Those people that are forclosing on their homes; its obvious they will recieve bad credit in return, but do they also HAVE to declare bankruptcy?

Originally posted by 38181
Those people that are forclosing on their homes; its obvious they will recieve bad credit in return, but do they also HAVE to declare bankruptcy?

No. Foreclosure is just repossession of property on a defaulted loan. Never did understand how people flipping burgers at McD can afford $400k houses. Now I know they can't.

Originally posted by 38181
Those people that are forclosing on their homes; its obvious they will recieve bad credit in return, but do they also HAVE to declare bankruptcy?

I suspect it won't be too long before "bad credit" and "bankruptcy" are non-issues. I also believe this was engineered to pull property out of private ownership and into the banks' possession. Who was it who said that if we don't watch out we will wake up owning nothing, slaves to the system?

Open your eyes. We have already been given as indentured slaves to the Federal Reserve (a private corporation) as it stands now while those who gave us to them are increasing our debt daily paying Haliburton and others for a war they manufactured as well.

And with the "easy" loans foreclosing, we will own nothing. Expect the whole to crumble and "for our own good" they will take control of us, herd us into those camps they have ready, or out and out kill the useless eaters.

Can we really believe this was not done on purpose?

If it was intentional or incompetence the American people don't seem to care either way.

The main problem is mortgate "originators" who sign the buyer were approving loans to people who could not or should not have gotten them. The banks relied on their own or their partners' mortgage originators. Mortgage originators get paid for originating a loan - more approvals, more fees they collect. That's a pretty obvious problem. You might get a job in a year? You're approved! You keep getting laid off - but you keep trying. You're approved!

Banks don't want to "own" forclosed homes. They really have trouble when they have numerous forclosed homes on their books. They are "in the hole" if they own a home without income coming in on it - especially in a falling home value market.

Imagine this.

Guy gets a 100% mortgate from Bank on $400K house.
Guy pays bank them $3K a month.
Their liability is $400K with ability to earn $600-800K over 30 years on the interest income at 6%.
Guy leaves house to bank after paying $10K in principal and $30K in interest after 2 years.
Bank forcloses in a down market.
They now have a home asset on their books for a possible value of $350K. If they sell it now, they could do ok. If they wait a year, and sell it at $320K, they are losing money.

Banks need to sell forclosures - sometimes at really discounted values. That also drives down local home values as "comps" selling for less by banks drives your personal sale value down too.

It's a snowball effect. Too many forclosures will ultimately (and has in some cases already) driven down home values across the country one neighborhood at a time. If I had 3-4 neighbors in a 1-mile radius end up in forclosure and their banks dumped their houses for $40-50K under value, my home couldn't be sold for its true value for a year or more until "comps" come up in value.

Banks do not want to forclose. They want owners paying their payments. They really also don't want early payment either (in older days, they had "prepayment penalties"). They want to know that the large interest payments are coming in for the early years (first 10-15 of a 30yr mortgage).

[edit on 25-7-2008 by bonaire]

I read somewhere recently (I can't recall exactly where) that the current foreclosure rate in the US is around 7000 per day.

The article states that the 220 000 number was for the second quarter so divide 220 000 by 90 days and you get over 2400/day of HOMES LOST which means the the foreclosure process is done.

Foreclosure proceedings take months.

A total of 739,714 foreclosure filings were recorded...

This figure put the rate at over 8000/day so I guess the article I read this week was right. Next quarter's numbers are going to be staggering and the process is really just begun.

This is what is going to eventually depress the economy and will erode the main economic activity of the US - eating out, buying crappy stuff you don't need and "keeping up with the Jones".

I've said it before and I'll say it again, an economic crash is a process not an event. You will not wake up one morning and find a headline stating something like "Depression Starts Today".

This is how it slowly develops, almost imperceptible to some people and vividly real to others until everyone is caught up in it. Just like boiling a frog, if you turn up the heat slowly enough it will go to sleep and die happy and warm not having enough sense to jump out.
.

The big problem is no longer with arms, but with people who have traditional loans, who have the lost the equity in their homes. They walk away because the property is not worth what they are paying. I know a few people who are doing this. They bought things with the equity, and they get to keep those "things",
and the bank is left eating the loss.

This trend really disturbs me. It is theft.

All this crap has me freaked out . I'm going sunday to look at my first house.
Its a little 60k house. Which oddly enough is on 1 (1-1/2) acres .
It looks like a decent house for me and the old lady . We don't plan on kids ect.
I really don't know what to look for when trying to get this mortgage.
I'm really hoping i can do a land contract . Or pay the owner directly . That is if it don't need any or much work . I dont know crap about rates interest ect. So if anyone that knows can help me out please drop me a u2u . It could save my azz

[edit on 25-7-2008 by d11_m_na_c05]

TRUTH, what do you think the long term implications are for America if this trend continues. I do wonder how much more the US economy can take.

JSO, when there is a housing slump values do go down, here in the UK prices have been dropping for the last 8 months so if you have the money its good news if your house hunting but not for those selling or losing their homes.

Popping in this reply to give everyone an insight from one who is part of the statistic. We bought our house 2 1/2 years ago. Yes it was 100% financing and yes on an arm. We were told that this was the only option we had for us to buy our first house. This was from 3 different sources. The payments fit our budget, so that was not a problem.
Now to the present day.
Gas prices have more than doubled since we moved. That means coming up with an EXTRA $350 a month for my vehicle and $125 month for hers. My arm adjusted and my mortgage pymnt went up $456 EXTRA a month. Groceries prices are now costing us an extra $234 a month. Now this didn't all happen suddenly so as things slowly started getting tight we Stupidly took out a few payday loans to help get by. I know...no flaming....DUMB. Well our initial plans of paying off those loans grew more distant as prices continued to increase and we had to start cutting things out of the budget. Came to the realization that we were living off our credit cards more than we realized so went into debt settlement with them.
Well things spiraled out of control especially when our arm adjusted. Coming up with the EXTRA $1100-$1200 a month for expenses and mortgage payment was nearly impossible. Contacted our mortgage holders to see what the options where and they told us tough luck. We tried Refinancing thru different banks but because we were behind no go.
Well to cut it all short... we are now in the beggining stages of foreclosure and they dwon't work with us. I am trying to get my car payments caught up and focus on saving my marriage. We make decent money $50k-$70k a year but still can't make ends meet.
What this whole post is about is realize that not everyone involved in these foreclosure numbers went in over our heads or with bad intentions. It is also people who are being affected by the rise in prices in everything who get piched as well.
I am not looking for sympathy but just here to point out that those of us that are losing our homes are not all bad people. We are losing our hopes and dreams as well. Just the facts.

[edit on 25-7-2008 by iggster]

[edit on 25-7-2008 by iggster]

Iggster, Its the money trick and its used on us all the time, the parasite bank owners lend us money they dont have then get money back with interest and its all planned. Despite the best efforts of many people the system is now being used against us. Now the banks have total control over our money they are being allowed to do what they like. In the good old days when you got paid with cash in your hand it was your money to do what you liked now its their money and they dont give a dam how many suffer for it. The whole lot of them should be rounded up and charged with extortion and then thrown in jail.

I dont have a problem with people making profits but I do when people are thrown out of their houses, or have to cut back on essential needs just to pay debts with massive interest charges on them. They say a slump is comming but the banks are still and will be making money so why does the Goverment any Goverment allow this to happen to its people, well we all know the answer there bought and bribed arent they.

Originally posted by bonaire
Guy gets a 100% mortgate from Bank on $400K house.
Guy pays bank them $3K a month.
Their liability is $400K with ability to earn $600-800K over 30 years on the interest income at 6%.
Guy leaves house to bank after paying $10K in principal and $30K in interest after 2 years.
Bank forcloses in a down market.
They now have a home asset on their books for a possible value of $350K. If they sell it now, they could do ok. If they wait a year, and sell it at $320K, they are losing money.

That's a good analysis, but I don't think you're realizing one thing. The banks aren't going to eat this money...they have lawyers to make sure of that. In this case, if they sell the home for $350k and the mortgage amount was paid down to $390k they are going to sue the guy they foreclosed on for $40k. This guy is either going to have to legally go bankrupt, in which case they take what he owns to pay for as much of this as possible, or they will garnish his wages until it's paid off.

I agree that the banks don't want to foreclose homes...but fear not, they're going to soften that blow by using the guy who they foreclosed on.

Originally posted by unnamedninja
If it was intentional or incompetence the American people don't seem to care either way.

I don't think it's so much that they don't care... It's that the reality is too frightening and they feel much happier with their collective head in the sand. Just don't believe it's happening and it won't affect me. Heh.

And if *I* can think of a scam to enslave and rob people of property - in just the way it went down - then I cannot believe others with the wherewithal to do the deed would NOT come up with the plan.

Sure, they will claim "incompetence," "no one could have foreseen...," etc. And people will just accept with a "Woe is me." But I assure you, this is all part of a very big package VERY intentionally being brought about.

Originally posted by bonaire
Banks don't want to "own" forclosed homes. They really have trouble when they have numerous forclosed homes on their books. They are "in the hole" if they own a home without income coming in on it - especially in a falling home value market.

While this is technically true, the question to ask is... If a bank has a bunch of foreclosed property... Who will get it if the bank goes under?

We bought our house in February . The interest rate was low. We got in at 6 percent. My house was 99k. What bothers me now, are prices dropped even lower. The house three houses down just sold for 64k! I went on trulia, some of the homes we looked at when we were buying around 100k, are now like 69.
Made me sick.

Still though, we were renting before this home and my rent payment was 800. My mortgage is now 800. So it made sense. Rents in the Phx area have shot up and there is nothing that is a three bedroom under 1k. So it is just a , "wish I would have waited a couple more months" .....