Obama's plan includes mortgage prinicpal reduction!

[EXman]

Originally posted by: Genx87
So how would one qualify for this?

simple you have to be one of the people who should not have bought in the first place. This will be economic injustice.

 

[EXman]

Originally posted by: LegendKiller
At this point what's the alternative?

let people who didn't read their paperwork suffer. It will teach them a lesson.

 

[LegendKiller]

Originally posted by: EXman

Originally posted by: LegendKiller
At this point what's the alternative?

let people who didn't read their paperwork suffer. It will teach them a lesson.

So you don't think that effects you at all?

 

[EXman]

Originally posted by: LegendKiller

Originally posted by: EXman

Originally posted by: LegendKiller
At this point what's the alternative?

let people who didn't read their paperwork suffer. It will teach them a lesson.

So you don't think that effects you at all?

No but the alternatives are worse:

Continued irresponsibility in paying for home loans and encouraging irresponsibility for personal gain. Will lead us to even more problems down the road.

Continued bailouts.

Punish responsible homeowners.

Using my kids future tax money to give to people who feel they are entitled to it.

Stopping a Thoroughly un-American social program.

 

[LegendKiller]

Originally posted by: EXman

Originally posted by: LegendKiller

Originally posted by: EXman

Originally posted by: LegendKiller
At this point what's the alternative?

let people who didn't read their paperwork suffer. It will teach them a lesson.

So you don't think that effects you at all?

No but the alternatives are worse:

Continued irresponsibility in paying for home loans and encouraging irresponsibility for personal gain. Will lead us to even more problems down the road.

Continued bailouts.

Punish responsible homeowners.

Using my kids future tax money to give to people who feel they are entitled to it.

Stopping a Thoroughly un-American social program.

The alternatives are worse. Keeping the people in the house means they ARE paying interest. Keeping them in the house means that investors in the mortgage bonds ARE paying taxes on the interest received, the banks ARE paying taxes on income...etc.

Most of these people didn't buy outside of their means in any normal circumstances. Most of the problem is because they are losing jobs and such.

Your kids will have a less secure future if things aren't slowed down a bit and things allowed to orderly fix itself rather than this chaos.

Un-American? LOL.

 

[Zebo]

Originally posted by: Vic

Originally posted by: Zebo

Originally posted by: Slew Foot
I dont see any reason for anyone to pay off any debts. you wait and bitch long enough, Obama will come bail you out.

In this piece http://www.msnbc.msn.com/id/29256639/ it makes it clear you don't even have to be in the rears to get it, only establish a market value below the principal owed. Like I said I'm taking a loan out immediately.

No servicer will grant a principal balance suspension solely on negative equity. There has to be a legitimate hardship.
The biggest confusion that people seem to have here is a belief that lenders are merely cutting principal balances. That is not so. They are suspending them, meaning that the borrower doesn't have to make payments on the suspended amount. That doesn't go away though, and the borrower is expected to repay it at maturity or when the loan otherwise comes due (like if the house is sold or refinanced).
In the case of short payoffs (i.e. short sales), lenders are allowed to pursue the deficiency in every case except California purchase money loans.

Read Msnbc link posted

 

[Vic]

Originally posted by: Zebo

Originally posted by: Vic

Originally posted by: Zebo

Originally posted by: Slew Foot
I dont see any reason for anyone to pay off any debts. you wait and bitch long enough, Obama will come bail you out.

In this piece http://www.msnbc.msn.com/id/29256639/ it makes it clear you don't even have to be in the rears to get it, only establish a market value below the principal owed. Like I said I'm taking a loan out immediately.

No servicer will grant a principal balance suspension solely on negative equity. There has to be a legitimate hardship.
The biggest confusion that people seem to have here is a belief that lenders are merely cutting principal balances. That is not so. They are suspending them, meaning that the borrower doesn't have to make payments on the suspended amount. That doesn't go away though, and the borrower is expected to repay it at maturity or when the loan otherwise comes due (like if the house is sold or refinanced).
In the case of short payoffs (i.e. short sales), lenders are allowed to pursue the deficiency in every case except California purchase money loans.

Read Msnbc link posted

To be blunt, I know more about this issue than any MSNBC reporter.

 

[EXman]

Originally posted by: Vic

Originally posted by: Zebo

Originally posted by: Vic

Originally posted by: Zebo

Originally posted by: Slew Foot
I dont see any reason for anyone to pay off any debts. you wait and bitch long enough, Obama will come bail you out.

In this piece http://www.msnbc.msn.com/id/29256639/ it makes it clear you don't even have to be in the rears to get it, only establish a market value below the principal owed. Like I said I'm taking a loan out immediately.

No servicer will grant a principal balance suspension solely on negative equity. There has to be a legitimate hardship.
The biggest confusion that people seem to have here is a belief that lenders are merely cutting principal balances. That is not so. They are suspending them, meaning that the borrower doesn't have to make payments on the suspended amount. That doesn't go away though, and the borrower is expected to repay it at maturity or when the loan otherwise comes due (like if the house is sold or refinanced).
In the case of short payoffs (i.e. short sales), lenders are allowed to pursue the deficiency in every case except California purchase money loans.

Read Msnbc link posted

To be blunt, I know more about this issue than any MSNBC reporter.

well that is a pretty low bar.

 

[EXman]

Originally posted by: LegendKiller

Originally posted by: EXman

Originally posted by: LegendKiller

Originally posted by: EXman

Originally posted by: LegendKiller
At this point what's the alternative?

let people who didn't read their paperwork suffer. It will teach them a lesson.

So you don't think that effects you at all?

No but the alternatives are worse:

Continued irresponsibility in paying for home loans and encouraging irresponsibility for personal gain. Will lead us to even more problems down the road.

Continued bailouts.

Punish responsible homeowners.

Using my kids future tax money to give to people who feel they are entitled to it.

Stopping a Thoroughly un-American social program.

The alternatives are worse. Keeping the people in the house means they ARE paying interest. Keeping them in the house means that investors in the mortgage bonds ARE paying taxes on the interest received, the banks ARE paying taxes on income...etc.

Most of these people didn't buy outside of their means in any normal circumstances. Most of the problem is because they are losing jobs and such.

Your kids will have a less secure future if things aren't slowed down a bit and things allowed to orderly fix itself rather than this chaos.

Un-American? LOL.

Yea un-American.

You do not have a right to own a home. If you do not make enough to keep up a home even if you can afford a payment you should not buy a home. No most of these people have not lost jobs lately. A lot of these people had problems well before all the economy going to crap. They also got Liar loans and just didn't read anything in their loan papers. Lots of speculators are getting burned. Some people of course are just now on hard times. That's the brakes. but don't paint a picture where all these people just lost their jobs and are trying to do the best they can. That isn't accurate.

There are plenty of rentals out there. go get one. Why should you pay for my house principle?

We deserve some pain for living the way we did for the last few years. This throwing $ at a problem that had to do with to much borrowing is giving crack to the addict. The economy will recover it always does. Don't believe Pres O remember he said "we choose hope not fear!" I guess he was crossing his fingers.

Sorry I forgot you paid 60k in taxes therefore you are the God of the P & N. I laugh when big shots throw numbers around it is very telling. Kinda like my bad grammar and spelling.

 

[Vic]

http://money.cnn.com/2009/02/2...postversion=2009022011

Who won't be helped by housing fix
The jobless and many of those who owe far more than home is worth won't benefit much from Obama's foreclosure prevention plan.

By Tami Luhby, CNNMoney.com senior writer
Last Updated: February 20, 2009: 1:00 PM ET

NEW YORK (CNNMoney.com) -- Don't have a job?

Struggling to keep up with payments on a home worth less than half the mortgage?

Owe way more than your home's value, but can still afford the payments?

Sorry, but you likely aren't among the 9 million people who may get help under President Obama's $75 billion foreclosure prevention program.

The program, unveiled Wednesday, is being hailed as the most comprehensive fix for the foreclosure crisis plaguing the nation. The president says it helps both responsible homeowners suffering from falling home prices and borrowers either at risk of or already in default.

But not everyone will benefit. The program does virtually nothing for the unemployed, who often don't have enough income to make any reasonable monthly payment affordable. And, since it relies more heavily on lowering interest rates than on reducing principal, it does little for borrowers concerned their homes will never recoup their value.

Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."
Foreclosures will continue

The administration's program isn't designed to help every homeowner, experts said. Nor should it.

"It's a mistake to think we can stop all foreclosures," said Edward Morrison, a professor at Columbia Law School. "Only about one-third of existing foreclosures can be stopped."

The plan calls for loan servicers to modify mortgages for those at risk of or already in default so that the monthly payment is no more than 31% of the borrower's income. This will be done primarily through interest rate reductions, which are more palatable to most servicers than principal write-downs. The federal government will subsidize the interest rate reductions, as well as provide a multitude of incentives for servicers, mortgage investors and borrowers.

Also, borrowers with little or no equity in their homes who are on time with their payments could be eligible to refinance to take advantage of the current low interest rates, which hover around 5%. The plan lifts the guideline that borrowers must have at least 20% equity to refinance, allowing those with loans as large as 105% of their home's value to qualify. This is designed to help people who have seen their equity eaten away by falling home prices.
No job? Out of luck

A growing number of people are falling behind in their payments because they've lost their jobs, ensuring the tidal wave of foreclosures will continue as long as unemployment keeps rising.

It's very tough, however, to help people who lose their income, experts said. Reducing monthly payments can only go so far since the loan's value after modification has to be worth more than it would be if the home were put into foreclosure. Those who lose their jobs often can't make payments large enough to overcome this hurdle.

For these people, the solution often is a short sale, in which the lender agrees to take forgive the loan balance above the home's sale price, experts said.

"In some cases, the homeowners can't stay in the home," said Marietta Rodriguez, director of the National Homeownership Program for NeighborWorks America.

The best way to help the unemployed facing foreclosure is to get them jobs, experts said. The Obama administration is addressing that in the $787 billion economic stimulus package the president signed into law on Tuesday. It is expected to create or save up to 3.5 million jobs.
Underwater borrowers

Many underwater borrowers -- those who owe more than their home is worth -- may find the plan falls short. Some estimates say up to 12 million homeowners may be underwater, with 4 million of them behind on their payments.

The danger is that some of these borrowers may decide it's just not worth it to continue paying if the home isn't likely to recoup its value. This is especially true of those finding it hard to make their payments.

Some struggling borrowers will qualify for lower monthly payments, but they will likely continue to be underwater. The government is offering to reduce their principal by $1,000 a year for five years, but that sum won't do much to bring them back into balance in most cases.

The only way to effectively help those with negative equity in their home is to forgive part of the loan balance, some experts say. They are disappointed that this measure is not given more emphasis in the program.

"Cutting principal is really what's needed to contain foreclosures," said Christian Menegatti, lead analyst for economic research firm RGE Monitor.

Other borrowers, however, are too far gone to get a modification.

"If you're so far underwater, more than about 150 percent loan-to-value, we think you're very unlikely to succeed -- those will not be eligible, as well," Housing Secretary Shaun Donovan said Wednesday.

As for those who can afford their payments, the program contains little to address their housing problems. Only those with loans worth 105% or less of their home's value can partake in the refinancing offer.

Martinez isn't interested in having his interest rate lowered. He would like to see some of his principal forgiven.

"Why would it be such a big deal for them to modify my loan?" he said, noting that his tax dollars are being used to finance the program. "Wouldn't that stabilize the economy?"

Some experts, however, say Martinez is the exception. Those who can make their payments aren't likely to walk away because still need a roof over their head, said Howard Glaser, a mortgage industry consultant.

"Homeowners aren't day traders in their homes," he said. "The investment value is not an issue."

 

[Genx87]

Interesting about the suspending 80% rule for refinancing. I am running into this problem right now. Only one bank is willing to refinance my primary due to negative equity.

 

[LegendKiller]

Originally posted by: EXman
Yea un-American.

You do not have a right to own a home. If you do not make enough to keep up a home even if you can afford a payment you should not buy a home. No most of these people have not lost jobs lately. A lot of these people had problems well before all the economy going to crap. They also got Liar loans and just didn't read anything in their loan papers. Lots of speculators are getting burned. Some people of course are just now on hard times. That's the brakes. but don't paint a picture where all these people just lost their jobs and are trying to do the best they can. That isn't accurate.

There are plenty of rentals out there. go get one. Why should you pay for my house principle?

We deserve some pain for living the way we did for the last few years. This throwing $ at a problem that had to do with to much borrowing is giving crack to the addict. The economy will recover it always does. Don't believe Pres O remember he said "we choose hope not fear!" I guess he was crossing his fingers.

Sorry I forgot you paid 60k in taxes therefore you are the God of the P & N. I laugh when big shots throw numbers around it is very telling. Kinda like my bad grammar and spelling.

We're already paying for the principal, one way or another. Your lack of knowledge in this area betrays you there. Most of the principal write-downs don't even get touched by you or me, we won't pay for it. The investors in the RMBS will.

As far as the interest subsidies, as Vic mentioned in another thread, we're paying for it one way or another.

My point behind the 60K was that not many people here even touch that, yet they're screaming like hell about taxing high wage earners. They're advocating something they've got no clue about.

Rich people won't suddenly stop working because they get taxed more. That's a logical fallacy.

What's truly American is this knuckle-dragging, chest beating, very ignorant idea that whatever happens, everybody will get their comeuppance without it affecting you. You don't even think past your nose to think how you can mitigate this problem.

 

[Budmantom]

Originally posted by: Vic

Originally posted by: Zebo

Originally posted by: Slew Foot
I dont see any reason for anyone to pay off any debts. you wait and bitch long enough, Obama will come bail you out.

In this piece http://www.msnbc.msn.com/id/29256639/ it makes it clear you don't even have to be in the rears to get it, only establish a market value below the principal owed. Like I said I'm taking a loan out immediately.

No servicer will grant a principal balance suspension solely on negative equity. There has to be a legitimate hardship.
The biggest confusion that people seem to have here is a belief that lenders are merely cutting principal balances. That is not so. They are suspending them, meaning that the borrower doesn't have to make payments on the suspended amount. That doesn't go away though, and the borrower is expected to repay it at maturity or when the loan otherwise comes due (like if the house is sold or refinanced).
In the case of short payoffs (i.e. short sales), lenders are allowed to pursue the deficiency in every case except California purchase money loans.

I have a feeling that few lenders pursue the deficiencies.

 

[Budmantom]

Originally posted by: LegendKiller

Originally posted by: EXman

Originally posted by: LegendKiller

Originally posted by: EXman

Originally posted by: LegendKiller
At this point what's the alternative?

let people who didn't read their paperwork suffer. It will teach them a lesson.

So you don't think that effects you at all?

No but the alternatives are worse:

Continued irresponsibility in paying for home loans and encouraging irresponsibility for personal gain. Will lead us to even more problems down the road.

Continued bailouts.

Punish responsible homeowners.

Using my kids future tax money to give to people who feel they are entitled to it.

Stopping a Thoroughly un-American social program.

The alternatives are worse.

Keeping the people in the house means they ARE paying interest. Keeping them in the house means that investors in the mortgage bonds ARE paying taxes on the interest received, the banks ARE paying taxes on income...etc.

Most of these people didn't buy outside of their means in any normal circumstances. Most of the problem is because they are losing jobs and such.

Your kids will have a less secure future if things aren't slowed down a bit and things allowed to orderly fix itself rather than this chaos.

Un-American? LOL.

We don't know if the alternatives are worse and we don't know if this plan will work.


I'm not sure how they will pay w/o a job?


Most of these people did buy outside of their means, they should have had 20% down and had 6 months in savings and we all would be better off.

 

[Vic]

Originally posted by: Budmantom
I have a feeling that few lenders pursue the deficiencies.

I have a feeling that, as usual, you don't know what you're talking about. The only rule that applies here is the one about squeezing blood from turnips.

I'm not sure how they will pay w/o a job?

Case in point. Someone without some form of financial ability, i.e. a job, to repay their mortgage, will not benefit from any bailout. It's not like you couldn't have read where I posted about this just a couple posts up.

It's amazing to me how you always insist on perpetuating FUD as long as it comes from your party line, and likewise ignoring truth if it contradicts the same. I have come to the conclusion that, being incapable of individual thought yourself, you have no concept that it can exist in others. In a very real way, as a thought conformist, you're as bad if not worse as any communist.

 

[Budmantom]

Originally posted by: Vic

Originally posted by: Budmantom
I have a feeling that few lenders pursue the deficiencies.

I have a feeling that, as usual, you don't know what you're talking about. The only rule that applies here is the one about squeezing blood from turnips.

I'm not sure how they will pay w/o a job?

Case in point. Someone without some form of financial ability, i.e. a job, to repay their mortgage, will not benefit from any bailout. It's not like you couldn't have read where I posted about this just a couple posts up.

It's amazing to me how you always insist on perpetuating FUD as long as it comes from your party line, and likewise ignoring truth if it contradicts the same. I have come to the conclusion that, being incapable of individual thought yourself, you have no concept that it can exist in others. In a very real way, as a thought conformist, you're as bad if not worse as any communist.

Vicky,

Did you have a bad childhood, did your dad abuse you, is that why you are always so angry?

 

[XMan]

Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."


Holy crap, either there's something more to that story or that guy is a complete jackass.

Based on the way the article is written, neither he nor his wife have lost their job.

So what has changed, really? The appraisals of houses around them? So what? It's an arbitrary number that's meaningless until such a time as they choose to sell. At that point it's worth what the market will bear. So who cares what the houses down the block are worth - and then the guy trys to screw the bank over since he's not happy with the terms of the contract he agreed to? Unbelievable.

Too darn many people have been looking at real estate as a short-term investment vehicle. It's a home, man, it's not a frickin' 401(k). I lived in apartments my entire life until my wife and I bought our house, and I could care less what it's worth right now. If we move it won't be for 5-10 years.

 

[Budmantom]

Originally posted by: bamacre

Originally posted by: BoberFett

Originally posted by: Xavier434

Originally posted by: CycloWizard

Originally posted by: Robor
Then stop making partisan statements when both sides share blame.

This is a statement by a D and will likely get passed on party lines by the D's with the R's in opposition, just like the "stimulus" bill. That's the great part about being a life-long independent: I get to make fun of all the idiots rather than just half of them.

Good for you. While you are content with being a cynical skeptic trying to say , "I told you so!" as much as humanly possible, the rest of us will do our best to objectively discuss and work towards solutions to the problems. Enjoy your ride on our wagon.

You aren't solving jack shit.

He's solving the problem by taking money from smart people and giving it to dumb people. Solving the problem is the goal, the theft necessary to achieve it is irrelevant.

This says it all.

 

[First]

Originally posted by: Budmantom

Originally posted by: bamacre

Originally posted by: BoberFett

Originally posted by: Xavier434

Originally posted by: CycloWizard

Originally posted by: Robor
Then stop making partisan statements when both sides share blame.

This is a statement by a D and will likely get passed on party lines by the D's with the R's in opposition, just like the "stimulus" bill. That's the great part about being a life-long independent: I get to make fun of all the idiots rather than just half of them.

Good for you. While you are content with being a cynical skeptic trying to say , "I told you so!" as much as humanly possible, the rest of us will do our best to objectively discuss and work towards solutions to the problems. Enjoy your ride on our wagon.

You aren't solving jack shit.

He's solving the problem by taking money from smart people and giving it to dumb people. Solving the problem is the goal, the theft necessary to achieve it is irrelevant.

This says it all.

If you're a layman, sure, it says everything you need to know. For people in the real world who don't putz around on their Xbox 360 all day, it doesn't say jack.

 

[LegendKiller]

Originally posted by: Budmantom

Originally posted by: Vic

Originally posted by: Budmantom
I have a feeling that few lenders pursue the deficiencies.

I have a feeling that, as usual, you don't know what you're talking about. The only rule that applies here is the one about squeezing blood from turnips.

I'm not sure how they will pay w/o a job?

Case in point. Someone without some form of financial ability, i.e. a job, to repay their mortgage, will not benefit from any bailout. It's not like you couldn't have read where I posted about this just a couple posts up.

It's amazing to me how you always insist on perpetuating FUD as long as it comes from your party line, and likewise ignoring truth if it contradicts the same. I have come to the conclusion that, being incapable of individual thought yourself, you have no concept that it can exist in others. In a very real way, as a thought conformist, you're as bad if not worse as any communist.

Vicky,

Did you have a bad childhood, did your dad abuse you, is that why you are always so angry?

No, just like me, it's just having to deal with stupid people, like you, every day.

 

[CPA]

Originally posted by: Genx87
Interesting about the suspending 80% rule for refinancing. I am running into this problem right now. Only one bank is willing to refinance my primary due to negative equity.

I wonder how that is going to play in Texas which has the strictest refinance laws of all states. Will this supercede state law?

 

[Budmantom]

Originally posted by: Evan

Originally posted by: Budmantom

Originally posted by: bamacre

Originally posted by: BoberFett

Originally posted by: Xavier434

Originally posted by: CycloWizard

Originally posted by: Robor
Then stop making partisan statements when both sides share blame.

This is a statement by a D and will likely get passed on party lines by the D's with the R's in opposition, just like the "stimulus" bill. That's the great part about being a life-long independent: I get to make fun of all the idiots rather than just half of them.

Good for you. While you are content with being a cynical skeptic trying to say , "I told you so!" as much as humanly possible, the rest of us will do our best to objectively discuss and work towards solutions to the problems. Enjoy your ride on our wagon.

You aren't solving jack shit.

He's solving the problem by taking money from smart people and giving it to dumb people. Solving the problem is the goal, the theft necessary to achieve it is irrelevant.

This says it all.

If you're a layman, sure, it says everything you need to know. For people in the real world who don't putz around on their Xbox 360 all day, it doesn't say jack.

Layman sure that's me.

I didn't finance more than I can afford, I live well beneath my means, I didn't use my house as a bank, I go to work everyday and I don't purchase more than I can afford.

I'm also of the philosophy that you don't get out this this huge financial mess by spending trillions of dollars that we don't have and can't afford.

Call me crazy.

 

[Blackjack200]

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."


Holy crap, either there's something more to that story or that guy is a complete jackass.

Based on the way the article is written, neither he nor his wife have lost their job.

So what has changed, really? The appraisals of houses around them? So what? It's an arbitrary number that's meaningless until such a time as they choose to sell. At that point it's worth what the market will bear. So who cares what the houses down the block are worth - and then the guy trys to screw the bank over since he's not happy with the terms of the contract he agreed to? Unbelievable.

Too darn many people have been looking at real estate as a short-term investment vehicle. It's a home, man, it's not a frickin' 401(k). I lived in apartments my entire life until my wife and I bought our house, and I could care less what it's worth right now. If we move it won't be for 5-10 years.

I wouldn't pay into it either if I was him. When the bank makes a mortgage loan, they are implicitly accepting some of the asset risk That's why they force you to buy homeowners insurance. How many people would continue to make mortgage payments if their house burned down? IMO, asking the bank to renegotiate the terms in this case is totally reasonable, and if the bank is smart, they would do it. Instead, it looks like they will opt for foreclosure, force him out, and end up with a property that is worth pennies on the dollar. Stupid.

And don't act like the guy is some kind of asshole, the bank knew the rules when it made the loan: any American can walk away from a mortgage with no injury beyond their credit score. There are no debtor prisons here. He is simply acting in his own rational self interest.

 

[fallenangel99]

There are some people who are struggling simply because they lost their jobs and can't find a job to cover mortgage. It's not because they are "dumbasses" and bought something they couldn't afford. Yes, there are those who did that, but there are also good, honest, hardworking people who can't make ends meet now. Example, if a family had $10,000 saved up, that will cover, maybe 4 months of mortgage, with the rest going towards day-to-day expenses. What happens if that family can't find a decent job (not working at McD for $6/hr)

 

[Vic]

Originally posted by: Budmantom
Layman sure that's me.

I didn't finance more than I can afford, I live well beneath my means, I didn't use my house as a bank, I go to work everyday and I don't purchase more than I can afford.

I'm also of the philosophy that you don't get out this this huge financial mess by spending trillions of dollars that we don't have and can't afford.

Call me crazy.

Given that we all know that just a couple of years ago, you would have criticized as pessimistically un-American anyone who didn't finance more than they could afford, or live beyond their means, or use their house as a bank, then I think it's very safe to say that yes, you are crazy.

And no, I'm not angry. It's just that you're an idiot. Ideologues like you could be shown reality by God Himself and you'd still deny it for the sake of your little make-believe pre-conceptions. What good are you except for scorn? Think of it this way. As you scorn those who purchased more than they could afford, I scorn you for believing more than you can understand.