08-03-2010 09:12 AM
Amen, amen, amen. Thank you. I don't know people who has not gone through this or any other trials who necessarily did something wrong. Life can change on a dime. Living above ones means is all relative because it's easy to judge others. I am going through this now as well. I lost my job in January '08 and I have only been able to work a very few temp jobs. Even they, temp jobs, are not as forth coming as temp jobs have been in the past. My age could be a factor where potential employers are concerned. As I have said in an earlier post, I don't mind my tax dollars helping whomever it will.
I do acknowledge that it is all GOD Who is keeping me and my daily prayer is that HE keeps us all. I have complete faith in HIM as HE is always faithful.
Praying for you all.
08-10-2010 11:38 PM
You know...all I hear about are the people who bought houses well above their ability to pay. I would like to hear some more discussion for those of us that bought a moderate house with a monthly payment we can afford...put money down...etc BUT now we are stuck forever in the house. This was never meant to be my forever house. We had always planned on moving to another state before the kids started high school. I now live in a house I owe WAY more than I could sell it for. All my savings went to the down payment. I dont want to live here for the next 15 years just to break even because the financial world created a bubble that burst! I had plans for my family...I cant make those happen now. It frustrates me that so many people think of the victims (YES! I said victims) of this crisis are to blame. What did I do wrong here? It also frustrates me that I see banks and auto makers bailed out but for me I get "you did this to yourself... so suck it up"
This is a worthwhile point.
Mudda, I certainly don't know about the particulars of your situation, and I'm no expert in any case, but I've wondered if there aren't some solutions to to underwater mortgage holders that don't involve money from the government.
On an individual level, I wonder if in some cases a homeowner can regain mobility by renting. If you can gain in rent a significant percentage of the mortgage payment and other costs, then that might be a solution. Since rents go up on average on par with inflation the ratio of income to expense should continue to become more favorable.
Another solution I wonder about. I saw a reference on the internet once to a house owned by a family trust. I wonder if it's possible to set up a corporation, sell the house to the corporation, then have the corporation sell the house at a loss and declare bankruptcy. Of course, there are people who just walk away from their mortgages. And then there's a deed in lieu of foreclosure. According to Wikipedia, the "principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan".
Businesses walk away from bad investments all the time. Have a fire sale, discount the office furniture, call in the liquidators, and walk away from the smoking crater. Happens all the time. Why can't individuals?
It's also possible that in a few years housing values may rise faster once again. That doesn't appear to be the prevailing opinion, but it's possible.
In the bigger picture, any money that the government manages to funnel to underwater homeowners has to come from somewhere. Unless they can figure out a way to get it back from the sellers, it's coming from someone else. Most likely our kids. That doesn't seem like a good idea either.
Individuals CAN "walk away from bad investments" like a corporation - it's called Bankruptcy! When companies liquidate everything they go out of business, the personal equivalent is a BK, not a great plan - best used as the last of all resorts. Also if you try the sell it to a corp and have the corp sell it at a loss then file bankruptcy trick you are commiting fraud and will be lucky to not get a new home at the crossed bar hotel of your state. (most states give out in the range of 3 - 10 years for that trick IF they catch you and IF the DA prosecutes to the fullest extent of the law, a lot of if's there). Although it does sound like what some big corporations will pull if they think they can get away with it - I'm remembering Enron.
I just feel that if you are in over your head you better start swimming harder! If you have to get a non-corming mortgage you probably can't afford that house anyway. So go fixed at no more than 35% of your TAKE HOME pay (without overtime or bonuses). If that won't buy the house you want you need to lower your standards or keep renting until you have saved up a down payment good enough to put you in your dream home with a payment you can afford for the life of the loan. I made the mistake of a non conforming loan and lost the house (about 7 years ago), the market was booming so it sold at the forclosure auction for more than we owed, super lucky break! Unfortunately FICO scores don't relfect that point. It's taken 7 years to go from a 398, 402 and 409 to a 567, 599 and 662, and I still can't even get a VA loan as a disabled vet (making over $85K a year)so I still rent, drive an old truck and SAVE!!!
08-11-2010 05:55 AM
I agree with many other posters here - bailouts should be to those who deserve it, not everyone. Those who were living within their means, and ended up losing their jobs and now owe more than they can sell their house for should be helped. I really don't have any sympathy, or spare tax dollars, for those who were living beyond their means or "speculating" in real estate...and that includes the banks.
I hope to buy my first house by the end of the year. I am scared by what has happened, and so am being very conservative in my search. Yes, the mortgage lender has approved me up to a certain amount, but I don't think I would be comfortable at that amount...what if I lose my job a few years from now? What if I end up on disability? I might be worrying too much, but I'd rather be safe than sorry.
08-24-2010 02:32 PM
There are so many different opinions about bailing out homeowners depending on what side of the coin you stand what State you are from. Homeowners are taxpayers too. They are people who decided to stop moving around where ever the money goes and start contributing to the town or city they live in. When the market went up everyone rejoice that their home appreciated. And there was a hefty collection of property tax to go with it…Again, depending on the State you live in. When the unemployment nationwide was not at this alarming percentage, one’s salary was enough to pay for the over-valued property you bought. Since you had a job, you could envision raising your family and finally set your roots where you were renting. Then someone in the family lost their job, maybe more than once, and there was not an equally well-paid job ever since…And that golden rule of having at least six months of saving, and the 6 to 10% contribution to your lame 401K plan which kept losing all you put in…Somewhere the government collected 10% early withdrawal penalty from your hardship, and taxes of course. It’s too late to judge people for buying the wrong price in the wrong state! If banks own more homes than people, we will quickly move into some kind of socialist government.
08-28-2010 07:45 AM
I must 1st say that because the banks were bailed out doesn't entitle more bailouts!!!! Gheez, where are our minds here folks, quit acting like kindergarden kids ("he got one so I should get one too") That being said, and as painful as it is to say, AND IT IS... I believe that the government nor the bank should give considerations to homeowners beyond a better %rate.... If we help because it's the right thing to do morally, then where does this stop fiscally? Because I decided to play it safe and buy a home much less than I can afford is as much my fault as if I bough a home I couldn't. Loosing a job makes this especially painful and emotional; but the point is this nation cannot start dealing out exceptions to individuals and companies unless we do it for everyone. By the way, my wife and I took a total Gross pay cut of 29% in Feb 09 ,while we were pregnant with our 1st child. I know it's tempting to take that leap of faith to buy that home, but one needs to save for bad times too. By the way, why hasn't anyone complained that we no longer manufacture and import most of our goods? Perhaps we need to address the illness and not the symptoms.... By the way, let's make it a Felony to finance a home with less than 20% down....
08-30-2010 02:15 PM
I like the idea of a lien on the property, if the lender could maintain the lien for as long as necessary, and only for those who could demonstrate compelling need, such as loss of job, death of breadwinner, or catastrophic illness. The lender could arrange a short sale and the new owner would inherit a lien for the unpaid balance of the loan. That way, if and when the property recovers its value, the lender could exercise the lien and recoup the original balance. This should help prevent windfall profits for the speculator who buys properties via short sale to rent and eventually sell when values rebound. There would probably be a huge surge in the secondary "lien market," to help spur the economy, as well.
As for those who were planning on "flipping" their homes in a couple of years and find themselves unable to do so, which I think is the case with most of those I hear complaining about being "under water," I have no sympathy. They gambled and lost.
09-03-2010 04:17 PM
I realize that this forum is a bit touchy but I am rather insulted and a little scared that I would be considered criminal for buying a home with only 5% down.
Just curious can you give some constructive advice on how you were able save your down payment?
09-04-2010 04:38 AM
I resent these narrow minded comment, assuming everyone is out for a free ride. I've always paid my taxes, followed all the rules, I'm conservative in my spending and continue to save so that I'm prepared when I retire. It's hard to continue to make payments on a sinking ship (condo community) that I had no influence in bringing down, especially when there are issues affecting the welfare of myself and my family that could impact our health and our safety. I purchased my residence well within the limits of my income, in what I thought was a safe community. I did not go overboard buying something I couldn't afford. Now I find myself in a piece of property that even the tax projections assessed at 1/4 of the value of my mortgage. There's mold issues, fires, windows broken out and threatening neighbors moving in. One of the new neighbors attempted to entice my young grandchildren into his home. This was not the conditions I originally thought I was going to experience or have to be responsible for. I can't rent my property or afford to move out if I continue to pay. The mortgage company won't discuss any options. If you have a reasonable solution, you tell me what it is oh Hollier then Thou....... May you find yourself and your family in a bad situation.
09-04-2010 01:06 PM
This is a reminder to be friendly and supportive.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.