What should this guy do?

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Sorry don’t have enough info in my brain to help out here,

Personaly, don’t think I would have got into this situation to begin with, If self employed I would try to pay cash or at least have sevaral lines of business to fall back on.

But good luck to him ….

[(former)FormerSanDiegan]

L J R – If I Assume the following (based on the info you’ve provided):

1. the application was legit
2. intermediate-term increase in income prospects are slim
3. He has enough savings to make about 2 years or less worht of mortgage payments.
4. unlikely to see a rebound of the property in a timeframe for which he could carry the loan with his assets
4. That all loans on the property were the initial purchase loans (no refi’s) for primary residence.
5. The loan payment is more than his current monthly income.

If it were my friend, I would recommend that he spend a small portion of my savings to contact a real estate attorney to weigh the option of walking.

Screwing over the banks, pension funds and/or other purchasers of MBS’ based on this guys poor judgment sucks, but I don’t see many other options other than bleeding away his life savings over the next 2 years.

Of course, that same logic doesn’t apply to the borrower. You thinks his risk is just the credit ding.
n_s_r – It’s not about logic it’s about the law and economic survival.

[(former)FormerSanDiegan]

L J R – If I Assume the following (based on the info you’ve provided):

1. the application was legit
2. intermediate-term increase in income prospects are slim
3. He has enough savings to make about 2 years or less worht of mortgage payments.
4. unlikely to see a rebound of the property in a timeframe for which he could carry the loan with his assets
4. That all loans on the property were the initial purchase loans (no refi’s) for primary residence.
5. The loan payment is more than his current monthly income.

If it were my friend, I would recommend that he spend a small portion of my savings to contact a real estate attorney to weigh the option of walking.

Screwing over the banks, pension funds and/or other purchasers of MBS’ based on this guys poor judgment sucks, but I don’t see many other options other than bleeding away his life savings over the next 2 years.

Of course, that same logic doesn’t apply to the borrower. You thinks his risk is just the credit ding.
n_s_r – It’s not about logic it’s about the law and economic survival.

[no_such_reality]

n_s_r – It’s not about logic it’s about the law and economic survival.

That’s not what I’m chafing about. It’s the mindset, that the banks took the risk. Sorry, the borrower took the risk. The borrower got an ARM, the borrower needs to plan for the reset. Instead, you’re saying the bank has to devine the future and say “sorry Mr. Borrower, in 3 years we think rates will be different today and we don’t see your plan for accomodating the worst case scenario”.

Can you imagine the bloody screams of injustice as all mini-trumps couldn’t qualify for a loan?

IMHO, everybody is going to piss and moan about the “unfair!” banks wanting 20% down and still charging 10% interest. Newsflash, they will have to because the mindset of the borrowers is “if the bank gives me the money, the bank is certifying it’s a good thing to do and if it goes south, I just stick it to the bank”.

[no_such_reality]

n_s_r – It’s not about logic it’s about the law and economic survival.

That’s not what I’m chafing about. It’s the mindset, that the banks took the risk. Sorry, the borrower took the risk. The borrower got an ARM, the borrower needs to plan for the reset. Instead, you’re saying the bank has to devine the future and say “sorry Mr. Borrower, in 3 years we think rates will be different today and we don’t see your plan for accomodating the worst case scenario”.

Can you imagine the bloody screams of injustice as all mini-trumps couldn’t qualify for a loan?

IMHO, everybody is going to piss and moan about the “unfair!” banks wanting 20% down and still charging 10% interest. Newsflash, they will have to because the mindset of the borrowers is “if the bank gives me the money, the bank is certifying it’s a good thing to do and if it goes south, I just stick it to the bank”.

[bob2007]

LJR,

“I don’t hire former self employed entrepreneurs. They just aren’t a good fit.”

I’m not in that category, but exactly what are they not fit to do?

[bob2007]

LJR,

“I don’t hire former self employed entrepreneurs. They just aren’t a good fit.”

I’m not in that category, but exactly what are they not fit to do?

[kicksavedave]

So lets see… a guy making $40K has a house he can’t afford? Well, he can either intentionally screw a dozen entities and walk away just because he lost his stupid gamble… or he can get some damn roommates! Seriously, when I was in my 20s, making $40K, and I wanted a bigger house than I could afford, I just had room mates, and we shared it. This guy wants his cake and wants to eat it too. Tough nookies, get on Craigs list and find some help.

That’s what he should do, and I don’t need to consult a lawyer to tell him so.

[kicksavedave]

So lets see… a guy making $40K has a house he can’t afford? Well, he can either intentionally screw a dozen entities and walk away just because he lost his stupid gamble… or he can get some damn roommates! Seriously, when I was in my 20s, making $40K, and I wanted a bigger house than I could afford, I just had room mates, and we shared it. This guy wants his cake and wants to eat it too. Tough nookies, get on Craigs list and find some help.

That’s what he should do, and I don’t need to consult a lawyer to tell him so.

[(former)FormerSanDiegan]

n_s_r – I generally agree with all of your points. A borrower needs to account for ARM resets if/when agreeing to the loan. It may have been irresponsible in this case. If he made 200K when purchasing, but now makes 40K, it may be a combinaiton of factors, not just irresponsibility. It may include a combination of lack of foresight, low intelligence, irresponsibility and bad luck.

The banks do have a fiduciary responsibility to “devine” the future via assessing their risks for loans they are originating and/or purchasing.

Having formerly been in debt to the tune of about 35K when I finished school, I believe in taking personal responsibility for my affairs and think others should do the same. I spent a few years climbing out of my own personal hole and I believe that I am better off now having done so.

However, it is easy to be noble in the abstract without having to walk in this man’s shoes. You may think that the noble thing for him would be to try to scratch by, draw down his cash and maybe take on some room-mates, so that he can go broke at age 55-60, rather than taking his lumps now and trying to recover financially before it’s too late to recover.

Perhaps if he chooses the trying to scratch by path he actually becomes more of a burden to society in the long run.

Consider this. The US debt currently amounts to $29,354 per man/woman and child in this country.
The noble thing to do financially would be for each of us to send a check to the Internal Revenue Service for about 30K for ourselves and each of our dependents. The law does not require this, but maybe it is the right thing to do.

Let me know when you send in your check.

[(former)FormerSanDiegan]

n_s_r – I generally agree with all of your points. A borrower needs to account for ARM resets if/when agreeing to the loan. It may have been irresponsible in this case. If he made 200K when purchasing, but now makes 40K, it may be a combinaiton of factors, not just irresponsibility. It may include a combination of lack of foresight, low intelligence, irresponsibility and bad luck.

The banks do have a fiduciary responsibility to “devine” the future via assessing their risks for loans they are originating and/or purchasing.

Having formerly been in debt to the tune of about 35K when I finished school, I believe in taking personal responsibility for my affairs and think others should do the same. I spent a few years climbing out of my own personal hole and I believe that I am better off now having done so.

However, it is easy to be noble in the abstract without having to walk in this man’s shoes. You may think that the noble thing for him would be to try to scratch by, draw down his cash and maybe take on some room-mates, so that he can go broke at age 55-60, rather than taking his lumps now and trying to recover financially before it’s too late to recover.

Perhaps if he chooses the trying to scratch by path he actually becomes more of a burden to society in the long run.

Consider this. The US debt currently amounts to $29,354 per man/woman and child in this country.
The noble thing to do financially would be for each of us to send a check to the Internal Revenue Service for about 30K for ourselves and each of our dependents. The law does not require this, but maybe it is the right thing to do.

Let me know when you send in your check.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

“banks wanting 20% down and still charging 10% interest”

Oh Please,… oh Please ….

Then maybe real-estate will be for those who are financially responsible and they will then be able to afford it too.

What a concept.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

“banks wanting 20% down and still charging 10% interest”

Oh Please,… oh Please ….

Then maybe real-estate will be for those who are financially responsible and they will then be able to afford it too.

What a concept.

[Reality]

Instead, you’re saying the bank has to devine the future and say “sorry Mr. Borrower, in 3 years we think rates will be different today and we don’t see your plan for accomodating the worst case scenario”.

What’s wrong with that? Why shouldn’t they be careful who they lend money to?

Any business wanting capital needs to produce a business plan. What’s the difference?

[Reality]

Instead, you’re saying the bank has to devine the future and say “sorry Mr. Borrower, in 3 years we think rates will be different today and we don’t see your plan for accomodating the worst case scenario”.

What’s wrong with that? Why shouldn’t they be careful who they lend money to?

Any business wanting capital needs to produce a business plan. What’s the difference?

[Author]

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