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Just When You Think The Housing Market Can Not Get Worse It Does

news.yahoo.com — Economists disagree whether soaring foreclosures in California suggest the world's eighth-largest economy is poised to slump or if it is just seeing its share of disarray from the subprime segment of the mortgage lending industry.

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  • GunbladeVIII, on 10/10/2007, -10/+178Good. Hope it gets worse, a lot worse. As a would-be first-time buyer who's effectively locked out of the market thanks to prices that are still too high after years of ridiculous unsustainable gains, every single foreclosure means my chances of getting a house at a price I can afford go up.

    To people who took subprime loans to get a house (and fueled the ridiculous price gains): shame on you. Should've seen this coming. To those that invested in funds backed by subprimes and are now losing their investments: shame on you, you took the risk, your investment encouraged predatory lending, and you got burned. I have absolutely no sympathy for anyone involved in the "housing slump".
    • rotten777, on 10/10/2007, -11/+47Remember, most of this is caused by the people in the real estate business. They have raped people and made millions.
      • Noctem, on 10/10/2007, -14/+32Yeah, that's called capitalism. They were making money because people were PAYING IT. Nobody was forcing them to buy houses.
        • GMorgan, on 10/10/2007, -7/+4America has huge areas of free land. What has stopped them from developing that. I'm sorry there is no sane reason to pay over the top for a home in an abundance of land unless some force is stopping you from developing your own home.
          • Noctem, on 10/10/2007, -0/+10Obviously, you don't understand the fundamental concepts of capitalism. It's a free, open market. If people wanted to develop these 'huge areas of free land', THEY WOULD. The problem is that they exist in places nobody wants to go.

            Hey, if you're interested, there is _literally_ free land available in Kansas, with the stipulation of development within a year or two. http://www.kansasfreeland.com/ - Enjoy Tornado Alley!
          • Aokami, on 10/10/2007, -0/+3Developing in these areas is tricky due to how removed from the existing infrastructure they are. Wherever they live people want the opportunity to have consistent employment, reasonable distances to emergency services and somewhat local recreation. Building this takes decades of careful planning and teamwork, and if the initial returns are low it is likely never to happen. Also a lot of the area that seems to be nothing is allocated farmland or compensational eco-preserve for other developments, so unless there is a huge incentive no developer wants to be the first to stick their foot in what may be a long bureaucratic battle.
        • diggless, on 10/10/2007, -0/+13its a tough commute from the middle of wyoming to LA and back each day.
          • norman619, on 10/10/2007, -1/+2Nah man not when you use your flying car!
          • HaywoodGiablomi, on 10/10/2007, -0/+1C'mon, wha'dya mean? Dick "dick" Cheney used to regularly go from his "home" in Wyoming to [a much larger and more expensive] "2nd home" in Houston & back. 'Course as the US Constitution would have made the chimp ineligible to be his 2nd in command, it was probably worth it.
          • sodade, on 10/10/2007, -0/+2I "commute" every day from New Mexico to Silicon Valley, NYC, Europe, India and beyond. Telecommuting FTW! Maybe if we get a progressive government going, they will give tax incentives to companies for Telecommuting.
        • llurker, on 10/10/2007, -0/+0Yes, but these license baring [R] logo wielding people pretending to be highly educated sure fooled a lot of people. I would guess in ways that congress should hold hearings over.
          Yes it is capitalism, but remember that free societies only exist when those taking advantage of the freedoms do so responsibly.
        • rotten777, on 10/10/2007, -0/+1Nobody's forcing them? What option do they have? They need to live SOMEWHERE correct? Pre-existing homes are ungodly expensive. New homes are ungodly expensive. Renting is not cheap whatsoever.

          You're right though. This is capitalism. Too bad we need regulation with capitalism. Just ask Microsoft that.
      • white1827, on 10/10/2007, -1/+14Like this silly woman in the article. "I thought it was a fixed rate loan". Federal law requires lenders to disclose the type of loan MANY MANY TIMES on MANY MANY FORMS the borrower must sign. Minimum font sizes are specified, etc. It's very clear when I hear something like this, that the person whining signed away their life without even a cursory glance at the documents.
        • AxeSwinger, on 10/10/2007, -2/+6You have to remember the women is 74. It's a completely different beast. I could imagine someone telling her to sign here, here, here, and here without her reading it because you used to be able to believe your banker was telling you the truth.

          She still should have read the documents but I could see her getting into the situation by predatory practices and it's almost criminal that she should lose her home of 40 years.
          • bacon_skoda, on 10/10/2007, -0/+1It is not unusual for these tricks. My dad, without telling me, opened an I.R.A at a bank we've done business with for a long time. It turns out to be an annuity that will pay him when he turns 85. they named their annuity, I.R.A, not the same as the Traditional IRA we all know, but the same acronyms. And the lady he talked to pays the bank money to put a desk inside the bank. so she wasn't even representing the bank.
        • mike17032, on 10/10/2007, -1/+2I agree, we need to get the old people on the trains heading to the camps before they can do more damage to themselves.

          Really, I dont give a ***** how old you are. Your life is your own. If you arnt smart enough to read before you sign something so important, you need to be in a home where they care for people like that.
          • HaywoodGiablomi, on 10/10/2007, -0/+1Ahh, crap. I dugg you up after reading only the first sentence. I thought you were dishing out a righteously sarcastic smack-down. Clearly, I was mistaken; you [insensitive] social-Darwinist [clod]!
      • TheCash, on 10/10/2007, -0/+11I wasn't aware the realtors in this country were going around forcing people to buy larger-then-they-could-afford homes with variable rate loans at gunpoint.

        Here I thought people were just forgetting the old saying 'buyer beware' en mass, without considering the meaning of the word 'variable.'

        But hey, if fat people came blame McDonalds instead of their lack of willpower, I'm sure these suckers can blame the realtors too. That's sort of the trend these days isn't it... blame everyone but yourself when things go less then kosher?
        • bacon_skoda, on 10/10/2007, -0/+1there are lenders that refi-ed people from their low interest gov loan to a much higher ARM when they've almost finished paying the original loan.
        • trothaar, on 10/10/2007, -0/+0The point remains the same: No matter how slimy those lenders are, the fact of the matter is that the people who took out those refi's had the choice to say NO.

          My husband and I got out of California in 2004, thank god. When we bought our home in Delaware, we grilled our loan officer to make sure we weren't being stuck in an ARM. We asked hard questions and refused to sign anything without reading it. That's all it takes to avoid being trapped in a bad mortgage.
    • GMorgan, on 10/10/2007, -0/+16TBH America has nothing on Britain for housing bubbles. Here many sincerely hope for a collapse because the current levels are unsustainable. When they talk about £1T worth of debt, most of that is in the housing market. However they are doing nothing to correct the situation.

      Rapidly increasing prices are simply an indication of a broken market. Some interference (probably from the state) is stopping the usual forces from interjecting and bringing normality. Unfortunately people invest in bubbles and it's then political suicide to actually try and fix the market.
      • Koldkompress, on 10/10/2007, -1/+3That's not true, we want to build on flood plains!

        Not the cleverest idea, really.
        • norman619, on 10/10/2007, -0/+2I've always wondered why they haven't started building arcologies. Oh wait we like to waste land. I forget.
    • Nutmegan, on 10/10/2007, -21/+11That's idiotic. When houses devalue, everyone's homes are worth less. Everyone who owns a home loses equity, not just the people who contributed to the problem. Sure, it might help a few first time buyers, but it hurts everyone who already owns any sort of real estate.
      • winmywii, on 10/10/2007, -2/+16And if you don't own and are looking to buy you couldn't care less.
        • floatingpoints, on 10/10/2007, -5/+4...you moron.

          If you buy a house now, your values will continue to fall just the same. Just because you bought it when it was low doesn't save you from the fact that houses around you that go into foreclosure will bring the overall land value down all over.

          Go ahead, buy a new house right now and see where you end up in 2 years. You'll owe more than the house is worth. If you lose your job, or relocate, good lucky trying to sell it without going 15k in debt.
          • norman619, on 10/10/2007, -0/+2LOL!!! Look who's the moron. All he has to do is wait till things start to stablize. He then jumps in and watches as he rides the new realestate inflation ride to the top. You would have to be stupid to buy a home now. You wait till the worst is over THEN come in and pick up the pieces. Turn someone else's misfortune into your own fortune. Plain and simple.
      • boot20, on 10/10/2007, -0/+17Let me cry you a river. The people that lose are the real estate agents and those that are trying to flip. If you are in your home for the long term, than the devaluation isn't going to hurt you long term.

        It'll help more than a few first time buyers, it will allow MANY first time buyers to actually enter the market which will, long term, drive up that equity that you lost short term.
      • GMorgan, on 10/10/2007, -0/+11That's capitalism. You invest in something that is over valued then you lose a lot of money when the market reasserts itself. You can be certain the market will reassert itself, it's just a question of how big the bubble will be when it happens.
      • geekee, on 10/10/2007, -0/+12You weren't complaining when your house was going up 20% a year. It's called a bubble.
      • iamnos, on 10/10/2007, -0/+10It only hurts current owners if they're looking to sell. We just bought our house, and if the market crashes, I couldn't care less. I'm locked in for 5 years on my interest rate, I can afford the payments, and have no intention of moving from this house until my wife and I are put in a nursing home by our kids.

        At this point I don't give a damn what the real estate market does. It could collapse, make my house worth 50% of what I paid, and it wouldn't really matter.
        • SpacemanSpiff, on 10/10/2007, -1/+3Will you still be able to afford it if your interest rate goes up to 10% in 5 years?
          The reason that is important is because your equity in the house doesn't help you one bit if the interest rates double. You'd have to refinance to get any of the equity out (or take a god-awful home equity loan) and those would carry the higher interest rates as well. Too many people bought on interest-only Arm Loans thinking they could refinance and now they're screwed.
    • ngmcs8203, on 10/10/2007, -6/+10Gubnlade... as an investor I would suggest that you try and figure out a way to buy up some foreclosures. Yes the subprime market made it difficult for people who got in too late, but they took advantage of an opportunity that was extended to them. It was their fault, and that of shady lenders, that they couldn't see that taking out more credit than they could afford would be bad. Foreclosures are a good opportunity for people who couldn't originally afford to buy a home to get into the market (as long as they themselves can carry the loans). If you have the capital now, why not see if you can buy a house now rather than gripe?
      • edstate, on 10/10/2007, -0/+10Because even at "reduced" prices, most real estate today is overpriced. Especially in the "hotter" markets. Until a decent home comes down to around 25% of take-home income (which is a LONG way down), even the foreclosures will be bubblicious.
        • Bhima, on 10/10/2007, -0/+10I've got a friend that buys foreclosed houses in Atlanta. They are going for far less than 25 cents on the dollar. But who knows when he'll be selling them and until then they're rentals.
      • floatingpoints, on 10/10/2007, -4/+4Actually, it wasn't the buyers' fault.

        Realtors and bankers are ***** shady and don't look out for your best interest. They just wanna close and collect on the commission of the deal.

        Everyone here who owns a home knows that it's IMPOSSIBLE to read through all those papers that you get, so it's not surprising that they slip ***** in there that you don't agree on. If you're a new buyer and don't know about real estate, they can really pull anything they want.

        That's why this is happening, not because people try to afford more than they can. If that was the case, the bank should correct them and give them the proper loan amount, which they aren't doing.
        • StudsTurkel, on 10/10/2007, -0/+8They show you in plain english what your payments will be. They also take your income and figure out what percentage of it will be going towards your loan on a monthly basis. The problem is that some places will give you a loan that has payments of 55% of your monthly income, and the people take them, but then refuse to live on that kind of a budget. If you can barely drive to work and eat ramen noddles and make your house payments then you should not get the ***** loan.
          • norman619, on 10/10/2007, -1/+2Well this is one expensive leasson for both buyers and lenders. Be a little more REALISTIC!!!!
        • Otto, on 10/10/2007, -0/+7*****. If you sign something without knowing what it means or what it says, then it's your own ***** fault and you have no room to blame anybody but yourself.

          I bought my first piece of property recently. I read every single document and understood exactly what it meant before I signed it. Yes, it took forever, and the closing agency didn't much care for me doing that. I told them too ***** bad and did it anyway.
        • engwar, on 10/10/2007, -0/+6A good rule-of-thumb is that if you can't afford a house with a flat percentage rate then you shouldn't buy it. Going with an adjustable rate that may go up and hoping that it won't is simply too risky.

          Always go with a flat interest rate loan. Unless you REALLY know what you're doing.
        • whopper, on 10/10/2007, -1/+1Alan Greenspan has said the adjustable market has killed the fixed market!! They are not bad if used correctly! Also Check out http://www.u1stfinancial.net/adam to pay off home if you own one!!

          Sue Kirchhoff and Barbara Hagenbaugh | Feb 24 '04
          Alan Greenspan



          WASHINGTON -- Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.

          In a standing-room-only speech to the Credit Union National Association meeting here, Greenspan also said U.S. household finances appeared generally sound, despite rising debt levels and bankruptcy filings. Low interest rates and surging home prices have given consumers flexibility to manage debt, he said.

          "Overall, the household sector seems to be in good shape," Greenspan said.

          Americans have been buying homes and refinancing mortgages at a record pace in the past several years, lured by low interest rates. Most mortgages are fixed rate, so consumers can prepay when rates go down but do not face higher costs if rates rise. Under adjustable-rate mortgages (ARMs), which made up about 28% of mortgages in January, borrowers usually have lower initial rates but face the risk of higher payments if rates in the broader economy rise.

          While borrowers can refinance fixed-rate mortgages, Greenspan said homeowners were paying as much as 0.5 to 1.2 percentage points for that right and the protection against a potential rate rise, which could increase annual after-tax payments by several thousand dollars.

          He said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs. Those savings would not have been realized, however, had interest rates shot up.

          "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage," Greenspan said.

          Joseph McKenzie, deputy chief economist at the Federal Housing Finance Board, says buyers like the stability of fixed-rate mortgages, but there is increasing flexibility in products. "There are lots of innovative programs, especially targeting low-income and first-time buyers," he says.The Mortgage Bankers Association said the average rate for a 30-year fixed mortgage in the week ended Feb. 13 was 5.46%, compared with 3.27% for a one-year ARM. Mark Zandi of Economy.com says that although Greenspan is technically correct, for some borrowers, including those with high debt, fixed-rate mortgages may be a better bet.

        • kefler, on 10/10/2007, -0/+3Actually it's called a "truth in lending" form, and its a 1-page sheet that explains everything about what you owe, and how much you will pay. It is the law that the lender gives you one and you sign it.

          So short of them forging your signature, there's no way you couldn't know the big details (i.e. ARM or not) of your loan. It is made to be very clear.
    • robojerk, on 10/10/2007, -4/+23I think myself as pretty conservative, and I enjoy living in a capitolist society. But lately I have been thinking things that go against those idea.
      People that buy and sell real estate just to make a quick buck have really screwed over people like me that want to purchase a home. My only option to get a home now is to place myslef in a 30-50 year loan and be stuck in debt forever. The sad thing is this is what the banks want, they want us in debt forever so we will be a continuous source of income.
      • punchinelli, on 10/10/2007, -0/+10"The sad thing is this is what the banks want, they want us in debt forever so we will be a continuous source of income."

        Not really. Banks hate mortgages. They sell them to other companies, called the "secondary mortgage market," to get rid of them. The only interest banks have in mortgages is whatever profit gain they get from selling the loan to someone else. Your interest rate is 7%, for example, they sell it for 7.5% to another company, and collect on the .5%. The real "continuous source of income" is fees associated with deposit accounts.
        • SPECOPS, on 10/10/2007, -1/+1For the first 3-5 years of a 30 year mortgage, you're paying almost all interest. A lot of banks sell it afterwards, especially if they feel the risk is higher now (e.g. ran your credit, you were late on some other form of credit, or ran up your cards too much, etc). We're talking about 60K in interest in a 350K loan, vs them making on average 1,000$ per sale (not 0.5%) - they will keep it as long as they can, then sell it.
      • engwar, on 10/10/2007, -1/+230 year loans are kind of the standard. Sure it's a long-term commitment. But are you really expecting to be able to find a house that you can pay off in 15 years or so? Do you know anyone who has done so? I don't.
        • mike17032, on 10/10/2007, -0/+2Yes, several. It all depends on how big of a house you want and where you want to live.

          My house was 40k, 3 years ago. It needed a small amount of work, but not much extra money.
      • TheCash, on 10/10/2007, -0/+8And yet, somehow society managed to own property for centuries before the mortgage became the crutch it is today. Before the days of credit cards, my grandparents actually had to wait until they had enough money to buy something before they could actually buy it, and yet somehow they managed to live very happy and comfortable lives.

        If you want to blame something, blame our society's need for instant gratification, fueled by the media constantly hyping individuals like Lohan, Hilton, etc like they are the end all of end all's, instead of pointing out that even though they have more money then 99 percent of us, they are obviously less happy with life and themselves then 99.9 percent of us are. Or blame hiphop and rap artists, burried in bling and living in disgustingly oppulent houses surrounded by flat screen plasma tv's on every wall and ceiling, yet still completely comfortable in attacking 'the establishment' for keeping them down. The day your bedroom becomes more expensive then the average middleclass home in this country is the day you transition from the society of have-not's and become 'the establishment.'
        • Egoist, on 10/10/2007, -2/+4Your logic has leaped a little too far. The houses from "centuries" ago were never as complex and extravagant as today. Air conditioning, electricity in EVERY room, bathrooms in every bedroom -- the quality of the homes have gone up and along with it the price.

          A simple house built by hand was affordable because there was nothing inside because the only modernization was a single hanging lightbulb. There's simply no comparison between the homes of the past the homes of today.
          • 2010student, on 10/10/2007, -0/+4Theres also no comparison between the productivity of a person back then and today. A single craftsman working by hand can produce a fraction of what a factory worker can tending to machines.
          • 2010student, on 10/10/2007, -1/+2Theres also no comparison between the productivity of a person back then and today. A single craftsman working by hand can produce a fraction of what a factory worker can tending to machines.
    • Tobark, on 10/10/2007, -17/+8"To people who took subprime loans to get a house (and fueled the ridiculous price gains): shame on you. Should've seen this coming."

      So I shouldnt have bought a place to live in? I should have continued to live in a ***** apartment even though I worked my ass of and saved up enough money to buy a house? Shame on me? No...***** you.
      • CorpT, on 10/10/2007, -3/+13DId you miss the qualifier "who took subprime loans" ? No one forced anyone to get a subprime loan. If you did, that's your own dumb fault. You should have continued to live in a ***** apartment, saved up enough and had good credit. Then you wouldn't have needed a subprime loan.
      • SocialPoison, on 10/10/2007, -1/+11This just in: if you had to do a sub-prime loan, you didn't have enough money to buy a house.

        You are not entitled to own a home as part of the American Dream. You have to earn it, and you got suckered in by a real estate agent and got ***** because you didn't read the fine print or realize that with minimum payments you wouldn't be paying off the principle.

        This isn't ***** you need a degree in economics to figure out.

        I hope you learned that all important life lesson, though: if a deal sounds too good to be true, it probably is.

        /no sympathy.
        • floatingpoints, on 10/10/2007, -2/+2You obviously never purchased a home.

          Did you sit through every page reading every fine print? Unless you're lying, the correct answer is no because it would take DAYS.

          Also, the banks OFFERED sub prime loans. The banks are the ones responsible. It's not like you say, "wow, i can't afford it BUT..." , no, the banks give you a pre-approved amount which INCLUDES this sub prime rate knowing that in 2 years, they'll make more money. Thing is, it's biting them in the ass now that they have to deal with all the foreclosures.
          • norman619, on 10/10/2007, -0/+3The you are stupid for signing an ugly document you didn't read. #1 rule is NEVER sign anything w/o reading the thing and understanding what it is you are getting yourself into. If it's over your head then get a lawyer to look it over for you. It's worth the extra money to know you aren't screwing yourself in the long run.
          • 2010student, on 10/10/2007, -0/+3"it would take DAYS."

            Yeah, and the responsibility of a $300,000 mortgage is a 20-30 year commitment
          • mike17032, on 10/10/2007, -0/+2Yes, every ***** page.

            And you are responsible, not the banks. YOU. Congrats on screwing yourself over.

            Since you seem to be an idiot, you want to buy a bridge? I got a great deal for ya, but dont worry about reading it because it has big words...
        • bjhath, on 10/10/2007, -0/+1@ floatingpoints "The banks are the ones responsible."
          The banks don't sign on the dotted line of the subprime loan. The buyer does, therefore the buyer is responsible. It is the buyer’s responsibility to do the due diligence before signing a scrubprime loan. If not, then the old adage applies: A fool and his money are soon parted.
      • floatingpoints, on 10/10/2007, -2/+4Amen.

        The OP are the types of people who make the situation worse by thinking they're actually getting a good deal. Then they come in, expect to get something from it only to find out the continuing foreclosures have dropped the value of their house by another 20%.
      • EthylAdded, on 10/10/2007, -0/+7Not just sub-prime: if you're one of millions counting on ever-rising housing prices so you can refinance every 6 months to get out of financial difficulty, YOU didn't have enough money to buy a house either.

        And you ARM folks: you're not sub-prime but, boy, are you going to be in trouble when your mortgage doubles and you can't refinance out of it because your home price dropped. YOU didn't have enough money to buy a house either.

        This is why the sub-prime problem is not being contained.
      • TheCash, on 10/10/2007, -0/+7No, you should have bought a place you could afford to live in today, instead of a place you could afford to live in when you bought it. It's called planning ahead and living within your means dude... it's not rocket science.

        You also should have been a little more forward thinking and patient, and waited till you could afford a fixed rate mortgage instead of a goofy variable rate mortgage with balloon payments etc. You got greedy, you got stupid, and you got played. Life's a b*tch, learn from it and move on, and stop blaming others like you're the first person to get suckered into a bad money deal.
      • Tobark, on 10/10/2007, -0/+2What the ***** are you guys talking about? No where did he say "variable rate" he said "sub-prime".

        I have a fixed rate mortgage , no balloon. Ive already got the principle down significantly in 3 years. The house was $130,000. The mortgage plus taxes in my area are less then my monthly rent.
    • SpaceMonkeyZero, on 10/10/2007, -4/+7Move someplace cheaper. There are a lot of communities in this country where you can get a mansion for the price of a California crapranch. And in those communities you can get a 2000 sq ft house for a few hundred more than a car payment.
      • samurailynn, on 10/10/2007, -3/+4Some of us don't want to leave our friends, family, jobs and everything else that we've established just to own a mansion in Nebraska. Then again, I'm not one of the people whining that I can't afford a house yet.
      • TheCash, on 10/10/2007, -0/+6Exactly. I think Cali is a beautiful place, but for what I would have to pay for a two bedroom home there with zero lot line could fetch me a nice four bedroom on a half acre with a huge yard for the kids in other places.

        Besides that, the taxes in Cali are ri-godd*mn-diculous to begin with. Where is the article attacking that whole 'I can't afford my loan payments because property taxes have wiped me out' joke? For a state that has a much higher amount of protesters and activists then most others, especially where anything government is concerned, where is the outrage at being forced to surrender the money you busted your butt earning to government that gives you very little say in how it's spent?
      • norman619, on 10/10/2007, -1/+3Hmmm... and what about your job? Your career? I do IT and well those places you mention don't have much of a market for someone with my skills. I moved to nice small city in Indiana where life is cheap but finding a freaking job was hell. The job I was lucky enough to find pays dick compared to what I was making back in a real city. So I'm heading back to the big city where it may cost more to live but companies actually pay me much more than just enough to get by.
      • mike17032, on 10/10/2007, -0/+3I work in IT. I found a place for 40k (that needed a small amount of work). I will have it paid off soon.

        My payment is around $300 bucks (though I pay a good deal extra to pay it off sooner), thats less than most people put on a car payment.

        If you feel you must live in CA, then tough *****. Suck it up and rent a place, or live in a van down by the river. But there are plenty of places (that have plenty of jobs) where you can find a house for a far, far better price.
        • boot20, on 10/10/2007, -1/+1How much did you spend on that 40k place to make it livable? How many repairs will the house need in the next 5 years? Where do you live? Do you have the intangibles that people like...you know nice shops, a night life, a sports team and stadium, etc
    • jostheller, on 10/10/2007, -5/+9I bought a 10 year old home in Sacramento in Nov 2001, where my purchase price was 13.9% more then its original purchase price in 1991. I sold in June 2006 at a 105% increase over my purchase price and moved to Washington... I couldn't have timed it more perfect =)
      • chalkboy, on 10/10/2007, -3/+11I hate all you Californians moving to Washington you are killing our housing market with all of your excess money from selling your homes in CA. I think there should be a 100k cash tax to move to Washington from CA.
        • MaynardJK, on 10/10/2007, -0/+4No *****. The market is still ridiculous where I live across the sound from Seattle. They are ***** up the market where I used to live in Montana as well.
          • chalkboy, on 10/10/2007, -1/+3All I can hope is they loose all of there money and can not afford to move any more.
        • jostheller, on 10/10/2007, -1/+5For the Record, I moved back to Washington. I was born and raised in Washington and in 2001 I was laid off because of the dotcom bust... In Pullman I was renting a 1500 sq ft apartment with a view for 500 a month. In 2001 when I moved to Sacramento (couldn't be picky about job location in 2001), the cost of a 2 bedroom apartment was equal to the cost of buying a home there. I felt it was a mistake to buy a home because I hated California even before I moved there, but I refused to loose so much money by renting. I bought in Sacramento hoping/praying/wishing that when I sold I would be able to sell for at least my purchase price. How was I to know that Sacramento was going to be one of the fastest growing counties in the US for the next 5 years? Anyways... Like I said, I timed it perfect. I moved back to Washington simply because the job market was better and I was throughly fed up with that hell hole state. I don't know why anyone would want to live there....
          • chalkboy, on 10/10/2007, -0/+4GO COUGS! I love Pullman (I am assuming that is the only Pullman I can think of) I forgive you of all wrong doing. I still think there should be a 100k tax though.
          • jostheller, on 10/10/2007, -1/+3=) Yep, you are right... I am a Coug for life. I liked Pullman so much after college that I took a job in Pullman designing ASIC's... Go Cougs!

            And, I don't disagree with your 100k tax... Although it is not only the housing system that Californians are screwing up. They are also screwing up the political system around here. Keep your big government, high taxes, and socialist tendencies down there.
      • TheCash, on 10/10/2007, -0/+3I wouldn't say I hate Californians, but I do hate the fact that things seem to turn to absolute sh*t whenever they move there en mass. I mean if you don't like someplace and you want to move someplace else, that totally makes sense and I'm cool with that, but why in god's name would you move somewhere and then turn it into the place you just left? If things were so great there, why did you move someplace else?

        I feel the same way about people that come here from other countries (illegally, in some but not all cases) yet feel completely justified trashing their new home while bragging about, and proudly displaying the flag of their old one. That's like coming into my home, eating my dinner and watching my tv, then b*tching about the meal and my lack of HBO. Man people can be two faced hypocrites sometimes.
        • sodade, on 10/10/2007, -0/+2I never really understood this. What, exactly, are these californians doing that turns a place into "absolute *****?" Raising the property values? Driving nicer cars than the locals? Sporting an I hate W bumpersticker? what is it?
    • StudsTurkel, on 10/10/2007, -1/+4Have you ever seen what a fourclosed house looks like? Complete ***** generally. Most times, people take or break everything. Light fixtures, toilets, copper plumbing, garage door openers, interior doors. Why? because they don't give a ***** and want some money.
      • TheCash, on 10/10/2007, -1/+4Yeah... it requires a little bit of elbow grease and hard work to turn a profit on. I'm guessing this is a completely foreign concept to some people.

        One of my first jobs was working for a guy who did just that: he'd buy up old foreclosed homes, hire unskilled folks like me that had a lot of muscle and willingness for everything but the stuff that required skilled labor, and turn those crackhouses into some of the nicest homes in the neighborhood. While he makes a healthy profit, he's more George Bailey then Mr. Potter, and most of the people he sells the homes to are buying for the first time and never thought they could realistically afford such nice homes. He also gets around half his workers (me included at the time) to donate some free time with him and do work around the neighborhoods themselves. You could say he's just doing it to increase the value of the home, but the amount of work and time he invests is not equivalent to any profit he gains from it in a monetary sense.

        Sometimes a few hours of your time can do more good for others then surrending 10 percent or more of your income to taxes, despite what certain politicians would have you believe.
        • sodade, on 10/10/2007, -1/+2I was with you at first, but this whole "charity will fix our problems" is crap.
    • CheshireCat, on 10/10/2007, -6/+1Nevermind the people who are getting kicked out of their house. Go ***** yourself.
      • MaynardJK, on 10/10/2007, -0/+6Cry me a river. I couldn't afford the payments on my Ferrari with my 60k salary. Now I have to ride my bike to work. Don't you just feel terrible for me?
        • mike17032, on 10/10/2007, -0/+2Maybe they should stick to houses they can afford then.
    • ryborg, on 10/10/2007, -1/+3I'm fortunate to be a home owner with a fixed rate in California but "shame on you" for playing the know-it-all card -- and without ever owning. We are all sheep in this game -- no one person who refrains from buying a house, be it subprime lending or speculation that the market may go down, has ever had an impact that meant a rat's ass worth of difference one way or the other to the market.
    • whopper, on 10/10/2007, -1/+2Buy condo get some equity in it and leverage that to buy the next... you can complain all you want and you'll keep renting. For all you who own here is a great way to get the equity working in your favor http://www.u1stfinancial.net/adam
      Give it a try!!
    • TheCash, on 10/10/2007, -0/+3Not to downplayCalifornia or anything, but the headline of this submission isn't exactly accurate. It doesn't mention California anywhere, and is more of a broad statement regarding the housing market everywhere, which isn't true.

      Frankly I'm suprised the submitter didn't manage to squeeze in a dig on the president somewhere.

      As bad as this situation is, and the fact that I hate seeing anyone in these kinds of situations, I have a hard time feeling too bad for people who should have known better, especially the woman in her 70's who probably tried to save a buck by buying into that whole 'refi now with Ditech' garbage, and now might lose her home of 40 years. How does someone with 70+ years worth of experience not understand the difference between a fixed rate and a variable rate loan? A ten year old could spot that difference. Most loan contracts of that size are some 20+ pages long, and you have to sign or initial the rate and rate rules in at least 4 different places, so unless she was mentally impared at the time and not in her right mind, the only person she can blame for this is herself. If she was mentally impared, she's got a good case against whatever company sold her the refi, and there are many many nonprofit groups and pro-bono lawyers that would love to help her take them to court.

      Personally, I can't afford a home of my own at the moment, which is why I have three roomates and a savings account. My first roomate moved out and bought a condo with his wife at the time because the monthly payments on the low variable rate mortgage he got were a third less then he was paying to live with others. He was pretty proud of that fact and made sure everyone knew how good of a deal he got. Trouble is, he's facing foreclosure and a divorce right now himself because he didn't plan ahead. Not only is he going to be back at square one, worst case scenario his credit is ruined for years. On the flipside, folks that lived within their means and saved up will be ready to buy a home around the same time the market crashes and everything becomes dirt cheap. I can't really be too hard on people getting currently hosed though I guess, as the only reason I know this myself is because my family of seven lived in a two bedroom apartment until I was 9 so my folks could save up enough for a home in a decent neighborhood that wouldn't bankrupt them for the next decade. Yeah Christmas kinda sucked compared to my friends, but I got a yard next to several acres of woods and my own bedroom for my tenth birthday so I thought it was a great deal.

      Yeah it sucks for these people, but everyone gets thrown a curveball sometimes and no one ever said life comes with any guarantees. Ultimately the only one responsible for watching your own ass is you who are attached to it. Of course it's garbage that some local governments turn a blind eye and even support shady contractors who build these pathetic high density multi-family dwellings that fall apart in ten years because more property owners per acre = higher tax revenue, but people in Cali still wear their democrat buttons with pride even though it's the republicans and libertarians that have been pushing for housing reform and decreased property taxes. I stopped trying to make sense of people years ago. Not going to try again now. Would be nice if they stopped blaming others though.
  • buggiemks, on 10/10/2007, -4/+81Good! That means that those of us who were smart enough to sit on our money will be able to buy a foreclosure from someone who went out and bought a house he/she couldn't afford.

    To all those people who locked into an insanely low fixed rate a few years ago -- I salute you.

    • combustion8, on 10/10/2007, -0/+20Exactly, so glad I held off.
    • Error601, on 10/10/2007, -14/+3Trying to pat yourself on the back for missing the boat is rather silly.
      • liv3fr33ordi3, on 10/10/2007, -0/+13Error6601, It's exactly your type of mentality that brought this bubble in the first place. Everyone felt that they had to jump into real estate before they missed the boat as you put it.
        • Winters, on 10/10/2007, -1/+8>> It's exactly your type of mentality that brought this bubble in the first place.
          Yea, you can't say it any clearer than that. +digg.

          All these people seeing the price go up, so they buy 75k worth of property for 250k thinking it will be worth 650k in a few years and if they don't they'll "miss out" and got it sold for 35k at an auction after they filed bankruptcy.

          Yea I REALLY missed the boat there.
        • Error601, on 10/10/2007, -3/+3Obviously you know zero about investing.
          • Winters, on 10/10/2007, -0/+3Well, look. There are alot of major investing firms that have already lost BILLIONS on this real estate problem. "pennies on the dollar". I guess they don't know ***** about investing either. There will always be people who got out at exactly the right time. Maybe they were smart and saw the signs, or maybe they were lucky, but there is no doubt that real estate was a really BAD investment overall the past several years.
      • Error601, on 10/10/2007, -5/+3Uh, no. That type of mentality cleared me a quarter million over a few years. People that sat on their ass missed out.
    • SpaceMonkeyZero, on 10/10/2007, -2/+5The problem is, you'll be buying up a huge house that fell into disrepair because the dumbasses who thought they could juggle a million dollar mortgage on $30 grand a year didn't fix a thing in the house.
      • Error601, on 10/10/2007, -5/+2What exactly do you think will be broken that will cost a lot to fix?
        • tnvwboy, on 10/10/2007, -1/+3It adds up quickly.
        • DrAudiology, on 10/10/2007, -0/+3As forclosures go.....the evictees usually trash the place. I've seen it happen a few doors down, New wiring, new plumbing and broken fixtures.
        • SpacemanSpiff, on 10/10/2007, -0/+5You've obviously never owned a home. Regardless of the age of a house, things break...and they are often very expensive to fix/replace.
    • Error601, on 10/10/2007, -3/+2Looks like the head in sand types just don't want to admit they screwed up by doing nothing. A lot of us made a ton of money off the real estate market. You spend all your money on consumer items, you're not going to have it when opportunity presents itself.
      • MaxPowers2007, on 10/10/2007, -0/+4Uh Ok, so instead of paying a grossly inflated price and signing onto 30 years of mortgage debt us "head in the sand types" spent all our cash on stupid things like savings accounts and GOOG stock. Instead we could have been... uh, upside down on a ***** mortgage when the market collapses.

        I love how smug assholes like Error 601 thinks that "owning" a house makes them wealthy. Cash-money in liquid form is real. Anticipated housing appreciation gains is pure ***** until it becomes REAL cash in the bank.

        Oh yeah, go ***** yourself.
        • inkswamp, on 10/10/2007, -0/+2Sort of. I agree that there is no call for being smug, but you're not entirely correct. My wife and I signed for our house before it was built (which locked the price in for us) and in the 8 months between signing and moving in, the house values skyrocketed and we made a ton of money because the builder agreed in writing not to change the price of the house. We could have turned around and sold and that would have been real cash in the bank for us. Of course, we'd be back to renting. It all depends on your perspective and what you expect of it. However, it's not entirely accurate to say that's not wealth.
      • Error601, on 10/10/2007, -0/+3Sorry, you're full of it. I made the money and it's in the clear. Not tied up in anything. If you're going to try to attack, at least learn something about the subject so you don't look like a total dumbass.
      • ABEND954, on 10/10/2007, -0/+1Not surprisingly, you missed the point. Yes, you and a few others made some money from the housing bubble. You got in at the right time, flipped a couple of properties, and got out before it all came crashing down. Congratulations, you made some quick cash.
        The housing bubble was built upon the fall out of the tech stock bubble. And the merger bubble that’s about to burst is being built on top of the housing bubble. Soon there won’t be any more bubbles to save this economy. The dollar will be devalued to nothing and there will be mass inflation and a depression to make the Great Depression look like a walk in the park. Enjoy those real estate profits while ya can.
    • inkswamp, on 10/10/2007, -0/+2I accept your salute but don't care much for your dancing-on-the-graves-of-others attitude. My wife and I timed it just right and got an insanely low fixed interest rate when the market bottomed out a few years ago, but everyone's situation is different and just because someone else's plans didn't work out for them doesn't mean it's a cause for celebration on your part. And besides, you'll discover what a bummer it is when you watch the value of your home, fixed rate or not, go up and then back down which severely limits your options as far as selling and buying something else. Bad news in the housing market is bad news all around, not just for people waiting to buy in. I wouldn't be so quick to do a little happy dance about it.
  • joshshu, on 10/10/2007, -38/+2There is now way to sell your house right now just because nobody want it and everyone is waiting for lower prices.
    The housing bubble made DOW to drop. And it's not over. We will see how Dow will collapse to the ground.
    Sell your Stocks, Gold, 401k until it's to late, you might lose everything! Dollar is getting stronger everyday, Start saving US DOLLAR as it will be in huge deficit coming days, Save CASH, Oil Bubble is about to burst. Gas is already got cheaper.
    It's called DEFLATION. Check my submissions regarding this coming DEFLATION.
    • Idrivearascal, on 10/10/2007, -0/+12What are you talking about? The dollar is getting...weaker...against the Euro and has for years and years.
      • joshshu, on 10/10/2007, -2/+2Look at the charts! Dollar just got stronger in the last few days . Isn't that a correlation with DOW?
      • Bhima, on 10/10/2007, -3/+2years & years?? It was 1.05 Euros to a Dollar when I decided the US was not the place to live and moved to Europe...

        and Josh? Josh maybe crazy and he may be right but he sure does SOUND crazy... Oil Bubble? WTF is this?
      • joshshu, on 10/10/2007, -2/+2DOW has been rising for years also, now it's reversing its direction. It's just falling. The same kind of story with the US Dollar. It has been declining for years now it's rising.
    • Nutmegan, on 10/10/2007, -0/+9If you expect massive deflation, why recommend cash as the answer? Isn't the value of the U.S. dollar what you're expecting to deflate?
      • qwickone, on 10/10/2007, -0/+5When you say there's deflation in the US economy, it means a dollar is able to buy more (read: more valuable). The price of everything is dropping, so if you hold cash, it becomes more valuable.
        Everything else he said is still stupid.
      • joshshu, on 10/10/2007, -1/+2The value of the US Dollar is Rising. Look at the charts for the last couple days.
      • GMorgan, on 10/10/2007, -0/+3Gold is the safe haven. It's why gold will be well above $2000 an ounce 10 years from now. All the years of building debt on debt will come back and bite us in the ass as it did in the past.
        • joshshu, on 10/10/2007, -0/+2Who told you that? Do you know it's all a scam? Then why is Gold is falling now when DOW is declining?
          • GMorgan, on 10/10/2007, -0/+2Well the Dollar is going nowhere right now. It is going down faster than Paris Hilton when the camera is rolling. The Dow and housing markets have had falls but the Dollar has been dropping consistently for about 4/5 years.

            Reality is that when the Euro was established it radically changed the monetary market. Suddenly you had another currency with a large economic base behind it. The Dollar wasn't the international currency of choice for decades, it was the only choice. That is no longer the case.
    • 2k3john, on 10/10/2007, -1/+12Does you has a clue?
    • WarpFox, on 10/10/2007, -1/+17Inflation is built into any system with a centralized bank. It's not a phenomena, it's controlled directly by the fed.
      • joshshu, on 10/10/2007, -0/+2So after a massive inflation we should expect a missive deflation.... Isn't that a turning point right now for inflation to turn into deflation?
        The US Dollar has been cheap those days during the housing boom, now it has been reversed.
    • MeMongo, on 10/10/2007, -0/+2Insane much?
    • Error601, on 10/10/2007, -3/+3...the long term effects of pot.
    • SpaceMonkeyZero, on 10/10/2007, -1/+5Are you seriously uneducated? Sell your gold, and stock up on Cash?

      Idiot.
      • joshshu, on 10/10/2007, -0/+2Hey educated Idiot, can you tell me why GOLD is depreciating now?
  • Forcough, on 10/10/2007, -1/+25Bloomberg News reported that Mozilo said, "We are experiencing home price depreciation almost like never before, with the exception of the Great Depression."

    Other mortgage lenders - including Bank of America - also reported problems with home-equity loans that supposedly went to solid borrowers: http://www.baltimoresun.com/business/investing/bal-bz.ym.marksjarvis29jul29,0,2238990.story

  • carpespasm, on 10/10/2007, -2/+55does this mean that a few thousand dollars worth of wood, stucko, and drywall sitting on a 1/4th acre lot won't go for 200-500 thousand dollars in the near future?
    • joshshu, on 10/10/2007, -17/+3Inflation is over, welcome to nasty Deflation. Prices won't appreciate. Because of Deflation prices will continue falling.
      • Noctem, on 10/10/2007, -0/+9That's.. pretty much exactly what he just said.
      • dogstar0125, on 10/10/2007, -0/+14Don't panic buddy. The housing market was in a bubble. This is a correction.
      • GMorgan, on 10/10/2007, -1/+2Prices will fall to what they are actually worth without state intervention you mean. Don't worry we'll restart the whole cycle just after it hits bottom.
    • tktechs, on 10/10/2007, -1/+6Are you kidding? A house in the Bay Area, Silly Con Valley, runs for $750K on up for 1000 sq ft homes!
      • boot20, on 10/10/2007, -0/+1That's going to be "corrected" pretty soon. I have a neighbor (in Walnut Creek) who is trying to sell his 1100 sq ft townhome that was built in the early 80's (and still has early 80's everything) for 900k...he hasn't had a single bite...so he's talking about dropping it to 850k, but doesn't want to "lose" money on it...

        Bah...it's over...Sell the house for 400k and be done with it.
    • Error601, on 10/10/2007, -1/+12It's the 1/4 acre that's worth the money. The structure normally depreciates as it ages.

  • combustion8, on 10/10/2007, -2/+8I love it!
  • heythisismyname, on 10/10/2007, -3/+5good buy low sell high!
    • mchristiansen, on 10/10/2007, -1/+2The trick is identifying the peaks and valleys.
  • superfusion, on 10/10/2007, -4/+9The first two comments salute the effect of low housing prices on affordability, but this kind of shock to the economy ... at a time when China and the EU are poised to supplant US hegemony (not to mention Iraq's "Vietnam effect to be felt for a generation or two ... remember the 1970's) ... isn't going to be good for anyone with a job or future tied to the U.S.
    • strafefire, on 10/10/2007, -0/+3Just like stock analyst in the late 90s that pushed stocks that were actually dogs and people bought them in droves anyway only to lose everything.

      Or like in the late 90s when people were told to buy and hold for the long term, while the brokers and fund owners were clearing house, thereby losing more...

      Yeah, history and markets repeat themselves...
  • moracity, on 10/10/2007, -1/+19The housing market is only getting worse because it's allowing idiots to buy homes they can't afford...which ruins it for the rest of us who have a mortgage we can actually pay.
    • Error601, on 10/10/2007, -2/+5How does it ruin it for people that can pay their mortgage?
      • SocialPoison, on 10/10/2007, -0/+3Yeah wasn't real sure on that point... unless he was in the market for a house when this nonsense happened.
      • StudsTurkel, on 10/10/2007, -1/+5It ruins it because if housing prices go up then you can re-finance your loan based on the new higher value of your home, in effect paying off your home with your home's increased value.
        When housing prices go down then the value of your home goes down and you are paying a loan for the amount of what the house WAS worth. If you need to sell or want to refinance you will loose money.
        • monkeyrun, on 10/10/2007, -0/+2but then again, if you can afford your home at the price you bought it for, why would you refinance it?
        • mrswirl, on 10/10/2007, -0/+4I'm sorry but I just don't understand your logic. If you have a $200K mortgage on a house that originally cost $300K but now appraises for $700K, don't you still owe $200K no matter how you slice it (or re-finance it)?

          You're not paying off anything - in fact, you're only increasing your debt load because of re-fi fees, closing costs, etc. You may be able to lower your payments but that doesn't reduce the principle balance in any way.
          • spuggy, on 10/10/2007, -0/+1Actually, the biggest problem here is the fact that your house is appraised at 700K, but will never sell for that.

            So, essentially, with property taxes, you're paying on the unrealized value of the house, which in your example would be on 400K.

            Now, granted that's also largely a testament to the way property taxes work in the United States (in many areas at least), but that's also an issue where by legit households get punished by the speculation.
      • boot20, on 10/10/2007, -0/+1magic fairies with pixie dust shoes and gum drop houses.
    • rizla420, on 10/10/2007, -1/+2I dont get that either. IF your mortgage is fixed, its the same price. Sure your house is devalued, but if your not planning on moving no worries. If you sell and your house is worth less than you paid for.. that sux, but thats life.
      • kaiser79, on 10/10/2007, -0/+3In a healthy market, houses never depreciate. They always appreciate slowly. So it does ruin it for the responsible people who count on appreciation and look forward to refinancing in order to reduce their debt and monthly payment. I plan on moving in 3 years. I hope the market rebounds by then. I also have a baby on the way. A lower mortgage payment would be really nice right about now. If it weren't for the idiot buyers and the sleazeball lenders, I'd be in a much better situation today.
    • edstate, on 10/10/2007, -0/+8He means that people who have savings, a good job, and good sense have been priced out of the market by *****.
    • sjbdallas, on 10/10/2007, -0/+4Agreed, it ruins it for the rest of us because we might have loans based on values that are no longer there. Sure the morons that bought 500K houses and couldnt' afford it get screwed -- which is fine -- but my 150K house will now go down in value and erase my equity. So I may as well have been flushing my mortage payment down the toilet for all the good it did me.
  • licoricewhip, on 10/10/2007, -1/+22The problem has been asking prices that are too high... and wankerbrains willing to pay them... and wankerbrains pre-approving those wankerbrains for loans they can't afford. Now, prices will be forced to "reasonable" levels.
    • JD52, on 10/10/2007, -0/+9Comment dugg for "wankerbrains"
    • tnvwboy, on 10/10/2007, -0/+4Your comment is exactly what a nieghbor up the street from me is doing. Our neighborhood ranges from $130K-200K 50yr old houses. By square footage and age I was expecting it to list for $155-160K. When I pulled up the listing he is asking $180K. Why? Because he was foolish enough to install granite counter tops in his kitchen. Our neighborhood can't support that! I don't doubt the price will drop. Then again some idiot may actually pay that much for the damn house. But as long as that idiot can afford it what should I care?
      • licoricewhip, on 10/10/2007, -0/+1Well, no, you really shouldn't care except that the buyers might now be positioned such that they can't pay their mortgage.

        The era of overpricing real estate is over (I hope).
  • TheToecutter, on 10/10/2007, -4/+13/shrug Have no plans of selling our house/property for a good 15 years anyway. We built this house 2 years ago, right at the sweet spot in the market. This only affects people who continually house hop, or flip houses, or who took out ridiculous loans while pulling in a meager wage.
  • brandonvan, on 10/10/2007, -1/+31Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor. - zoidberg
  • dogstar0125, on 10/10/2007, -1/+23Anybody with half a brain has seen this coming for the last five years. We have had a housing bubble CAUSED by low interest rates and idiotic sub-prime mortgage terms that let borrowers get in over their heads. And on top of it, we have a nation of stupid consumers who have accessed the "equity" that they suddenly gained through this bubble to load up on consumer debt. Blame regulators and lending institutions. They all knew this would happen.
    • GMorgan, on 10/10/2007, -2/+7Problem is the result of central banking. They lend money that doesn't exist, go figure.
  • danielrh9, on 10/10/2007, -3/+8When I look at stories like this these days, I just sit back and laugh. My wife and I just bought our first house at a ridiculously good price along with a pretty good rate. We just happen to be in an amazing buyers market right now in Huntsville, Alabama where there is about to be a lot of relocation due to a ton of government jobs being moved here from Washington.

    We just bought a house appraised at $170,000 for $115,000. I ***** you not.
    • floatingpoints, on 10/10/2007, -8/+3So it's amusing to you that people are getting ***** over by banks?

      You should be furious. But hey, as long as you're making a good investment, ***** the other guy, right?
      • sjbdallas, on 10/10/2007, -0/+1Have you ever been to huntsville? At either 170K or 115K, this dude overpaid. You either work at a defense company or the university, anything else puts you in the service industry so I wouldn't move there if they were giving houses away.
    • Winters, on 10/10/2007, -0/+3Well anyway, part of the problme is that those appraisals are also kind of bogus. Maybe it was only worth 85k, maybe nobody would buy it for less than 50k in a few years. If you're HAPPY with it, and you feel like it's a good price, then you got a good deal. If you bought it becuase you thought it was a good investment, or that you're not paying as much as it's "worth" then the jury is still out.
    • akula696969, on 10/10/2007, -0/+5Hopefully that dropping price will stop dropping now that you have bought the house. ;)
      • Winters, on 10/10/2007, -0/+3LOL that's great. Some people obviously understand what's going on here, like you. Others don't.
    • SocialPoison, on 10/10/2007, -0/+2Not bad.

      $115,000 wouldn't get you a garage around where I live >.
    • mchristiansen, on 10/10/2007, -0/+3What types of jobs are migrating from DC to Huntsville?
    • monkeyrun, on 10/10/2007, -0/+1If only you could ship your house over to California .... :(
    • jscozzari, on 10/10/2007, -0/+1ya my house just appraised at 350k a few days ago, sounds great on paper but i know damn well its a load, realistically its about 250k..damnit where did that fantasy 100k i just had go....
      • sjbdallas, on 10/10/2007, -0/+1Maybe you should cash out some equity and buy a foreclosure then.
    • SpacemanSpiff, on 10/10/2007, -0/+9Except now you live in Huntsville, AL.
    • whopper, on 10/10/2007, -2/+0You should try this program out to get the most out of the house!!
      http://www.u1stfinancial.net/adam
  • 0crabby0, on 10/10/2007, -3/+7I hate to see all of those Californian's declaring bankruptcy :(

    "While a fraction of California's 8.4 million residential properties, the foreclosures marked a jump of nearly 800 percent from a year earlier, propelled by markets awash in subprime loans."

    While we are currently experiencing a housing boom in the Southeast - But these foreclosures will make it harder for first time homeowners to obtain reasonable credit in any state.

    Where is George Bailey when you need him?
    • plizard, on 10/10/2007, -1/+0The only reason there is a boom in the southeast is because people like me who lost their house from Katrina are buying another one.
  • Error601, on 10/10/2007, -0/+13Fortunately the country is still a whole lot bigger than some over inflated areas in CA.
    • boot20, on 10/10/2007, -0/+1Ya because the rest of the country isn't facing record foreclosure rates or anything...

      BRILLIANT!
  • SteveTheSultan, on 10/10/2007, -4/+1It will be to a lesser extent like savings and loan of the 80's. Government bailout will have to come because Fannie Mae and Freddi Mac are hurting too. Also appreciation went up to quick and the market is correcting its self. Now agents are struggling to find ways to advertise their properties to a smaller audience of buyers. Real estate advertising sights like http://zoglist.com will expand the marketing and help increase sales to stable the market.

    Plus real estate companies got construction loans based on a future value of the property. So they could build the heck out of the place and try to charge a premium for the houses. Other than leveling of prices, and thinning of the heard for real estate agents, values will begin creeping up again in the next 18 months.
    • boot20, on 10/10/2007, -0/+1You are kidding, right? Housing are going to devalue left and right, not creep up in 18 months. I point you to the housing crash in Houston in 79-81. The housing market did not recover in 18 months or even 180 months....it took almost a decade for everything to even out.
  • addicted68098, on 10/10/2007, -2/+12i think an economy without a dependence on the housing market will be a better economy.
    • rizla420, on 10/10/2007, -1/+1how is that even possible? Every aspect of the housing market has an effect on the overall economy. THere are loans from the buyers to buy the house. Loans from the construction companies to build the house. There are jobs needed to buy/build/sell houses. There are mutual funds that invest in companies that are involved in construction/real estate. I dunno, im no investor myself, but i dont see how you could magically remove the housing market from the economy.
    • Pitofdoom, on 10/10/2007, -0/+0Once you loose all the paper pushing jobs, and you shut off the war machine, what economy do we have left, even McDonald's will be un-employed.
  • winmywii, on 10/10/2007, -0/+8California is way over priced. My house is probably worth 180k here, but in cali it would have sold for 500k+
    • Lemuel, on 10/10/2007, -0/+0On the other hand, the high temperature was about 75 degrees in San Luis Obispo today...
  • neddallen, on 10/10/2007, -6/+1Michael Savage is not worried. Look where he lives (home address on Google Maps):
    http://digg.com/politics/Michael_Savage_s_Home_Address_on_the_Water_on_Google_Maps_PIC
  • SpaceMonkeyZero, on 10/10/2007, -4/+20Hey Californians... That's what happens when you buy a 1200 sq ft house for $750,000 and expect it to keep going up 20% a year in value. You got screwed by your greed.
    • SocialPoison, on 10/10/2007, -0/+3Wasn't so much that as people getting in over their heads debt wise.
    • Error601, on 10/10/2007, -0/+2That's one in the same. Taking on too much debt with the assumption the equity gains would keep you liquid. Dumb investment strategy unless you're using high risk money you can stand to lose.
    • boot20, on 10/10/2007, -0/+2Not just Californians. Go to other cities in the Southwest like Phoenix or Albuquerque...same mess, slightly lower prices.
  • floatingpoints, on 10/10/2007, -10/+5You people act like it's the buyers' fault.

    The BANKS are the ones misleading people (read: new buyers).
    • plizard, on 10/10/2007, -1/+8Yep - I worked for Aegis Mortgage and I know how misleading and backstabbing they are.
    • Waiting2awake, on 10/10/2007, -1/+8if you are walking around blind and without a cane - who is to blame?
      • floatingpoints, on 10/10/2007, -2/+2It's most certainly not the fault of "the blind". So if something on your car breaks, you expect everyone to just magically know what it is and what to look out for so mechanics don't swindle and lie to them? If your furnace goes out, you expect people to know exactly how it works and why it broke to the furnace salesman doesn't rip you off or pull a fast one?

        That's not how it works.

        Same applies to buying a house. Should everyone immediately know the ins and outs of how these banks and realtors operate? ***** is way too complicated.

        There used to be a time when brokers and realtors were there to HELP you, but now the market is saturated with greedy ***** leeches who do nothing but take advantage of people for a quick buck.

        Unfortunately, everyone is now a greedy deceptive prick.

        The people behind this should be held accountable for being manipulative and deceptive.
        • SpacemanSpiff, on 10/10/2007, -0/+2If someone is going to charge me $10,000 to repair my furnace, then you can be damn sure I'm going to do some research and ask around. Same goes for housing. If you're about to lock yourself into a 30 year mortgage for hundreds of thousands of dollars then it is your responsibility to understand what you are doing. The bank should answer any questions you have. In fact, many states have a specific page which must be signed separately when closing on a house that shows (in gigantic font) how much your monthly payments will be and how much you will actually pay over the life of the loan (e.g. $1 million on a 500k house).
      • Smight, on 10/10/2007, -1/+0I blame the guy that read the contract to me omitting that lasiq surgery might actually decrease my vision and in that event they would be kicking me into the back alley to fend for myself.
        • ldkronos, on 10/10/2007, -0/+2You don't blame yourself for not reading it for yourself?
    • iamnos, on 10/10/2007, -1/+2The banks aren't any happier about this than anyone. A new buyer loses their house because they can't afford the mortgage. The bank takes possession and sells it. When the market is falling (like it apparently is down there), the bank takes a loss because they can't sell it for what's still owing on the house.
      • Floodle, on 10/10/2007, -0/+1the bank doesn't take the loss - you still owe them the difference so you're left with no house but still a bit of a mortgage
    • Winters, on 10/10/2007, -0/+2Banks at fault for THEIR investments, by lending the money out to high risk people. Some banks then sold the investments to others, for a fraction of the value, not losing anything.

      Buyers are at fault for not realizing they could not afford it in the long run.

      I have great credit, and when I went car shopping the first car they showed me was a 85,000 dollar car. Even though I was already approved, I knew I could not afford it. I got me a nice 15,000 instead.
    • MaynardJK, on 10/10/2007, -0/+6Someone that enters into a half million dollar contract without knowing what they are doing and loses their shirt only has one person to blame.... THEMSELVES.
    • edstate, on 10/10/2007, -0/+2I think most people are saying it's BOTH the idiot buyers AND the evil banks' fault.
      • joshshu, on 10/10/2007, -0/+1This housing bubble has been planed for years!!! And bankers did everything possible to trap people under heavy debts. By mortgages, by credit cards.
        If you are in a big debt I feel sorry for you as it will be harder to pay it off because of deflation. You know: jobs cuts, decline in salaries.
    • StudsTurkel, on 10/10/2007, -0/+5"A fool and his money were lucky to get together in the first place." - Gordon Gecko
    • joshshu, on 10/10/2007, -0/+1This was a buyer's fault. You should be thinking about yourself not the bank or the government. We live in a free country and you are free to do whatever you want with your money. If banks missleaded you then it's your fault.
  • TeamRocket, on 10/10/2007, -1/+6Real Estate Market Going Down! , Down, Down, Down!!
  • halligan00, on 10/10/2007, -3/+4Gentlemen, (and the 1 lady who's on digg)

    Real estate does not follow normal market rules. Increasing prices do not increase the supply of land. It's a collectible market: price increases beget price increases, until the tide turns. (yes, *buildings* follow market rules, but buildings depreciate; only land appreciates).

    It's the fault of two things: Allowing private banks to create credit-money (debt); and, fundamentally, failing to collect the community-created value of land.

    Paradoxically, land value taxes reduce sprawl, improve housing affordability, and stabilize prices. Unfortunately, California has a property tax cap, and taxes improvements at the same rate as land.
    • dogstar0125, on 10/10/2007, -0/+2This is a normal market rule. It's called "price elasticity of supply". And while increasing price won't create new land, it will increase the supply of land to the market.
      • halligan00, on 10/10/2007, -0/+1The eslasticity of supply for land is exactly 0.

        Land currently not for sale isn't like goods stocked in a warehouse.

        While land prices increases may induce some owners to sell, it induces more buyers looking to speculate. It's positive feedback, until it's not.
        • dogstar0125, on 10/10/2007, -0/+1Not true. There is land out there that is not on the market. As prices increase, you see it come onto the market. I own a few acres of subdividable land myself.
    • edstate, on 10/10/2007, -0/+3Property tax caps and easy money for idiots is a dangerous mix...
  • noizeuk, on 10/10/2007, -1/+1In the UK, weve gone through a very fast and brutal rise in house prices. My dad bought a house for £62,000, he's now selling it for £125,000 and he has only had it for 2 years. Now its not that people in the UK can't afford the houses, its the quality of life over here that is so high. Debt is up and the reason why we cannot repay is because of the high interest rates and additional interest rates applied by the Bank of England. Common sense is a rule that needs to be undertaken by the younger majority and apply thier money more wisely. Sure, a house is a wise investment in the right circumstances and regions. It is very hard for young people to enter the housing ladder but thats just how things are. I guess its because the UK has a better economy than the US.. but im being naieve.
  • halligan00, on 10/10/2007, -3/+2Damn comment system.

    This phenomena has two main causes:
    1) allowing private banks to create money, in the form of credit & debt
    2) not collecting the community-created value of land.

    Paradoxically, Land Value Taxes (LVT) decrease the cost of land and real estate. They reduce sprawl, improve employment, and improve housing affordability. Unfortunately, California taxes improvements, as well as land, and even worse, they've a property tax cap.
  • plizard, on 10/10/2007, -1/+2"Countrywide Financial Corp., the largest U.S. mortgage lender, last week slashed its 2007 forecast, suggesting that rising delinquencies and defaults may spread beyond subprime borrowers to borrowers with stronger credit."

    I tried getting my mortgage with them and they quoted me 1.25% higher than everyone else even though I have a 775 FICO. Their reasoning was because of the increase of foreclosures in the market.
    • way2muchsense, on 10/10/2007, -0/+1Go shopping. People will try all kinds of crap on you for any idiotic reason they can think of. I bought a vehicle some years ago, and the dealer tried to rope me into a financing deal at 18% (or something like that), saying that since I was active Army and Desert Storm was about to commence, they had to charge me more. I called *****, and went to my friendly-neighborhood credit union, who was more than happy to write me a new car note at 8% (a little better than the going rate in 1991).
  • JD52, on 10/10/2007, -0/+6Um yeah. There were a lot of people who knew this ***** was going to pop. Many who have seen it before. Ever heard of the Dot.com/Telecom bubble?
    Same patterns different sector. Some people will never learn.
    • Error601, on 10/10/2007, -2/+1Uh, no. Only clueless people that think that capital investment and real estate investment work the same way.
      • JD52, on 10/10/2007, -0/+1YOU MEAN THEY DON'T WORK THE SAME?! My whole life is a lie! /sarcasm
  • THE4IRON, on 10/10/2007, -0/+6"After refinancing into an adjustable-rate mortgage last year, she faces possible foreclosure on her home of nearly 40 years."
    After 40 years you should have the stupid thing paid off to begin with?! What the hell were you doing that whole time?

    "I thought it was a fixed."

    Nice try.
    • Alphi1, on 10/10/2007, -0/+2I was thinking the same thing - that after 40 years there better not be much of a mortgage left, I would hope!!

      As for her excuse of thinking it was a fixed, trust me, you can get suckered by less-scrupulous refinancing "experts".

      Precisely that happened to me three years ago.

      I was talked into doing a refinance on my fixed mortgage, that it would save me $50 per month, just by refinancing the mortgage (not even consolidating other debt).

      So I went forward with the process, until the day of signing the paperwork. Now my new "fixed" loan had magically become a 3-year arm. When I confronted the refinance guy on it, he assured me that even if it did go up in the future, it was capped at going up only 2%, which considering the rate it was, even that rate + 2% was still better than my old fixed mortgage.

      Of course, I was still hesitant, and I ran the numbers myself (to see where I would stand, equity-wise, after 3 years and after 5 years, when we'd planned to move anyways), and found that after 5 years, even paying the extra $50 back into my mortgage, I'd still be $500 worse-off with the refinance than with the original fixed (and that even neglects any rate changes).

      So I brought it up with the guy, and he told me that if the difference was "only" $500, he'd be happy to give me a check for $500 out of his commission once it was complete.

      Yup, you guessed it. Once the transaction was complete, he quit and mysteriously vanished. All attempts to get the $500 from his employer (the finance company itself) were met with "he shouldn't have promised you that"...

      Oh, and as for my 2% cap on the raising interest? Once the 3 year fixed period ended, it jumped by the whole 2% immediately. Then I found out (after some digging) that the 2% cap was an annual thing. In other words, it could go up as much as 2% EVERY YEAR.

      Fortunately for me, I just got myself out of the whole mess, by selling that house, and buying a bigger one (which I'd planned to do about now anyways), ensuring time and time again that I have a fixed interest mortgage now.


      Oh, and yes, I got a STEAL of a deal on the new house, so I'm set there for a LONG while.
    • sjbdallas, on 10/10/2007, -0/+1My bet is she cashed out some "equity" and what's really killing her is a 2nd or 3rd mortage.
    • whopper, on 10/10/2007, -2/+0Yeah people generally refi every 5 years and never pay their house off anyway.... here is a good solution
      http://www.u1stfinancial.net/adam
  • rfquinn, on 10/10/2007, -3/+3This could get very, very ugly. Check out the Real Estate Roller Coaster:
    http://www.youtube.com/watch?v=kUldGc06S3U
  • synthpop, on 10/10/2007, -0/+2here's a financial tip: don't buy sh*t you can't afford.
    so would now be a good time to buy or are prices gonna sink even lower?
    • tnvwboy, on 10/10/2007, -0/+1It's going to swing wildly from region to region. Some markets were hotter than others. Those who bought into more stable neighborhoods will likely see less price swings than the hot ones where everyone invested thinking they could flip the house in a year or two and double their money.
  • Treshnell, on 10/10/2007, -1/+2I hope to be in the market for a house within the next 5 years, so this should be a good thing!
  • noizeuk, on 10/10/2007, -2/+0My advice now is to sell up shop. Re buy cheaper and reap the rewards of high appriciation in values over the next 10 years :D
  • etnu, on 10/10/2007, -0/+9Median household income for the bay area: $65,000
    Median single-family home price for the bay area: $700,000

    It just doesn't add up! You can't afford a $4k + monthly mortgage when you're barely making $4k a month after taxes. Home prices have been driven up by investors for the last 5 years or so who cashed out their stock options before the crash. Now that the home prices are leveling off (or declining), they're going to start trying to dump those houses and returning their investment dollars to the stock market.

    It's true that there's a limited supply of land, but it's not *that* limited. Unless you're living in SF proper, there's tons of undeveloped land where houses can be built. Almost all of the empty land plots are owned by real estate developers who are intentionally preventing development in order to artificially drive up prices.

    The end result is that ordinary, hard working people with good jobs are forced to live in crappy apartments. I make nearly $100k, but I'm living in a 2 bedroom apartment in Milpitas that's costing me $1700 a month. This is wrong.
    • damnyooneek, on 10/10/2007, -0/+1its just like that in D.C.
    • SwordofKahless, on 10/10/2007, -0/+1Same as in NYC suburbs.
    • Error601, on 10/10/2007, -1/+1You can always move somewhere else.
      • skubiszm, on 10/10/2007, -0/+2And take a pay cut and still not be able to buy a house. Win win!

        Guess what, the places with high house costs are where the jobs are, the places with low housing costs have no jobs.
    • EvolvedAnt, on 10/10/2007, -0/+3The thing is, everyone who is buying those houses have dual income. Both parents are working full time jobs. This is bad because it is unfair to us single guys, as adds pressure to get into a relationship solely to afford a house. Secondly the children of those familys will grow up distant from their parents, who will be forced to use day-care then preschool then baby sitters until finally the kids are old enough to be on their own but barely spent any time with their parents. Then the kid is off to college so he can get a carreer that won't pay enough to buy a home unless he gets married to a carreer women.

      That is not my idea of the American dream.
    • Floodle, on 10/10/2007, -0/+1so if the investors are starting to pull out of the housing market I assume they will start investing in shares again (pushing them up in price) - time to buy shares perhaps?
  • odessadark, on 10/10/2007, -1/+3Fine with me. I work in the housing industry and if I get laid off, I can spend more time playing WoW. My boss simply can't understand that my Tauren Hunter will not level himself.

    Here's to hoping my unemployment is at least $14.95/month!

    • tommyredcoat, on 10/10/2007, -0/+4Oh yeah, that will be fine with you until your mom loses her house and you don't have a basement to live in anymore.

      "No, darling I can't pick you up any Hot Pockets. I am on my way to my second job so I can pay the mortgage"
    • whopper, on 10/10/2007, -3/+0Try this out for extra income in the housing market
      http://www.u1stfinancial.net/adam
  • expert01, on 10/10/2007, -2/+1Step 1: Buy house from/for consumer
    Step 2: Increase monthly prices
    Step 3: ???
    Step 4: Profit!
    • sjbdallas, on 10/10/2007, -0/+1Step 3 was where you sell the note to another bank so you get your money out.
      • expert01, on 10/10/2007, -0/+1How can you possibly make money if you pay someone $750,000 for their house, then drive their payment up so they can't afford it, then kick them out of their home? If you do that, instead of getting money, you'll just have a house. And if behavior like that causes house prices to fall, and you gave $750k, and you'll be getting back less than $750k...
  • Snarfy, on 10/10/2007, -0/+13I just bought a house. I thoroughly explained to the banker I was only interested in fixed rate, 30 year mortgage.

    My initial good faith paper came in: 5/1 ARM. The banker said it was only for the estimate, not the actual loan. More paperwork later, still have this 5/1 ARM. During closing, get the closing papers, it STILL says 5/1 ARM. I refuse to sign until banker corrects it. The banker resent the same papers FOUR times before I finally was given correct papers with a 30 year fixed rate. FOUR TIMES! My mortgage is through Wells Fargo. Beware of their shady practices.

    With that said, I'm now one of those bastards with a killer low fixed rate. Thanks all you subprime suckers!
    • tnvwboy, on 10/10/2007, -0/+1My banker wasn't quite that shady but he definitely wanted to get me into an ARM also. Luckily my real estate agent was seasoned and gave me sound advice about getting a fixed rate. I was pretty naive and could have been taken for a ride. I dodged a bullet there. But I also didn't try to buy into more than I could afford. I wanted a HOME not an INVESTMENT.
    • way2muchsense, on 10/10/2007, -0/+1High five to you, my friend. I've heard a lot of horror stories about Wells Fargo lately. Just wait until somebody else buys your mortgage. Then you get to adjust your whole life around an entirely different group of *****. Principal's customer no-service, for example, is even worse than your average cable company.
    • whopper, on 10/10/2007, -2/+0Hey my neg-am loan is working great for me!! Don't get stuck on 30 years is the only way to go!!! Try this out
      http://www.u1stfinancial.net/adam
      See how that can take you from 30 to 12 years without extra payments!!! Dont wait 30 years to pay of the house!!
  • grkgod, on 10/10/2007, -0/+1so this means no more nail salon techs out there trying to sell houses....
  • noizeuk, on 10/10/2007, -6/+1Wow wow, you make nearly 100k and your complaining?

    as stated, ym dad owns a 125k house and earns only 24k a year. Lets put that in american money for a sec. 125k is roughly $250k, he earns only $48k. i'ld say you were in a good position there except for the tpye of house you own. i do understand that there isnt much fluctuation in the type of property but with that money over here you can have 2.4 children, a nice car and a 4 bedroomed house and stil be comfortable.
  • voodoobru, on 10/10/2007, -0/+1what makes this even worse is that the alot of companies are renegotiating a lower interest rate with defaulters because in many instances it is cheaper to reduce the rate and take smaller loss than it would be to forclose and sit on the property in a declining housing market.

    what does this mean to you and me, it means stupidity is being rewarded and it will still be difficult for a first time housing buyers to get the deals they want.
  • fingaz, on 10/10/2007, -0/+1I hate to say it, but there are so many people like the first poster on this thread that are just sitting on the sidelines waiting for the prices to come back down to earth for them to buy, and once the real estate market stabilizes, it is going to run up again quickly because there will be another surge in demand. Most people will not want to rent forever. So, unless you are capable of timing it perfectly, which nobody is, we are doomed to repeat the same thing, which is why real estate is such a cyclical industry. The banks will catch on and come up with some new and clever way to get people to buy home, whether it is through 40 year mortgages or something we've never even heard of before. I am starting to see an alarming number of people holding out to buy (just about everyone I talk to or read about) because the press is touting the real estate market as a disaster every day. What do you think will happen when the press starts to report that the real estate market is rebounding?
  • noizeuk, on 10/10/2007, -1/+0The real estate industry is a very srtong and very influentual one. It can cause a reccession... lower wages, heighten unemployment and ruin business. lets hope your governemnt, economists and people sort this thing out with GOOD dicision making and not greedy pro business pro capitalist motives.
  • theshaze, on 10/10/2007, -0/+1I was supposed to save that money? Oh well, at least when what you're all saying happens, rent will be cheap again!
  • painhertz, on 10/10/2007, -1/+2Ahh...soon my perfect credit and my large downpayment will conspire together to own your house. My plan is finally coming together after years of saving.
    • sjbdallas, on 10/10/2007, -0/+1I believe a savvy finance guy will tell you to keep that downpayment in savings or invest it in the market rather than put it on the house.
  • weebit, on 10/10/2007, -1/+3ok so you are home loan institution, and you allowed like 75 family's in any month to get a loan. You approved them all, because of the house boom. Some have balloon payments, or they have a gradual payment for the next 30 years. Well they are not the only ones that did this. Very few are considered good risk loans. Many banks did this also, and so did the ones wanting to get into the market, and make a few couple grand. Then jump back out. If you was capable of granting a loan then chances are you may have several 100+ individuals with home loans that are on shaky ground. Now you multiply this for each state. Because their was such a boom in the market, and now loans are starting to fault. This is the BIG problem. If it had happened in just one area, then it could of been dealt with. But because it is on such a grand scale then chances are many banks etc are out the money.

    Now look at wall street during the great Depression this same thing happened. Loans were not just for the rich, and everyone lined up for them, no credit necessary. But those loans went bad, no one could pay, and it was the downfall of the great Depression. Just as we were warned not long ago that this might happen California was the first to show signs of trouble in the great Depression. The same thing is happening now. Have you been watching the stock market? If not keep a eye on it. They have been having selling frenzies, but it has been bouncing back. A bad day, and it may not bounce back.
  • HyProGlo, on 10/10/2007, -0/+2To be honest, something will change within the banking system because there are plenty of people here in Michigan that bought within their budget. But cannot refinance their ARM because real estate value has dropped so far that the amount [in my case] is now double what the state assessed value is.

    My wife and I bought a condo for $179K 3 years ago. On a 5-year ARM, planning to refinance right about now. The state assessed value on the condo is now $74K. Over a $100K loss in value. Granted my taxes are dropping in cost. But banks that we talked to want an appraisal prior to any paperwork being started. The appraisal is based on sales of similar condos within a 10 mile radius. Unfortunately none have sold. Even going back 2 years one cannot find a condo that has sold for even its purchase price. The fall-back for appraisals is now the state assessed value, with is $100K less than what we bought it for. Which kills us. We're already planning to foreclose or declare bankruptcy because we cannot afford a 4% interest hit when the ARM expires; however, we would be willing to refinance the condo and keep it. This whole situation sucks ass -- pardon my French. We threw the place on the market and, should it sell, take a $20K hit, out of pocket to get rid of it. I don't know which is worse bad credit or a $20K debt.
    • joshshu, on 10/10/2007, -0/+1Bad credit is better than a 20K debt. You don't lose nothing with your bad credit history. Just simply it will make you smarter, you will not get in debt anymore.
      I see people talking about debtor's prisons return.
    • joshshu, on 10/10/2007, -0/+1Bad credit is better than a 20K debt. You don't lose nothing with your bad credit history. Just simply it will make you smarter, you will not get in debt anymore.
      I see people talking about debtor's prisons return.
    • whopper, on 10/10/2007, -1/+0Call your lender and they can work something out with you. Trust me they don't want to take a hit... They are working with a lot of people now!!
      http://www.u1stfinancial.net/adam
    • phatt-matt, on 10/10/2007, -0/+120K debt is better than bad credit. It could take years to recover from a foreclosure or bankruptcy. Bad credit will cost you more down the road because you'll end up with a higher interest rate because most banks won't want to extend credit to you.
    • icetigaurus, on 10/10/2007, -0/+1You should probably just try to sell the house and take the hit. The real estate market is going to get much much worse before it gets better. Sell while you still can and feel sorry for whatever sucker buys it now.
  • idc5, on 10/10/2007, -0/+2I am a loan officer in Southern California. The last few months have been pretty bad in terns of qualifying borrowers for new loans as well as falling values which hurts the LTV (loan to value), one of the key qualifying factors of a loan. It's bad, and it's getting worse and worse. Home prices shouldn't have gone that far up in the first place, and now a lot of people are getting *****. Homes that were 150K back in the early 90s are now in the 600k range (average price in orange county); one would need a combined income of about 120k to be able to safely afford the average home in Orange County.
    • crapmatic, on 10/10/2007, -0/+2That's insane. What kind of job pays 120K? Attorneys and doctors, maybe, but there's only so many of them. This is why I think the housing market is going down the toilet.
      • skubiszm, on 10/10/2007, -0/+1icd5 said combined income, so a couple would only need to make 60k each to get to the 120k mark. I don't know where you live, but in California the median income is around 60k. But still, 150k houses going for 600k doesn't sound right. That's why I am stuck renting. It's either that, or live in the middle of the desert and commute 2 hours each way.
    • whopper, on 10/10/2007, -3/+0Try this out with your clients it can be a great income producer during sl