Rant: What a waste of breath..

[veloguy]

http://www.hud.gov/news/release.cfm?content=pr07-123.cfm

Thanks for the hand up Bush.. Part of the reason I'm in my current situation is $90K drop in the past two years in my property's equity. Sorry I moved my family to a "speculators" market and made the mistake of buying a home for my family. Doesn't change the fact that at the end of the day, I couldn't care less about Countrywide, securities markets, etc. I'm going to do what it best for my family, and if that requires forclosure, so be it. Grrr.. end rant.

[Lindsay]

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.

[JRScott]

I know this might sound unsympathetic however I think the situation would be better if the government didn't involve themselves in the matter.

I fear that this will cause more problems in the future and not really fix the problem. It will at most only delay the problem by a few years perhaps a decade or two.

The government doesn't have the money to guarantee these things. If you have any doubt look at the national debt.

I do believe that the companies should have taken it upon themselves to refinance at lower rates and kept the market from crashing. It was in their best interest.

The government I feel is just causing what's going to be a larger problem 10 years down the road as we also start getting the majority of Baby Boomers collecting from the entitlement programs (which we also don't have the money to pay).

[Lindsay]

JRScott, thats actually interesting that the mortgage companies didn't lower the rates on their own. I would think that they'd rather lose a little interest money than have a bunch of foreclosures. My sister and I spoke on the mortgage crisis and she was against the government helping too.

One of the things that amazes me is that so many loans were made to people who couldn't afford them. When we bought our truck in 2004, we were completely honest about our income; we even furnished my husbands pitiful paystubs. They should have laughed us all the way out of the dealership, but instead they financed a $35,000 truck when my husband was only making $15,000 a year. I was against buying the truck, which is financed totally in my husbands name, I don't even have a driver's license. I never thought Nissan Motor Acceptance Company would finance the loan, but they did! When we did our refinance, our mortgage company didn't care about the income at all, they just wanted to make the subprime loan. They said we didn't even have to tell them our income! What was interesting about our mortgage being refinanced is that our own mortgage holder called us to refinance and did the hard sell. I tried to refuse but they just kept pressuring me about it, so I gave in. They said that it would pay off alot of credit card debt and it made alot of sense to do it, ect. So I'm sure this has happened to alot of people. We figured that if we got the loan, we must be able to afford it. And things just went really bad. I feel bad for everyone that are victims of predatory lending. Alot of people aren't good with finances and got in over their heads.

I've been listening to Dave Ramsey every single day for the past month to get tips on how to live within our means after bankruptcy. I know he doesn't advocate bankruptcy, but it was way too late for us before I found out about his radio show. On every show there are many people who call in and they are upside on their houses, in foreclosure, some of the houses have been on the market for a year and can't be sold. I guess in some areas the real estate market is horrendous. Some people are paying 15% interest. It's real sad to listen too. Dave usually tells them to do a short sell with the bank.

[JRScott]

Dave's a good person I've been taking his Financial Peace University classes since filing bankruptcy. I"m hoping to put together a better program in the future never to return to this.

Yes these lenders didn't care about you or the others they lent to. Their idea was that the property would continue to rise in value and if you failed to pay they would foreclose. Sell the property for more than the original debt. Pay it off and still make a hefty profit. They've been stung by their own strategy and should pay the penalty. That's why I think they should refinance them and accept the loss, it might prevent them doing such again. A government bailout won't teach them anything .

I don't blame the people like yourselves who went to the banks or finance companies to get these loans. They should as you said realized you couldn't pay and not given the loans.

[demismom]

JRScott, thats actually interesting that the mortgage companies didn't lower the rates on their own. I would think that they'd rather lose a little interest money than have a bunch of foreclosures. My sister and I spoke on the mortgage crisis and she was against the government helping too.

One of the things that amazes me is that so many loans were made to people who couldn't afford them. When we bought our truck in 2004, we were completely honest about our income; we even furnished my husbands pitiful paystubs. They should have laughed us all the way out of the dealership, but instead they financed a $35,000 truck when my husband was only making $15,000 a year. I was against buying the truck, which is financed totally in my husbands name, I don't even have a driver's license. I never thought Nissan Motor Acceptance Company would finance the loan, but they did! When we did our refinance, our mortgage company didn't care about the income at all, they just wanted to make the subprime loan. They said we didn't even have to tell them our income! What was interesting about our mortgage being refinanced is that our own mortgage holder called us to refinance and did the hard sell. I tried to refuse but they just kept pressuring me about it, so I gave in. They said that it would pay off alot of credit card debt and it made alot of sense to do it, ect. So I'm sure this has happened to alot of people. We figured that if we got the loan, we must be able to afford it. And things just went really bad. I feel bad for everyone that are victims of predatory lending. Alot of people aren't good with finances and got in over their heads.

I've been listening to Dave Ramsey every single day for the past month to get tips on how to live within our means after bankruptcy. I know he doesn't advocate bankruptcy, but it was way too late for us before I found out about his radio show. On every show there are many people who call in and they are upside on their houses, in foreclosure, some of the houses have been on the market for a year and can't be sold. I guess in some areas the real estate market is horrendous. Some people are paying 15% interest. It's real sad to listen too. Dave usually tells them to do a short sell with the bank.

Your situation sounds like ours. How do these people SLEEP at night knowing what they've done to the American people?

[keepmine]

The issue I think is huge hasn't been addressed. There needs to be legislation preventing lenders from pursung a deficiency balance in mortgage foreclosures. They should get the property back and that's the end of it.
I fear this site and others are going to see a pickup in traffic soon as more and more lawsuits are filed by lenders seeking deficiency payments.

[JRScott]

The issue I think is huge hasn't been addressed. There needs to be legislation preventing lenders from pursung a deficiency balance in mortgage foreclosures. They should get the property back and that's the end of it.
I fear this site and others are going to see a pickup in traffic soon as more and more lawsuits are filed by lenders seeking deficiency payments.

I see bankruptcies increasing for at least the next 2 decades.

Some of it will be the mortgage fallout that is going to occur.
Some will be credit cards
A lot will be baby boomers who in retirement find out they aren't going to get all the benefits that the government has promised, their simply isn't enough money.

[lostinmich]

The issue I think is huge hasn't been addressed. There needs to be legislation preventing lenders from pursung a deficiency balance in mortgage foreclosures. They should get the property back and that's the end of it.
I fear this site and others are going to see a pickup in traffic soon as more and more lawsuits are filed by lenders seeking deficiency payments.

Why is it you feel the lenders shouldn't have recourse for deficiency balance? Do you think they should have to eat the loss for you?

I'm not judging here nor am I saying you are wrong but my thinking here is that it's not the creditors fault the value of the property went down. They were just providing you the opportunity to buy the property on credit now instead of having to wait to have the cash on hand.

Somebody has to pay the deficiency, and that should be person that got the loan unless they include it in a BK.

[whatamess]

I agree JR Scott. The more that BIG GOV stays out of our personal lives the better. They will delay everyones personal pain for two years at best. Until we as a society STOP living on credit, (and that goes for uncle sam too,) we will never fix this issue.
Just look at how much we owe China!!!!

When the boomers retire we are in BIG BIG trouble. People like my mother, who retired thinking her SS and my fathers SS checks, plus Medicare would get them by are already in a bad reality check. My mother can barley pay her bills and we supply her food, internet, and day trips. Her home owned of 45 years has had the school taxes go up $3,000 in the last five years due to schools building, adding, building, adding. The elderly cant afford $6,000 in school taxes on a $120,000 house around here. I often wonder why NJ doesnt use lottery money to fund schools.

Our government taught us well...spend spend spend. Pay later. No wonder we are in this mess!!! I cant stand almost any of the top five presidental contenders on either side, so I dont see things getting better with the next man (or woman) we have lined up either.

Enough rant.
WAM

[BKOnce]

Agree !!.. I , baby boomer, am now prepared saving $$ for my... future coffin & funeral costs... hic hic hic...

[whatamess]

No no BK once, its not your fault. Its the governments. Dont take it wrong. Im not one of those "Blame it all on the boomers" people.

If government had not spent the Social security funds down to nothing, something they should have NEVER EVER touched, we may be okay. That was OUR money. I read once they spent a ton of it on the space station. The one Russia left for broke.

NUTS!
WAM

[keepmine]

Why is it you feel the lenders shouldn't have recourse for deficiency balance? Do you think they should have to eat the loss for you?


Yes I do believe the mortgage holder should eat the loss. The sort of loss you see on something like this is likely to be far beyond the scope of an individual to repay. The mortgage companies are some of the largest financial institutions on earth. Far better for them to absorb the loss than have a rash of individual bankruptcies. They should not have offered silly products like I.O mortgages or the horrible ARM's to people who likely took it because they couldn't afford a conventional product. I just see no good reason to go after someone for a debt they can't possibly repay. A debt likely created by falling real estate values and rising interest rates. Not something the homeowner could control.
I think it's time lenders and consumers realize that not everyone should have access to a loan. If you don't have the income to repay comfortably, you have no business owning a home.Lenders should not be allowed to create products that are designed to get people to buy things they can't afford.

[lostinmich]

I can certainly understand your view and I agree that the companies are hurt a lot less than the individual consumer. It's a bad situation for all involved when real estate values fall. And, yes, it's time lenders and consumers realize not everyone should have access to a loan.

[cathywhite4495]

It's a deficiency that put me into bankruptcy. I ended up owing $20k on a deficiency. My mortgae was for $35K so they apparently sold my house for only $15K? This was 5 years ago and I never heard a thing from them. It didn't even show up on my credit reports as a deficiency. Then I got a phone call demanding payment. I don't have that much money sitting around so I offered payments. They laughed at me (literally!) and said they would rather sue me and garnish my checks.
If the economy wasn't tanking like it is, maybe we wouldn't have this big of a problem. People are leaving my area of the state so fast it makes your head spin. They just had to close down another school this summer. That makes 3 schools in 4 years and I don't live in a big district!