- 305
- 10
- Joined
- Jul 16, 2002
Those of you that own homes and have fallen behind due to the struggling economy, what are you guys doing to stay in your home? Is anyone using this 31% ofyour take home pay to do loan mods?
Struggling NT Home Owners ... What are you doing about it? vol. Obama save me!
richkarlmarx
Banned
- 606
- 10
- Joined
- Jun 30, 2009
well i was struggling before but im cakin now. i was forced to sell two of my houses, but its alright 6 is alright for now.
my advice - sell some of your houses to get more cash. then PM me and ill invest it for you.
my advice - sell some of your houses to get more cash. then PM me and ill invest it for you.
- 1,850
- 10
- Joined
- Dec 27, 2004
I see what your doing..Its corny now get a new gig...(or life)
- 3,426
- 10
- Joined
- Jan 30, 2008
die troll
- 131
- 11
- Joined
- Mar 1, 2008
FYI - It's not 31% take home - It's total mortgage cost (Principle, Interest, Taxes, & Insurance) / Gross monthly income = Housing ratio This is tobe 31% - If it's a 2nd mortgage, then it'll be 42-45% with all mortgage costs. I definitely recommend everyone to take advantage of the plan now,especially if your rate is anywhere above the Freddie Mac rate. I think it's at 5.35% around, currently-
- 2,649
- 512
- Joined
- Jan 4, 2008
Bro, you just gonna start another Obama vs. Conservatives thread... smh
- 5,485
- 14
- Joined
- Jul 24, 2007
Leave the house.
Look for an affordable apt.
Look for an affordable apt.
- 8,712
- 11
- Joined
- Aug 24, 2006
Obama don't care about you son.
- 131
- 11
- Joined
- Mar 1, 2008
This is bad advice and shouldn't be used as a statement to blanket everyone's position, imo.
There are many instances where staying in your home will be a very viable option. Depending on who your investor and/or servicer are, there may be manyoptions from your bank. I would get some good counseling and weigh everything out, before making the decision about leaving your home (especially, if you wantto keep it.)
I can give some insight and honest opinions on any general questions that you may have.
T
trelvis tha thrilla
Guest
And why should he care anyways?
- 16,732
- 14
- Joined
- Apr 15, 2008
i cant stand trolls
- 5,485
- 14
- Joined
- Jul 24, 2007
It's far from horrible advice.
Not only is he having trouble with the mortgage but he's prob way underwater on it as well.
Even if he was having no trouble with the mortgage, it'd be plain old stupid to be paying x amount as basically extra interest since the value of theproperty will not return for the foreseeable future.
This is the most reasonable course of action to take. The banks will not refinance the note to the true value of the property.
There's no shame in not being a dummy and leaving if the bank is not willing to refinance the note to reelect the real value of the home.
Of course your credit will take a hit but is it any worse than paying X amount for an overvalued home?
This is the best option available for many and that's why more and more are choosing this path.
By Mark Gimein
Posted Tuesday, April 15, 2008, at 8:12 AM ET
California is to mortgage lending what Chicago is to pork bellies. For years, that meant it was a place with soaring house values; today, the foreclosure rate across the state is twice the national average and going up fast. Riverside County, outside Los Angeles, may be the foreclosure capital of the country, with a rate close to six times the national average. And housing prices are in freefall.
California should be the poster child for a mortgage-loan bailout. In few other places have so many taken on such onerous debts with so little equity. Unfortunately, the crisis in California is going to get much worse, and there is no bailout that will solve it. Why? Because if the first stage of the foreclosure crisis was about people who could not afford their mortgages, the next stage will be about people who have every reason not even to try to pay their mortgages.
Over the next several months, we're going to be subjected to a chorus of hand-wringing about the moral turpitude of people who walk away from their mortgages and pronouncements like last month's warning from Treasury Secretary Henry Paulson that people should honor their mortgage obligations. The problem with finger-wagging on what you "should" or "ought" to do is that, when it comes to money, you're usually given the lecture only when it's in your interest to do the opposite. Certainly, that's the case for all the California homeowners who in the next year or two are going to find themselves with the choice of whether, faced with a huge new wave of interest resets and a historic decline in the value of their homes, they will simply walk away.
First, those home prices: For a weird few months of the mortgage crisis, statisticians came up with peculiar numbers about home values, rolling out comforting stats showing single-digit declines. Well, that's over.
Last month, the California Realtors' association (folks who in October managed to "project" that prices would fall 4 percent in 200reported that, actually, California house prices in February fell 26 percent from a year ago. In the places where the foreclosure boom has hit hardest, it's worse.
A quick, almost random survey of some foreclosure prices in Southern and Central California:
These are not sale prices. They are asking prices. Don't doubt that they are negotiable.
- In San Bernardino, a house bought for $310,000 in 2005 is now being offered by the bank for $199,900.
- A 2,000-square-foot ranch house in Rancho Santa Margarita is down from $775,000 to $565,000.
- A starter home in Sacramento, sold for $215,000 in 2004, is now down to $129,900.
Unfortunately, when it comes to the California crash, these striking numbers are not the end. They are the beginning. (To give Paulson his due, he said that, too.) Which brings us to the other scary part of the California story: a coming wave of interest-rate resets in prime loans given to people with good credit that are just as bad, or worse, than we've seen in subprime.
The most common subprime loans were known as "2/28" in the industry: 30 years, including a two-year teaser rate before the interest rate rose. Now these loans have reset, and we're seeing the fallout.
But prime borrowers, too, got loans that started out with low payments; if you bought or refinanced your house in the last few years, it's not unlikely that you have one. With an "option ARM" loan you have the "option" (which most borrowers happily take) of paying less than the interest; the magic of "negative amortization." The loan grows until you hit a specified point-the exact point varies with the lender; with Countrywide, it'll come after about four and a half years-when the payment resets to close to twice where it was on Day 1.
Just two banks, Washington Mutual and Countrywide, wrote more than $300 billion worth of option ARMs in the three years from 2005 to 2007, concentrated in California. Others-IndyMac, Golden West (the creator of the option ARM, and now a part of Wachovia)-wrote many billions more. The really amazing thing is that the meltdown in California is already happening and virtually none of these loans have yet reset.
Option ARM loans were heavily marketed to upper-tier home buyers in California. It's hard to know how bad the option ARM crisis will be before it actually happens, but Moe Bedard, an advocate in Southern California who advises homeowners on foreclosure and blogs about the crisis at Loansafe.org says that the difference in the time until the rate rises is the main reason that upper-middle-class Orange County (now facing foreclosures at a rate merely twice the national average) hasn't yet been hit as badly as places like Riverside.
When those dominoes start falling next year, we may or may not have a subprime bailout plan, and the discussion will start about how to bail out this next tranche of borrowers. The bailout plans on the table now, such as the one put forward by Barney Frank (one of Congress' genuinely cogent financial minds), are reasonably based on the principle of bringing payments down to a point that homeowners can afford.
But where prices fall 40 percent to 60 percent, all that goes out the window. Why? Because in expensive locales like San Diego, tens of thousands of people with 100 percent loan-to-value mortgages and option ARMs are living in homes in which they have no equity and on which they owe a lot more than the house is worth.
In these places, accepting a government "bailout" that pays them, say, 90 percent of the value of the house to keep from foreclosing will be very tough for lenders, who (if the appraisers don't fudge the numbers) could be forced to take 36 cents or 45 cents on the dollar for their loans. On the other hand, any plan that makes them pay more if they can afford it is hugely disadvantageous for the borrowers, who have option ARMs about to reset and are much better off handing the keys to bank-and maybe even scooping up the foreclosed house down the street.
If you're one of the "homedebtors" (a fantastic neologism coined by the anonymous blogger IrvineRenter on the Irvine Housing Blog) in this position, you might start thinking very seriously about just how attached you are to the wisteria vine snaking over the basketball hoop on your garage. That's what a lot of other California borrowers will be doing.
The luckiest of those are the ones who used option ARMs to buy a house. For them, walking away is easy: Their loans are "nonrecourse," and the lenders can't go after them for more than the value of the house. The choice is harder for those who used the loans to refinance. The quirks of real-estate law regarding refi loans make it possible (though not necessarily easy) for lenders to try to get back more money even after taking the house.
If you think, however, that should make lenders a lot happier, forget it. LoanSafe's Bedard says that even in this group, most of the option ARM borrowers he talks to-some of them living in $800,000 houses-are already considering walking away from their deeply depreciated homes as soon as the rates reset.
Bet on this: Whatever moral qualms are being urged on borrowers to keep them from walking away from their mortgages, they'll count for a lot less than the economic reality facing borrowers whose homes have fallen in value by half. Lenders had no reservations about selling borrowers loans with rising payments that would be poisonous in a rising market. Now it seems borrowers have no reservations about leaving those lenders with the risks they begged to take.
Consider, too, that, yes, going through a foreclosure kills your credit rating and makes it a lot harder to buy a new house-but as more and more prime borrowers go into foreclosure, it's perfectly possible that buying a new home a year later will in the near future be as routine and unsurprising as the once inconceivable idea that you can get a whole batch of new credit cards two years after a bankruptcy.
Of course, all those people stuck between rising mortgages and falling prices are free to follow Paulson's advice: Keep making payments on an outsized mortgage, and take a bullet for the greater economic good. Fortunately for them, and perhaps unfortunately for the economy, a lot of them will come to the realization that they just don't have to.
Mark Gimein is a New York-based writer.
http://www.slate.com/toolbar.aspx?action=print&id=2188982
- 1,259
- 10
- Joined
- Jan 4, 2005
- 5,522
- 133
- Joined
- May 2, 2007
- 1,270
- 11
- Joined
- May 17, 2006
- 12,911
- 843
- Joined
- May 4, 2005
im about to buy a house in about a week... 1840sqft new construction for 215k... too many damn short sales... i dont got the time to deal with them because imtrying to take advantage of the $8,000 obama money...
Originally Posted by wawaweewa
It's far from horrible advice.
Not only is he having trouble with the mortgage but he's prob way underwater on it as well.
Even if he was having no trouble with the mortgage, it'd be plain old stupid to be paying x amount as basically extra interest since the value of the property will not return for the foreseeable future.
This is the most reasonable course of action to take. The banks will not refinance the note to the true value of the property.
There's no shame in not being a dummy and leaving if the bank is not willing to refinance the note to reelect the real value of the home.
Of course your credit will take a hit but is it any worse than paying X amount for an overvalued home?
This is the best option available for many and that's why more and more are choosing this path.
By Mark Gimein
Posted Tuesday, April 15, 2008, at 8:12 AM ET
California is to mortgage lending what Chicago is to pork bellies. For years, that meant it was a place with soaring house values; today, the foreclosure rate across the state is twice the national average and going up fast. Riverside County, outside Los Angeles, may be the foreclosure capital of the country, with a rate close to six times the national average. And housing prices are in freefall.
California should be the poster child for a mortgage-loan bailout. In few other places have so many taken on such onerous debts with so little equity. Unfortunately, the crisis in California is going to get much worse, and there is no bailout that will solve it. Why? Because if the first stage of the foreclosure crisis was about people who could not afford their mortgages, the next stage will be about people who have every reason not even to try to pay their mortgages.
Over the next several months, we're going to be subjected to a chorus of hand-wringing about the moral turpitude of people who walk away from their mortgages and pronouncements like last month's warning from Treasury Secretary Henry Paulson that people should honor their mortgage obligations. The problem with finger-wagging on what you "should" or "ought" to do is that, when it comes to money, you're usually given the lecture only when it's in your interest to do the opposite. Certainly, that's the case for all the California homeowners who in the next year or two are going to find themselves with the choice of whether, faced with a huge new wave of interest resets and a historic decline in the value of their homes, they will simply walk away.
First, those home prices: For a weird few months of the mortgage crisis, statisticians came up with peculiar numbers about home values, rolling out comforting stats showing single-digit declines. Well, that's over.
Last month, the California Realtors' association (folks who in October managed to "project" that prices would fall 4 percent in 200
A quick, almost random survey of some foreclosure prices in Southern and Central California:
These are not sale prices. They are asking prices. Don't doubt that they are negotiable.
- In San Bernardino, a house bought for $310,000 in 2005 is now being offered by the bank for $199,900.
- A 2,000-square-foot ranch house in Rancho Santa Margarita is down from $775,000 to $565,000.
- A starter home in Sacramento, sold for $215,000 in 2004, is now down to $129,900.
Unfortunately, when it comes to the California crash, these striking numbers are not the end. They are the beginning. (To give Paulson his due, he said that, too.) Which brings us to the other scary part of the California story: a coming wave of interest-rate resets in prime loans given to people with good credit that are just as bad, or worse, than we've seen in subprime.
The most common subprime loans were known as "2/28" in the industry: 30 years, including a two-year teaser rate before the interest rate rose. Now these loans have reset, and we're seeing the fallout.
But prime borrowers, too, got loans that started out with low payments; if you bought or refinanced your house in the last few years, it's not unlikely that you have one. With an "option ARM" loan you have the "option" (which most borrowers happily take) of paying less than the interest; the magic of "negative amortization." The loan grows until you hit a specified point-the exact point varies with the lender; with Countrywide, it'll come after about four and a half years-when the payment resets to close to twice where it was on Day 1.
Just two banks, Washington Mutual and Countrywide, wrote more than $300 billion worth of option ARMs in the three years from 2005 to 2007, concentrated in California. Others-IndyMac, Golden West (the creator of the option ARM, and now a part of Wachovia)-wrote many billions more. The really amazing thing is that the meltdown in California is already happening and virtually none of these loans have yet reset.
Option ARM loans were heavily marketed to upper-tier home buyers in California. It's hard to know how bad the option ARM crisis will be before it actually happens, but Moe Bedard, an advocate in Southern California who advises homeowners on foreclosure and blogs about the crisis at Loansafe.org says that the difference in the time until the rate rises is the main reason that upper-middle-class Orange County (now facing foreclosures at a rate merely twice the national average) hasn't yet been hit as badly as places like Riverside.
When those dominoes start falling next year, we may or may not have a subprime bailout plan, and the discussion will start about how to bail out this next tranche of borrowers. The bailout plans on the table now, such as the one put forward by Barney Frank (one of Congress' genuinely cogent financial minds), are reasonably based on the principle of bringing payments down to a point that homeowners can afford.
But where prices fall 40 percent to 60 percent, all that goes out the window. Why? Because in expensive locales like San Diego, tens of thousands of people with 100 percent loan-to-value mortgages and option ARMs are living in homes in which they have no equity and on which they owe a lot more than the house is worth.
In these places, accepting a government "bailout" that pays them, say, 90 percent of the value of the house to keep from foreclosing will be very tough for lenders, who (if the appraisers don't fudge the numbers) could be forced to take 36 cents or 45 cents on the dollar for their loans. On the other hand, any plan that makes them pay more if they can afford it is hugely disadvantageous for the borrowers, who have option ARMs about to reset and are much better off handing the keys to bank-and maybe even scooping up the foreclosed house down the street.
If you're one of the "homedebtors" (a fantastic neologism coined by the anonymous blogger IrvineRenter on the Irvine Housing Blog) in this position, you might start thinking very seriously about just how attached you are to the wisteria vine snaking over the basketball hoop on your garage. That's what a lot of other California borrowers will be doing.
The luckiest of those are the ones who used option ARMs to buy a house. For them, walking away is easy: Their loans are "nonrecourse," and the lenders can't go after them for more than the value of the house. The choice is harder for those who used the loans to refinance. The quirks of real-estate law regarding refi loans make it possible (though not necessarily easy) for lenders to try to get back more money even after taking the house.
If you think, however, that should make lenders a lot happier, forget it. LoanSafe's Bedard says that even in this group, most of the option ARM borrowers he talks to-some of them living in $800,000 houses-are already considering walking away from their deeply depreciated homes as soon as the rates reset.
Bet on this: Whatever moral qualms are being urged on borrowers to keep them from walking away from their mortgages, they'll count for a lot less than the economic reality facing borrowers whose homes have fallen in value by half. Lenders had no reservations about selling borrowers loans with rising payments that would be poisonous in a rising market. Now it seems borrowers have no reservations about leaving those lenders with the risks they begged to take.
Consider, too, that, yes, going through a foreclosure kills your credit rating and makes it a lot harder to buy a new house-but as more and more prime borrowers go into foreclosure, it's perfectly possible that buying a new home a year later will in the near future be as routine and unsurprising as the once inconceivable idea that you can get a whole batch of new credit cards two years after a bankruptcy.
Of course, all those people stuck between rising mortgages and falling prices are free to follow Paulson's advice: Keep making payments on an outsized mortgage, and take a bullet for the greater economic good. Fortunately for them, and perhaps unfortunately for the economy, a lot of them will come to the realization that they just don't have to.
Mark Gimein is a New York-based writer.
http://www.slate.com/toolbar.aspx?action=print&id=2188982
Thought most, if not all of CA loans, are nonrecourse, not just ARMs?
And wwaaawawwawawawaawa, you're assuming the bank knows the "real value". Generally they don't, nor does the home owner, and the comps thebanks use are absolutely terrible. The system is terrible. I disagree w/ the notion of walking away, that %%%$ pisses me off.
- 1,386
- 10
- Joined
- May 9, 2009
obama ... ... ... lmao
- 7,161
- 3,971
- Joined
- Jan 5, 2008
- 5,485
- 14
- Joined
- Jul 24, 2007
Thought most, if not all of CA loans, are nonrecourse, not just ARMs?
And wwaaawawwawawawaawa, you're assuming the bank knows the "real value". Generally they don't, nor does the home owner, and the comps the banks use are absolutely terrible. The system is terrible. I disagree w/ the notion of walking away, that %%%$ pisses me off.
Of course the "real value" is difficult to get at but all homeowners who refi can rest assured that the Bank will not underestimate the value of the home.
The bank won't appraise for anythign near real value because they don't want to be writing off 30%+ off of a note.
Walking away may not be "ethical" or "moral" but the US banking system hasn't been so either.
It's the best option for many. Especially those that will never be able top afford the mortgage anyway.
The only reason for staying would be if the bank that holds the mortgage is one of those that won't foreclose and are basically letting the debtors livemortgage free for the time being.
Of course the "real value" is difficult to get at but all homeowners who refi can rest assured that the Bank will not underestimate the value of the home.
The bank won't appraise for anythign near real value because they don't want to be writing off 30%+ off of a note.
Walking away may not be "ethical" or "moral" but the US banking system hasn't been so either.
It's the best option for many. Especially those that will never be able top afford the mortgage anyway.
The only reason for staying would be if the bank that holds the mortgage is one of those that won't foreclose and are basically letting the debtors live mortgage free for the time being.
There's a moratorium in CA, so I'm sure that's preventing a glut of new listings. The person receiving the loan wasn't just asgreedy as the bank? Sure, in some circumstances you can argue the person was hoodwinked, but hardly all and hardly the majority. Those people saw falseprofits too and were under the fabrication that home prices can "only go up".
Jack !++ realtors touting "instant equity" and people lacking the desire to do their own due diligence on a large "purchase" and then blamesomeone else? American's lack the ability to take responsibility for their own actions, by and large. Frankly I don't feel like being the one to payfor it.
- 5,485
- 14
- Joined
- Jul 24, 2007
There's a moratorium in CA, so I'm sure that's preventing a glut of new listings. The person receiving the loan wasn't just as greedy as the bank? Sure, in some circumstances you can argue the person was hoodwinked, but hardly all and hardly the majority. Those people saw false profits too and were under the fabrication that home prices can "only go up".Originally Posted by LazyJ10
Of course the "real value" is difficult to get at but all homeowners who refi can rest assured that the Bank will not underestimate the value of the home.
The bank won't appraise for anythign near real value because they don't want to be writing off 30%+ off of a note.
Walking away may not be "ethical" or "moral" but the US banking system hasn't been so either.
It's the best option for many. Especially those that will never be able top afford the mortgage anyway.
The only reason for staying would be if the bank that holds the mortgage is one of those that won't foreclose and are basically letting the debtors live mortgage free for the time being.
Jack !++ realtors touting "instant equity" and people lacking the desire to do their own due diligence on a large "purchase" and then blame someone else? American's lack the ability to take responsibility for their own actions, by and large. Frankly I don't feel like being the one to pay for it.
I wouldn't say many of the debtors were greedy. I'd say many were ignorant and dumb when it came to finances.
On the other hand, many Relators, appraisers, and middlemen mortgage brokers were straight up criminal in their actions.