Home Forclosures hit record high

[skeptikal Premium Member]

Lol I work for a Credit Union....

We aren't crooked. People are stupid for getting themselves into something like that. What alot of people don't understand is that the Banks and Credit Unions did not just flip a switch and say "oh we are going to screw people on their homes". People willingly signed an agreement on an ARM. It says right there in the title 'Adjustable Rate Mortgage'. That's what people get for being stupid.

"Yeah it sounded like a good idea at the time and the Rate was great!", Duh... Did you think you were going to keep that rate forever?

Get a fixed rate mortgage and you won't default unless you miss payments.

God Is Love

-Rev Run

(lol sorry just had to add that)

 

[Flipx99 5,000+ posts]

Well that makes me feel better....

buying a home is pretty overwhelming for some reason...just too many parts.

 

[skeptikal Premium Member]

Well that makes me feel better....
buying a home is pretty overwhelming for some reason...just too many parts.

Rent one, problem solved

 

[snoopdan 5,000+ posts]

Lol I work for a Credit Union....

o Rly ? give me a home loan fool! //content.invisioncic.com/y282845/emoticons/biggrin.gif.d71a5d36fcbab170f2364c9f2e3946cb.gif

 

[TylerBD12 10+ year member]

Well that makes me feel better....
buying a home is pretty overwhelming for some reason...just too many parts.

yeah it's really not all that bad. just depending on who you're working with.

 

[skeptikal Premium Member]

o Rly ? give me a home loan fool! //content.invisioncic.com/y282845/emoticons/biggrin.gif.d71a5d36fcbab170f2364c9f2e3946cb.gif

Lol i fix the computers though.

If you wanted to move to Indiana I could set you up with an Originator. Our Credit Union would die to help some of these members lol.

 

[Chevillac 5,000+ posts]

my parents have bought at least 3 foreclosures in that past couple months and "flipped" them

Im looking at one right now, down in FL though, its on SHORT SALE status. In a good area too.

I need to goto an auction or 2.

//content.invisioncic.com/y282845/emoticons/word.gif.64b12e39f936af3b4fff38a1c0bd0244.gif

yeah banks are all crooked....

sacasm?

too bad you have to have tons of equity in "something" to do that //content.invisioncic.com/y282845/emoticons/crap.gif.7f4dd41e3e9b23fbd170a1ee6f65cecc.gif

Im so glad I didnt buy a house in Jan of this year... it was before this whole subprime lending disaster. That old commercial "in debt up to my eyeballs" sure came full circle didnt it ? //content.invisioncic.com/y282845/emoticons/laugh.gif.48439b2acf2cfca21620f01e7f77d1e4.gif

what commercial, it is weird though, there are a lot more of those debt fixer commercials out now.

The only thing that I worry about is that this is going to make it harder for people like me to get a loan.

It is. Example a friend of mine just got his A cert for being an electrician. $34/hour he makes now, couldnt get a loan for $250k. Good credit and all. He isnt sure what he is gonna do. Like 6 months ago I was getting preapproved for high amounts, I should try now to see what happens.

its funny too, cuz they always said, you can ask for whatever you want, as long as you think you can afford it, I bet they wont/arent saying that to people now.

 

[snoopdan 5,000+ posts]

Lol i fix the computers though.
If you wanted to move to Indiana I could set you up with an Originator. Our Credit Union would die to help some of these members lol.

Meh, im stuck at Fort Knox forever probably, lol. Thanks though.

 

[Flipx99 5,000+ posts]

Lol I work for a Credit Union....
We aren't crooked. People are stupid for getting themselves into something like that. What alot of people don't understand is that the Banks and Credit Unions did not just flip a switch and say "oh we are going to screw people on their homes". People willingly signed an agreement on an ARM. It says right there in the title 'Adjustable Rate Mortgage'. That's what people get for being stupid.

"Yeah it sounded like a good idea at the time and the Rate was great!", Duh... Did you think you were going to keep that rate forever?

Get a fixed rate mortgage and you won't default unless you miss payments.

God Is Love

-Rev Run

(lol sorry just had to add that)

3 things

1) I don't think lenders fully disclosed what could/could not happen with ARMs...or downplayed the risk when the prime rate was at 1%. The best econometricans in the world have a hard time predicting interest rates. You think Joe Six-Pack stands a chance?

2) ARMS aren't inherently bad. The restrictions on pre-payment lock people in. Hell, some interest only loans forbid pre-payment without severe penalty. That means they cannot even move.

3) Mortgage companies do not have the same rules and regualtions about ARMs like banks do. A bank can only adjust so high per year and have a yearly cap. Mortgage lenders do not have those same restrictions.

I think it was greed on both parts. The banks did not explain the risk well enough....I know this because I had to explain it to a lender....I study this every day at school. The people selling this shit don't know wtf they are selling, they are just giving the customer what they want.

Only make $200/wk, sure we can fit you in this $200k home with some creative financing...They didn't care that it was entirely rigged against the customer....but at the same time, the customer should know what they can and cannot afford.

 

[DejaWiz 5,000+ posts]

Sad news. I have known 2 couples that have let their houses foreclose with a 3rd possibly on the path.

When my wife and I where wheelin & dealin on a house a little over a year ago, we used a mortgage broker to get a fixed APR loan at average market value. There were quite a few banks that sent proposals with variable rates (the good ole 80/20 mortgage). I told our broker to immediately shred any more he received and tell these banks/lenders that variable rate was not an option.

My wife's parents bought a house with an 80/20 loan and their variable rate was just about to kick in. Couple phone calls later and they are now on a fixed rate for the remaining amortization period.

 

[jdawg 5,000+ posts]

Another problem is people get talked into these 20 year loans where the first 5 you pay interest only. Not like a portion of your monthly payment is on the house the rest interest, it interest only. So even after 5 years or whatever of paying you still havent paid a single penny on your house.

 

[Flipx99 5,000+ posts]

My wife's parents bought a house with an 80/20 loan and their variable rate was just about to kick in. Couple phone calls later and they are now on a fixed rate for the remaining amortization period.

80/20 loans are not inherently variable. Essentially you get two loans...80% at one rate and 20% at higher rate.

From my understanding, it helps you avoid PMI. Still need to do more research on it.

Another problem is people get talked into these 20 year loans where the first 5 you pay interest only. Not like a portion of your monthly payment is on the house the rest interest, it interest only. So even after 5 years or whatever of paying you still havent paid a single penny on your house.

Again, this isn't bad.

That is exactly how corporate bonds and financing use to work in the 30s.

But the problem is this

1) restrictions on pre-payment (or refinancing....corporations refinance the debt)

2) the possibility of refinancing is tied to the market value of the home.

 

[Flipx99 5,000+ posts]

It is. Example a friend of mine just got his A cert for being an electrician. $34/hour he makes now, couldnt get a loan for $250k. Good credit and all. He isnt sure what he is gonna do. Like 6 months ago I was getting preapproved for high amounts, I should try now to see what happens.
its funny too, cuz they always said, you can ask for whatever you want, as long as you think you can afford it, I bet they wont/arent saying that to people now.

I was thinking that $250k is a really nice home...but I always forget about in some places a $250k home is a shanty. Here a $250k home is very very nice.

but that is only $70k/yr....I dunno. I would try to get something in the $150k range, but that may not get you much home.

 

[jdawg 5,000+ posts]

here 250k is ok, kinda funny you can drive 10 miles across the line into WV and the same house 250k here is 100k there

 

[DejaWiz 5,000+ posts]

80/20 loans are not inherently variable. Essentially you get two loans...80% at one rate and 20% at higher rate.
From my understanding, it helps you avoid PMI. Still need to do more research on it.

True. I should have clarified. They got 20% at the average fixed APR and the 80% was an ARM.

20% was almost paid off and they got a notice in the mail about the details of the 80% ARM portion and it was going to start out at around the 10% area. Couple of phone calls to say that they have never missed or made a late payment and the 80% was converted to a fixed rate at the national average.

I speculate that the lender was using the 20% portion as a probationary period to gauge how their repayment habits are. Dunno.