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Homeowners bailed out of foreclosure once, need another bailout

Slew Foot

Slew Foot

Lifer
"New data released Monday show that more than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again."

http://biz.yahoo.com/ap/081208/financial_meltdown.html

Does this really surprise anyone? Joe Idiot buys a home 10 times his annual income with a neg am teaser loan and cant afford it when the bank expects its money back. Joe Idiot never really wanted the house, he just wanted a lottery ticket. He begs the bank/govt (indirectly, you the guy who tries to save and stay within his means) and gets help, only to realize a few months later he's still in deep crap.

Until prices come in line with traditional incomes and loans, you wont see the end to bailouts and the economy wont be able to grow. And thus, the end wont come until inflation blows up peoples paychecks, or housing prices tumble. You can kick out all the deadbeat loanowners now and get things over with quickly, or you can suffer for a decade like Japan.
 
I was going to make a thread over this but I was choking on the vomit I made from laughing so much. What a shocker, eh? Definitely lends credence to the idea that a shakedown is necessary and keeping people in homes they cannot afford is a waste of time, not to mention it merely punishes those who otherwise could afford a home by artificially propping up prices above where they should be.

This propping-home-prices stuff is a damned charade. Somebody needs to stop the music and have us all find a chair; those without a chair too bad. There can't be a chair for everybody right now.
 
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
 
Teach a man to rely on others and he will be bailed out. Teach a man how to rely on himself, he will bail himself out.

What fools.
 
Originally posted by: NeoV
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
Click to expand...

You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
 
Originally posted by: Slew Foot
Originally posted by: NeoV
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
Click to expand...

You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
Click to expand...

Fak, that's disgusting.
 
Originally posted by: Slew Foot
Originally posted by: NeoV
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
Click to expand...

You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
Click to expand...
Haha, that is an extreme case but a telling one nonetheless. What fools.

 
Originally posted by: NeoV
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
Click to expand...

Few people bought a home 10x their income, but quite a few exceeded the old rule (3x income). The national average during the boom years crept up to 4x income, with some areas hitting an average of 6-8x income. The foolishness was definitely widespread.
 
No matter what happens, I just hope the under writers get their heads out of their asses. Don't approve anyone for more than what they can afford and hold standards when it comes to credit, but don't limit mortgage loans to only those with elite credit histories at the same time. We can bitch and complain about personal responsibility till the end of time regardless of justification. Unless the under writers and banks start doing what they are supposed to do we will continue to see more shitty loans that result in these kinds of foreclosures. That or we will hardly see any loans at all which is really bad too.
 
Originally posted by: Xavier434
No matter what happens, I just hope the under writers get their heads out of their asses. Don't approve anyone for more than what they can afford and hold standards when it comes to credit
Click to expand...

Why wouldn't they if they can just sell the mortgage to FM/FM?
 
Originally posted by: Slew Foot
Originally posted by: NeoV
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
Click to expand...

You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
Click to expand...

So? don't move to Fremont then. Many of my parent's friends moved to Fremont in the late 90s. They bought their houses with their 100k incomes at 600-700k and have lived there since then.

You can move here if you want: houses near Oakland for less than 100k!
 
Originally posted by: maddogchen
Originally posted by: Slew Foot
Originally posted by: NeoV
loans being modified wasn't exactly a bailout

How many of these people really got into homes that were 10x their annual income? I think we are simplifying the problem a bit too much.
Click to expand...

You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
Click to expand...

So? don't move to Fremont then. Many of my parent's friends moved to Fremont in the late 90s. They bought their houses with their 100k incomes at 600-700k and have lived there since then.

You can move here if you want: houses near Oakland for less than 100k!
Click to expand...

Haha Oakland, I'd be dead in a week there.
 
This just goes back to the old give an inch take a mile...

Some people simply do not deserve to own homes.

IMO home ownership is a privilege not a right!
 
Well I'd be interested to know about the circumstances surrounding the modified loans. Did the banks only do enough to buy the homeowners another six months or so anticipating that by then the government would have a program to bail out people in danger of foreclosure? Because that wouldn't surprise me in the least.
 
Originally posted by: frostedflakes
Well I'd be interested to know about the circumstances surrounding the modified loans. Did the banks only do enough to buy the homeowners another six months or so anticipating that by then the government would have a program to bail out people in danger of foreclosure? Because that wouldn't surprised me in the least.
Click to expand...

Do you blame the banks or the people?
 
I didn't read the OP, or any of the comments but this I will have to say to the homeowners bailouts: FUCK THEM!!!!

That's right, FUCK THEM!!! Let them burn, let them default, let them learn how to be responsible, let them learn how to NOT be greedy and live within their means.

If they default, their houses will be repossessed and auction off by banks, which will CORRECT the housing prices in accordance to income level. There will be QUALIFIED buyers, the ones that are responsible enough to wait to buy at the right price, the ones that are responsible enough to NOT cause the fucking crisis that we're in right now. This correction is what needed for the economy to recover. It has to hit a bottom BEFORE it can starts going back up. The bottom is to let all these fuckers die, and a new economic cycle will begin with the new responsible buyers.

Proud member of the "FUCK THEM AND LET THEM DIE, FUCK THE BAILOUTS" club.
 
Originally posted by: Slew Foot
You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
Click to expand...

Seriously, do not buy a house there. Those prices are bound to crash. Rent. Do not buy.
 
Its more than half, but not 100%. That means there is still a high count of those who are making their payments and keeping their homes.
 
With the money we?ve spent this year, every single home in this country could have been either paid for or significantly reduced in price (and thus made affordable). Instead, our government's priority has been to maintain those unreasonably high prices.
 
Originally posted by: Jaskalas
With the money we?ve spent this year, every single home in this country could have been either paid for or significantly reduced in price (and thus made affordable). Instead, our government's priority has been to maintain those unreasonably high prices.
Click to expand...

Actually our government feels that bailing out poor, helpless Wallstreet and the pathetic ensemble known as the "Big 3" for over 3x they are worth.

Don't delude yourself into thinking they will "help" homeowners.
 
Originally posted by: zephyrprime
Originally posted by: Slew Foot
You know what pisses me off? Im about to move next year to the one zip code in CA that hasnt had a huge price drop (Fremont 94539), Median household income 115K, median house 1.1 million, the median price has stayed about the same for the last 4 years. My current zip code is down about 50% from the peak.
Click to expand...

Seriously, do not buy a house there. Those prices are bound to crash. Rent. Do not buy.
Click to expand...

Yeah Im not that stupid. I can rent one of those homes for 2200/month.
 
Much of this "homeowner bailout" never was intended to have people "keep their homes", but rather to stretch out the defaults over time. People who didn't recognize the hazards in an option ARM or a subprime ARM still didn't have the wherewithall to recognize that they couldn't meet the "new" terms, either. Basically, lenders just found a way to extract more money from a debtor in way over their head, soften the blow to themselves...

Think about it. If you (hypothetical You) can only really afford $900/mo, and your $1000/mo teaser rate ARM resets to $1700, then the lender agrees to a deal where you still pay $1300/mo, you're still screwed, only worse, because you'll try to live off your credit cards until the axe falls... meanwhile, they've been getting paid something, and get to ease the losses onto the books... They knew you were still screwed when they inked the adjustments...

Fremont median house prices still nearly 10X median income? Buying is obviously a suicide mission... Hell, I'd be looking for a longtime landlord to rent from, so as to avoid taking losses and having to move if the landlord goes under...
 
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