The rich bail on their mortgages more than the poor

unfortunately, some people do all of that and still get caught. trust me when i say this is a good friend, i know how he was saving, not extravagant, and was doing everything right. everything. the industry he was in took a huge hit and still has not recovered. even tho he has moved on to a different industry, not making nearly as much, he still went through it all between while searching for another job, any job, because it was extended and because now he is not making nearly as much. all those goals for financial stability? he had achieved those. and every bit of it was sucked away when his industry went into a financial tailspin because of the economy.

im not gonna say there arent people who bought more than they could afford. but there are those that bought what they could easily afford and maybe at the time could have afforded even more. for those people, the economy made for circumstance far beyond their control, and have caused them to lose everything. even when they are struggling to make things right. struggling to make not only the payments they owe now plus back payments. but some institutions wont accept that.

those are the people that need lenders to work with them. when they go in and show that

a: they were "downsized" or had a huge drop in income although employed, sometimes with the same employer they had been with for a long time
b: are employed, just not for as much as what they had made most of their adult life
c: are again making payments and willing to set up a back payment schedule to make things right. (in his case has sent in back payments only to have them returned because they are not the full amount owed!)

how does it make sense to not work with those people? these arent people walking away from responsibility, they are trying to be responsible, but not being allowed to be.

 

Since Dodd, along with Barney Frank, was one of the chief promoters on the policy that allowed banks to make high-risk loans to individuals who could not otherwise afford a home, I have to assume that was what he was talking about. It was certainly in line with his philosophy.

 

Oh I don't doubt any of that. But I also feel there are probably plenty out there who decided to get a loan for a house they couldn't afford and are now the ones who are delinquent.

 

agree there are plenty of those, no doubt. unfortunately, there are also the others, and they are being punished for doing everything right and still getting kicked in the teeth by the economy. and the ones that STILL want to pay for their homes, but need to alter things, or at the very least have a payment plan for catching up if they cannot catch up in full, to not do so is wrong. if you dont want to argue the morality, you can argue that it is actually better for the housing market to let those people keep their homes and work with them to make a payment plan.

those that couldnt afford in the first place, well, i dont know what to say other than they should not have, and the lending institutions should not have. that part was a cluster in the making.

 

seems like the point of the article was missed. the "rich" and not so rich are getting in trouble on their mortgages. the rich walk away from their mortgage more.

i started the thread mostly because i have antipathy for those that came down hard on people that were foreclosing when the bubble burst. ive not heard much berating of the owners of investment homes that foreclose ( a huge percentage of all foreclosures) or of these "rich" owners that are foreclosing.

 

I understand. At the end of the day, there are events in life that are so overwhelming that we really can't plan for them and we just get whacked! I'm sure Jewish families in Germany in the early 1940's never thought anyone would force them out of their home, onto trains, in send them to death camps. Some things, you just can't plan for, like housing bubbles, and the bubbles always pop, with many spin-off effects.

 

no, you havent been paying attention. all people that ever have any financial problems are lazy, drug-using democrats---and dont dare give them one dime of tax money.

 

It isn’t necessarily being educated in living and life. In many cases this whole economy collapse has caught some very educated and savvy people off guard. It isn’t the fault of the individuals in many cases. I mean what if you are one of the people who have lived in their home for 5-10 yrs, it’s your home not just a house, you bought before the housing bubble, the only thing you did was cash out a little equity to do some home improvements, and kept your mortgage payments and balance way below what the housing bubble got to. What if you were someone that was making a solid 6 figure income, you kept your debt less than 20% of your take home pay, you saved a substantial amount, and even put funds away for your kids college in one of the state/federal run programs to lock down the tuition. And then your income not only dropped a little, not just 20-30%, but down to less than 25% of what you were making due to the industry you work in and have for close to 20 yrs. What do you do? You have 3 kids and a wife, all 3 are young and need day care of some sort, your wife’s job history really wouldn’t create an additional income that would justify putting the kids in daycare, for she has been a stay at home mom for the past 8-10 yrs. What do you do then? You do your best to manage your bills and keep your cost of living down, you supplement your income with your savings trying to ride out the storm, keeping your head above water and managing your mortgage and bills. Until your savings runs out, and the economy still hasn’t turned around and your career still hasn’t recovered.

This my friends is the story behind over 60% of those that are losing their homes. This isn’t the story of some investor that is just walking away from a bad investment, this isn’t the story of someone who bit off more than they can chew, this is the reality behind the housing crisis. Believe the media, believe the government, but this is the reality. Are these lazy people that don’t want to make things right, or are they people caught up in a much bigger storm that doesn’t seem to have an end? Do these people deserve to lose their homes or do they deserve to find some solution to keeping their homes? Most if you ask them, I would bet, would prefer to keep their homes, but as Okie pointed out, in many cases the banks just aren’t willing to work with them. So as the property values of your homes fall, as you sit back and watch your neighbor lose their home, realize that many of them didn’t bring this on themselves, but rather just don’t have the answers to save their own homes and the banks aren’t willing to help them. As Okies put it, they got their bailout, so too bad for you. Our bottom line is now in the black and even when we lose money on this home we will still be in the black. In the long run many of you will look at this and not blink an eye, but when your investment, your home, isn’t the investment that you wanted it to be, when it isn’t appreciating the way you had hoped it would, realize it is the banks, not the people in the homes, that are screwing you too. A home is supposed to be a built in savings account, and in many people’s case is their largest investment and form of savings. As you watch that savings continue to go out the window, look to the same banks that own your mortgage, as to whom is really to blame for you no longer having the savings you once did.

 

Good post Legacy Tiger.
Let me take it a step further and point out that these things are only going to get worse as the Bush Tax Cuts expire this fall.
I will also point out that the debt commission will make their assessment after the elections.
Somewhere down the road taxes will increase and or we will get new taxes because of the debt and possibly energy such as cap and tax.
If things are bad now just wait til then.

 

Just one more cog in the financial crunch many are feeling. But hey, look on the bright side, according to the media and certain segments of the gov't the economy is on the rise again. Of course it isn't hard to show some improvement when the bar was so low. Also, they don't clarify it by telling the truth, that it is improving in pocketed areas while at the same time getting worse in others.