Rant: What a waste of breath..

[HelpThisGirl]

wow,I don't think we even have homes under 150K here! Where do you live? I need to move there!

We have a high rate mortgage that we are upside down on. Our house is financed for 90,000 but only could be sold for about $65,000 (and that may be a stretch). We paid $69,000 for the house in 1999 and refinanced it a few years back to try to take control of the credit card debt (which of course didn't work). It's a subprime mortgage with American General Finance. We're keeping the house as we like the area that we live in and couldn't rent for what our mortgage costs. It's not a bad house, just a very tiny one (about 900 square feet).

I realize that others have it much worse. I can't imagine that some people are paying huge amounts of interest and the houses have lost 100k in value. From what I've read on the news, there are going to be plenty of foreclosures soon.

There are a couple houses on our street that are foreclosed on and we live in an area that houses average about $100k for a 3 bedroom 1200 square foot home. The odd thing is that they've been vacant for over a year; I guess they can't even find someone to buy the home at foreclosure rate.

[leftyf]

This is always a great subject. Very few of us are victims...we're reaping what we've sowed, so to speak. We're a bankrupt country with a bunch of bankrupt citizens. I'd love to become a bankruptcy attorney or a trustee. That's a real growth industry I believe....I'd love to blame Bush, but I really can't. I'm surprised he even acknowledged that there was a problem. I'm buying my next house in cash...or not. Tenant for life isn't as bad as it sounds.
Take care of your health and get plenty of rest.
Lefty

[lrprn]

Yes, it is tempting to blame others for our bankruptcies, but the bitter truth is no one held a gun to our heads to sign on the debt dotted line.

In our case we way overextended ourselves - should have known better, but kept thinking that once the kids were out of college and on their own, we could climb out of the hole. Maybe we could have done it if our non-secured creditors wouldn't have had an APR and late fee field day. But we opened the door to them being able to do it.

I'd like to see Congress pass a law that limits the circumstances that creditors can raise APRs without due cause limited to how a debtor handles the debt with that creditor alone.

The problem is now that the wolf's in the hen house and tasted the money, getting the wolf out and balance restored is going to be very, very difficult. Politicians don't like making decisions that could impact their re-election funding. And the balance is so far tilted towards the millionaire side of the fence, we little people have little chance of rebalancing the playing field. Absolute power bought with millions of dollars corrupts absolutely.

Frankly the "new and improved" 2005 bankruptcy law did exactly what it was supposed to do - make it harder to file and get more money back into the hands of our mostly billionaire creditors. It's a great success....just not from our side of the fence. And we've given up our political power because we can't contribute millions any more. Welcome to the American caste system built on the almighty Dollar. Doesn't feel very good, does it?

[B12]

My opinion on this might seem harsh, but no way should the government get involved in a bail out of this mortgage mess.

The last time this happened was in the late 80s and there are systems in place to work through the problem, BK, etc.

The ARM is not a bad product, either, if used within its original intent. It was used for people who knew they were not staying in a house more than 3-7 years. The difference then was that you were qualified at the 3rd year rate, not the teaser 1st year.

The problem arose when lenders decided to qualify at the 1st year rate.

In my opinion, the reason why us baby boomers are in a mess is, yes, because of easily attained credit cards, BUT, I blame the introduction of the almighty HOME EQUITY LOAN as the main reason.

Would you believe that the home equity loan was actually not allowed in some states?

I don't have to tell you about the lender's marketing advising people to pay off credit cards with a lower rated home equity loan and write the interest off on taxes.

Of course, this only worked if you cut up every single credit card and never got another one.

This is the first generation going into retirement without one cent of equity in their homes. The lenders are now going after the previous generation with the "reverse mortgage."

Is it the lender's or government's fault? Of course not. This is a capitalistic society. All the government can do is exactly what they are doing.....putting in stricter guidelines.

The government is responsible for HUD, Respa, Fair Housing, Anti Trust, all vehicles to stop unfair practices. It cannot and should not get involved in private enterprise.

[JRScott]

Yes, it is tempting to blame others for our bankruptcies, but the bitter truth is no one held a gun to our heads to sign on the debt dotted line.

In our case we way overextended ourselves - should have known better, but kept thinking that once the kids were out of college and on their own, we could climb out of the hole. Maybe we could have done it if our non-secured creditors wouldn't have had an APR and late fee field day. But we opened the door to them being able to do it.

I'd like to see Congress pass a law that limits the circumstances that creditors can raise APRs without due cause limited to how a debtor handles the debt with that creditor alone.

The problem is now that the wolf's in the hen house and tasted the money, getting the wolf out and balance restored is going to be very, very difficult. Politicians don't like making decisions that could impact their re-election funding. And the balance is so far tilted towards the millionaire side of the fence, we little people have little chance of rebalancing the playing field. Absolute power bought with millions of dollars corrupts absolutely.

Frankly the "new and improved" 2005 bankruptcy law did exactly what it was supposed to do - make it harder to file and get more money back into the hands of our mostly billionaire creditors. It's a great success....just not from our side of the fence. And we've given up our political power because we can't contribute millions any more. Welcome to the American caste system built on the almighty Dollar. Doesn't feel very good, does it?

While I agree that the consumer has to accept some blame for their situation, I also realize that these sub prime mortgage companies in particular where at times predatory lenders. In many cases they knew they shouldn't have loaned money to these individuals. They decided to take a business risk because of the trend of property value rising they saw a win win situation. They thought they'd just foreclose and sell the property a second time for more money than the first. What they failed to realize many of them is that everything that goes up has to come down at some point. It was a bad business decision on their part. When you or I have made bad decisions we've had to pay for that, through bankruptcy or other such institutions, and I feel these lenders should be subject to the same sort of punishments. They had it in their power without the government to step in and save themselves by renegotiating with their customers and investors. Many chose not to do it.

I do believe we as a nation need to reign in the legislature branch more than any other branch right now. Sadly what I feel needs to be done would require at least one if not more constitutional amendments which are unlikely to pass .

[Spartan]

Sub prime lenders falsely suggesting to poorly informed borrowers that the borrowers can afford the house and falsely suggesting to the borrowers that the borrowers can simply refinance later when the teaser rates go up in 2 years.....

While the borrower is ultimately responsible for his action and decision, the sub prime lenders are not a whole lot different from fraudulent salesmen. Regulatory agencies dropped the ball on this one. There is enough blame to pass around. This fiasco will most likely require tax payers bailout, much like the S&L crisis......

[JRScott]

Sub prime lenders falsely suggesting to poorly informed borrowers that the borrowers can afford the house and falsely suggesting to the borrowers that the borrowers can simply refinance later when the teaser rates go up in 2 years.....

While the borrower is ultimately responsible for his action and decision, the sub prime lenders are not a whole lot different from fraudulent salesmen. Regulatory agencies dropped the ball on this one. There is enough blame to pass around. This fiasco will most likely require tax payers bailout, much like the S&L crisis......

It shouldn't require a bailout. All the subprime lenders have to do is amend the terms of the agreements and lower the interest rates back down to where their customers can pay them. It means less profit but they stay in business and the customer stays in their home.

The national debt cannot afford for us to continue to buy out people because of bad decisions. The last time we had no national debt was when Andrew Jackson was president. For generations the government has operated on a spend today and pay tomorrow platform that within the next two decades is going to catch up with them much like it has caught up with many of us.

[Spartan]

It shouldn't, but it will. Political pressure.

[JRScott]

It shouldn't, but it will. Political pressure.

I agree that political pressure most likely will have congress and the executive passing something.

[Boscoe]

There are 2 things that need to happen with this mtg mess:

1) Amend the current bk law to allow trustees or bk judges to unilaterally amend the terms of high interest mtgs out there. Limit the change to lowering the rate to prime, or maybe even do a means test and lower it to where the debtor needs it to be to make end meet without surrending their homes and cars.

2) Require a minimum of 20% in cash down payment on any non-owner occupied home, especially investment properties. If this was in effect in late 05, early 06, I would not have ever known this forum existed, never mind creating over 100 posts by now.

There is plenty of responsibility to go around (debtors, creditors, lenders, and we all really should be happy that we have any bk system at all. I know people from South America, where if you get in debt, they take everything you have, furniture, cars, jewelry, etc. and you are forced to live in almost squalor with only a few clothes and little money. No exempting homes, retirement accounts, nothing!