"Mortgage crisis" rant

[85_SS_302_Coupe]

Ya know what? My health screwed my credit to the point where i'll probably live in an apartment for the rest of my life. I pay $700 a month for this crappy little apartment. You know what i would give for the opportunity to own a house with a garage? I'm F'in sick of hearing about people who can't pay their house payment and lose their house and i'm sick of hearing about any kind of relief. Where's MY relief? Hell i don't want any hand outs just give me one of these houses that someone couldn't pay for! Give me a damn double wide on 2 acres of land!

[Mista Bone]

I'd settle for a single wide on a 1/3 acre!

[Timido]

I hear you. Where is my relief? Why do we bail out people who made foolish decisions with their money. People bought houses who couldnt afford them from the start. Just because the morgage lender said you qualify for a big mortgage doesnt meen you can afford it. I understand people loosing their jobs or having health problems but just because the ARM Rate goes up you cant afford a house? That is not a good excuse.

[08 Vette]

I hear you. Where is my relief? Why do we bail out people who made foolish decisions with their money. People bought houses who couldnt afford them from the start. Just because the morgage lender said you qualify for a big mortgage doesnt meen you can afford it. I understand people loosing their jobs or having health problems but just because the ARM Rate goes up you cant afford a house? That is not a good excuse.

+ 1 You should not be rewarded for making bad decisions!

[85_SS_302_Coupe]

See i don't even want a big expensive house because my luck and finances just won't allow it. I'd just like to have something with a garage that i can eventually own instead of pissing money away on an apartment and getting nothing back on it. I've just got an uphill battle with my finances before i can even think about trying.

[DeckerEnt]

Looking at it from another angle, a house costs much more than just the mortgage. Just like an apartment costs more than just the rent. With a house, the other costs are up there too. Taxes,insurance, water, sanitation, repairs, upkeep, beautification, upgrades, a whole lot of stuff first time home owners never even plan for. And if the real estate agent went down the list, some people would not buy such a big house.
Keith

[Timido]

See i don't even want a big expensive house because my luck and finances just won't allow it. I'd just like to have something with a garage that i can eventually own instead of pissing money away on an apartment and getting nothing back on it. I've just got an uphill battle with my finances before i can even think about trying.

Keep at it you will get it.

[mustangboy]

I hear you. Where is my relief? Why do we bail out people who made foolish decisions with their money.


Took the words right out of my mouth.

[Sharad]

deja vu. I posted a thread about this a few months ago. I agree 100%

[Waffles]

Wow... I actually completely agree with all the posters. Someone make a note of it lol.

[DeckerEnt]

Note taken. LOL
Keith

[cstreu1026]

Looking at it from another angle, a house costs much more than just the mortgage. Just like an apartment costs more than just the rent. With a house, the other costs are up there too. Taxes,insurance, water, sanitation, repairs, upkeep, beautification, upgrades, a whole lot of stuff first time home owners never even plan for. And if the real estate agent went down the list, some people would not buy such a big house.
Keith

If people don't consider the other cost with owning a home then they are naive, ignorant, just plain fucking stupid. I know there are always exceptions and some people fall on hard times, but what about the rest of the people who thought interest only loans and ARM's were good idea. I say fuck those people and dumb ass banks that wrote the loans. They should all get what they deserve. Just because "bill" in the next cubicle can afford a million dollar McMansion doesn't mean you can or even deserve one. And then there are the people who are purposely defaulting on their loans because they bought property at grossly inflated prices and now owe more than its worth. There should be a much greater penalty for those people than just a few years of bad credit.

[07thorobrd]

yea i hear all of you i want to move out so bad but i cant right now i have to get a few things taken care of first. but when i do finally get my own place o what a great day that will be

[DeckerEnt]

Make sure you know what you are getting into. No arms, lock in a good rate for 15-30 years. Know what your payment is. You should always make more money so the payments should get easier over time.
Keith

[Rick93coupe]

When my car/boat/bike get done, I'm gonna move out of my moms basement. For now I'm just gonna stay here, she pays for the cable.

[Rick93coupe]

:D That was a joke. lol

[mach_u]

:D That was a joke. lol
:lol: I was like, hmmm... Priorities. haha I agree completely on this whole mortgage crisis we shouldn't be bailing anybody out. I bought my first house and 20, young, dumb and without a whole lot of input from anybody. I however was smart enough to realize that the rates were the lowest in 20yrs or something crazy, it would probably be a smart idea to lock in a low interest instead of doing the ARM that my mortgage broker was pushing for. :rolleyes: I could also do simply math and figured out my budget and realized how much ultimately I could afford and still allow enough room for incidentals. I don't have a fancy house and truth be told could afford a lot more BUT I bought smart, didn't stretch myself and have no regrets. There's no reason why the government should have to bail out stupidity. Maybe a few stupid people will learn a lesson or two. :cool2:

[Jaylynn]

i remember being a kid when my parents were building a house & rates went up to 18%..... they'd already sold our other house & we had to change plans to build a smaller ranch vs a tri-level...... they married very young 19\20 but were responsible with money & just lived at their means. I remember many times them talking about not wanting to be "house-poor" like others they knew who were chained to their house. That stuck with me.

I this case i think people forgot or never learned all the basics...... i have some sympathy for certain homeowners.

But, i really don't have much sympathy for companies behind all this - they paid big bonuses to sales people & execs for all these bad loans. They all made their money, don't think we should bail the corps out. (oh yea, we probably give them tax breaks too)....

[Waffles]

Make sure you know what you are getting into. No arms, lock in a good rate for 15-30 years. Know what your payment is. You should always make more money so the payments should get easier over time.
Keith

I used to sell a lot of ARMs, and in the right situation they are a better loan. First time home buyers are only in their homes an average of 3 years. If they already know it's only a "starter home" and they're going to move, why pay more interest? ARMs were not the problem.

[Jaylynn]

ARM's aren't evil un-to themselves........... BUT - severely underestimating the risks of an ARM, rates high, not being able to afford house at bump up rate, not being able to selll house etc are serious problems when people glorify - "hey, pay less now it'll all be ok later, don't worry about it". .... It's pretty obvious that many people found thier way into ARM's that were unsophisticated borrowers who didn't understand\couldn't afford the risk & now they're learning a very hard lesson. (many of them asked for it, i'm sure - wanting to pay less now, wait for the magical housing market to double the value of their house then selling for fat profit)

[Waffles]

When the rates dropped everyone was buying and refinancing which created a boom in the mortgage market. Everyone and their pregnant 12 year old sister was starting their own brokerage. Everyone had to get creative to get business because there was so much competition. Conventional and sub-prime lenders both started taking some of the craziest risks you could ever imagine. Countrywide had a loan we called the "Fast and Sleezy" (it was really call the Fast & Easy) because if all three bureau's scores were over 700, I could write a conventional loan with no income verification, no asset verification, and if there was an appraisal it was a drive-by and it was at standard conventional rates. Yeah, that wasn't going to get abused or anything. *rolling eyes*

Sub-prime started lending up to 103-107% LTV, which meant a home buyer didn't have to have ANY money upfront, they were simply walking into a payment. RHS (USDA government loans) would lend up to 100% of the appraisal regardless of the purchase price. A lot of brokers would use this to tack on HUGE fees. For instance, if you're buying house for $100K but it appraised for $110K, you can rest assure there would appear $10K in closing costs. I knew one broker that was earning $25K per month writing these loans. Subprime lenders were writing no income/no asset loans down to mid 500 credit scores. There was just so much competition that companies got very loose in order to continue to be able to write loans at all. These loans were simply poorly designed. I remember one loan, it was a 5 year balloon with a 40 year amortization.... designed to get younger folks into more house than they could afford. Yeah, it was actually marketed that way. Hello? More than they could afford? And who is suprised here that they couldn't afford it in 5 years?

I made a lot of money brokering loans. I made my money by being creative. My competition had gotten lazy because writing loans had become so easy. If something wasn't clearly a conforming loan, they'd just toss them into subprime and quote them 7.5% on a 2 year ARM. I would take that same borrower and find mitigating circumstances and get them approved on a conventional loan. This meant that I could put them in a slightly higher rate conventional rate loan, say at 6.5% fixed which is by far a better laon than they were getting elsewhere. But also because 6.5% was high for conventional lending, it meant I'd get a shitload for the loan when I sold it. People are happy because they get a much better loan; I'm happy because I went the extra mile and got paid well for it; bank is happy because they're holding a low risk loan with a higher than normal interest rate.

[Jaylynn]

Good information - sounds like you're one of the good guys!

Seemed like some consumers were 'asking for it'...."Fast and Sleezy" lol

[Sparky]

About 4 years ago, up here in Clark county, there was a class held by the county to teach first time home buyers. All of the loan companies/banks were in on the deal. I actually took the class for my mom when she was buying her house. The banks were offering an extra .5% off their loans if you took the course. The big thing back then was the ARM and they were pushing it hardcore. The way the course instructor was selling it went something to the extent of " statistically the rates have shown to go down more than up, so you stand a very good chance of making out at the end versus a fixed rate". I about shit right then and there. I knew what was going on, it was a scam. The majority of these first time buyers are very naive and trusting to someone who is supposedly working for a government funded program. So, they're basically getting steered into an ARM because they think its the smart thing to do , because this real estate "expert" is telling them it is. I on the other hand have above average common sense and a nose for bullshit. I don't own a house yet, but I would never do anything more than a fixed rate 15 year loan. I'm not spending the last half of my life paying off a house that I'll never be able to enjoy until I'm to old to give a damn.

However, I feel sorry for the people losing their homes more than the people that loaned them the money. Based on my experience in the deal, the loan companies got what they deserved. To call the defaulters stupid is a bit harsh. Sure, they were ignorant enough to choose the ARM and/or overspend. But, the people that gave them the money knew better. Give big business a chance to exploit naivety and they will squeeze the tit for all its worth, and cry when its all dried up. I watched a senate hearing with all the heads of the top mortgage CEO's on C-SPAN a few weeks ago and it about made me sick. They hide behind their numbers and paperwork and it all sounds legit, they look at the senate with their big puppy dog eyes, begging for sympathy. Screw them, they should get regulated. Anything thats been done to save this economy since the war has been nothing more than a bandaid. It like watching a real life version of Tetris on advanced mode. You try to maneuver and stack shit to keep the right flow, but you keep getting the wrong solutions and before you know it, game over.

It just kind of pisses me off when you prey on the poor and unsuspecting, and when it bites you in the ass you come home crying because their big brother ran you off. Scam someone and make fun of them because they were dumb enough to fall for it. The old bait and switch. Thats why the world is so fucked up today, everythings for sale.

The last time I saw my dad he made a comment after watching the news. He said "you know, nobody has any pride anymore." I replied " nah, people have too much pride, what they don't have is any shame, there's a difference"


But any way David,lol, its not gonna be that hard in a year or so. You'll get a house, its not that hard.

Bleh, I'm going to bed. I hope all this stuff makes sense in the morning *hiccup*

[Waffles]

Actually, there was quite some time where ARMs did nothing but drop. I knew a guy who had an FHA 1/1 ARM for 8 years and it had dropped every year he had it.

[fst 5pto]

About 4 years ago, up here in Clark county, there was a class held by the county to teach first time home buyers. All of the loan companies/banks were in on the deal. I actually took the class for my mom when she was buying her house. The banks were offering an extra .5% off their loans if you took the course. The big thing back then was the ARM and they were pushing it hardcore. The way the course instructor was selling it went something to the extent of " statistically the rates have shown to go down more than up, so you stand a very good chance of making out at the end versus a fixed rate". I about shit right then and there. I knew what was going on, it was a scam. The majority of these first time buyers are very naive and trusting to someone who is supposedly working for a government funded program. So, they're basically getting steered into an ARM because they think its the smart thing to do , because this real estate "expert" is telling them it is. I on the other hand have above average common sense and a nose for bullshit. I don't own a house yet, but I would never do anything more than a fixed rate 15 year loan. I'm not spending the last half of my life paying off a house that I'll never be able to enjoy until I'm to old to give a damn.

However, I feel sorry for the people losing their homes more than the people that loaned them the money. Based on my experience in the deal, the loan companies got what they deserved. To call the defaulters stupid is a bit harsh. Sure, they were ignorant enough to choose the ARM and/or overspend. But, the people that gave them the money knew better. Give big business a chance to exploit naivety and they will squeeze the tit for all its worth, and cry when its all dried up. I watched a senate hearing with all the heads of the top mortgage CEO's on C-SPAN a few weeks ago and it about made me sick. They hide behind their numbers and paperwork and it all sounds legit, they look at the senate with their big puppy dog eyes, begging for sympathy. Screw them, they should get regulated. Anything thats been done to save this economy since the war has been nothing more than a bandaid. It like watching a real life version of Tetris on advanced mode. You try to maneuver and stack shit to keep the right flow, but you keep getting the wrong solutions and before you know it, game over.

It just kind of pisses me off when you prey on the poor and unsuspecting, and when it bites you in the ass you come home crying because their big brother ran you off. Scam someone and make fun of them because they were dumb enough to fall for it. The old bait and switch. Thats why the world is so fucked up today, everythings for sale.

The last time I saw my dad he made a comment after watching the news. He said "you know, nobody has any pride anymore." I replied " nah, people have too much pride, what they don't have is any shame, there's a difference"


But any way David,lol, its not gonna be that hard in a year or so. You'll get a house, its not that hard.

Bleh, I'm going to bed. I hope all this stuff makes sense in the morning *hiccup*

Here is the thing though, it is the "nonconforming" arms that are killing people. If you are actually in a "conforming" ARM your rate is actually decreasing right now. It is the people who kill there credit, run the credit cards up, dont make payments on bills. They put thereselves in bad positions and have no choice but to file a BK or refinance into a shitty ARM. I have always been a big pusher at the fixed rate, although we actually get "paid" more for selling an ARM product.

But here is a good question: You tell me how many people with over a 700 credit score is bitching about their adjustable rate?

[Timido]

The good thing about the interest on the mortage is it is a tax deductable. My 30 fixed mortage at 5.375 is really like 3.5%

I heard a couple weeks ago Kramer saying they are trying to give home builders tax breaks. They were part of the problem in the first place

[mach_u]

The good thing about the interest on the mortage is it is a tax deductable. My 30 fixed mortage at 5.375 is really like 3.5%

I heard a couple weeks ago Kramer saying they are trying to give home builders tax breaks. They were part of the problem in the first place
They definitely played a huge part, that's for sure. I remember going to look at a new Ryan Homes community and they lady ran all the numbers and said $x,xxx will be your mortgage payment. Well, she figured it in on an ARM and also didn't drop the fact that the tax rate included in the payment was going to almost double once the tax changed from land tax to house+land tax. I can only imagine how many first time home buyers/new home buyers wouldn't have had a clue. Thankfully we knew what to ask but I would imagine a lot of people would have blindly gone in and bought way more house than they could afford and gotten screwed in the process.

[cstreu1026]

Yup home builders suck to. You could tell when people in our neighborhood got hit the back escrow payments as well as the increased tax payments...thats about the time the first realtor signs started popping up.

[02mingryGT]

The last time I saw my dad he made a comment after watching the news. He said "you know, nobody has any pride anymore." I replied " nah, people have too much pride, what they don't have is any shame, there's a difference"

Yeah makes me wish for the old West when you could shoot a MF'er for cheating ya.

[02mingryGT]

although we actually get "paid" more for selling an ARM product.

So if you make more money then the bank makes more money. So it's doesn't take a genius to figure out a fixed is best for the consumer. Anyone with over a 700 score and an ARM is a DUMBASS and probably goes to Argosy every day. :lol: Not giving you shit just had to comment on that.

Good info though guys.

[fst 5pto]

So if you make more money then the bank makes more money. So it's doesn't take a genius to figure out a fixed is best for the consumer. Anyone with over a 700 score and an ARM is a DUMBASS and probably goes to Argosy every day. :lol: Not giving you shit just had to comment on that.

Good info though guys.

Well actually no, the bank will make less money initially because the rates are lower on ARMs. Then like I stated earlier, if you are currently in a conventional arm, your rate is going down, which means less money for the bank also.

[fst 5pto]

So it's doesn't take a genius to figure out a fixed is best for the consumer. Anyone with over a 700 score and an ARM is a DUMBASS and probably goes to Argosy every day.

And actually like I stated before if you are in a conventional Arm, whcich means good credit typically, your rate is going down and has been.... not really a dumbass just more of a gamble/risk that is paying off dramatically.... for now. But who knows what there rate will do, right?