What is Digg?463 Comments
- nrvous250gt, on 02/20/2008, -3/+113Who woulda thought that giving a $700,000 mortgage to a gas station attendant was a bad idea?
- inurb, on 02/20/2008, -6/+90I get a little razzled when people start talking about how the government should step in and help these homeowners. I have no idea what they are smoking. Because I know that if I make a bad investment and I lose substantial amounts of capital Uncle sam doesn't come in to save the day. People should take their bumps and bruises and pay for their mal-investment.
- tcpip4lyfe, on 02/20/2008, -19/+102I have no sympathy for people who had a adjustable rate mortgage. It's a contract. Maybe you should have read it.
- Nougat, on 02/20/2008, -7/+75It's exactly what any business would do in the same situation. When it doesn't make financial sense to keep paying for something, you stop paying for it.
Corporations aren't bound by moral responsibility; if people insist on being bound by it, they'll keep getting screwed. - turbanastic, on 02/20/2008, -38/+90because people needs to be morally responsible. don't throw your problems on everyone else.
- tomek77, on 02/20/2008, -15/+54Like the saying goes: "business is business, nothing personal". I wouldn´t even hesitate a split second before walking away! If you believe in capitalism, then doing what gives you the most financial gain (and is legal), is what´s best for society.
- 0xbaadf00d, on 02/20/2008, -1/+35You don't have to read all 30 pages to know that an adjustable rate mortgage's rate will adjust.
- zachriggle, on 02/20/2008, -7/+39But it's the American way! Spend far beyond my means, and when I have amassed such a debt that I can't pay for anything anymore (or rather, don't want to), I can *screw* the bank that lent me the money and *destroy* my credit. Americans need to learn a simple principle: If the money is not in your bank savings/checkings account, don't buy!
On the upside, those that do this might have a slightly harder time charging their next 55" Plasma at BestBuy to a new credit card (at 19% interest). - inactive, on 02/20/2008, -5/+36I am a conservative. But sometimes this makes economic sense for the borrower. Why pay 11% interest on value that doesn't exist? It is foolish. It has nothing to do with responsibility. The lender had no business writing a loan whose terms could not be full filled. This is the natural result of money that is too cheap. Many countries around the world (China, Japan, EU) run huge trade deficits with the US. They have nowhere to put their profits except into investing in overcapacity at home, real estate speculation, and buying crudy US mortgage bonds. We see the results in abnormally low borrowing rates.
- jcaino, on 02/20/2008, -4/+33the 2 times i've closed on a house...i sat through and read everything...and anything i wasn't clear on i made sure to have explained. screw being rushed - you're the one with all the cards in your hand. just because you caved to the pressure doesn't mean i have to.
oh...and if you have a decent agent - they will provide copies of paperwork to take out and review. - PhantomRogue, on 02/20/2008, -8/+36Except the Banks preyed on everyone stupid enough to think they can pay off a 300,000 dollar Mortgage in 3 years before the 2.5% jumped to 15%
Dont make it out to be that the Poor got *****. The FED ***** everyone who tried to live above their means. People who kept on the straightened path are fine. - kooft, on 02/20/2008, -6/+34"...people needs to be morally responsible"
Morality doesn't enter into it, it's a business transaction. You should certainly try to avoid foreclosure, but walking away from it is a valid and legal option. - thcobbs, on 02/20/2008, -4/+30EVERYTHING is spelled out in black and white when you buy a house. and the CRITICAL things.... like interest rates, whether or not they are variable, mortgage payment, PMI, and insurance are ALL VERY CLEAR AND VERY BOLD.
At some point the fault does have to fall on the person who signed a document. - munkyxtc, on 02/20/2008, -17/+41How is walking away from your mortgage not irresponsible? I would think selling the house at a loss and not killing your credit would make more sense.
- NJank, on 02/20/2008, -1/+23*riding my 30yr 5.65 fixed and lovin' it*
- HyProGlo, on 02/20/2008, -2/+23What about people who bought within their means? Living in Michigan, I can safely say that I know a pile of people that bought "normal" homes. Say, $175,000, on a 5-year ARM with the plans to refinance that ARM at the four year mark.
They are making their payments. And they aren't living beyond their means. Yet, when they go to the bank(s), the banks won't touch them for the refi. Why? Because the state assessed value has dropped through the floor. In my case, $40K, less that what I bought the home for. So guess what the bank wants? 20% down to buy the house -- 20% of the assessed value. Plus they want the difference between the value of the ARM and the current value. So, if I was going to walk into closing, I'd need to bring over $40K.
Frankly, I don't have $40K laying around. And if I did, would I be in this bind? Doubtful.
My wife and I make more than Bush's plan allows a family to make. So we're hosed there.
To me, it makes perfect business sense. If the lenders won't work with us, ***** 'em. I can repair my credit faster than I can recover a $40K+ hit to the wallet.
The bonus for us? It's a condo. If we stop making association payments, the association puts a lien on the condo. Meaning that it cannot be sold. So the bank will have to pay the back association dues, as well as the taxes on the property, until it sells. And remember, I'm in Michigan. Nothing is selling here.
Frankly, I'm willing to take the hit. - dafragsta, on 02/20/2008, -27/+48Morality is subjective. Why not ***** the bank that preyed on the poor by offering them false hope? it could be argued that the morality deficit lies on either side of the argument.
- xienze, on 02/20/2008, -1/+21So did you take out the loan knowing that you'd never really be able to afford it unless it refi'd to more comfortable terms? I don't see how that's the bank's fault. You should've bought what you could afford to buy at 30 years, fixed. Hell, if everyone had done that instead of taking teaser rates and assuming that their houses would appreciate at 10%+ every single year we wouldn't be in this mess.
- MindStalker, on 02/20/2008, -8/+28So your saying when you get caught in a scam you have a moral responsibility to complete the transactions.
//Opps gotta go, need to reply to the Nigerian Prince who just emailed me back! - Kallius, on 02/20/2008, -1/+20I wish I could digg you up more than once. It amazes and sickens me how many feel that people are bound by ethics, yet companies are not. Corporations have all the rights of a person, but few of the responsibilities. These corporate apologists need to give their collective head a shake.
- unknownpoltroon, on 02/20/2008, -2/+21I would be fine with this, except I know my dumbass responsible "didn't buy an overpriced house I cant afford" self is going to be forced to "bailout" the banks who made TRILLIONS making these bad loans.
- alpinecow, on 02/20/2008, -3/+22For most people, that would depend on how big a loss. Is poor credit worth $50,000 to you? What about $500,000?
- mrgreen4242, on 02/20/2008, -4/+22A bank wouldn't hesitate for a second to jack up your interest rate if they could even though it might mean you can't afford to pay anymore. Is that morally responsible? In any case, it's the banks who are trying to make it someone else's problem. They created this mess and are going to get government (taxpayer) bailouts, even though they entered into a contract with someone.
- cawpin, on 02/20/2008, -6/+24That doesn't change the fact that you're a ***** ignorant fool for signing the loan in the first place.
- annenk38, on 02/20/2008, -6/+24You reap what you sow. When you lend irresponsibly, with deliberate lack of candor, you get proper return on your investment.
- jkoski, on 02/20/2008, -3/+21Then they're stupid and deserve what they get. A home is probably the single largest purchase you're ever going to make and you're signing a contract that will put you in debt for it. If you don't know what you're (not you personally, galore) getting into you should stay in mom's basement.
- galore, on 02/20/2008, -12/+29Have you ever closed on a house?
The three times I did, at different title companies, several years apart, I was ALWAYS under OBNOXIOUS pressure to initial and sign some 30 pages of legalese. Paperwork that they could not (or didn't want to) furnish in advance. It took me around two hours each time in the title office to read that ***** and make some sense out of it. And still I felt like I signed something I didn't fully understand. I guarantee you, the VAST majority of home"owners" sign closing papers without attorneys and under pressure. - bentman78, on 02/20/2008, -4/+21This just goes to show the culture if irresponsibility we have in this country. People don't want to take responsibility for their actions. It's not my fault people got mortgages they can't afford without budgeting properly. Now their selfish deeds will leave the rest of us with the bill...
It's things like this that make the US fail. - panicofficer, on 02/20/2008, -1/+18There may be a lot of legalese mumbo-jumbo but the important details are laid out very clearly. Details like interest rate, total amount you will be paying including interest, any ARM or balloon info, etc. There's no excuse to miss that. When I bought my house those 3% interest rate arms looked really great compared to the interest rate I got but I did some research and decided it was a bad idea. More people need to take some responsibility. Being happy and successful doesn't mean you have to own an HD Plamsa tv, 3,000 sq. ft. house and a luxury car. Buy less than what you can afford, save the rest, love your family and friends, and do the best in all you do. That's success.
- Dewhead, on 02/20/2008, -1/+18Not exactly Phantom, the ones who kept within their means are the ones who are going to foot the bill for this.
- silveravnt, on 02/20/2008, -1/+17I think the difference lies in education level more than skin color. Stupid people fell for this.
- lsatkins, on 02/20/2008, -3/+19The problem I have with it is people are being short sighted when they think they need to walk away from a house they can pay for. Yes you may have bought it for $300k, owe $290k and it's only worth $250k, but in 10 years you will owe much less then the house is worth and you won't be upside down on it. It's not like a car that has a much shorter life. The idea when you buy a house is that you stay in it for 30 years. Homes are not meant to be short term investments. They are long term. You may have lost money now but in the long run you historically will make money.
- danske, on 02/20/2008, -6/+21Morally responsible, US, you're kidding right?
- Dewhead, on 02/20/2008, -1/+15I'm a realtor and work with many lower income buyers. Our compassionate government (over several administrations) thought it would be a wonderful idea to implement the Community Reinvestment Act and special bond programs such as ACORN and other zero down programs to help first time home buyers. I had clients that could not come up with a $500 earnest money deposit and felt "victimized" when I asked them how they come they believed they would be able to pay for a $1400 mortgage payment next month. The government shouldn't decide who qualifies for a loan or not. I can promise you lenders only see "green" when it comes to lending. If a person qualifies and can pay it back that is all that matters.. If someone needs help getting a loan, maybe they shouldn't getting a loan in the first place. Just a thought.
- imbetterthanu, on 02/20/2008, -0/+14I couldn't agree more. My wife and I don't buy anything we can't afford to directly pay for. Our credit cards carry no balance on them when we pay our bills monthly. We have purchased a 42" LCD television on credit, but it was one of those "no interest for 36 months" deals and we paid it off six months into the terms and promptly cancelled the card.
We got our credit sense from our parents. I just hate the thought of all of the kids growing up today looking at the way their parents spend and abuse credit. I think it's going to get much worse in the future. - cyberdependent, on 02/20/2008, -1/+15When we bought our house, I was seriously annoyed at the amount of money our agent and the various mortgage lenders we looked at were trying to get us to spend. At the time I made about $30k, and my bank and a few other mortgage lenders were trying to give us between $150k and $200k! We went through Realtors that refused to show us homes less than $100k. I would look at on-line payment calculators and just think there was no friggin' way I'd ever be able to make those payments and got more and more angry that nobody seemed to want to help us buy a house we could reasonably afford. Not only that, but most treated us like we were idiots for not borrowing the maximum we could, didn't we know that owning houses were like printing money?!?! Eventually we found a house on our own for $55k that I've been able to make payments on even as I went back to graduate school.
Now I know people that have monthly payments higher then their monthly income, or that bought McMansions were they owe hundreds of thousands more than they could possibly sell for now, and while I feel they could've made better decisions, I don't hold them entirely responsible for their situation, and I certainly don't blame them at all for walking away if they choose to - it is their most logical course of action. - JohnboiWaltune, on 02/20/2008, -0/+13If my mortgage payment went up $1000 (which would never happen since I have a fixed rate), I would still be able to afford it easily. People just buy a house that is too expensive. A house is a place to keep your stuff and sleep, that's all. I have a very nice little condo in an affluent part of town. My payments are about 10% of my after-tax income. I am going to just pay the whole thing off this year. Don't get greedy and you won't get *****.
- jmas9, on 02/20/2008, -1/+14This is why you should always get a lawyer to help you with the process. A few grand up front to have an expert on your side can save you a lot of money and peace of mind in the long run. If you can't afford a lawyer, then maybe you shouldn't be signing for six figure loans.
- olenick, on 02/20/2008, -1/+14I agree w/ all the rest. The holders of these notes, and the servicers, did their best to make a killing when they sold the paper. There's no moral obligation to protect them. If anything, there's a moral obligation to let the market work -- inflict deep pain on the note-holders -- and "share" the consequences of their irrational decisions with their shareholders.
- ern939, on 02/20/2008, -3/+16its time to "flip that house"
- chrispix, on 02/20/2008, -0/+12That is why they have the summary sheet with your rate, APR, and cost of doing the loan. Does not take but 30 seconds to scan that. That document HAS to match all your other paperwork or they are in violation of federal lending laws.
- jackkerouac, on 02/20/2008, -2/+14Sorry, but you kinda sound like a dumbass. You signed a contract you didn't fully understand? Are you ***** nuts?
- munkyxtc, on 02/20/2008, -2/+1450k, probably; of course it sucks, but eventually the economy will recover and you'll probably want to buy another home; having a big ole black eye for ditching a commitment to a mortgage will make that next to impossible. but if your house lost $500k in the latest down turn of pricing then you WAY overpaid.
- chrispix, on 02/20/2008, -2/+14When I bought our first house in 2003, I had no idea if I would be staying there for 3 years or 20 years. I had no idea how my neighborhood (we were the 5th house constructed) would turn out (good/bad). After about 3 years, we ended up selling. People were leaving their homes because they did not know their taxes were for the prior year, so when their taxes were re-appraised and there was a house on them, they could not afford the extra $500/month. Some were leaving because they had adjustable rate mortgages and they went up $100/month, and they could not afford it. These were DR Horton homes, and I think the builders working so closely with the lenders to make any deal go thru is part of the issue. I went with my own lender, at a better rate, and fixed. The neighborhood went to crap with about a 10% forclosure rate, and 20% rental rate in a 3 year old neighborhood. This included section 8 rentals. The new friendly drug dealer 2 doors down made my decision to move an easy one. So we bought some land, and built a home on it, in an established neighborhood. Got another fixed mortgage.
Had I known that I was going to be in my first house for only 3 years, then a 3/1 ARM would have been a great way to save some money, but hindsight is 20/20. - Nougat, on 02/20/2008, -2/+14chimeraM is right - it's a bail-out of the banks in the guise of a bail-out for homeowners. Trust me, if there was an easy way to bail out the banks and still put people out on the street, they'd have done it already.
- ivandir, on 02/20/2008, -1/+13Why not incorporate yourself and write off the loss at the expense of tax payers? That is what most companies do anyway.
- blackinthmiddle, on 02/20/2008, -2/+14I saw a story similar to this one about two weeks ago. What's scary are the people walking away who can afford to make the monthly payments. Imagine you buy a house for $800K at the height of the market with no money down. The housing market immediately crashes and now your house is only worth $515K. Who knows when you'll get your equity back.
Your neighbor is being foreclosed on and his house is similar to yours and going for $495K. You buy your neighbor's house, then walk away from your main house. Foreclosures take two years to come off of your record and is not enough of a deterrent for people. - bullittcatcher, on 02/20/2008, -1/+12and then live off the government for the next 7-15 (half that with good behavior)
- thebaron2, on 02/20/2008, -1/+12Maybe you should have brought an attorney, or at least SOMEONE who knew what they were doing a bit more than you apparently did.
Whining that you got "rushed" into signing a contract is just that - whining. You can't be forced to sign anything, and even AFTER you sign you have 3 days to back out if you want. If you aren't TOLD that you're allowed to back out that gets extended to a few years (I believe it's 3)*. Bottom line - you don't sign something you don't understand, especially when it relates to a substantial purchase like a home. Shifting the blame to others because you caved under pressure is NOT an explanation, it's an excuse. And a lousy one, at that.
* This is the case at least in Illinois, but I believe that it applies everywhere else. - inactive, on 02/20/2008, -5/+16The same people that will go out mortgage a 700,000 house on a $50k salary are the same ones who think the govt is entitled to pay for their screwups, pay for their free health care and tax someone else to pay for it!
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