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Mortgage renegotiation - so angry! - 10/8/2008 6:17:53 AM
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csl7037
Posts: 1620
Joined: 3/24/2008
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Is anyone else really angry at the concept of defaulted/defaulting "homeowners" being able to renegotiate their interest rates and principal thanks to this bailout? So because I bought a house I could afford, made the necessary sacrifices to be sure that I could continue to afford it as my taxes and insurance went through the roof the last few years, I get to continue paying full price on my home where my neighbor (hypothetical) who never should've been able to get in the house in the first place, has been delinquent and behind on the mortgage for months, now gets to work down to a better interest rate and potentiall even negotiate down the principal on that loan?!?! Is anyone else just about to scream over this? I could just not pay my mortgage for a few months and get bailed out! Is that what people will do? It's tempting.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 8:16:20 AM
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JimboFletch
Posts: 6631
Joined: 4/11/2005
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I'm more inclined to give the consumers a little benefit of the doubt for not knowing the housing market would tank before their higher payments kicked in and they couldn't sell the home. I believe a lot of them honestly thought they were making a smart investment, although I personally avoided anything but fixed morgages.
OTH, I am very much angry at the greedy institutions that made the loans while not even caring if the new owners could make payments 5 years out - because they were going to get their cut up front and, then, sell the mortgage to some other sucker. Those are the people that should get hammered by the legal system.
I'm just glad that as the economy tanks, my morgage was paid off early, that I'm out of debt, and still have a job.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 8:41:10 AM
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wordsnpic
Posts: 24
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Agreed, Jimbo. I am happy that a lot of people in trouble are able to renegotiate their rates to where they should be and stay in their homes. It is good to see people get a break. So many people are hurting right now.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 9:31:31 AM
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Row1
Posts: 250
Joined: 12/2/2005
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"Didn't you agree to work for a Denarius?"
Matthew 20. Something to think abt.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 9:40:42 AM
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stamper_ben
Posts: 10985
Joined: 4/11/2005
From: Lone Star State
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Why did people think that the housing price bubble wouldn't burst?
When we lived in Calif a few years back, we saw our $50,000 house increase in value to $350,000 in the 20 years we lived there. Choice had to be made to refinance (again) in order to keep up with the rising cost of living or sell out and relocate to somewhere with more reasonable living expenses. Sell we did, got out of debt and until a legal issue came up we were mortgage free. Now the house we sold has been on the market by the new owners for about a year now and they are probably stuck with a mortgage payment they can't afford. By God's grace we did the right thing and got out at the right time. (BTW, the asking price on that house is @ $450,000 if anyone is inclined to help those folks out...)
_____________________________
We will be known as His by the love we show one another.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 10:20:58 AM
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GroupW
Posts: 2911
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: csl7037
Is anyone else really angry at the concept of defaulted/defaulting "homeowners" being able to renegotiate their interest rates and principal thanks to this bailout? So because I bought a house I could afford, made the necessary sacrifices to be sure that I could continue to afford it as my taxes and insurance went through the roof the last few years, I get to continue paying full price on my home where my neighbor (hypothetical) who never should've been able to get in the house in the first place, has been delinquent and behind on the mortgage for months, now gets to work down to a better interest rate and potentiall even negotiate down the principal on that loan?!?! Is anyone else just about to scream over this? I could just not pay my mortgage for a few months and get bailed out! Is that what people will do? It's tempting.
What good does it do to be angry? You managed your money well. You'll likely have a decent retirement, a rainy day fund and access to future credit if you decide to splurge on a new car someday. People that didn't do this sunk all their spare cash into a house they couldn't afford and have put themselves in a bind for years to come. Even after some get a reduction of principal to stay in their homes, many will still eventually default. Most will continue to pay money for homes they still can't really afford.
Do you really want to swith places with them? Just enjoy the results of your own responsibility. Why make yourself angry over a contract that you made that's performing according to everyone's expectations? Reminds me of Matthew 20 in some ways:
The Parable of the Workers in the Vineyard
1"For the kingdom of heaven is like a landowner who went out early in the morning to hire men to work in his vineyard. 2He agreed to pay them a denarius for the day and sent them into his vineyard. 3"About the third hour he went out and saw others standing in the marketplace doing nothing. 4He told them, 'You also go and work in my vineyard, and I will pay you whatever is right.' 5So they went.
"He went out again about the sixth hour and the ninth hour and did the same thing. 6About the eleventh hour he went out and found still others standing around. He asked them, 'Why have you been standing here all day long doing nothing?' 7" 'Because no one has hired us,' they answered. "He said to them, 'You also go and work in my vineyard.'
8"When evening came, the owner of the vineyard said to his foreman, 'Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.' 9"The workers who were hired about the eleventh hour came and each received a denarius. 10So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. 11When they received it, they began to grumble against the landowner. 12'These men who were hired last worked only one hour,' they said, 'and you have made them equal to us who have borne the burden of the work and the heat of the day.'
13"But he answered one of them, 'Friend, I am not being unfair to you. Didn't you agree to work for a denarius? 14Take your pay and go.
Edit: Just noticed Row1 beat me to the punch.
< Message edited by GroupW -- 10/8/2008 10:59:51 AM >
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Mortgage renegotiation - so angry! - 10/8/2008 10:49:13 AM
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mrtigger
Posts: 292
Joined: 4/12/2005
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quote:
ORIGINAL: csl7037
Is anyone else really angry at the concept of defaulted/defaulting "homeowners" being able to renegotiate their interest rates and principal thanks to this bailout? So because I bought a house I could afford, made the necessary sacrifices to be sure that I could continue to afford it as my taxes and insurance went through the roof the last few years, I get to continue paying full price on my home where my neighbor (hypothetical) who never should've been able to get in the house in the first place, has been delinquent and behind on the mortgage for months, now gets to work down to a better interest rate and potentiall even negotiate down the principal on that loan?!?! Is anyone else just about to scream over this? I could just not pay my mortgage for a few months and get bailed out! Is that what people will do? It's tempting.
I agree with you. I think your anger is entirely appropriate. Especially in view of the fact that many of these homebuyers obtained mortgages fraudulently. I find it very irritating that they are now being portrayed as 'victims' (although maybe a few actually were) when it actually was the criminal & greedy behaviour of the homebuyers that is the primary cause of this financial mess.
I do think something has to be done though. The number of defaulting mortgages is big enough to take down the banking system. So, I think we have to hold our nose and do this kind of stuff to keep people in their houses and prevent a bigger mess.
I do think though there should be some measures taken to restore a sense of justness & fairness in this situation. Any principal write down should be repaid to the gov (or whereever the write down came from) at a later time of sale, or if it's foreclosed on the write down amount should be taxed at 100% (thus collectible via a tax lien) and have to be paid back as a tax. What we provide should be temporary aid that we recoup later, and not just a free gift to the ones who get helped. And any bank or individual who gets bailed out or foreclosed on ought to pay an extra 5 % or so income tax surcharge for the remainder of their lives.
_____________________________
mr tigger
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RE: Mortgage renegotiation - so angry! - 10/8/2008 11:30:45 AM
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BJinWA
Posts: 90
Joined: 5/9/2007
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i too am angry, well, maybe frustrated.
i have been in my home for almost 20 years now. during that time, i was divorced, raised two wonderful daughters and paid all my bills on time. of course there was some maintenance that i deferred until i could afford it.
during that time, two of my neighbors declared bankruptcy. it frustrates the heck out of me when they did, because one week later each made major improvements to their homes and new cars soon followed. i drive a 5 year old car with 150k miles on it (paid for of course). one of my neighbors drives a bmw and the other buys a new suv every other year.
i realize that my financial position is probably better then theirs, yet it is a sort of annoyance when i see her walk to the mailbox dressed to the hilt.
it's the same thing with the bailout.....but i sleep well at night knowing that i have paid for everything i have.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 11:43:55 AM
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kernsfamily
Posts: 1360
Joined: 4/26/2006
From: Dallas (originally Detroit)
Status: offline
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quote:
ORIGINAL: csl7037
Is anyone else really angry at the concept of defaulted/defaulting "homeowners" being able to renegotiate their interest rates and principal thanks to this bailout? So because I bought a house I could afford, made the necessary sacrifices to be sure that I could continue to afford it as my taxes and insurance went through the roof the last few years, I get to continue paying full price on my home where my neighbor (hypothetical) who never should've been able to get in the house in the first place, has been delinquent and behind on the mortgage for months, now gets to work down to a better interest rate and potentiall even negotiate down the principal on that loan?!?! Is anyone else just about to scream over this? I could just not pay my mortgage for a few months and get bailed out! Is that what people will do? It's tempting.
I share your frustration.
I have a relatively "modest" house for my area (though, it's MUCH more house than I ever had growing up).......we bought something we could easily afford, and nothing that was a "STRETCH" on the budget.
As the sole-income provider for a wife and THREE kids, about 5 years ago, I was UNEMPLOYED for TEN months. Guess what? We made ALL of those mortgage payments ON TIME (along with most of the other bills)......with these people getting "renegotiated" rates and reductions in PRINCIPAL, one would think that I could get some "credit" of some sort for doing what is RIGHT......i couldn't even get them to make a 'notation' on my credit reports!
This whole situation reminds me of an incident that occurred right after we got married, and moved to the Dallas area.
When we first moved here, immediately after getting married (actually I had a job here for a few months before the wedding), we did the apartment thing for about 2 years...to give us time to see where everything was (good neighborhoods, areas to avoid), and just look around (and, have some fun living totally 'maintainance free', and with our housing costs being VERY VERY low).......On alot of weekends, we would drive around ALL OVER the place. Check out neighborhoods, go to open houses....to get an idea of what houses cost, and what we can expect to afford, and basically figure out exactly where we wanted to get a house at....etc..etc...
WELL, we went to alot of neighborhoods in NEW subdivisions, too. One community we visited, had some houses that seemed good...and were seemed to be at least be near our 'price range'. The "salesperson" there showed us some houses, and we told her what we would be looking for.....and then she gave us some "monthly payment" scenarios. At first, they ended up being considerably higher than what we really wanted to spend (when doing a traditional fixed-rate, 30-year). THEN, the "creative math" crept in. She came up with this "scheme" that I would pay $X amount the first year of being in the house, then each year for the next several years, the payments would go UP by a few hundred dollars a month. She easily explained that since I was to "ASSUME" I would be getting raises and bonuses annually, that would cover the higher and higher payments to come.
OF COURSE....we left....was totally insulted by these so-called "ASSUMPTIONS" they were going to make on my behalf just so they could sell me a house.
But, how many other people FELL for it...and, then, fell flat on their faces?
18 months after getting married we DID buy a house. Awesome location. Great schools. We got a steal on it, and got it considerably "under market price" (an elderly couple who couldn't keep up the yard any more...and were wanting to sell quickly...and, even at the price they sold it at, they made out VERY well). Not the GREATEST house in the world, and we've been tempted over the past 10 years to "UPGRADE" into a newer/better house. Though, back in January, we decided to KEEP the house (until retirement), and instead, to do a 'phase-by-phase' renovation of the house. (What's better than having a decent house, along with a mortgage that's SO easy to afford...even though my income has increased considerably since we bought it!)... We're 10 years into this mortgage....and, i want a paid off house well before we retire. Thankfully, the economy in our area is very strong, and house prices are 'steady'.....if not "inching" up even more....
so....there's a FEW mortgage stories/commentaries all lumped into one.
_____________________________
Proud dad of 3 great girls....Erin, Emilie and Elise
Blessed to have all of them in a "totally awesome" public elementary school!
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RE: Mortgage renegotiation - so angry! - 10/8/2008 11:46:12 AM
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kernsfamily
Posts: 1360
Joined: 4/26/2006
From: Dallas (originally Detroit)
Status: offline
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quote:
And any bank or individual who gets bailed out or foreclosed on ought to pay an extra 5 % or so income tax surcharge for the remainder of their lives.
And, any individual who gets "bailed out" should have a BIG RED "X" on their credit reports.....which autmatically either disqualifies them from getting a new mortgage for a length of time, OR at least one that has an interest rate well ABOVE the "current market rate".....as a "penalty" for putting themselves in position of needing to get "bailed out".....
< Message edited by kernsfamily -- 10/8/2008 11:54:15 AM >
_____________________________
Proud dad of 3 great girls....Erin, Emilie and Elise
Blessed to have all of them in a "totally awesome" public elementary school!
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RE: Mortgage renegotiation - so angry! - 10/8/2008 11:53:33 AM
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coco101032003
Posts: 13
Joined: 10/1/2008
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Dear CSL7037,
I would be one of the people you are angry with then. I was looking into these forums to post about my misfortunes and get some advice and fellow christians to pray for me. I came across this one thinking I would find some great advice and all I see is anger. I am so sorry that you feel that way and maybe you are right about some people getting breaks that they dont deserve but I can only speak for myself. my husband and I have been struggling with our morgage for the past year and it has been so hard. We in the beginning bought our house for us and my mother to live in. She was to help us with the morgage until I finished school and atleast stay until we were stable because she had recently been divorced and we were looking for a house and now needed one big enough for all of us. My husband has two kids who lives with us too. Well she got married and moved 2hours away and now there are some hard feelings because of the financial bind she left us in and that I am fresh out of school and not yet making alot of money. We also recently had a child who has put some financial strain on us but we are managing. I would love it if our bank could help us out some how and believe me I would never do this again and we are paying for our bad judgement. We have struggled with our marriage and there have been times I didnt think we were going to make it. My child is not on any government help because we manage to pay everything for him THANK GOD and my husband has good insurance. The Lord has blessed us even through these hard times but we were young and made the wrong decision buying this house. I just want you to know that we are paying dearly for the bad judgements and are now just praying GOD will get us through this. I am so proud for you that you dont have these troubles and just know how blessed you are . GOD is so good!!! We have learned from our mistakes and maybe GOD will help you to be an advisor for others on how to help themselves financially. Please keep my family in your prayers.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 11:58:56 AM
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GroupW
Posts: 2911
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: coco101032003
Dear CSL7037,
I would be one of the people you are angry with then. I was looking into these forums to post about my misfortunes and get some advice and fellow christians to pray for me. I came across this one thinking I would find some great advice and all I see is anger. I am so sorry that you feel that way and maybe you are right about some people getting breaks that they dont deserve but I can only speak for myself. my husband and I have been struggling with our morgage for the past year and it has been so hard. We in the beginning bought our house for us and my mother to live in. She was to help us with the morgage until I finished school and atleast stay until we were stable because she had recently been divorced and we were looking for a house and now needed one big enough for all of us. My husband has two kids who lives with us too. Well she got married and moved 2hours away and now there are some hard feelings because of the financial bind she left us in and that I am fresh out of school and not yet making alot of money. We also recently had a child who has put some financial strain on us but we are managing. I would love it if our bank could help us out some how and believe me I would never do this again and we are paying for our bad judgement. We have struggled with our marriage and there have been times I didnt think we were going to make it. My child is not on any government help because we manage to pay everything for him THANK GOD and my husband has good insurance. The Lord has blessed us even through these hard times but we were young and made the wrong decision buying this house. I just want you to know that we are paying dearly for the bad judgements and are now just praying GOD will get us through this. I am so proud for you that you dont have these troubles and just know how blessed you are . GOD is so good!!! We have learned from our mistakes and maybe GOD will help you to be an advisor for others on how to help themselves financially. Please keep my family in your prayers.
He Coco-
I'm one of those Wall Street types that the other half of the website is complaining about, so we have that in common. If there's any way I can be of assistance, feel free to contact me. I know about as much about mortgages as anyone here, so I'm happy to do what I can.
Peace,
BT
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:04:45 PM
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GroupW
Posts: 2911
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: kernsfamily
quote:
And any bank or individual who gets bailed out or foreclosed on ought to pay an extra 5 % or so income tax surcharge for the remainder of their lives.
And, any individual who gets "bailed out" should have a BIG RED "X" on their credit reports.....which autmatically either disqualifies them from getting a new mortgage for a length of time, OR at least one that has an interest rate well ABOVE the "current market rate".....as a "penalty" for putting themselves in position of needing to get "bailed out".....
Normally, that would be the case under the standard underwriting guidelines for conventional conforming loans. Normally, something like that would have put you into Alt-A type loans or worse.
If I had to guess, we'll see some degree of looking-the-other-way on a lot of this. We're already seeing that in the commercial mortgage space - some lenders are offering discounted payoffs to borrowers so they can get some of the debt off their books. Accepting a discounted payoff like that isn't being perceived by other lenders right now as all that bad. Normally, it would flip you over into hard money lender world.
Just a guess on my part, and I could easily be wrong, but I think it has a strong possibility of playing out that way.
BT
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:09:13 PM
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GregandJenny
Posts: 616
Joined: 2/16/2006
From: Near Seattle Washington
Status: offline
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In this crisis I am all for renegotiating the interest rate paid. However I am not for renegotiating the principle.
1. If I buy something today (including an investment) it has a probability of losing value. That's on me. When you take a gamble you take a gamble.
2. Some people's interest rates are way to high, this is gonna cause them to foreclose. If they can get a decent interest rate and make payments then at least the bank can get the money back. If the house has to be foreclosed on there is a decent chance that it will be on the market for a while (at least here) if it is able to get sold at all. The bank will lose money on it. Possibly keeping us in this cycle. To me this is a win-win.
I dont' like the other way but I am not angry. I think when we are in turbulent financial times people are trying to find the best solution.
G
_____________________________
It does not have to be well with my circumstance to be well with my soul!
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:36:36 PM
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csl7037
Posts: 1620
Joined: 3/24/2008
Status: offline
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quote:
ORIGINAL: kernsfamily
quote:
And any bank or individual who gets bailed out or foreclosed on ought to pay an extra 5 % or so income tax surcharge for the remainder of their lives.
And, any individual who gets "bailed out" should have a BIG RED "X" on their credit reports.....which autmatically either disqualifies them from getting a new mortgage for a length of time, OR at least one that has an interest rate well ABOVE the "current market rate".....as a "penalty" for putting themselves in position of needing to get "bailed out".....
Will there be anything like this? Will this be reflected on future credit reports? Geez, I hope at least for that much! There've got to be consequences for stupidity and greed!
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:43:35 PM
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GregandJenny
Posts: 616
Joined: 2/16/2006
From: Near Seattle Washington
Status: offline
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I guess the reflection on credit reports would be up to the bank. right now i think the bank is just wanting to get at least the principle.
G
_____________________________
It does not have to be well with my circumstance to be well with my soul!
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:46:48 PM
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GroupW
Posts: 2911
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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Probably not as much of a penalty as there has been in years past. There's a sense among some players that you'll see some flexibility by lenders regarding people that got caught up in the madness over the past several years. It will be interesting to see how that really plays out.
Only time will tell.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:49:02 PM
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csl7037
Posts: 1620
Joined: 3/24/2008
Status: offline
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quote:
ORIGINAL: kernsfamily
quote:
And any bank or individual who gets bailed out or foreclosed on ought to pay an extra 5 % or so income tax surcharge for the remainder of their lives.
And, any individual who gets "bailed out" should have a BIG RED "X" on their credit reports.....which autmatically either disqualifies them from getting a new mortgage for a length of time, OR at least one that has an interest rate well ABOVE the "current market rate".....as a "penalty" for putting themselves in position of needing to get "bailed out".....
Will there be anything like this? Will this be reflected on future credit reports? Geez, I hope at least for that much! There've got to be consequences for stupidity and greed!
quote:
ORIGINAL: coco101032003
Dear CSL7037,
I would be one of the people you are angry with then. I was looking into these forums to post about my misfortunes and get some advice and fellow christians to pray for me. I came across this one thinking I would find some great advice and all I see is anger. I am so sorry that you feel that way and maybe you are right about some people getting breaks that they dont deserve but I can only speak for myself. my husband and I have been struggling with our morgage for the past year and it has been so hard. We in the beginning bought our house for us and my mother to live in. She was to help us with the morgage until I finished school and atleast stay until we were stable because she had recently been divorced and we were looking for a house and now needed one big enough for all of us. My husband has two kids who lives with us too. Well she got married and moved 2hours away and now there are some hard feelings because of the financial bind she left us in and that I am fresh out of school and not yet making alot of money. We also recently had a child who has put some financial strain on us but we are managing. I would love it if our bank could help us out some how and believe me I would never do this again and we are paying for our bad judgement. We have struggled with our marriage and there have been times I didnt think we were going to make it. My child is not on any government help because we manage to pay everything for him THANK GOD and my husband has good insurance. The Lord has blessed us even through these hard times but we were young and made the wrong decision buying this house. I just want you to know that we are paying dearly for the bad judgements and are now just praying GOD will get us through this. I am so proud for you that you dont have these troubles and just know how blessed you are . GOD is so good!!! We have learned from our mistakes and maybe GOD will help you to be an advisor for others on how to help themselves financially. Please keep my family in your prayers.
Everybody hits bad circumstances in life - sometimes all at once. I'm going to assume (for my sanity's sake) that you're not in a risky "creative" mortgage and say that you're going to be hurt by this too. If you made relatively wise decisions with the circumstances and information you had at the time (assumption), the economy taking on you has exacerbated your issues because of the people greedily getting in over their heads. You're stuck because you couldnt' downsize when your circumstances changed and you needed to. But consequences to bad decisions are inevitable. My beef is with people who wont feel any because they just don't care, they'll take what they can get, and unless there's a big "scarlet $" stamped on their forehead will go right out and get in the same messes again while I'm left holding the tax bill on this.
quote:
ORIGINAL: GregandJenny
In this crisis I am all for renegotiating the interest rate paid. However I am not for renegotiating the principle.
1. If I buy something today (including an investment) it has a probability of losing value. That's on me. When you take a gamble you take a gamble.
2. Some people's interest rates are way to high, this is gonna cause them to foreclose. If they can get a decent interest rate and make payments then at least the bank can get the money back. If the house has to be foreclosed on there is a decent chance that it will be on the market for a while (at least here) if it is able to get sold at all. The bank will lose money on it. Possibly keeping us in this cycle. To me this is a win-win.
I dont' like the other way but I am not angry. I think when we are in turbulent financial times people are trying to find the best solution.
G
I think there should be an investigation. Some companies were fraudulently making these loans, some were pressuring and misleading consumers. Some just let people be stupid and made some money off of it. But where there were real, significant abuses, maybe those people should be allowed to renegotiate interest rates - but not the principal! That's silly. My house has gone down in value just as much as anyone else's!
I understand what you're saying about foreclosures not doing anybody any good - the bank doesn't want your house! I have a friend who is renting and is being foreclosed on! Well, their landlord's being foreclosed on - they were paying the rent but who knows what he was doing with it! I told her to contact the bank and maybe they'll let her keep renting...they don't want an empty house any more than she wants to have to move. But there just better be something in place down the road to make it really hard for anyone who get bailed out to get ANY kind of credit in the future.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 12:59:24 PM
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BJinWA
Posts: 90
Joined: 5/9/2007
Status: offline
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thank you coco, for reminding me there are two sides to every story.
i hope all works out for you.
ps---welcome to the forums!!!!
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RE: Mortgage renegotiation - so angry! - 10/8/2008 1:31:51 PM
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reach
Posts: 1338
Joined: 4/12/2005
Status: online
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I am in a situation where we have a balloon on our mortgage. My husband almost lost the house and did what he could to stay in the house. Right before we got married, he refinanced again, to combine his first and second. I have been pushing for us to refinance to a fix, so that we are paying toward owning the house, but we have a jumbo loan, so we cannot get a good rate. So when the interest rate bill was passed earlier this year, I told my husband we need to refinance, but when we went to do it, we could not because the price of our home went down over 100K in 1 year. So we did not have enough equity to refinance. So I check again later, and the price of the homes in our neighborhood went down another 50K and we would hour home would appraise under what we owe now (Because of the forclosures, they are really affecting the price of houses). So now we can't refinance at all.
We have over three years before our interest rate would go up. We are praying that things fix themselves in that time. We do make the payments, we pay extra priciapal payments. We don't live in an expensive house. We would not have a house if it weren't for the fact that my husband already owned it. We talked about moving into an already finished house, but we decided to just start fixing our own house and stay here for a while. We did not move into something pricey and out of our league. We don't have any debt and we own both of our cars.
My feeling is, we knew what kind of loan we had. I never in a million years expected housing prices to drop that much. I expected they would drop a little, as I think in CA the houses were way overpriced. But not over 150K.
If things don't work out in 3 years, then we would be in the same boat as everyone else. And we know that is the price that you pay. Unfortunately. We would try and sell the house, and get what we could and then pay off the rest of the loan.
I really don't know that we could have done anything different than we did. All I can say is we will continue on this path and God will honor us for doing the right thing.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 2:26:25 PM
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gigigirrl
Posts: 81
Joined: 3/27/2006
Status: offline
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A few thoughts.
* I understand where the op is coming from. But I am happy even though I have given up certain niceties to be ok. I still have a house over my head, food in my fridge, and intact credit.
* I don't think we can say the borrowers were completely innocent. My dh and I were offered "creative" solutions that would have gave us 25% to 49% more money for buying a house than I figured we could actually afford. How many people wanted more house and took advantage of what the banks offered. Did not do the homework to see what they could afford.
* I don't know how much we can point our fingers at the "greedy" institutions since there was a govt. regulation that mandated with penalties for not making subprime loans. I am sure there was some greed but making them out to be the devil in this whole mess is disingenuous.
* I had friends get into homes that they were barely on the edge of paying for - that if one wrong thing happened they would have problems paying theyre bills.
* What you can afford does not mean standing on the edge of the cliff financially-it means being with in good reason from the edge of the cliff.
* People getting loans whose credit didnt support the viability of them being able to pay off the loans.
* Fix your credit first- than get a loan- save up for a down payment than get a mortgage.
* There are thousands of individual stories out there of lives hanging in the balance. I am not heartless. I understand things happen unexpectedly. There is a philosophy that I have lived by ever since I was around 20 when I got bit by an unexpected event. Plan for the worst, hope for the best. And I do make a point planning for the very worst. Because it does not happen all the time but it does happen. And if you have planned for it and it does not happen all the better. Over the years I have seen so many hurt from a false pollyanna attitude. Thinking everything will be fine. I feel so bad for them when the bad stuff happens. I want to give them a big hug. All I can say is please consider living by that philosophy, it has not failed me in all these years.
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RE: Mortgage renegotiation - so angry! - 10/8/2008 2:35:35 PM
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GroupW
Posts: 2911
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: reach
I am in a situation where we have a balloon on our mortgage. My husband almost lost the house and did what he could to stay in the house. Right before we got married, he refinanced again, to combine his first and second. I have been pushing for us to refinance to a fix, so that we are paying toward owning the house, but we have a jumbo loan, so we cannot get a good rate. So when the interest rate bill was passed earlier this year, I told my husband we need to refinance, but when we went to do it, we could not because the price of our home went down over 100K in 1 year. So we did not have enough equity to refinance. So I check again later, and the price of the homes in our neighborhood went down another 50K and we would hour home would appraise under what we owe now (Because of the forclosures, they are really affecting the price of houses). So now we can't refinance at all.
We have over three years before our interest rate would go up. We are praying that things fix themselves in that time. We do make the payments, we pay extra priciapal payments. We don't live in an expensive house. We would not have a house if it weren't for the fact that my husband already owned it. We talked about moving into an already finished house, but we decided to just start fixing our own house and stay here for a while. We did not move into something pricey and out of our league. We don't have any debt and we own both of our cars.
My feeling is, we knew what kind of loan we had. I never in a million years expected housing prices to drop that much. I expected they would drop a little, as I think in CA the houses were way overpriced. But not over 150K.
If things don't work out in 3 years, then we would be in the same boat as everyone else. And we know that is the price that you pay. Unfortunately. We would try and sell the house, and get what we could and then pay off the rest of the loan.
I really don't know that we could have done anything different than we did. All I can say is we will continue on this path and God will honor us for doing the right thing.
I do expect things to improve, but quite possibly not enough to help you refinance out of this problem. I don't see property prices in CA coming back by $150 grand, even if you live by the Bay. It might be worth while to start talking to your bank or other credit professional now to see what can be done while people are motivated to work with you.
Fortunately, CA is a single action state which limits a bank's ability to come at you personally for the excess of a mortgage over it's value.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Mortgage renegotiation - so angry! - 10/8/2008 2:54:06 PM
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reach
Posts: 1338
Joined: 4/12/2005
Status: online
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We don't need 150K.... Only about 110K (hehehe!) That would give us enough equity to refi. We would be even better as we pay the loan down, since we are paying on the pricipal. And yes, we live in the bay area.
Question: We get a big tax return. We were going to start using it to do stuff on the house. Would it be better to pay the loan down, fix the house up, so it sells for more, or just hold the money and see what happens with the market. Last year we held most of the money because I was laid off, and we did not want to spend all of our cash and not have anything in the bank. It was the right decision.
< Message edited by reach -- 10/8/2008 3:02:50 PM >
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RE: Mortgage renegotiation - so angry! - 10/8/2008 3:42:11 PM
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csl7037
Posts: 1620
Joined: 3/24/2008
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