Foreclosures... The bad and The worse

[meresal]

It seems that foreclosures are one of those things now that, "Everyone knows someone who has experienced one, or has experienced one personally."

With the new talks about more initiative to help these families in need, I thought sharing a few anonymous stories would be interesting. This is not political and only comes from the fact that I heard the most appaling stories this weekend from my sister, about two of her old neighbors in Nevada. How are they going to determine which families really need the help and which ones have "made the bed they now lay in"?

Stories:

1.Guy lives by himself, bought up about 5 houses in the first phase of a neighborhood on the south side. Sold all of them off (except the one he lives in) after they rose to 150% his purchase price in about 3 months. About 2 years ago, he refinanced with an adjustable rate loan. He went out and bought an $80,000 car, and a few extrordinary trips. Fast forward to now... he is upside down on his house by about $100K and wants to sell the house for market value. He is trying to negotiate with the bank to write off his debt when he sells, becasue otherwise he would have to foreclose.

2. Family moved in at the same time as my sisters family and "said" guy above, aprox 6/7 years ago. Just as the previous guy, they refinanced their house and paid off all CC debt. After about a year (almost a year ago), their interest rate went up... they left the keys on the counter, moved everything out, ran up all the credit card debt they could, relocated to the East coast, and declared bankruptcy.

These just boiled my blood. I understand not all foreclosures are this way, but it seems that the only ones I hear about are along these lines.

 

[MichelleCarmen]

Parents of a girl that goes to my sons' school had their house foreclosed on. I know for a LONG time the dad was looking for work and could only find temp work and I guess him and his wife could make it because as I was looking on the MLS and found out their house is now "bank owned." He even once mentioned to me that he had been spending HOURS a day applying for jobs. Very sad.

Another person I know had their house foreclosed on after it partially burned down and it was found that even after insurance money covered the repairs, the house would still stink like smoke and wouldn't be worth anything. They had a 30 year fixed without an ARM.

Another person foreclosed on after he lost his job and couldn't pay the mortgage.

And, another family I know may lose their home because the business they own isn't making any money now that the housing slump has wrecked their company.

DH and I were lucky to sell our home before it was too late. We were having a tough time for a bit. We DIDN'T have an ARM, my dh's business wasn't making as much money due to the economy and THAT is why we were in a tight situation. We sold our home for just about what it was worth in just the knick of time.

Honestly, after struggling, I'm absolutely sick of posts that ONLY point out the bad. People have NO idea how hard many people are struggling or possibly they simply do not care. I feel bad for the girl from my sons' school because she still goes there and I bet many parents are judging them without knowing the facts.

 

[Tacori E-ring]

This is what DH does for a living. Often times the person was uneducated about their loan. So once it started adjusting they could not afford their payment (sad). DH has sat in closings where he KNEW the buyer was getting screwed (by the broker) but what can you really do? He just got a house where the guy died. If there is no family then the house gets foreclosed on (same with people that go to prison).

There WILL and ALWAYS will be people who are take advantage of the system.

 

[Shoopy]

Hi mer

I''m confused. What about those stories "boils your blood"? Are you upset with the families or that they have to foreclose and no one is helping?

Our community is a condo conversion. There are I think 200 units, half of which are owned and the other half still have renters or are vacant. We have had 20 foreclosures so far. Why? Because of who the developers targeted. They went after un-educated people (when it comes to real estate) and promised a $700 payment for a 3 bedroom condo (unheard of in our area). When these people went to close, they saw that their actual payment was in the $1,000s. So the developer said "we''ll give you one year free of association fees" and these people took the unit.

Well now the year is over, they have to pay the $300 association fees, on top of the high mortgage they couldn''t afford to begin with. Who do you blame in that case? The families that weren''t educated enough to know what they were getting into or the developers that filled their heads with dreams that they could do it even though they really couldn''t.

A bad situation all around.

One of our family members (distant cousins) bought one of these units and had to foreclose. They just couldn''t afford it any more and they both didn''t have a lavish lifestyle.

 

[Shoopy]

Another story:

My FI''s friend got into the real estate business. He was buying houses, fixing them up and wanted to flip them. He started with 3 houses and was able to sell all 3 so he got ambitious and bought 7 more thinking that in one month, he''ll sell them. It has now been 1.5 years and he hasn''t sold a single house. What he has done is rent them out for as much as he can and pays the difference in the mortgage. Because of this, he had to rent out his own home and live with his mother (where he doesn''t pay rent) along with his wife and 2 kids because he refuses to foreclose. Right now he''s ok but its one of those lives where everthing has to remain exactly as is to survive...God forbid a child gets sick or their car breaks down.

 

[MichelleCarmen]

Date: 9/23/2008 12:28:19 PM
Author: fieryred33143
Another story:

My FI's friend got into the real estate business. He was buying houses, fixing them up and wanted to flip them. He started with 3 houses and was able to sell all 3 so he got ambitious and bought 7 more thinking that in one month, he'll sell them. It has now been 1.5 years and he hasn't sold a single house. What he has done is rent them out for as much as he can and pays the difference in the mortgage. Because of this, he had to rent out his own home and live with his mother (where he doesn't pay rent) along with his wife and 2 kids because he refuses to foreclose. Right now he's ok but its one of those lives where everthing has to remain exactly as is to survive...God forbid a child gets sick or their car breaks down.

There are many "rent-to-own" homes in my neigborhood that are renting for around $2,200 month, so I would venture to guess that many of them are homes that are being rented for less than what the owners pay for their mortgages and they're hoping to hang in there for a few years. One of the homes has been on the market for at least nine months and has been vacant the entire time. At least they're trying but I wonder how much longer they can hold out. Your FI's friend is lucky he can rent out his homes! I'm betting in the coming year, markets will be flooded with homes for rent.

 

[meresal]

Hi fiery

, it''s been a while. With all my travel, I haven''t been on here very much.

The thing that "boils my blood" is that these people ARE very well educated in life and in finances, and they took advantage, or are trying to take advantage of the system. As the others that you have stated, these people were not "taken" by pushy mortgage brokers. What they have done makes all the others that are truely struggling look bad.

I started this post in hopes that people would share the stories that really make you want to reach out and help our fellow Americans. It''s a horrible situation, and I would like to think that there is going to be some kind of checks and balances system if we start giving out money.

Hope that clears it up!

 

[mrssalvo]

I''m sure there are truly sad stories out there where folks would need help for things like unforeseen medical issues etc. But, the sad truth is most of the foreclosures are do to banks giving loans to people who really couldn''t afford them to begin with or folks that did try to take advantage of the system (which was foolish for banks do allow the whole zero down, balloon mortgage thing to begin with IMO. anything with the word ballon in it makes me nervous because ballons will pop. I personally think the gov''t bail out is a bad idea. I think it''s going to make a horrible situation much, much worse.

 

[Pandora II]

I''m seeing the same thing over here.

But only about 1 in 4 of the people at my surgeries with problems with repossession are what I would call ''victims''. The others just lived above their means and thought the bubble would never burst.

I should probably feel sorry for them too, but these are the people who have been living it up for years whilst DH and I have been being sensible and living in a not so nice property - but always well within our means. Should we now have to pay through the nose to bail these idiots out?

Those who have ''honestly'' come unstuck I feel huge sympathy for - but they''re very much the minority that I am seeing.

 

[Rhea]

I don''t own, I rent. But what Pandora pointed out is what scares me, that I will live above my means. We''re tying to move. We can afford the current place, but want something different. We''re constantly discussing what we can afford realistically and long-term.

I can''t tell how much of the situation is media hype and how much of it is the world falling down around us.

 

[Tacori E-ring]

Addy, if you are in the US foreclosures are public record. You can easily find of how many (and who) are foreclosing in your county. Also another good way to see how the RE market is in your area is looking at the number of withdrawn and expired properties on the MLS. Days on market will also give you an idea of how fast properties are moving in a certain neighborhood.

 

[Rhea]

Date: 9/23/2008 5:54:35 PM
Author: Tacori E-ring
Addy, if you are in the US foreclosures are public record. You can easily find of how many (and who) are foreclosing in your county. Also another good way to see how the RE market is in your area is looking at the number of withdrawn and expired properties on the MLS. Days on market will also give you an idea of how fast properties are moving in a certain neighborhood.

I''m not in the US; I''m in England. Could you please tell me what the shorthand in your post means? Then maybe I can convert it to English

to use for my own evil purposes. RE, and MLS.

 

[Tacori E-ring]

Date: 9/23/2008 6:01:40 PM
Author: Addy

Date: 9/23/2008 5:54:35 PM

Author: Tacori E-ring

Addy, if you are in the US foreclosures are public record. You can easily find of how many (and who) are foreclosing in your county. Also another good way to see how the RE market is in your area is looking at the number of withdrawn and expired properties on the MLS. Days on market will also give you an idea of how fast properties are moving in a certain neighborhood.

I''m not in the US; I''m in England. Could you please tell me what the shorthand in your post means? Then maybe I can convert it to English

to use for my own evil purposes. RE, and MLS.

I am guessing that the information would probably be public there too but I have no idea.
RE= real estate
MLS= multiple listing service (it is the list where every home that is for sale through an agency is posted on this list. It is a useful tool where you can see the average home sale in a certain street/area, days on market, description of properties usually with photos, etc but it not available through the public)

 

[Girlrocks]

Date: 9/23/2008 12:09:28 PM
Author:meresal
It seems that foreclosures are one of those things now that, ''Everyone knows someone who has experienced one, or has experienced one personally.''

With the new talks about more initiative to help these families in need, I thought sharing a few anonymous stories would be interesting. This is not political and only comes from the fact that I heard the most appaling stories this weekend from my sister, about two of her old neighbors in Nevada. How are they going to determine which families really need the help and which ones have ''made the bed they now lay in''?

Stories:

1.Guy lives by himself, bought up about 5 houses in the first phase of a neighborhood on the south side. Sold all of them off (except the one he lives in) after they rose to 150% his purchase price in about 3 months. About 2 years ago, he refinanced with an adjustable rate loan. He went out and bought an $80,000 car, and a few extrordinary trips. Fast forward to now... he is upside down on his house by about $100K and wants to sell the house for market value. He is trying to negotiate with the bank to write off his debt when he sells, becasue otherwise he would have to foreclose.

2. Family moved in at the same time as my sisters family and ''said'' guy above, aprox 6/7 years ago. Just as the previous guy, they refinanced their house and paid off all CC debt. After about a year (almost a year ago), their interest rate went up... they left the keys on the counter, moved everything out, ran up all the credit card debt they could, relocated to the East coast, and declared bankruptcy.

These just boiled my blood. I understand not all foreclosures are this way, but it seems that the only ones I hear about are along these lines.

You can do that???

 

[Hera]

I don''t think people should be let off the hook for taking on a loan they couldn''t afford. Three years ago I was in the market to buy a house and I decided not to for a couple of reasons:

1. I did a lot of research and kept on hearing that there was a bubble and prices were going to decline.
2. It made sense to me that the prices couldn''t sustain because people''s median incomes weren''t in line with housing prices.
3. The mortgage broker suggested I take out an adjustable mortgage and when I did the calculations and saw the increase after the resetting period, I was really taken back. The mortgage broker said the way houses were appreciating, I could refinance or sell for a profit. I asked myself whether I could afford to make the payment AFTER the resetting period. My answer was that I could, but not for a one bedroom condo.

So I have a problem with people who sign what is probably the largest financial commitment they will make without doing research and without calculating the worst case scenario. I also have a problem with people who bought more than they could afford. Just because you can borrow a certain amount doesn''t mean you should.

I think it''s really a disservice that there''s going to be a mortgage bailout. It would likely stop the housing market from declining and keep housing from being restored to reasonable prices.

 

[Tacori E-ring]

Girlrocks, it happens all the time.

 

[icekid]

Date: 9/23/2008 3:13:31 PM
Author: Pandora II

I should probably feel sorry for them too, but these are the people who have been living it up for years whilst DH and I have been being sensible and living in a not so nice property - but always well within our means. Should we now have to pay through the nose to bail these idiots out?

Those who have 'honestly' come unstuck I feel huge sympathy for - but they're very much the minority that I am seeing.

I do feel badly for many of the people in these terrible situations right now. But at the same time, I feel similarly to Pandora. My husband and are I responsible with a capital R; we save save save, did NOT buy as we were not financially ready, work incredibly hard to provide for the future, and are far from living a luxurious life. Now because the rest of the country has chosen the opposite path, it falls to us to clean up the collective disaster. It's depressing to always be "the good one" and not come out ahead for it in the end.

 

[Dancing Fire]

i don''t feel sorry for these people.they deserve to be homeless,buying a homes they can''t afford,living the life style of the rich and famous. there''re no FREE lunch in life.

https://www.pricescope.com/community/threads/the-reason-why-the-housing-boom-was-the-worst-thing-that.85157/

 

[Dancing Fire]

Date: 9/23/2008 8:33:14 PM
Author: Girlrocks

Date: 9/23/2008 12:09:28 PM
Author:meresal
It seems that foreclosures are one of those things now that, ''Everyone knows someone who has experienced one, or has experienced one personally.''

With the new talks about more initiative to help these families in need, I thought sharing a few anonymous stories would be interesting. This is not political and only comes from the fact that I heard the most appaling stories this weekend from my sister, about two of her old neighbors in Nevada. How are they going to determine which families really need the help and which ones have ''made the bed they now lay in''?

Stories:

1.Guy lives by himself, bought up about 5 houses in the first phase of a neighborhood on the south side. Sold all of them off (except the one he lives in) after they rose to 150% his purchase price in about 3 months. About 2 years ago, he refinanced with an adjustable rate loan. He went out and bought an $80,000 car, and a few extrordinary trips. Fast forward to now... he is upside down on his house by about $100K and wants to sell the house for market value. He is trying to negotiate with the bank to write off his debt when he sells, becasue otherwise he would have to foreclose.

2. Family moved in at the same time as my sisters family and ''said'' guy above, aprox 6/7 years ago. Just as the previous guy, they refinanced their house and paid off all CC debt. After about a year (almost a year ago), their interest rate went up... they left the keys on the counter, moved everything out, ran up all the credit card debt they could, relocated to the East coast, and declared bankruptcy.

These just boiled my blood. I understand not all foreclosures are this way, but it seems that the only ones I hear about are along these lines.

You can do that???

yes, i knew this was coming 3 yrs ago. 0 dp sub prime ARM

 

[somethingshiny]

I''ve known of three people (families) that had foreclosures. Every one was due to a job situation and the homes had been purchased long before any of this weird housing market stuff.

The sad thing is, none of these homes was worth more than $60,000. Our job economy just got so bad for a while that everyone was struggling. A few failing crops due to drought or flooding, that''s a bunch of guys who aren''t gonna get paid to combine. Of course the landowner has insurance against this occurrence, but his workers get screwed. I actually know some landowners who gave some of the normal "pay" to their guys just to keep them for the following season.

Right now we''re in the middle of an awful flood. One of our friend''s works for a large grain company and is currently trying to save $5.5 million dollars of grains from ruin. After they sandbagged for the first 3 days, they had to lay some guys off temporarily and they can''t say when they''ll come back to work. The company will have to rebuild. Another place down the river lost everything and all of the employees are laid off. There''s already talk about some of those guys getting into foreclosure.

Personally, I don''t know (or heard of) anyone who got themselves into a bad situation, just bad circumstances.

 

[TravelingGal]

Date: 9/23/2008 9:06:16 PM
Author: icekid

Date: 9/23/2008 3:13:31 PM
Author: Pandora II

I should probably feel sorry for them too, but these are the people who have been living it up for years whilst DH and I have been being sensible and living in a not so nice property - but always well within our means. Should we now have to pay through the nose to bail these idiots out?

Those who have ''honestly'' come unstuck I feel huge sympathy for - but they''re very much the minority that I am seeing.

I do feel badly for many of the people in these terrible situations right now. But at the same time, I feel similarly to Pandora. My husband and are I responsible with a capital R; we save save save, did NOT buy as we were not financially ready, work incredibly hard to provide for the future, and are far from living a luxurious life. Now because the rest of the country has chosen the opposite path, it falls to us to clean up the collective disaster. It''s depressing to always be ''the good one'' and not come out ahead for it in the end.

Ditto. Greed was especially rampant here in California. I don''t care what any crook tries to sell you. Do the math. If you make a combined wage of 70K, you cannot afford a 700K house.

Our family house was foreclosed in 1995. Yeah, business was bad, and there were bad circumstances. But you know what? My father also made some bad business decisions that put us in the hole. There are consequences to those decisions and do I feel like we were a victim? No. That''s life. It happens. We could no longer afford our home. Move on. I am still living in the apartment that we sought shelter in back in 95 (of course, now with my husband and kid.)

Have an emergency fund people...enough to live on for at least 6 months should something go south on you. Can''t save enough for an emergency fund? Then you can''t afford the house you live in! Yes, the economy is tough and jobs are even tougher to find, so if you can''t find a job in your field in 6 months, well then you needed a BETTER backup plan.

Harsh? Maybe. But people in this country need to understand that credit is not cash. Just because your house goes up in price does not mean you''re rich until someone actually BUYS it at that price.

TGuy and I are looking for a house in a price range that we can pay it for 6 months if we BOTH were to lose our jobs and indefinitely if ONE of us were to lose our job. And if one of us croaks? Well there''s money in the budget for life insurance too.

 

[luvmyhalo]

Well said TGal! I'm also in Southern California and I see foreclosures pop up weekly in my area. Most of these are not people who have lost their job and can't find work, its people who thought they could afford waaaaay more than they really could.

It's sad yes, but everyone is responsible for their own situation. There are no victims. If people are uneducated and don't understand the terms of their mortgage...educate yourself!!! Go to a public library, get on the internet. There are resources everywhere. Read the terms of your contract. If there's something you don't understand, ask questions! It's no one else's responsibility but your own to assure that you can afford your home.

Our country relies so much on credit cards and most live way beyond their means. Maybe this will serve as a wakeup call for people to buy only what they can truly afford.

 

[Dancing Fire]

Date: 9/24/2008 12:29:08 AM
Author: TravelingGal

Harsh? Maybe. But people in this country need to understand that credit is not cash. Just because your house goes up in price does not mean you''re rich until someone actually BUYS it at that price.

agree !!

just like stocks....you may feel good when its going your way,but you haven''t made a penny until you sell.

 

[Hera]

Date: 9/24/2008 12:29:08 AM
Author: TravelingGal

Date: 9/23/2008 9:06:16 PM
Author: icekid

Date: 9/23/2008 3:13:31 PM
Author: Pandora II

I should probably feel sorry for them too, but these are the people who have been living it up for years whilst DH and I have been being sensible and living in a not so nice property - but always well within our means. Should we now have to pay through the nose to bail these idiots out?

Those who have ''honestly'' come unstuck I feel huge sympathy for - but they''re very much the minority that I am seeing.

I do feel badly for many of the people in these terrible situations right now. But at the same time, I feel similarly to Pandora. My husband and are I responsible with a capital R; we save save save, did NOT buy as we were not financially ready, work incredibly hard to provide for the future, and are far from living a luxurious life. Now because the rest of the country has chosen the opposite path, it falls to us to clean up the collective disaster. It''s depressing to always be ''the good one'' and not come out ahead for it in the end.

Ditto. Greed was especially rampant here in California. I don''t care what any crook tries to sell you. Do the math. If you make a combined wage of 70K, you cannot afford a 700K house.

Our family house was foreclosed in 1995. Yeah, business was bad, and there were bad circumstances. But you know what? My father also made some bad business decisions that put us in the hole. There are consequences to those decisions and do I feel like we were a victim? No. That''s life. It happens. We could no longer afford our home. Move on. I am still living in the apartment that we sought shelter in back in 95 (of course, now with my husband and kid.)

Have an emergency fund people...enough to live on for at least 6 months should something go south on you. Can''t save enough for an emergency fund? Then you can''t afford the house you live in! Yes, the economy is tough and jobs are even tougher to find, so if you can''t find a job in your field in 6 months, well then you needed a BETTER backup plan.

Harsh? Maybe. But people in this country need to understand that credit is not cash. Just because your house goes up in price does not mean you''re rich until someone actually BUYS it at that price.

TGuy and I are looking for a house in a price range that we can pay it for 6 months if we BOTH were to lose our jobs and indefinitely if ONE of us were to lose our job. And if one of us croaks? Well there''s money in the budget for life insurance too.

That''s really great. Buying a house only on one income is a really great rule of thumb if you can do it. There''s a book called the The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. It explains that families that rely on two incomes can find themselves in financial disaster because both incomes are dedicated to necessities such as home and car payments, insurance, food, gas etc. When one of the incomes is no longer available as in job loss or medical illness and there is no discretionary income, they find themselves filing for bankruptcy or their home ends up in foreclosure.

 

[LaraOnline]

Date: 9/23/2008 9:06:16 PM
Author: icekid

Date: 9/23/2008 3:13:31 PM

Author: Pandora II


I should probably feel sorry for them too, but these are the people who have been living it up for years whilst DH and I have been being sensible and living in a not so nice property - but always well within our means. Should we now have to pay through the nose to bail these idiots out?


Those who have ''honestly'' come unstuck I feel huge sympathy for - but they''re very much the minority that I am seeing.

I do feel badly for many of the people in these terrible situations right now. But at the same time, I feel similarly to Pandora. My husband and are I responsible with a capital R; we save save save, did NOT buy as we were not financially ready, work incredibly hard to provide for the future, and are far from living a luxurious life. Now because the rest of the country has chosen the opposite path, it falls to us to clean up the collective disaster. It''s depressing to always be ''the good one'' and not come out ahead for it in the end.

It is interesting, but I do think it''s difficult to work out how ''worthy'' someone who goes broke is. I guess it''s more realistic to assume that the person was silly/greedy with their money.

However, if people are borrowing to invest, rather than just consume, well the judgements just get a little more difficult. Everyone has the human ambition to want to get themselves and their family ahead.

Risk is a part of pretty much every business venture, regardless of how well-planned it is. Succeed, and the whole world laughs with you and claps you on the back...fail, and you fail alone. (or something like that)

I think it''s difficult to assume that all people who suffer from foreclosure have been living the high life, particularly in comparison with your (or my) own personal lifestyles. But how can that really be judged? Everyone has different priorities and spending habits. Perhaps the foreclosed person would marvel at the areas in which you or I ''waste'' our money.

Just my thoughts. Having said that, ultimately the risk and responsibility rests with the person who borrows the money and signs on the line. You have to be a grown-up to borrow money.

 

[MichelleCarmen]

Date: 9/23/2008 9:18:16 PM
Author: Dancing Fire
i don't feel sorry for these people.they deserve to be homeless,

You seem so proud that you have been correct that the bubble would burst. Good for you. Though, I cannot fathom how any person would feel as heartless as to say any person deserves to be homeless. . .

I think this is ironic in light of the thread started by Irishgrrl (here in the Hangout forum) called "HollyS's Open Letter to the PS Community," that says everyone is caring and compassionate here on PS. hmmmm. . .

 

[Dancing Fire]

Date: 9/24/2008 1:05:00 PM
Author: MC

Date: 9/23/2008 9:18:16 PM
Author: Dancing Fire
i don''t feel sorry for these people.they deserve to be homeless,

You seem so proud that you have been correct that the bubble would burst. Good for you. Though, I cannot fathom how any person would feel as heartless as to say any person deserves to be homeless. . .

no difference if i made an bad investment,i deserved,b/c it is my fault and nobody elses.

 

[Elmorton]

NPR had this topic on Talk of the Nation on Monday - and some of the things that the callers an experts said was really interesting in terms of yes, there are resources available for people before they get to the foreclosure point, but the paperwork, etc is practically a full-time job which means that a person working a full-time job to try to salvage their mortgage payment has a hard time getting access to resources.

We''re buying our first home and moving into it this weekend, and it was a foreclosure 2 years ago. When the contractor was explaining what he did to it (the house is back on his hands after the first owners post-flip moved into a larger home) and what it looked like, it was very much a sobering experience to know that there had been residents there who pretty much had nothing and lost their home - I was immediately reminded by FisherofMenGirly''s post after she bought a foreclosure and found the previous residents'' dishes in the dishwasher. It''s heartbreaking to think about what another family must have gone through.

My husband and I have been over our finances a million times to make sure we can afford our house, because as first-time homebuyers, it IS a confusing process and we don''t want to be in the situation that so many Americans have been in. Going through the house-buying process, I understand now how many people thought they could afford a house that they can''t. While some foreclosures were certainly because people lived beyond their means, I don''t think anyone can make a blanket statement about the housing situation. I thought I heard a statistic that the majority of foreclosures were actually under 150k homes(?). Greed is certainly a cause of this mess, but I don''t think we can put all the blame on the buyers - greed was certainly causing lenders to make horrible decisions as well.

 

[NewEnglandLady]

Date: 9/24/2008 12:29:08 AM
Author: TravelingGal

Date: 9/23/2008 9:06:16 PM
Author: icekid

Date: 9/23/2008 3:13:31 PM
Author: Pandora II

I should probably feel sorry for them too, but these are the people who have been living it up for years whilst DH and I have been being sensible and living in a not so nice property - but always well within our means. Should we now have to pay through the nose to bail these idiots out?

Those who have ''honestly'' come unstuck I feel huge sympathy for - but they''re very much the minority that I am seeing.

I do feel badly for many of the people in these terrible situations right now. But at the same time, I feel similarly to Pandora. My husband and are I responsible with a capital R; we save save save, did NOT buy as we were not financially ready, work incredibly hard to provide for the future, and are far from living a luxurious life. Now because the rest of the country has chosen the opposite path, it falls to us to clean up the collective disaster. It''s depressing to always be ''the good one'' and not come out ahead for it in the end.

Ditto. Greed was especially rampant here in California. I don''t care what any crook tries to sell you. Do the math. If you make a combined wage of 70K, you cannot afford a 700K house.

Our family house was foreclosed in 1995. Yeah, business was bad, and there were bad circumstances. But you know what? My father also made some bad business decisions that put us in the hole. There are consequences to those decisions and do I feel like we were a victim? No. That''s life. It happens. We could no longer afford our home. Move on. I am still living in the apartment that we sought shelter in back in 95 (of course, now with my husband and kid.)

Have an emergency fund people...enough to live on for at least 6 months should something go south on you. Can''t save enough for an emergency fund? Then you can''t afford the house you live in! Yes, the economy is tough and jobs are even tougher to find, so if you can''t find a job in your field in 6 months, well then you needed a BETTER backup plan.

Harsh? Maybe. But people in this country need to understand that credit is not cash. Just because your house goes up in price does not mean you''re rich until someone actually BUYS it at that price.

TGuy and I are looking for a house in a price range that we can pay it for 6 months if we BOTH were to lose our jobs and indefinitely if ONE of us were to lose our job. And if one of us croaks? Well there''s money in the budget for life insurance too.

If I could write as eloquently, this is exactly what I would say

As I always say, let me be responsible for myself and the consequences of my decisions and let others be responsible for themselves and the consequence of their decisions.

D and I live on very little--we save the majority of our incomes. We invest the majority of our savings, which means that we''ve lost quite a bit over the past month or so. That was OUR decision and we''ve learned from it. That''s what life is about. Sometimes it sucks.

The truth is that it''s hard to live beneath your means--it''s a decision. We get poked fun at for our "cheapness" since we drive a really crappy car and live in an apartment on the wrong side of the tracks. I mean, it is kind of funny, but it enables us to save a ton of money so that we can reach our financial goals faster (mainly, we don''t want to take out a mortgage to buy a house). When you watch everybody around you (who often make less) go into debt to buy luxurious cars and big homes it just makes you realize how NOT doing that is really worth it.

A good friend of mine married a man who spent way too much money---plus he had this "dream" of owning $1 million worth of real estate before the age of 30 (mind you, "owning" to him meant "paying a mortgage on"?????) Anyway, they bought a nice home that was RIGHT AT their means, then used the equity of that home to buy land to build ANOTHER house. As they were building she found out he cheated on her and started the divorce proceedings...by this time the value of their home and the land they bought had decreased and they were in MASSIVE debt...which she is STILL paying for years later. She completley owns that she was guilty of letting him take over the finances...making bad financial decisions has very long-term effects and most people would rather just declare bankrupcy (her ex-husband did).

 

[Beacon]

Date: 9/24/2008 1:05:00 PM
Author: MC

Date: 9/23/2008 9:18:16 PM
Author: Dancing Fire
i don't feel sorry for these people.they deserve to be homeless,

You seem so proud that you have been correct that the bubble would burst. Good for you. Though, I cannot fathom how any person would feel as heartless as to say any person deserves to be homeless. . .

I think this is ironic in light of the thread started by Irishgrrl (here in the Hangout forum) called 'HollyS's Open Letter to the PS Community,' that says everyone is caring and compassionate here on PS. hmmmm. . .

I don't feel at all sorry for people who do this stuff. I live in CA and there was so much of that. Always has been really. There are people who do all kinds of speculations, never pay their property taxes, lie on the mortgages, use the money to buy fancy cars, etc. Should our money be used to save their bacon ? Do they deserve pity? No way.

We live hugely below our means, drive normal cars and so on. I was always amazed to see people who didn't have much or make much take on these expensive homes. What were they thinking? They were thinking that if it worked out they would make money and if it didn't they would walk away. So now they are walking.

No pity from me!

P.S. I do feel sorry for people who got sucked into mortgages they did not understand (though I think they have an obligation to make every effort to understand them, no matter what the Sales Rep says). I also feel sorry for people who lost their job or had a family situation. But the folks who just took advantage of a big gamble and lost - no way.