DISQUS

cowboyneok · 1 year ago

Although I'm sure there are lots of stories of people who played the system, I'd rather see the homeowner's bailed out than the lenders. I totally resent my tax dollars going to help those at the HIGH END of the income spectrum scale than keeping the poor in their homes. I met a hard working African American woman, veteran who was just foreclosed upon. She is someone I would like to see keep her home. There are lots of people like her out there.

Its a complicated issue. There are those, indeed, like the yuppie couple who gambled and lost but there are a LOT of people like her, an African American hard working woman veteran. She is a big volunteer type, as well. I met her at the American Legion where she volunteers three days out of the week. I hate to see people like that losing their home, and its not good for our economy, either.

Also, that poor 90 year old woman in Ohio who shot herself, didn't get a lower rate. She was getting booted out on the street, as well. She then got a lower rate, or something so I guess if you shoot yourself they might reconsider?

Bush_Bites · 1 year ago

I'm tired of the sob stories and I should be annoyed about this too, since I'm paying 6.35 percent.

But if the buyer and the bank made some kind arrangement on their own, I guess it's better than the taxpayers having to bail either of them out.

John Aravosis · 1 year ago

The bank was taken over the FDIC. They didn't tell you that one in the story. So it may be YOU who just bailed out this woman.

HereinDC · 1 year ago

John, I saw that too, I use to be in the mtg, business. I think I heard them say that she has a longer term now on her mtg. maybe 40 years not 30 years.....so....she really is not building up any equity in the house....It's not like she really is making a "killing"......yes, she is getting an % rate break....but she really is not building any equity.
Better to have someone in the house than rather a foreclosed house.

John Aravosis · 1 year ago

But it's not better for everyone. It's better for her. And it's better for her neighbors who don't want to lose value on their homes. It's not better for the first time home buyer, or the person who bought their home, made their payments, and now is trying to move into a nicer home, who now can't afford to buy her house, or other homes in nice neighborhoods like hers, because the prices have been artificially kept higher than they would be at current market rates. Part of supporting home ownership is helping those of us who want to buy a home, not disadvantaging those of us who want to buy a home. It's not just people who OWN homes who are involved here. That's what's bugging me. Anyone who wants to buy a new home is now facing artificially high rates, and that's not fair.

Busboy · 1 year ago

Excellent post, John. Almost all of the call-ins on the radio today agreed with you. I agree with you. Maybe we should have a 3 month "freeze-out" where everyone doesn't pay their mortgage for 3 months. That would send a message. I also agree with cowboy. Why the hell should we be bailing out derivative jerks who schooled the system by inventing their cute little CDO's and CDI's, and all of the other instruments that allowed them to hedge on billions of dollars for cents on the dollar. And, listen, don't take any shit from the Europeans. Their money managers knew this house was built on sand.
End of rant...........

vkobaya · 1 year ago

I agree with cowboyneck. Home ownership is a good thing. Home owners are contributing members of society who send their kids to college, pay taxes and leave the world better than they found it. Until this generation, home ownership was encouraged with low interest loans and low cost housing. These are far, far better people than the damn CEOs and crooked Wall Street executives or the members of this administration. These are the contributing members of society who will make this nation a better place.

vkobaya · 1 year ago

Don't buy into the right wing lies and propaganda. It is the CEOs who gamed the system, not these beleaguered homeowners. At worst the homeowners miscalculated how much they could afford but the banks lied to them and always intended to cheat them. Only ones that I think don't deserve help are those people who are in trouble because they bought a half dozen or more homes all on credit parlaying or leveraging each home as collateral for the next "investment."

Patriot · 1 year ago

The really scary question is how many people who are struggling, pay their mortgages but, pay them late month after month are beginning to question this tactic for themselves. I am periodically in this group and I DO NOT CONDONE the act of defaulting for a better interest rate even though mine is at 8.65. Nonetheless, I know people that defaulted over a year ago, haven't paid a mortgage payment since, have had no action against them, the lender even paid off several years of back taxes and on and on.

The situation out there is truly beyond belief.

Bush_Bites · 1 year ago

People just quit paying and nothing happened to them?

I had no idea you could even get away with that.

Busboy · 1 year ago

The mortgage company has to wait until there is a sufficient default amount vs the value of the property in order to proceed. Otherwise, they evict the homeowner, pay a lot of legal fees and can't recoup the loss. Not much exciting about foreclosing a home in a market which is dropping like a rock...

Patriot · 1 year ago

YOU CAN'T get away with that. At least that's the way it was supposed to work. I have to believe it will eventually catch up to these people but, after 1 year it has been nothing but, question and response from the lender.

These same people also managed to not pay on a $ 65,000 Lincoln Navigator for 2-1/2 years before the bank finally repossessed it. They only repossessed it because the driver finally inquired 3 times why the paperwork for refinancing had never been processed. MORAL of the story; banking is incredibly corrupt at the executive levels.

vkobaya · 1 year ago

You aren't deliberately gaming the system and I don't think you should be pointing the finger at others. An 8.65 interest rate on a mortgage is criminal. It isn't you or those others who are criminals. Of course, those interests should be brought down to decent, fair, honest and affordable interest rates. In the past when mortgage rates got into the unreasonable level so that homeowners' payments went only to interest and principle grew, the federal government did subsidize loans to make them reasonable and affordable as home ownership is desirable and needs to be encouraged.

matty · 1 year ago

You described it perfectly John.

We read our paperwork, we bought a house we knew we'd be able to afford, we read the paperwork on our mortgage.

And now these people get a lower interest rate than us???

Bullshit.

FunMe · 1 year ago

I paid by the rules and all I got was a stinking t shirt!

I too decided to wait, although here in the LA area YIKES. A house costing $300K 5-6 years ago is now selling for over $800K.

I DON'T THINK SO!

So I don't have pity for those who gambled, especially MBAs who should have known that there was a necessary correction coming in the real estate market.

They all can sweat, and not sleep at night.

Me - I spend my weekend WALKING to the beach. Actually, since I work only 2 miles (saving on gas) from my job, I go to the beach for lunch as many times as I can. Sure I pay more for rent, but not as much as I would had I gone for an ARM in order to get real estate.

Hmm... I'll just sip my Capirihnas, get my buzz ... and go back to the beach while my nights are spent sleeping so well not worrying about a mortgage.

Stories like the one you wrote deserve no sympathy from anyone of us.

Busboy · 1 year ago

This month may be the "golden" time to buy a house. In the future, the "no money down" deal will probably be dead... I've even heard about the possibility of "negative interest" mortgages where the government would pay you to assume the principle debt on existing homes. That may come later this month.
Yes, Virginia, there is a "Big Rock Candy Mountain"...

driver1076 · 1 year ago

Heres the deal I saved my money for a decent down payment I shopped around until I found the house I could afford,neg.a fair price for both Myself and the seller calculated what payment I could afford in the worst situation (which were in right now) went to get a mortgage with a decent credit score 680 to 710 and could not find a lender for 6 months because I was only borrowing 120,000.00 this was only 5 years ago and every lender I went to told Me I could buy a home for 500,000 and I told them they were crazy,finally found someone to pick it up and now Im paying 7% after doing some research I discovered that the lenders were only making 8,000.00 on my mortgage instead of 18,000 to 26,000 they would make on the larger loan,Im self employed have been for over 10 years and they never once asked Me for ANY income documentation I never showed them anything except the account with the down payment in it.After I purchased My home I thought to myself this is going to fall and fall hard I figured it would last another 6 months or so to let the Repukes stay in power but when gas went through the roof and people had to buy everything at inflated prices the economy just couldnt hang on.Maybe I should just Sop making my payments and use the extra money for gas to keep My business going.

hdaman · 1 year ago

I bought a place I could afford. Now it is worth half of what I owe. Once the home prices settle I may find myself upside-down in my mortgage. If that happens, I and many like me will default and you will be looking at the second wave of this crisis.

John Aravosis · 1 year ago

Oh, is everybody sitting down? I just got off the phone with a friend who caught something we all missed in the story. When her rate went down from 7% (which is hardly whopping) to 4.8%, her monthly mortgage payments dropped $1,749. Yes, her monthly mortgage dropped by an amount equal to many of your TOTAL monthly mortgage payments. Assuming that figure is correct, her mortgage is for $1.2 million. That's who you just bailed out.

hdaman · 1 year ago

yeah... Responsible people with limited resources are road kill in our current environment. Trust me, once home values stabilize many people are going to look at what they owe and what their homes are worth. If rental rates drop by 10% I would have a hard time justifying 2300 a month for a fix-up condo.

driver1076 · 1 year ago

You know the worst part is My home is worth less than I paid for it and all the money i put down went right out the fricking window,plus since I have only lived here for 5 years about 95% of all the payments I have made have went right to interest.This is the last house I will ever buy.If I cant pay cash for the next place I buy I will build it myself even if I loss square footage I just dont care anymore and I will never put Myself through this again

Mickey7 · 1 year ago

This is exactly the problem with McCain's mortgage purchase program. They would have to make the same program available to everyone or there would be massive revolts about the unfairness of it.

Forty2 · 1 year ago

Oh fuck these douches who took on far more debt than they KNEW they couldn't repay even before they defaulted.

And fuck me for prudent, saving, no debt, and renting til prices stop falling. Damn, what a douche for doing the right thing. I should max out my cards and go get a new BMW and just not pay any of it. Grrr...

cogguy · 1 year ago

I've always wondered why these refinances necessarily need to be a 30 year fixed mortgage. If you're going to allow people to get a lower rate than those of us who carefully saved for our home purchase, why not also make them accept a much longer term mortgage, say a 50 year mortgage. Longer-term mortgages tend to have lower rates, but the total amount paid is much greater over the course of the mortgage. You could justify the reduction to a fixed rate that people could afford. Their payment would be more interest than principle (which would then go right back to the taxpayers who funded this bailout). They can always pay down the principle if they start making more money, and if the house increases in value (eventually), they could sell for a profit. So, the homeowner accumulates less equity but keeps their house and the taxpayers get the benefit of the added interest over the course of the loan. I don't see why something like this wouldn't work, but maybe I'm missing something?