Foreclosures---goobers, is it just me?

Question

Anybody who bought their home before '05 is a-okay or they were gonna loose it naturally. There is no crisis, except for the adjustable notes written after '05, which were moronic to begin with.

Answer 1

Hindsight is 20/20.  It’s easy to look back now and see the storm building. At the time, too many people blindly believed anything they were told instead of doing their own research, and they’re suffering now as a result.

Answer 2

No, there are plenty who bought their homes ages ago and thought it was a grand idea to take cash out.

My OWN BROTHER was here crying last might.

In 1993 he bought his house for 70k.   Everything was fine and dandy.

Between 2005-2007 he refinanced THREE times and took out over 200k in CASH and BLEW it all.

Now, 2008 is here and he comes crying and has not paid his mortgage in 6 months.

He thinks the government will bail him out and wants me to help him fend off the mortgage company.

I have no idea what he should do, other then keep my name off of anything associated with him.    But, this is the kind of greed that is destroying our economy.     There is nothing "natural" about blowing 200k at the race track.

I will probuly end up pressured to buy his freakin' house, which I do not want, and let him leech off me for the rest of our lives.

Answer 3

It's not just the adjustable notes that are the cause.  There are other reasons for loosing ones home.  If you loose your job due to layoff, or there is a divorce or death of one of the borrowers.

If you purchased your home prior to 05 and refinanced it, you could be in the same boat as you're talking about.

Those adjustable loans have been around for more than just the last 3 years.  The only problem with them now is the values are coming down and borrowers that are in trouble can't sell their home to be able to pay off thier loans.

If the borrower has not been making the full payment or at least the interest only part of the payment, the differance is added to the balance owed (negitive amortization).  Now the values have gone down and the guidelines are more restrictinve, the borrowers can't refinance either.

I've had a 30 year fixed, a negitive amortized loan and an interest only loan on my home.  All three of these loans were good for me at that time.  I also have a HELOC on my home.  Due to market in my area I'm upside down on my home.  I wasn't when I refinanced, was 80% LTV.  I'm not going to walk away from my home just because of that.  I'll keep making the payments as long as I can.

There is nothing wrong with the neg am loans, if you educate the borrower correctly and the borrower understands what the interest payment will be after it adjusts.

Oh, and  lying about thier income so they could buy a home they clearly didn't qualify for.