cscottm
join:2002-05-09
Kent, WA
 ·Qwest.net
| [General] Housing Market & foreclosures
I was watching the news & they had a report about people protesting at the HQ for WAMU due to people needing help because they were being or going to be foreclosed on.
Can someone please tell me why someone would takes out an interest only, or ARM, etc type of Mortgage, when they knew in 3 to 5 years, the new payment was going to be too much for them to afford when they originally signed the paperwork ?
I keep reading articles about people being foreclosed on & I'm wondering on what percentage of these are the ones where the lender clearly said & on the paperwork "your payment is going up $500-$100 starting on mm/dd/yy"
I do know there are the people who during that time period would try to refi to a fixed rate or sell the house, however I am sure there are people who are still working at the same employer & doing the same job, that thought they would get enough of a raise to cover the $500-$1000 increase |
|
cocothebean
You Are My Nightmare
Premium
join:2002-11-16
Carson City, NV | What is mostly everyones hardest subject in school???
MATH!!!
 |
|
tao
Chaos Impends
Premium
join:2000-12-03
Lansing, MI
 ·Comcast
| reply to cscottm
Hate to rain on your rant, but.....
My house has already sold at auction. I don't want it back. I am fine with the outcome, but my situation varies a bit because my divorce terms gave me a year to sell and the market fell because of all the other forecloresures.
Consider this: The value of homes has dropped, with the exceptions of San Diego and Seattle. Everywhere else there is a range of reduced selling prices, due in part, to foreclosure sales.
Consider my home: Purchased in mid-2005 for 140k, auction price: 145k, current listing price: 85k, number of calls in last two weeks for home at $85k: zero.
I would buy the house for $85k, it is a steal at that price. I have the income, but with the foreclosure, I can't get financed. Lots of people can't get financed at any price. Lots of people got stuck because the banks were no longer offering loans at that consumers credit rating. Lots of people got stuck because they could not refinance the loan amount because the value of the home backing the loans had fallen.
The market is vastly changed from even 2 years ago. Please don't piss on these folks, some of whom are victims of their own idiocy, others are victims of the cheap money running into real estate two years ago, see Bear-Stearns for reference on that.
--
I play darts: »www.triple20dartingsupplies.com | »www.adaoflansing.com
I support unions: www. 1009aldrivers.org www.1039atu.com
|
|
Rob
In Deo speramus
Premium
join:2001-08-25
Kendall, FL | reply to cscottm
Because many of the ARM customers were lied to by their subprime brokers.
No excuse, but everyone is equally at fault. |
|
icp1
Premium
join:2000-10-13
Saint Louis, MO
clubs:
·AT&T DSL Service
·AT&T Southwest
| reply to cscottm
I agree in a way, it is a lot of the consumer's fault -- BUT, I bet 90+% of the ARM holders were told "if you have to hold it longer than this term, you can just refinance to a fixed rate".
And of course it is now impossible for those same people to refinance due to the banks giving out bad loans, falling values, etc. I know some people with great credit having trouble getting a standard mortgage... |
|
Phil
Rojo Sol
Premium
join:2001-06-11
Camarillo, CA
·DSL EXTREME
| reply to Rob
said by Rob  :Because many of the ARM customers were lied to by their subprime brokers. Is that the excuse these home-owners are using and the justification behind the government's bail-outs that are in the works? The whole bail-out scenario is what angers me the most, thinking that as a person with a family who decided to wait on buying a home, is now going to have my tax dollars spent bailing out those who didn't read the fine print. Not to mention the already massive amounts of money gone to bail-outs for the banks. |
|
Rob
In Deo speramus
Premium
join:2001-08-25
Kendall, FL
·Comcast
·AT&T Southeast
| said by Phil :said by Rob :Because many of the ARM customers were lied to by their subprime brokers. Is that the excuse these home-owners are using and the justification behind the government's bail-outs that are in the works? The whole bail-out scenario is what angers me the most, thinking that as a person with a family who decided to wait on buying a home, is now going to have my tax dollars spent bailing out those who didn't read the fine print. Not to mention the already massive amounts of money gone to bail-outs for the banks. The bailout angers me too. The issue should be dealt with between the bank and the customer. |
|
tao
Chaos Impends
Premium
join:2000-12-03
Lansing, MI
·Comcast
edit:
May 9th, @10:07PM
| reply to cscottm
nm
--
I play darts: »www.triple20dartingsupplies.com | »www.adaoflansing.com
I support unions: www. 1099aldrivers.org www.1039atu.com
|
|
Technogeez
Misanthropic curmudgeon
Premium
join:2007-01-20 | reply to cscottm
I dunno -- people who eat the free candy at the bank can't complain when they get cavities...
--
Read your contract and TOS before signing anything. |
|
X Man
Sober
Premium
join:2005-09-05
USA
| reply to tao
said by tao :Damn, you folks just don't seem to get how it works. If the private sector will not take a risk on refinancing loans, then those people are screwed. Don't you think that those folks should have done their homework, and realized there was a very real possibility that these easy loans would dry up?
No, of course not. It's not the fault of the borrower. They are victims. 
Look, I know there were a lot of liars in this mess. However, to believe the Real Estate Agent or the Mortgage Broker at face value was a pretty foolish move. No?
Newsflash! Land, Property and homes don't always go up in value, regardless of the fact that the brokers told the borrowers so. Additionally, the ridiculous assumption that this cheap money would be freely available to a home buyer with an ARM 2, 3 , 4 or 5 yrs out is sad.
In 1981 the Prime Lending Rate was a staggering 18.47 % and the buyers during this most recent boom assumed they'd easily be able to get re-fied for under 6 or 7 % and that the value of their homes would grow by at least 20% annually! Foolish.
said by tao :Therefore, the government allocates money to the real estate markets to provide the necessary liquidity to stabilize the markets. If you don't need a real estate loan, the influx of money preserves the value of your home. Oh no it don't. As the Fed "prints" and dumps Billions of dollars of their funny money into the DOW or the Real Estate market it further de-values the Dollar making the ability to borrow for the typical consumer harder as inflation soars. So, it makes no difference if the perceived, or estimated value of a home is "preserved" if one can't borrow enough to buy it. As a symptom of this bailout the Dollar collapses making the price of OIL and therefore everything else soar!
If these "buyers" [speculators is more appropriate] bothered to do a little due diligence they wouldn't have agreed to taking out ARMS with "Stated" earnings as the basis for these loans which were far beyond their means to begin with.
So, those that didn't fall for this crap are going to be left to pay for it all.
Regards,
Mike |
|
