Maybe it's time to get over it??
76% of students receive financial aid scholarships.
Stop taking it so personally, or taking it out on me. You essentially missed my point entirely, and keep dredging it up over and over again. I understand that you will not understand.
This thread is about mortgage reduction.
So you the buyer have no responsibility for controlling yourself, and deciding not to buy beyond your means? If the bank pushes you to take a mortgage you can't actually afford, you should go ahead and take it because the bank is pushing you to? Same when the real estate agent tries to upsell you, or car salesman for that matter? Don't buy what you can afford, buy what they are telling you to buy?
And when you find out it no longer is worth what you paid for, if it ever was, the government really should step in and take over and "make it ok" by just magically erasing part of what you owe?
But only if you're so irresponsible you haven't even bothered to make payments? If you have been making payments, to darn bad, suck it up. You get nothing.
And people who lost their jobs and income, but didn't buy stupidly expensive houses, they lose out as well. For this only applies to upside down houses. If you were responsible to begin with, you don't qualify for help either.
Really? A whole bunch of you think this is fine and balanced and as it should be?
Really?
mguar wrote:z31maniac wrote:You cannot read well.. in order to get the reduction you need to owe more than the house is worth.. It's not a handout.. Banks Cheated, Got caught and did this rather than pay big fines and penalties.. No different than if you got a speeding ticket and had to pay a fine..MG Bryan wrote:I didn't either. A $150k reduction would put $55k in my pocket!DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."I didn't take that away from it at all.
No, you're sarcasm meter is just COMPLETELY broken.
Lighten up, stress is a killer.
As far as overbuying being that low on the list, I'd still disagree. If my wife and I got a divorce, I wouldn't lose my house/truck/track rat.
We bought a house we could easily afford on ONE income, not two.
So did I and that turned out to be a good thing. Well, it wasn't THAT easy but I was able to keep my head above water, just barely, and get out with my credit etc intact.
But there were all kinds of stupid mortgages out there in the 1990's. I remember reading an ad for some loan program where you could borrow up to 125% of the value of your house and thinking to myself 'that is absolutely insane'. The basis of that program was that home values were climbing and not predicted to drop. (By the way, that program still exists and is backed by Fannie and Freddie! http://www.nakedcapitalism.com/2009/07/freddie-fannie-to-provide-125-ltv.html )
FWIW, way back when (1990's) Alan Greenspan said the economy was growing too fast, there would come a day when it would correct (including the housing market) and it would be best to prepare for that. IIRC Congress got their bowels in an uproar, was going to censure him over that and he withdrew the comment. Unfortunately, I can't find the exact quote via Google but it does appear that now a lot of people blame him for the bubble. Huh? What? Bringing it up makes it his fault? Oh well, I guess everyone's got to have a devil to blame stuff on.
My current abode may have been caught in that. This neighborhood has stayed pretty stable even with the wild market swings. There have of course been changes, but not like some areas. This house peaked at ~$148k just before the bottom fell out (it's now valued between $135-$140k) and it turned out the PO had a mortgage 'forgiven'. That becomes a matter of public record (and is also treated as income by the IRS).
In about 25 seconds of Googling I had the 'forgiven' or 'written off' amount: $171,000.00. 
No wonder Fannie Mae fought me so hard on price reductions (I paid $88k for the house 
). Yeah, that's right. The loan program which allowed the PO to get in so deep over their heads was federally guaranteed and underwritten. (And still is, according to about 10 seconds of Google research.) That means we the taxpayers took a bath so that I could buy it cheap.
So all this about predatory lending practices etc not having a government connection is horse feathers and I don't mean feathers. If there is one thing I've learned over the years it's that some people are going to fleece anyone they can and push the cost/blame off at every opportunity, I've seen it too many times. [sarcasm] So forgive me [/sarcasm] if I don't agree with all this mortgage reduction crap which rewards basically criminal behavior.
Keith wrote: Don't judge your own situation by that of others.
Quoted for most important words posted thus far...
Life is not fair...get the berk over it. You make decisions, you live with them, the world turns, and we all go on. Yes, Its BS that some asstard who bought 4 times more house than he can afford gets a bailout, while hardworking earners making responsible decisions get nothing but a thanks and a buckwheat (see Things To Do In Denver When Youre Dead if youre unsure of what a buckwheat is). Its BS all day long...but guess what, thats life, @sshole...deal with it.
In reply to mguar:
4cyl, if everything was done that way then no one would ever do time etc for their crimes. [curmudgeon] If I had my way the bankers and gov't monkeys who let this go on (and even encouraged it) would be doing hard time, making little ones out of big ones. [/curmudgeon]
It's hard enough for me to try to raise a kid who I expect to be responsible for her actions. Then this kind of shi+ happens and the people who took advantage of the whole thing get rewarded... what kind of message does that send to her?
The whole thing is like kindergarden: some kids learn if they start pointing all around them eventually the teachers will give up trying to pin down what really happened. Generally that gets corrected at some point but not with these folks. They kept on doing the same type thing into 'adulthood' (or at least they are physically adults) with the results you see now.
For what it's worth, this all happened once before, back in the 1920's and it crashed in the 1930's. http://en.wikipedia.org/wiki/National_Mortgage_Crisis_of_the_1930s
The National Mortgage Crisis of the 1930s was a Depression-era crisis in the United States characterized by high-default rates and soaring loan-to-value ratios in the residential housing market. Rapid expansion in the residential non-farm housing market through the 1920s created a housing bubble inflated in part by ad hoc innovation on the part of the four primary financial intermediaries – commercial banks, life insurance companies, mutual savings banks, and Building & Loans (thrifts). As a result, the federal overhaul stemming from New Deal legislation gave rise to a paradigmatic shift in mortgage lending, popularizing longer-term maturity, fully amortizing mortgages and creating a thick secondary market for mortgage-related securities.
Disclaimer #1 - I'm not advocating policy here, just trying to give a bit of perspective.
Disclaimer #2 - What follows is enormously oversimplified, therefore lacking nuance and easy to criticize.
The housing bubble and collapse did not have a single culprit. Some of it was a government overzealous to increase home ownership rates (think donkey), some was lack of regulatory control (think elephant), some was "irrational exuberance" and some was just plain greed and opportunistic abuse of the system.
The rationale behind principal reduction is this: the economy won't improve until the housing market stabilizes. The housing market won't stabilize until we slow the glut of foreclosures. So we take some money accumulated by the greedy during the boom and give it to those who got in over their heads. That keeps people out of foreclosure, the market stabilizes, the economy improves and the general population benefits as a result.
The 125% LTV loans referenced above are the HARP program - same general principal. Refinance people who are underwater on their loans which puts them in a better position and results in fewer foreclosures, thus stabilizing the market.
The fact that some individuals get rewarded for lack of personal responsibility is incidental to the strategy - the big picture is to stabilize the housing market and thus get the economy back on track.
You say - "Hey, I acted responsibly, how come I don't get a benefit?" Take a look at mortgage rates. 3.75% for 30 years? You will likely not see that again in your lifetime. Guess what - only those who have managed their finances responsibly can qualify. Not everyone will be able to take advantage of this but many already have, either by buying or refinancing at historic low rates (again an effort to stabilize the housing market and stop home values from dropping any further). Believe me, in a few years you will dance a happy dance every time you think about the mortgage you got in 2012.
To hammer home the point - It isn't fair or equitable for each individual circumstance but that's not the goal. The goal is to get the economy growing again. Is this the right way to do it? I dunno. Some say we should have let the market tank completely and self-correct. That would have been a lot more painful for a lot more people - not all of them irresponsible borrowers.
Now don't get me started on the regulatory backlash - as far as the pendulum went to one side in 2003-2007, we've now gone to the equal and opposite extreme.
I will say I agree with mguar on most of his points, except one: the zero down mortgage. Here's why:
A house is a big responsibility. But any more it's sold more as a lifestyle thing, just like a luxury car or whatever rather than a necessity. That brings out the status seekers who in general tend to also be the same 'shift the blame' types that got us where we are now. These are the people who have the big house, the two pimpwagons, fortyeleventeen credit cards etc ad nauseam so they can look wealthy and also are the ones who default quickest, leaving the rest of us to pick up the pieces.
For someone to uphold their end of the deal on a house, they need to have some skin in the game and that skin is the down payment. Even 5% is better than zero down. 20% is even better. The mortgage companies realize this (to an extent, they still want the loan origination fees) and that's why the 80% LTV ratio is the trigger threshold for PMI (private mortgage insurance). They know the ones with less equity are more likely to default.
That's also why a lot of the time you deal with Company A to get your mortgage and then you get a letter 6 weeks later saying your loan has been sold to Company B. A grabbed the origination fees and then pushed the loan itself off to someone else. Pass that buck, man...
In reply to Curmudgeon:
I hear you, I really do, and part of me agrees. Not too many people are responsible these days, and even less accept responsibility for their actions. But in reality, if you spend your time making wise decisions, and not worrying about what other people are doing, or, more importantly, how other people are being treated better than you, YOUR life will turn out the way YOU want it to.
If you know theres a possibility that a home value could fall, yet the debt on that home would remain the same, a potential buyer must weigh that risk against the benefit, and DECIDE if its worth it. Just because, in general, home values hadnt been falling recently, doesnt ASSURE you they wont. Letting some asshat in a suit convince you they definitely wont is a bonehead mistake.
Buying a home, and being underwater on it, plain sucks - Im in that boat, I understand. I also understand its not my fault as Ive always paid MY mortgage on time. I understand that its the fault of others being irresponsible (both those lending, and those TAKING the loans). I dont think its fair. But I dont let fairness enter the equation. I liked the home, planned ahead, knowing the possibilities, and made my decision. Either Im ok with risks, or Im not. I make my decision based on this, and I live with my decision. I will honor my obligations, and am ok doing so because I only agreed to the obligation after considering the risks. If someone is stuck in a situation they created (took too much money, bought too much house, whatever), then, guess what, its their own fault. I agree, there were shady scams out there, but no one held a gun to someones head and forced them to sign at the dotted line. Buying a home takes a LOOOOONG time, you have ample opportunity to weigh the factors out. The onus is on you, the homeowner, because the decision was yours.
If I have the ability to be part of the decision making process when it comes to policy reform, sure, I will vote how I think its fairest. And if I get a say in electing the guys who make the rules, I will try to vote in a way that promotes my value system. But Im not going to spend all day bellyaching about how things arent fair. I dont like it that people who are underwater by their own hand get assistance, while I get squat. But, MY situation hasnt changed - Im still in the exact same place I was before the a-holes got their bailout. I dont see where I have room to complain.
mguar wrote:ronholm wrote:50% of college graduates can't get a job.. So a doctor with $250,000 worth of student loans can't find work he's dumb? An engineer who can't find work is dumb? A pilot with $150,000 worth of student loans can't find work he's dumb? A teacher with $60,000 worth of student loans can't find a job is dumb? Or maybe things are so screwed up now that our bright young people are being punished for mistakes BANKS made..bastomatic wrote: So you can make any bad decisions you like and have them wiped away in bankruptcy, but try to better yourself through an education and you'll be saddled with the burden of paying it off until it grinds you under.If you don't have the sense to figure out how to get a college education without burying yourself in debt... You are not college material.
yes, yes, yes, yes and yes. No to the banks being the cause of things being so screwed up..... Oh sure.. banks made mistakes.. but only because they had a bunch of people dumb enough to take them up on it...
If you throw yourself 250K in debt seeking a career and 'can't' find a job.. you are dumb.
50% of college students probably shouldn't have been there in the first place. and 50% of the 50% who are at college and should be there don't end up with an education worthy of the debt they have chosen to incur.
That is dumb.
For to many kids these days going to college is simply the thing to do.. It is an excuse to frign party for 4-6 more years.
What... you haven't been to a college town? They must build all those Pubs and Bars so the kids have some place to work so they might not incur so much debt while attending school?
Please..
There are plenty of ways to get a real education without burying yourself in debt.
You bought a house you couldn't afford... SORRRY..... you can't make the payments...
enjoy the apartment.
In reply to foxtrapper:
In fact, I don't think this program goes far enough because there is a lot more to this than meets the eye, but that's not necessarily been reported all that broadly in the mainstream media.
One of the problems that this program is trying to resolve is that there is a massive imbalance in incentives between certain servicing operations (like the ones BoA owns, but there are other large banks that are part of this agreement, too) and the investors that are holding the loans. The servicers weren't only screwing homeowners (there is plenty of documented servicer misconduct out there, like intentionally applying payments late even though payments arrived on time so they could charge late fees, not working with distressed borrowers because the servicer profits from foreclosure, etc etc), but they also screwed investors who are holding the mortgage backed securities.
It's a well documented fact that working with viable borrowers for loan modifications - which tends to happen all the time in business-to-business lending - will minimize the losses for investors overall compared to grabbing the collateral, especially when the party grabbing the collateral isn't the investor and said party can deduct all their fees etc before handing over what's left. The incentive structure for servicers however makes it much more profitable for them to foreclose than to work with viable borrowers. The fact that the loan recovery rate on a mod is usually around 70%-ish, whereas the recovery rate on a foreclosure after all the fees and crap is way less than 50% should concern you somewhat. BTW, those investors that hold mortgage backed securities shouldn't concern you, right? That's just some big shot Wall Street dude who's not going to notice the loss anyway, right?
Actually, there is a very good chance that you are that big shot Wall Street dude via your pension or 401(k). Pension funds and 401(k) mutual funds hold a ton of MBSs as they were deemed safe investments that paid a reasonable rate of return.
Just to give you a couple of pointers regarding the misconduct of the banks that is supposedly covered by this agreement:
There is also a lot more under the surface of this whole thing, like:
There is also the argument that reducing the number of foreclosures will stabilise prices in markets that are at best lukewarm which should benefit those homeowners that didn't "win" the principal reduction "lottery".
There is a lot more to this overall than meets the eye, and a lot of it isn't visible until you actually start looking into the matter further than the reporting in the local and mainstream media.
Also, before you blame everything on deadbeat borrowers and people buying iPads when they should have paid the mortgage and their six credit cards, I would recommend reading the book "The two income trap". That was written before the whole housing bubble got really frothy, but you can already see the makings of these problems being described in there.
[1] It's called "fabricating" if a bank does it and "forging" when Joe Schmoe does it, IIRC. There is a ton of documented instances of documents appearing in court out of thin air.
ronholm wrote: yes, yes, yes, yes and yes. No to the banks being the cause of things being so screwed up..... Oh sure.. banks made mistakes.. but only because they had a bunch of people dumb enough to take them up on it...
Uh, yes, they are.
First, their greed let them figure out ways to make a whole lot of loans. Yes, there should be some personal responsibility, but when banks advertise loans that tell you that you can buy a $500k home for $1500 a month, they are feeding the financial greed of human nature. Get a better home, check, pay not a lot of money, check- and the economy is good enough right- no. You could say that people should not have bought homes- but at the time, they were being convinced that it was the right thing to do, financially.
Then the banks bundle all of the loans up, and sell them as investments. Hiding the simple fact that many of the loans were questionable to the buyers of these investments.... shocking.
(both home buying and investment buying can be show as an easy way to make money, and pay low taxed on making that money, since if you hold the house or the investement for a year, and then sell it, you only pay 15% on the profit).
Who drove the whole realestate industry to an inflation in value and in housing starts that does not correlate to either housing shortages or population growth? Yea, banks.
And a funny think when they collapsed- they took the rest of the economy with them. With them licking their wounds, they would not make loans for businesses or buyers- which killed everyone who was doing their part in a responsible manner. Even now, with a substatial part of the economy moving quite well, and expanding, we are still being harped that housing starts are not getting back to where they were and values are still struggling....
Yea, you can trace a lot of ills straight back to the entire banking and finance industry.
Someone tap me on the shoulder when the banks start FORCING people into anything. Im taking a nap...
My point was (and no I didn't clarify this for which I apologize) that the 20% is (or should be) part of the qualification process.
Back in the 1980's and 1990's a certain party with a penchant for spending other people's money was continually pushed to ease up on the regulations governing mortgage qualifications because a certain group of citizens didn't historically save a lot of their income and thus requiring them to suddenly become responsible savers went against their cultural norm, meaning that was discrimination.
And that's where the 'if you can fog a mirror you get a loan' thing came from because that mean they had to take all comers who met the vastly relaxed regulations. Otherwise Fannie/Freddie would cut off the money spigot, effectively putting the mortgage broker/bank out of the mortgage business.
That came from the party with a penchant for deregulation. So as always both sides screwed We The People again. And got reelected.
FWIW, I was sort of a beneficiary of that. In 1994 could have bought my first house for $500 down plus closing costs (it was a new house for $85,000, built to our specs from a stock plan), but the APR was lower if we put down 5%. So that's what we did. The house rose in value quickly as part of the 'boom', it put us over the 80% LTV pretty quick (> 5 years, IIRC), we refi'd for 15 years and the value continued to rise till 2003 when we sold it for $136,000 and used the equity to put 20% down on the next house.
I also submit that I believe GI Bill loans included a garnishment clause; if you didn't make your payments they'd take them out of your retirement or active duty check for you against your will which would definitely lower the default rate. If I am wrong, sing out! I am not saying all GI Bill mortgage holders were made to pay by force. I am 100% sure the vast majority were conscientious folk who paid their bills on time, just like the rest of us.
I do know the motorcycle shop I hung around in Chucktown loved selling to service members because it was real easy to sell the loan at a quick profit for that whole easy garnishment reason. That was straight from the owner and his sales guy. They'd sell the guy a bike, write a loan in the dealership, then turn around and sell the note to a bank or (more often) a finance company for a quick profit and no more collection/repo headache.
I also know for a fact that if a service member writes a legitimate business a bad check or refuses to pay a legitimate bill a quick call to their commanding officer will fix that REAL quick. I know that one 100% for sure because I've done it.
My bank made me sign my loan for the Miata at gunpoint, personally.
Same with the truck I owned back when I was 19. I distinctly recall them dangling a loved one over a pit of flames until I signed.
Damn. They bad about that, ain't they?
4cylndrfury wrote: Someone tap me on the shoulder when the banks start FORCING people into anything. Im taking a nap...
ding! ding! ding!
I belong to two different credit unions.
People bitching about the faltering economy and how hard we have it... via high speed internet connections...... During working hours...
It makes me laugh every single time..
I'll definitely blame them when the car gets repo'd, too. It's their fault they made me sign a loan for more than i can afford while my car depreciates. They're so evil.
That's why I drive an old paid for rig. I heart no montlies.
MG Bryan wrote:DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."I didn't take that away from it at all.
Me neither.
man up
^^^A phrase that's no longer in at least 50% of Americans' vocabularies. berkeleying sad. Wouldn't it be nice if we were still the place where people came seeking financial liberty? If it was, you'd see boat-loads of French and Greek entrepreneurs in the coming months.
ronholm wrote:4cylndrfury wrote: Someone tap me on the shoulder when the banks start FORCING people into anything. Im taking a nap...
(clap, clap, clap.)
4cylndrfury wrote: Someone tap me on the shoulder when the banks start FORCING people into anything. Im taking a nap...
No, people were not forced into buying anything, true.
But you are given an option- you can have a bigger house, and pay less a month for it. AND your taxes at the end of the year would be less. And the home will be worth 10% more in a year. What would you say?
You would ask a financial person- is that right for me? I'm not sure if it is....
The financial person says "sure, yea, the loan is fine".
Seriously, if you had financial questions, who do you ask? Your parents or a banker?
As for the blame being on D programs to get more people into homes. Duh, who really benefits by more people getting homes? As far as I can tell, the people who led us to the abyss will not lose any personal money....
I blame the government for the stupidity of the average American. Unless the ba- sorry, Banks* somehow control the schools as well.
Here's a thought, instead of Home Ec*2 being a class for cooking and other stuff, howsabout we make it a mandatory class on living within your gotdamn means. Explain how a family of 3 do not need a 3200 sqft 350000 dollar house, how you shouldn't buy a new car when you make minimum wage and the joys of buying actual food and spending less money than the folks who buy hot pockets and cheetos by the ton.
It's happened before, it happened now, it'll happen again. People seem to go about 20 years, if that, before making the same berkeleying mistakes again.
*Protip, getting drunk on another forum and telling someone who uses capitalized Banks in their argument to just use Jews instead of hinting at it gets you banned for a while. But it was worth it.
*2Do they even have Home Ec anymore? Or was it too demeaning to women for the patriarchy to force them into homemaker roles or some crap like that?
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