Wall Street Break Down- How do you feel about it?

[Lux Et Veritas Academy]

Yesterdays Wall Street breakdown just makes me angry- angry at big financial institutions, angry at people who took out ridiculous mortgages, angry at the greed in America- angry at the politicians who don't care about the economy ...mad mad mad.....shall I go on! How do you feel about this- have we discussed this yet

[Nestof3]

I really don't know if I can agree that politicians don't care about the economy.

 

But, I do think people should be more conservative when getting mortgages. People who depended upon ARMs to get more house then they needed and then not being able to afford their payment when the rates adjusted annoys me. What do they think "adjustable" means?

 

People just seem to expect so much in terms of size of house these days -- great if you can afford it, not great if you can just squeak by.

[mommylawyer]

Unfortunately, the lending guidelines are so loose people who earn minimum wage are able to finance (at well over 100% financing) homes costing $300,000. These same people have $60,000 trucks and $100,000 in credit card debt. *I've seen it - part of what I do at work is review people's finances.*

 

It's truly amazing what the banks will lend, knowing people won't be able to pay it back, setting people up for failure.

 

The economy is just getting worse - and honestly, I don't think any one person - president, congressman, etc. - can do anything about it. I think there should be a complete overhaul of our financing and taxation institutions. Tougher lending regs, fair tax (yes, I'm one of those), etc.

[Mrs Mungo]

Yesterdays Wall Street breakdown just makes me angry- angry at big financial institutions, angry at people who took out ridiculous mortgages, angry at the greed in America- angry at the politicians who don't care about the economy ...mad mad mad.....shall I go on! How do you feel about this- have we discussed this yet

 

I'm most mad about the massive deregulation of the lending industry because that is *largely* what has led to this. Here's an indicator of how serious it is-McCain is widely known as a deregulator. Today I see he's suddenly calling himself a "Teddy Roosevelt Republican." Someone who is on record as a deregulator is now comparing himself to the Trust Buster? That in itself shows that deregulation is a large part of the problem.

 

I really don't know if I can agree that politicians don't care about the economy.

 

Well, I think it should be rephrased as "politicians care less about the economy of our nation than lining their pocketbooks."

 

But, I do think people should be more conservative when getting mortgages. People who depended upon ARMs to get more house then they needed and then not being able to afford their payment when the rates adjusted annoys me. What do they think "adjustable" means?

 

ARMs have received a lot of the blame. However, I have a good friend who lives in CA who has a regular sized house (3 bedrooms with 3 kids, under 2,000 sf). Because *so many* of her neighbors had homes they couldn't afford and abandoned their homes the home prices in her neighborhood started to freefall. Once they owed considerably more on their house than it was now worth (due to falling home prices) the bank said it was no longer sufficient for the collateral on their loan. They chose to keep their kids in the home they grew up in and they were *lucky* because she had money from an inheritence and they were able to pay the tens of thousands of dollars that made up the difference. Not everyone has that kind of money. I'm just saying that not all people losing their homes made bad financial choices.

[Stacy in NJ]

I really don't know if I can agree that politicians don't care about the economy.

 

But, I do think people should be more conservative when getting mortgages. People who depended upon ARMs to get more house then they needed and then not being able to afford their payment when the rates adjusted annoys me. What do they think "adjustable" means?

 

People just seem to expect so much in terms of size of house these days -- great if you can afford it, not great if you can just squeak by.

 

 

The financial risk really isn't in the individual market (individuals over-financing).

 

Banks, brokers and other financial institution have been using packaged mortage debt as low risk investments, selling them to hedge funds. It's basically a bubble. As real estate losses value the debt does as well, whether or not the property owner defaults on their mortage.

 

Mortage default rates are at 2.9%. In the '90's they were near 1.9%. Obviously, this is an increase, but not market shattering.

 

This issue is about institutionaly risk evaluation. The rating companies (Standards and Poors) have been way to cozy with the companies they're suppose to be evaluating. Many of these companies should have had their debt downgraded long ago, but S&P and others were negligent.

 

It's going to get really ugly. :glare:

[Nestof3]

It's truly amazing what the banks will lend, knowing people won't be able to pay it back, setting people up for failure.

 

 

And you know what? When the banks try to be strict (as we saw them be to friends of ours who in their mid 40's just bought a house with a 30 year, $200,000 mortgage), people talk about how mean banks are.

 

The standards did loosen a little so that these people could get their loan, but I have no idea how they are going to make it. I also don't see why they need 4,000 sq feet. Their vehicles are falling apart, they have no health insurance except state assistance for their 8 kids, etc.

[hsmamainva]

Once they owed considerably more on their house than it was now worth (due to falling home prices) the bank said it was no longer sufficient for the collateral on their loan.[/b]

 

I've never heard of this before!!! Is it a common practice for a mortgage company to just do this out of the blue? Or were they trying to refinance at the time the bank told them this? (Or something like refinancing?)

 

We owe more than our house is worth, simply because houses here have dropped in value since we bought ours in 2005. We don't have an adjustable mortgage or anything like that. We'd love to move, but we can't until the market improves.

[Amy in NH]

I'm most mad about the massive deregulation of the lending industry because that is *largely* what has led to this. Here's an indicator of how serious it is-McCain is widely known as a deregulator. Today I see he's suddenly calling himself a "Teddy Roosevelt Republican." Someone who is on record as a deregulator is now comparing himself to the Trust Buster? That in itself shows that deregulation is a large part of the problem.

 

 

I think this is it in a nutshell. Deregulation. Free market? Well, when the free market fails, we don't allow free market consequences, do we? Instead we saddle the taxpayers with billions/trillions of dollars of bailout, while the CEOs and others who made bad decisions walk away with their pockets full.

 

Where is the justice?

[Confuzzled]

I don't think it's accurate to portray only one political party as responsible for this mess.

 

http://www.nytimes.com/2008/09/10/us/politics/10fannie.html

 

http://www.politico.com/news/stories/0708/11781.html

 

Both parties and both candidates have taken money from lobbyists pushing for deregulation.

 

Kris

[hornblower]

Mortage default rates are at 2.9%. In the '90's they were near 1.9%. Obviously, this is an increase, but not market shattering.

 

Isn't that the number only for prime mortgages? Subprime & ARM are waaay higher & as I understand, prime is expected to rise rapidly in the next year or two.

http://www.nytimes.com/2008/08/04/business/04lend.html

 

 

This issue is about institutionaly risk evaluation. The rating companies (Standards and Poors) have been way to cozy with the companies they're suppose to be evaluating. Many of these companies should have had their debt downgraded long ago, but S&P and others were negligent.

 

It's going to get really ugly. :glare:

 

Yes, I think it will get ugly. I think we saw the beginnings of this with AIG being downgraded today....

[Mrs Mungo]

I've never heard of this before!!! Is it a common practice for a mortgage company to just do this out of the blue? Or were they trying to refinance at the time the bank told them this? (Or something like refinancing?)

 

No, apparently it is common practice. They were making their payments, had never been late, had been in their house more than 10 years, weren't trying to refinance or anything.

 

We owe more than our house is worth, simply because houses here have dropped in value since we bought ours in 2005.

 

And that's exactly what happened to them. Once the disparity hit a certain percentage the bank told them to pony up cash or they would foreclose. Now...this was a few years ago and in one of the first and hardest hit areas of the country. Banks may be working with people a little more at this point because they are taking such a hit.

[Mrs Mungo]

I don't think it's accurate to portray only one political party as responsible for this mess.

 

http://www.nytimes.com/2008/09/10/us/politics/10fannie.html

 

http://www.politico.com/news/stories/0708/11781.html

 

Both parties and both candidates have taken money from lobbyists pushing for deregulation.

 

Kris

 

Just to clarify, my post was *not* intended to blame just one party. My post was to illustrate how bad it is when a *known* deregulator suddenly switches tracks to claim the title of "Teddy Roosevelt Republican."

[nmoira]

 

Well, I think it should be rephrased as "politicians care less about the economy of our nation than lining their pocketbooks."

And those of their friends and corporate supporters.

[hornblower]

Yes, I think it will get ugly. I think we saw the beginnings of this with AIG being downgraded today....

 

posted too fast .... so now I'm replying to myself.

http://money.cnn.com/2008/09/16/news/companies/AIG/index.htm?cnn=yes

Your fed is rescuing AIG with an 85 bil 'loan'. I'm still trying to decide what the market will make of this in the a.m. On one hand, if AIG wobbles badly, it would ripple out badly. OTOH, 85 bil?

 

That's a LOT.

 

For Bear Stearns, the fed chipped in 29 bil to JP Morgan to induce JP Morgan to take over.

http://www.usnews.com/blogs/flowchart/2008/3/25/what-taxpayers-get-from-the-bear-stearns-bailout.html

 

And then there was Fannie & Freddie.

 

Just for comparison, the war in Iraq is costing 12 bil/month....

http://rawstory.com/news/2008/Price_of_Iraq_war_now_outpaces_0318.html

 

The US gov't is carrying such a huge public debt already that taking on these additional expenses is a huge problem. I really don't see any blue sky here at all....

[CLHCO]

 

The US gov't is carrying such a huge public debt already that taking on these additional expenses is a huge problem. I really don't see any blue sky here at all....

 

I see lots of blue sky! In fact, it's falling on my head. (Chicken Little joke - it's late.)

 

Me? We're really hoping for a stimulus plan at this point. In for a penny and all that stuff. We'll finish with my food storage, get that generator and whatever else for TEOTWAWKI. (End Of The World As We Know It) We figure, if the sky is going to fall anyway. :lol:

 

I'm only kind of joking. :001_huh: Kind of.

 

In truth, I don't think we're seeing rock bottom or anywhere near it. We'll have some hiccups up and down for a bit as we print more money, live a bit longer in denial, then the sky will slam down. Me? I'm taking this opportunity to try to prepare at least a little with the fraction of peanuts I have left in my pocket.

[JudyJudyJudy]

I'm just saying that not all people losing their homes made bad financial choices.

You are totally correct. When my husband and I bought our home, we bought well under our means. It's a modest house. However, when my husband got laid off twice in under three years, we struggled to make the payments. If he had not landed a contract with the company he's now working with (he's self-employed now), we would have lost our home.

[Vida Winter]

Yesterdays Wall Street breakdown just makes me angry- angry at big financial institutions, angry at people who took out ridiculous mortgages, angry at the greed in America- angry at the politicians who don't care about the economy ...mad mad mad.....shall I go on! How do you feel about this- have we discussed this yet

 

I share your emotions. Stupid, stupid, stupid, and I don't want to end up paying for it! Those who took the risk should shoulder the burden.

 

~Dana

[CLHCO]

You are totally correct. When my husband and I bought our home, we bought well under our means. It's a modest house. However, when my husband got laid off twice in under three years, we struggled to make the payments. If he had not landed a contract with the company he's now working with (he's self-employed now), we would have lost our home.

Yep. Same here. We got less than we could afford by quite a bit. What we didn't expect was for my husband to get laid off twice, take a 40% cut in pay and only craw our way back to what he should be making for this house through a 7 year period. We almost lost our home.

 

I have mixed emotions on much of this but in truth, our loan back then was legitimate and below what we technically could have received. That isn't the case in all situations.

[Guest Virginia Dawn]

We'll have some hiccups up and down for a bit as we print more money, live a bit longer in denial .

 

This is what bothers me. I am having a really hard time wrapping my mind around the fact that our country it is doing all this bailing out with money it doesn't actually have. Money whose only value is in the minds of people who accept it. But why do they accept it? It is beyond my scope of imagination.

 

And if we keep printing more money, we could be looking at an even worse economy, compared to those in the past when a wheel barrow full of paper money would buy you a loaf of bread.

 

As dh is fond of saying about the government and its monetary solutions:

 

"Smoke and mirrors, smoke and mirrors."

[LisaKinVA]

It hits a bit too close to home, here. FIL works for Merrill (since mid-80's), and has seen his retirement savings drop by 75% in the past year. They only found out about the sale on Monday a.m. when my dh called them! They have no idea what may happen to them.

 

The last time this happened... well, I'm thinking the dot-com bomb, really, and the major "correction" on Wall Street. My dh and I lost nearly everything. It took us 7 years to get back to our earlier income level... and an awfully long time living in a basement.:tongue_smilie:

 

I've been angry for a long time at the leadership of both political parties, and sometimes, the more I learn, the angrier I become.

 

This mess didn't just "happen" -- the foundation was laid a decade or more ago. Mix in some greed, fraud, and abuse -- and it wasn't long for disaster.

 

Last night, I found this from the Congressional Record... regarding the Federal Housing Enterprise Regulatory Reform Act of 2005. The purpose of this bill was to correct the gross wrongs going on at Fannie Mae and Freddy Mac. The bill was killed in committee. The full primary source can be found here (Thomas). This is John McCain speaking on behalf of the Act in May 2006... emphasis mine:

 

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

 

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. I urge my colleagues to support swift action on this GSE reform legislation.

 

This bill was re-introduced in 2007, as S. 1100. Current and past co-sponsors of this bill include Sen. Haegel (NE), Dole (NC), McCain (AZ), Sununu (NH), and Martinez (FL). It's been sitting in committee since April 2007.

 

So, maybe a few people were trying to look out for us after all... it's just sad that neither Reps or Dems rallied to make these, or other changes that might have helped -- although, I think it still would have been too late for some.

 

The bailouts make me physically ill. I don't know what would happen to the economy without them -- but without significant changes I don't see them helping in the long run.

 

I also wonder what happens if the gov't does "too much." Doing nothing is a bad idea... getting too involved can be a whole new mess.

[LisaNY]

Honestly, my first reaction is shame and guilt at not having gotten around to that in depth study of economics I keep promising myself. I don't like not really understanding the nuances of something this big... of not being able to reasonably evaluate the analyses and the proposed responses.

 

I don't feel angry - and especially not at our political leaders. I have a sick feeling that we are paying the price for our choices as a country - choice we have allowed, or even pressured, our leaders to make. ...and we, the people, we are the ones who have ignored subtlety and nuance and made our elections, including the current one (and on all sides of the aisle) more about style than substance, and have rewarded demagoguery and shallow sound bites over substance and genuine character... we have pushed for short term gains, in our personal lives and in our political and economic policies. We have mortgaged our children's economic futures so we can avoid making the hard choices now... can we really expect our leaders to be better than we are? ...when we seem to actively expect them to be worse?

 

I don't know where we go from here. Will this be another warning we ignore? Will the crisis calm down and our attention turn to the next set of headlines? Or will we buckle down and start trying to figure this all out? We can't have it all... at least not for very long, and always at a high interest rate... we have to decide what our real priorities are... financially and otherwise, because financial decisions can't be made in a vacuum, to work they have to reflect our values, our priorities, and our.. well the way we want to live, to work, to deal with ourselves and others.

 

*Excellent* post, Eliana! Well said! :001_smile:

[Bev in B'ville]

that our market was due for a mini-crash (that's my word not his because I can't for the life of me think of the term he used - need more coffee). Anyway, he went on to say that stocks are overvalued and that the market would rebalance itself eventually. It looks like that's what it's doing.

 

Based on what he said my husband removed all monies we had in stocks and 401Ks and put them in safer investments. I'm glad he did now. Our investments would have lost a lot of value over the last year if he hadn't.

 

Greenspan also said it's a fallacy to think that government or the presidency has that much control over Wall Street and the day-to-day market. It's a global market and so many factors are happening outside of our borders to affect the economy. Just look at OPEC and the effect they have on the economy when they adjust production. I'm not saying government doesn't have any control, just offering a different viewpoint.

 

If you want to see stocks go down a lot further, watch what happens when/if the next president increases corporate taxes. They'll plummet.

 

As always, just my musings.

[Renee in NC]

You are totally correct. When my husband and I bought our home, we bought well under our means. It's a modest house. However, when my husband got laid off twice in under three years, we struggled to make the payments. If he had not landed a contract with the company he's now working with (he's self-employed now), we would have lost our home.

 

And we are losing ours, mainly because our business is failing due to a slow construction industry (we are in equipment rental.) Yes, I would make different decisions knowing what I know now, but hindsight is always 20/20!

[Renee in NC]

This is what bothers me. I am having a really hard time wrapping my mind around the fact that our country it is doing all this bailing out with money it doesn't actually have. Money whose only value is in the minds of people who accept it. But why do they accept it? It is beyond my scope of imagination.

 

And if we keep printing more money, we could be looking at an even worse economy, compared to those in the past when a wheel barrow full of paper money would buy you a loaf of bread.

 

As dh is fond of saying about the government and its monetary solutions:

 

"Smoke and mirrors, smoke and mirrors."

 

This is my thought, too.

[mysticamethyst]

I am not sure what to think anymore, when we bought our house 3 yrs ago we could afford it, and the payment. We paid around 129,000 for our house had a 1200 a month payment, that was 200 less than our rent. Now, our morg. payment is almost 1700 for the same house, I cannot afford this with everything else that is going on. We go for re finance, and are told we have to come up with 20% down,on a house we all ready own, there is NO WAY that is going to happen. My husband has a good paying job, but we are struggling every month to pay our bills because of way everything is going. I wish I understood what was happening, I wish I could wrap my brain around it and figure it out; but I can't. I just hope it changes soon, I dont' want to lose my house but it is heading in that direction.

[hornblower]

For a good quick overview of how we got here I like

Bad Money by Kevin Phillips http://www.amazon.com/Bad-Money-Reckless-Politics-Capitalism/dp/0670019070/ref=pd_sim_b_7

[Mrs Mungo]

It hits a bit too close to home, here. FIL works for Merrill (since mid-80's), and has seen his retirement savings drop by 75% in the past year. They only found out about the sale on Monday a.m. when my dh called them! They have no idea what may happen to them.

 

The last time this happened... well, I'm thinking the dot-com bomb, really, and the major "correction" on Wall Street. My dh and I lost nearly everything. It took us 7 years to get back to our earlier income level... and an awfully long time living in a basement.:tongue_smilie:

 

I've been angry for a long time at the leadership of both political parties, and sometimes, the more I learn, the angrier I become.

 

This mess didn't just "happen" -- the foundation was laid a decade or more ago. Mix in some greed, fraud, and abuse -- and it wasn't long for disaster.

 

Last night, I found this from the Congressional Record... regarding the Federal Housing Enterprise Regulatory Reform Act of 2005. The purpose of this bill was to correct the gross wrongs going on at Fannie Mae and Freddy Mac. The bill was killed in committee. The full primary source can be found here (Thomas). This is John McCain speaking on behalf of the Act in May 2006... emphasis mine:

 

 

 

This bill was re-introduced in 2007, as S. 1100. Current and past co-sponsors of this bill include Sen. Haegel (NE), Dole (NC), McCain (AZ), Sununu (NH), and Martinez (FL). It's been sitting in committee since April 2007.

 

So, maybe a few people were trying to look out for us after all... it's just sad that neither Reps or Dems rallied to make these, or other changes that might have helped -- although, I think it still would have been too late for some.

 

The bailouts make me physically ill. I don't know what would happen to the economy without them -- but without significant changes I don't see them helping in the long run.

 

I also wonder what happens if the gov't does "too much." Doing nothing is a bad idea... getting too involved can be a whole new mess.

 

http://www.politifact.org/truth-o-meter/article/2008/sep/17/mccains-warning-fannie-and-freddie/

[Guest janainaz]

Yesterdays Wall Street breakdown just makes me angry- angry at big financial institutions, angry at people who took out ridiculous mortgages, angry at the greed in America- angry at the politicians who don't care about the economy ...mad mad mad.....shall I go on! How do you feel about this- have we discussed this yet

 

Yes, angry at the greed in America and that includes myself. I would say that my family lives pretty humbly, but like someone else pointed out to me, it's all relative. They were right. We gripe and complain and whine about high gas prices and healthcare (yeah, I complain, too) while people in other countries sit and watch their children starve to death. Imagine having nothing to give your kids to eat? THAT is suffering. People have replaced relationships with stuff and that is why the #1 prescribed drug in America is for anti-depressants. Everyone is depressed because they can't get their eyes off themselves and they live in this world pursuing happiness. Joy is only found in contentment and that is why there is so much misery. Our needs being met is not enough - we always have to strive to be more and outdo the other guy. Wether it be by the size of our house or the way in which we educate our kids, we always need to be better.

 

If a great depression were to come it actually might force people to care again - about what really matters. On that note, we see the damage of things like Hurricaine Katrina, etc., but we don't stop to look at all the positive that was worked through such a disaster. I imagine there are people who lost everything except their very breath and as a result found their life.

[lynn]

I believe we will be seeing a decline in our lifestyle we are presently use to as taxpayers will get hit with higher taxes to cover these "bail outs" If they would let it go and just let things happen, which they should have been all along it will correct itself.

[K&Rs Mom]

I believe we will be seeing a decline in our lifestyle we are presently use to as taxpayers will get hit with higher taxes to cover these "bail outs" If they would let it go and just let things happen, which they should have been all along it will correct itself.

 

:iagree: Businesses have failed plenty of times before, and it IS hard for everyone involved; but the gov't bailing them out doesn't actually help anyone, it just messes with the economic processes, so they get even more messed up, and more businesses fail, and expect the gov't to bail them out also....

 

As for the stock market and this current situation, I'm not surprised. It's only going to get worse the more the government tries to "manage" things. :glare:

[Jane in NC]

 

As for the stock market and this current situation, I'm not surprised. It's only going to get worse the more the government tries to "manage" things. :glare:

 

In this interview from Fresh Air, Professor Michael Greenberger of the University of Maryland argues that the lack of oversight on derivatives, credit default swaps, etc. contributed to our financial problem. Not that I have a handle on credit default swaps, mind you, but I feel a bit of understanding having listened to this.

 

I do have problems with the rescues since this country does not have the money to pay for the bail out. But I am not sure that letting these firms go under will ultimately solve the crisis.

 

Next question: what do we do when FDIC is drained?

 

Jane

[Raders Fan]

Or at least, that's what I think. I hope I am wrong. I really hope I am wrong, but I am planning to be right.

 

Dh and I decided when he took a new job on the other side of the country (old job was in grave danger of evaporating, or we never would have left our home) that we wanted a place where we could grow our own food. We planted 10 fruit trees (more will come next year) and a huge garden. Unfortunately, having surprise major abdominal surgery in the middle of summer is not conducive to a good harvest. So as far as gardens go, it was a year for learning, and we'll do better next year.

 

Like Cheryl, we are preparing for really tough times. We have food storage for over a year for our family, plus extra to share. We have a generator. We have enough savings to make it for six months at least if dh loses his job. We still have to get 50-75 gallons of kerosene to heat the house in a disaster, and a few other small things.

 

If we are wrong and there is no economic disaster or EOTWAWKI, we will have purchased next year's food at this year's prices. The price of food is only going to go up, so we will have made a good investment. Heckuva lot better than we can do in the stock market.:tongue_smilie:

 

Jennifer

[Academy of Jedi Arts]

The further cutting of interest rates and the idea of printing more money makes me sick.

 

My family is absolutely doing worse than we were when I quit working 8 years ago. If God forbid my husband or I were to get a major illness, even with insurance we would be able to afford to pay for our basic needs, but hardly anything above that. If I had known then what I know now, I may very well have not given up my career until dd was preschool age so I could save more.

[Mamagistra]

This is what bothers me. I am having a really hard time wrapping my mind around the fact that our country it is doing all this bailing out with money it doesn't actually have. Money whose only value is in the minds of people who accept it. But why do they accept it? It is beyond my scope of imagination.

 

And if we keep printing more money, we could be looking at an even worse economy, compared to those in the past when a wheel barrow full of paper money would buy you a loaf of bread.

 

As dh is fond of saying about the government and its monetary solutions:

 

"Smoke and mirrors, smoke and mirrors."

 

 

:iagree: AKA the Federal Reserve. :glare:

[lynn]

 

If you want to see stocks go down a lot further' date=' watch what happens when/if the next president increases corporate taxes. They'll plummet.

 

As always, just my musings.[/quote']

 

Hmm, and who is promising to do this? There is only one person that has talked about doing this that I know of, please correct me if I am wrong but I believe it's Obama.

[StaceyinLA]

>paid around 129,000 for our house had a 1200 a month payment<<

 

I'm not trying to be rude, but how did you have a payment that large on that sum? What interest rate was this? We have a $95,000 mortgage (on a house that is now worth $225,000) and our payment, including insurance, is under $700.00. That means one for $190,000 would only be around $1,400. I just don't understand how 129,000 is costing you 1200/month! Of course if your taxes and stuff are really high, that could explain it.

 

I'm sorry - it's really not my business, but that is just something I'd have to examine more closely.

[Nestof3]

I'm not trying to be rude, but how did you have a payment that large on that sum? What interest rate was this? We have a $95,000 mortgage (on a house that is now worth $225,000) and our payment, including insurance, is under $700.00. That means one for $190,000 would only be around $1,400. I just don't understand how 129,000 is costing you 1200/month! Of course if your taxes and stuff are really high, that could explain it.

 

 

Not everyone gets a 30 year mortgage. She could have a 15 year mortgage at 7 percent interest.

 

http://www.mortgage-calc.com/mortgage/simple.php

[JennifersLost]

Well, I for one am furious at the situation. The current set of politicians are preventing the necessary correction now, setting us all up for inflation and a huge correction some time in the future.

 

If the price of houses is so out of reach of the common family now, the answer isn't to lend families more money than they can possibly repay. The answer is to stop lending all that money, let the number of sellers outstrip the number of buyers and let the price of houses FALL again.

 

Duh.

 

(Sorry - that was rude, but I couldn't resist).

 

I feel like this type of thinking has invaded every aspect of our lives - that we all should somehow magically have everything be rosy and perfect all the time. Everyone should be able to afford big houses. Everyone should get a dirt-cheap mortgage. Everyone should have big-screen tvs, new cars, fancy furniture. Everyone should be "saved" by modern medicine, even when they're 99 and obviously dying. Every business should be bailed out and on and on.

 

Hello. Have we forgotten that lives and countries have ups and downs? Have we forgotten that we actually have to earn enough to PAY for things? It's ridiculous and our government is propping up a house of cards that should be allowed to fall.

 

During the tough times people get new chances. When a company fails it creates an opportunity for a new company to emerge - possibly a better, more efficient company with superior products.

 

All I see happening now is that inflation is going to outpace the savings of everyone who "did the right thing". Nice.

[Nestof3]

Great post, Jennifer!

[lynn]

Well, I for one am furious at the situation. The current set of politicians are preventing the necessary correction now, setting us all up for inflation and a huge correction some time in the future.

 

If the price of houses is so out of reach of the common family now, the answer isn't to lend families more money than they can possibly repay. The answer is to stop lending all that money, let the number of sellers outstrip the number of buyers and let the price of houses FALL again.

 

Duh.

 

(Sorry - that was rude, but I couldn't resist).

 

I feel like this type of thinking has invaded every aspect of our lives - that we all should somehow magically have everything be rosy and perfect all the time. Everyone should be able to afford big houses. Everyone should get a dirt-cheap mortgage. Everyone should have big-screen tvs, new cars, fancy furniture. Everyone should be "saved" by modern medicine, even when they're 99 and obviously dying. Every business should be bailed out and on and on.

 

Hello. Have we forgotten that lives and countries have ups and downs? Have we forgotten that we actually have to earn enough to PAY for things? It's ridiculous and our government is propping up a house of cards that should be allowed to fall.

 

During the tough times people get new chances. When a company fails it creates an opportunity for a new company to emerge - possibly a better, more efficient company with superior products.

 

All I see happening now is that inflation is going to outpace the savings of everyone who "did the right thing". Nice.

 

EXactly, from where we are "doing the right thing" living well within what we can afford knowing many people around cannot afford things they have, probably are not sleeping to well.

[Kris]

I'm *not* happy -- okay, I'm pretty ticked off -- and I admit to having evil thoughts.

 

Frankly, I'm sick and tired of fighting to live within our means while the taxes we pay are bailing out people who don't. We live in a dump and can't afford to make the repairs we need to make, let alone "upgrade" to a better house. Our *newest* car is 14 years old! But we can't afford a car payment, so we take care of this one. I have *no* clue how we're going to heat the house this winter because the last quote I got on filling the propane tank nearly gave me a stroke.

 

I am *sick* of it. I'm seriously thinking of going down to the welfare office -- I know there's one around here somewhere -- and finding out if we can get a piece of this pie.

 

I know this nasty little corner of the world I call home is an insignificant gnat compared to the BILLIONS going to bail out these companies, and the jobs that are at stake, but it's the little corner of the world that *I* am responsible for.

 

And I don't need to be psychic to know that, come this winter when we're freezing our butts off in this small, insignificant dump, there won't be a bail-out check with our name on it.

[threetreasurs]

I am just hoping that things settle down a bit. To have this right after the hurricane is hard to absorb. I keep thinking of people who need their investments to meet expenses after their houses and jobs have been wiped out; bad timing.:001_huh:

[mysticamethyst]

Stacey, What happen is my dh and I were very stupid with credit when we were young, took FOREVER to fix and repay. Fastforward 14 years we FINALLY can buy a house but becasue we were young and stupid we get an 7% interest rate that is now over 10% I believe. I get we were irresponsible when we were first married but we paid it back, but we still suffer for not being educated when it came to credit and money; we will lose our house for it. I am not living above my means, we do not have more house than we need, credit cards, extra cars, go on vacations we can't afford. There are people that deserve to go down with this sinking ship, but I don't think everyone should go down. People who bought houses with sole intention of flipping, making HUGE profit, and took a HUGE morg and now can't pay because no one can afford, no one shohld bail them out. People who have been in their houses for 10+ years and are finding out that their house is worth less than what they paid for it, because of what has happen, and again I am not clear on it at all just that we are in the middle of it and seem to be going down in a spiral motion gaining way to much speed.