are an example of a hard working, professional couple that despite advanced degrees cannot afford a home in our high cost of living area. That means we don't buy a home. I could bemoan our circumstances, but at the end of the day we don't "deserve" a house until we've saved and have the income to support it. It's a bummer sometimes, sure, but waiting and renting is the responsible thing to do. Your post makes it seem like you feel almost entitled to home ownership and I don't think that's fair.
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#146 of 256 Old 10-29-2007, 09:27 PM - Thread Starter
 
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I honestly am suprised you didn't do more (at least a little!) research before taking on such considerable debt. Even just browsing on some bank websites to check out loan information you'll find "how much can I afford" calculators. Here's an example:

http://www.becuhomeloans.org/calcula...ll_maxloan.asp

While I agree that some lenders were predatory, there's also a **basic** amount of research/due diligence that should be expected on the part of the purchaser.

Finally, Jennica, I wanted to respond to your "oh it must be so great to have so many opportunities" comment. My husband and I are an example of a hard working, professional couple that despite advanced degrees cannot afford a home in our high cost of living area. That means we don't buy a home. I could bemoan our circumstances, but at the end of the day we don't "deserve" a house until we've saved and have the income to support it. It's a bummer sometimes, sure, but waiting and renting is the responsible thing to do. Your post makes it seem like you feel almost entitled to home ownership and I don't think that's fair.
I'm not saying that at all! I don't think I deserve a home. I have said repeatedly that we made a big mistake! Look near my avatar for where I live, it says "Big Mistake", Minnesota, it doesn't say "the house I can't afford but am entitled to, Minnesota"!

Furthermore, here where I live, if DH and I both had degree's, then we would be only spending 25% of our income on mortgage/rent. I don't know where you live or how much it costs to buy a home there. I wasn't speaking about you, I was speaking about us. We don't make enough to do that, and we wouldn't make a enough to that even if I worked full time! If somebody does make enough to do that with rent or mortgage then I think it's great that they are making that much money. Why is that so wrong to say? I've never made that much money and I wish I did, so why is it so bad to say, "Hey, you can afford to only spend one quarter of your take home pay on where you live, that is awesome, I'm so happy that you have that opportunity!" Why is that so bad? It seems like everything I say on this thread is wrong. If I try to explain my feelings about our situation people accuse me of having this sense of entitlement. If I say I made a mistake, people say too bad, deal with it. If I say it was partially the banks fault, NOTE: PARTIALLY!!!, people say "well it's your fault for not knowing, or looking into it more, or doing more research." Sometimes people screw up and they make mistakes. Big huge mistakes.

I looked at mortgage calculators, which don't take into consideration whether you have a $400.00 a month car payment or not, they are just very general. And the one you linked to was not very far off from what we are paying. We didn't have any credit card debt or car payments when we moved in, so we thought we could nudge up the price a bit. I also already explained that it was never a problem in the past that half of our income went to where we lived and the other half to all other expenses. I just didn't know. I honestly didn't. If your trying to make me feel like an idiot, then congratulations, you succeeded.
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#147 of 256 Old 10-29-2007, 10:09 PM
 
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... I looked at mortgage calculators, which don't take into consideration whether you have a $400.00 a month car payment or not, they are just very general. And the one you linked to was not very far off from what we are paying. We didn't have any credit card debt or car payments when we moved in, so we thought we could nudge up the price a bit. I also already explained that it was never a problem in the past that half of our income went to where we lived and the other half to all other expenses. I just didn't know. I honestly didn't. If your trying to make me feel like an idiot, then congratulations, you succeeded.
jennica,
You don't need me to defend you and I certainly can't put it more eloquently than ShaggyDaddy or a few of the others who understand the industry.

However, I did want to offer my moral support and encouragement. I hope the bank has a reality check and decides to work with you or that you find a buyer.

Good luck and please keep us posted.
~Cath
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#148 of 256 Old 10-29-2007, 10:33 PM
 
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Jennica--have you posted your situation on http://www.creditboards.com? I think there are actually some very helpful people there, and there is a section both for just mortgages as well as for your personal credit.

There are also people who might be able to help you repair your credit if you do go into foreclosure.

I can't believe they won't do anything until you miss payments. It's like the world is run by robots now. It stinks.
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#149 of 256 Old 10-30-2007, 12:25 AM
 
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Thank you Leta for your insight :-)

And my 2 cents worth -

This sell-at-a-loss situation can happen to ANYONE, even with a financially conservative 20% down payment. Real estate is subject to overall "market risk" (related to interest rates) and also local risk factors. For example, if GM closes a factory in location X, employing 2,000 people and opens a new factory in Y, employing 2,000 people, property values will be affected in both places. Many "working class" American cities have lost many highly paid manufacturing jobs to overseas. Hence the term "rust belt."

Example: person buys a house in suburbs for $100,000, with 20% down

*Due to local economy and high gas prices, house value drops by 15%
*Person needs to move for job ... and now owes money to the bank...

resale of house: $85,000
transfer tax 1% - $850
real estate agent 6-7% - $5500
Pay back the bank -$80,000
and other misc selling expenses!

In this case, even though the homeowner was conservative and put down 20%, they are still SOL. If you are a homeowner, check out www.zillow.com for estimates of your regional market performance.
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#150 of 256 Old 10-30-2007, 01:09 AM
 
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My personal responsibility is of high importance to me, but (and here's why my argument becomes admittedly philosophical in nature) I would submit to you that the whole entire reason we have institutions, figures of authority, and government is to help pick up some the slack wherein personal responsibility ends. Because honestly, how far do we take it? Do I just take all the blame if my house burns to the ground because I didn't have the foresight to buy myself a fire engine?
Leta, this is a really interesting point. With the internet, it seems that it should be so easy to become an expert whatever you want. But it hasn't always been that way. We should be able to trust the system at some point. Just like we *should* be able to trust the medical system, ect.

Texmati-- Knitter, Hindu, vegetarian, WOHM. Wife to superdadsuperhero.gif and mom to DS babyf.gif24 months, and DD boc.gif 8 months! .

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