Housing bust: Share your story

I lived in Sacramento, California until I moved to Branson,Missouri in year 2004. Many of our family friends told us why we are leaving such a great Real Estate market. We’ve accumulated about 10 houses from 1999 with little down or some no down at all. Fortunately, we were luck to have the good renters pay our mortgages and some for those houses. We were a little hesitant to leave California and the bustling real estate market. We have decided anyway to move and placed all our homes for sale, and sold them all in a matter of days!!! Friends thought we were crazy, but, looking back we are so happy that some one was watching out for us.
We are so blessed to be here in branson, the beautiful country!!!!!!!!

I live in a small bedroom community in Southwest Riverside County, CA. In my Cul-da-Sac, there are 11 home. All were built 4 years ago and we all moved in at the same time. Now 4 of the 11 are abandoned and the families we once called friends are living in apartments. It is sad! So I’m getting involved. I got my CA Real Estate License and I joined a Company that is contracted by Mortgage Servicers to help families avoid foreclosure. We get paid by the Servicer and DO NOT COLLECT ANY MONEY FROM THE HOMEOWNER!!! I have personally helped a few families and it feels GREAT! I just wish more people knew about this Company. If you have done well for yourself, help educate your neighbors before you don’t have any! Trust me, it feels good.

Nobody should be judging others until they have walked in the other person’s shoes. I am a single parent and when prices on everything started to go up, and my income didn’t, I was fortunate to have the equity in my home to assist me with my expenses. When the housing market fell apart, I lost my equity and my ability to pay my bills. I bought my house at a price I could afford, but I did not expect the price of everything to go up so much faster than my income. The problem in this country is that the CEO’s are getting rich off of our hard work and the rest of us are going to be thrown into the lion’s pit. Stop giving businesses financial breaks and take care of the people of this fine country……I can’t wait until Mr. Bush is out of office.

The bailouts should be intensely selective if at all since it punishes responsibilty mostly. Yes there are always cases of bad luck and I think those are the ones that should be helped. There is no reason to reward stupity. If you could buy a house than you must have basic math skills to figure out what you could afford. What I don’t understand is out of all these comments, is everyone has bought in the last 4-5 years. I am 45 and bought our home in 1993 in Fairfield County Connecticut which is the second highest cost market in the country. I owe less than a $100K on a house that is according to the market now worth about $500K. I have a 15 year fixed at 5.5% and re-fied about 6 years ago so it will be paid off in September 2017. Unless everyone here is very young (and I don’t think I am that old), did everyone move in the last 5 years? Sure I would love a larger house than the 1600 Sq. Ft. Cape we are in but see no logical reason to take on more debt. All we owe is the mortgage and related expenses. I have saved my whole life, taken plenty of vacations, have way too many cars and been pretty lucky with my job. I understand how many can be under water but if they were even mildly responsible when they purchased there home to live in it shouldn’t really matter unless they are trying to sell it and move again. Eventually the market will settle down but other than certain places I don’t believe the values can go back to the ridiculous prices they were driven up to.

I continuously pat myself on the back for not making a bad gamble or investment on my home purchase. I chose to live below my means to afford myself some cushion in case one of life’s setbacks came at me. For those who live on the edge, it’s a manageable risk that you took, now you must pay. I have no sympathy for you. How many of those who lost on their current house, gained substantially on their previous sale. REPO the HUMMER and matching boat before any gov’t bailout. SUCK IT UP.

I bought my house from my ex-husband with the dream of giving the children a secure home in the midst of a painful divorce. I used every penny I had to pay off debt, and had taken a second to cover the mess I was left in.

I was incredibly ignorant then, and knew nothing about what I was getting myself into. I have spent two years here, but I just couldn’t keep up with the payments. I have been trying to sell it for over six months, and I haven’t had a single offer. I have been in constant contact with my bank. It is a mess out there though, and I have had to dive into what I see is a tangled mess with their “Loss Mitigation Department”.

I am wiser now. We are incredibly frugal. The Salvation Army is our new shopping mall. I have no debt other than this house, but I am wild with worry every night. When school is out, I am packing everyone up and sending the bank my keys. My dream of providing a family home for my children is over. Wish us luck.

I

It seems to me, even more then a spending within our means problem, the US has an addiction to gambling. Vegas, Atlantic City, On line gaming, Riverboat Casinos, Indian Casinos…. pipe dreams. Why not expect people to gamble on being able to make payments on their house “ship” that was about to come in. The get rich quick mentality is coming home to roost. I do real estate investing, but I put 20% minimum down on all properties as I do not want to have negative cash flow. I also do 30 year fixed loans. Seems to work out well. I also agree with one reader: if you have to get a 2nd, 3rd or 4th job to see yourself through this, then do it. My dad was an engineer in the late 70s and was laid off. He worked 3 jobs, one of which was selling shoes at JC Penney, just to make the house payment and put food on the table. For those who foreclose or short sale, I think future purchases should require a 5 year waiting period and 25% down.

Stephen, I concur.
I purchased in June of 2006 with 100% financing. My rate between 1st & 2nd was a real 5.52%. I was just under 50% of my payscale for a newly promoted Construction Project Manager. I knew that the market would drop, and anticipated paying down 1/4th of my mortgage, eliminating the 2nd so that I would be able to refi with an 80% LTV. God laughs when we make plans. In January of 2007 I was laid off. I had purchased a new home, and so it was not even built until October of 2007. The reason I went 100% financing was to maximize present value cashflow. I challenge any arogant SOB as to how the unscrupulous lending practices of banks is my fault, or responsibility. I am now upside down by 160K and refinancing at that LTV will cause a $1,000 a month increase. Bernake needs to hold the banks accountable for passing the discounted rate reductions on to the homeowners. Since the banks are still only looking out for themselves my community of 87 new homes has over 30 in foreclosure.

We bought a home in 8/2004 for $228,000 (appraised for $240,000). $188,000 was the 1st mortgage, $40,000 was the second mortgage. We increased the 2nd to $60,000 in order to live high off the hog. My income is $75,000 and my wife is a stay at home Mom.

Now we are paying the piper. The 2nd mortgage has a balloon payment in 9/2010. The house was recently appraised at $210,000. We want to save the house so in November 07 we started paying down our $75,000 in unsecured debt. As of today, we’ve knocked off $10,100 from our debt load and we’re hoping to have almost all of that $75K payed off by the mortgage deadline. The 1st mortgage will keep dropping and we can move the 2nd mortgage debt to my 401K (via a 401K loan) and to our unsecured lines of credit. We’re hooked on Dave Ramsey which is where we got the revolutionary idea of attacking our debt.

Noone is responsible for the mess we are in, except us. We did this to ourselves. I don’t want a government bailout of us or anyone else. People must face the consequences of their actions.

I have read many of the postings and it is rather humorous to read all the postings by those touting their good fortunes and how everyone else should just suck it up and deal with their own stupidity. All you guys just go to the mirror and look at yourselves and give yourselves a big pat on the back.

The bottom line is that this situation might have been initially started by a certain group of folks but it has now caught a lot of other people in it’s net. I am lucky in that I can weather the storm. I own numerous houses around the country including my primary home in Virginia that has been hit very hard by the drop. I bought it in 2006 at the high point. I am getting ready to move to Dallas and we will have to rent the house in VA because I am not ready to lose 100K in value but others might not be so lucky. Many people I know have been forced to move due to loss of jobs and are now getting crushed because of the inability to sell or even rent their old home. These folks bought well and had no fancy mortgages. Don’t get so caught up in being impressed with yourselves to overlook that there are thousands of people out there with these issues now as opposed to merely being the greedy investor types that you would like to make them all out to be.

I am sad to see how many people are judging other peoples situations. While many people were not responsible with their choices there are also plenty who were just caught in a bad situation. My husband took a dream job transfer to a location in Southern California. We bought a median priced home for our area with 20% down and a conforming fixed loan with payments we could afford. Six months later he was very unexepectedly let go and spent 3 months unemployed. We had to move out of state to find work. although we were fortunate to sell because we took a very aggressive approach, by the time we paid the closing costs, realtor, and the loss in value of the home we pretty much lost our entire life savings. The bright side…because we were in good shape to start with we did not go into foreclosure or have to bring money to the table. Our credit is also still excellent. Unfortunately we are now in mid-life starting completely over with a lower paying job and a huge financial loss. This economy is hurting a lot of people for a lot of different reasons. It is not just greed. Please be careful about pre-judging. We are all in different situations.

There are too many whiney cry babies in this country. Take responsibility for what you have done and deal with it. I will never be upside down in my home because I bought what I knew I could afford in any market. I sacrificed and work my ass off to pay for my home. If you are crying about your home get off your lazy ass and get a second or third or maybe a fourth job to make ends meet. Your not getting a bailout from my tax dollars.

I bought my house in mid 2004, well below my 3X income. I put down almost 25% down from my savings. Lenders told me to borrow more so that I could buy a bigger house. I went against this advise and bought what I thought I would be comfortable with. My payment has gone up $ 1200 at the start to upto $1750 with increasing insurance, property taxes, home owners association fees. No problem, I can still easily manage. But on the flip side, even a highly responsible individual like me who bought well within my means is now fearful that the falling prices ( we are closer to mid 2004 prices in some areas, with realtor fees early 2004 rates) would out a part of my downpayment. I surely did not speculate and did not go overboard when I bought my house. I surely do not support policies that advocate bailing out people who speculated.

Anne from HolierThanThouVille wrote, “My house is ok and we’re doing fine right now, but no one knows the future, right?”

That’s right, no one knows, not even the people who are in a bind today. Of course, when it’s you who’s in a bind tomorrow, you’ll blame it on someone else.

I bought my home in Feb ‘05. I put 20% down with a 30-yr fixed rate mortgage. I got a second when the market was up but was careful not to draw on it too much. Last week, my home equity lender shut down my account, citing falling property values. When I called back to let them know I still had more than 20% equity in the home even at their reduced value, they said they didn’t care, they wouldn’t loan me ten cents against the house even if I had no other debt whatsoever. So much for the small business I’d been using that credit for! You know, one of the uses they encourage when they sell you the loan? It’s not just the irresponsible people who are getting hit by this mess.

This is the problem I see on a daily basis being in the mortgage industry. People want champagne lifestyles while living on beer money. I have read these postings and there are alot of people on here who are not in trouble with foreclosure on their mortgage, and there are people on hear blaming everything that they can point their finger at. But I con concede the fact that yes the financial lending institutions did this to themselves but they did not do to this to consumers. Freddie and Fannie have both scaled back their offerings recently and over the past few years they have been allowing for a lot of bad loans due to loosened guidelines. However it was the consumer buying those loans, I hear people complain that their lender put them into an adjustable mortgage all the time, and how they are now in bad shape because its adjusting. It’s not the lenders fault, it was the consumer for buying it without educating themselves on the product or hiring an attorney who could explain the pitfalls of the product. And they say that they didnt know it was an adjustable….. bull, the industry is so heavily regulated that they require a disclosure for every thing especially adjustable mortgages. I have heard people reference “it’s time to grow up” and “act like an adult” and I agree, adults buy houses and adults do their research to make an educated purchase. The only one to blame for their foreclosure is the buyer who overspent on purchase price and closed with an adjustable rate mortgage without learning about what they were buying.

Gary from Tallah:

You forgot to include yahoo’s that cashed out refied (refried) which doesn’t count as a house sale.

They use their house as their personal ATM machine (real smart). Now they are in the same boat as others that actually overpaid during that same time.

How about doing a story on the other 99% of the people that were smart enough to not dive into a mortgage plan that they knew they could not afford? How about most of the people that are doing fine instead of “the sky is falling” media driven recession?

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unfortunately, i think it is a lot less than 99%. aren’t like 10-20%+++ of the mortgages out there of the sub-prime ARM little $ down variety? This is what the mortgage brokers were pushing hard and people took them because the initial payments were lower than a fixed rate.

And I’d like to point out that it was not just corporate greed. Did the first owners of my first home need to walk away with $92K? Did their home really appreciate that much in two years? No.

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They sold the home for what the market said it was worth at the time. They weren’t responsible for the market being inflated. If they had put it up for less money there would have been a bidding war anyway.

Why shouldn’t they try to make some money? What the heck do you know about their financial situation?

Criminey, don’t blame others for selling you something at a price you agreed to! It’s not like they didn’t disclose hidden toxic waste in the basement.

sorry, but it sure as heck seems like a lot of people were making a lot of big ticket decisions with little or no grasp of what they were doing.

Our mortgage is substantial, but at least it is only 2.5X our combined income and the home has appreciated 15% since we bought it 1 1/2 years ago (NYC is still strong, but I expect to lose that appreciation at some point like when rates go up — but we plan on being here for 10-20 years anyway, so no big deal). In all honesty, I think 2X is a better rule of thumb, although perhaps unrealistic for many. 3X is pushing things if, for example, you have car payments and childcare expenses and such.

The real estate market is turning downward right now, but I believe the media makes it worse than it really is, thereby making it worse (a political ploy?). For example:

Florida has about 8.5 million housing units. During 2003-05, 700,000 sales occurred, and many used sub-prime loans to finance their purchases. But prices spiked during 2005-07, meaning prices were significantly higher than a normal market would have yielded. During 2005-07, 550,000 sales occurred, which is an indication of how many people actually might have overpaid for their home. Most of them were financed with conventional loans, but about 16% (about 88,000) of those homes were financed using sub-prime loans. Florida had about 120,000 foreclosures 2005 and 124,000 in 2006. They spiked during 2007 to 279,000 - the result mainly of adjustable rate loans.

My point? Only about 6.5% of buyers overpaid during the spike, unless they were really stupid. Foreclosures have doubled from the previous year, but that still only represents 3.3% of the housing inventory in 2007. Many adjustable rate mortgages (ARM) have a two year cap and adjusted as soon as it was up, so most of the 03-05 sales financed with ARM’s have now wreaked their havoc. It’ll take the market awhile to digest these foreclosures and the regular housing inventory, but as prices fall back to a level in line with incomes, we can get back to normal. It’s just a big learning experience and correction. It may be another year or so, but be patient; we’re not that far away. Everyone wants and expect instant gratification from something that is very complex.

It took my family 13 months to sell our property in Winter Garden,FL (20miles from Orlando,FL) last year. We moved to Austin,Texas where we can afford to purchase cash and hoping prices don’t fall too bad in Texas too.FL,NV,CA all had it coming.

Anyone who says “the lender convinced me that I could afford payment X” is just looking for someone else to blame. Sorry you are in a mess but you, not the lender, are responsible for your finances.

As a construction worker I used to hear many of these people make statements like: “I deserve this $400K house.”, “We look at this $500K as an investment!” (No thought to the frictional costs of taxes, insurance, interest expense, etc.) People are now bearing the responsiblity of their actions and they don’t much like the experience. If they are smart enough not to walk away from their obligations, they will learn a valuable lesson from all this. Be very carful when you use credit. You are spending your future finacial opportunities today.

Recession? what recession? This is a well planned out government REPOssesion plan. Just like dictators in Venezuela, and Cuba, we have becomed victims of a repossesion of land by our local governments. The only difference is that Chavez and Castro call it what it is. A distribution of wealth. What just happened in Miami is a distribution of wealth,with all the wealth going to the gov. What else would you call it? Taxes in Miami soared to unprecedent levels, Insurance premiums double in 6 moths, the price of gasoline at $3.85 a gallon for unleaded regular, add to that the driving distances in Florida where the public transportation is non existance. To top it all we have now the price of food going thru the roof. Our schools are in trouble under the leadership of the ex-NY City ousted president, “Mr Let me ruin your city” “rudy”/ He gets a 80k bonus in the middle of a sinking economy, in a city where the medium income is under 45k a year. Republicans are in charge here, so don’t let them tell you that democrats want to tax the hell out of you. They are playing the game too. Only difference is that they know how to play it.
Yes call it by the name REposession of wealth. Thank You Bush, I miss those Reagan days when faced with high oil prices he stood up and told the arabs where to go eat. But then again Bush is a Texan, with Petro dollars in his wallet.
This too shall pass.

Never thought I would do this, but here’s our story. After years of difficult tenants and wanting some peace of mind, sold our “beautiful duplex” and found our “dream home” before selling the duplex. The buyer we found was caught in the “subprime” mess and our closing was postponed weekly for months. It cost us more than $30K to maintain and pay for this property while we waited for a closing. We also had to reduce our price $30K to close. BUT, it was all worth it to find the perfect home for us. I don’t think I’d ever again buy before selling, but who knows. The market is so delicate now. Not sorry after all.

My wife & I bought a home in 2000. We paid up front the old rule of 10% in cash. We kept our budget to the old rule of up to or less than 1/3 of our income, based upon 15 years of employment each at the same companies, as opposed to hopping & shopping employers when we were tempted by greener grass somewhere else. We got a good rate on a 15 yr mortgage as we had established good credit. And we have refinanced twice since as the rates went further down in ‘02 & ‘04. The current crisis is not effecting us, and at present we could pay off our home whenever we wish with our savings is need be.
Posted By Moral of this story? : May 8, 2008 12:59 pm

Geez, do you and your wife ever throw caution to the wind, get crazy stay up later than 10, drive without a seatbelt or have sex in a position other than missionary? Loosen up…

What’s happening right now is more than a housing crisis. It’s a CREDIT CRISIS!!! Americans have been so used to buying goods that’s way more expensive than what they can afford. Doesn’t matter if its a house or a brand new car or a shiny new plasma TV. If you can’t afford it, somebody is willing to give you credit so you could pay the minimum balance for 5-30 years. Heck, 70% of the economy is dependent on consumer spending. How whack is that? Whatever happened to living within your means? Or even below it?

I agree with Catherine from WI. Everything is more and more expensive and our take home pay is smaller and smaller. What do they expect?! I’m sure the people in charge don’t notice much becuase they are making WELL over six figures and it hasn’t hit their wallets yet. But is that when things will get better? When the top dogs start feeling the pressure? Too late. We’ve already moved on.

If Mr. Alan greenspan had done his job PROPERLY, we would not be in this dire mess we are in. So it’s 100% HIS fault for not regulating the industry when he had the chance. But, I’m sure he is sitting pretty on his millions along w/ wifie Andrea Mitchell from MSNBC. What a jerk!!!!!

NO FRIGGIN WAY!

You will not get any of my tax dollars to bail your worthless butt out of the mess that you got yourself into.

I think back to how many calls I got from California people bragging about how much their house went up over the past few years.

Why do people in California have a different reality than most other people from different states?

You paid $600k for a 2600 sq ft house?? With fake wood floors??

How is that arrogance doing now?

You made your bed California, now you sleep in it. Maybe people will realize that your state is a sh**hole, and that 600k house is not even worth 100k.

We need this housing recession to be harsh enough that the west coast idiots don’t do it again.

My husband and I bought our house in the summer of 2004, literally months before things started going crazy. We financed 100% of the $290k price tag but we could easily afford the payment even while still paying the mortgage on my first house. We finished some work on the old house and I sold it a few months into the boom for a tidy profit ($45k). We watched our current house soar to $501k in value but we only used the high appraisal to leverage a refinance with Bank of America with no PMI and added no new money to our loan.

I’m in a desirable neighborhood in north Phoenix (Moon Valley) that isn’t being hit nearly as hard as the crazy people who bought in the outlying areas. Even my own sister and her husband bought a house in Maricopa which gives them about 90 minutes of daily commute time despite my warnings. I don’t see the outlying areas of the city recovering for several years with these gas prices going up.

But, they just HAD to have the big new build that they couldn’t afford in a more reasonable area of town.

My husband received a dream job offer in Seattle last November. We moved in January. We’re still trying to sell our house in Philadelphia, but have had only one serious offer by a delinquent buyer in five months. Until we sell that house, we’re stuck in a rental in Seattle — and paying both mortgage and rent, as if our money woes after visitng the gas pump weren’t enough. It’s a great time to be a buyer — but only if you can sell first.

It is unbelievable how callous some of you people are.
As stated earlier, the government bails out corporations all the time with our money. I would much rather for that to go regular folks, so they will not lose their homes.
Stop judging people by your own standards and broaden your mind a little- it’s called growing up.

I only know one person affected by the “mortgage meltdown” and that person is a financial idiot. 3 houses in 4 years each bigger than the last and he is complaining now that he will not be able to pay when interest only teaser loan resets nor will he be able to sale. He was not complaining about the mortgage company when he was gaming the system. Greed is a deadly sin.

p.s. I suspect that most of the people posting comments referencing “the way the economy is” have absolutely no idea what the definition of a recession is.

After 7 years in my home the sheriff sold my house 3-17-08 in a foreclosure action by a federally chartered savings bank in Cleveland Ohio.I fought my foreclosure for 2 years and ran out of money.I was threatened with a frivolous lawsuit by the bank for fighting my foreclosure. I went to the office of thrift supervision ,the banks federal supervisor.I then learned that federal regulations protect federal savings banks from crimes committed against them. There are NO Federal Consumer Banking Regulations that protect the mortgage borrower from the Bank that has been unethical and harmed the borrower.Therefore Federally Chartered Savings Banks operate with impunity.Acordingly Congress
protects the Congress from wealthy and powerfull
Federal Banks by not passing Federal Consumer Banking Regulations.The proof is in the question:how many people can afford to hire an attorney to fight their foreclosure.The Federal Government,Composed of the Treasury Depart,FBI,US Attorney General and Congress only protect the Federal Banks. The Taxpayer,as far as morgage loan borrowers like you and I have absolutely no Protection.Congress however has offered to protect the Banks,Builders,and private sector(hedgefunds) with regulatioms and money. The Congress has not passed $1.00 worth of protection for the Federal Chartered Savings Bank Mortgage loan borrower.
If you have been in a foreclosure action by a Federally Chartered Savings Bank please share your story with me for my research.
Michael LittleBig- POB 16588 Rocky River Ohio 44116

I bought my house in Aug 05. Want to know how much trouble I’m having paying my mortgage??? None, whatsoever. Why?? Because I figured out what I could afford on a 30 year fixed and that’s what I borrowed, leaving 150 grand on the table.

Buying a house is adult time. It’s a big decision and a big commitment. If you got in over your head, it’s really not any elses problem. Are we going to start bailing out people that buy BMWs and then can’t afford them too?

I don’t own a home, but I’ve had to move recently because the condominium I was renting went into foreclosure. I guess I should be grateful that my landlord warned me. I know of people who’s landlord did not tell them and they came home one day to find a notice to vacate on their door. I hear that’s happening a lot. If you’re renting, watch for a lot of unsoliticed mail from movers….a dead giveaway that you will need to move soon.

I could be wrong here, but this is all seems like an example of greed which in my opinion starts with the consumers. A lot of people bought in order to sell for a profit even though it seems like many of them could barely afford their monthly mortgage while trying to re-sell or what have you. I’m not a homeowner, somewhat recent grad, but I just don’t see the urgency to own a home until I know I can afford it. For now, I’m going to have to rent. Would I rather buy? Sure. I’d like a lot of things. Everyone wanted a piece of the pie and now there’s none left.

Here’s another story on someone who did it right. Our original mortgage, which was much less than we could have obtained, was for 30 years-fixed. Two years later, when our financial situation improved, we refinanced to a 15 year-fixed. As our salaries increased, instead of selling and buying something we really couldn’t afford, we socked away the extra $$. We were able to buy a second home, with a 10 year fixed mortgage. Now, we are retiring and have both mortgages paid off. If we had listened to the banks on what we “could have borrowed”, we would be $500K in debt. It pays to live below your means and not try to be a big shot.

My daughter, a student at UC Davis just bought a nice condo in Sacramento - 2 years ago was sold for 375K, foreclosed - she paid 190K - I advised her to stay there 5 years at least and MAYBE value will recover to her [accepted] offer

Take a look at the big picture folks. All the jobs that were created during the housing boom are going away, taxes are drying up, Gas is on the rise, Food prices are increasing, etc… It doesn’t matter who is to blame. these factors all reinforce themselves in a nasty cycle. Welcome to recession.

No sympathy from me for home owners in a crises. Most of them asked for it.

My wife and I moved out of Los Angeles county to NC where housing was more affordable and nicer.

Instead of buying a Hummer or BMW Mini I bought a ford escort for $2400 in cash. Not only did it save me in gas but no payments.

My wife and I are loving the recession, its unfortunate that gas prices have gone up, (I hope they skyrocket and we push more twords solar) but gas prices have had little affect lifestyle.

Prices on other items have gone down due to demand and we are currently looking into buying some rentals, foreclosures of course

I am so sick and tired of reading about people who made $40, $50 or $60,000 a year who bought $400,000 homes. My husband and I make over $80,000 a year and we are not buying anywhere near what our good credit and the bank will allow us to buy because we know our budget and what we can afford. And because we are responsible, when we went through the loan process, we faced tougher restrictions because of the idiots who somehow believed they could afford these huge houses on modest incomes. I have zero sympathy for them. I do feel bad for their neighbors who are watching their homes lose value. When are we, as individuals, going to start taking responsiblity for our own actions and stop blaming others? If someone tried to talk me in to a $400,000 home on my income I would laugh. Bailing these people out just does not seem fair.

“My old man once told me that a mortgage should always be fixed, and the total amount mortgaged should be no more than 3x annual income if one wants to live “comfortably” and travel/vacation, and no more than 4x annual income if one can be thrifty.”

Best advice in this forum.

I’m a single mother and I bought my house with a 0%-down loan (dodging rotten tomatoes and shoes) BUT BUT BUT I made sure to only look at houses under $125K. That’s well under 3X my salary. I bought a starter home for $123,500 with a 30-year fixed and 2 months after that, I was laid off. My mortgage payment was just under $1K but it took me a whole year to find another gig. Thank the Lord that I didn’t have to put anything down because I used my downpayment money I had saved for 4 years to keep my head above water. Came close to being late a couple of times (thank goodness for 15-day grace periods) but I still have my home and my credit score has gone up since then. I LOVE being a homeowner and I am so proud of myself for it!

I have bad luck and good luck at the same time. The property that I bought lost 30% of its value. However, when it was in peak, I refinanced it and invested in my own country where the home prices increased 5 times, which compensates more than the lost value here. Now, I stopped paying mortgage and sending the keys to Lender.

I used to work in the Mortgage industry 4 years agao at the height of the refi boom. As I saw homes coming in at higher and higher prices I knew the bubble would burst - it has happened before.

I was going to buy a new home and realized that I could loose my shirt. I settled on a 10 years old, 2000 sq ft doublewide. Between Prinicple, Interest, Taxes, Insurance, Lot Rent, 6,000 gallons of water, and trash pick up my monthly housing expense is less than $900.00. My 15 year fixed note will be paid off in 12 more years.

Bought in Sonoma County, California in 2006 with no money down. Home has lost over 30% of value in less than 2 years. Will be foreclosing because can’t afford payments, and can’t refi. No money down should not be an option, and lenders, brokers and agents should be more responsible to inform potential buyers of the possible scenerios i.e. market fluctuations, values decreasing, no ability to refi. Was told that I could refi in 1 or 2 years, but can’t now.
This economy sucks!

I live in California and bought at the end of 2004, and recently sold the home. I had a 30 year fixed loan and put 10% down. I paid an extra payment every year, and guess what? When you include realtor fees I still had to write a check for almost 20% of my original purchase price. Why so much, because I realized what many trying to sell haven’t…the market is correcting, in a major way.

Now I’m going to be renting for a couple years so I can put 25%-30% down this time. Having substantial negative equity in my home I could have just walked away, but instead did the right thing. I took out the loan for that much, so I owed the money. What I don’t want to do is pay for anyone else’s lack of ethics. I do feel sorry for the people who are caught in a bad situation, such as job loss or death of a spouse, but I have a feeling that’s an incredibly tiny minority of the homes in this situation. The rest? Flippers, speculators, investors, and greedy individuals looking to make easy money. I feel nothing for them, and I don’t want the market to stay inflated while I pay for them to stay in their homes.

to the people who mention being so far into debt and what not, go google “dave ramsey”, he is the financial king. also, i have great, steady job, and could’ve easily bought a 140,000 home, but opted for the 69,000 one, why? to avoid what has happened here. sure, five years from now i may have to sell and i may only get 55,000, but so what, im not in my house to make money, im there to live. and plus, i opted for the small house so that my emergency fund can sustain me for at least a year. emergency funds are a must as well, very very handy in times like these

My husband and I bought in 2005. We had no idea what a subprime loan was. We thought prices in our area were high because of a recent hurricane and the need for beach-front property owners to have a place to live. Anyways, we bought our first home for $222,500 which was well within what we could afford. In 2003, that would have bought a McMansion. In 2005, that bought us a very modest home. Our realtor went on and on about what a good deal we were getting even though we were buying the home for $92,000 more than the last owners paid in 2003 (with no upgrades). This was our first home. We only intended to stay for 5 years. However, when prices started dropping in 2007, we were terrified that we would be stuck. The issue with that home was that the yard was extremely tiny. We told our realtor in 2005 that we wanted a decent-sized yard but she talked us into the small-yard home. So we sold in 2007. We lost 20-30K to sell it but if we sold it today we would have lost about 60K. We bought a new home in 2007 at a decent price that was more than $100K less than the amount we were preapproved for. The builder has dropped prices since, but not as painful as it could be I guess. My point is that this is not just affecting people who were not irresponsible, but people that bought what they could afford but were in the wrong place at the wrong time.

My community has a heavy military population. The problem is that homeowners that get orders can’t sell their homes. They are losing money to rent out their homes or leave it on the market. Most military do not have subprime loans, but they can’t sell the home for what they paid. I think it is pathetic that these people defend our country but are nearing financial ruin over other’s greed.

And I’d like to point out that it was not just corporate greed. Did the first owners of my first home need to walk away with $92K? Did their home really appreciate that much in two years? No.

I wish I bought “way back when” like the other high and mighty people on this board. Too bad I was busy getting a college education instead. If only I had thought to buy a home instead of getting educated and starting a career in the early 2000s. Then I too could look down my nose at others that were in the wrong place at the wrong time.

This is something I’ve known for years, there are WAY TOO MANY people who cannot manage money worth spit. With stars in their eyes they let greedy mortgage brokers tell them they can afford something they’re pretty sure they can’t. But hey, “he said I could so I can.” Let’s take a look at our middle schools and highschools and start teaching the basic economics of living. How to balance a checkbook, pay bills on time, learn to invest, learn the risks, learn to consider all the “what ifs” of life. As parents we need to be teaching these things even if the schoools are not.

It makes me sick how we’ve come to this point and we’re still falling. My house is ok and we’re doing fine right now, but no one knows the future, right? We’re all at risk of painful bumps in the road thanks to some incredibly greedy and uneducated people. I plan to teach my children about how to handle money and live within their means.

I am sorry, we live in the upper midwest and we have a TRUE market with a home appreciation growth of 4 to 5% a year. I am thankful for where we live and our continuing booming economy!

there is some truth to the observation that buyers of homes that were unaffordable deserve to lose their a** when prices go south. HOWEVER,the first rule of banking is “can this loan be repaid” The mortgage providers should NOT be given a rescue when they are the prime suspects in greed gone wild.

We purchased our home in southern California in 1996 at an ideal low point in the market. We’ve seen the value of our home double, triple and nearly quadruple. It is absurd that banks would approve the value of these homes at such unrealistic prices. I guess they figured that they could make up for low interest rates by increasing the principal on the loans. Golly… I guess THAT didn’t work as planned!
Regardless, we bought this when we were both working and had no children. Now Mom stays home with the kids and money is very tight, but feasible because our mortgage payment is reasonable on one income. Woe are the children of tomorrow whose parents both work in order to keep a roof over their heads.
I hope the market adjusts back to home prices that are 3-4 times one’s salary so that we can restore traditional family values by having at least one parent at home.

You’re all a bunch of dummies. Real estate was never an investment; its just a place to live. Rather than bitch about prices going up… oil, gas, food, etc. and instead invest in the companies that are reaping the profits, Marathon Oil, US Natrual Gas Find, Potash, etc. As Cramer says… buy, buy, buy.

I feel badly for all the folks who are in the foreclosure process due to rising interest rates and the job losses that resulted from this fallout. Ultimately folks were like myself just chasing the “American Dream”, and either overextended themselves or assumed that past performance was a de facto guarantee of future gains.

My wife and I made up our minds in 2007 to pay off our debts and through extreme sacrificing were able to do so (outside of the home mortgage). Not having the burden of car payments, credit cards payments, HELOC, or PMI have allowed us to save an additional $1000 each month. Because our credit is in stellar shape we have decided to start investing in foreclosure properties so that we can increase our portfolio and offer affordable housing to families. Even though these are challenging times we feel fortunate to be able to capitalize on this situation.

I hear a lot about the poor real estate agents who are really suffering through all of this. I have no sympathy, in fact I have great apathy towards them. I was a first time home buyer and bought in 05 and have seen my house drop in market value ever since. Turns out EVERYTHING that I was told by my agent was a lie. Generic sales tactics to make a quick sale. Whats worse is I’ve had to make ongoing repairs and renovations the entire time I’ve been living there. He didn’t negotiate one red cent on my behalf on all the things the house needed.ie. roof, plumbing, electrical etc. Realtors, along with the predatory lenders are despicable, sociopathic scum. I will NEVER use another real estate agent again, and I tell every person I have a related conversation with not to either…they agree. And with all the online technology available now a days we won’t have to.

Builder RW Hertel & Sons, Inc. of Ventura, CA has built low standard, high priced homes all over Central California, as soon as the first rains come the Homes Leak and Toxic Mold appears went we told the builder he covered it up. The State Investigators confirmed 100 % of the homes he built in Rancho Obispo are below code and not to industry standards. Now they are NOT worth anywhere near what we paid for them mostly due to the Lousy Cheap Building. Then we come to learn he sues the buyers of his homes if you complain to the City Officials. Hertel is causing the homes to lose value just by his name being the builder. Do a Google and RW Hertel and see for yourself.

Well… I think that common sense should be the rule for most of the normal situation. I remember a lender telling me that I could afford a $1,600 mortgage as soon as I finsh my car payment wich are about $800 and will be done next year. But I told my self NO and I went for $850 mortgage p/month. Of course the $1,600 house would be nicer and bigger than the one I have now, but I am able to pay it myself while I have wife at home (pregnant) a daughter and my mom depending on ME. Do I feel safe? NO, with the economy the way it is and the houses prices changing every day I can’t feel safe but I feel safer than if I got that $1,600 mortgage. Maybe in 5 years I get another house…maybe, who knows what happen in 5 years.

I am not sure why anyone is not hitting on this point: People have less money. We all make less money because there is higher supply of workers and less demand for them. We are paying more at the pump, the gas station, for clothes, etc. Property taxes are going up, parents pay more fees for their children to attend public schools, etc. Dollar by dollar our take home pay declines. We watch our housing values sink and our mortgage companies will not refinance us because we have all been late on those high interest credit card payments that has been keeping us afloat. We are just riding out the storm until the sheriff comes to take us out of the house we can no longer afford. My husbands work hours have been cut because construction is down. We are drowning and just want out. Bankruptcy, foreclosure, who cares anymore. We haven’t fought one day since we made the decision to just say forget it and try to move on.

I think this is great, I can’t afford a house. I have to rent, I can’t wait until 2001 when I can afford one again… Assuming I have a job.

How easy it is for some of you to say no government bailout. We just gave Bear a big bailout, we just gave Iraq a big bailout. What is the matter with bailing out homeowners who are upside down because of a lose in home values? Stop sounding like governor bush and think of those whose misfortune was caused by wamu, countrywide etc.

I work for a mortgage company that is licensed in 13 states. We have seen a lot of people trying to refinance due to low rates and our low margins get denied due to appraisals.

It’s not that the houses aren’t necessarily worth what the borrowers think they’re worth. It’s that nothing in their areas are SELLING. Comps are all based on SOLD houses. I’ve seen a house down the street from me on the market for 3 years now.

Daylight Discount Mortgage

Why does anyone allow a lender to convince them of what they can afford?
You may can afford a $500,000 mortgage, but that doesn’t mean you have to take one out. I wouldn’t have had the guts to taken out the maximum amount. Again, to those who have lost their jobs or their health, I hope that they can get help. But those who got simply caught keeping up with the Jones’s, I am sorry too, but not sorry enough to think the gov’t should bail you out.

We should not bail out investors or lenders.

My suggestion is to have true market value assessments, that would be appealable. Once the value is established, those that owe over the value would have the mortgages reduced to 80% of the assessed valuation. From this day forward, banks could not lend more the 80% of the assessed value of a home. No more HELOC that can get people to 125% of their homes value. This plan would benefit everyone and not just those not paying their mortgage payments. It would keep homes from becoming and sitting vacant. For those that owe less than 80% of the assessed value, they would be given a 20% writedown. This plan would only be for owner occupied homes and only one per family. If you are married and have two homes, you only get the benefit for the one that is your primary residence. If you live apart you could pick which home you wanted to put into the plan. It could not be used on your vacation home.

Anyone taking this benefit would have their rate reset. You would decide; 30 year 7.0%; 20 year 6.25%; 15 year 5.75%; 10 year 5.33%. All rates would be fixed rates.

Of the 6.4 trillion in mortgage debt, this would probably cost us, the taxpayer, 3 trillion (IMO).

This plan does a few things…it keeps folks in their houses and it frees up income to help stimulate the economy. The next item to deal with would be credit cards. I purpose limiting credit card limits to 10% of your income. All revolving credit would have to fit into this 10%. If you make 100K and have a 10K limit with Visa and want to use Best Buys 90 interest free program for 1K, you would have to have 1K free on your Visa card, the Visa limit would automatically be lowered at 1K, to appropriate the 1K at Best Buy. Each year when you file your taxes, your credit limit would be re-established. If you lost income, your line would be frozen until you got back under the 10% limit, if it went up you would get a little more credit.

I hate the idea of the USA becoming more of a nanny state, but if we don’t do something us that pay our bills will forever be paying back the debt of others.

I live in Ft. Lauderdale (we bought at a pretty good price so we’re not underwater… yet) but it sure is a bummer to pay all that money in interest to a bank for negative equity in return. I’m just going to do what everyone else is… dump the thing back at the bank. I’ll get to live rent free for a year and save up for the next place. And who cares about my credit, the lenders are going to have to let us back in the market sometime, that’s how they make money.

My wife & I bought a home in 2000. We paid up front the old rule of 10% in cash. We kept our budget to the old rule of up to or less than 1/3 of our income, based upon 15 years of employment each at the same companies, as opposed to hopping & shopping employers when we were tempted by greener grass somewhere else. We got a good rate on a 15 yr mortgage as we had established good credit. And we have refinanced twice since as the rates went further down in ‘02 & ‘04. The current crisis is not effecting us, and at present we could pay off our home whenever we wish with our savings is need be.

It is all a matter of perception. For example:

Rising oil prices = BAD
Falling oil prices = GOOD

Rising food (commodity) prices = BAD
Falling food (commodity) prices = GOOD

Rising housing prices = GOOD?
Falling housing prices = BAD?

There will be people who benefit by houses correcting to traditional affordability levels, and people who will end up losing. Let the market correct - instead concentrate on keeping the market working instead of trying to fix a market that needed to correct anyway.

My old man once told me that a mortgage should always be fixed, and the total amount mortgaged should be no more than 3x annual income if one wants to live “comfortably” and travel/vacation, and no more than 4x annual income if one can be thrifty.

This was sound advice for me, and certainly holds true during the current housing bubble. I always wondered how families on a 60k-70k income afforded a 400k-500k mortgage and taxes. Now I know!

This is just one aspect of the domino affect of this recession. I work in the Realestate/financial industry. I lost my job because of slow business. Then I had to take a job in the industry for a company that won’t pay anything close to what I previously earned or deserve. Companies can afford not to pay people what they deserve because there are so many people out of work in this industry. Therefore, I lost my house because I couldn’t afford the payments anymore. Nice how that all comes back around isn’t it…

There should be no bail out for any investors. When you invest, there are risks. The biggest risk being you could lose everything. No matter how good the market looks there is no “sure thing”. I am sure if your investment panned out and you made plenty of money, you would not be sending me a check. Why should my tax dollars bail you out because of your own stupidity? If you try to buy what you cannot afford, somewhere down the road you will get burned!

Folks, I am at the epicenter of this situation. I like virtually every homeowner out there has lost value on their property since the downturn began. However my family situation has been compounded by working in the mortgage industry for the better part of the past 15 years. You’d only need one guess to come up with the name of my last employer. The media has also portrayed far too many hard working people in this industry as liars, cheats, and unethical. Certainly, there were bad practices out there. As there are in every other profession you can name. Everyone folks, don’t kid yourselves.

I am far from bitter about the situation, though I have found it quite challenging to get beyond the stigma associated with the residential lending debacle, and the publicity hasn’t made finding new employment easier. Incidentally, I did all the right things scholastically, obtaining both Undergraduate and Graduate degrees in Business. I feel for all those affected by this situation. Just understand that some of us are more acutely than all those bemoaning people being “bailed out”. Folks, Donald Trump was “bailed out” in Atlantic City, Chrysler was also “bailed out”. This is hardly unprecidented, and the domain of the mortgage banking world.

Time for some real perspective people.

I find it disheartening to read all those comments about people “shaking a finger” at all the people going through foreclosure and bankruptcy. They may be shaking their fingers now because they paid their mortgages on time, but wait until the rest of their condo association goes belly up and then they have to start paying more monthly fees. Wait until their neighbors stop paying property taxes and the local government imposes higher taxes to make up for the difference. Wait until your insurance goes up because of all of this. Wait until you try to refinance for whatever reason and you have to pay higher fees. You can shake your finger now, but sooner or later, someone else will be shaking their finger at you when all of these higher fees and expenses push you into foreclosure. Post your comments then finger shakers.

Noah@ShortOnChange.com
http://www.ShortOnChange.com/blogs/blogs.htm

We are those people who over bought in 2005. The lender convinced me and my wife that we could afford the home, even though the payment was %70 of our take home income. The real estate agwnt we worked with swore to us that we should buy it and then make a killing the following year selling it. We have no one to blame but ourselves. Next month may be the first time we will miss a payment. We have talked with Countrywide about it, but each time they inform us there is no help. We had no credit card debt when we bought, but with rising cost, we have paid everything else on the cards and the $50,000 max will be hit this month. We don’t know what our options are but before all of this we were very happy. Now we fight constantly about bills and our kids are suffering through it as well. I have no idea what the answer is, foreclosure, short sale, bankruptcy? Never thought we would hit bottom like this.

Nothing wrong with the prices of houses, it’s the mortgage companies. But, what is wrong with people with bad credit not being able to buy a house with no money down at an attractive rate? That is exactly what has caused our housing/mortgage crunch today. In the past, mortgage companies were more lenient and now they’ve had to tighten up on their lending underwriting in an effort to correct the market; however, they continue to stratigically implement 100% financing even for people who don’t qualify, i.e., The Ameridream Program, etc. We just need to get back to basics. We need Americans to learn to save for down payments on houses and maintain good credit. No more 100% financing, stated income, interest only loans to unqualified individuals.

Obviously none of the people posting comments about”lviing above your means” live in california. What people dont understand is that in LA renting is just as much as owning a house in some cases. People in areas as such need to have ARMS or interest only just to afford to get into a house for there family. For most of these people moving to a more affordable place is not an option. I blame the bubble 70% the buyers 30%.

Hey Maggie, your house is priced too high, that is why you did not sell it. the market determines the price, not what you previously paid for it. if yopu don’t want to sell at a lower price pay the mortgage until prices rise or rent it. simple as that.

A point of view that receives little attention is Allen Greenspans practice of keeping the interest rate to low, for to long. I am not a fan of high interest rates but even 2 points would have given the Fed more room. Notice Greenspan works for now and how his boss got rich?

As home-owners, rehabbers, and educated entrepreneurial investors, my partner and I made all the right investment decisions. We had good loans, at 70% LTV or lower on good properties, repaired with quality work, did not speculate, only “flipped” one house in 7 years, held properties to build assets, added value, did not ask for sky-rocketing prices…And still could sell several properties: banks got 3 of them, one our owen home! So at the end of the day or this comment, some of us investors {STILL a part of the community, hard working, not flipping bad properties to home-owners} feel like we are made out to be some of the “bad people” along with predatorial lenders etc., so we feel in trying to the right things as good investors, law abiding citizens, & home-owners, we could use the same help that Bear-Sterns got to “some degree” and what Chairman Barney Frank suggests! What do you think?

Mike

If you have not already done so, please sign the petition against government bailouts at angryrenter.com. Thanks!

Randall in Il….You are right that the prices are adjusting however if you can’t sell a home then you must go even lower than what is realistic.

I knew I wasn’t alone w/ my philosophies! Thanks for the reinforcement.

Randall from Chicago is right on, housing prices are not dropping, they are merely correcting. In many areas of the country including mine, housing is just plain unaffordable without the “magic” loans of the past. Without any buyers, housing prices will and should drop.

Many sellers don’t realize this or accept it and won’t budge from their prices, waiting for the market to “improve”. Ironically these are often the same people who doubled or tripled their money on their house. I can’t feel sorry for them and certainly can’t feel sorry for the greedy people who bought the McMansions thinking that prices would increase indefinitely. It is basic economic principle, people can not afford $500K houses making $60K a year, something had to give and I do not know how so many people missed the eventual “burst” of the bubble.

I have read that in most years 3% of all homes are in default. Now we are being told that 5-6% are in default.So 94% of all homeowners are paying their mortgages on time? Not the crisis we see in the headlines. The sky is not falling but real estate values are. For most people a home is purchased to live in, receive a tax write off and benifit from “long term” appreciation. You only lose if you have to sell now. Place the blame game wherever you want but the Big Boys (see WAMU, Countrywide, Bear Stearns, et al) made the rules and gave away the money. They are losing billions(see shareholders) because they made billions and will continue to do so over time. Most people aren’t just losing their homes because of a “bad loan” but because they invested in Real Estate at the wrong time and for the wrong reasons.

I am currently in foreclosure to no fault of mine.
I was injured in 2001 and the company I was working for denied everything and litigated the case for over five years when everything was tossed out including my life back in 2007 after a lengthy appeal. Now I am helping my mother thru chemo.
I was told by a friend to sell in 2005 wish I did.
I lost my first house in Hurricane Andrew and now a condo to another storm.
Things happen you beyond your control.
Lets face it, the market was artficially inflated and then the rug was pulled out from all property owners and now those left have to pay the piper.I due hold the fed responsible because they let the unscruplous lenders and bankers do and say whatever they could to get that money and never protected the consumer.It was a cluster F$%#%K.
The rich keep getting richer at the expense of the middle class and the poor.This has just started and will get much worse before it gets better on a national level.
Ask Governor Spitzer he is a hypocrit but he did write an article blasting the Bush adminstration for letting this occur and we all know what happened to the Gov.

I also get a little perturbed to hear we’re gonna extend more help, but then I hear Ben Bernanke advise help needs to be made. He knows alot more about economics than I and most bloggers do, so I think I’ll trust his judgement. Otherwise the “full faith and credit” of the US may be lost.

I WATCH with fascination, and sorrow the problems unfolding in the U.S.

Thing is, we’ve seen it before. From 1997 to 2003, Hong Kong property prices fell by 69%, one of the biggest busts anywhere, anytime. It was very painful for those who bought in HK’s exaggerated peak in 1997. That was a wild spike upwards, so we may not see the same in the US. A fall of 30-35% seems more likely IMHO.

Britain, where I lived before coming to Hong Kong, is likely to suffer more than the UK. The cycle is a year or so behind the US, but I could see a fall there of 40% or more.

These moves are predictable. There are techniques to do so. Try a search of “UK Property” on YouTube, and see if you agree.

My girlfriend lives in the Roaring Fork Valley of Colorado.

2 or 3%? this past year she saw nearly 85% on her home shes been in less than a year.

Between 10-30% is NORMAL here.

why didnt CNN include it here, its a geographic region larger than probably all of the locations listed -combined-

It makes sense to me to have been conservative, wait and save to afford a house. I did and got a 30 year fixed. I believed in no bailouts, but I’m coming around to the realization that I’m affected by the market, and if we dont help the idiots, I wont fair much better. Whats the point? Its about being fair. But economically, helping out the idiots will help me retain home value, and also help the economy, and myself in getting a better job. They gambled and lost, but I cant use that against them, in the end we are all stuck in this world. We spend enough on porkbarelling, bailing them out surprisingly is quite cheap.

The government continues to bail out the industry that created the mess in the first place. All of the creative “solutions”, like dropping the prime interest rate, does nothing to help consumers. How about lowering the interest rates on anything I have bought on credit (mortgage, credit cards, car loans, etc.) We had our home on the market for 14 months, starting before the market went south. We would practically have to give it away to sell it now. Fortunately, we were not in a position to “have to” sell. Just looking to scale down after our children left home. Yes, we are part of the responsible folks that pay their fixed rate mortgage on time and with extra. There are no rewards for doing the right thing!!!

One thing that I rarely hear people talk about is the rediculous “bubble” that contributed to this mess. Housing values aren’t falling; the prices are merely correcting to reflect the actual value of what a house is.

During the bubble, the value of a home was grossly misrepresented by inflated prices that were being driven by a free-for-all mortgage mentality and “get rich quick” property flippers. Because so many people lacked to foresight to realize (or care) that a correction was inevitable, the lifestyle of the single family home became unaffordable to those that it previously was. “Predatory” mortgages only offered people a means to maintain the perception of status, even if it was out of their reach in reality.

The fact that the administrators of lending companies didn’t foresee what was coming has to be due to utter incompetence (unlikely in many, many cases) or to criminal opportunism.

It’s no surprise that your average borrower didn’t have a grasp on big picture, especially those that were buying to live and not on speculation. I find it hard to believe, though, that those that make their living in the market didn’t know what was around the corner and didn’t really just throw the shareholders and the taxpayers under the bus.

Having bought in before the bubble began, I found myself struggling when property taxes in my neighborhood tripled while the actual living conditions and value inherent to the community (the sort of thing that should determine real estate value) remained stagnant.

Everyday I red bout how people re affected and they have to default on their loans because they took 120% out on their house - now they can’t pay the 100% loan - and what about the 20% they took to buy cars, boats, etc. Or the people that say it is not worth paying because their house isn’t worth the original price it once was.

My husband and I bought a house in ‘99, sold our house recently and took the money we made to buy free and clear a house - now we have no mortgage. How about writing about people who live below their means, and don’t spend feverishly on unnecessary things. I want a story on capable people.

Minimal government intervention to help PEOPLE…

Maximum government intervention to help investment bankers and corporation…

Ahhh the good old Ameri…Rebublican way…

“Currently, my husband and I are paying two mortgages…one being on a house that we cannot sell after almost a year on the market… We were very responsible when signing on for these mortgages, and we feel shafted” - Maggie, Birmingham

See, that’s exactly the impatient, materialistic homeowners who need to learn a hard financial lesson. This “Maggie” claims to have been responsible, yet she was assuming TWO mortgages! Has she ever heard the idea of RENTING an apartment until she sold the other house?
But no, she and her husband just had to get a new house first. They need to list that other house below their purchase price, even if it means eating a few thousand to get rid of it. But they are so proud that they will now likely foreclose on both homes.

Come on Andy, it’s PA!!

I find it interesting that some of the far right wing posters here seem to be so quick to attack the greed of individuals, but are generally silent when it comes to bailing out greedy corporations. Also, why have you been so silent about the presidential greed that is costing me and millions of other Americans, roughly $10k/minute in Iraq? Is this ‘trickle down’ greed? I don’t think we should bail anyone out. Let’s stop rewarding corporations who think that free market rules are applicable only when they’re winning and then run to the government for protection whenever business isn’t doing so well. And let’s stop rewarding individuals who seem to eschew math for magic –thinking they can afford $250k houses on $60k salaries.

People who got ARMs and zero-down loans, KNEW they couldn’t afford the house. They need to lose their house and learn a tough financial lesson.
Same goes with the people who decided to buy a new home before they sold their old home, thereby assuming two mortgages.

My wife and I sold our old house and WAITED until we got enough for 20% down before even looking for a home. We rented until that point. But American couples are so greedy for that next McMansion.

I for darn sure don’t want my taxpayer to bailout the greedy homeowners. NO BAILOUTS.

I thought being able to “afford” something means “not going into debt for it”?? If you have a mortgage, then obviously you could not afford a house. Maybe people should just buy “bedrooms” since thats all they can afford. I am going to start saving all my money, so one day, I can pay for my new electric car in cash. At that rate, I may get it in 15 years. I am going to put my house on the market, which will sell to one of you oh-so-responsible people in 3 years. Then, i am going to by a “bedroom” somewhere that is zoned for farming. Of course, being the goody two-shoes I should be, I will pay for my bedroom in cash. I will grow all my food, buy a cow for milk, and come up with my own filtration system to re-use the “crick” water over and over. I will also become a vegetarian, so I don’t have to hurt innocent animals. Will that make the morons in the US happy? Wake up people. The end result of this is that no matter what kind of debt you have, or what you do with your life, YOU STILL DIE AT THE END!!That being said, loosen up your britches and live a little. I don’t know about the rest of you, but i’m not perfect. What I DO know is that I’m 26 years old, and have already owned my home for over 2 years, work hard and pay my bills. Think about that while your beer-guzzling 20 something’s are either sleeping on your couch still, or attending some lousy excuse for a “university” on your dime.

Don’t panic people! Most of these are due to people who purchased at no/low down adjustables. Many of these people took cash out while the housing was still accelerating. When the payments adjusted, they bailed out and either walked away or sold for much less, since they were cash ahead with the cash they took out. The median price is based on the current homes that have sold. In areas where the median price has dropped, its because it’s based on these types of homes. That doesn’t mean your house value has dropped also. In better areas, the median prices have been rising.

I would like to comment on the spelling errors that Matt from PA has provided for us.

I’m sorry but I have no sympathy for you if you have over extened on your home. We bought our first house 4 years ago and it wasn’t our dream home but it was within our means. I would love to have a bigger house and one day when my hard work and savings add up I will be there but for now I love that I can sleep at night knowing that I’ve never missed a bill payment in my life and that I can pay extra each month on my mortgage. Remember that in America there is no entitlement to the American Dream. You have the right to Life (w/ exception of pro-abortion people), Liberty (w/ exception of ACLU), and the Persuit of Happyness (Note the word is Persuit and not Guaruntee).

Currently, my husband and I are paying two mortgages…one being on a house that we cannot sell after almost a year on the market (even at the price we paid for it!). We were very responsible when signing on for these mortgages, and we feel shafted that we are having to suffer because of the irresponsible decisions of others. Why are there programs for the irresponsible people? What about those of us who followed the rules, have made “smart” financial committments, and are now stuck paying for it at no fault of our own? What is funny is that we put the home for rent and had 15 responses the very next day (after ZERO responses to buy in a year!). There is something very wrong with this picture.

I agree with most of the postings already here. If you signed the papers without making sure you could afford the payment, then you deserve the pain. And the media could stop the bleeding if they would report on the rest of us that are responsible. HOwever, I like the rest of the responsible ones are paying a price for their mistakes. We lost my mother in law to cancer last year and have been trying to sell the house per the terms of her estate trust. Guess what? we have dropped the price 120K over the last 10 months and still cannot get a buyer. Why, because most of them cannot get a loan! Get the credit markets freed up so this economy can get moving again. Maybe then, the rest of us who were responsible will see our home values go back up.

I consider myself to be liberal, but I agree with much of what parinoid Greg (CNN a bunch of “commies”?) wrote. I have been waiting to buy a house for years because I knew I could not afford it. The irresponsible banks, brokers, and buyers who sold and agreed to these loans deserve to go down. It makes me sick to think that the government will bail the people out who helped inflate the prices with their irresponsibility. Intervening in foreclosures will prop up prices and keep honest home buyers out of the market.

I’m not surprised at the backlash on this board. No one wants to hear about these people. Why aren’t stories written about the responsible owners who did things the right way, the responsible buyers who are kept out of the market because of the bubble, and the responsible agents and brokers hurt by this greed?

So glad to see other comments like my own. I am tired of the media harping on the mortgage problem. It is a problem becuase people are greedy and want to own something more than they can afford and the banks are to blame too, for telling people they borrow more than they could really afford. Everyone seems to forget about taxes, maintenance and utilities to be able to afford a home. We bought below what we could afford and didn’t fall into the ARM gimmick, we pay our mortgage on time and make extra payments. How about doing a story on the majority of us that do that? The media is creating our current “recession,” by definition we are not in a recession, the media has sensationalized everything to scare people. STOP IT!

I agree with the direction of these posts. CNN, please stop writing about these bailouts and sob storys. Enough already. The more you write about them, the more comfortable those people going through it will be knowing “they’re not alone, so it must not be their fault”. It is their fault. Really it is.

We committed to a move from Las Vegas to Maryland in the end of 2004 signed a contract to build in Maryland at 2004 prices using our equity from the boom in Las Vegas as a down payment and sold in Vegas in June 2006 at the end of the peak before prices dropped. Our house in Maryland has dropped but not down to the price we paid. We made out great in the housing boom and only took out loans we could afford. Our mortgage is paid on time monthly and we are enjoying our McMansion.

You know, it’s nice that all you perfect people can sit here and talk about how it’s everyone’s fault they lose their home, and people should be more responsible. You probably aren’t the ones that have lost your jobs either. The fact is, rich or poor, everyone needs a home. With things like groceries and gas skyrocketing, and people losing jobs, not everyone can make it. Are you going to sit there and fault every single parent who has been working hard to keep a roof over their kid’s head, and then maybe they lost their job? If you do, then you are probably the same people who hire the illegal immigrants that “do the jobs that Americans don’t want to do”. Please. I know plenty of people who would be happy with any job at this point. Let’s not use this rough patch in the economy as a step to our pedestals of glory. If you people are so well off, then take a few days off at your solid job and look around. Bad things happen to good hard working people. And yes, I pay my mortgage also. Give you all a cookie.

I have my mortgage payment deducted from my bank account 2x monthly. I save a bunch of interest by doing that. I did not buy more house than I could afford. I did not re-mortgage it. I am not looking for sympathy or a bail out. I think the crooked bankers should be shot. How many times are they going to fleece the American people? Also, the dopes that bought houses they could not afford deserve their fate.

I don’t think this line of comments was what CNN had in mind when it opened this feature for comment. They were looking for the poor me, whiners who wanted to blame others for their problems. Well cudos to you all who have given CNN an education in what makes America great. Self reliance, responsibility for your actions, and minimal government interaction. You all have those commies at CNN scratching their heads on where are all the “victims”. The CNN liberal staff should be focusing on the vast majority (98%) of us who are keeping the system solvent by paying our mortgages on time and making extra payments when we can… that’ the real story here. CNN misses it again.

My family has been in residential construction for 4 generations. The destruction of our industry is due to the greed of our financial systems and a federal reserve that did not do their job. Some believe the fault starts with the borrower. Some believe the opinion I have stated above. It is similar to the old question-”Which came first, the chicken or the egg?” The answer is simple. The chicken hatched the egg. The financial institutions and our marvelous government agencies hatched this egg.Personally I fell it would be fitting that individuals responsible for this should have their own homes foreclosed on. I doubt Mr. Greenspan is worried about such things. For over 2 years the builders in our town have had vertually no new work. The values of residential realestate has dropped below replacement cost.People in our industry have been living off of retirement assets and savings which will soon be gone. It will be amazing to see what happens this year when hundreds of thousands more lose their homes. Possibly we all can live at Mr.Greenspan’s home and he can explain his “bubble theories” to us again. Maybe some of the important people from Wall Street and the lending institutions will take some homeless people in.Maybe these people have some new bright idea to assist building professionals who are out of work. Based on their prior track record I don’t think I will listen to them. To those who will lose their homes,I will pray for you. To those who have no work,I will pray for you. To those who created this mess,I will pray for you too.

All closings are held at an attorney’s office in TN, the title atty is an unbiased party in the transaction. You can request whomever you want. That is the time to ask detailed questions or call a couple of days ahead to request a HUD for your closing and then ask! If you don’t like something, then walk out and ask for it to be redone. I have done this several times in my life, way before I became a realtor!

I agree with everyone else. I have no sympathy for anyone that signed a mortgage agreement without understanding exactly what they were doing. If you don’t understand, don’t sign. If you sign, it is your problem and you should deal with it. We shouldn’t be using taxpayer dollars to bail out (or protect) people who can’t do simple math. I live below my means and bought a house I could afford in spite of the bank telling me I could afford more. I’m no genius, but I was smart enough to say “no, thanks” to an ARM.