Mortgage Defaults May Be Driving Consumer Spending

[briansd1]

What’s next?

inflation, price controls.

I actually support price controls. Real estate parcels that benefit from mortgage modification or some other kinds of relief should be forever deed restricted as “affordable” and not be allowed to rise above a certain percent over time.

[UCGal]

[quote=meadandale]We all know that these people aren’t smart enough to be banking their mortgage payments in lieu of making the payments so I’d say that this assessment is pretty much spot on.
[/quote]

True story, real person, lives in another state:
* She’s a stay at home mom
* He’s had the same job for 15 years or so
* purchased home 11 years ago. Refied 7 years ago.
* got behind about 9 months ago. Had dispute with bank over penalties.
* Stopped paying 9 months ago.
* Trustee sale scheduled for next month.
* She’s freaking out.

2 months ago she asked me for advise. I asked if they’d applied for a loan mod. They had – they don’t qualify because mortgage is less than the 31% they push it to. (good news in my book – mortgage should be affordable.)
I asked if they were banking the mortgage payments they weren’t making – to either bring account current or for deposit on rental they’d be moving to… Nope – they can’t afford it.

Yes – the same mortgage payment they made for years… same income they’ve had for years… now they can’t afford it.

I concluded they’ve expanded their spending to absorb their mortgage payment money and like the free rent… but have no plan in place AT ALL for what to do when they get booted out of the house. And they will be booted out.

It’s hard to muster sympathy when there’s been no external factors (loss of job, illness, whatever) to put them in this position.

[UCGal]

[quote=meadandale]We all know that these people aren’t smart enough to be banking their mortgage payments in lieu of making the payments so I’d say that this assessment is pretty much spot on.
[/quote]

True story, real person, lives in another state:
* She’s a stay at home mom
* He’s had the same job for 15 years or so
* purchased home 11 years ago. Refied 7 years ago.
* got behind about 9 months ago. Had dispute with bank over penalties.
* Stopped paying 9 months ago.
* Trustee sale scheduled for next month.
* She’s freaking out.

2 months ago she asked me for advise. I asked if they’d applied for a loan mod. They had – they don’t qualify because mortgage is less than the 31% they push it to. (good news in my book – mortgage should be affordable.)
I asked if they were banking the mortgage payments they weren’t making – to either bring account current or for deposit on rental they’d be moving to… Nope – they can’t afford it.

Yes – the same mortgage payment they made for years… same income they’ve had for years… now they can’t afford it.

I concluded they’ve expanded their spending to absorb their mortgage payment money and like the free rent… but have no plan in place AT ALL for what to do when they get booted out of the house. And they will be booted out.

It’s hard to muster sympathy when there’s been no external factors (loss of job, illness, whatever) to put them in this position.

[UCGal]

[quote=meadandale]We all know that these people aren’t smart enough to be banking their mortgage payments in lieu of making the payments so I’d say that this assessment is pretty much spot on.
[/quote]

True story, real person, lives in another state:
* She’s a stay at home mom
* He’s had the same job for 15 years or so
* purchased home 11 years ago. Refied 7 years ago.
* got behind about 9 months ago. Had dispute with bank over penalties.
* Stopped paying 9 months ago.
* Trustee sale scheduled for next month.
* She’s freaking out.

2 months ago she asked me for advise. I asked if they’d applied for a loan mod. They had – they don’t qualify because mortgage is less than the 31% they push it to. (good news in my book – mortgage should be affordable.)
I asked if they were banking the mortgage payments they weren’t making – to either bring account current or for deposit on rental they’d be moving to… Nope – they can’t afford it.

Yes – the same mortgage payment they made for years… same income they’ve had for years… now they can’t afford it.

I concluded they’ve expanded their spending to absorb their mortgage payment money and like the free rent… but have no plan in place AT ALL for what to do when they get booted out of the house. And they will be booted out.

It’s hard to muster sympathy when there’s been no external factors (loss of job, illness, whatever) to put them in this position.

[UCGal]

[quote=meadandale]We all know that these people aren’t smart enough to be banking their mortgage payments in lieu of making the payments so I’d say that this assessment is pretty much spot on.
[/quote]

True story, real person, lives in another state:
* She’s a stay at home mom
* He’s had the same job for 15 years or so
* purchased home 11 years ago. Refied 7 years ago.
* got behind about 9 months ago. Had dispute with bank over penalties.
* Stopped paying 9 months ago.
* Trustee sale scheduled for next month.
* She’s freaking out.

2 months ago she asked me for advise. I asked if they’d applied for a loan mod. They had – they don’t qualify because mortgage is less than the 31% they push it to. (good news in my book – mortgage should be affordable.)
I asked if they were banking the mortgage payments they weren’t making – to either bring account current or for deposit on rental they’d be moving to… Nope – they can’t afford it.

Yes – the same mortgage payment they made for years… same income they’ve had for years… now they can’t afford it.

I concluded they’ve expanded their spending to absorb their mortgage payment money and like the free rent… but have no plan in place AT ALL for what to do when they get booted out of the house. And they will be booted out.

It’s hard to muster sympathy when there’s been no external factors (loss of job, illness, whatever) to put them in this position.

[UCGal]

[quote=meadandale]We all know that these people aren’t smart enough to be banking their mortgage payments in lieu of making the payments so I’d say that this assessment is pretty much spot on.
[/quote]

True story, real person, lives in another state:
* She’s a stay at home mom
* He’s had the same job for 15 years or so
* purchased home 11 years ago. Refied 7 years ago.
* got behind about 9 months ago. Had dispute with bank over penalties.
* Stopped paying 9 months ago.
* Trustee sale scheduled for next month.
* She’s freaking out.

2 months ago she asked me for advise. I asked if they’d applied for a loan mod. They had – they don’t qualify because mortgage is less than the 31% they push it to. (good news in my book – mortgage should be affordable.)
I asked if they were banking the mortgage payments they weren’t making – to either bring account current or for deposit on rental they’d be moving to… Nope – they can’t afford it.

Yes – the same mortgage payment they made for years… same income they’ve had for years… now they can’t afford it.

I concluded they’ve expanded their spending to absorb their mortgage payment money and like the free rent… but have no plan in place AT ALL for what to do when they get booted out of the house. And they will be booted out.

It’s hard to muster sympathy when there’s been no external factors (loss of job, illness, whatever) to put them in this position.

[briansd1]

UCGal, sounds like this story on PBS.

I wanted to scream as I was watching Jason Welsh’s story.

http://www.pbs.org/newshour/bb/business/jan-june10/foreclosures_04-12.html

PAUL SOLMAN: Welsh bought this house 10 years ago for a little over $100,000.

PAUL SOLMAN: Five years ago, his equity in the home up several hundred thousand dollars, Welsh put in the pool.

JASON WELSH: Been an utter joy. Like I said, it was a major undertaking.

PAUL SOLMAN: Cost?

JASON WELSH: That was right around $40,000, $42,000 for the pool and the cage.

PAUL SOLMAN: Pushing the total mortgage to $240,000. Soon after, the Cape Coral market began to sink like a stone.

And how much can you get for the house at this point?

JASON WELSH: The comparables, $100,000, maybe $120,000, at most, you know?

[briansd1]

UCGal, sounds like this story on PBS.

I wanted to scream as I was watching Jason Welsh’s story.

http://www.pbs.org/newshour/bb/business/jan-june10/foreclosures_04-12.html

PAUL SOLMAN: Welsh bought this house 10 years ago for a little over $100,000.

PAUL SOLMAN: Five years ago, his equity in the home up several hundred thousand dollars, Welsh put in the pool.

JASON WELSH: Been an utter joy. Like I said, it was a major undertaking.

PAUL SOLMAN: Cost?

JASON WELSH: That was right around $40,000, $42,000 for the pool and the cage.

PAUL SOLMAN: Pushing the total mortgage to $240,000. Soon after, the Cape Coral market began to sink like a stone.

And how much can you get for the house at this point?

JASON WELSH: The comparables, $100,000, maybe $120,000, at most, you know?

[briansd1]

UCGal, sounds like this story on PBS.

I wanted to scream as I was watching Jason Welsh’s story.

http://www.pbs.org/newshour/bb/business/jan-june10/foreclosures_04-12.html

PAUL SOLMAN: Welsh bought this house 10 years ago for a little over $100,000.

PAUL SOLMAN: Five years ago, his equity in the home up several hundred thousand dollars, Welsh put in the pool.

JASON WELSH: Been an utter joy. Like I said, it was a major undertaking.

PAUL SOLMAN: Cost?

JASON WELSH: That was right around $40,000, $42,000 for the pool and the cage.

PAUL SOLMAN: Pushing the total mortgage to $240,000. Soon after, the Cape Coral market began to sink like a stone.

And how much can you get for the house at this point?

JASON WELSH: The comparables, $100,000, maybe $120,000, at most, you know?

[briansd1]

UCGal, sounds like this story on PBS.

I wanted to scream as I was watching Jason Welsh’s story.

http://www.pbs.org/newshour/bb/business/jan-june10/foreclosures_04-12.html

PAUL SOLMAN: Welsh bought this house 10 years ago for a little over $100,000.

PAUL SOLMAN: Five years ago, his equity in the home up several hundred thousand dollars, Welsh put in the pool.

JASON WELSH: Been an utter joy. Like I said, it was a major undertaking.

PAUL SOLMAN: Cost?

JASON WELSH: That was right around $40,000, $42,000 for the pool and the cage.

PAUL SOLMAN: Pushing the total mortgage to $240,000. Soon after, the Cape Coral market began to sink like a stone.

And how much can you get for the house at this point?

JASON WELSH: The comparables, $100,000, maybe $120,000, at most, you know?

[briansd1]

UCGal, sounds like this story on PBS.

I wanted to scream as I was watching Jason Welsh’s story.

http://www.pbs.org/newshour/bb/business/jan-june10/foreclosures_04-12.html

PAUL SOLMAN: Welsh bought this house 10 years ago for a little over $100,000.

PAUL SOLMAN: Five years ago, his equity in the home up several hundred thousand dollars, Welsh put in the pool.

JASON WELSH: Been an utter joy. Like I said, it was a major undertaking.

PAUL SOLMAN: Cost?

JASON WELSH: That was right around $40,000, $42,000 for the pool and the cage.

PAUL SOLMAN: Pushing the total mortgage to $240,000. Soon after, the Cape Coral market began to sink like a stone.

And how much can you get for the house at this point?

JASON WELSH: The comparables, $100,000, maybe $120,000, at most, you know?

[NotCranky]

This type of loose money keeps the prices of necessities and optional stuff up for people who are paying rent or mortgage, even though they too might be living through tough times. I just want to point out to CaRenter yet one more way the responsible get the short end of the stick.

[NotCranky]

This type of loose money keeps the prices of necessities and optional stuff up for people who are paying rent or mortgage, even though they too might be living through tough times. I just want to point out to CaRenter yet one more way the responsible get the short end of the stick.

[NotCranky]

This type of loose money keeps the prices of necessities and optional stuff up for people who are paying rent or mortgage, even though they too might be living through tough times. I just want to point out to CaRenter yet one more way the responsible get the short end of the stick.

[NotCranky]

This type of loose money keeps the prices of necessities and optional stuff up for people who are paying rent or mortgage, even though they too might be living through tough times. I just want to point out to CaRenter yet one more way the responsible get the short end of the stick.

[Author]

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