why that was nice

[SteveSkal]

This is a very sore topic for me. I have been in the Mortgage Industry for almost 10 years now and I saw this coming, nothing I could do to stop it, it was greed all around, greed of the Mortgage Broker's wanting to fill their pockets, greed by the lenders who saw business coming in like never before and just said yes to everything, greed of the borrowers who's eyes were bigger than their stomach.... when you have a smooth talking broker telling you "Hey, I can put you in a much larger house for the SAME payment" people just light up and say OK, and don't even ask anymore questions, its sad! So it snowballed from there, housing prices stared to soar, more and more exotic loan programs were designed to accomodate. The bubble had to burst sooner or later and here we are.

Now as far as the government bailing this out, I am on a fence here too, I have the same sentiment as far as "you may your bed, now you have to lie in it", Sure I think all these greedy bastards should lose their homes, why should they get help when I was responsible and got a 30 year fixed mortgage on a smaller home that I knew I could afford today, tomorrow, and 10 years from now. HOWEVER, if government doesn't step in and do something it could lead to a recession so they really are doing what needs to be done.

 

[HitManSE 10+ year member]

They didn't tell the consumers that. They told them what the customer wanted to hear to close the sale.

Not only that, but they were actually giving seminars all over the place as to how those ARM's were going to be one hell of an investment tool. Most of them were free and hundreds would show up every week. Im sure they were privately supported by banks or someone that would benefit //content.invisioncic.com/y282845/emoticons/laugh.gif.48439b2acf2cfca21620f01e7f77d1e4.gif

Personally I did the opposite, I opted for an old school 30yr stretch load and locked the rate at very close to 5%. That was back in early 04' and Here I was waiting for the foreclosure "sales" to hit the market to scoop up another one and Bush does this shit //content.invisioncic.com/y282845/emoticons/rolleyes.gif.c1fef805e9d1464d377451cd5bc18bfb.gif Talk about placing a band-aid over a bullet wound.

As stated, the issue is the Government is now helping people who were stupid. Those people will make those mistakes in the future, also they shouldnt have let the banks go as far as they did either with their loans. Now the banks have an even larger majority of people by the proverbial balls.

 

[hoss 5,000+ posts]

i opted for the 30yr fixed as well, i was VERY tempted by the IO, ARM's, and other enticing sounding loans. but i went with the voice of reason (in this case, my mom, a CPA) and stuck with the 30yr fixed.

glad i did that.

 

[HitManSE 10+ year member]

This is a very sore topic for me. I have been in the Mortgage Industry for almost 10 years now and I saw this coming, nothing I could do to stop it, it was greed all around, greed of the Mortgage Broker's wanting to fill their pockets, greed by the lenders who saw business coming in like never before and just said yes to everything, greed of the borrowers who's eyes were bigger than their stomach.... when you have a smooth talking broker telling you "Hey, I can put you in a much larger house for the SAME payment" people just light up and say OK, and don't even ask anymore questions, its sad! So it snowballed from there, housing prices stared to soar, more and more exotic loan programs were designed to accomodate. The bubble had to burst sooner or later and here we are.
Now as far as the government bailing this out, I am on a fence here too, I have the same sentiment as far as "you may your bed, now you have to lie in it", Sure I think all these greedy bastards should lose their homes, why should they get help when I was responsible and got a 30 year fixed mortgage on a smaller home that I knew I could afford today, tomorrow, and 10 years from now. HOWEVER, if government doesn't step in and do something it could lead to a recession so they really are doing what needs to be done.

The part in bold is definetely a problem, thats why it was stated those people were stupid. If someone could be swayed so easily, without asking any questions...then they are pretty much, stupid. Sure they could be put into a house for the same price, but a simple thought that comes to mind is for HOW LONG? 1 yr? then what? If they simply applied supply and demand, they should have been able to see what the outcome was going to be. If the housing boom wasnt that, and the demand wasnt as high.

Well, then the ARM loans may have been a good idea. Thats IF everyone wasnt going crazy buying as many homes as possible, overextending their loans beyond anything they could possibly afford. A few of my friends did the same thing, one bought one and actually started off with a 30yr (like I suggested) but 6 months later the price had gone up. So what happened? He re-fied with an ARM and pulled about $50k and the payments stayed the same. Despite my warning, he was ecstatic at the time. Well, hes upside down now //content.invisioncic.com/y282845/emoticons/rolleyes.gif.c1fef805e9d1464d377451cd5bc18bfb.gif

Another ended up buying 3 condos (you know, those apartments that everyone converted //content.invisioncic.com/y282845/emoticons/laugh.gif.48439b2acf2cfca21620f01e7f77d1e4.gif ) same issue but he started off with an ARM. Hes crying now. I however stuck to just one, sure I wish I had bought another one too but it wasnt realistic at the time and I sure wasnt about to overextend myself and pick up an ARM. Hell with that.

Not to mention all those greedy homebuilders that are now screwed as well. The market hit that pothole and flipped for many that had applied for loans several months (if not further back) prior to it stalling out. Well, now they got those large loans they were waiting for. What can they do? Not build? They're still building. Thousands went up post market stall and they knew they were stuck.

 

[denim 5,000+ posts]

We are a perfect microcosm of the USA. //content.invisioncic.com/y282845/emoticons/wink.gif.608e3ea05f1a9f98611af0861652f8fb.gif

 

[Flipx99 5,000+ posts]

There is nothing inherently complex about traditional ARM. I know I will get an ARM when doing home loans.

Putting an ARM in the hand of the average person is like putting a gun in the hand of a child. There is nothing wrong with ARMs just as there is nothing wrong with guns.

 

[Flipx99 5,000+ posts]

I bet I could swindle half this forum into the purchase of a structure security that would make them bankrupt twice times over.

 

[PollyCranopolis 10+ year member]

I'm saving this picture for special occasions

 

[WhoSayWho? 5,000+ posts]

Nice to know how mature you can be. Stay the asshat you always have been. //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif Thing is I don't need to put you on ignore to ignore you. I did it before over stupid shit you spouted off eons ago and just ignored your dumbass and will do it again. I can see why Scooby does what he does though. Also I don't see you posting pics of your awe inspiring self. //content.invisioncic.com/y282845/emoticons/rolleyes.gif.c1fef805e9d1464d377451cd5bc18bfb.gif

I have no idea what you are talking about. I suppose you may have gotten upset from time to time when I asked how your bastard child was doing. But the fact is that I was genuinely curious about the child. I know that some may give the term "bastard" a negative connotation, but for me it is simply a way of keeping track of which children were born out of wedlock. In a way I admire you for not only raising your baby but also the babies of the men who were there before you.

I hope this explanaition helps and we can get along now.

 

[2002XLT 5,000+ posts]

So what exactly does this mean for someone that just bought a house 2 months ago?

 

[SteveSkal]

So what exactly does this mean for someone that just bought a house 2 months ago?

Depends on what type of loan program you are in and how long you plan on staying there and if you wish to refinance in the next couple of years

 

[Flipx99 5,000+ posts]

So what exactly does this mean for someone that just bought a house 2 months ago?

Are you in an ARM?

 

[SteveSkal]

If you are in a fixed rate loan, are in your dream home and don't plan on moving any time soon and don't plan on refinancing, then this all won't have any kind of profound affect on you.

 

[2002XLT 5,000+ posts]

Depends on what type of loan program you are in and how long you plan on staying there and if you wish to refinance in the next couple of years

Fixed at 7.6 for 30 years. Kinda high, but my dti was stretched.

plan on staying around 5 years unless i start making a lot of $$, really an investment. The town is expected to boom in the next decade, so 5-10 years. I wouldnt mind refinancing if i could get a couple points off my interest rate.

Are you in an ARM?

No. See above.

 

[2002XLT 5,000+ posts]

If you are in a fixed rate loan, are in your dream home and don't plan on moving any time soon and don't plan on refinancing, then this all won't have any kind of profound affect on you.

I wouldnt say its my dream home, but its definantly a nice starter home.