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102 Comments
- edstate, on 03/02/2009, -7/+38That's why we all need SAVINGS. And, surprise, your house does NOT = SAVINGS.
I'm aghast that this debate (which it is, amazingly) still hasn't come back around to the CAUSE of this *****. Yes, the government pushed the banks to make bad loans. And yes Wall Street went ***** nuts... but the real cause is US. The PEOPLE, who have forsaken time-honored rules about how to behave, economically.
Used to be people actually planned for disaster. Imagine that. - sjbdallas, on 03/02/2009, -1/+24I feel bad for the first person because he wasn't doing anything out of whack. He didn't buy more house than he needed even though he worked two jobs. It was his medical issues that ended up screwing him. The second person however, was making 42K but had a 185K loan after refinancing a few times (presumably to cash out). That's poor money management in anyone's book I think.
- inactive, on 03/02/2009, -3/+24No job is forever.
No home is forever.
All you can do is lick your wounds and move on. Things can be tough, but its not the end of the world.
How about more stories of people getting back on their feet or adapting positively to the times? - inactive, on 03/02/2009, -9/+29This is becoming all too common.
A coworker's husband just lost his job on Friday (he'd been there 12 years).
My brother got "fired" from his job as a hospital chaplain. Yes. Chaplain. Fired. It's that bad.
Where's the dignity and integrity and safety net? It's not there. These concepts have been systematically rooted out of the American landscape by neocon policies, starting with Ronald Reagan. He's the one who started this mess.
Everyone should be writing their elected reps with stories about their families and friends because I still don't think they get the full scope of what's going on out here. - booksnmore4you, on 03/02/2009, -1/+20Wow. A very poignant read.
- Hillsfar, on 03/02/2009, -1/+16Our manufacturing jobs, making things that people here in the U.S. and in other countries have, have flowed out over the decades years. Half of U.S. teens don't graduate high school, so they either work at a McJob or they live a life of crime or they live off a working family member (usually parents), or they live off welfare. Many major corporations doing business in the U.S. don't even pay income tax. Debt and bubbles and governmental manipulation of statistics like unemployment, inflation, CPI, GPD took over. But what happens when the buck stops?
You're left with the fact that we all need to tighten our belts by about 30%. For some, that means jobs are gone. This is ain't just a Depression. We're not going to see a "U" shaped recovery. This will be an "L"-shaped reset. - minnecrapolis, on 03/02/2009, -0/+14And I have a rule of always having at least 1 year salary in savings.
Then I lost my job (during the dotcom burst). I lived on a very, very strict budget but since there were so many others that were in my field at the time it took almost 2 years to find a new position. I worked part time, even laying tile, just to make some money rather than just spending out of savings.
The point being, some of these people did have savings but they have ended up using them because of this emergency. Once those funds are gone there isn't much they can do except hope that our economy has improved.
That being said, when I lost my job I let my mortgage company know right away. They offered a loan modification which allowed me to pay a lower payment each month and either put those payments on the end of my loan (thus increasing how long I would be paying a mortgage) or to pay up the difference at a later date (which I ended up doing).
The reality is, if you are up front with your mortgage company, especially in this economy, they will most likely try to work something out with you. They would, believe it or not, rather keep you in the house paying something than pay for the foreclosure process and end up sitting on an empty house for who knows how long (which will most likely end up gutted by thieves). - trollick, on 03/02/2009, -0/+13So... if homes are so great, and everybody should have one, shouldn't we all be excited about falling prices???
- DangerCollie, on 03/02/2009, -1/+13I see it almost every time we answer a medical call. One lady collapsed because she was shorting her medication, we see a lot of that. One young fella having a seizure refused transport because he didn't have insurance and was already paying off a hospital bill. He had another seizure a few hours later, again refusing transport.
This is more than just an economic meltdown, people are dying. And this is just the warm up act. Wait until people start running out of unemployment benefits. Desperate people do desperate things. - 029JO, on 03/02/2009, -0/+12I'm afraid we are going to be hearing more and more stories like this in the near future. This economic down turn is going to be a hard lesson for many people some deserve it many don't.
- Shiftgood, on 03/02/2009, -1/+12I think we are going to see a progressive American culture reborn out of all this. Arts, music, lifestyle, creativity and innovation are strongest when people are at their weakest. I think we'll be seeing a renaissance.
- PhantomRogue, on 03/02/2009, -0/+11Im not surprised. Because companies (like AIG) kept buying the CDO's (Collateralized debt obligations). So Banks kept making more and more loans. It didn't matter how poor the loans were, because they could sell the CDO and even the Loan itself off to other people. The underwriters kept hedging and hedging the loans out, but as soon as the end buyers started to not be able to re-hedge and resell the funds (due to Dividends and P/E points being way too low) it was the well drying up. No longer could they continue to sell phantom funds and actually have to prove their worth.
Banks made money not by being banks... but by being "fee driven institutions." The banks got the Initial Payment from not only the Mortgagee but from the place buying the CDO. So the Banks never cared about the Mortgage, only the Fee to set it up and the money they got from selling it to the CDO Investors. Banks stopped becoming banks. - ousthouse, on 03/02/2009, -0/+9YES! I've been renting and saving up for a downpayment for years. I was called unpatriotic by a coworker when I told her that I'm happy to see prices drop around town.
We all hate people who profit from speculating that gas prices will go up... why is the opposite true when it comes to housing? - PopcornDave, on 03/02/2009, -0/+8"Everyone should be writing their elected reps with stories about their families and friends because I still don't think they get the full scope of what's going on out here."
While I sympathize with what your sentiments are, writing to those political buffoons would do nothing more than provide them with soundbites. They don't give two ***** about the "regular folk" until election time rolls around and then they're all handshakes and cigars.
If they really wanted to help, they'd be cutting their own ***** salaries instead of giving themselves a pay raise last December. Show us that you actually do understand what the country is going through and take a pay cut as well. Stop the "let them eat cake" mentality. - TexMexRex, on 03/03/2009, -0/+7I'm sorry, but I do not understand the culture of living on the edge of your financial means so that any one unexpected bump in the road leads to bankruptcy. Real stories I have seen: Gas is $4, I'm bankrupt because I own 2 new SUVs. Had to buy bottled water on credit card because I have no cash. Both kids lost iPhone the same week, I can't afford to replace them. I'm sorry, but I don't understand how this has become normal. Why does nobody put any money in the bank. Why does nobodies family support them when there is a crisis. Yes buying a home is/was the american dream, but when did it become a mansion you never planned to pay off.
- anubis2night, on 03/03/2009, -2/+9With an average medical problem costing 350,000 I think it would ***** anyone up. I for one would rather live in a country with free medical and higher taxes. At least then you know what your future payments are going to be.
- inactive, on 03/02/2009, -7/+14This is what you get when you have a federal reserve pumping excessive amounts of capital into the market. I wonder how things would be if the market set interest rates, instead of the fed. Probably a lot more stable. But nooo, that would 'never work' because people in power wouldn't be able to control it.
- firesphotons, on 03/02/2009, -3/+9Dear hippie, sorry to hear it, I'm on the verge of losing my "paid for" house. I once commanded about 85K a year, now I can't find enough work in my field or even a job ringing up groceries. I guess the end of the baby boomers just need to fade away or make suicide clubs for when we have nothing left.. In retrospect, I should have not paid my home off at least I'd have that money to eat while my fellow American's were forced to pay my mortgage..
- kingmanic, on 03/02/2009, -2/+8I find it sad in the US that up until this year the #1 cause of bankruptcy was health related costs. I think for the first time in a long time it'll be something else (unable to cover mortgage due to loss of job). The US is the only modern civilized democracy which you are 1 uncovered accident/1 uncovered ailment away from financial ruin. You get lower taxes but the potential for you to lose it ALL in a stroke of misfortune is frighteningly unjust.
For the Majority of the US (~90%) you'd get better coverage for you money paying Canadian Taxes than paying health premiums. - anubis2night, on 03/03/2009, -1/+7The cake is a lie...
- mattowan, on 03/03/2009, -0/+6There should be a fund for those who think that anyone in foreclosure should receive handouts. One of the libs on this board should start it - that way the it could be 100% voluntary rather than looted from a portion of the population.
- madrid, on 03/03/2009, -2/+7"One bad risk or misjudgment of the heart."
So true. I put all my eggs in one basket when I decided to settle down with someone only to have them walk out on me completely without warning. It took me months to recover financially, and I don't know if I'll ever trust anyone like that ever again. - krellor, on 03/02/2009, -0/+5So you paid your house off, but don't have any appreciable savings to live off of while you find a job? I mean, I don't know how long you have been out of a job, but me and my wife have an emergency fund that we can live off for two years. So, what, you just paid it off and never set aside any money? I don't get how you lose a house that is paid in full by losing your job, unless it has been years since you had a job.
- kingmanic, on 03/02/2009, -0/+5"The reality is, if you are up front with your mortgage company, especially in this economy, they will most likely try to work something out with you. They would, believe it or not, rather keep you in the house paying something than pay for the foreclosure process and end up sitting on an empty house for who knows how long (which will most likely end up gutted by thieves)."
They don't want your house now but a few years ago many across the US actually counted on their customers defaulting. They could then cash in on the rapid appreciation of the house. Even when the house was trashed the appreciation made up for the repairs they'd need to do. It's a different time now and a foreclosed house on a bank balance sheet is a massive albatross around their necks. - Legacy23x, on 03/02/2009, -1/+6Nice to see some people still have a positive outlook on things. Yes bad things happen. Stupid people do stupid things. Now let's learn from it and fix it as best we can.
- Eorster, on 03/02/2009, -0/+5Yea, but good luck getting that next job or home.
- joand315, on 03/02/2009, -0/+5I'm really surprised the bank loaned the money with those kind of numbers. Back in the early '90's I couldn't get a loan for 80,000 when I was making that kind of money. My Dad had to cosign. I was 40 years old with a good but sparse credit rating. Did the banks want to fail just a few decades later?
- trollick, on 03/03/2009, -0/+5The sad thing that the government will try to use YOUR own tax money to keep YOU priced out of the market.
- inajeep, on 03/03/2009, -0/+5Do you want to read about feel-good stories or do you want to see the number of people unemployed? Not everyone of those people can bounce back by finding a better job or started their own business. I would say less than .01% will do better. Salaries are headed down, jobs are not available as they once were, out sourcing ....
Reality sucks sometimes. - Trekhawk, on 03/03/2009, -0/+5The market would allow them to go down in flames. It's their "punishment." The market wouldn't advocate the bailouts either. The market would reach equilibrium by purging the poor investments and rewarding the prudent. The market is ruthless and uncaring, but it works.
- Newswiseguy, on 03/02/2009, -5/+9what happens to the least of my brothers happens to me.
- geekee, on 03/03/2009, -0/+4It's sad that the whole idea behind the FED was to stabilize the economy by controlling the money supply to dampen the business cycle. Instead, the fed is only interested in the politcal agenda of always making the economy look good. So interest rates are always too low, and the money supply is always too great.
Remomber, credit is a destabilizing force in the economy, and needs to be treated with care, not reckless abandon. Credit is good in moderation to responsible people. When you stray from that path, well I don't need to point out what happens.
It's sad that the federal govt. is acting like the worst of the reckless borrowers. Nice example Mr. Obama (and your guilty predecessors) - Metasquares, on 03/03/2009, -0/+4Those time honored rules are now considered a classical economic doctrine, replaced by the modernist one (Keynesian economics), which posits that wealth can be created without anything of value to accompany it.
Like stripping music of melody and art of form, stripping economics of value defames the entire field. In this case, it can also do... has also done... great harm. - PopcornDave, on 03/02/2009, -0/+3Not going to happen as it doesn't play well to the climate of fear that's the general talking points right now.
Fear = ratings. - krellor, on 03/02/2009, -0/+3I am. This is a great time to buy if you have a good credit score and a job. I'm still watching though, prices are still dropping, so don't want to buy too early.
- trollick, on 03/02/2009, -3/+6If one medical emergency ***** you up financially, maybe you are not in position to buy such an expensive item as a house.
- Haoie, on 03/02/2009, -2/+5When did social security become so, insecure?
- geekee, on 03/03/2009, -0/+3It's sad that people lost some money and need to go back to renting, but it's not the end of the world. There's no right to own a home in the US constitution. There never was. Nothing has changed. If you bought a home more than 4 years ago, you probably are not even under water. If you bought sooner, and didn't put anything down, you didn't lose much. If you put down a lot (i.e. 20% like in the old days), and your house is under water, than you are in the same boat as the internet bubble investors who lost all their money a decade ago, and no one bailed them out.
- geekee, on 03/03/2009, -0/+3Great idea. I'll go further and say the govt. should allow it to be written off as a charitable deduction. However, the recipient must report it as taxable income.
- inactive, on 03/03/2009, -1/+3Cancer isn't crossing in front of a speeding van unless you smoke (which is literally asking for it).
It happens to a lot of women all the time; how do you prepare for it? - whorunbartertwn, on 03/03/2009, -0/+2The first guy maxed out his home's equity to buy heavy equipment for the demolition business he was trying to start, that's what allowed his medical issues to screw him when they came up.
- PYRTN, on 03/03/2009, -0/+2Of course, you get as many strikes and do overs as you want if you're a bank or in the auto industry. That's what you pay lobbyists for after all.
- pintomp3, on 03/03/2009, -2/+4Do you remember his foreign policy? Iran-Contra?
- NicoNicoNico, on 03/03/2009, -0/+2You're right. I owed $80k on a house, more than half the house's value on a down payment, and they went to foreclosure proceedings in four months. I called, and they would only send me from rep to rep.
I did sell it in five months, though, so it all worked out. - CTK14A, on 03/03/2009, -0/+2"Work hard and plan ahead"
Tell that to all the recent college graduates who can't find work -- They did both and are now stuck with obscene amounts of debt and no work. I spent college working a job in the day, a job at night, and going to class/doing homework in the middle -- now I have a bachelor's and send resumes out all day with no luck.
This 'pull yourself up by the bootstraps' stuff is *****. - Destroytoy, on 03/03/2009, -0/+2FTA
"And if she sometimes spent too freely on clothes and gear for her girls, she was able to balance the books by drawing on her equity in the home she bought in 1995."
Well there you go dumbass. Using your home as an ATM to cover your frivolous spending habits is why so many people are screwed now. I have very little sympathy for such individuals. This points directly to the lack of financial discipline that so many are now trying to "learn" after the fact. - Metasquares, on 03/03/2009, -2/+4"We have entered the one strike and you're out era. One lost job. One medical emergency. One bad risk or misjudgment of the heart."
I hate to say it, but this is the nature of reality. If you make a bad decision and try to cross in front of a speeding train, you're not getting a second chance. Observer A is dead.
Responsible living involves preparing for these eventualities and using the time prior to them to build your own safety net. If you take a foolish investment risk... well, don't take the risk unless you can afford the consequences. - Trekhawk, on 03/03/2009, -1/+3$350K? What are we counting and not counting as an average medical problem?
- inactive, on 03/03/2009, -0/+2Well, I hate being broke but I'll say it. It's good to be a non homeowner making less that 30,000 a year.
I know my priorities, don't have any kids (by choice) and can buy $60 worth of food at aldis to last 2 weeks. My monthly bills are $500 and if I get screwed over and fired I'll be able to make it serving tables.
2 years ago I was making 40,000 a year and I would have sunk when my previous employer laid off the local force to move it to india.
It's good to be poor, sometimes - inactive, on 03/03/2009, -0/+2When it's your own money on the line that you're loaning out to people, you're gonna be a lot more careful about doing so than if it costs you next to nothing to loan money. That's basically the problem with the fed. Where is the value basis?
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