"Foreclose me...I'll save money!"

Oh, and I believe it is computerized lending that has been the problem, not greedy banks. Don't choose an ARM when you KNOW and sign forms that it WILL adjust UP. When you start at a very low rate, common sense says it will not stay the same, but will increase.

Banks qualify customers on the first worst case rate increase. Not the intial rate. If you have gone to the subprime market, well, you already have bad credit and have not paid your bills for whatever reason. Don't expect to get the best rate. You do not deserve it. Those that pay their bills get the good rates for being responsible and PAYING their debts.

Have a bit of sense when you go shopping for ANY item and don't spend more than you can afford to pay back. Common sense people. Have just a little and you won't find yourselves in a bad way.

I owe less than half on my home because I chose a fixed rate 15 year mortgage. We bought a home within our means. That we could afford on one salary. It was a choice. We could have bought more, but made a choice not to get in over our heads

Unless you are stupid(and some people really are) you know when you can't afford something. Don't buy more than you can pay for! The banks aren't your over indulgent mommas. You are not owed a lower rate just because you want one. You chose an ARM, you were fully disclosed on what they are. You don't get the fixed rate when you get an ARM. If you wanted a fixed rate, you get one instead.

You won't see banks being lenient again anytime soon. We are back to 15 years ago lending rules again. Which is a good thing. I saw all this coming when they cut out real people as underwriters

All those "rich" lenders that people think ought to give them fixed rates now on their ARMs, well, good luck! They are gone. All our investors are no more. They have gone out of business and have been bought up. Banks aren't going to "give" you anything. They are businesses and have to make money to keep their doors open. Most don't have their doors open anymore

Originally posted by disgustedbyhumanity
You will still owe the bank the difference. Eventually they will get the new house as well if you don't pay them. For people with a bunch of other debt and not enough income to pay them, bankruptcy is probably your best bet. The courts will only allow creditors to keep the amount of debt you can afford to pay, the rest will be discharged.

I am also underwater on my home. That said, I have no intention of screwing those who gave me my loan. If something happened and I couldn't pay then I would consider other options. First step is to fall behind and then ask the bank adjust the terms to what you can afford. This can include reducing the principal amount due, the interest rate, or the length of the loan.

Just plain outbailing because you made a bad deal is bogus. Peoplelike you are the reason that I am disgustedbyhumanity.

"Bankruptcy is probably your best bet bet". Stop worrying. Nothing is alright. --------------PC

Bankruptcy is also no longer an easy way out either. I have mulled over the idea of walking away from my house too since it has lost 100k of value because of the market and the fact that illegal aliens have taken over my town and driven down the values of the homes. I was lucky enough to have purchased at the bottom and still have about 40k in equity but if it gets to the point of my home value getting below what I paid for it then I too am tempted to just say screw it and the bank and walk away. Them sending me a 1099 for the for the difference in fetched auction amount to the loan value is a big deterrent. Claiming bankruptcy will also not clear you of a lot of debt now, especially if you are like me and actually can make the payments. I have a screw the bank and the government attitude now because they have allowed this illegal alien problem to get so bad that it has affected my town so drastically and caused my home value to plummet so I have no qualms about screwing them either. The banks will always have the laws on their side folks and will always have an out. The average guy can never stick it to them like they stick it to us unless we all do it en masse.

I had the same idea as the guy in the OP's article about buying a 2nd home in a non illegal alien invaded area of Northern Virginia and then just letting the home I'm in now go to foreclosure, but the legal entanglements would just be too great, especially in Virginia where the state government works overtime to screw the people and reward corporations.

The link from the OP has a few words that explain it all: “My ARM payment…”
That’s it in a nutshell. Now, I’m no expert, but it seems to me that signing up for an ARM mortgage is one of those things that is, or should be, a common sense DON”T. It’s like: DON’T run with scissors or DON’T drink liquids you can’t identify. The idiot in the link is just a whining crybaby who thought they were getting a deal that was soooooo great and probably the clown congratulated themselves on their investing savvy – at one point.

Not to exonerate all the shady lenders out there that helped bring this fiasco to fruition. But it seems, time and time again, too many people went out there and made major investments in real estate with about the same amount of forethought and deliberation as they would use to buy a candy bar.

So, we end up with greedy, idiotic buyers and put them in with greedy, clever brokers and bad transactions result….Gee, who could have guessed this would be the result?

Unfortunately, those of us that spent years saving money and months looking at homes and weeks trying to find an agent and days poring over contracts are now going to suffer as well. What a waste. I shoulda just went out one weekend and picked a mansion and signed some papers. Then I could be a victim too and have everybody else worry about my mess while I stand by and cry.

reply to post by loam


I'm kind of a movie buff, and that's why I LOVED the film "Fight Club". It's at it's core about taking back what is truly yours, your life, or what big business refers to as your "credit".

I'm not currently a home-owner, thanks to a divorce, but I'm kinda glad I'm not. I had purchased a couple of homes with my former spouse, both done with "shady income reportings" and it was easy as pie.

When I look back I think "man, how did I own a home?" My ex-wife and I were both making ok money, but man? Did we grow up fast or what? I have a good friend in the mortgage business. I never asked him to, but he fudged the #'s on our first loan to get it approved.

Shortly after I was married, I was fired from my job. We had just bought a new home and everything went to hell in a handbasket. Needless to say, I am not married anymore.

I eventually regained my job, in another division of the national company. I have since been promoted, and am now making more money than I ever had!

Before I was originally fired, I had also bought a new car. After I lost my job, I could not afford it. You would think that in that situation the car loan company would have worked with me, but no, they wouldn't.

Even though that today I am in a much better place financially, the damage that was done to my credit by the car loan company not willing to "work with me" has an everlasting effect. Of course, I coud have declared bankruptcy when times were most tough, but I guess my pride just wouldn't let me do it.

My point is that the credit companys have been given so much freedom in the past, and it is now time for them to be held accountable for this mess.

Somehow though, I feel that in the end, it will be the creditors and the creditors alone who recieive a pardon from thier mistakes.

That mistake of cousre being taking advantage of the American people.

Just think about ...how old were you when you were mailed your first credit card application?

I would bet it was just after you turned 18 and registered with the selective service.





[edit on 1/27/2008 by Kaiser Sohse]

Originally posted by disgustedbyhumanity
You will still owe the bank the difference. Eventually they will get the new house as well if you don't pay them. For people with a bunch of other debt and not enough income to pay them, bankruptcy is probably your best bet. The courts will only allow creditors to keep the amount of debt you can afford to pay, the rest will be discharged.

I am also underwater on my home. That said, I have no intention of screwing those who gave me my loan. If something happened and I couldn't pay then I would consider other options. First step is to fall behind and then ask the bank adjust the terms to what you can afford. This can include reducing the principal amount due, the interest rate, or the length of the loan.

Just plain outbailing because you made a bad deal is bogus. Peoplelike you are the reason that I am disgustedbyhumanity.

haha.... outbailing is what companies do all the time. It's called "Taking a loss". And if you spin it right, you could probably also claim it as a loss on your taxes.

Please may i offer some advice, in all circumstances, if at all, never walk away from your property, if push comes to shove and moneys tight, try to find a way, talk to your bank, or society, because if u think that walking away, justified or not, or by still keeping in touch with your money lenders is fine, then think on a few things.

OK so the condo value is less in this moment, so what, if it goes down it must come back up right, in property that is, wait a few years, whats a couple of years, trust me on this one, and if u must find a further income if poss, but keep your home. Ever been denied credit, had constant letters demanding repayments, lawyers letters, bank letters, court letters, daily telephone calls, into the late evening, from the debt collectors, the stress alone can damage, you mentally, and suddenly the debt outstanding has doubled due to everyone adding their fees, and letters costs, and remember 5 years from now, when your condo is back at its 12 percent plus per annum, and payments are balanced, how are you going to feel, well let me tell you, you will kick yourself big big time, promise you, final final, its 2008, remember 2003, seems like yesterday right, thats 5 working years. Oh and one thing, how you going feel when you drive past your old condo, in the evening, sunset, your home looking beautiful, and someone else living in it, diferent car parked outside, all because you thought, OK i can walk away, no problemo, i can do it, pls get smart on this one.
If this helps at least one person to think correctly than my day has begun with a smile..
dno.

It helps nothing and offers no real practical solution to the problems we face.

I hate to be the one to post this, but someone has to, and probably many have thought it, but you know...there is absolutely no scientific data to support that more material goods you possess the happier you will be...for those of us with little, the fall is short.

A correction was in the works, you know it was inevitable, and now many of you are left holding the bag. I'm sorry about that, but you know, many more of us have a very light bag, and so...

At least people won't be so arrogant in the days to come...correction brings people down to earth a bit.

best of luck everyone now that the nose is lowered a few inches...

Originally posted by passenger

So, we end up with greedy, idiotic buyers and put them in with greedy, clever brokers and bad transactions result….Gee, who could have guessed this would be the result?

Add to that gross consumerism and consumption as people were borrowing against the equity of their homes, which then quickly depreciated due to market forces (see below), to float their unrealistic and extravagant lifestyles.

I think the point made about illegal immigration, though it may seem like a stretch to be labeled as part of this problem, is somewhat valid but for a different reason than posted above. Builders who were using cheap illegal immigrant labor were throwing up homes as fast as possible thus saturating the market with cheaply built, over-valued, builder grade beige boxes. The market was flooded with crap and so then market prices pushed downward because no one could sell their existing homes.



[edit on 27/1/08 by kosmicjack]

[edit on 27/1/08 by kosmicjack]

We're one of those subprimers.....
quite frankly, we bought what we needed.....at a modest price....our payments were lower than what we could rent something like this for..and to be honest, is cost us less to move into it than it would have to move into a rental..so, even if we did lose the house, we would have still made out. we're still upside right, the home is still worth more than we owe on it. we have plenty of income coming into the house to meet the demands, and we have already had some interesting offers as far as refinancing, which I hope the heck my husband hurries up and takes one of the offers since well....my hip is going in the same direction as my foot so I want to find a job that is easier on the bod.....even if it's minimum wage, I just need the health insurance really. but, changing now would not improve our chances of refi...

Look the economy has been out of wack for way too long now. The last time we bought, well, we bought because all of the hud subsidized housing was out of our price range, we bought a trailer, and rented a lot, and were paying less than we would have if we were renting. We lost that one when my foot gave out and I couldn't work! We lost everything, and well, that's when we decided to move to a friendlier environment. But, I've got to ask this question.....for some reason, the mortgage company did send up the title to that trailer by the way, have no idea why....but.....this small group of people, ya know the ones that are doing their best, working hard, but still finding it impossible funds to provide the basic necessities...like healthcare, shelter, ect.....well, they aren't qualifying for assistance either...and well, these sub prime deals may have been just the answer for at least some of their pr oblems, at least for a little while...they could have decent housing, at a price they could afford, since well, the hud subsidized housing went out of their price price range. Are they just the fodder for every lame-brained money generating scheme that is thought up, or am I imagining it?

you know, we are one of the last countries in the free world without a universal health care system that covers us from cradle to the grave. It's a screw job, and you might notice not a Republican in the race is running to fix that, not one...sorry, can't say we over here in Democratic land, didn't tell you so.

No need crying over the spilled milk. Vote for someone, anyone but a Republican, and let's turn this country around.

You guys taking up the bank's and the government's side make me laugh. Telling everyone that they should have honor and pay their debts. I have thought that way all of my life but not any more. These scums have decimated the country with their greed and the government lets them get away with it. Do you think their credit will be ruined and that anyone will come after them with 1099's for loss of value? No, they will be bailed out by the tax payers just like they always are. Wake up and join them in their sleazy ways and tell them to stick it. Walk away from your homes if you are 100k upside down. At that point you will NEVER make up the difference in value because home values will never reach those absurd amounts again and you will always owe more than your home is worth.

I assure you that illegal aliens DO make a huge dent in this home market because many of them purchased homes in the boom at the top and are now walking away and getting foreclosed on. My town of Manassas Park in Virginia was overrun by them and it has decimated the town and the home values. Nobody but illegals wants to live here now because of the squalor and now that the construction market is dry and they can't make their payments, they are not able to get approved for a loan and the ones already in their homes are losing them.

You do what you got to do for your own survival just like the banks do. Don't feel bad for one second for walking away and scamming them if you can get away with it because they certainly wouldn't. For the rest of you crying about dishonor and responsibility: give me a break. Wake up and smell the coffee and stop thinking like they want you to think.

Hi guys(and gals),
I’ve only posted here two times total, but I’d appreciate it if you all read my story. Here is the background:
My wife and I bought a house here in Vegas about 1.5 years. It’s a small 3 bedroom in a lower middle class neighborhood. We got a 30 year fixed rate 80/20 loan. It has a higher interest rate, but we’re not in the game to “flip” a house so we took it instead of an ARM. We are relatively young and this is our first house. The loan officer, real estate agent, and basically everyone else told us that our first year would be rough, but after we built equity we could refinance and get lower monthly payments. I was ok with this. We had money saved up.
Well here we are, over a year later in one of the worst hit markets. We are upside down and no one will work with us. We can barely afford our bills right now. We come within about a hundred dollars a month on our income to bills budget. I drive the cheapest motorcycle ever. My wife has a crappy little Hyundai. We don’t drink, smoke, or gamble. Our only luxury is cable internet. I don’t even get the movie channels. I’m wearing clothes that don’t fit right because I gained weight (in a good way I might add). I’m OCD when it comes to our finances. I have a ledger that I write even the smallest transactions in. We use credit but only for the incentives like cash back and bonus points. We pay off the balances each month. Sometimes we come out upside down at the end of the month as a result of unexpected expenses. That’s what the savings is for. I had planned on rebuilding our account after our payments went down. We are very good at saving money.
Well now we have a baby on the way (which is totally awesome). However, this changes everything. My wife will be out of work for maternity and making 60% of her current pay. As of right now she misses a lot of days, because this pregnancy is rough on her. Our income has gone down. Our bills will go up. A crib. A stroller. Diapers. Medical bills that our lovely insurance expects us to co-pay. You know the deal.
Here’s what ticks me off. We collectively make about 90k/yr. It’s garbage that we have to live like this to afford a modest home. When we applied for the loan we got approved for much larger amounts in much better neighborhoods, with much larger homes. We didn’t borrow “irresponsibly.” We borrowed modestly. We got taken for a ride. Every time you turn on a TV or a radio, you hear shows like “flip that house” and refi with “ditech.com.” The media screams at you “buy a house buy a house.” It put me in a state of emotional turmoil because I felt that I needed to buy a house NOW, before they got even MORE expensive. This is the mortgage companies’ faults for accepting phony inflated appraisals (Wamu anyone?) We could’ve bought way outside our means on an ARM loan and we’d at least have lower payments for a few years. However we’d be screwed then, just like we are now. Once again, we didn’t intend to “flip” this house. We wanted to start our family here and stay at least 5-10 years.
So I call my mortgage co. just like CNN said. I call Hope Now Just like Bush said. No one will help us. Hope Now thoroughly detailed my budget with me and told me that the only thing over budget is our house. They gave me numbers for charity groups like “Catholic Charities.” C’mon do you think these people are gonna give charity to someone who earns 90k/yr? I’m not even a Catholic! They also said to get a second job at a temp agency or similar business. I have some college education but no degree, the odds of me getting a decent second job are low. Besides, now we have high unemployment reports in the news. I guess I’m lucky to even have a job? I’m attending college right now in order to make more money when I graduate. I refuse to work a second job and miss the time with my child and have to cut back on school time. Besides which, I can make in one day overtime, a week’s worth of what I’d likely make at another job(my company is not giving out OT right now as a result of the economy however.) I have priorities. Keeping this crappy house is not one of them.
So now that you have the background, here’s our plan of action. WE traded our car and got a Toyota Prius because it’s larger(for the baby) and more economical and the insurance is even cheaper than our trade-in which had lower overall value. I find that kinda funny. We did this to get a low rate on the car before our credit takes the plunge. We did not make the mortgage payment as of Jan 1st. This was hard and unnatural for us to just not pay a bill. In 3 months, when they start blowing up our phone with calls, We’ll see if they want to work with us. We’re willing to stay in this house, which is 15% upside-down (and according to Meryll-Lynch headed for even more losses), if the mortgage company can figure out a way to drop our payments at least 350-400/month. This will give us enough leeway to replenish our savings and still live the modest life style that we live until I graduate and make more money. If they refuse to our terms, then they can take this stupid house back. We have the car we want. My bike runs. For all intents and purposes, we live by cash anyways. I’ll take the credit hit, we won’t need credit for a while.
If the mortgage co. decides the latter then we get time to save money and have our bank account higher than it was, before we moved into this house, before they kick us out. Then we can rent somewhere and have 1000-1500$/month to put away in savings. I’ll start my kid’s college fund. Make sure we have the money to eat all-organically. Make sure I have the time to spend with my family. Maybe I’ll get my wife a day at the spa. She deserves it, going to work every day even when she feels like crap just because we can barely afford our bills. Let her have the day off. Screw it.
I feel bad about becoming a “part of the problem.” We were young. Naïve. I’ve now come to realize that owning a house isn’t everything. Being happy is, and I just can’t go on knowing that I’m bailing water out of a boat for at least the next 5-7 years just to stay afloat and break even. I’d rather get a cheaper life raft and enjoy the ride.

Thanks for taking the time to read this.


[edit on 27-1-2008 by WatchingFromTheFence]

I have no sympathy for the banking system. They adopted a method of subprime lending and then with fervor pitched "The American Dream" to people who they knew could not afford it.

No one will be able to convince me that the end result of such a gamble on subprime lending was not known before hand and as cracked as I may sound, my gut tells me this was a wonderfully orchestrated method to ensnare a bunch of people that may have been on the mid-to-lower-middle-class line and shove them into poverty very quicky.

Anyone feeling sorry or sympathizing with the banks, should probably consider that the banks would have known full well that a government bail-out would be on the horizon. They were really in a no-risk situation as the government couldn't possibly let the banking industry collapse regardless of how many subprime loans were to go under.

I've known a couple of people that went for pre-approval prior to the subprime lending crash and when applying for that pre-approval at lower amounts, every one of them received an "upsell pitch" by the lending institutions trying to show them how much more home they could afford under the then existing low ARM rates. Fixed loans were NOT pitched equally with ARMS -nor- were the various loan types fully explained to them.

Credit agencies and lending institutions are predators and they tend to prey upon the very people that can rarely afford to do business with them. Those are also the people who desperately want to acheive The American Dream and will succumb to any sales pitch that can deliver them what they're looking for.

As for those prepared to walk away from the debt, I support their decisions. Morailty and money have never been good bed-fellows nor will they ever be. Business is business. My only hope is that for those who -do- walk away from their debts is that they finally understand how debt truly enslaves an individual and their families and that they will move to a more self-sufficient approach in life in the future, even if it means a lowered standard of living on the "material" side of life.

For those who are sticking with their debts while still acquiring or revolving their debt, good for you -- You're a model of good citizenship. Unfortunately, I have less hope for you than I do those that will walk away from their debts. Since you've handled your debt appropriately, I doubt you'll ever see the inherent bad that credit has done to this country and you'll probably continue to support that type of financial model over the course of your lifetime. While there are people like you, there will always be credit applications being mass mailed out and the "pimping" of the ever elusive "American Dream" will continue.

reply to post by WatchingFromTheFence

This is a great story, WatchingFrom, and I really feel for you. It resonates!That goes also for all the others that are in your exact same situation, including the people which have posted here.

This kind of thing should not be happening. You are being crushed by an uncaring and unsympathetic system. A segment of our society has lost its empathy. They are blinded by their greed. So it is really good to try to restore that empathy, through posts such as yours.

Keep fighting, and don't lose hope! I am sure you will make it through this, especially with your winning attitude.

Originally posted by Apsaroke.. the "pimping" of the ever elusive "American Dream"...

I absolutely love that characterization!

Sorry if this is a one-line post!

SOLUTION

Since I am a Real Estate investor (No not from taking courses or a stupid seminar) but I have over 400 tenants in both residential and commercial properties across my town. Finally on ATS this IS my field of expertise..lol


Let me make this suggestion to you. Instead of cutting out, screwing your credit and having to bear the bad mark on your credit for 7 years to come. Not to mention that regardless of the 7 years, the next time you go to buy a home there WILL be a question asked on the application of weather or not you have previously defaulted on a mortgage loan....and lying on that question will get you in BIG trouble, so no matter what that foreclosure WILL follow you around FOR LIFE.

The solution is to in a nut shell, rent out your home.

(Waaaaa but it's to hard waaaa I dont want the hassle)

The fine go away, don't bitch and live with the consequences FOR EVER.

BUT if you want to COME OUT ON TOP, than read on.

Run an add, put a sign in the yard, go online and search for a rental application form and a lease (rental agrement...lease and rent mean the same thing) (there are hundreds for free online) have whomever calls you and looks at the home and wants it fill out the application, you can easily have their credit checked by a landlord service company. If they look OK (No evictions...no foreclosures *hint hint* and no repossessions) then fill out the rental agrement, collect the first months pro-rated rent and move them in.

Of course you want to set the rental amount for at least $100.00 more than your payment.


SUPPRISE! Now you have your payment covered AND your making an extra $100.00 a month.... and you we're gonna drop it all, and ruin everything.

Better yet, do a rent to own...I can help you all the way if you PM me, but in essence they rent from you for 12 months, you keep copies of their canceled checks and at the end of the 12 month period, they apply for a loan to buy your place for lets say...$10,000 more than you owe... the bank sees that since they we're living there for 12 months they treat it as a refinance which makes it 100% easier for your tenants to get the loan....and viola, now you had over the year $1200.00 in your pocket and an extra $10,000 when they close on the home...

And you we're gonna walk away from it all....lol

[edit on 27-1-2008 by DisabledVet]