Story Comments

To selr
Yes you're right. Things do happen to people who are on top of things. Real Estate went bonkers and many people were trying to make money quickly(the flip) or live beyond ones means. Your plan is a good one. Supply/Demand. No one wants. No one buys. No one wins. We are at equilibrium again and prices drop and banks loose.
To jc-vista
That's right. Who is punishing the banks? Why aren?t the banks held accountable? Why do they get to write this off and we have to declare a 1099 (yeah I know, A law passed). Big Deal. You know. This reminds me of The Beginning of The Great Depression. The banks tanked and so did the Stock Market. This is not your typical cyclical business cycle.

Certainly everyone should rightfully blame the lenders. They have laws which protect them from their misdeeds. Get rid of title 11 1322(b)(2). Make it also that lenders cannot get more than the house if they foreclose and cannot come after the borrower they took away the home from. Logic, since they took the home, the person must find and pay for another place to live. The lender could adjust the loans to make default from happening. They do not! Take away the regulations which guarantee them profit for sticking someone to live with relatives, several friends or whatever is needed since they would have to pay back for having nothing. Those loans for sub-prime should be marked as unlawful and across the board rewritten to feasible alternative conditions.

Things do happen to even the smartest and at one time financially comfortable people. It is the economy right now, the loss of jobs, incomes being lost forcing people out of their homes. Everything has gone up in price, not value, except our homes. If you are one of the LUCKY ones to be able to hold on right now great, if not you are 'SOOL'. The mortgage companies say they are willing to help but I personally have been turned down, turned away and told sorry, go to family or friends for help. I'd rather sell or walk away, just like everyone else. Leave the banks holding enough empty homes to maintain and they will change their attitudes. I say we all walk away and leave them hanging out to dry. Thank you Countrywide, for NOTHING!!! Countrywide has the worst attitude of all. NO suggestion, no empathy, no deal...

To rgoldst
I'm not looking to blame anyone. If the banks would have kept their standards of 20% down or no loan, or if the banks would have looked at income verification forms closely, they would not have approved my parents and I wouldn't be in this mess. Face the facts, banks saw a chance to lend to people who wouldn't read those 20 or so pages and they stuck it to them: rich and educated taking advantage of poor and ignorant. It's and old story that goes way back. So now the banks, you, the consumer, and the economy will bear the burden. Can't wait till you have some foreclosures on your block and watch you property tank.

Everyone wants to blame the 'greedy lending institutions' however everyone also signed 15 to 20 pages explaining exactly the terms and penilties for borrowing the money to purchase their homes.

It seems to me that people always look for a scape goat and I don't think that blaming thier current bad fortune in the housing market on the lenders is fair.
In fact if you took an adjustable rate or another one of those loans where you can get in very cheaply then you made a bad decision and didn't take into consideration that the housing market could decline like it does every 8 to 10 years.

The lenders really don't owe the borrowers anything and if they should try to help you be grateful because it isn't and shouldn't be thier responsibility,

i'm currently in that situation. where are these banks that want to help? It sure isn't mine! They are pushing foreclosure not helping me! I asked for a forebearance agreement and they said yes if I gave them $38,000 Imagine that! I don't want to read another article about banks helping because its a bunch of bull and it gives all of us false hope that we will be saved from all this which is nonsense

Just foder for the rich? I?m 52, I have continued to pay all of my bills on time all my life, my home value sank by 40K, I couldn?t refinance earlier because of a big prepayment penalty which expired 12/07, my home mortgage is is 250K (2K monthly), the appraised value now is 250K, I earn 65K annually, I contacted Wells Fargo about holding back from increasing a 9% rate to 11% (2.3K monthly). They told me sorry can?t help you, you can?t afford the house, you need to earn 75K annually. So looks like it?s forclosure, bankruptcy or sell the house short (quoted 175K, a 75K+ Loss) So I?m dedicating the rest of my life to return the favor to Wells Fargo! Good Luck All!

Part 2 I had spent 4 months on this loan and did not want it to fail and couldn?t walk away because it was last resort for my parents. I was looking for a loan modification of an ARM which was about to expire into a Fixed Loan. But instead was saddled with ANOTHER arm. The only thing I got out of World Savings-Wachovia was no penalty. In the end I am determined to OUTSMART these unscrupulous B**T**DS. All the press about financial institutions wanting to help is crap. They are greedy little ba**** and are out to make money off of all of us.

I helped my senior citizen parents refinance a house that still had equity in order to secure money for other negative mortgages. In Miami a couple hoodwinked my parents in 2 awful mortgages. I was asked to solve my parent?s problem, started reading voraciously about the mortgage debacle, & proceeded to take the recommended steps. I went to talk to World Savings-Wachovia, had to jump 30 million hurdles to get money out. In the end the underwriter said to the World Savings representative I was working with. 'We got 'em where we want them.? meaning my parents.

That is completely based in fantasy. An unbridled market consumes itself. Regulating the market also in not foolproof since it only makes a group of regulators who become rich by monetary influences and the regulators' own greed.
The proposed laws that are presently in process will cut off the legality of companies making loans which are obviously not sustainable. We'll be able to have more confidence that the loans are in the better interest regarding the borrower.
The other laws should take care of the aftermath caused by the lender industries lack of integrity and aid those with highly unsound loans. I would not rescind the laws after the bad lending practices are somewhat neutralized, no rule of law means no integrity in the markets.

An unbridled, unregulated, free market, that is ruled by the laws of supply and demand, regulates itself. The less the government meddles with capitalism, the better.
But help me to understand your point of view, jc-vista...what about the housing industry is unfair to consumers, and what could the force of law do to impose fairness that is not there currently?

It is obvious that the lending industry is not going to be fair unless they are regulated into fair practices. Life is not fair has not much to do with regulating fairness. Fairness doe not come naturally to the excessive greed without regard to effecting our courts and 'trickle up economics'. The predators cannot poison those they feed on without the toxicity reaching them once again.
When our economy recedes due to their poor practices, we will all feel the effects as a nation.
I take it your remarks were in sort of sarcasm. Regulate, regulate, regulate. Unbridled markets do nothing but increase poverty and liquidate any middle class.

jc-vista seems to have come to the startling conclusion that life isn't fair.
'The industry is fully responsible for these underwater loans': Try reading 'Buying A House For Dummies' before borrowing six figures.
'An average person will look at a home and rely on the businesses to give them a fair deal.': No, only a sucker would do that.
'I bought from a home tract developer.': See above.
'The trouble is with having to pay excessive rent of $1000 for a two bedroom...Where does money for savings come from? Another job?': 1st, if it is what the market will bear, then it is not excessive. 2nd, another job? Sure, if that's what it takes; no one said affording a house would be easy. You can't always have what you want when you want it. Of course, you could just finance 100% of the cost of the house, get a 40-year, interest only, adjustable-rate, option-payment plan; that strategy has been popular with LOTS of impatient home-buyers recently.

Sympathy does little good in solving problems where a person can be set into a loan which has terms that could be expected to fail in a short term. The loan is 20 years plus for a lot of loans, so forward thinking should be more realistic and cover an honest prediction.
Saving up for a home and investing 20% into it sounds like a great thing to do. The trouble is with having to pay excessive rent of $1000 for a two bedroom, pay for high cost utilities and food. Where does money for savings come from? Another job? Living with other relatives? It rarely comes from a two person income with 40 hour workweeks.
Positives, the prices for homes are falling to more affordable values. Negatives, people are losing homes due to bad loans. No one is really expediting practical cures for the problem prevention and cure. The legislation is stalled to date.

The developer had a community file a class action suit on them and took a severe hit for issues related to houses that were not valued at or near what the builder set up people for loans in. I had the house already but the other community had success in the class action suite.
Regardless, the loan that I received should have been for a first time homeowner at a better term. I admit to my stupidity for trusting the developer was looking out for the best interest of the clients. Some of the proposed items in HR 3915 should aid in preventing future incidents nationally since trust in the free market policing their own actions in reputable practices is well known not to be the case.
Regarding in taxpayers bailing out these bad loan casualties, it is not the case. The proposals would give fair loans to us foolishly trusting individuals.

jc-vista - the loan you got or didn't get probably didn't have anything to do with predatory lending. You have a builder who has a mtg co who has an employee who probably wasn't trained If I understood what you were saying. A borrower, educated or not does have to beware. Shopping for the lowest rate & lowest fees has a tendancy to get a lot of people in trouble, not all but alot. As a lender I listen to what my clients tell me they want, most of the time I have to tell them why they don't want what they are asking for. Interest only, negative ammortization once I explain what that loan is and what happens they don't want it and if they do they can go somewhere else and most of the time they do. There are a lot of borrowers out there that make that choice those people can't be saved by 'anti predatory' lending laws.

Banks are in business to make money. Is that a surprise to some?
If people are stupid enough to buy homes with little or nothing down, not read their contracts, then finally figure they can't make the payments, why should we (the taxpayer) bail them out. Reward stupidity?
Interest rates go up and down. Housing prices go up and down. You take your chances when you borrow.
Let the stupid people lose their homes, and let the dumb banks take their losses for making unsecure loans.
Don't bail anyone out with my tax payments!

'Predatory' - by nature I beleive there is some predatory nature in the buisness of loaning money. Lets be real, beneath the superficial cover of the lenders desire to help us purchase our homes. They wanna make 'a buck'. The assurance that they can get back what they loan plus 'a buck' is to give you a loan with interest matching the risk level that you present due to your past credit history. I beleive in paying what you borrow and minimizing the extra 'buck' over time. ARM loans or any kind of variable interest rate loans is unwise to me. Gimme a set low interest rate so I know what to expect. As a borrower we should use our 'good' credit scores, level of income and options of diffrent lenders as an arsenal to negotiate terms that are sensable and not rely on the lender to look out for our best interest. Dont let the other guy drive your car, especially if your the one who's gotta make the payment.

I spend about 5 dollars a week on lunches. I drive a car that is 6 years old and amnot bad in math. This is my first home that I have financed. I rented previously for the 25 years after leaving high school. An average person will look at a home and rely on the businesses to give them a fair deal. I know that I bought from a home tract developer and all was financed from that end. Why my first time home purchase did not come into play or a decent termed loan was not arranged is simply predatory in nature. Hopefully Congress and the House will work on getting the legislation passed. I face the effects of an ARM while also facing favored protection for loans secured on primary residences. One bill HR 3915 imposes regulation. The other bill HR 3609 removes regulation or favoritism. I have no credit cards or extravagant consumer purchases or an excessive lifestyle of living beyond my means.

No jc-vista the 'industry' is not responsible for the underwater loans. It is the stupid, ignorant, clueless would be home owner. If these morons had a fundamental grasp of third grade arithmetic and had any control of their insatiable appetite for 'I deserve' everything and I deserve it now, they would not be up ships creek without a paddle. They would have known that they could not possibly afford their McMansion, the plama TV, the SUV and the BMW in the driveway, the cable TV, the $40.00 per day on lunch and Starcrap coffee, the bottled water (you need to be crazy), the fancy vacations, and the rest of the endless list of goodies. Believe me, I have seen them all. I just laugh at them and ask them what does debt mean? What is that thing called a mortgage? Then I get in my 10 year old car and drive home with a smile.

The industry is fully responsible for these underwater loans. The loans were made by lowly regulated industries who by no means were trustworthy. I read all the time that the borrower was greedy. It is not the case. The institute did not regard the real estate taxes and home owner insurance along with certain other fees related to homeownership. Two bills in the House, HR 3915 for the regulation of fair loans and HR 3609 for helping out those currently with bad loans are great steps. Senator Durban and Senator Dodd have legislation in progress for these problems a free, unregulated market caused. We don't seem to preach no regulations for social predators. Economic predators are no better.

I worked 25 years for bank so I am familiar with mortgages. Two major reasons that that there are many people with negative equity are low downpayments or no downpayments when the mortgage is taken out and 'cash-out' refinancing where equity was withdrawn during the housing bubble to support an excessive lifestyle for their income level. When housing values level out or decline, there is a crisis. I do not feel sorry for these people. In effect, they have 'rented' homes at below market prices and lived above their means for the last couple of years. Now they have to find new rentals that they can afford t current market prices. Also to blame are greedy/irresponsible financial institutions who enabled spendthrift Americans with no documention (liar)loans or extreme low teaser rates which reset at much higher interest rates in as little as two years. Finally, the US government's policy of pushing increased homeownership to marginal borrowers compounded the problem.

We are experiencing the death spiral syndrome. Home values will continue to spiral downward until a point of equilibrium is reached....that is, when people can actually qualify on a full doc loan program that will most likely be a fixed rate. The average income where I live is about 52k and utilizing average debt figures, values will have to come down to an average of 300k. Currently, values are more in the 500-600k range which means we have a long way to go. We were in the 700-800k range 2 years ago so the decline has already been substantial but the worst is yet to come. Tighten your seat belts folks, a depression is looming in the not too distant future. Educate yourself about the truth and it will set you free.

I think people who can afford the house payment but they just 'dont' want to should suck it up and do the responsible thing and stay put. There are people that walk away because they can't refinance and they want to. It's a little harder for all of us to pay bills. AND if you do let your house go back or you do pay your bills late or you have a bunch of collections don't call your bank or mortgage person and say I deserve a mortgage because no you don't. you can't pay the bills you have on time what makes you a good credit risk... pay your bills, save some money and then you get to borrower money. www.indigodearborn.com - ctal@sbcglobal.net - 'mortgages made easy'

Most of the people I talk to as a mortgage broker are net ellibible for any kind of help. They do not qualify for the mortgage they have or even for a new mortgage if the value of the house wasn't so low. Not all but a lot of the people who are not able to afford the mortgage payment can't because they fail to budget, they want what they want when they want it. I think the saying my dad used to say to me is 'you don't always get what you want' and 'life isnt always fair'

Fwsports is 100% correct. Those of us who live our financial lives responsibility not only get nothing from the system, but we get to pay to bail out the irresponsible with our hard earned money. Although I am 63 years old, retired, no pension, never made a six figure income I can not get a penny of free money for college tuition for my kids. Why? My house is paid off. Money in the bank. I?m not one of the privileged under-privileged groups. If I had spent every penny, had a big mortgage, was in debt up to my a$$ I would have gotten grants. Ask me how much sympathy I have for those that will lose their houses?

Mr. Good Homeowner Fwsports:
The answer to your question is 'NO?, you will not receive a tax Credit, in fact people like you and I will bear the tax burden for the people who received the tax credit. The homeowner, financial institutions and their stockholders should bear the entire burden and consequences for financing homes with ridiculously puffed up price tags.

So, as a good homeowner in the sense that I purchased what I could afford, I paid over 20% down, I did not lie on my loan application, I have never had a late payment, will I get some sort of 'tax credit' like those that will receive the FED Mortgage forgivness debt relief whatever act......or will those who deserve nothing, those who lied, cheated, knew better, etc, once again get something for nothing?....