[zek157]

Delaying the inevitable with plastic. Hard to believe someone would be in this position within a year of buying the house.

At least it takes a year to loose a house in IL.

[dfwgator]

In August 2006, Reeves and her husband bought a $214,000 home with almost no money down

Mistake #1.

[LibWhacker]

...especially with her husband's furniture sales job largely commission-based...

What, only one job??? Each of them should probably be working two.

[RightWhale]

"Now all I'm doing is making the minimum monthly payments."

Paying them off can be one of the hardest things to do.

[Obadiah]

In August 2006, Reeves and her husband bought a $214,000 home with almost no money down, leaving them with a monthly payment of $1,636...The next worry? The U.S. holiday retail spending season is rapidly approaching and, according to Rosenberg and others, this could push many home owners over the edge.

Where to start. First off, this couple no doubt started getting in trouble months or weeks after they bought the house as the loan was originated in August 2006. What does that tell you. Second, the monthly payment amount of $1,636 on $214,000 borrowed cannot include property taxes, which in Illinois adds probably another $350 - $400 on top of the $1,636 amount. The article seems to imply that this couple will max out their credit cards, save their house, and declare bankruptcy. Finally, to all the fools out there who there who will load up on the $20 cheap plastic Chinese garbage as Christmas gifts and lose their house...don't come crying to the government for a bail out. And NO SOB stories in the MSM!!

[ikka]

"We fell behind (with the mortgage) and twice we agreed to new repayment schedules that didn't work out," said the 31-year-old, a compliance officer at a small bank on Chicago's blue-collar South Side. "It's been a lot of stress. But this time, if all goes well, we should be able catch up."

In August 2006, Reeves and her husband bought a $214,000 home with almost no money down, leaving them with a monthly payment of $1,636 -- higher than they planned on, especially with her husband's furniture sales job largely commission-based and business not good due to the U.S. housing slowdown.

They bought at the top, went higher than their planned budget, and were dependent on commissioned sales to make the payments. What did they think was going to happen?

[4yearlurker]

A classic case of people who cannot manage their money. Imagine going into more debt because you are in debt.
My wife is trying to talk me into getting ONE credit card,(Discover)I’m still balking at the idea. I like not being in debt up to my a$$!

[Hydroshock]

Economy/Credit/Housing Ping List

If you want on or off this list let me know.

[capitalist229]

So who gets stuck with the tab ?

Clue - it's an election year.

BUMP

[Sloth]

But as part of her efforts to avoid defaulting on the mortgage, Reeves said she has "maxed out" all her credit cards, spending to the limit on basic needs. "Now all I'm doing is making the minimum monthly payments."

Brilliant! I bet the next ingenious step is payday/car title lending.

[jalisco555]

Another reason for debacles like this (aside from this family’s financial mismanagement) is the whole notion that everyone should own their own home. Many people who are in trouble today would have been far better off if they had rented. Home ownership is a siren song for some people.

[McLynnan]

Reeves and her husband bought a $214,000 home with almost no money down

Big mistake. People who demonstrate an ability to save for a downpayment have shown they have some financial discipline. Used to be you had to put at least 10-20% down and have a decent credit history to get a mortgage. Today's clueless buyer takes out a jumbo mortgage with no money down then maxes out their plastic furnishing the place.

[ex-Texan]

Foreclosures in Bay Area and Statewide Hit Record Highs in 3rd Quarter

Statewide, 24,209 homes were taken back by lenders in the third quarter, also the highest level recorded. That was up 604.8 percent from last year's third quarter, when 3,435 California homes were lost to foreclosure, and a 38.7 percent increase from the preceding April-to-June quarter of this year.

"We're deep into uncharted territory because we've never been in this boat where the housing market is weakening so much in the absence of a recession," LePage said. "We've never had this widespread use of very risky unconventional loans."

Subprime Catastrophe Was Foretold in 2004

Excerpt:

"Increased subprime lending has been associated with higher levels of delinquency, foreclosure and, in some cases, abusive lending practices." So declared Edward M. Gramlich, a Federal Reserve official.

These days a lot of people are saying things like that about subprime loans -- mortgages issued to buyers who don't meet the normal financial criteria for a home loan. But here's the thing: Mr. Gramlich said those words in May 2004.

And it wasn't his first warning. In his last book, Mr. Gramlich, who recently died of cancer, revealed that he tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere. * * *

A new report from Congress's Joint Economic Committee predicts that there will be two million foreclosures on subprime mortgages by the end of next year. That's two million American families facing the humiliation and financial pain of losing their homes. * * *

In a paper presented just before his death, Mr. Gramlich wrote that "the subprime market was the Wild West. Over half the mortgage loans were made by independent lenders without any federal supervision." What he didn't mention was that this was the way the laissez-faire ideologues ruling Washington -- a group that very much included Mr. Greenspan -- wanted it. They were and are men who believe that government is always the problem, never the solution, that regulation is always a bad thing.

Unfortunately, assertions that unregulated financial markets would take care of themselves have proved as wrong as claims that deregulation would reduce electricity prices. * * *

In fact, both borrowers and investors got scammed.

I've written before about the way investors in securities backed by subprime loans were assured that they were buying AAA assets, only to suddenly find that what they really owned were junk bonds. This shock has produced a crisis of confidence in financial markets, which poses a serious threat to the economy

I have been posting warnings here since 2003, myself. Hardly anybody listened. Others attacked me maliciously. Over 2,300 hacking attacks were launched from corporate web sites. Criminal conduct from corporate criminals. So what else is new? Nada por nada.

Oh, well. Nothing to see here. Greenspan was responsible for creating at least three huge bubbles. Dot.com. Housing. The Credit bubble. Add to that the Bubble Economy. Now were are dealing with a dollar crisis created by the Federal Reserve System. Watch the middle class get shafted as the dollar implodes.

Open borders. 30 million illegal aliens are here already. Nobody gives a shi'ite. Bubble economy. Bernanke wants to lower interest rates yet again. Why? To benefit his cronies on Wall Street, mortgage lenders and credit card companies. Yet, no benefits will flow to middle class Americans. We all get the shaft. Need I say more?

[Centurion2000]

The reason? A second debt mountain on top of the first.

Rising mortgage payments and tighter lending standards for refinancing amid the subprime credit crisis have dried up once-easy access to home equity loans for many middle-income borrowers -- so desperate borrowers are using credit cards to cover basics while trying to keep up with home payments.

Now we know why Congress has made it damn near impossible to declare bankruptcy now.

[dalereed]

“said the 31-year-old, a compliance officer at a small bank on Chicago’s blue-collar South Side”

That bank sshould fire her immediatly!

[MD_Willington_1976]

Holy crap, 1600+ a month with one job...

I complain about 900 a month and I make close to 3600 a month...

[Oatka]

Years ago Chuck Harder was talking about those who were going to lose their homes because of non-payment, for whatever the cause.

I remember two suggestions:
1) If things are so bad it looks like you’re going to lose the house (as in this couple’s case), don’t make any more payments - save those precious bucks to start over. It will take the lender at least 90 days to get you out.
2) (This I found a most interesting CYA). On the last day, just before you leave, take pictures of every room as well as the outside. Have that day’s newspaper showing in each pic to date the picture-taking (at least you know it wasn’t taken earlier than that date). This would be a godsend if the place was trashed after you vacated and the lender claimed you left it that way.

[RobRoy]

The only way buying time in this fashion will make your position better than when you started is if, during that time, you win the lotto.

Otherwise it is a serious mistake.

[Chili Girl]

"If they spend a lot, about three months after Christmas when the bills and mortgages are past due, we could see a rise in delinquency and foreclosures."

Perhaps MANY PEOPLE should re-think Christmas spending this year also.

[Freedom4US]

I shouldn’t criticize, but what’s a “compliance officer” at a bank? Shouldn’t they be reasonably expected to know better than most what they are getting into? Further, that borrowing at high interest rates on credit cards only digs the hole deeper?

[Alice in Wonderland]

Tomorrow is the forclosure hearing for a property I'm holding the mortgage on. Instead of using plastic, this fellow dismantled the shed last week and sold the roof and walls for scrap metal. I wonder how much more damage he'll cause before the foreclosure sale next month.