Koolblue13 Posted February 16, 2009 Share Posted February 16, 2009 This is not 1 or 20 people, it's millions. So we kick all of them to the curb and leave milllions of houses vacant. Because there are no buyers. So what you have done is leave TRILLIONS of dollars worth of real estate vacant. With nobody paying a dime on them. Now all the houses around them are going to be worthless, whether the owners are paying on time or not. Exactly how does this stimulate the economy? I said it before, the issue that these people were stupid or greedy is moot. When the prices finally come back to realistic, I will buy my first home. I'm working and saving, as soon as these irresponsible homeowners are out, I will be in. Want people in these houses at the expense of tax payers, give those who haven't bought a home they couldn't afford enough for a down payment. Link to comment Share on other sites More sharing options...
TimmySmith Posted February 16, 2009 Share Posted February 16, 2009 When the prices finally come back to realistic, I will buy my first home.What is realistic?No offense but your scenario is not realistic. Look at it it this way. You wait for houses to come down to your price, if you have a price. But why would anyone buy a house that is depreciating to "their price"? It's like waiting for a stock to come down to buy it. Unless you are Warren Buffett and have control over the marketplace, that's a losing proposition. Link to comment Share on other sites More sharing options...
Koolblue13 Posted February 16, 2009 Share Posted February 16, 2009 What is realistic?No offense but your scenario is not realistic. Look at it it this way. You wait for houses to come down to your price, if you have a price. But why would anyone buy a house that is depreciating to "their price"? It's like waiting for a stock to come down to buy it. Unless you are Warren Buffett and have control over the marketplace, that's a losing proposition. I am renting a house that was originally listed at $1,600 a month. I'm getting it at $1,300. I'm saving money because of the housing market. There are a lot of rentals now, in an area that there never is. Last year, a studio here would be $1,200 a month. Now, $800. I can afford to save a little and spend more in my community. Link to comment Share on other sites More sharing options...
TimmySmith Posted February 16, 2009 Share Posted February 16, 2009 I am renting a house that was originally listed at $1,600 a month.I am not going to argue the merits of renting right now. Certainly a very safe way to go. However, just about every single person I have known who was waiting for the right time to buy has never bought. A different thread.All I am saying about a housing "bailout", although it technically is not a bailout but more a restructuring of terms, is that it is necessary to save ALL houses, not just the ones in foreclosure. If 10 houses on your street are vacant and for sale and have no value, then yours has no value either. There is no market. Arguing about foolish people is a waste of time, because it ultimately affects ALL homeowners. Link to comment Share on other sites More sharing options...
DeanCollins Posted February 16, 2009 Share Posted February 16, 2009 When I bought my condo, they really tried to push an ARM on me..... and I'm refinancing to a 15-year fixed. The mortgage market has changed very rapidly in the past few years, and it really was crazy in the middle of the bubble. I got a little of that also but obtained 15 year fixed loans. Are you not being rewarded? You just bought property at deflated prices. I'm sure you got a very good interest rate. I just got the appraisal back on my condo, and I am locked at 4.75% for a refinance. Maybe it's not a handout, but I feel like I'm getting some pretty good rewards. Don't you? Yea I kinda thought about that, but then again I'm positioned well timing wise and otherwise for the opportunities. For the last 20 years, I could have been living about 3 times as large as I do (the two vehicles I drive are '99 and '01). Instead I've saved a lot of money and bought properties and other investments and kept my cash flow very positive and zero debt other than a mortgage or two. I look around at people that make less than or the same as I do and they've got two $50k lexuses, big boats, and new harleys... heavy debt and zero cash savings to tide them over. What ever happened to prudent people keeping 6-12 months of expenses in liquid assets? I keep 18 months. There hasn't been a year, in the last 15 that I haven't kept $30k in reserves, so that I wouldn't have to tap IRAs when an economy like this rolled up on us. Link to comment Share on other sites More sharing options...
Elessar78 Posted February 16, 2009 Share Posted February 16, 2009 This is not 1 or 20 people, it's millions. So we kick all of them to the curb and leave milllions of houses vacant. Because there are no buyers. So what you have done is leave TRILLIONS of dollars worth of real estate vacant. With nobody paying a dime on them. Now all the houses around them are going to be worthless, whether the owners are paying on time or not. Exactly how does this stimulate the economy? I said it before, the issue that these people were stupid or greedy is moot. I'm not sure if you were disagreeing with me. But I was on the same side as you on this. I was saying that if they are out on the curb then it's not doing anyone any good. Better to keep them in their houses, buying furniture, going to Loew's or Home Despot, than having all those vacant houses (which by the way will lead to crime and neighborhood deterioration). Link to comment Share on other sites More sharing options...
Elessar78 Posted February 16, 2009 Share Posted February 16, 2009 well, then the ARM came due, there wasn't any equity in the house to enable people to refinance. The APR shot up, they couldn't make their payments. They were upside down at that point. gotcha, so people were banking on a rise in equity to cover the difference when the APR readjusted. Thanks. Link to comment Share on other sites More sharing options...
chipwhich Posted February 16, 2009 Share Posted February 16, 2009 gotcha, so people were banking on a rise in equity to cover the difference when the APR readjusted. Thanks. Well if you could have predicted the future here goes.... Since say...1990? Every person on here that bought a house should have gotten an ARM. Anyone until say 3 or 4 years ago that got fixed price mortgages payed too much in their payment. If you could have predicted the trends, an ARM was the only way to go since 1990 until recently. So the fact that someone banking on a rise in equity and lowered APR was not abnormal. It was pretty standard for oh...15 years. Lets keep everything in perspective. Link to comment Share on other sites More sharing options...
In Flames Posted February 16, 2009 Share Posted February 16, 2009 i agree that people who chose to buy a 500k home on a 30k salary should lose their house and get no help. Personally, my wife and i bought a 80k house, and she lost her job, and im working part time looking for full time, we have lived within our means, but losing her job put some things in line for us. Our main goal is to keep our house, cause i DO NOT want to raise 2 young boys in an apt. so if we could get some help, that would be wonderful, but if not, we will be able to manage because she is at least getting unemployment for now. Link to comment Share on other sites More sharing options...
Kilmer17 Posted February 16, 2009 Share Posted February 16, 2009 **** it. Everyone else has their hand out. I want mine too. If my grandkids are paying for the debt of the stupid, they might as well have to pay mine off too! How silly was I all these years living within my means. Link to comment Share on other sites More sharing options...
Hubbs Posted February 16, 2009 Share Posted February 16, 2009 Speaking of ARMs... get ready for the next wave: We’ve only started the first round and it is game over. In total approximately $750 billion of option ARMs were originated from 2004 to 2007. What is even more troubling is that 55% of borrowers with option ARMs owe more than their actual home is worth. And this data is conservative since it comes from the banking sector which didn’t even see the recession coming even while they were standing knee deep in it.Now here is where the data becomes more recent. As of December of 2008, a stunning 28% of option ARMs were delinquent or in some stage of foreclosure. We haven’t even seen the major recasts and already over 1 in 4 of these loans is imploding. Can you say subprime redux? In recent reports I have been seeing that people are saying this won’t be as bad as subprime since just over half of subprime loans were delinquent or in foreclosure in December. To those people I say, come back in December of 2009 and it will be a very different ball game. 50 percent is optimistic for the option ARM game. Linky-link Link to comment Share on other sites More sharing options...
FanboyOf91 Posted February 16, 2009 Share Posted February 16, 2009 Speaking of ARMs... get ready for the next wave:Linky-link Good read. :doh: Link to comment Share on other sites More sharing options...
81artmonk Posted February 16, 2009 Share Posted February 16, 2009 Yeah but here's the thing. There was no catch as long as the value of homes kept rising and interest rates kept dropping. Everyone managed just fine.But when the mortgage rates started to rise and home prices dropped it all went south. Anyway, Americans can't even manage their credit cards, I wouldn't expect much more out of them on a mortgage. This is very true, but still no excuse for people to get bailed out over a poor financial choice. Let's not take into account the many a folk who did this to flip a house, and are now left hanging. IMO the govt cannot get into the biz of helping gamblers Link to comment Share on other sites More sharing options...
Toe Jam Posted February 16, 2009 Share Posted February 16, 2009 Absolutely not. But that's already been said. Link to comment Share on other sites More sharing options...
sjinhan Posted February 16, 2009 Share Posted February 16, 2009 i just read the original post and already were too many posts that I didnt bother reading it all so i make restate something already has... ok here is my problem with painting the entire "distressed" homeowners with a single stroke... there are alot of families out there THAT did not "reach" for house they couldn't afford but basically LOST everything they have saved up to this point of their lives if not more because of others who did... yeah sure since they did not "reach" for a house, they can still pay the payments and they got a fixed loan so the payments will not suddenly up BUT they are completely screwed if they were try to sell their house now. I would still consider them "distressed" even if they haven't gone into foreclosure Link to comment Share on other sites More sharing options...
stevenaa Posted February 16, 2009 Share Posted February 16, 2009 I bought a house in 2004 on an ARM. 2 years later my first payment increase hit and I refinanced. Fixed 30 at 7%. Now, I'd like to refinance but my home value has decreased and I basically have zilch equity. I'd like rate reduction for my handout, please. Link to comment Share on other sites More sharing options...
Special K Posted February 16, 2009 Share Posted February 16, 2009 I would rather the feds bail out "distressed students." Link to comment Share on other sites More sharing options...
kansasduo Posted February 16, 2009 Share Posted February 16, 2009 We continue to AWARD bad behavior....instead of encouraging good If there is a BAIL-OUT.....it should ALSO include those of us making our payments (Maybe 1% reduction in mortgage interest subsidized by the fed?) This would "STIMULATE" the economy by giving me more $$$$$ to save or spend....instead of just another HAND OUT for the irresponsible (not those whose circumstances have changed) This would be EQUAL PROTECTION UNDER THE LAW I couldn't agree more with your ideas! I cant believe I have paid my mortgage on time for all these years and thats bad thing??!! God what a screwed up government. Link to comment Share on other sites More sharing options...
D'KanSkinFan Posted February 16, 2009 Share Posted February 16, 2009 I would rather the feds bail out "distressed students." Here ya go~ http://www.stevengetsgreen.com/ Link to comment Share on other sites More sharing options...
MoeRedskins Posted February 16, 2009 Share Posted February 16, 2009 Anybody who got an ARM mortgage doesn't deserve any help. You know exactly what you were getting into when you bought a house you couldn't afford otherwise. Link to comment Share on other sites More sharing options...
NattyLight Posted February 16, 2009 Share Posted February 16, 2009 What is realistic?No offense but your scenario is not realistic. Look at it it this way. You wait for houses to come down to your price, if you have a price. But why would anyone buy a house that is depreciating to "their price"? It's like waiting for a stock to come down to buy it. Unless you are Warren Buffett and have control over the marketplace, that's a losing proposition. TS, an economist I am not, but I have listened to plenty of lectures on the internet because I try to educate myself on **** I have no idea on. From what I've gathered, a realistic price for homes is defined in terms of median (50th %tile) household income and mean (average) home prices. Historically, this trend has been 1:2.5. I think Census data put my state, MD, as the second in the country with a median household income of around $65K, which suggests that the mean home price should be around $163K. This is the realistic number I think that dude was talking about. The latest internet searches for HoCO, BaltCO I did yielded that mean prices were anywhere from $280K-320K depending on the source. Pretty scary IMO. Unfortunately, I'm not making this up. However, the time span in which I've researched this was not consolidated, so I'm not going to spend an hour searching for the links. But this information is out there. Link to comment Share on other sites More sharing options...
Bubble Screen Posted February 16, 2009 Share Posted February 16, 2009 Anybody who got an ARM mortgage doesn't deserve any help. You know exactly what you were getting into when you bought a house you couldn't afford otherwise. this Link to comment Share on other sites More sharing options...
ChocolateCitySkin Posted February 16, 2009 Share Posted February 16, 2009 This is very true, but still no excuse for people to get bailed out over a poor financial choice. Let's not take into account the many a folk who did this to flip a house, and are now left hanging. IMO the govt cannot get into the biz of helping gamblers the point is some people were forced into these arms... 3 people on here all stated that the banks tried to make them take ARM loans. Link to comment Share on other sites More sharing options...
SnyderShrugged Posted February 16, 2009 Share Posted February 16, 2009 the point is some people were forced into these arms... 3 people on here all stated that the banks tried to make them take ARM loans. even if the bank "tried to make them take ARMS", the responsibility still lies with those who decided to take them up on it. no one held a gun to their heads to take out the risky ARM. So NO, no-one was "forced" into an ARM loan. Link to comment Share on other sites More sharing options...
DjTj Posted February 16, 2009 Share Posted February 16, 2009 All this debate about "blame" really misses the point. We're not going to bail out these people just because we are forgiving them for their mistakes. We are bailing them out because it helps the country as a whole. (1) If there are too many defaults, it will devalue mortgage-backed securities, which will require further write-downs of bank assets, and could lead to the collapse of major banks like Bank of America, Citibank, etc. which could cascade into failures at AIG, Morgan Stanley, etc. Our entire bailout strategy since September has focused on preventing this. (2) Too many defaults will devalue everyone else's house. It's not just the people who took irresponsible loans who will benefit, but everyone who has been making their payments on time. People like stevenaa I bought a house in 2004 on an ARM. 2 years later my first payment increase hit and I refinanced. Fixed 30 at 7%. Now, I'd like to refinance but my home value has decreased and I basically have zilch equity. I'd like rate reduction for my handout, please. will be able to refinance. People like kansasduo If there is a BAIL-OUT.....it should ALSO include those of us making our payments (Maybe 1% reduction in mortgage interest subsidized by the fed?)will be able to refinance.It's really not about whose fault it is. It's about what is best for the economy as a whole right now: Slowing the rate of default and cushioning the decline in home prices is something that will benefit a lot more people than just the delinquent borrowers. Link to comment Share on other sites More sharing options...
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