Should Everyone Who Did Not Buy A Home Properly , Lose Their Home?
BySorry I did not mean to shout. I have researched areas like Detroit, chicago, Baltimore, Philadelphia and many other poorer areas. In San Diego we have such areas too. many of these (re-finanancially) troubled adults are going to lose their homes. These people may have bought a home properly yet were forced into re-financing. I do not think you should have a Harvard graduated loan officer taking advantage of less educated people and blame it all on them. I feel for people in foreclosure be they in Tampa or Detroit. These pre-foreclosure people are still families in this great ( AHEM( country of ours. I feel in certain extrememly poor neighborhoods a cram down is more than appropriate. Imagine john q complainer, who is making 251.000 a year how your home would be worth 100,000 less because we did nothing to help those less fortunate. I think this is a republican fear tactic. All of the 8 million or probably really 3 million people are helped than home values will not slip down to 50.000 how would you people current on your payments like to have 50.000 homes in your neighborhood?
Your observations point out how complicated a situation we are in. There was greed and ignorance involved at many levels.
If you have never sat in a lender’s office listening to the explanation of how you can buy the home you really want, I’m not sure you can understand how “smooth” these lenders can be. And, some of these loan officers were also ignorant of the long-term effects of these loan programs, because they were brand new at the profession. So you have new loan officers dealing with first time homebuyers, who were marginally qualified to get a loan. A recipe for disaster.
I also acknowledge the greed of some home owners who found their homes were appreciating in value at the rate of 20% – 30% a year. So they did cash out re-fi or HELOC to buy what they wanted. Big screen TVs, fancy clothes or cars, expensive vacations, investment properties in other states w/more affordably priced housing. You name it, conspicuous consumption was everywhere.
I had several instances of clients who insisted on buying with 0% down payment and financing all or most of the closing costs, even though they could well afford to pay the closing costs and at least 10% down if not more. No amount of discussion impressed on them the possible ramifications of an 80/20 loan or the hybrid ARM.
Then there are the folks who bought prudently. They are floating down the same river as those who acted imprudently. They may have lost their jobs, they may have lost 40%+ of their savings, their neighborhood may be full of blighted, empty foreclosures. I do feel for them…for us.
I believe the de-regulation of the banking industry, lowering of lending criteria, greed of investors to buy over-valued “mortgage backed securities”, our elected officials (across party lines) making rules and deregulating without having the professional expertise to understand what they were doing, the Federal Reserve Bank (at the direction of Greenspan)…all had a big hand in our current situation. I think most of the blame should be placed with these.
Ignorant or imprudent/greedy home owners/home buyers didn’t cause the conditions, they got caught in the mess.
Greedy home owners and unqualified home buyers shouldn’t have been able to get the money or houses they wanted. The lenders should have just said “NO”. It was their job to make wise decisions and they failed. They should be held accountable.
I think those elected officials who voted on the measures that allowed lenders and banks to slacken their criteria should be held accountable.
I think Greenspan and the Federal Reserve officials who backed his lead should be held accountable.
(Leaving my soapbox for now)
sHOULD EVERYONE WHO DID NOT BUY A HOME PROPERLY Absolutely they should if they did not buy it properly. It is not the govt’s function to protect ignorance.
No home goes down in value until someone sells that home in a market when the value is less.
There are hardworking people who deserve a hand but the idiots who bought way beyond their means with FULL knowledge those loan payments were going up and now want to cry foul SHOULD lose the home.
>>If you overextended yourself, with a big mortgage, new cars, big screen TV, etc., than YOU and only you are to blame. The banks are losing out too, and they should. That will be their punishment. But you also need a lesson to learn.
It’s not fair for all the people who responsibly manage their lives and financial situation to bail out all those who blatantly thought the pot of gold would never run dry.
I see this everyday in my job. Just because you bought your house in FL or CA for 400k and it is now worth 200k, doesn’t mean your investor/lender is at fault! YOU signed the loan docs for YOUR house. If the house appreciated, would you be willing to pay the lender more?…Doubt it! You’d take more equity out of the house appreciated and over obligate yourself more. Too many people over extended. EVERYDAY I see household incomes of ~4000-5000…and expenses 7000+…that is only sustainable for so long…
Irresponsible people who bought homes they actually couldn’t afford couple of years ago should all lose their home. They should have been smarter than that. Besides home prices still need further correction. In most Southern California places, prices are still way high.
no. people are totally uneducated about the loan process.
it’s the creditors fault not the public
YEs, the lesson is be good, follow the rules, and you’ll end up losing. Welcome to the new AMERIKA!
i dont think so
Have very mixed feelings on this. There were some out and out frauds run on some people, and for them think laws that use to be on the books in 60’s should apply. Any misrepresentation by loaning body should give person getting loan money free. You had very little of currant BS when those laws were on the books and enforced.
There are a large number of people that had to have known they were going totally over their heads and they should lose. For group that took risk if everything went perfect they could have pulled it off think the currant plan seems good.