Millions Spend Half of Income on Housing

AP Via WalletPop ^ | September 23, 2008 | ADRIAN SAINZ and ALAN ZIBEL

[<1/1,000,000th%]

Strange that I could never get that kind of a loan.

[Sacajaweau]

Pay 15% on taxes and next year, when you add in that raise, they’ll get more than the 15% you paid last year.

[UCFRoadWarrior]

Some good comments....but really dumb ones like “he should sell his house and move into a smaller one”...

Obviously some in here are living in Mommy’s basement and paying no rent. In Florida its impossible to sell a home right now...so there is no leaving a home unless a bank forecloses.

The past few years, I stayed in a rental even though I could afford a home. Thank God I held off...because even people with normal mortgages are having problems in Florida due to non-market rises in housing costs.

The prices keep coming down, so soon I can snag a house

[p. henry]

Oh for Pete's sake. Cry me a river. I am getting so tired of hearing about the plight of overleveraged homeowners. These people are grownups. They made their own investment decisions. In many cases they looked at the market and decided that in an inflating market more leverage is better than less. In other cases they just had to buy that boat, recreational vehicle or other toy, and their "equity" enabled them to do so. In other cases they really could not afford to own any house but nevertheless decided to buy one. BUT THEY ARE NOT VICTIMS. They got other people's money in returm for a promise to repay it and are now defaulting on that promise. In an adult world when you default on such a promise, bad things happen. Mommy can't tiss your booboo. The government doesn't compel your lender to make it all better.

I feel the same way about the big investment houses and the institutional investors to whom they sold CDO's. They made investment decisions. They should live with the consequences of those decisions. The real (non-financial) economy clearly requires liquidity. If the continued existence of what is left of Wall Street is required for that purpose, fine. Put it on life support to the extent necessary to serve that purpose. However, if Wall Street truly is insolvent, then the equity and debt holders of the big investment houses should lose their investments and the big compensation packages have to go away. I am not interested in insulating them from the consequences of their actions, just as I am not interested in subsidizing people who were real happy with the effect of overleverage until the bubble burst.

[AndyJackson]

I hate to say it guys because I am not in favor of bailing these overleveraged owners out, but the leverage that Greenspan poured in allowed the prices to be bid up by banks/brokers/etc. With enough money they can sit on the offer price, and if you want a house you have to pay. They even made it easy. Let me show you how you can afford this house: no interest, no principal, no documents, etc. Fine print: 4 years from now DC will have to bail us all out.

It's all part of the same tidy package WS just dumped on Congress's doorstep.

[yazoo]

Maybe Ray should have put together a budget before he bought the house.

[mplsconservative]

Good tips, Marie!

I’ve found it much easier to not dine out very often, living 30 some miles from my favorite restaurants. And I’m only kind of kidding. :) My tastes, when dining out tend to be a little out of the norm. I like to have things I wouldn’t make myself like spicy beef Jaimaican patties.

I appreciate that when I cook, I know exactly what’s in our food. We have a fairly large garden so this time of year is wonderful. I’m pretty frugal myself, so I liked your post!

[untrained skeptic]

Buy a smaller house, Ray. One you can afford next time.

Easy to say, but a lot of people bought houses they could afford at the time but things have changed. They lost jobs, or lost income at a job the relied heavily on commission, bonuses, or overtime.

In my case, I got divorced and stuck with the house...

The house is now worth about 20% less than it was four or five years ago.

If I sell now, I lose a huge amount of my savings that I had sunk into the down payment. However, I can't rent the place for as much as I'm paying in my mortgage, fees and taxes despite having put down 20% when I bought the place.

I didn't really have a choice, so I recently started renting the place. I'm losing a couple hundred dollars every month, plus whatever it will cost to fix the place up to salable condition when I'm done renting it out. I'm now renting out my brother's basement. Not how I'd planned on ending up at 40 after being reasonable with my finances and not overextending myself, but I'll be back in reasonable shape once the housing market recovers. It may be a few financially tight years between now and then, but there are no guarantees that life will always just keep getting better and better without any setbacks along the way.

[Marie]

Have you heard of the Tightwad Gazette?

I’m trying to take frugal to a whole new level over the next 6 months. Put up chickens and a garden, making quilts out of scraps, weening off of garbage bags, composting, etc.

I’m spending a LOT of time these days wandering around looking for “holes in our bucket”.

The kids are the biggest holes! When they come home from school, lights get flipped on, water starts running (and running and running...), the air conditioning is dumped out the front door again and again, food gets wasted...

I’m becoming quite the harpy! lol!

My daughter’s almost got it. She scrounges the ground for dropped change around the school. Her friends tease her, “Quick, Jew! There’s a penny!” One of her friends asked her why she bothered with pennies. She replied, “Because five pennies make a nickel!”

She’s collected $51.00 this month.

[mlocher]

Pay 15% on taxes and next year, when you add in that raise, they’ll get more than the 15% you paid last year

I can hear the dems in congress right now hollering, "Cha-ching!"

[Dagny&Hank]

He struggled to make his $1,400 monthly mortgage payment and $330 monthly homeowners' association fee until May, when he stopped paying

Boo, Hoo!

And here I thought that $500 per month in rent (which includes taxes, sewer, and water) was rough on a $1000 per month income. The only way I'd buy a house is if I could get a mortgage for $400 per month (with taxes, sewer, and water making it $500/month). In other words, a $50,000 house (500 sq ft) with a 15 year mortgage (I've not enough confidence for a 30 year mortgage).

[mplsconservative]

Whoa! I think I’m going to go into town and start looking for change. That’s quite the haul.

I’m not quite as ambitious as you are. I’d love to have chickens but between the neighbors and the coyotes, I wouldn’t be very successful. Quite frankly, it worries me to let our little terrier out at night and we have a fence.

I’m happy to have acquired a freezer for free from a neighbor that moved. Been shopping the sales at the grocery stores and stocking up on the two for ones. It sure beats trying to stuff food into our side-by-side freezer.

My one and only “crumb cruncher”, (he’s eleven) is about home from school. Time to make snacks! :)

[Recovering_Democrat]

Al Ray is so strapped for cash, the only time he eats out is on Wednesday or Sunday, when the local McDonald's sells hamburgers for 49 cents.

Man, what a tragedy. I'm about to bust out cryin'.

[Darnright]

>And in Las Vegas, the Nevada Fair Housing Center is helping Rita Harvey renegotiate her mortgage from $2,700 to around $1,800 per month. Harvey, 64, lives on about $3,300 a month in social security and disability payments for herself and her four disabled grandchildren. She nearly lost her home this summer after her adjustable rate mortgage payment jumped.<

How unfair! This poor woman is destitute! Destitute, I tell you!

[dragnet2]

So get another job or live in more affordable housing.

Yes, he should quit spending, pull himself up by his bootstraps and not expect government handouts or bailouts..

Wait a minute.....???

[TASMANIANRED]

He only eats 2 days a week.

He can make a mint selling the newest diet craze.