Sebastian (a lady) Posted February 25, 2009 Share Posted February 25, 2009 I agree with you. I didn't fall for these kinds of loans either. I just think that this standard should apply to banks as well, only more so. If individuals should have known better, then the banks really should have known better. They were the better-informed than the consumer, and should have known exactly what the risks were. The banks should not have been bailed out. I would generally agree with you that the extent of the bailout should be extending depositor insurance to protect the depostis of savers. HOWEVER, it is also unfair for the government to twist the arm of banks to extend loans to people who can't repay them (in the interest of diversity) and then have the gall to complain when the banks can't hold up under the pressure of defaulting loans. Quote Link to comment Share on other sites More sharing options...
Tracey in TX Posted February 25, 2009 Share Posted February 25, 2009 I've had mixed feelings about bailing out families who made really poor choices. Why should we and our children/grandchildren pay for someone else's greed to keep up with the proverbial Joneses? This story takes the cake: DH talked to a man in CA who owns two homes, both purchased in the housing bubble. This is a well dressed, articulate, well-to-do man who has a 790 FICA score. He now owes hundreds of thousands more on his homes than he can make by selling them. He lost his job and will relocate. New company won't buy homes. So he's filing for bankruptcy because he doesn't want to pay those mortgages. WHAT??? Lenders were at fault for taking jumbo loans that they could barely afford when the economy was good. Few people put any more down. When there is little personal funding at stake, there's little to actually lose. We qualified for an obscene amount of money. We used only half on the first home; and 1/3 of available credit on our current home. Ooopsys and "what ifs" always happen. Things break, age, and need replacing. That needs to be taken into consideration. Negative amortization loans were the closest thing to the banks working hand-in-hand with Satan. It's horrible. But they helped people buy homes they never should have purchased because they couldn't afford it. Now our responsible families, children, and grandchildren will be cleaning up an ineffective industry's mess, and the mess of millions of greedy Americans who want more than they can afford. I really hope Cafferty (CNN) is right. Maybe this will readjust our American dream and lower our expectations to what is realistically attainable. It's not our "father's America anymore". Quote Link to comment Share on other sites More sharing options...
fivetails Posted February 25, 2009 Share Posted February 25, 2009 we spent 4 years looking for a house that met our needs and our personal budget. it wasn't that we didn't find homes either, it was that we had to make a move within minutes of seeing the house to beat out investors. Dead serious. They have the money and the means to move FAST on a deal and most people looking to buy to own do not or are way too cautious to do so for fear of living in a lemon. Plus banks favor investors over home buyers because the money is faster and less hassle. We had one guy literally walk in the bank door in front of dh and our realtor and make a CASH offer on the house we were interested in. We had our financing already set to go and everything, but we couldn't compete with a flat cash offer. He turned around and sold it for 100K more after getting some work done on it and cleaning it up. Pricing it right out of our budget. so yes, I can see why investors get far more homes at great deals than people who are looking hard for a decent home to actually live in I think that's pretty normal. We've never owned a home (yet), just rented, so I really know nothing of mortgages and all that, but it seems like a pretty normal assumption -- ie, this "professional" has more education than I do on *this topic*, so I should listen to him/her. I don't think anyone can really fault people for that. I can. MY money is MY business and it's MY business to know what I'm doing with it. My home is also my business and it's my business to know what I'm getting in it and how. Compare it to other professions - when you go to the dentist and he says that you have blah blah blah and need blah blah blah to fix that, do you spend the next year studying dental texts and such to see if he knows what he's talking about? Or do you trust that he, as the dental professional, knows what he's talking about? When a lawyer gives legal advice, do you start scouring law textbooks to see if he's right? Or do you trust that his advice, as a legal professional with ten years of law training (or whatever it is), is correct? How about an electrician? Plumber? It doesn't take a year even for a house! :001_huh: I come home, think about it, maybe google it, maybe ask a few relatives/friends or get a second opinion, talk to dh (he worked in dental claims for 4 years), and THEN make a decision within a day or two. Then think how much I'm willing/able to pay for it and call to negotiate payment for the service. We tend to believe that the people educated in their specific fields would know what they were talking about - yeah, sometimes, unfortunately, they don't. But *most* of the time, they do...so it's a normal assumption to make - this banking professional (whatever they're called) knows what he/she is talking about. Can't really fault people for *that* - they are doing what most do when they've sought out the advice of a professional. Listening to it! yikes! NOoooooo *running screaming into the night*;) absolutely not. just because someone is a professional and knows their job, does not mean that the decision they would make is the right decision for you. they might be giving great advice, but that doesn't mean it's great advice for you. when I seek out the advice of a professional, any professional, it's to get an opinion on available options from them. I listen to it, but that does NOT mean I feel compelled to follow it. I'm seeking advice - not to be told what to do, but to have information on what my available choices of what to do are. I listen, weight it with my own thoughts and collected information and then I make the decision I feel is best for me/my family. I never let a professional make the decisions for me. Y'know what? If *you* are able to get yourself to a point where you understand as much as the professional - that's great.:) Not everyone can do that. Googling often doesn't help unless you have at least a *base* of knowledge about your topic - how do you know how to interpret what you find? how do you know that the googled info is correct? Anyone can put anything on the internet. I could look up "how to change the head gasket" for my van - but how in the world would I know if the website I'm viewing is giving me the right instructions? What about this site over here? (not to mention, how do I interpret what I'm reading - do I know what these tools are that they're talking about? Do I know where these engine parts are and what they do?).....how long is it gonna take me to get to the same point of understanding as the guy up the road who is a licensed mechanic? (Just an example) Yeah banking/mortgages/investments/whatever is different, but all the googling still isn't going to give me the college or university education and the experience that a professional banking/mortgage/investor/etc person would have. Friends and family only works if they happen to have the knowledge and experience. Know how much advice most of *my* friends and family could give me about mortgages and whatever? Oh about, hmm, none. ;) ...why not? Because most of them have never owned a home - it's not even on their radar because it's not something they can afford to do. Anyway. All I'm trying to say is that we hire professionals for a reason - we pay them the big bucks because they are the ones who went through college, university, whatever, they are the ones with the experience and detailed knowledge in their profession -- it's NORMAL for people (everyday average people) to trust the advice they get from a professional. I didn't say it was good to always do that. I said it was normal. :) (y'know...I find this whole thing so odd. People are saying that banks were giving mortgages to people who couldn't afford them, right? That seems so odd considering we had the opposite experience. We TRIED to get a mortgage a couple of years ago -- just a little one! -- and the bank wouldn't touch us because they said dh didn't make enough money. In truth, he didn't. But I just find it weird.... ) Quote Link to comment Share on other sites More sharing options...
Tracey in TX Posted February 25, 2009 Share Posted February 25, 2009 it's NORMAL for people (everyday average people) to trust the advice they get from a professional. We hire professionals for almost everything. And I always assume they're spinning the truth for profit. ALWAYS, always, always. Whether it's a bold faced lie or skewed belief system due to employment. I do my research before a decision, then we reconsiders each point. Why would we ever put our financial trust in someone who has a profit motive? They might be my BFF, but they're protecting their interests like we are SUPPOSED to protect our own. Quote Link to comment Share on other sites More sharing options...
Sebastian (a lady) Posted February 25, 2009 Share Posted February 25, 2009 There was actually an article in one of the financial magazines I get (either Money or Kiplinger's) a few months ago that was about the idea that a financial professional didn't necessarily have their customer's best interest at heart, or necessarily perform better than the customer would have done just doing the index. Do I second guess a dentist. Sometimes. If he is suggesting a drastic course of action or something that is going to be really expensive. Do I treat what I'm told by all manner of professionals with some skepticism? You bet. And if the professional is going to benefit directly from getting me to invest or take out a loan, I'm going to be there reading the fine print and shopping around. Quote Link to comment Share on other sites More sharing options...
Sebastian (a lady) Posted February 25, 2009 Share Posted February 25, 2009 Do you have to disclose how many kids you have on an application? I can see a landlord having a problem with 20 people in a four bedroom house. Especially if they weren't related (ie, someone subletting rooms and perhaps not being careful about the wear and tear). But we rent out the house we own. We have restrictions on the size and number of pets. But I can't say that there is any restriction in our contracts on kids. Quote Link to comment Share on other sites More sharing options...
fivetails Posted February 25, 2009 Share Posted February 25, 2009 it's NORMAL for people (everyday average people) to trust the advice they get from a professional. We hire professionals for almost everything. And I always assume they're spinning the truth for profit. ALWAYS, always, always. Whether it's a bold faced lie or skewed belief system due to employment. I do my research before a decision, then we reconsiders each point. Why would we ever put our financial trust in someone who has a profit motive? They might be my BFF, but they're protecting their interests like we are SUPPOSED to protect our own. I tend to trust unless I am given reason to act differently. Maybe I'm weird. Quote Link to comment Share on other sites More sharing options...
fivetails Posted February 25, 2009 Share Posted February 25, 2009 And if the professional is going to benefit directly from getting me to invest or take out a loan, I'm going to be there reading the fine print and shopping around. Do they? The guy in the bank that does your mortgage application, I mean. The one who tells you yes - or "go away" :lol: Quote Link to comment Share on other sites More sharing options...
Reya Posted February 25, 2009 Share Posted February 25, 2009 (edited) Having refi'd recently, and having dealt with banks who seem DETERMINED to screw up the paperwork and everything else to make it impossible to get the refi done, I can see how in some circumstances--when the homeowners took out a bad loan but then tried to turn it into a better loan and got railroaded by the company--that it could be the bank's fault. We were *thisclose* not to foreclosure but to simply walking out on the house and making it foreclose. Seriously, it was THAT difficult to work with them. It took in excess of 100 hours of my time, dozens of phone calls, dozens of transfers--and IT SHOULD HAVE ALL BEEN STRAIGHTFORWARD. We could afford the loan, but the rate was WAY higher than what it should have been, and since we bought the house when the market was up, if we couldn't get the refi, it only made sense to ditch the house and get another one, at the new loan rates. And our credit score would have recovered in a year, so we could have done it. Note: We weren't trying to cheat the market. Just go with it. Home values decline--fine. We got a house about 20% less than the going rate because the kitchens and bathrooms were so awful, so we could absorb most of that. We'd originally fully financed, though, because our downpayment was locked up in our other house, which was for sale. So when we got the money back when our old house sold, I wanted to put down on the new house and refinance at rates that were now nice and low--again, following the market. We had the credit scores. Everything was fine. Except that customer service dealing with all the various entities made it a frigging NIGHTMARE. I think at least part of what we're seeing here is a collapse in customer service. :001_huh: That said? It's squatting, not homesteading. *rolls eyes* Edited February 25, 2009 by Reya Quote Link to comment Share on other sites More sharing options...
fivetails Posted February 25, 2009 Share Posted February 25, 2009 Do you have to disclose how many kids you have on an application? I can see a landlord having a problem with 20 people in a four bedroom house. Especially if they weren't related (ie, someone subletting rooms and perhaps not being careful about the wear and tear). But we rent out the house we own. We have restrictions on the size and number of pets. But I can't say that there is any restriction in our contracts on kids. Sometimes. Some landlords don't ask - but some do.... we recently had to find another rental house (we move down the street this weekend) here and a LOT of people didn't want to rent us something small & cheap because we have kids and pets (and we only have two kids). It's stupid when you think of the kinds of places people lived in years ago - my grandmother was one of 13 kids in a 2 bedroom house. ;) Quote Link to comment Share on other sites More sharing options...
lionfamily1999 Posted February 25, 2009 Share Posted February 25, 2009 I have more sympathy for the homeowners than the banks. Granted, they should've never taken those loans, they should've gone with higher interest and a steady mortgage; but, since the Feds have bailed out the banks, I have to say, I think the money would've been better spent on bailing out the homeowners. The banks would've still gotton their money (for the mortgages) and there'd be less empty houses and less homeless people. I used to be very firm about this. DH and I worked hard to own our home, my parents worked hard to keep their home, why should we help people that didn't do the work? If I had to choose, however, I would still give the money to the people with bad loans, rather than the banks that made them. Oh, and better the original owner squats than some random person. Quote Link to comment Share on other sites More sharing options...
TXMomof4 Posted February 25, 2009 Share Posted February 25, 2009 BUT THE BANKS SHOULDN'T HAVE BEEN BAILED OUT EITHER! THEY made decisions that led to their financial problems, too. I don't expect to be bailed out and why should we bail them out? It just frost my cookies to be considered a "deadbeat" because I can't pay my bills, but when the banks can't pay their's the gov't gives them money and they go on vacation, KWIM? What's good for the goose is good for the gander, right? I agree whole-heartedly. Did you see the congresswoman in Ohio that is recommend people who have received a forclosure notice? Apparently, some of the banks did such a bad job of paperwork, the notes on a lot of the homes can't be found. So there's no legal evidence that the homeowner owes the bank anything. This world is just crazy sometimes. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 25, 2009 Share Posted February 25, 2009 Do you have to disclose how many kids you have on an application? I can see a landlord having a problem with 20 people in a four bedroom house. Especially if they weren't related (ie, someone subletting rooms and perhaps not being careful about the wear and tear). But we rent out the house we own. We have restrictions on the size and number of pets. But I can't say that there is any restriction in our contracts on kids. usually you have to disclose everyone that will be living in the home, including children. even so, it's not like they don't see the big 12 passenger van and ask what's up with that, kwim?;) one of the reasons we bought the home before this one is because the house we'd been renting for 5 years and had gone from 1 dc to 5 dc in was no longer going to renew our lease. We took awesome care of it, got our entire deposit back, she just wanted to let her aging fil live there. we absolutely could not find a place that would rent to us when they found out we had more than 3 kids. even when we offerred to pay a higher deposit. as far as apartments go, they do have restrictions. supposedly firecode rules. Quote Link to comment Share on other sites More sharing options...
Aubrey Posted February 27, 2009 Share Posted February 27, 2009 Why assume that only an investor would be interested in a foreclosure house? Our old tae kwon do instructor is a small business owner. He's been looking for a house to buy for several years but has been unwilling to pay the inflated prices available in Hawaii. For him, a drop in housing prices is a Godsend. I know that more than investors would be interested in foreclosed homes, but when the market is flooded with them, I think that investors will represent the majority of people who can buy. Quote Link to comment Share on other sites More sharing options...
TravelingChris Posted February 27, 2009 Share Posted February 27, 2009 I get two newspapers here. One had a sad luck story about a woman being foreclosed. The other later published the real story. SHe bought the house at a lower price, refinanced at a much higher price, than sat in the house for a year and half paying nothing toward the mortgage and of course, no rent. Other stories we have here are the low paid immigrants buying 500,000 dollar houses. They managed to do that byu paying some artificially low payments at first and now they are up to full payments. Since we couldn't afford a 500,000 house with quite a good salary (and very steady employment), who lent them money like that? I have no idea what anybody was thinking. Greed seems to be the keyword for both the mortgage lenders and the home owners. I don't have any idea how we were making 75,000 and could buy a 169,000 home in 1999 and in 2005, people who were making 75,000 could buy 400,000. It doesn't make sense and I blame both plus the government for forcing banks to make mortgages to people who were likely to default. Quote Link to comment Share on other sites More sharing options...
KathyJo Posted March 1, 2009 Share Posted March 1, 2009 Yup. It's creepy when definitions are changed. I think Orwell wrote a book about that... Really? I didn't know that. I've only read 1984. :001_huh: Quote Link to comment Share on other sites More sharing options...
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