Poor planning home 'buyers' might be getting more government aid...
 

Why is it that once again, people who overexerted themselves financially are getting a pickup from the government? If people hadn't bought homes that they could not afford, the housing market wouldn't be in the mess that it is in today.

I have a hard time cheering on a plan that rewards poor planning. Yes, it may help get things back in line after a while, but I have no sympathy for people who make large purchases that they shouldn't make. I don't see rewards for home buyers that did things as they should have, and have contributed to what little stability the market has left (and are paying high interest HELOC loans). :1orglaugh


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" WASHINGTON (Reuters) - President George W. Bush said on Saturday he is looking to expand U.S. efforts to help struggling homeowners reduce their mortgage payments, as Democrats pressed for a more substantial federal role.
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Bush said some 130,000 homeowners have used a Federal Housing Administration program to refinance unaffordable mortgages since it was announced last August.

"This is a good start, and my administration is committed to building on it," Bush said in his weekly radio address. "So we're exploring ways this program can help more qualified home buyers."

Bush said 300,000 homeowners are expected to use the program by the end of this year, more than the FHA's initial estimate of 240,000 homeowners.

That is a fraction of the 10.3 percent of U.S. homeowners, some 8.8 million in all, who owe more than their houses are worth, according to Moody's Economy.com."
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More on http://news.yahoo.com/s/nm/20080329/...omy_housing_dc

Oh well... At least it's better than sending everybody who makes over $3k a year a $600 check (while fazing rebates out for the top 25% of tax payers).

who ends up owning the homes if they refinance with the fed housing program and default on their loans anyway?

Frankly, sherm, your talking out of your ass here.

I happen to be one of the people effected by this. I bought a home 2 years ago at 7.1%, The note was immediately sold to another bank, who has now raise the interest to over 12%. My mortgage payment went from 830.00 to over 1500.00 per month.. In the 2 years I have lived here, they have applied 127 dollars toward the principle. As my note stands now, the original amount I financed, 119.000 is now sitting at 124,000 after 2 years of paying. PLUS in the current market my homes value went from 138,000 to around 90,000.

This is why 11 homes currently are in the exact same situation as myself within 1 block of me. WTF are we to do? At the current rate I would spend something like 420,000 dollars on the home I bought for 119,000... What is going on is almost criminal at this point.

So you can take your opinions on this and shove them right up your ass for all I care.

Read your contract and dont buy on the high end of the market? Seems pretty simple to me.

Sorry that shit happened to you, but no one forced you to sign that contract and no one forced you to buy on the high end of the market. Those were just poor choices.

I do hope you and your family get through this ok.

I bought mine 4 years ago to put my disabled mother in she died I lost that income, when the 2 year fixed went adjustable it went from 7 to 12% now i am unemployed not that I haven't looked for work, i have sent in over 200 resumes and not one reply (mind you I had one of the head of cal-state look over my resume and wanted to hire me). Honestly I can't actually get any help they told me I needed to make more money, well no shit.

whats going sucks for the people out there who did not go over their budget at the time but got screwed in the end

Buy on the high end? the house was valued at 138.. I bought it for 119.. I bought the house to LIVE in not turn around. I wanted to raise my family in it. But fuck the bank.. they can have the house. I already have a CD waiting to buy another house and at 5.2% (Fortunately I have some family well off and they want to do this for me) But, what about others who don't have this option? There are a lot of FAMILYS going down the toilet right now... and this is going to effect you directly. The fallout from this mess is going to be felt around the world. So, it's a little bit more than a couple people having bad luck or whatever you like to call it. Here's an interesting thing to read...

http://www.gregpalast.com/elliot-spitzer-gets-nailed/
Eliot's Mess

The $200 billion bail-out for predator banks and Spitzer charges are
intimately linked

By Greg Palast
Reporting for Air America Radio's Clout

March 14th, 2008
Bernanke Explains why the 200 Billion is good for YOU

While New York Governor Eliot Spitzer was paying an 'escort' $4,300 in a
hotel room in Washington, just down the road, George Bush's new Federal
Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion
in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there's a BIG difference. The
Governor was using his own checkbook. Bush's man Bernanke was using ours.

This week, Bernanke's Fed, for the first time in its history, loaned a
selected coterie of banks one-fifth of a trillion dollars to guarantee these
banks' mortgage-backed junk bonds. The deluge of public loot was an
eye-popping windfall to the very banking predators who have brought two
million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the
way of this creepy little assignation at the bankers' bordello: Eliot
Spitzer.

Who are they kidding? Spitzer's lynching and the bankers' enriching are
intimately tied.

How? Follow the money.

The press has swallowed Wall Street's line that millions of US families are
about to lose their homes because they bought homes they couldn't afford or
took loans too big for their wallets. Ba-LON-ey. That's blaming the victim.

Here's what happened. Since the Bush regime came to power, a new species of
loan became the norm, the 'sub-prime' mortgage and its variants including
loans with teeny "introductory" interest rates. From out of nowhere, a
company called 'Countrywide' became America's top mortgage lender,
accounting for one in five home loans, a large chunk of these 'sub-prime.'

Here's how it worked: The Grinning Family, with US average household income,
gets a $200,000 mortgage at 4% for two years. Their $955 monthly payment is
25% of their income. No problem. Their banker promises them a new mortgage,
again at the cheap rate, in two years. But in two years, the promise ain't
worth a can of spam and the Grinnings are told to scram - because their
house is now worth less than the mortgage. Now, the mortgage hits 9% or
$1,609 plus fees to recover the "discount" they had for two years. Suddenly,
payments equal 42% to 50% of pre-tax income. The Grinnings move into their
Toyota.

Now, what kind of American is 'sub-prime.' Guess. No peeking. Here's a hint:
73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans
versus 17% of similar-income Whites. Dark-skinned borrowers aren't stupid -
they had no choice. They were 'steered' as it's called in the mortgage
sharking business.

'Steering,' sub-prime loans with usurious kickers, fake inducements to
over-borrow, called 'fraudulent conveyance' or 'predatory lending' under US
law, were almost completely forbidden in the olden days (Clinton
Administration and earlier) by federal regulators and state laws as nothing
more than fancy loan-sharking.

But when the Bush regime took over, Countrywide and its banking brethren
were told to party hearty - it was OK now to steer'm, fake'm, charge'm and
take'm.

But there was this annoying party-pooper. The Attorney General of New York,
Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.

Instead of regulating the banks that had run amok, Bush's regulators went on
the warpath against Spitzer and states attempting to stop predatory
practices. Making an unprecedented use of the legal power of "federal
pre-emption," Bush-bots ordered the states to NOT enforce their consumer
protection laws.

Indeed, the feds actually filed a lawsuit to block Spitzer's investigation
of ugly racial mortgage steering. Bush's banking buddies were especially
steamed that Spitzer hammered bank practices across the nation using New
York State laws.

Spitzer not only took on Countrywide, he took on their predatory enablers in
the investment banking community. Behind Countrywide was the Mother Shark,
its funder and now owner, Bank of America. Others joined the sharkfest:
Goldman Sachs, Merrill Lynch and Citigroup's Citibank made mortgage usury
their major profit centers. They did this through a bit of financial
legerdemain called "securitization."

What that means is that they took a bunch of junk mortgages, like the
Grinning's, loans about to go down the toilet and re-packaged them into
"tranches" of bonds which were stamped "AAA" - top grade - by bond rating
agencies. These gold-painted turds were sold as sparkling safe investments
to US school district pension funds and town governments in Finland
(really).

When the housing bubble burst and the paint flaked off, investors were left
with the poop and the bankers were left with bonuses. Countrywide's top man,
Angelo Mozilo, will 'earn' a $77 million buy-out bonus this year on top of
the $656 million - over half a billion dollars - he pulled in from 1998
through 2007.

But there were rumblings that the party would soon be over. Angry
regulators, burned investors and the weight of millions of homes about to be
boarded up were causing the sharks to sink. Countrywide's stock was down
50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now
control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital
went bankrupt. Who? That's Carlyle as in Carlyle Group. James Baker, Senior
Counsel. Notable partners, former and past: George Bush, the Bin Laden
family and more dictators, potentates, pirates and presidents than you can
count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the
poor little suffering bankers. They got the public treasure - and got to
keep the Grinning's house. There was no 'quid' of a foreclosure moratorium
for the 'pro quo' of public bailout. Not one family was saved - but not one
banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo's Countrywide
stock rose 17% in one day. The Citi sheiks saw their company's stock rise
$10 billion in an afternoon.

And that very same day the bail-out was decided - what a coinkydink! - the
man called, 'The Sheriff of Wall Street' was cuffed. Spitzer was silenced.

Do I believe the banks called Justice and said, "Take him down today!" Naw,
that's not how the system works. But the big players knew that unless
Spitzer was taken out, he would create enough ruckus to spoil the party.
Headlines in the financial press - one was "Wall Street Declares War on
Spitzer" - made clear to Bush's enforcers at Justice who their number one
target should be. And it wasn't Bin Laden.

It was the night of February 13 when Spitzer made the bone-headed choice to
order take-out in his Washington Hotel room. He had just finished signing
these words for the Washington Post about predatory loans:

"Not only did the Bush administration do nothing to protect consumers, it
embarked on an aggressive and unprecedented campaign to prevent states from
protecting their residents from the very problems to which the federal
government was turning a blind eye."

Bush, Spitzer said right in the headline, was the "Predator Lenders' Partner
in Crime." The President, said Spitzer, was a fugitive from justice. And
Spitzer was in Washington to launch a campaign to take on the Bush regime
and the biggest financial powers on the planet.

Spitzer wrote, "When history tells the story of the subprime lending crisis
and recounts its devastating effects on the lives of so many innocent
homeowners the Bush administration will not be judged favorably."

But now, the Administration can rest assured that this love story - of Bush
and his bankers - will not be told by history at all - now that the Sheriff
of Wall Street has fallen on his own gun.

A note on "Prosecutorial Indiscretion."

Back in the day when I was an investigator of racketeers for government, the
federal prosecutor I was assisting was deciding whether to launch a case
based on his negotiations for airtime with 60 Minutes. I'm not allowed to
tell you the prosecutor's name, but I want to mention he was recently seen
shouting, "Florida is Rudi country! Florida is Rudi country!"

Not all crimes lead to federal bust or even public exposure. It's up to
something called "prosecutorial discretion."

Funny thing, this 'discretion.' For example, Senator David Vitter,
Republican of Louisiana, paid Washington DC prostitutes to put him in
diapers (ewww!), yet the Senator was not exposed by the US prosecutors
busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer - rarely done in these cases - was
made at the 'discretion' of Bush's Justice Department.

Or maybe we should say, 'indiscretion.'

Seems to me that you agreed to pay that interest rate when you decided to purchase with that particular loan. Why didn't you just get a 30 year fixed loan? See? Your trouble could have been avoided so easily. Why do you blame the people who are lending you the money? They told you up front that the rate would go up. You just ignored that part of the contract I guess.

It is very hard to feel sorry for people who sign contracts and then come back to claim that the contract wasn't fair. The time to decide if the contract is fair is BEFORE YOU SIGN IT!!!!!!!!


Get a second job.

So your an idiot that got an adjustable rate one and now are complaining that it went up ?

If you did not want to gamble with the possibility of rates going up you should have got a fixed rate one.

You think the majority of Americans aren't in this hole? My HELOC is adjustable as well, but I planned for that. I spoke to my lender and asked about both extremes...Right now with the rate cut, I am paying 2% less, but I'm not naive enough to think that it can't swing the other way at any given time. The fix was to Refi at the time when a home had equity into a single mortgage at a fixed rate. Instead, the American Idiots took out Home Equity Loans and dug themselves into deeper holes. I know a lady who took out $150k in an equity loan for random purchases...of course she had to foreclose last month. Go figure. Sadly, many were like her, playing with "free money".

I will pay $460k on my home that I purchased for $325k...But I was well aware of that at the time of purchase. Very little of your principle is paid in the first 15 years of a mortgage. This has always been the case, and is no different now. People just expect the government to pat them on the ass and to tell them it will be ok. The problem is that people are so quick to pass their errors on to anybody other than them, instead of taking responsibility for their own mistakes.

You're not in a unique situation but I apologize that this is taking a toll on you. If it's a huge burden financially to pay the increase in fees, talk to a lender, pull out the cash to pay the refi fees, and lock your rate. LOCK LOCK LOCK. Now is the time. :2 cents:

I'm sorry to hear about this situation and I wish you the best. May I ask why you only went for a 2 year fixed? What would the difference have been monthly to have locked it in at 7% for the 30 years?

Not trying to be an asshole, but I'm just curious..That seems like the type of loan created for people who intend to flip houses, and would be far from beneficial to a home buyer who intends to stay through the long haul. :2 cents:

You guys living in your apartments have no clue do you... I actually WAS told that this was a fixed loan. (That's one of the things that my attorney is currently fighting... ) and they buried this whole adjustable thing in fine print some 20 pages into the contract. We had no clue that it was going to change until one day 2 years after buying we got the letter telling us the news. and raise it they have... 1.5% ever single month (which is the Max) since the 2 year anniversary of the loan.

To those of you who have never bought a house before, like myself included before this... there is a shitload of stuff they hustle you into to sign. Should I have read it better... yes. BUT I made the mistake of trusting my realitor, Huff, who was telling me that this was normal, that this was standard for all first time buyers yada yada. I even put 8k down. I make over 100k a year but I'm not about to pay for this house as it currently sits. AND Im not going to rebuy it (which I could do with the CD) No, I'm going to let them fght for the house... which will take them about 2 years, and then make them sit on the fucking thing for another year after the foreclosure is final. PLUS I'm taking every fucking thing I can out of the house. They can have the fucking shell for all I care.

I understand what you are saying... I really do... But here is and example where I did not get a equity loan... actually I put about 20k in upgrades into the house after I bought it, case out of pocket... but this stuff for the most part is coming out with me... except for the new carpet, paint and 10k retaining wall I had built in my back yard. I got my house cheaper cause it needed work, and I did that work, and I did it with my own cash... then this crap happens and I'm out everything. So, am I a little pissed... yup. but now it's all left up to the lawyers who are fighting the case. Oh, and do a quick google of Ocwen... they are the ones who ending up with my mortgage... quite a story there in itself.

I hope you're not assuming I live in an apartment. :1orglaugh

Now the truth comes out: You didn't read, and you listened to the jibber jabber of some lender. That is the problem: people listened to workers making commissions instead of taking the time to research the biggest purchase of their lives.

I was a first time home buyer 6 years ago..I read EVERY single page of that contract and highlighted every thing I was unsure of. I took a $20k loss on my 2nd home after fees, but hey...I learned and didn't roll over like a bitch.

The fact that you are playing dead and giving up the home when you say you have money to purchase another home, is proof that you are contributing to the problem. If you have the cash, pay the closing fees and refi the home to a locked rate. If you're not part of the solution, you're part of the problem. :2 cents:

Mortgage fraud. Mortgage company owners and brokers are millionaires now, and taxpayers must pay the bill.

"US mortgage-fraud cost seen at $2.5 billion a year - 27 Mar 2008
NEW YORK (Reuters) - Losses from mortgage fraud such as lying on loan applications and inflated appraisals will cost the industry about $2.5 billion ."

"Mortgage broker facing 30 years for fraud - Bizjournals.com"

I'll agree with you: Mortgage brokers are some of the sleaziest people out there...Hell, anybody giving credit to others does their best to twist things into their favor.

Consumers just need to be aware of this and learn to actually read these hundreds of pages of pure BS, and ask questions. Hearing that something is "standard", doesn't make it right. :2 cents:

its much more than poor planning people. Also if you let the whole thing turn to shit, to be able to say thats shows them. We will send this country into a depression.

Agreed 100%, but fuck... I'm not upset about trying to spark the revival of the market. I am just so sick and tired of seeing bailouts for people, while the people paying the highest tax rates and planning ahead, get stuck footing the bill.

Can you see the reason for my irritation? Hell..1 day I may hit rock bottom, but I know who I will blame: myself. :2 cents:

so you got a adjustable rate when you thought it was fixed ?

LOL

Seriously, how dumb do you have to be to sign a contract you don't understand?


You thought it was "fixed"?????

Are you retarded? That is not something they "hide" in the contract.


That is the EASIEST part of the contract to understand.


Sounds like you are not a "smart" person. Perhaps you border on tardation?

Did you have your attorney read it before you signed it?

bailing them out will cause massive inflation and higher taxation that could also lead to a depression.

1. the Apartment comment was to others that chimed in.. not yourself.

2. At this point I agree about being part of the problem. But at the same time, I'm not going to help line the pockets of some scum. It will actually cost them money to deal with me. I'm not going to play their bitch anymore, I'm going to eat some $$ but they are as well. AND I'm doing it correctly this time... I have one of the best firms in my area working for me. Someone who has dealt with this Ocwen company a lot. you also have to understand something else... I had a credit rating of around 820... which over the course of this mess has dropped to around 540... so refinancing is out. The only option I have is the CD. That added together with around 25k in medical bills (Which were occurred while insured with Anthem but, which Anthem is denying ) has left me at the a what the fuck ever attitude. Basically you start feeling like your getting bent over and fucked from every direction. When this is all said and done, I'll take the CD, buy and new house and start fresh. Oh and I have been in contact with Ocwen about this... They will sell my note off to me for 123,000... What a crock of shit. Why do you think I'm letting them foreclose.. they want me to pay them 4k more than I originally bought the house for, after making payments on it for 2 years. where the house is only worth about 90k. In my zip, there are almost 3 thousand homes in PRE foreclosure right now. Not including the ones already foreclosed on. for the first time in history, the number of foreclosed homes on the market is greater than the number of regular homes here.

at some point you just have to say enough is enough and walk away.

I guess I am. Just like the MILLIONS of others this is happening to right now.

proof positive the US school systems are failing.

I think its best to help them keep our houses. Too many people this happened to so I feel this wasnt carelessness.People got fucked. Also Higher taxes are coming,you cant go to war and lower taxes.

Yes, if you thought you had a fixed rate and you didn't, then you did something quite foolish.

Here's what's going to happen. Your home is going to be foreclosed on and will go to auction. You are legally on the hook for the difference between what it sells for and what you owe (read your contract). More than likely you will receive a 1099 for this. You will be paying taxes on it. Or they will put a lien on any other property you ever own. Or both.

People who think their life is going to be all rosy by walking away from a house are the people who sign contracts for hundreds of thousands of dollars that they don't understand.

Maybe it's time to rent instead of trying to buy again? Rental prices should be fairly low, no?

Don't be proud to be a member of the "dumb" club.


Fight to get out of it!!!!

there's more to it than that when thousands of people all "poorly plan" at the same time

We have someone here admitting they can afford to keep their house but they don't feel like owing more than it's worth. Do you really think our tax dollars should be used to help them out?

You're being penalized for reading your contract and knowing what you got into when you bought your house. Perhaps you think that's fair. I'm not one of those people.

There are plenty of people with plenty of dollars who will be more than happy to snap those houses up at auction.

Thank you:thumbsup

Oh crap, you are so hot!


Just sayin'

I am sorry to hear about your healthcare issues...I can relate to that 100,000,000%. I just wince when hearing anybody choosing foreclosure over playing ball when they have the means. It's because of these foreclosures that people like myself are sitting on properties worth $70,000 less than they were when they were purchased just 2 years ago. :2 cents:

Thanks Jake :)

I stopped right there in my tracks. I had my own issues when Ocwen bought out my mortgage years ago. They broke my original terms and began the ass fucking. They are notorious for it and I feel for you. I am still fighting with them over issues on my credit report which they are wrong about.

I know I made a post on here some many moons ago about it and Ocwen. Also really do feel for you as I had an attorney with the original mortgage. They still switched shit, began fucking, and screwing me at every chance. Changing due dates, changing fee's, adding in new penalties, attempting to force me to pay a surcharge to use anything but western union quickpay. Hell they even called and threatened my parents who are not even on the title or were co signers. Yes I am also aware this is against many laws. They do not give a shit and this was well before any credit fuck up like now.

There are a million and a half people in jail in the U.S. Do you think that they were all fooled into breaking the law?


Just because a lot of people do it, doesn't make it an institutional problem.

Face facts . . . . there are a lot of really dumb people running around.

Then that makes it even worse - now you're saying our tax dollars should help bail out a company like that? C'mon people......

Ya... We need to start looking closer into our educational system. People have stopped being self reliant and have now turned to NEEDING a scapegoat for poor decisions. Smart individuals never make large uneducated decisions...especially when the stakes are as high as they are.

Some of the wisest words my father ever said: "Don't take somebody else's word for fact when they are handling your money." :2 cents:

Peaches...I'm glad I'm not alone here.