Deseret News | Reader comments: Foreclosure future grim for Utahns

Reader comments
Foreclosure future grim for Utahns

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Dave | 12:45 a.m. April 17, 2008

Don't believe this stuff, until our leaders in the state acknowledge this it's true. I have read many stories that say our leaders say Utah is different than the rest of the country and I trust them. When the governor says we may have high foreclosures they it could be true, but until were told it don't listen to this stuff.

Just like with the recession looming, until I hear President Bush say it's happening it's not true.

If we just ignore this stuff it won't happen, trust our leaders god be with them.

TOT | 1:10 a.m. April 17, 2008

Well, it has all finally come home to roost. I have been warning about these things coming for nearly two years. I had people tell me I was crazy. Numerous articles were run quoting local economists saying that Utah was different for a hundred different reasons.

Utah isn't different, just late.

Here we go.

Holding Out | 1:21 a.m. April 17, 2008

I have a great and very safe job and I earn a great income (95K). I love to save my money. I haven't bought a house yet because I feel that prices are too high. I know I can afford one but why pay for something that will depreciate like a car? I hope the housing bubble hits Utah hard. I know too many people that live like they make a lot of money, and I know they don't. Utahns and Americans in general need to learn how to save. The bursting housing bubble is a good thing. The government needs to stay out and let the market fix itself and let grown adults suffer the consiquences of their irresponsible spending habbits. I am a responsible adult and I am paying the price right but not living a 95K lifestyle. I will be rewarded for my thriftiness when I buy house at half the current market value. Americans need to do learn to do the same.

Comments continue below

Failed economic policies | 1:39 a.m. April 17, 2008

Perhaps some type of federal regulation is needed to protect people from mortgage brokers who stretch qualifications and fail to adequately inform their clients of the negative potential of some of their loan vehicles.

The lack of oversight in this industry has created a mega problem for the nation.

The cry of "Get the government off our backs and let business do the business of business" is no longer heard as often and it is replaced with the cry of "Some type of federal program is needed to bail out our economic institutions."

The effects of their own "laizze faire" policies have come back to haunt them.

Ronald A, Young | 3:24 a.m. April 17, 2008

Thatï¿½s only about 4 percent. If a couple of things happen in this years legislature then I will be ready to leave this Lovely Rock for the mainland. You have to buy within your means and even below it you house is vital and because of Tax advantages you should buy instead of rent. I do not believe that people went into adjustable rate loans with out knowing it and not thinking the rates would adjust. I accepted (the buyer is the customer) a slightly higher fixed rate just to avoid that. The Market can adjust do to supply and demand of both buyer and the Banks willingness to loan. Thats why when I did buy I hired a Shark (lady real estate agent) to represent me. She found me a nice house in a less desirable area of the island. I live underneath an extent Volcano Cone. Its been that way for millions of years and the people tell me, as long as the Volcano on the Big Island continues to go off we are safe. When the Island came out of the Sea, my part came out first. I think the problem was mostly Buyer Greed.

awesomeron | 3:50 a.m. April 17, 2008

Buyer Greed and Bank willingness to loan to unqualified buyers. People wanting more house then they can afford and adjustable rate mortgages. Being upside down in a Car is okay and you kind of expect it, just hold on to the vehicle, pay it off. Then Bank for 3 years what would be the Vehicle Payment. Then Pay Cash for the next one, and from then on. Being upside down in a House is a vastly different story. Some people are going to have to either double up, or move back in with their parents. Back to the Silent Scream Days. I feel badly for them but they made their choices. Some will pay for their homes with their Tithe Money, which will open up a whole set of other problems. 2nd Jobs really kill families and the 2nd job money almost always gets tied up in paying increased debt. When the 1st dollar from job 2, gets spent on something other then what it was planned for the 2nd job holder needs to quit. Its a fast and down hill slope. More Education always equals a better job. You never get the close times that are lost back.

liberal larry | 4:43 a.m. April 17, 2008

This whole mess is a direct result of policies and attitudes started under Reagan. The idea that all government is bad has caused the decline of responsible oversight by our federal government. We see it in energy planning, immigration, healthcare, and even foreign policy. Bush has exemplified this irresponsible trend with this bungling of Katrina, Iraq etc., it is hard to lead a federal system if you think that government is the problem.

Free agency | 4:52 a.m. April 17, 2008

But those consumers should have taken the time to read what they were signing. I was always taught if it is too good to be true, it probably is. The same goes for a person who is purchasing a $300K or more home with a monthly payment of only $1000. It's impossible! The consumer should have done the math and realized it wasn't true. Same thing as a car. People buy cars based on payment. Some neglect to realized the payments are low because they are stretched out over 7 years.

They made their beds now they can sleep in it. The government doesn't have to govern us in all aspects of our lives. We should all be grown ups.

Re: Holding Out | 4:54 a.m. April 17, 2008

I am so happy for you, you've had the opportunity to save and jumped on it. You are also holding out to buy a house, good for you.... However, you are pretty dang rude to HOPE the housing bubble hits Utah hard. How sad. My guess is, even though you make a good living you don't have many friends, with an attitude like yours who would even want to be around you.
What comes around goes around, maybe your job isn't so safe buddy.

Charles H. Cardon | 5:10 a.m. April 17, 2008

SINCE THE PROBLEM WAS CREATED BY THE MORTGAGE COMPANIES WHICH INVENTED THE VARIABLE RATE PRODUCT, THEY SH9UD BE FORCED TO FIX THE PROBLEM BY ALLOWING THE VARIABLE RATE TO BE CHANGED TO A FIXED RATE FREE OF ANY CHARGE. THIS WOULD ALLOW PAYMENTS TO BE STEADY WITHOUT INCREASE. THE NEW RATE WOULD HAVE TO BE GOVERNED BY AN INDEPENDENT, EQUITABLE JUDGE WHO IS WELL QUALIFIED TO MAKE THE DECISION.
I BELIEVE THAT THERE WAS AN ELEMENT OF GREED IN THE DEVEKLOPMENT OF THIS PRODUCT AND THOSE WHO FOISTED IT ON THE GENERAL PUBLIC SHOUOLD PAY THE PRICE.

As For Me | 5:13 a.m. April 17, 2008

Dave,
I won't believe there is a problem with just Guv Huntsman saying there really is a problem. I need Jeff Thredgold to say there is a problem. Only then will I believe it.

dah | 5:19 a.m. April 17, 2008

dream on, a house at half the price? keep saving your money you will need it to pay your ever increasing rental rates. these foreclosed properties can be occupied by our increasing population they refer to it as immigration i have a house down the street with about 7 immigration occupants in it. they can split the rent, cheap housing.

Busted Buster | 5:33 a.m. April 17, 2008

There was already a mechanism in place, and it failed. We allowed the Federal Reserve to take over our monetary system. They were supposed to control inflation by regulating the flow of money. They supplied the cheap money that caused this boom and its eventual bust. They alone are to blame. Get rid of the Federal Reserve and quit using fiat money.

Problem solved.

Also holding out | 5:39 a.m. April 17, 2008

Prices have been dropping in St. George for over a year now. I'm still holding out here because mortgage payments vs. income and mortgage payments vs. rent ratios are still far above historic norms for St. George. Salt Lake's boom was just a little bit later than ours, and it's bust will follow too.

We've also been saving money and have a high household income and can afford a house, but simply won't throw our money away on such a rapidly depreciating asset. It's also unwise to leverage your money on something that won't appreciate in value.

re: Dear Holding out | 5:43 a.m. April 17, 2008

You'd better pray the job you now have and your nest eggs of savings are still there when you need them.

I have seen people in your situation: good job, living wisely lose it all in a heartbeat...No fault of their own...

Don't think you are beyond something catastrophic happening to you.

I hope the housing situation wakes people up, but I don't hope they lose their homes, that is cruel.

I saw a bumber sticker yesterday that said,

LIVE SIMPLY SO OTHERS MAY SIMPLY LIVE!!!!!

We all need to do that!!!!!!!!!!!!!!!

Tony | 6:09 a.m. April 17, 2008

Dave:

What planet are you living on? Do you watch the markets? Have you seen government statistics? Are you dreaming?

It's about time the market there corrected. Irrational borrowers and their liar loans should be punished. Let the markets work. Why should I help subsidize the bailout of people making poor decisions. Let the markets work. If you were smart and didn't overpay, good for you. If you got in over your head, tough luck.

All about status | 6:14 a.m. April 17, 2008

One of the things that's struck me in the several years I've been in Utah is the importance of status. I've seen so many people buy houses far larger and fancier than their needs: more importantly, too large for their budgets. Combine that with the expensive cars in the carports, the boat and the vacation cabin, it's not surprising that the chickens eventually come home to roost.

I don't know why it's so important to be seen as rich, when personal finances don't support it. I hate to see my own property value go down as a result, but it's hard to feel sorry for people whose vanity got the better of them.

didn't happen overnight. | 6:12 a.m. April 17, 2008

Most people mistakenly think the Great Depression just happened overnight.

They also forget that is the time when millionaires were being made by the sackful while the rest of us little people were either just getting by or starving.

Start telling your children and grandchildren that the best things in life are free and that they really don't need that Lamborghini.

oink oink | 6:29 a.m. April 17, 2008

Don't blame the banks and don't blame the government.

People were greedy.

If a deal seems to good to be true it probably isn't.

All hogs end up at the slaughter house eventually.

LIVE WITHIN YOUR MEANS

GET OUT OF DEBT

Truth Is Hard | 6:28 a.m. April 17, 2008

Those picking on "Holding Out" must have missed the part about him saving money. He's right about getting a house for half off. And he nor I wants the economy to crash. We just know that it will. A country's economy can't be floated on massive debt forever.

Anonymous | 6:30 a.m. April 17, 2008

Tony,

Pssst Pssst,

Dave was being SARCASTIC, as was I.(As For Me)

Failed? | 6:30 a.m. April 17, 2008

Nobody put a gun to anybody's head and forced them to borrow more than they could pay back. Buyer be ware!!!! Consumers need to READ THE CONTRACT. We are all big boys and girls. This can't be laid only at the door of the lenders. There were plenty of greedy borrowers, living well beyond their means out there. With that said, however, I have to put the blame at 55% lenders and 45% borrowers because (for reasons I do not understand) people think that when they qualify for a loan they think it means it is financially prudent to accept the loan. They believe that loan officers are financial advisors. NO THEY ARE NOT. They are salesman. They do not care if you have money left over to save for retirement, go on vacation, or send your kids to college. Bottom line: Economic illiteracy is killing us. People have to stop living beyond their means. Too many believe they are "entitled" to live in a $400,000 house on a $40,000 income. Simply amazing.

Consumer's Fault | 6:33 a.m. April 17, 2008

I'm sick of hearing how this entire mess is the "Mortgage Companies Fault!" Its the fault of the American public! Nobody held a knife to the throats of individuals that took out subprime mortgages. They new the risks. Its not the mortgage company's fault that these individuals are financially ignorant. Its simple: Do not get something you cannot afford! Oh wait...we live in Utah - where the next family is always trying to keep up with the "Jonesï¿½s". ITï¿½S OUR OWN FAULT! AND NOW YOU WANT THE GOVERNMENT TO BAIL YOU OUT?? YEAH RIGHT!

Kevin | 6:44 a.m. April 17, 2008

To "Holding Out"

EXACTLY! DITTO! But the government will prop up the market and delay the correction. They need to let the foreclosures come. Let the market shake out, and let the prices come down. It will be OK. Then I'll buy. Then liquidity will return to the market.

Some will get burned. But it's the marginal, speculating home buyer got us to this untenable situation. Let them foreclose, have bad credit, have to rent. Those risk-ignorant buyers of mortgage-backed securities, and so-called predatory lenders have suffered already. This is right. This is what should happen. Don't need regulation. Just let nature take its course.

AJ | 6:52 a.m. April 17, 2008

Utah usually runs behind the times on things like the economy. Just as the economic boom was fueled by construction, the coming hard and deep recession in Utah will fall with construction. New homes permit down 75% to the lowest level since 1990. No more equity for people to take out of their homes to pay those debts and then go back into it.

So with construction drying up, where are the jobs going to go? What about all those workers who have construction jobs or businesses related to construction who are now facing economic hard times? They will be hit first and will be hit hard. In 2006 out of 54000 new jobs, 14000 were in construction or 26% of the total new jobs were construction. Well, if we lose 20% of our jobs to 25% that is going to hurt. What about extra spending money? No more eating out (or less of all of this) and that also means keeping older cars longer, no thrill spending. Things are going to cycle back to being rough, but a year or so after the national economy revives so will we. Maybe after the national election.

It's their own fault | 6:58 a.m. April 17, 2008

I laugh out loud when I see people blaming the mortgage companies--WHATEVER! You are the one who signed on the loan...knowing full-well that if even the slightest thing went wrong you couldn't make the payment. Well, I'm with Holding Out--I've already bought a condo and a home and I'm planning to own a bunch of real estate before it goes up again.

Denny Andrews | 7:08 a.m. April 17, 2008

The previous couple of comments are right on. Around here image is everything, and if it all has to be faked so be it. Overextend on your house, then tear every bit of equity out of it to buy the 1 ton pickup to get groceries, and a boat to drag around the desert behind it. Who knew such stupidity and blatant greed would come back on us?

Jay | 7:27 a.m. April 17, 2008

I was surprised that Greenspan allowed this to happen. A couple weeks ago, USA Today printed a article, on the country of Sweden, which got themselves into the same exact problem, that the US economy is in. As he knew of what happened there, could he not think of way to prevent it from happening here?

Tim | 7:33 a.m. April 17, 2008

The ride up was a thrill and drop will be tough. Who could be surprised? We seem to think, rather consistently, that this will never happen again or to us.

Ty | 7:40 a.m. April 17, 2008

You know, i bought my house in Davis County about a year ago and I estimate I am already upside down. Luckily we can comfortably afford the house, but we are down somewhere around 10%-15%.

I expected this having come from California and watched what happened there. Of course everyone here kept saying "this won't happen in Utah cause our economy is different." The funny thing was that I heard every single one of these excuses in California before the housing market crashed.

The fact of the matter is that the market needs to correct. If we allow the government to try to fix it, we will just end up with more problems down the road. The whole cause of the over inflated housing market was a direct result of trying to stop a market correction (recession) when Bush was first in office. Now we are facing the same recession but being caused by different areas. If the government attempts to stop this one, then we will just be faced with another down the road. Sometimes the markets just need to work themselves out without the government stepping in the "fix" everything.

Real Wealth | 7:37 a.m. April 17, 2008

My wife and I for Christmas purchased 3,300 lbs of white wheat at $10 per 50 lbs. Today it is worth $30 per 50 lbs. Is there anyone else who has tripled their investment in the last 5 months?

My dad taught me that it is real hard to eat money.

Can't Wait | 7:37 a.m. April 17, 2008

I and thousands of others are just waiting for the dam break. Looking for a good deal in Utah. Can't wait, but will.

This is really very simple... | 7:43 a.m. April 17, 2008

It doesn't matter what the government does or what mortgage companies offered...when you buy a house you still have to sign on the dotted line. If you didn't know what you were signing, that's YOUR fault. Too many people jumped at a chance to buy a house they couldn't really afford in the first place. "Interest only loans" and "variable rates" are cheap at first, then the price goes up - that's how they WORK. There is no trickery, no government scams - just people trying to get more than they could really afford and now they're dealing with the consequences.

Anonymous | 7:55 a.m. April 17, 2008

Holdin Out - Definitely has it right. Too many people live beyond their means to "have it all" right now, and can't see beyon the end of their nose. How can you not think there is something wrong about living a $100K lifestyle on a $75K income. The moment you hit a bump in the road (and it is not a matter of "if", but "when") such as losing a job, someone gets sick, divorce, etc. etc. realty hits in a big way. It is a sad thing, but adults need to act like adults and not try to blame the economy, the government, the banks, or anyone else for their decisions to expose themselves to greater risk than necessary. People in Utah, and America in general need to wake up and make better financial decisions about how and where they spend their money. People need to start thinking "long-term" and make a "life-style" adjustment. The economy won't change until attitudes change.

Shame on us | 8:01 a.m. April 17, 2008

Shame on us for not reading our loan terms more thoroughly before signing. There was never a time that I doubted or was discouraged by my 30 year FIXED rate of 5.5%...plus I didn't try to buy more than I could/should afford, even though I could have qualified for a much much higher (double) what I ended up buying. Shame on the consumer for not informing himself; there's no way I should put that responsibility on anyone or anything else. Government oversight cannot replace the consumer's common sense!!! Immoral loan brokers need to be handled, but I'm guessing that the majority of people just walked in and told the broker what they wanted, and got it, and now the masses have to deal with the fallout.

Also, I'm not moaning about a decline in the market, there's no way prices will drop back to where they were when I bought 5 years ago. I can handle a 10%-20% drop in home prices since my value is currently 100% better than purchase price.

RE: Didn't Happen Overnight | 8:02 a.m. April 17, 2008

Amen to everything you said. It's tough convincing my son why that 1995 Ford Explorer with over 200,000 miles is still sufficient for my needs. It runs great and has never left me stranded. Aside from the expected repairs it was paid for several years ago. Last month when the starter quit I bought a new one at Schucks for $129.00 and put it in myself. My son said, for the umpteenth time, "I can't believe you keep spending money to fix that thing. Why don't you just go buy a new one?"

Son, think about it...$129.00 every six or so months for repairs or $500.00+ EVERY MONTH for payments. No rocket science degree required here!

I'm feeling pretty comfortable in our modest house with a fixed rate mortgage and only 7 years left to pay too!

Bigger and newer does not always equal better!

Anonymous | 7:57 a.m. April 17, 2008

The Great Depression

The Great Depression Part II

Capitalism at its finest.

hc | 8:04 a.m. April 17, 2008

This report is a joke. Look at the source and credentials of the author. What credence can be given to a "manager" of Health and Human services with Pew Charitable Trust? I personally think that a lot of the current problem is due to the insatiable thirst by the media for "gloom and doom" headlines and stories. If the same stories are broadcast over and over, no matter how unreliable the sources, the public starts to believe them and they turn into a self fulfilling prophecy. You can see this in some of the comments here like the person who is eagerly anticipating a 50% decline in home values. Having a foreclosure in your neighborhood doesn't necessarily mean that anything will happen to your house value. Foreclosure sales are generally not even accepted as comparables when other homes in the area are valued. The loss of income due to higher income taxes from renting and the risk of waiting and missing the "upturn" in the market may well outweigh the benefit of possible lower prices in the future.

Anonymous | 8:15 a.m. April 17, 2008

To all those who don't get sarcasm:

The first post is funny!

Also, recessions are necessary for future growth. And when investors take risk (too large a home, variable interest loans, etc) then some are going to suffer. That's why they call it risk. Government should avoid any intervention. Let the recession happen and get over with, and then we can start another growth cycle. It is not possible to have uninterrupted growth.

Let them drop back to normal | 8:17 a.m. April 17, 2008

Of course prices are going to drop. They're over-inflated. And they NEED to drop in order to be in line with the purchasing power of the average Utahn. If they don't drop, then the next generation of home buyers won't be able to buy. And for those of us who do own, a historically distorted amount of income goes to paying our mortgage (and lining the pockets of investment bankers in NYC), preventing us from purchasing the normal Utah goods and services that keep our economy hummin. Simple economics, folks. Anyone who thinks housing prices should be supported in the stratosphere should email me. I have some great $5 stock left over from the dot-com bubble that I'd be more than happy to sell you at the $200 per share that it once (stupidly) was. (I own two houses, by the way, so I'm getting hit with the rest.)

housefree | 8:12 a.m. April 17, 2008

My little family has been "house free" for all but 3 years when we owned a little condo. We've lived with family for 5 years trying to make it on one income. It's just not going to pan out. Some were cut out to understand and play the job market. Others really struggle because the game goes against their nature. That second income is going to have to be added in the next few years. Still, I'm optimistic that everyone who lives wisely will feel less pain than those who overextended themselves as our debt-reliant economy caves. Say "so long" to the comfy life and "hello" to the simple life.

Ernest T. Bass | 8:12 a.m. April 17, 2008

Americans are too spoiled. Americans are completely narcissistic. This is good, it needs to happen.
The keeping up with the Jones mentallity will cripple Americans.

Hoping for the best | 8:21 a.m. April 17, 2008

I really don't care what the governor has to say about all this. I really am waiting to hear what "Super Dell" will say. He is a man who we all can trust, and he will certainly fix this whole foreclosure mess. If anyone can do it, "Super Dell" sure can!

Earl | 8:27 a.m. April 17, 2008

Jay, Greenspan didn't allow it to happen, he MADE it happen. Remember when he and the rest of the Fed took the interest rate down to 1%? Borrowing was so easy and plentiful that it drove the real estate market up sooooooooooooooo predictably. Now Bernanke is following in his footsteps by bring the rates back down again. All he's doing is throwing gasoline on the fire. It's going to a big fire sale on real estate!

Darren | 8:27 a.m. April 17, 2008

I remember when someone came to my house and tried to push one of these loans on me. Luckily I didn't. This hurts the banks as well as the person who borrowed. Neighbor will see their property decrease in value as well. The borrower and the bank both had a part in making this mess, yet the bank gets bailed out by the government...I mean you an I get to pay for it. The government needs to stay out of it and let the pieces fall where they may. I didn't do it and I don't want to pay for it.

Question | 8:28 a.m. April 17, 2008

Am wondering what do you do when 2 years ago you qualified for a loan, bought the house, and have paid payments perfectly on time... but now you want to refinance the same house, and because of stricter recommendations from the Feds, you cannot qualify for your own house that you currently live in, and have paid mortgage on?

re: re: Dear Holding out | 8:30 a.m. April 17, 2008

I make 110k per year, have owned my humble 1500 sqft home for over 10 years now. I still drive a 1989 vehicle. I watched the housing boom with dismay and avoided it at all costs. It was too expensive 10 years ago after the boom in the 90's, let alone the cartoonish levels its at now. My job is at just as much of risk as anybody else's and I know that my savings won't keep me alive for too long. The very real possibility that I may lose everything due to the carelessness of others ticks me off beyond words. This country is at the pinnacle of pigginess (just made that up) and laziness. Its beyond disgusting. Everybody wants everything right now. Have you noticed that it affects our lack of civility with each other as well? And even though I try to do otherwise, I don't leave myself out of that statement. If every nation consumed like we do, the world would look like the moon in just a handful of years.

Anonymous | 8:40 a.m. April 17, 2008

Jay--Greenspan allowed this to happen?? What about all the people who didn't bother to find out what they were getting into when they got their mortgage(s)? These days it's all about a lack of responsibility. Apparently, you and many people think that babies took out those mortgages because they couldn't think for themselves. Oh, those big, bad mortgage companies! Oh, brother. People need to grow up and take responsibility for their choices, and not blame the outcome on others. Maybe if people around here actually lived within their means, things like this wouldn't happen. I am one Utahn for whom these "horrible" foreclosures are beneficial, because I'll be looking to buy a house. Thanks to you, all you brainless people!

Howard | 8:43 a.m. April 17, 2008

In order for the 4% foreclosure rate to have any meaning we need to know what the average foreclosure rate has been in past housing slumps and during good times.

What It Means to Prosper | 8:50 a.m. April 17, 2008

What a despicable joke this whole mess is!

Why do you think we receive several credit card applications every week (or day) and endless advertising about using the equity in homes? Why do you think the easy credit scam has been going on forever and will continue into the future?

It's all about money and people either understand and benefit from the principle of credit, or they become slaves to it. It's about that simple.

And, some of us have been warned, and warned, and warned for decades no less. Yet, we have had as many problems with money, bankruptcy, etc., as any state or group of people.

My theory is its a misunderstanding of a theme several of us are familiar with -- "if ye keep my commandments, ye will prosper."

It's just that we haven't understood that "prosper" means enough resources to have full stomachs and clothing and a dry and warm place to sleep at night and opportunities for education, for example. Instead we think "prosper" means fancy vacations, boats, snowmobiles, big trucks and lots of other big-boy toys.

Heaven help us when all of the "give" has been squeezed out of national and world markets.

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