Bush & The Sub-Prime Disaster

[nhboy]

AFL-CIO: "Bush is making noise about taking action to ease the subprime disaster. Today, he made a big deal about announcing aid for home owners—but “urging” Congress to act and “directing” federal housing honchos to work on initiatives doesn’t go far enough fast enough to provide concrete assistances for home owners facing foreclosure."
LINK

 

[tomchamp]

AFL-CIO? Do you know what that means nhBoy?

 

[nhboy]

AFL-CIO? Do you know what that means nhBoy?

No.

 

[jetmonkey]

Saving the stupid from themselves over and over only weakens the nation.

 

[kom526]

Saving the stupid from themselves over and over only weakens the nation.

Ed Zachary!

 

[Christy]

Saving the stupid from themselves over and over only weakens the nation.

Ya know, I take some amount of pride in having excellent credit, and maybe it's petty, but it chaps my ass that the government is going to bail out those who were irresponsible and got themselves into a pickle by over extending themselves on a home that they knew they couldn't afford.

What incentive do I have anymore to be responsible and pay my debt? Maybe I'll just stop paying my mortgage and buy a fabulous vacation. I mean, why not? I can just hop in line with the rest of the folks getting a gov't bailout ya know?

 

[MMDad]

but it chaps my ass that the government is going to bail out those who were irresponsible and got themselves into a pickle by over extending themselves on a home that they knew they couldn't afford.

Most people aren't very smart about their finances. They go to a finance company, and they tell them what they can afford. That's what they spend. While they should be responsible for knowing what they really can afford, it's also kind of predatory for the lending companies to convince people to use all of the credit they can get.

Example: In 1993 I was in the market for a house. I calculated all of my expenses and determined I could easily afford $90K, and could afford $100K with some effort. The mortgage lender said I could afford $115K, and tried to talk me into borrowing that much. My realtor ignored my desires and only showed me houses around $115K. I had to find my house by myself because the realtor wouldn't listen.

So, I see this as a two part problem: the predatory lenders and the idiots who fall for their line. The mortgage lenders deserve the problems they are having because it is of their own making, as do the stupid people who get themselves into too much debt.

Either way, the only thing that government intervention can do is to slow or delay the collapse. I'd rather that they stay out of it and let the collapse finish so that the mortgage companies can learn a little bit of restraint. Those companies that survive will have learned a lesson about giving money to people who can't afford the payments.

 

[czygvtwkr]

Exactly, they are creating another airline industry if they start to bail out mortgage companies

 

[refi-rep]

Trying to figure out how his plan is going to help those who ve become behind on their mortgage and now have semi bad credit, because with semi bad credit their interest rate will be higher then those who have good credit and if they already have an adjustable rate mortgage their interest is going to be about the same after everything is said and done just with no surprises, and no reset time. Im helping a few customers now who re facing the adjustable reset and thank goodness their refinancing now and not waiting til the reset period to save their credit and while getting some cash out and still saving money.

 

[vraiblonde]

Example: In 1993 I was in the market for a house. I calculated all of my expenses and determined I could easily afford $90K, and could afford $100K with some effort. The mortgage lender said I could afford $115K, and tried to talk me into borrowing that much. My realtor ignored my desires and only showed me houses around $115K. I had to find my house by myself because the realtor wouldn't listen.

They did the same with us when my ex and I bought our first house, except the realtor was wonderful and didn't push us (Lorrie Garner of O'Brien). We got "qualified" for a $120k house - after we stopped rolling on the floor laughing, we informed them that we had no intention of spending every penny on a mortgage and that we would like food and the occasional 6-pack of beer as well as a house.

 

[vegmom]

My family has been on me for several years now to buy a house even though I had a bankruptcy on my record (humiliating, but did it as last resort).

"Oh prices are going to keep going up you should buy now! You should have bought 6 months ago! What's wrong with this neighborhood?" yadda yadda yadda argh!

I considered an interest only loan, until I found out how they really worked -thank you Suze Orman! Would rather have pulled my teeth out with pliers than pay interest on a subprime loan. Gov backed loans had to wait for a bit of credit report polishing.

My credit is better now (alwas pay my bills on time, bankruptcy went bye bye), income higher, and housing prices are sliding. Here is a preview of what I shall be doing at Thanksgiving Dinner this year:

told you so told you so lalalala told you so

 

[vraiblonde]

I considered an interest only loan, until I found out how they really worked -thank you Suze Orman!

Interest-only loans should be against the law - that is predatory lending at its finest.

 

[vegmom]

That's why I didn't go that route. Its the riskiest loan out there. The only application I can think of where that would work is a rental property that you planned on selling in 5 years or less. Even then you'd have to count on selling prices remaining fairly stable. Anyone try to sell a house between say 1990-95?

Trust me, if you have investments in something everyone is in an all fire hurry to get in to (including the clueless) sell....sell now!

 

[refi-rep]

Interest-only loans should be against the law - that is predatory lending at its finest.

I absolutely agree, I had a customer a week ago with one and when I called my appraiser his comp came back less then what he owed due to being 30k in the rears because of the interest only. I also put ARM's in the same category as being very bad for the consumer because if the lender tells you oh dont worry about the rate going up, you can refi two yrs from now, no problem, however your home value drops from the time you signed til your reset, your in big trouble. I only advise fixed rates!

 

[AK-74me]

Interest-only loans should be against the law - that is predatory lending at its finest.

yeah but the name of itself should be enough warning to anyone with half a brain. "Interest Only" . Now I know that some people like to use them when flipping a house or the like but seriously anyone that uses one just to get into a house and aren't savy with these type loans should know they are getting into trouble.

 

[refi-rep]

My family has been on me for several years now to buy a house even though I had a bankruptcy on my record (humiliating, but did it as last resort).

"Oh prices are going to keep going up you should buy now! You should have bought 6 months ago! What's wrong with this neighborhood?" yadda yadda yadda argh!

I considered an interest only loan, until I found out how they really worked -thank you Suze Orman! Would rather have pulled my teeth out with pliers than pay interest on a subprime loan. Gov backed loans had to wait for a bit of credit report polishing.

My credit is better now (alwas pay my bills on time, bankruptcy went bye bye), income higher, and housing prices are sliding. Here is a preview of what I shall be doing at Thanksgiving Dinner this year:

told you so told you so lalalala told you so

I admire your self control on not trying to keep up with the Jones'. Mr & Mrs. Jones may look like their living the life on the outside but Mr. & Mrs. Jones are swimming in their pool of debt, and get the ole courtesy calls about being late with their bills on the inside.

 

[czygvtwkr]

Interest-only loans should be against the law - that is predatory lending at its finest.

I don't think so, isn't it pretty damn obvious what interest only means? I have no sympathy for someone who will take a loan out for hundreds of thousands of dollars and not bother learning about what they are doing.

 

[refi-rep]

I don't think so, isn't it pretty damn obvious what interest only means? I have no sympathy for someone who will take a loan out for hundreds of thousands of dollars and not bother learning about what they are doing.

I have sympathy for the older ppl who were told its a fixed rate and never told it was an interest only with a fixed rate(Lying by the lenders). However on the other hand those that signed and understood completely that just wanted a house and there was no other way, I dont have as much for but will help them as much as I can because if you cant afford it, you cant afford it. Another thing I dislike is the stated income because thats pretty much fraud if you think about it.

 

[somdrenter]

I absolutely agree, I had a customer a week ago with one and when I called my appraiser his comp came back less then what he owed due to being 30k in the rears because of the interest only.

Hey refi, I'm gonna need your help.

I’m gonna go out and buy the largest house I can not afford with a 6 month ARM. When the rate re-sets, I’ll just apply for the FHASecure program and get bailed out. It’s a win-win for everyone!!.

 

[refi-rep]

Hey refi, I'm gonna need your help.

I’m gonna go out and buy the largest house I can not afford with a 6 month ARM. When the rate re-sets, I’ll just apply for the FHASecure program and get bailed out. It’s a win-win for everyone!!.

Have fun with that one