How the housing sector went under

garv221

Simple example.

http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true

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BeaverC32

Loved it! Although it is sad that it is true. My dumbass friend bought a house with no money down so he has a monthly payment that is well beyond what he can pay himself. In order to pay it he is having his brother, his brother's girlfriend, and his friend living with him paying rent. He is also trying to rent out his spare bedroom. Plus his school taxes aren't rolled into his mortgage so it will be interesting to see his reaction once that bill comes in.

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

garv221

BeaverC32 wrote:

Loved it! Although it is sad that it is true. My dumbass friend bought a house with no money down so he has a monthly payment that is well beyond what he can pay himself. In order to pay it he is having his brother, his brother's girlfriend, and his friend living with him paying rent. He is also trying to rent out his spare bedroom. Plus his school taxes aren't rolled into his mortgage so it will be interesting to see his reaction once that bill comes in.

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

Did he buy an ARM? Or is he just simply a dumbass who bought a 30yr fixed at a rate much higher than he could afford?

keenon

the true problem is that he was sold something they knew he couldn't afford.. no verifications just all around bad deal. alot of mortgage brokers and banks sold people into bad deals for $$ commission checks .. sub prime lenders and programs that the broker/bank put you in offer better $$ than the normal stuff

predatory lending is what its called:
One less contentious definition of the term is "the practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against."[1] Other types of lending sometimes also referred to as predatory include payday loans, credit cards or other forms of consumer debt, and overdraft loans, when the interest rates are considered unreasonably high.

Although predatory lenders are most likely to target the less educated, racial minorities and the elderly, victims of predatory lending are represented across all demographics.[2][3]

Predatory lending often occurs on loans backed by some kind of collateral, such as a car or house, so that if the borrower defaults on the loan, the lender can repossess or foreclose and profit by selling the repossessed or foreclosed property.

dave0212

Great, but unfortunately so true

garv221

Keenon

^ Agreed. Even though this situation has the same stance as "Guns don't kill people- people kill people" There should have been better restrictions and the banks should have never approved loaning ARMS and Interest Only to those who cannot financially swing the change in monthly obligations a year later. Just a nasty situation where people were told what they wanted to hear and not told what they didn't want to hear when getting a mortgage.

bertieb

125% mortgages FTW!

mengo17

BeaverC32 wrote:

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

When it comes to housing only?

dynamik

That was great. Thanks for sharing. I saw one of those images on Digg, but I had no idea it was part of a larger project.

undomiel

mengo17 wrote:

BeaverC32 wrote:

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

When it comes to housing only?

Not in my experience. Just this morning my wife read a journal entry from a college girl who just got a brand new 2009 Honda Fit. It's sad that she'll be paying for that one for a long time.

garv221

undomiel wrote:

mengo17 wrote:

BeaverC32 wrote:

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

When it comes to housing only?

Not in my experience. Just this morning my wife read a journal entry from a college girl who just got a brand new 2009 Honda Fit. It's sad that she'll be paying for that one for a long time.

A 2009 Honda Fit costs about 16K, that is not a big deal at all.

EJizzel

garv221 wrote:

Simple example.

http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true

This is great, I already forwarded the link to my co-workers.

My wife used to work for 2 mortgage companies and would come home every day with stories of people with a 500 credit score getting approved for a loan. She would actually not approve many loans but would get overridden by the higher ups.

The funny thing is one of her old bosses just got sentenced to 18years for filing fraudulent loans and pocketing the $$$.
http://mortgageblues.us/news/488

undomiel

garv221 wrote:

undomiel wrote:

mengo17 wrote:

BeaverC32 wrote:

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

When it comes to housing only?

Not in my experience. Just this morning my wife read a journal entry from a college girl who just got a brand new 2009 Honda Fit. It's sad that she'll be paying for that one for a long time.

A 2009 Honda Fit costs about 16K, that is not a big deal at all.

It's a huge deal if you don't have $16k.

dynamik

I think income in relation to whatever type of loan is the important thing to look at. A $16k car is a lot if you're making minimum wage, but it's nothing at all if you're pulling down six-figures.

dtlokee

16k? I have at lest that much in my spare change drawer...

garv221

EJizzel wrote:

This is great, I already forwarded the link to my co-workers.

My wife used to work for 2 mortgage companies and would come home every day with stories of people with a 500 credit score getting approved for a loan. She would actually not approve many loans but would get overridden by the higher ups.

The funny thing is one of her old bosses just got sentenced to 18years for filing fraudulent loans and pocketing the $$$.
http://mortgageblues.us/news/488

Wow, now that is a serious sentence that was deserved.

BeaverC32

mengo17 wrote:

BeaverC32 wrote:

I see so many people spend beyond their limits when it comes to housing, it's ridiculous.

When it comes to housing only?

No, but it is more pronounced with a 100k+ loan versus , for example, spending a couple thousand on a vacation you really shouldn't be going on. People purchase houses for the max amount they were approved for, but don't factor in other expenses such as utilities, groceries, repairs and general maintenance, taxes, etc. In other words they can afford the mortgage but then realize they forgot to factor all of life's other expenses.

garv221 wrote:

Did he buy an ARM? Or is he just simply a dumbass who bought a 30yr fixed at a rate much higher than he could afford?

Simply a dumbass that has a 30yr fixed rate. He bought it late spring of this year and is already talking about selling the house. Absolute idiotic decision to buy a house in the first place, but live and learn I guess.

rfult001

Wow! Give this to Bush and Co. It might give them some insight.