Posted on 08/10/2006 5:31:16 AM PDT by Hydroshock
What kind of ARM goes up that much that soon? I am thinking it was subsidized by the builder to move stock- now it's someone else's problem. Cold.
When I saw the tagline for the thread, I thought it was about a dog wetting on the carpet...
The home looks like a typical tract built home by one of the major big builders in the country. It probably was financed through their own mortgage company and immediately sold. Usually this builder buys down the interest rates which multiplies this problem. Some of their communities have a 20% default rate and the houses in these communities do not appreciate even in good markets.
... and go which way? Since 2004 was near record low interest rates, which direction did they think it would go?
What part of the word "adjustable" do they NOT UNDERSTAND?
With NO MONEY DOWN, they have probably twenty bucks in equity in the thing. So now if they sell it for say $200,000, they STILL OWE $17,000 (minus the twenty bucks), and they have no house at all.
Actually he was a good candidate for an ARM as he planned to live there only five years. The problem was a one-year ARM was the stupid part.
Not stupid, but definitely short-sighted. They made some mistakes (who hasn't) but if they learn from them, they will be in another house one day and older and wiser.
Deceptive word play aimed at the ignorant. When will it sink in? Stupid people do stupid things. Let them suffer so the lesson is learned.
If it is the builder I think it is, they tend to buy down interest rates and jack up the price of the home to compensate. Its great for the first year, but then they are left with overpriced poorly built house in a neighborhood with numerous foreclosures. Been going on for a while.
The standard motto of a loser.
Sad
It's all about income and expenses. It can be managed but the streams are what they are.
"(I see stupid people. They're everywhere. They don't even know that they're stupid.) *Rolleyes* "
These people aren't stupid, they're just ignorant, and thus, manipulated. Big Difference, IMHO.
For as long as our schools are more concerned with teaching a relative morality where Johnny gets 2 daddys or 3 mommys and everything is OK as long as it feels good, this will continue to occur. For as long as our schools (and the NEA, implicitly) are more concerned with stuffing our kids with communist and socialist idealogy, this will continue to occur.
When (not likely ever) our schools (which WE pay for) get back to the business of teaching the 3Rs, American Pride, Capitalism and good old fashioned common sense, we will begin to see a change. When Johnny learns (in school) about buying cars, houses, investments, insurance, loans, negotiating strategy, simple money management, and a whole host of other pertinent, relevant REAL LIFE issues, we will begin to see a change.
I'm not holding my breath.
R3
Well, sure...but a kind of stupidity heavily pushed by mortgage lenders. I'll bet 30-40% of homes sold in California over the last five years are occupied by buyers who used some similar trickery to "get your piece of the American Dream...before it's too late!"
If it becomes an epidemic, expect the Democrats to call for massive new Federal spending on "housing relief" - on the theory that it is unfair and disruptive to kick people out of houses they can't afford, and it would be better for the government to "help" them make their payments. Ultimately, the taxpayer will get stuck footing the bill, just like in the S&L meltdown of the 80's.
This was Mistake #1.
And Howell figured the value of their home could only go up in the five years they planned to live there.
This was Mistake #2. Ten bucks says the Howells owned a lot of dot-com stock, too.
It's interesting to see these sob stories all over the media these days. I don't have a shred of sympathy for these folks.
***Shawn Howell gambled and thinks he lost. Would he have spent more money by selling after two years at a loss or by renting at nearly the same amount for two years?***
He lost by buying. If the bank forecloses, it will sell the house for whatever it can get, which will be less than Shawn paid. Shawn still has to pay the difference in what he paid and what the bank sells for in order to satisfy his two mortgages. His two years of mortgage payments will have been interest on the loan only, as is the usual way with mortgage loans, believe it or not. In other words, he has no vested interest in the house.
If he had rented at the same price, he could walk away without any debt to repay.
R O T F L O L!
***The real reason is that banks allowed people to borrow money on houses they clearly could not afford - this is the big change from 5 years ago.***
Right. And the banks are irresponsible in doing so.
"Is this example the best the Bush-hating MSNBC could do?"
We may be looking at a second meltdown.
***Is this example the best the Bush-hating MSNBC could do?***
Notice that they posed Shawn in his army camies. THAT makes it Bush's fault. s/
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