Underwater Homeowners Thread

[paramount]

I do wonder if there really is a dollar collapse how this will affect any recovery. Even factoring that in (as much as possible) I think TG is correct.

As a side note, this is what I don’t understand. I went by and looked at this property yesterday, nice house but 370k!?

http://www.redfin.com/CA/Temecula/33153-Romance-Pl-92592/home/6574149

According to my calculations, this house is worth around 240k or so.

[Username]

Note before Rant: Paramount this is not directed at you, only a general rant.

It’s called due diligence. If I went car shopping and found a car I loved and didn’t get it inspected by a mechanic and it had serious issues under the surface and it cost me an extra few hundred dollars a month in repairs because I bought a lemon it would be my fault for not doing my homework. Any of us could have purchased a home in the past few years, all you needed was a pulse and a crooked loan officer (were there any that were not crooked?). I knew a few people during the bubble who purchased several properties simultaneously (All owner occupied so the bank would give them a better rate and they wouldn’t need to include the payment in their debt ratio ratio.) basically doubling/tripling down and they lost big time. I personally don’t believe anyone deserves a bail out especially anyone who committed fraud (however I understand without a bail out we may see a total collapse of the dollar and maybe our great nation). If I went into Symbolic Motors in La Jolla and said I was a lawyer or a doctor and produced a down payment and some fraudulent documents I am sure I would find a sale man who would sell me a Ferrari and collect a commission (hell he might even help me with the fraudulent documents for his commission). A few months later when the repo man comes I would be crying because it was my Ferrari and I was entitled to it (even tho I lied to get it and couldn’t really afford it). I did my homework and realized I couldn’t afford either a Ferrari or a house in Southern California during the bubble so I have rented and waited for things to come back to reality. I still think we have a long way to go, but I don’t think anyone who bought should complain for making a decision without doing their homework or thinking about the future.

*Rant over*

[Username]

Note before Rant: Paramount this is not directed at you, only a general rant.

It’s called due diligence. If I went car shopping and found a car I loved and didn’t get it inspected by a mechanic and it had serious issues under the surface and it cost me an extra few hundred dollars a month in repairs because I bought a lemon it would be my fault for not doing my homework. Any of us could have purchased a home in the past few years, all you needed was a pulse and a crooked loan officer (were there any that were not crooked?). I knew a few people during the bubble who purchased several properties simultaneously (All owner occupied so the bank would give them a better rate and they wouldn’t need to include the payment in their debt ratio ratio.) basically doubling/tripling down and they lost big time. I personally don’t believe anyone deserves a bail out especially anyone who committed fraud (however I understand without a bail out we may see a total collapse of the dollar and maybe our great nation). If I went into Symbolic Motors in La Jolla and said I was a lawyer or a doctor and produced a down payment and some fraudulent documents I am sure I would find a sale man who would sell me a Ferrari and collect a commission (hell he might even help me with the fraudulent documents for his commission). A few months later when the repo man comes I would be crying because it was my Ferrari and I was entitled to it (even tho I lied to get it and couldn’t really afford it). I did my homework and realized I couldn’t afford either a Ferrari or a house in Southern California during the bubble so I have rented and waited for things to come back to reality. I still think we have a long way to go, but I don’t think anyone who bought should complain for making a decision without doing their homework or thinking about the future.

*Rant over*

[Username]

Note before Rant: Paramount this is not directed at you, only a general rant.

It’s called due diligence. If I went car shopping and found a car I loved and didn’t get it inspected by a mechanic and it had serious issues under the surface and it cost me an extra few hundred dollars a month in repairs because I bought a lemon it would be my fault for not doing my homework. Any of us could have purchased a home in the past few years, all you needed was a pulse and a crooked loan officer (were there any that were not crooked?). I knew a few people during the bubble who purchased several properties simultaneously (All owner occupied so the bank would give them a better rate and they wouldn’t need to include the payment in their debt ratio ratio.) basically doubling/tripling down and they lost big time. I personally don’t believe anyone deserves a bail out especially anyone who committed fraud (however I understand without a bail out we may see a total collapse of the dollar and maybe our great nation). If I went into Symbolic Motors in La Jolla and said I was a lawyer or a doctor and produced a down payment and some fraudulent documents I am sure I would find a sale man who would sell me a Ferrari and collect a commission (hell he might even help me with the fraudulent documents for his commission). A few months later when the repo man comes I would be crying because it was my Ferrari and I was entitled to it (even tho I lied to get it and couldn’t really afford it). I did my homework and realized I couldn’t afford either a Ferrari or a house in Southern California during the bubble so I have rented and waited for things to come back to reality. I still think we have a long way to go, but I don’t think anyone who bought should complain for making a decision without doing their homework or thinking about the future.

*Rant over*

[Username]

Note before Rant: Paramount this is not directed at you, only a general rant.

It’s called due diligence. If I went car shopping and found a car I loved and didn’t get it inspected by a mechanic and it had serious issues under the surface and it cost me an extra few hundred dollars a month in repairs because I bought a lemon it would be my fault for not doing my homework. Any of us could have purchased a home in the past few years, all you needed was a pulse and a crooked loan officer (were there any that were not crooked?). I knew a few people during the bubble who purchased several properties simultaneously (All owner occupied so the bank would give them a better rate and they wouldn’t need to include the payment in their debt ratio ratio.) basically doubling/tripling down and they lost big time. I personally don’t believe anyone deserves a bail out especially anyone who committed fraud (however I understand without a bail out we may see a total collapse of the dollar and maybe our great nation). If I went into Symbolic Motors in La Jolla and said I was a lawyer or a doctor and produced a down payment and some fraudulent documents I am sure I would find a sale man who would sell me a Ferrari and collect a commission (hell he might even help me with the fraudulent documents for his commission). A few months later when the repo man comes I would be crying because it was my Ferrari and I was entitled to it (even tho I lied to get it and couldn’t really afford it). I did my homework and realized I couldn’t afford either a Ferrari or a house in Southern California during the bubble so I have rented and waited for things to come back to reality. I still think we have a long way to go, but I don’t think anyone who bought should complain for making a decision without doing their homework or thinking about the future.

*Rant over*

[Username]

Note before Rant: Paramount this is not directed at you, only a general rant.

It’s called due diligence. If I went car shopping and found a car I loved and didn’t get it inspected by a mechanic and it had serious issues under the surface and it cost me an extra few hundred dollars a month in repairs because I bought a lemon it would be my fault for not doing my homework. Any of us could have purchased a home in the past few years, all you needed was a pulse and a crooked loan officer (were there any that were not crooked?). I knew a few people during the bubble who purchased several properties simultaneously (All owner occupied so the bank would give them a better rate and they wouldn’t need to include the payment in their debt ratio ratio.) basically doubling/tripling down and they lost big time. I personally don’t believe anyone deserves a bail out especially anyone who committed fraud (however I understand without a bail out we may see a total collapse of the dollar and maybe our great nation). If I went into Symbolic Motors in La Jolla and said I was a lawyer or a doctor and produced a down payment and some fraudulent documents I am sure I would find a sale man who would sell me a Ferrari and collect a commission (hell he might even help me with the fraudulent documents for his commission). A few months later when the repo man comes I would be crying because it was my Ferrari and I was entitled to it (even tho I lied to get it and couldn’t really afford it). I did my homework and realized I couldn’t afford either a Ferrari or a house in Southern California during the bubble so I have rented and waited for things to come back to reality. I still think we have a long way to go, but I don’t think anyone who bought should complain for making a decision without doing their homework or thinking about the future.

*Rant over*

[CA renter]

TG,

Here in San Diego, and parts of L.A., the natural peak was in 2001 in many places. You can see the sales rates and price increases slowing down in late 2000/early 2001, and many people in the RE field (back when they were fairly sane) were calling the top of the housing cycle.

I knew plenty of people who were getting neg-am/no-doc and other toxic loans before 2003, and buyers had been in a frenzy since the late 90s. An anecdote: our favorite waitress at a local, family-style restaurant could hardly contain her enthusiasm when she told us about how she and her *boyfriend* (who also worked at the restaurant) were buying a $400K house. They had no downpayment, no other income, and they were both in their very young 20s. This was around 2001/2002, IIRC.

We were never allowed to experience the recession that was supposed to happen in 2000/2001. We just dipped a little, then it was off to the races when Greenspan started juicing the housing market. Now, we will have to experience the pain from the 2001 recession in full, PLUS suffer the effects as all the money that was created in 2001-2007 gets sucked back out of the system. Greenspan really f’ed us.

[CA renter]

TG,

Here in San Diego, and parts of L.A., the natural peak was in 2001 in many places. You can see the sales rates and price increases slowing down in late 2000/early 2001, and many people in the RE field (back when they were fairly sane) were calling the top of the housing cycle.

I knew plenty of people who were getting neg-am/no-doc and other toxic loans before 2003, and buyers had been in a frenzy since the late 90s. An anecdote: our favorite waitress at a local, family-style restaurant could hardly contain her enthusiasm when she told us about how she and her *boyfriend* (who also worked at the restaurant) were buying a $400K house. They had no downpayment, no other income, and they were both in their very young 20s. This was around 2001/2002, IIRC.

We were never allowed to experience the recession that was supposed to happen in 2000/2001. We just dipped a little, then it was off to the races when Greenspan started juicing the housing market. Now, we will have to experience the pain from the 2001 recession in full, PLUS suffer the effects as all the money that was created in 2001-2007 gets sucked back out of the system. Greenspan really f’ed us.

[CA renter]

TG,

Here in San Diego, and parts of L.A., the natural peak was in 2001 in many places. You can see the sales rates and price increases slowing down in late 2000/early 2001, and many people in the RE field (back when they were fairly sane) were calling the top of the housing cycle.

I knew plenty of people who were getting neg-am/no-doc and other toxic loans before 2003, and buyers had been in a frenzy since the late 90s. An anecdote: our favorite waitress at a local, family-style restaurant could hardly contain her enthusiasm when she told us about how she and her *boyfriend* (who also worked at the restaurant) were buying a $400K house. They had no downpayment, no other income, and they were both in their very young 20s. This was around 2001/2002, IIRC.

We were never allowed to experience the recession that was supposed to happen in 2000/2001. We just dipped a little, then it was off to the races when Greenspan started juicing the housing market. Now, we will have to experience the pain from the 2001 recession in full, PLUS suffer the effects as all the money that was created in 2001-2007 gets sucked back out of the system. Greenspan really f’ed us.

[CA renter]

TG,

Here in San Diego, and parts of L.A., the natural peak was in 2001 in many places. You can see the sales rates and price increases slowing down in late 2000/early 2001, and many people in the RE field (back when they were fairly sane) were calling the top of the housing cycle.

I knew plenty of people who were getting neg-am/no-doc and other toxic loans before 2003, and buyers had been in a frenzy since the late 90s. An anecdote: our favorite waitress at a local, family-style restaurant could hardly contain her enthusiasm when she told us about how she and her *boyfriend* (who also worked at the restaurant) were buying a $400K house. They had no downpayment, no other income, and they were both in their very young 20s. This was around 2001/2002, IIRC.

We were never allowed to experience the recession that was supposed to happen in 2000/2001. We just dipped a little, then it was off to the races when Greenspan started juicing the housing market. Now, we will have to experience the pain from the 2001 recession in full, PLUS suffer the effects as all the money that was created in 2001-2007 gets sucked back out of the system. Greenspan really f’ed us.

[CA renter]

TG,

Here in San Diego, and parts of L.A., the natural peak was in 2001 in many places. You can see the sales rates and price increases slowing down in late 2000/early 2001, and many people in the RE field (back when they were fairly sane) were calling the top of the housing cycle.

I knew plenty of people who were getting neg-am/no-doc and other toxic loans before 2003, and buyers had been in a frenzy since the late 90s. An anecdote: our favorite waitress at a local, family-style restaurant could hardly contain her enthusiasm when she told us about how she and her *boyfriend* (who also worked at the restaurant) were buying a $400K house. They had no downpayment, no other income, and they were both in their very young 20s. This was around 2001/2002, IIRC.

We were never allowed to experience the recession that was supposed to happen in 2000/2001. We just dipped a little, then it was off to the races when Greenspan started juicing the housing market. Now, we will have to experience the pain from the 2001 recession in full, PLUS suffer the effects as all the money that was created in 2001-2007 gets sucked back out of the system. Greenspan really f’ed us.

[CA renter]

Here’s an article by Ed Leamer from UCLA Anderson Forecast (the same Ed Leamer who suddenly shifted gears near the peak and wrote that the bubble wasn’t really that bad after all, and we shouldn’t see prices fall significantly…I wonder who was paying him off), questioning whether or not there was a bubble in 2002:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/Bubble.pdf

Here is is again in 2003, with an update on “Bubble Trouble” where he discusses the P/E ratio for housing:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/PE_ratio_update.pdf

And here, the Federal Reserve itself was cautioning against an increase in abusive lending practices:

The revisions also restrict certain
acts and practices in home-secured
transactions. For example, creditors may
not refinance their HOEPA loans within
one year of extension if the refinancing
is not in the borrower’s interest.
To strengthen the existing prohibition
against extending credit on the basis
of homeowner equity without regard to
ability to repay, creditors must verify
and document the homeowner’s repayment
ability. The disclosures that must
be given three days before closing to
borrowers obtaining HOEPA-covered
loans must state the total amount borrowed
and must indicate whether that
amount includes payment for optional
credit insurance or similar products.

(page 127)

http://www.federalreserve.gov/boarddocs/rptcongress/annual01/ar01.pdf

Believe it or not, that was from 2001. I have no idea what happened to cause things to get even more risky in the mortgage markets. Somebody was paid off, IMHO (yes, I tend to think our problems were not due to stupidity on the part of regulators and financial executives, but were due to certain people who stood to gain from the credit bubble, and who had the power to persuade lawmakers to do their bidding).

[CA renter]

Here’s an article by Ed Leamer from UCLA Anderson Forecast (the same Ed Leamer who suddenly shifted gears near the peak and wrote that the bubble wasn’t really that bad after all, and we shouldn’t see prices fall significantly…I wonder who was paying him off), questioning whether or not there was a bubble in 2002:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/Bubble.pdf

Here is is again in 2003, with an update on “Bubble Trouble” where he discusses the P/E ratio for housing:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/PE_ratio_update.pdf

And here, the Federal Reserve itself was cautioning against an increase in abusive lending practices:

The revisions also restrict certain
acts and practices in home-secured
transactions. For example, creditors may
not refinance their HOEPA loans within
one year of extension if the refinancing
is not in the borrower’s interest.
To strengthen the existing prohibition
against extending credit on the basis
of homeowner equity without regard to
ability to repay, creditors must verify
and document the homeowner’s repayment
ability. The disclosures that must
be given three days before closing to
borrowers obtaining HOEPA-covered
loans must state the total amount borrowed
and must indicate whether that
amount includes payment for optional
credit insurance or similar products.

(page 127)

http://www.federalreserve.gov/boarddocs/rptcongress/annual01/ar01.pdf

Believe it or not, that was from 2001. I have no idea what happened to cause things to get even more risky in the mortgage markets. Somebody was paid off, IMHO (yes, I tend to think our problems were not due to stupidity on the part of regulators and financial executives, but were due to certain people who stood to gain from the credit bubble, and who had the power to persuade lawmakers to do their bidding).

[CA renter]

Here’s an article by Ed Leamer from UCLA Anderson Forecast (the same Ed Leamer who suddenly shifted gears near the peak and wrote that the bubble wasn’t really that bad after all, and we shouldn’t see prices fall significantly…I wonder who was paying him off), questioning whether or not there was a bubble in 2002:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/Bubble.pdf

Here is is again in 2003, with an update on “Bubble Trouble” where he discusses the P/E ratio for housing:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/PE_ratio_update.pdf

And here, the Federal Reserve itself was cautioning against an increase in abusive lending practices:

The revisions also restrict certain
acts and practices in home-secured
transactions. For example, creditors may
not refinance their HOEPA loans within
one year of extension if the refinancing
is not in the borrower’s interest.
To strengthen the existing prohibition
against extending credit on the basis
of homeowner equity without regard to
ability to repay, creditors must verify
and document the homeowner’s repayment
ability. The disclosures that must
be given three days before closing to
borrowers obtaining HOEPA-covered
loans must state the total amount borrowed
and must indicate whether that
amount includes payment for optional
credit insurance or similar products.

(page 127)

http://www.federalreserve.gov/boarddocs/rptcongress/annual01/ar01.pdf

Believe it or not, that was from 2001. I have no idea what happened to cause things to get even more risky in the mortgage markets. Somebody was paid off, IMHO (yes, I tend to think our problems were not due to stupidity on the part of regulators and financial executives, but were due to certain people who stood to gain from the credit bubble, and who had the power to persuade lawmakers to do their bidding).

[CA renter]

Here’s an article by Ed Leamer from UCLA Anderson Forecast (the same Ed Leamer who suddenly shifted gears near the peak and wrote that the bubble wasn’t really that bad after all, and we shouldn’t see prices fall significantly…I wonder who was paying him off), questioning whether or not there was a bubble in 2002:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/Bubble.pdf

Here is is again in 2003, with an update on “Bubble Trouble” where he discusses the P/E ratio for housing:

http://www.anderson.ucla.edu/documents/areas/ctr/forecast/PE_ratio_update.pdf

And here, the Federal Reserve itself was cautioning against an increase in abusive lending practices:

The revisions also restrict certain
acts and practices in home-secured
transactions. For example, creditors may
not refinance their HOEPA loans within
one year of extension if the refinancing
is not in the borrower’s interest.
To strengthen the existing prohibition
against extending credit on the basis
of homeowner equity without regard to
ability to repay, creditors must verify
and document the homeowner’s repayment
ability. The disclosures that must
be given three days before closing to
borrowers obtaining HOEPA-covered
loans must state the total amount borrowed
and must indicate whether that
amount includes payment for optional
credit insurance or similar products.

(page 127)

http://www.federalreserve.gov/boarddocs/rptcongress/annual01/ar01.pdf

Believe it or not, that was from 2001. I have no idea what happened to cause things to get even more risky in the mortgage markets. Somebody was paid off, IMHO (yes, I tend to think our problems were not due to stupidity on the part of regulators and financial executives, but were due to certain people who stood to gain from the credit bubble, and who had the power to persuade lawmakers to do their bidding).

[Author]

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