Bad home loans

[Scott S]

As the mortgage crisis continues to unfold a thought occurred to me.

I don't know anyone who has lost their home, except for maybe one person that went through a divorce. Do you know of any?

This new scheme to bail out bad loan debt will be paid by the vast majority of us that have been responsible in our choices. I would propose that any home owner that will get help from the government to keep a home must forfeit a portion if not all of the interest deduction for that loan.

At least there would be some accountability to the rest of us.

Scott S

[427 S/O]

Scott, It didn't dawn on me until I read where thousands of homes in Las Vegas were in, or are in the process of foreclosure. Speculators no doubt!, they just might be the real culprits here!, I thought it was the regular folks trying to 'move up'?. All those foreclosed houses will be bought, it's just going to take some time.

[4RE KLR]

Being in the construction business for many years I know many people who have lost their homes in this fiasco.

I am not sure what the solution is, but I don't like the bailout at all.

In my opinion, the bailout is for the stock holders and political friends and not for the benefit of the actual homeowners.

[Ron61]

Scott,

I know of 5 homes in a mile or so of me that have been foreclosed on. All were bought within the past 6 years and they gave about 4 times what the houses were actually worth in this inflated market.
I just took the dogs for their morning walk and there is a brand new house just built about 4 weeks ago for sale so I stopped and got one of the papers the Realty company left in the holder on their sign. My God, I can't believe what they want for it. Here is what they have: Lot Size 50' by 135'. House 1,204 square feet. Three bedroom 2 bath. Has central heat & air, dish washer, gas stove, city water and power, PG&E gas. A 24'by 24'garage.

Now I know that I built my little house is 1976, but I have kept it up and had vinyl siding and triple insulation on it, plus double windows and insulated garage. My lot is 150' by 140'. House is 1,288 square foot as my Mother didn't want the sunken den so I left it open and that took 235 feet off the living area. I also have the T installed in the street sewer line for the upper lot in case I ever built a garage there. And I couldn't begin to get that much for this place. I also have central air and heat and no gas as my electric bill is about the same as my friends when he adds his gas and electric together. I have a place for the built in dish washer, just never got one. Also have washer and dryer in garage so you don't have to go out in the weather to use them. My garage is 22' by 24' so that one is a couple of feet wider.

In Redding the repossessed houses aren't moving at all and the neighbors have started an adopt a house program and work weekends cutting the brush and weeds that have grown up in the yards and trying to put wood over the broken windows.

Ron

[Silverback51]

Originally Posted by Ron61

Scott,

I know of 5 homes in a mile or so of me that have been foreclosed on. All were bought within the past 6 years and they gave about 4 times what the houses were actually worth in this inflated market.
I just took the dogs for their morning walk and there is a brand new house just built about 4 weeks ago for sale so I stopped and got one of the papers the Realty company left in the holder on their sign. My God, I can't believe what they want for it. Here is what they have: Lot Size 50' by 135'. House 1,204 square feet. Three bedroom 2 bath. Has central heat & air, dish washer, gas stove, city water and power, PG&E gas. A 24'by 24'garage.

Now I know that I built my little house is 1976, but I have kept it up and had vinyl siding and triple insulation on it, plus double windows and insulated garage. My lot is 150' by 140'. House is 1,288 square foot as my Mother didn't want the sunken den so I left it open and that took 235 feet off the living area. I also have the T installed in the street sewer line for the upper lot in case I ever built a garage there. And I couldn't begin to get that much for this place. I also have central air and heat and no gas as my electric bill is about the same as my friends when he adds his gas and electric together. I have a place for the built in dish washer, just never got one. Also have washer and dryer in garage so you don't have to go out in the weather to use them. My garage is 22' by 24' so that one is a couple of feet wider.

In Redding the repossessed houses aren't moving at all and the neighbors have started an adopt a house program and work weekends cutting the brush and weeds that have grown up in the yards and trying to put wood over the broken windows.

Ron

Ron,

You left out how much they were asking for the new house.

[Dan40]

In 1971, I bought a house south of San Fransisco for $47900. [2600 sf]. Sold it in 84 for $255,000. I was out in Ca in 2004, went past the house, it was on the market again for $1,200,000. My son [a former cobra owner] bought one in the mid 90's for $395,000. [slightly larger in San Jose] about a week before the bottom dropped out he sold it for $1,400,000. Both excellent deals for us, but the houses were grossly over inflated in price. There had to be a correction at some point. But throw sub-prime mortgages into that mix and its a disaster instead of a correction.
In the market bailout, I want to see a brigade of top to near-top management arrested, prosecuted and their monies confiscated. Just like drug dealers are. They didn't create $50 and $100 million dollar paychecks out of corporate LOSSES without breaking SOME laws. The Enron scammers were prosecuted, why should this crop of liars and thieves get a pass? A whole lot of them in prison with a cellmate named Ben Dover would make for some record lap times in the clean up of the system.

Dan

[Ronbo]

While the value of the houses was too high the big problem was the morgage companies writing loans to people they knew would default.

Over the last ten years I saw this happen to a few people I knew, had nothing to do with the value of the house itself, they simply were in over their head. Every time I asked myself the same question "How the heck did you get qualified for a morgage that big?", when I saw the house I asked myself "you paid how much for this?".

Was a time when you stood a slim chance in he!! of buying a home that was more than two ~ three times your annual income. Not to mention a good credit history.

When I saw 7yr car loans pop up a couple years ago...

[392cobra]

Financially ignorant people with wants bigger than their needs & no ability to repay of course had no part in this.

Those bad people just took advantage of them . Yep,more victims.

[Ronbo]

Financially ignorant people with wants bigger than their needs & no ability to repay of course had no part in this.

Those bad people just took advantage of them . Yep,more victims.

Of course they're not victims, they walk away with what they started with. Broke with lousy credit.

There's something called a finance officer from the bank who's supposed to deny these applicants as their duty is to safeguard the other people's money their handing out.

If you want to blame the "financially ignorant" well then it's also the people's fault that put there money into these banks making these bad loans.

No, the financial institution has a responsibility to it's investors not to engage in this reckless activity.

[392cobra]

Nobody dragged those people into the bank,kept them from having a lawyer read contract and then forced them to sign it.

Both are to blame but the person signing a legal and binding contract more so. They can say no and walk away.

[Ron61]

Silverback,

Sorry. They are asking $199,000 for it and it has one of the old dam shacks built back in the late 30 on one side about 15 feet from it and another older but in better shape house on the other side. That old dam shack alone would lower the value as it is a dump and looks as if it is ready to fall down.
My house is older and I have a lot more room and larger lot, but I couldn't get half that price for it.

Ron

[427 S/O]

They'll be lot's of renters out there for anyone with means and interest in picking up a repo or two. Pay a management company 7-10 % to handle the rent and grief.

[Bill Bess]

Greed is the problem!

People the couldn't afford a home could get one, Appraisers that put unreal values on property, Owners "flipping houses", Banks that forgot the rules and made up new ones, selling groups of loans to bigger lenders to get more cash, lenders getting insurance on the groups of loans...
GREED....and finally our credit cards are maxed-out.

CRASH...........CAN'T MAKE THE PAYMENTS...OPPS!

Now the tax payers can pay for the next 100 years to get it fixed.
Old Bill

[Wayne Maybury]

Some people "bought" with no intention of making any payments. A friend of mine is a used car dealer and he just bought an '08 Subaru with 3000 or 4000 miles on it. I asked him what was the story on this car since it was virtually brand new. He said that a young guy bought the car, drove it for 3 months, and never made a payment. The bank repo'ed it and my friend bought it at an auction. I guess this is how it is today. These big houses are exactly the same except in many cases, the mortgage seller knew that the buyer was not able to afford the big house before the mortgage was signed.

Wayne

[trularin]

Holy cow! The house two door down just posted, "Bank Owned".

I am shocked, but I think Steve is right, the Fed is going to help out a few friends and let the rest flounder.

[Ronbo]

That's alright if you haven't already been hit with it your local government will be whining about the drop in property tax since the house values are declining.

Of course you'll hear that they need to raise the rates to compensate for this...