Housing “nightmare” tarnishes the American dream

[waiting hawk]

How about a title like that when you are stuck selling a house on margin?

http://biz.yahoo.com/rb/070318/usa_subprime_dream.html?.v=3

[Happy renter]

I don’t understand how come the media seems to give a lot of mercy to the subprime borrowers???? They have bad credit and borrow with zero down. They have nothing to lose if their houses are being foreclosed. Some even filipped & cashed out a lot of money from their houses already. Eventally, we (responsible & honest renters) have to pay for some of the loss. These people have already inflated the housing market for us to suffer. It’s like stealing money from us. We have to speak up also and should not let them to take more advantages of us.

Things come around, go around greedy flippers!!!!

[ucodegen]

I don’t understand how come the media seems to give a lot of mercy to the subprime borrowers???? They have bad credit and borrow with zero down. They have nothing to lose if their houses are being foreclosed.

It is due to poor/non-existent financial education in high school combined with traditional liberal arts degree weak in hard science/math or business. It may also have something to do with authors of those articles not wanting to spend the time and check the facts.

Many people think that having the government spend more on specific services will not effect them in the pocket book.. forgetting where the government gets their money in the first place. If the gov spends more, it has to collect more (in taxes).

[robyns_song]

For some reason, all of these articles talking about people going through foreclosure say that the borrowers “didn’t understand” the terms of the mortgage. What didn’t they understand…that they had to pay the money back? They didn’t think that creative financing had a price? Why is it that everyone seems to take the side of the dumb borrower and paint the lender as evil?

[salo_t]

Maybe a handful of borrowers truly didn’t understand what they were getting into but the majority of borrowers had a good idea that this was not your usual type of financing and that there could be a risk. Most people that took these loans were told that when the introductory period was up they could just refinance and keep doing so until they finally unload the home onto some other sucker. I know this to be a fact because I argued with a few workmates about this and they were so certain that housing will always go up so they would be fine.
I just can’t bring myself to feel sorry for any of them.
I keep imagining how every time someone I know bought one of these over priced homes and acted as though they were brilliant investors. Now that the poop has hit the fan they want to cry foul and say they were duped… please.

Buyers face it, your investing strategy was not brilliant and now you have to pony up so deal with it.

[Raybyrnes]

salo_t

You can’t be saying that you expect people to take responsibility for making a mistake. It has to have been the mortgage broker for providing the financing or the appraiser or the realtor. There has to be someone to blame other than the person who signed a contract with a reasonable expectation that things would go up. That would be far to adult like to hold them responsible for their own mistakes

[sstearns2]

At this point it’s more correct to say that if the government spends more it has to borrow more.

We should all (including me) start writing our congress members everyday telling them not to try to bail out sub prime.

Scott

[salo_t]

I think at this point if the government wants to get involved they could make the lender re-negotiate the terms of the loan and offer them a 30 year fixed rate at the going interest rate
from the time the loan was originated. 4.5% or whatever.

This is more than fair but my guess is that they would still not be able to afford the mcmansion they overpaid for and will be assed out.

[23109VC]

abo0ut a year ago, i was shopping around for rates and ended up talking to a loan broker who flat out told me to do an ARM and said it was no big deal that real estate always went up, and in a couple of years I could refi out of the loan into a new one… he acted like it was no big deal, and everyone was doing it.

when he told me how much loan I qualified for, I gasped and said there was NO way I could afford that much loan, and that my income wouldn’t support it. he said i could go “stated income” and just put down “whatever i wanted” for my income…

i didn’t walk.. I RAN. but there a lot of people out there who don’t know any better, are ignorant, or maybe justl iked what they heard and went along wih the program.

herd mentality. everyone was doing it, they did it..

now they pay for it. but my poitn is there are PLENTY of people out there who were profiting of screwing people and they were all too happy to sign people up for loans that would lead to foreclosure….

[Raybyrnes]

Hey you could also make the argument that the same people were doing this 6 years ago when the boom was taking off and they made a lot of ordinary folks millionairs in a very short period of time. They get paid to make loans. That is there job. I don’t hold that against them and many of the people are fairly articulate at spelling out the terms and conditions of the loasn. It is the buyer who adamently suggests that they want X paymets are they will walk to the next guy that is going to give them that deal. People don’t want to ehar that they can not afford soemthing. Now they are learning a lesson. Will they have to learn twice is the real question.

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