subprime-mortgage meltdown; Is the default due to morgage companies or the borrower?

[Darbex]

And thats why a lot of those places are getting regulated because they are extremely predatory but I have a slightly different view of them then I do the larger banks with mortgages

[jeebus]

Wow I am one of the biggest proponents of the fact that vast majority of Americans are ignorant and lazy but predatory lending is real and is a big factor in the issues we face. Banks are one of the most corrupt industries in the US economy. A lot of people werent buying million dollar homes they were buying middle of the road middle class homes. And you are lucky you live in a state that real estate is cheap. In other states due to supply and other factors a 200K home here would get you a home in LA that is in an area like 5th ward or Acres Homes. To live in a middle class home in CA you have to spend atleast 500K and the salaries in those areas are not that much higher then they are here. I remember I was thinking about moving to Seattle to work for a company and they were offering me the same pay as I got here. Yet the cost of renting an apartment near the company which was actually outside of Seattle similar to Katy the apartment cost $2,000 a month where in Katy you could get the same apartment for $800 a month.

Where exactly is it written anywhere that U.S. citizens are entitled to own a home? Where did this sense of entitlement come from? There's a reason people have rented/leased their residence for years. There's a reason why some people move out to the country just to live in a trailer.

No one is entitled to OWN a home. This sense of entitlement is what has gotten so many people in trouble - not the banks or their practices.

[sunrise]

And thats why a lot of those places are getting regulated because they are extremely predatory but I have a slightly different view of them then I do the larger banks with mortgages

I don't see the difference! The banks and mortgage companies are in the same business as a pay day loan or a pawn shop, each takes collateral for a loan of monies for a set period of time with a signed contract! Just because one seems more outstanding than the other does not mean the business is different. There both after your money!

sunrise

[Delock]

Since the topic of taking a loan out and only temporarily able to pay the interest, what about pay day loans or the pawn shop loans? These loans are legal and have extremely high interest rates!

sunrise

MAN! No way in hell would I use them!

[Delock]

Where exactly is it written anywhere that U.S. citizens are entitled to own a home? Where did this sense of entitlement come from? There's a reason people have rented/leased their residence for years. There's a reason why some people move out to the country just to live in a trailer.

No one is entitled to OWN a home. This sense of entitlement is what has gotten so many people in trouble - not the banks or their practices.

It's the America way! House, nice car in the drive way, and 2.5 kids!

[Kiovo]

I'm just going to have to agree to disagree with you on this subject! For me it comes down to simple math. No one forced these people to take out loans, not the banks, not the government. And I am not lucky I live in Texas, but I choose to live in Texas. Cause you're right, it makes no sense to live in the states where shacks are going for $200k+

[ImaGuyGeek]

It's the America way! House, nice car in the drive way, and 2.5 kids!

Work hard, play by the rules and you can achieve your goals is the American way. You do this and the rest will follow. This is why most immigrants who come here legally are successful, grateful and happy.

There are too many people out there trying to game the system with shortcuts and free rides because they feel entitled to "stuff".

[Darbex]

Jeebus, I never said anyone was entitled to own a home. What I did say is that the banks are flat lying to people about what they can and cannot do. If you are denying that the banks had a large portion of the mortgage problem then you dont understand what really happened.

Kiovo, you are lucky because real estate in Texas could easily be just as expensive then where would you go. But because of our state government and other things as a result of the real estate bust a few decades ago it didnt get out of control here. Look at Austin housing costs there are more expensive then they are in the rest of the state not as bad as say CA but they are higher and the wages arent significantly better than Houston.

Sunrise, I never said that there is a big difference I did say that I do have a slightly different view in that for the most part payday loans are more explicit and most people know you will be raked over the coals. Also there is less of an emotional attachment with the end product. In home buying you have the emotional attachment to the purchase and in many cases the banks hide things from consumers and flat lied to many people about ARMs and other mortgage vehicles.

[jeebus]

Jeebus, I never said anyone was entitled to own a home. What I did say is that the banks are flat lying to people about what they can and cannot do. If you are denying that the banks had a large portion of the mortgage problem then you dont understand what really happened.

I feel like you're trying to convince me that mobsters with mean faces, tough words, and big guns pushed all these people into a corner of the bank, and told them to sign on the dotted line - or else. I don't remember it being like that. In fact, I remember sitting down like an adult and figuring out how much we could afford before ever talking to the bank. Am I supposed to pity those people so feeble that they were steam rolled by a bank looking to make a profit? Again its the "woe is me, I'm just a poor helpless victim" mentality I don't buy. Sure there will always be examples of people who were truely taken advantage of (namely senior citizens) but there's no way there are that many victims out there to justify the thousands upon thousands of ARM induced foreclosures. Those are the result of greed.

Kiovo, you are lucky because real estate in Texas could easily be just as expensive then where would you go. But because of our state government and other things as a result of the real estate bust a few decades ago it didnt get out of control here. Look at Austin housing costs there are more expensive then they are in the rest of the state not as bad as say CA but they are higher and the wages arent significantly better than Houston.

If no one chose to live in those areas, the home prices would go down. Supply and demand. Do I feel sorry for someone wanting to live in LA and pay 10 times as much as what they would get in Houston? NOPE. How can one justify the victim mentality when it involves a million dollar mortgage. It makes you ask the question: "What was so wrong with your rented space before that you had to run from it, into this horrible mortage?" Are there thousands upon thousands of victims in cities like LA too?! No, greed is again the answer.

Sunrise, I never said that there is a big difference I did say that I do have a slightly different view in that for the most part payday loans are more explicit and most people know you will be raked over the coals. Also there is less of an emotional attachment with the end product. In home buying you have the emotional attachment to the purchase and in many cases the banks hide things from consumers and flat lied to many people about ARMs and other mortgage vehicles.

There's a difference between lying and not disclosing what you're about to agree to. If you don't read the fine print, then whose fault is it, really? Its a contract. NEVER sign something you don't understand. My home closing was a painfully long process because I read everything before I signed it and asked about what I didn't understand. People are too impatient though today. Everyone has ADD and wants instant gratification.

It's the America way! House, nice car in the drive way, and 2.5 kids!

You're damn right its the American way! The problem is that it took me and my wife nearly 10 years of fulltime work before we were able to get into our first home. Not everyone seems mature enough to want to wait though, and the goverment open the doors to let the banks feed the people's greed. This is the end result. I have no pity for those who were greedy and chose to live beyond their means.

[Darbex]

ok

[jeebus]

LOL

Sorry I ranted. I've just had to hear a bunch of people at work sell me their sob story how they got trapped in their 300k ARM and had to sell/foreclose and its all the government's fault, etc etc.

[stevenallenbarnard]

[/QUOTE]You're damn right its the American way! The problem is that it took me and my wife nearly 10 years of fulltime work before we were able to get into our first home. Not everyone seems mature enough to want to wait though, and the goverment open the doors to let the banks feed the people's greed. This is the end result. I have no pity for those who were greedy and chose to live beyond their means.[/QUOTE

But what about those who WERE living within their means and lost their homes due to job loss, etc. YOu and your wife are both very lucky to even have full time work in this economy. What would happen if one of you lost your income? What if both of you lost your income? We assume that everyone who had a subprime mortgage felt as if they were "entitled" to something and living above their means.

[Kiovo]

You're damn right its the American way! The problem is that it took me and my wife nearly 10 years of fulltime work before we were able to get into our first home. Not everyone seems mature enough to want to wait though, and the goverment open the doors to let the banks feed the people's greed. This is the end result. I have no pity for those who were greedy and chose to live beyond their means.

haha it only took me 4 years if even!

[jeebus]

haha it only took me 4 years if even!

Only cuz you married an old dude and took all his money!

But what about those who WERE living within their means and lost their homes due to job loss, etc. We assume that everyone who had a subprime mortgage felt as if they were "entitled" to something and living above their means.

Those people who were living with in their means and lost their home due to a foreclosure because they both lost their jobs do not fall into this catagory. They are the true victims of all this.

My anger is mostly with those who were foreclosed on before the layoffs even started. I'm speaking of the ARM financed homeowners who rolled the dice on the fact of whether they would be making enough money in 5 to 10 years to make that adjusted payment when the principle kicked in. Those thousands of foreclosures (I feel) perpetuated the recession. It was systemic. Thousands of ARM's came due, thousands forclosed, banks began to fail, businesses propped by the banks began to fail, people were laid off, and we land in a recession with 10+ percent unemployment and thousands of homes left in foreclosure.

We as a society collectively chose to live beyond our means, and when it got away from us, it punished those very few remaining hard working people you ask about in your example, who were laid off and lost their homes as well - even though they WERE responsible.

Its the ant and the grasshopper. Except in this version, there's only 1 ant and 1,000 grasshoppers.

YOu and your wife are both very lucky to even have full time work in this economy. What would happen if one of you lost your income? What if both of you lost your income?

When we financed, we only borrowed at 75% our combined income. That way if one of us ever lost our job, we could still manage - just very tightly. Now, if we both lost our jobs, then it wouldn't matter if we lived in a tee-pee. No income is no income. We all know the outcome.

I work with guys and have neighbors that only made XYZ combined annually, but borrowed via ARM at that up to 200% of that set amount. They all thought the same (if they gave it any thought): "Five years from now, we'll be making more than enough money.."

[Kiovo]

But what about those who WERE living within their means and lost their homes due to job loss, etc. YOu and your wife are both very lucky to even have full time work in this economy. What would happen if one of you lost your income? What if both of you lost your income? We assume that everyone who had a subprime mortgage felt as if they were "entitled" to something and living above their means.

you're right, we are fortunate to both have jobs, but if you read my originally post I did say - i understand about the ones who lost their jobs and weren't able to pay their mortgages. But I don't believe that's the majority of people that defaulted on their loans. I am also mainly talking about sub-prime mortgages and ARMs. IMO taking out an ARM is irresponsible, that's like saying I know I can't afford this home, but I can afford the monthly payments right now. And btw, when we sat down to purchase our home I was still in college and working only 20 hrs a week. So we based what we could afford on our income back then, not what we could potentially be making 5 years down the line. A home is the biggest purchase you make and requires the most research. I think some people completely skipped a few steps and only heard what they wanted to hear from lenders. Oh, and I work for one of the biggest banks in the country so I've seen first hand what people were willing to do to get the loan they want.