Skip to comments.Resentment Grows Over Paying for Others' Foreclosure Misery
Posted on 02/20/2009 2:51:38 PM PST by metmom
Michelle Fry is a suburban Atlanta homeowner who has seen the value of her modest one-family home drop by more than half in the past year. She now sees a national mortgage bailout plan that appears to reward people who bought more house than they could afford and can't pay their bills. And she has a simple question for President Obama:
"Why am I paying for them?"
"We are very frustrated and scared," said Fry, 32, a newly expectant mother who works as a creative director for a public relations firm. Her husband Sam, 38, is a truck driver for a local printing company. Their combined household income is less than $100,000.
(Excerpt) Read more at foxnews.com ...
We'd all be in jail!
Uh oh. Better get those finances in order, Mrs. Fry. The White House will soon be calling you out as well.
That said...it’s beginning...
Anyone else having problems with the fox news website? I can’t get the pages to load.
Do I continue to invest, or do I cut and run? he asked.
Cut and run. FAST. ODumbo will save you!
Welcome to the new ghetto Michele Fry. So your house lost 1/2 it’s value? Its the sacrifice ZerO wants of you. Enjoy the change you can believe in!
I saw the Administration talking how about bad it is to be under water (or on the verge) on a mortgage. For the majority of people, this is not any big deal. I am probably 25% below my mortgage, however, I still make my payments, that hasn’t changed. As long as people don’t have to move, shouldn’t they just continue to make payments. It’s funny how no one in the press asked why homeowners having their home values fall (when they don’t have to sell), is such a crisis.
He and his media flaks can blame Bush all they want but people will have no patience with vanishing retirement accounts and high unemployment.
When I click on a link, only the headline will appear with no article. I have tried different browsers with no luck.
Somebody on another thread pointed out that 90% of mortgage holders do pay their mortgages and that the fact that 10% do not is hardly the stuff of crisis. But if you listened to Bambi and Friends, you’d think the statistics were exactly the reverse.
This is being manipulated.
What I’m gathering is if you lost your equity then you won’t be selling your house and trading up. If you are 25% down you won’t be doing that for years and years probably if ever. Since so much of our economy seems to be based on churning the real estate market having people sit on a house isn’t going to put any money in anybodies pockets.
see, say payday! see, say payday!
Only that site. All else are fine. Some slower than others.
Only the profligate, venal and stupid are bailed out by the thrifty, honest and wise.
It's about 'Equality' dontchyaknow...But as in George Orwell's classic 'Animal Farm' there are various levels of equal.
I would guess that the association pays for things like cutting the grass, maintenance for the outside structure, etc. They collect a regular fee from homeowners so that everyone shares the cost.
There may be fewer owners but the grass still needs to be cut, painting needs to be done, etc.
People who overbought McMansions should be booted out, mortgage holders should boot them out and sell to someone else. If a person has a modest home and lost their job some temporary relief should be considered.
For 2/3rds of the GWB Administration we did just fine with the economy overall and unemployment hovering around 4.2% on average..just for the real record.
That’s good. I’ll have to consider that for a sign...
The first mortgage forclosures are just the tip of the iceberg. What are the banks and mortgage companies who hold the second mortgages on these default properties going to do? Believe me, I am betting that over 50% of these properties have second mortgages or inflated lines of credit on them. You know the “home improvement” credit lines that were obtained for a vacation.
I would say that there are probably some people who expected to sell out and retire to a cheaper home. Now they can't sell, and are stuck continuing the payments on a fixed income when they never expected to.
There are probably also some people who have lost jobs specifically because of the economy or have had a catastrophic illness and can't get out from under a payment they can no longer afford because the house won't sell.
I feel for people in these situations. They've been screwed. If they were the only ones we were going to help, I could agree with that. But this is a tiny percentage of the problem, and $8000 isn't going to help them much anyway.
All I meant by my comment is that we all know the media is in the tank for Obama and will not blame him for anything going wrong. The libs will instead keep saying it's all Bush's fault, just as they've been doing the last eight years. Much more of this bad economic news, though, and I think opinion will begin to turn no matter what lies the MSM tells to save the Obamessiah.
The stock market is a leading indicator, basically looking at what they think the economy will look like in 6-9 months. What is happening now is Wall Street has no confidence Porkulus, the mortgage bailout or the Geithner "I'll have to make this up as I go" plan will work.
I know we all hate Obama, but what they are trying to do is slow down / halt foreclosures.
The thought process is that until home prices stabilize, the banking industry is in trouble.
Even though it is good policy to avoid personal debt, business's depend upon leveraged money (the banks) to keep going.
So, stopping foreclosures stabilizes home prices, which stabilizes banks, which allows them to loan to business's, which, hopefully, will keep us out of a 30 year economic decline.
No, it maintains the bubble and kicks it down the road. Keeping people in homes they cannot afford is putting a bandaid in an amputated limb.
Home prices will stabilize when supply and demand coalesce, that's how capitalism works. Stabilizing home prices above the level where young people can afford to buy them accomplishes what economically?
Except for the transfer of wealth from folks who bought what they could afford to people who bought what they could not afford of course.
Uh oh. Better get those finances in order, Mrs. Fry. The White House will soon be calling you out as well.
That said...its beginning...
Indeed it is Carling, well said.
As for Ms. Fry, “Why am I paying for them?”, here is the answer:
It works like this Ms. Fry: Remember Mr. Obama’s reply to “Joe the Plumber” that he would spread the wealth around?
According to “Obamanomics” brand of socialism, if you make
$100,000.00 per year, your next door neighbor makes $75,000.00 per year and your third door neighbor makes $50,000 per year this is not equality and should be reconciled.
You will have to relinquish $25,000 per year to your third door neighbor bringing his income to the same $75,000 that you will have remaining and keeping you both equal to the next door neighbor’s income of $75,000.
This program will result in everyone being equal financially and when he taxes everyone by 50% of their income, no one is encumbered more than the other. Also each will qualify for the same level of Government subsidies.
See how simple this is? Everyone can feel good about living at the same level of poverty and dependence on the government with no hope of improving their lot in life.
Now, having an honest answer to your question, doesn’t it make you feel much better?/sarc
I was really hoping to retire with some income security, but it may be a will be out of work in a food line.
In the words of Dear Leader you are spreading the wealth around.
That’s right. The nation started really tanking only after the Democrats regained control of Congress.
“The thought process is that until home prices stabilize, the banking industry is in trouble.”
My point was that home prices are not going to stabilize because they are over-mortgaged. Example: A home was sold two years ago in a development that still has on-going new builds, sales and starts. The owner owes $150,000.00 first mortgage and $25,000.00 on a second. The precise home except it is new is being marketed for $150,000.00 by the builder with attractive mortgage terms. The owner is trying to sell the property for $175,000.00 to simply cover the mortgages and walk away. Problem, a buyer can by the same home for $150,000.00 from the builder. OR, in this same development there are probably 25 homes sitting empty because the owner turned key and walked away, the properties are in foreclosure, so a potential buyer can offer the mortgage company a short sale and probably buy the existing default property for $130,000.00. It is a noble thought to stop foreclosures but it is not just the first mortgages that have to be negotiated.
I believe this shows why the great experiment of “true democracy” always fails when the populace learns they can vote themselves a pay raise through the treasury.
The bottleneck is these banks want to get the toxic loans off their books but DO NOT WANT TO ACCEPT THE LOSS ON THE BOOKS.
Assume a 300k house now only worth 150k. KEEP IN MIND the current holders of the mortage (assuming they can even prove it) are NOT THE ORIGINAL LENDERS. The note holders are subsequent speculators.
Forclosure: Bank has to bid their final judgment 300k amount and then hold the house trying to sell it for 300k, plus pay lawyers, plus pay court costs, plus pay upkeep. loss on the books indefinitly until sold for whatever amount. Bank loses much more but is penny wise and pound foolish
Short sale: Bank has to accept the lessor amount of 150k but still has the costs and a loss of 150k. Bank will not allow current occupant to keep house and be the short sale buyer. loss on books assuming it is ever sold. again bank is penny wise and pound foolish.
Bankruptcy: finality in the extreme. The court says this asset is worth 150k and that is it. Assuming the laws change to pre 2005, then it is lien stripped. The bank gets 1/2 loaf. The loss becomes a certainty and written off on the taxes. Finality and certainty. However the banks don’t want that because they think option one will give them the 300k sooner than later via bail out cash.
Everyone I know in the Washington DC suburbs who bought a home in the early 2000s did so to try and take advantage of the housing boom. They all upgraded homes with profits from the sale of their existing homes and used unusual financing schemes to afford homes near the 1 million dollar range. Although most of them are not at risk of foreclosure they are sitting on homes no longer worth anywhere near what they paid for them. They took a risk with their money and now they have to pay the price. It is an outrage that taxpayers who were more responsible with their money should now be asked to pay for the risks taken by people trying to make an easy buck.
Yup, I couldn’t agree more.
I’d like to know what O pays for his Chicago “mansion”. I bet he doesn’t pay a dime. Someone has taken care of that for him.
Inherent in PROFIT is RISK. If there is no risk, there is no profit. If there is too much risk, there is no sense in lending, as there will be no profit.
Making the banks swallow more hit on defaulting mortgages =more risk. How will that free up lending?
The bank is already getting saddled with a property that is liened at up to twice it’s current value. How does it help them to be prevented from reclaiming even that from their losses?
This is like a game of musical chairs were the “loser” gets to stay in the game and just remain standing. Then the last guy with a chair is declared the loser and thrown out of the game.
You don't know that it's stupid to try to slip people money to keep them in a home that they cannot possibly afford?
As I understand it, the plan is to restructure the loans into terms that they can afford.
“She now sees a national mortgage bailout plan that appears to reward people who bought more house than they could afford and can’t pay their bills.”
Seems that what is NOT being reported is that the bailout also includes renters in homes that are being foreclosed on AND any renter who is facing homelessness. That little tidbit is also tucked into the stimulus bill.
Expect an Obama rant about selfishness soon.
LOL! Where does that image come from, a movie?
“You don’t know that it’s stupid to try to slip people money to keep them in a home that they cannot possibly afford? “
I know that it was stupid from the get-go in June 2000 when Bush pandered to illegals by pushing his “Ownership Society”. I wonder exactly what he EXPECTED would happen when you give people an opportunity to use their Section 8 vouchers as downpayment on a mortgage?
And people aren’t looking at the big picture, connecting the dots, and seeing the ultimate intent. Predictably, the more the crises grows the easier to sell the bipartisan/globalist’s agenda for a North American Union.