i should also add this to my last post. the unscrupulous real estate brokers have been under no restraint by our federal watch dog agencies. the sole purpose of government should be to control the predetary nature of the capitalist society. if left free to operate, big business would crush the middle class. look what happened to big oil, the energy companies, the savings and loan of the 80’s, and no the real estate market,all left free to do as they please-free market forces at work with no restraints..
Last year I was processing 11 refinances a day. The loan amounts were so high and the property values as well. People got instant cash in their pockets. Now the housing market has depreciated. You know what happens next…
I think the blame for each problem lies with the person who has the problem. For “Joe Homeowner” who is getting foreclosed on, its his fault that he got himself into a mortgage that he couldn’t afford or didn’t understand.
For the companies going bankrupt, they have no one to blame but themselves. They know everything about the person who applies for a loan, if they approve the loan and it goes bad on them….their approvals are too lenient.
For the last 5 years I have been scratching my head saying you just can’t make loans of 110% of home value, with no money down and no income verification. Then you go throw in some interest only options, with a little negative amortization in a declining market and everyone knew where this was headed.
I don’t see how this is anyone’s fault but the homebuyers. I purchased a foreclosed home 4 years ago in a neighborhood where there were more sale signs in the yards then children playing. One by one the sale signs left and lockboxes were installed by the bank. The homebuilder told people that you could afford a new house for the price of rent. Are people this stupid? Should lenders, homebuilders or anyone else be to blame? Why? This is just another example how people want to make poor decisions and then have someone else pay for their mistakes.
And don’t laugh at the plasma TV, new car, 45K on the credit card. I would inspect mobile homes that people were paying over 20% interest on. They would have the big screen tv, pure bread dogs (multiple), new cars and everything else most people would like to have. But in the same hand they could not come up with a few hundred dollars to seal their metal roof so the thing wouldn’t leak. When the loss was not covered they wanted to claim they were getting screwed.
….concern about subprime lending has been apparent for the last few years. This should come as no suprise to any of the stakeholders in this financial mess.
The only question now is who bails out whom and by what process? Through the courts? A federal bailout? (see Sen Dodd)
As my favorite author taught me a long time ago….TANSTAAFL (there ain’t no such thing as a free lunch).
Had to sell a home in the southern USA two years ago. Houses in the area were averaging over a year to sell and prices were dropping quick. We sold our house for 5% less than we paid for it over 4 years earlier – then factor in commissions, etc and we had a seriously negative transaction.
Meanwhile, Ryland and the other major national homebuilders were literally WORKING 7 DAYS A WEEK to build new homes & new home developments keep springing up everywhere when existing stock can’t sell and people are losing $$ on their homes.
We were on the HOA board for our neighborhood – it was not uncommon for someone to buy a new home for $150k and get foreclosed within a year, meaning that they had no business buy a house and the lender also had no rationale for giving them a mortgage. If you can’t make the payment on a $150k over 30 years something must really be weak financially.
I blame the national homebuilders who won’t slow down and mortgage companies who give loan to lousy risks. It will hurt – and probably hurt all of us to some degree – but let them fail and better companies will come in.
When you go to a professional you rely on their judgement – that is why they are called “profesionals”. Given that premise, a great many people got caught in this mess and are losing a great deal in the process. The problem was that lenders would not work with the people who honestly wanted to work things thru, hence the resulting foreclosure when the homeowner was out of options.
If these people were “professionals” to begin with, they wouldn’t have loaned people the money to get into homes they couldn’t afford in the first place. Then you wouldn’t be blaming them for not helping them keep the house.
Sorry Homeowner, putting all the blame on the lenders because they won’t “work” with a borrower who is 4-6 months behind on his payments and has NO WAY of ever making them up or even paying a discounted amount is pure bull. I say the blame is spread around between the naive homebuyer who wanted 4000 sq ft instead of 1500 sf and pure greed took over as the housing market exploded and also the mortgage brokers who danced those ridiculos ARMS and interest only teaser loans out there. When I refinanced my home two years ago, it had already appreciated over 200k and the mortgage broker was begging me to do an ARM and take out the extra 200k and saying it would still be less than a 30 yr fixed. I stuck with my 30yr fixed at 5.25% and now, I am not in danger of losing my house and I bought what I could afford.
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i should also add this to my last post. the unscrupulous real estate brokers have been under no restraint by our federal watch dog agencies. the sole purpose of government should be to control the predetary nature of the capitalist society. if left free to operate, big business would crush the middle class. look what happened to big oil, the energy companies, the savings and loan of the 80’s, and no the real estate market,all left free to do as they please-free market forces at work with no restraints..
Last year I was processing 11 refinances a day. The loan amounts were so high and the property values as well. People got instant cash in their pockets. Now the housing market has depreciated. You know what happens next…
I think the blame for each problem lies with the person who has the problem. For “Joe Homeowner” who is getting foreclosed on, its his fault that he got himself into a mortgage that he couldn’t afford or didn’t understand.
For the companies going bankrupt, they have no one to blame but themselves. They know everything about the person who applies for a loan, if they approve the loan and it goes bad on them….their approvals are too lenient.
For the last 5 years I have been scratching my head saying you just can’t make loans of 110% of home value, with no money down and no income verification. Then you go throw in some interest only options, with a little negative amortization in a declining market and everyone knew where this was headed.
I don’t see how this is anyone’s fault but the homebuyers. I purchased a foreclosed home 4 years ago in a neighborhood where there were more sale signs in the yards then children playing. One by one the sale signs left and lockboxes were installed by the bank. The homebuilder told people that you could afford a new house for the price of rent. Are people this stupid? Should lenders, homebuilders or anyone else be to blame? Why? This is just another example how people want to make poor decisions and then have someone else pay for their mistakes.
And don’t laugh at the plasma TV, new car, 45K on the credit card. I would inspect mobile homes that people were paying over 20% interest on. They would have the big screen tv, pure bread dogs (multiple), new cars and everything else most people would like to have. But in the same hand they could not come up with a few hundred dollars to seal their metal roof so the thing wouldn’t leak. When the loss was not covered they wanted to claim they were getting screwed.
….concern about subprime lending has been apparent for the last few years. This should come as no suprise to any of the stakeholders in this financial mess.
The only question now is who bails out whom and by what process? Through the courts? A federal bailout? (see Sen Dodd)
As my favorite author taught me a long time ago….TANSTAAFL (there ain’t no such thing as a free lunch).
Had to sell a home in the southern USA two years ago. Houses in the area were averaging over a year to sell and prices were dropping quick. We sold our house for 5% less than we paid for it over 4 years earlier – then factor in commissions, etc and we had a seriously negative transaction.
Meanwhile, Ryland and the other major national homebuilders were literally WORKING 7 DAYS A WEEK to build new homes & new home developments keep springing up everywhere when existing stock can’t sell and people are losing $$ on their homes.
We were on the HOA board for our neighborhood – it was not uncommon for someone to buy a new home for $150k and get foreclosed within a year, meaning that they had no business buy a house and the lender also had no rationale for giving them a mortgage. If you can’t make the payment on a $150k over 30 years something must really be weak financially.
I blame the national homebuilders who won’t slow down and mortgage companies who give loan to lousy risks. It will hurt – and probably hurt all of us to some degree – but let them fail and better companies will come in.
To bad though that some of these yahoo’s are not located in ….CHINA..
They have a unique way of dealing with such imbeciles..
When you go to a professional you rely on their judgement – that is why they are called “profesionals”. Given that premise, a great many people got caught in this mess and are losing a great deal in the process. The problem was that lenders would not work with the people who honestly wanted to work things thru, hence the resulting foreclosure when the homeowner was out of options.
If these people were “professionals” to begin with, they wouldn’t have loaned people the money to get into homes they couldn’t afford in the first place. Then you wouldn’t be blaming them for not helping them keep the house.
Sorry Homeowner, putting all the blame on the lenders because they won’t “work” with a borrower who is 4-6 months behind on his payments and has NO WAY of ever making them up or even paying a discounted amount is pure bull. I say the blame is spread around between the naive homebuyer who wanted 4000 sq ft instead of 1500 sf and pure greed took over as the housing market exploded and also the mortgage brokers who danced those ridiculos ARMS and interest only teaser loans out there. When I refinanced my home two years ago, it had already appreciated over 200k and the mortgage broker was begging me to do an ARM and take out the extra 200k and saying it would still be less than a 30 yr fixed. I stuck with my 30yr fixed at 5.25% and now, I am not in danger of losing my house and I bought what I could afford.