Comments on: Stupidity Got Us Into This Mortgage Mess

By: Comment on Stupidity Got Us Into This Mortgage Mess by Pat Hengl

Comment on Stupidity Got Us Into This Mortgage Mess by Pat Hengl — Sun, 21 Sep 2008 09:11:17 +0000

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By: Pat Hengl

Pat Hengl — Sun, 21 Sep 2008 03:42:24 +0000

I am sorry but I hear all kind of blame put on the barrower and not much put on the lender I ‘ve been around for 65 years and there was a time you didn’t get a loan or a credit card until you could show you were responsible and the lending company checked into your records and if you had bad credit you didn’t get a loan or a higher interest rate just so you could charge more that you probably were going to default on .I’m sorry you really do need to be your brothers keeper or theres a good chance everybody is going to pay for it….like now…I don’t think people know what a mess this irresponsible lending has done and the sad part about it could have been avoided

By: jane

jane — Fri, 25 Jan 2008 20:05:12 +0000

@ Dragon Lady In your respons about where does the other $2,000 a month go: probably a lot to taxes. I live inside the City of New York (not Manhattan but another boro) I bought there because property taxes in New Jersey and in the suburbs around New York are outragous (It’s a trade off as NYC has a city income tax.) Most of the people I know who own homes outside of New York City have Property taxes of AT LEAST $10,000 (although its probably closer to $15,000 for the money article couple). By living in the city my combo of income and property tax are more like $6,000.

By: Pikk

Pikk — Fri, 25 Jan 2008 04:31:08 +0000

Where I live (Dallas) all they’ve been building lately is 200K+ townhomes. Guess Dallas is going to be filled with even more rich stupid people soon…

By: KC

KC — Fri, 25 Jan 2008 03:48:27 +0000

I read this article, too. These people make about what my husband and I do and I’m wondering… “how in the —- did they get into this position?” There is no excuse for this if you compare them to what my husband and I have been able to do with a similar income – course we actually own our older cars, have paid off our credit cards, and bought a much smaller and affordable home in a very nice neighborhood. These people are just dumb, but I’m afraid there are lots more dumb people with high incomes to go along with them. Shameful!

By: REM

REM — Thu, 24 Jan 2008 20:17:44 +0000

I am wondering, with the foreclosures and more people perhaps turning to renting, how will that affect the rental prices of current multi-family housing market? I know that building new affordable multi-family housing has not been a priority during the recent years because it is not a money-maker for contractors and investors, but now with more people needing to rent and having a more limited amount of rentals than mcmansions, will rental prices go up? Can anyone add input?

By: Dragon Lady

Dragon Lady — Thu, 24 Jan 2008 16:45:12 +0000

In looking at this article, I’m left cocking my head like a confused golden retriever for a completely different reason. These guys are bringing in about 2K a month above their housing expenses, and they still can’t make ends meet?? I know that property taxes and insurance can take a huge bite out of your monthly take-home, but even so, what are they doing that takes up so much $$ per month that they can’t cut out?

Between me, my husband, and our boarder income, we bring in about $93K to $98K (depending on unreliable bonuses). Our fixed monthly expenses above mortgage include utilities, insurance, food, entertainment, and property taxes of $2150. (And we still contribute 13% to the 401k.) At the end of this exercise, it looks to me like my household and the Maderas live on a similar $2K-ish extra a month. Yes, their house costs about 35% more than mine, so their insurance and prop taxes are likely that much higher, but that would still costs only an extra $160 a month. That could be absorbed by just downgrading the food and entertainment budget of $400 a month to more like $200, or reducing the 401K to a minimum 5% to keep the company match.

And I should probably mention: we live in the infamously overpriced Bay Area of California (only 30 miles from San Francisco). Living frugally is the only way a non-six-figure-earner can buy a house in this market.

I honestly don’t think these people have thought about all their options. It’s not like this is some poor idiot making $40k a year that managed to take out a $400K “liar loan”. The difference between their expenses and their income is actually manageable with some belt-tightening. If Melissa Jones is accurate, and a bad business decision pushed them over the edge, I’d actually be more understanding. As is, it just looks like they’re so used to living the high life that they can’t even picture occasionally eating mac+cheese at home like the rest of us.

By: Marie

Marie — Thu, 24 Jan 2008 16:33:20 +0000

Nobody has even mentioned what happens to these people when they are hit with unexpected hardship like job loss or health problems. They put themselves out on a limb. Everyone grows up with the “American Dream” of owning a home. I consider my husband and I very lucky that we had a local credit union that very carefully calculated a loan that was tied to a low percent of our income. It was almost impossible to find a nice house that cheap (think Green Acres), but after a lot of searching, we found one. Three years later, DH, our major breadwinner, lost his job due to a disability. It was a major scramble for most of last year with only my $1K take-home pay (after insurance premiums and child care expenses) and some savings to live on. But, we were never even late on a mortgage payment. It seemed like tough-love at the time, but we are now really grateful we listened to our credit union and borrowed low instead of high. We now have some disability payments to help us, and I have taken on more hours at work, we cut our expenses to bare-bones, etc. We are having it really tough, and I don’t think we should have to pay for people who got in over their heads just to try to speculate on the market. There are a lot of people in our type of situation every day (ie s*** happens in life), and nobody talks about giant government bail-outs.

By: Smelt

Smelt — Thu, 24 Jan 2008 16:31:39 +0000

I’m sooooo steamed…these freakin’ idiots who make 3 times what I make, are “professionals” and go and blame “the lenders”….what are you? Freakin Nuts?

You bastards deserve it…I make 40K a year, have 3 kids, my wife stays home, have no debt…paid off the house (240K). How? By being responsible…no cell phone, no cable, no fancy cars. No BS. We live quietly, tastefully…I bet I eat, sleep and live better than these idiots ever will. Save, spend wisely, give to the poor and work, hard. You sorry sacks of sh**!

You greedy bastards..materialistic whores!

Damn, I’m so P.O.ed about this…

OK…I’ll be quiet now.

By: pfodyssey

pfodyssey — Thu, 24 Jan 2008 04:39:04 +0000

Uhhh…Carvel franchise eh…as in ice cream…as they say, truth is stranger than fiction. Regardless, I think the discussion is a valid one. A few comments:

* Generally, the government should not get involved…except to prevent (pass laws) or prosecute things like fraud, etc.

* Yes, home prices may go down as a result…that’s basic economics (supply and demand). Some say we will get “hurt” as a result. I would strongly argue that artificially propping up prices is worse…and not sustainable.

* In principal I have no issue with banks / lending institutions modifying the terms of the original loans (ex: maintaining their current interest rates for X years in order to stave off foreclosures). Given the expected losses they will incur due to massive foreclosures, it seems a rationale business decision to do so in order to minimize the damage to the business. It also seems sensible to have someone help coordinate such a big undertaking. I am also ok if someone in our government is willing to take on that task. However, they should be the facilitator…not the arm twister (per my first point above).

* People need to be accountable for their finances…period. I think we should be protected from fraud and the like..but if you don’t pay attention and / or are irresponsible…it’s your responsibility to deal with the consequences.

* Similarly, businesses need to be accountable for their finances. If they don’t know how to underwrite risks, then they must deal with the consequences, whether it be lost profits, battered stock prices, or a bankrupt business. Obviously, stockholders may suffer…but poorly performing or failed business are not new…happens every day for all kinds of reasons.

RESPONSIBILITY. ACCOUNTABILITY. We must have it and embrace it as we will likely be facing similar issues in the future:

* Credit card debt
* Social security
* National debt

The sooner we face it, the better off we’ll be.