Home Forclosures hit record high

[skeptikal Premium Member]

This is true. And as for ARM's... people should know better. It's simply applying the logic of how credit cards have been handles for decades to a mortgage. Miss one or make a late payment, you're screwed.

Thank You. It's not the banks (or mortgage lenders) job to say, oh you could be screwed when the rate kicks in. That is the buyer's decision of purchasing a home.

If you are not responsible enough to research the issues that could arise from an ARM or any adjustable rate anything, it is your own fault.

Is it unethical, yes I have no disagreement here, but still... the buyer signs the dotted line.

Now I'm not just saying this because I work for a credit union lender, I'm just sick of people trying to place blame where it does not belong. You should ask questions when talking to a lender not just let the lender tell you what you should do.

 

[skeptikal Premium Member]

I hope taxes are abolished soon.

lol funny story, I study econ as well. And you know all those nice tax cuts we got over the past 10-15 years...

Well there is a candidate that is trying to pass a $1 TRILLION dollar tax bill that will take back over 3x as much as they 'relieved' us.

 

[jdawg 5,000+ posts]

I hope taxes are abolished soon.

vote Ron Paul

 

[DejaWiz 5,000+ posts]

An ARM is based on prime rate, not only repayment history.

True.....

 

[Flipx99 5,000+ posts]

Thank You. It's not the banks (or mortgage lenders) job to say, oh you could be screwed when the rate kicks in. That is the buyer's decision of purchasing a home.
If you are not responsible enough to research the issues that could arise from an ARM or any adjustable rate anything, it is your own fault.

Is it unethical, yes I have no disagreement here, but still... the buyer signs the dotted line.

Now I'm not just saying this because I work for a credit union lender, I'm just sick of people trying to place blame where it does not belong. You should ask questions when talking to a lender not just let the lender tell you what you should do.

I WILL SEND YOU $50 PAYPAL RIGHT NOW IF YOU CAN TELL ME ALL THE DETERMINATES OF INTEREST RATE CHANGE.

The point is, you can't, I can't Morgan Stanley can't....most people predicted a .5 cut by the FOMC and they only got .25.

I think it is totally off base for a business to sell a product to a customer without fully explaining the risks, the mechanisms, what may cause rates to change, maximum risk exposure. How many hours of regressions would you expect your mother to run? Huh? How many econometric programs does she have access to?

To expect John Q Customer to have a full realization of interest rate risk is absurd...All they see is a dream home...and mortgage lenders aren't helping my making it possible by extreme leverage.

The blame is just as much on the lenders as it is the customers.

 

[SethPhillips 5,000+ posts]

my sis bought some property out here in utah for around 50,000. built a 2 story 10k+ sq ft house on it and it's allready gone way up in price... she could sale it for over 750,000...

im half tempted to buy a house myself.. flip it and sale it.

 

[goinpro 10+ year member]

my sis bought some property out here in utah for around 50,000. built a 2 story 10k+ sq ft house on it and it's allready gone way up in price... she could sale it for over 750,000...
im half tempted to buy a house myself.. flip it and sale it.

thats not to shabby at all...takes a lot of work though...

the house my parents just finished flipping we only techinically owned it for like 30 days before it we put it back on the market last nite, they will make at least 100 K on it.

But like many said it is very risky investment and more then not it usually doesnt happen easy

 

[skeptikal Premium Member]

I WILL SEND YOU $50 PAYPAL RIGHT NOW IF YOU CAN TELL ME ALL THE DETERMINATES OF INTEREST RATE CHANGE.

The point is, you can't, I can't Morgan Stanley can't....most people predicted a .5 cut by the FOMC and they only got .25.

I think it is totally off base for a business to sell a product to a customer without fully explaining the risks, the mechanisms, what may cause rates to change, maximum risk exposure. How many hours of regressions would you expect your mother to run? Huh? How many econometric programs does she have access to?

To expect John Q Customer to have a full realization of interest rate risk is absurd...All they see is a dream home...and mortgage lenders aren't helping my making it possible by extreme leverage.

The blame is just as much on the lenders as it is the customers.

Lol that I cannot do, I wish I could I would love $50. But unfortunately I do not work for the Feds...

Lol man I get where you are coming from and I completely understand that lenders SHOULD let borrowers know what could happen. All I'm saying is that they are not legally bound to, therefor won't. I could be wrong, there could be lenders that do these things but think of it from a business standpoint, if you are not required to do so by law and will make you extra money would you tell people these things? Nope, I didn't think so.

My mother and another family member were laid off by American Home Mortgage when they went under. We have been fortunate enough to see things like this happening and are locked into a Fixed Rate mortgage.

I'm not saying you are wrong by any means. But the borrower's responsibility is to know the risks. Thats why I said "Ask questions".

 

[DejaWiz 5,000+ posts]

Here's a DTI calculator for anyone to use.

 

[Chevillac 5,000+ posts]

my sis bought some property out here in utah for around 50,000. built a 2 story 10k+ sq ft house on it and it's allready gone way up in price... she could sale it for over 750,000...
im half tempted to buy a house myself.. flip it and sale it.

flip it? sale it?

What is house flipping to you? what is your definition of it?

Also, its sell. You sell something, or you have something for sale.

Here's a DTI calculator for anyone to use.

Interesting.

 

[IamDeMan 5,000+ posts]

flip it? sale it?
What is house flipping to you? what is your definition of it?

Also, its sell. You sell something, or you have something for sale.

Interesting.

No he plans to literally flip the house on it's roof, get some sheets and "sail" it.

 

[Tiger Bass 5,000+ posts]

What is actually causing this boom in foreclosures? Is it just stupid people trying to buy more than they can afford or is it genuine economic problems?

 

[IamDeMan 5,000+ posts]

What is actually causing this boom in foreclosures? Is it just stupid people trying to buy more than they can afford or is it genuine economic problems?

It's people who accepted risky loans 2 years ago. Many of them being ARM. I took a full point higher on my mortgage just to steer away from ARM.

 

[Chevillac 5,000+ posts]

No he plans to literally flip the house on it's roof, get some sheets and "sail" it.

Thats what I got from the post.

What is actually causing this boom in foreclosures? Is it just stupid people trying to buy more than they can afford or is it genuine economic problems?

see below

It's people who accepted risky loans 2 years ago. Many of them being ARM. I took a full point higher on my mortgage just to steer away from ARM.

//content.invisioncic.com/y282845/emoticons/word.gif.64b12e39f936af3b4fff38a1c0bd0244.gif there were a shitload of articles on this about a month ago, thats when I was reading about them. CHeck around, youll get the full story rather than just bits and pieces from this thread.

 

[Tiger Bass 5,000+ posts]

Well, if it comes down to people accepting ARM's, it does seem to be a bit their fault. The economy isn't exactly the best it's ever been right now. Granted, as Flip mentioned, no one can predict interest rate changes, but you better at least have a good idea of how the economy is doing right now. It's just dumb to risk $150k or more on an investment when the money is being loaned to you and you have done zero research.