Your payment should be 50% of your take home pay?No way!Maybe 33% at most.This is exactly why we are in this mess.
JZ42, thanks for interpretting the article and the associated comments for me.
If I may interpret my answer for you: I said, "I know some of you..."
and was referring to those whose comments you referred to as "mean."
I'm not ungrateful, however, and wish you well in your future efforts to tutor
others who actually need the help. ;)
@deltafoxtrot,A long with bad loans, I'd hope you'd refuse addicting
drugs, alcohol, dangerous sexual activity and a loaded pistol when offered to
you to play cowboys and indians with your children.
The lenders tend to lean mostly towards the upper end of the lending
possibilities, thus setting out a carrot that is hard to achieve. When people look at purchasing homes, they need to understand that their house
payment should only be 50% of their take-home pay. The other money - 20%
savings, 30% household designated items - should be budgeted in. If the payment
is more than 50% of your net income, then you are in way over your head.
DeltaFoxtrot,Yes, we can blame people for accepting what was offered.
Personal responsibility comes into play. It is your responsibility to understand
your cash flow, not the lender. If someone offers me a loan that is more than I
can afford, I say no. In fact, I bought my house at the tip of the market and
did not buy at the max-qualifying amount. I am now not even remotely close to
underwater on it. Depreciation should only matter if you are forced to
relocate (such as job requirements). Your mortgage isn't fluctuating with the
home value. If job loss or job relocation requires it, that is where the now
oft-abused short sale comes into play.
@Deltafoxtrot,"can we really blame people who took what was
offered them?"The answer to your question is YES! Good grief,
Deltafoxtrot.......What does depreciation have to do them not being able to
afford to continue paying for the house? When the $200,000 home depreciated to
$125,000 it doesn't affect the monthly mortgage payment. They may not have
equity now, but it doesn't affect their means to pay for the house.And to use the word gamble explains it all. Gamblers usually lose.I know tons of people whose homes have depreciated and they are still making
payments just like they agreed to when they signed the papers on that 30 year
loan. Matter of fact, that is most of America. History proves that real estate
always comes back over time. That $200,000 home may be worth $300,000 in ten
years but gamblers are not patient people.
Utah is only high in foreclosures because, unlike other states, Utah's laws make
it very easy to foreclose. In many states, the foreclosure process is long and
time-consuming for lending institutions. In Utah, it relatively simple.
The banks got their bail-out from the American People, but the American people
can rot homeless without jobs cause they don't contribute to Your representative
offshore account like the Banks do.DeltaFoxtrot said: The only
difference is, the banks got millions to keep themselves from going under, while
the homeowners got nothing. The govt. helped out big business first and the
people last, which only made the recession last longer.For the
republicans it's business as usual.Got to love the Crowd who
believes this could never happen to them cause' they're too clever.
Exactly right. Great point. Those who lose their homes are truly victims - cast
away by out dated laws and regulations. There has to be a better way so that
families can keep their homes as they move to rebuild their lives. It serves no
one when thousands are thrown out of their homes.
Part of the problem is that houses have depreciated over the past 5 years. A
house that cost $200,000 in 2006 might be worth $125,000 today. So if people do
get in trouble or find themselves in a situation where they can no longer afford
to live where they do, they can't sell the house and break even. So they end up
stuck there, unable to pay the mortgage, until they are foreclosed on.It is the fault of homeowners who overspent and didn't plan correctly... but
can we really blame people for taking what was offered to them? It is also the
fault of the banks for accepting such low down payments and extending huge
amounts of financing to people who really couldn't afford it. They gambled that
prices would keep rising and even if people defaulted they would be able to flip
the house for a profit. That gamble didn't work. The only difference
is, the banks got millions to keep themselves from going under, while the
homeowners got nothing. The govt. helped out big business first and the people
last, which only made the recession last longer.
Larger homes, newer cars, bigger flat screen TVs, fancier multimedia phones,
regularly eating out, having 100s of dish/cable channels, owning latest
laptops/Ipad gadget, extensive collection of blueray movies, expensive vacations
. . .It is all of these necessities that are getting people into
trouble.Perhaps the government could do a better job of providing us
with all of these needs?
Oldcourgar - the article is about people being victimized by predatory lending
practices not people losing homes due to illness, loss of job, etc. People who
make poor financial decisions are not being ridiculed or shunned rather people
are trying to point out that they made the decision to borrow above their means
and should not simply blame. The government should not save people who make
poor decisions. Some comments are rather mean but the majority are simply
saying people used the lending system just as much as lenders. They saw an
opportunity to get a bigger, nicer home using stated income etc. Both parties
need to take responsibility on this matter.
While banks and mortgage companies are not totally blameless, most of the
responsibility for the situations of homeowners rests with the homeowners. Many
bought more house than they needed or could really afford. They were too
immature to plan for a possible day of financial reckoning because they were
busy playing with their new pick-up trucks, ATVs, recreational vehicles,
watching their satellite TV, and using their iPhones, and other garbage they
didn't need nor could they afford on top of their mortgage payments.
I know some of you. You are the same people that think every homeless person is
a criminal and deserves to be hungry, cold, and friendless. Certainly most every
person losing a home to foreclosure could have done things differently...and
may, indeed, have made some bad decisions. But they probably didn't choose to
lose a job or a business. They probably didn't choose to have a catastrophic
illness. They probably didn't choose their distress and sorrow. Even if they
were at fault and foolish...why despise them, ridicule them, or shun them? I
speak from experience. And I now know who our real friends are. And I thank God
for them. We'll dig out of our mess and be better people for the experience...at
least partly because of the unconditional love and encouragement of good,
faithful, forgiving friends.
I vividly remember buying our first house and having the bank put down the
dollar figure we were able to borrow. We were shocked and knew we could not
afford it so we borrowed much less. Just because the bank puts down a number
doesn't mean you have to borrow that amount. Most homeowners are not and were
not victims rather didn't make decisions based on their financial situation.
Banks don't know how much you spend at 7-11 each morning or how much you donate
to charity. They simply approve you based on income not expenses but people
forget that simple fact. It is easy to blame someone else rather than take
personal responsibility. We learn how to do homework in school but people seem
to forget how once they make the largest financial decision of their life. Now
thanks to banks and individuals who made very poor decisions I have to figure
out how to pay my bills. Thank you very much!
Victims, victims, victims. Perhaps the biggest cause of problems in this
country is because everybody is owed something and a viction OF something. Good
grief, people, grow up.America needs a paradigm shift in it's
perception of exactly what is "owed" or what "victim" even
means. I'm worried about the future of our country, NOT because of who is
President but because who the people are becoming.
I'm on all sides of this. Yes, some people were unwise in buying too much fancy
houses, taking adjustable mortgages, etc. But people with big
families genuinely need somewhat bigger houses, too. I know, I lived in an 800
sq. ft. home once with five kids, husband and a friend--it was doable for a
short time, but awfully hard. We were thrilled to move into a house with 1120
sq ft and a basement we could finish.On the other hand, when one of
my sons went to buy a small 3 bedroom fixer-upper at a reasonable price at the
time for our area, he was encouraged by the mortgage company to fudge his income
to qualify more easily--which he refused to do. They took over a VA loan on the
re-possessed house--at a significantly higher interest rate than is going now.
They've had several periods of unemployment due to the economy--he works
construction. They lost their insurance and had a terrible accident to a kid.
VA refuses to restructure the loan as some mortage holders are willing to do.
VA outsources loan management to India, by the way. No help.
Wow, there is certainly a lot of sympathy shared in prior post . The real
question is what all the financial institutions did with the billions of tax
payer dollars supposedly distributed for the benefit of the public. It is
obvious after this recent crisis those funds never reach those that actually
might be in need. So why hasn't the govt. stopped the spending that has only
resulted in bigger pension plans for fortune 500 CEOs? Congress is just now
realizing banks make more money by allowing foreclosures than by helping people
to modify their loans? Yes, amazing concept that businesses are in it for
themselves and look at the bottom line. I can't blame them, but this is why the
Feds need to stay away from the marketplace!
Yes mortgage brokers, wall street money, and government programs pushed or
allowed products that never should have been available to the public (i.e.
interest only ARM's, Negative Amortization loans, no down payment programs), but
people need to take responsibility for their financial lives. The increase in a
homes value doesn't pay the loan off, you're income and savings do. Before you
get a home, pay off consumer debt, build a rainy day fund, and save for a down
payment. Then find a home that fits your budget (debt to income no greater than
33%. Also, find a community bank that services mortgages or someone that has a
local person in your area. If you follow these simple guidelines you will never
"By and large I don't think that's the average person being foreclosed
upon," he said. "The person who's losing their home today is somebody
who lost their job because of the financial crisis."Let's break
that paragraph down: First, this person only "thinks" the average
person being foreclosed upon are not those who borrowed too much money. I'm
sure most of you can harken back to when you were buying a home, at least I can,
and the banks offered us way more than we could pay, or at least that's where
our whole paycheck would go to.This person next says that the people
who are losing their homes today are those who lost their jobs. Okay, I can go
with that. But to then blame the banks and mortgage companies doesn't fit,
unless this person believes the banks and mortgage companies should provide the
person who lost their home a job. How can it be the bank or mortgage company's
fault.@my2cents: Why should the banks negotiate? You signed a
contract. Why should you get a better deal just because....??
"The only cure is for people to stop buying stuff they can not afford, even
if it means continuing to rent, or living in a smaller, less expensive house,
and driving and older, cheaper car."Are you trying to destroy
our economy, DN Subscriber? Why do you hate America?
I feel sorry for the folks in this situation. But don't go crying
"victim".It will do yourself no good and people will only
grow to resent you.It is tough to lose a job but when you do, you
have to be ready to make do.I once sold my home to stay out of debt
when times were tough. It wasn't easy but we made it through and came out
better in the long run.A house is just a building, a home is where
Although I sympathize with those going through foreclosure it is not the end of
the world for them. Some people are clueless when it comes to financial matters.
There is always a risk that one will lose their job. A wise person will factor
that into their financial plan. Second, there are only a few cases of
"predatory lending" in UT unless one's definition is any loan that the
borrower subsequently defaults on. Third, the mortgage industry is one of the
most heavily regulated industries in the nation. Try to get a license to be a
mortgage broker and you will see why there are only 3000 of them when there used
to be 12,000.
Most people who are going through foreclosures are not looking for somebody to
take care of their situation. They want to meet their payment obligations. I had
to deal with a mortgage company for over a year who claimed I missed a payment
in December 2009. The crazy thing is I had arranged automatic payments through
my checking account. I had records that the money went to the mortgage company.
They would not accept that. I spent 12 months working on getting this fixed. The
only solution I found was to get a home loan modification--it turned out I was
qualified for the reduction. The mortgage company kept on "losing"
papers throughout the process. It is a good thing I kept a good paper trail
going, otherwise they would not have followed through on their obligations. I
have heard horror stories worse than mine. The mortgage companies are creating
bigger messes than solutions.
What it sounds like to me, is you all have great comfortable jobs and have never
suffered from job loss or a major medical emergency. You are jumping to
conclusions that are greatly judgmental! I am glad you don't hold my mortgage
note. There are those who do purchase more than they need but they are in the
minority. Get off your high horse and put yourself in someone else's shoes for a
day, a week, a month or even a year. It is only through generosity of family
that we were able to keep our home. Now that we are employed again we are able
to make all our payments. Good people have bad things happen to them even if
they think they are well prepared.
This is what the entitlement mentality produces; Other people must pay for my
living beyond my means, if not I am a victim of other people's greed!
Isn't Utah one of the states with the highest square footage per home?Guess all that greed is coming home to roost. Stop blaming others for your
For the uninformed, these people are not trying to avoid their obligations and
debts, the banks and mortgages companies are unwilling to cooperate and work
with any refinancing plans and forcing foreclosures. Most mortgage
companies and bank card companies are held in off shore accounts that cannot be
contacted or reasoned with. Many times a property or mortgage or credit debt has
been subdivided among many creditors rather than a single contract holder. When
there are multiple parties having separate claims to a debt its impossible to
locate them or know who they are. Not even third party collection companies know
all the information.There is an easy method to see just how vast and
diversified debt is in the US, try and find the contact holder of in-store
credit cards or large bank credit cards contracts. When you reach the shores of
England and other foreign banks you hit a dead end and no information. This is
what these people have encountered.
Foreclosure is only the fault of people who fail to pay their mortgages. A few
may be truly unfortunate types who have lost jobs.However, most
probably made a very small down payment; bought the most expensive house they
could; save very little money for emergencies; and generally live a lifestyle
above what they can afford.Just like Congress.The only
cure is for people to stop buying stuff they can not afford, even if it means
continuing to rent, or living in a smaller, less expensive house, and driving
and older, cheaper car.There are indeed other victims, but not the
ones cited in the story. How about all the depositors (those are people who
save money and their bank or credit union loans it out to other people for
mortgages or cars) who will get little or nothing in the interest they expected
for the use of their money by the foreclosure "victims?"Too bad that massive federal spending on counseling jobs ran out, but we
cannot afford it any more. Just turn your radio on and listen to Save Ramsey or
Clark Howard, and 90% of the "victims" could avoid foreclosure.
The taxpayer is the victim for having to bail these people out. You don't try
to get something for nothing and most of these people tried to get a home way
over and beyond what they could ever pay for. I don't feel sorry for them, I
despise them and their gluttony.
Place the blame on someone else. That's the American way.I feel for
those who have lost their jobs. But part of buying a house is buying within
your means in case of a rainy day. If you don't have savings put away, maybe
you shouldn't be buying in the first place. People have lost jobs since the
beginning and held on to their houses. Yes their are those whose circumstances
would have lost their house no matter what but they are the minority here.Most people who are losing their homes are those who bought way too much
house and now that can't afford it. They are not in the minority. They signed
adjustable mortgage loans so they could qualify for the loan. The smart money
is to buy a house you can afford on a fixed loan so you know your future no
matter what happens to the financial sector. Since when does a family of four
need a 4,000 sq foot home with all the upgrades? They would fit nicely in a
1,300 sq. foot house with a payment at the fraction of what they are paying.
ALL these foreclosures are the fault of only the banks?Really?I totally agree that navigating the mortgage/closing process is a
confusing pain the rear end and, no, I don't claim to understand every part of
it and, yes, I do think banks loaned waaaaaay too much money to people who never
should have tried buying a home. However, I DO know how to figure
an interest rate and what that monthly payment will be and I'm smart enough to
know I also need to add taxes and insurance to that monthly payment.And, oh yeah, I know how to figure my monthly expenses and add all of them up
to see if I 'really' can afford that nice, new home.They are ONLY
'victims?'Only victims of not using their brains....