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Obama administration to order lenders to cut mortgage payments for jobless

StandUpChuck said:
Arborvitae and roses do nothing to increase the value of your home. Curb appeal, yes. Value, no.

Many of those other improvements seem more like asthetic improvements. I would guess that the house was likely in not such attractive state when you bought it or you wouldn;t have had to do all that. If so, you likely paid a little less than FMV at the time because of the condition.

Assessed value is not the same as fair market value. Hopefully your assessed value is well under FMV so you won't pay as much in taxes. Do you want the assessed value to be higher?? :confused:

Did you buy your house as an investment property or a place to live?

I also built my home at the top of the market. I'm not planning on selling unless I absolutely have to, and then, rest assured, I know I'll be getting a bargain on the new property I buy.

What people fail to realize is that a lot of foreclosures out there currently are NOT caused by someone losing their job or getting into trouble because of ARMs. Yes those happen, but a lot of people bought bigger and better homes before they sold their current one. When the former didn't sell quickly, they ended up carrying 2 mortgages. Many just defaulted on the previous one since they were already comfortable in a new and bigger house with no plans to move any time soon. In many cases, they strip the first property of all the goodies and install them in their new home. For every poor Joe down on his luck, there's an opportunistic Josephine out there taking advantage of the current situation.
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Great explanation.

I'm buying in about a year, should be the perfect time to get a great price.
There are still millions of homes that haven't been put up for sale yet.
 
Harry Guerrilla said:
Great explanation.
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Thank you.

I'm buying in about a year, should be the perfect time to get a great price.
There are still millions of homes that haven't been put up for sale yet.
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Yes and no Harry. We don't know what interest rates will look like in a year. So even if house prices continue to go down (and they probably will :sigh:), a higher interest rate might offset any savings you may receive by waiting. If you're waiting until prices bottom out, I'd be careful. If you're waiting because you're saving up for a proper downpayment, I applaud you.
 
StandUpChuck said:
Yes and no Harry. We don't know what interest rates will look like in a year. So even if house prices continue to go down (and they probably will :sigh:), a higher interest rate might offset any savings you may receive by waiting. If you're waiting until prices bottom out, I'd be careful. If you're waiting because you're saving up for a proper downpayment, I applaud you.
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That's it right there.

I found a home I love but need the rest of the down payment cash. :(

I expect interest rates to rise, the fed is signaling so but in my area the prices are depressed pretty well.
I found 4 bedroom for about $60k, it's a steal and in great shape.
 
Erod said:
Oh, yummy. I always wanted to live in a 1,000-apartment tower in Tokyo.
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Me too.. as long as the apartment isn't over 320 sq. ft.
 
Harry Guerrilla said:
That's it right there.

I found a home I love but need the rest of the down payment cash. :(

I expect interest rates to rise, the fed is signaling so but in my area the prices are depressed pretty well.
I found 4 bedroom for about $60k, it's a steal and in great shape.
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That house won't last. Offer full price, but ask the sellers to pay your downpayment. Im guessing however, that it's a foreclosure, so there may not be any money for the seller's to do that.

Make sure you're represented by a realtor.
 
StandUpChuck said:
Yes those happen, but a lot of people bought bigger and better homes before they sold their current one. When the former didn't sell quickly, they ended up carrying 2 mortgages. Many just defaulted on the previous one since they were already comfortable in a new and bigger house with no plans to move any time soon. In many cases, they strip the first property of all the goodies and install them in their new home. For every poor Joe down on his luck, there's an opportunistic Josephine out there taking advantage of the current situation.
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One thing I've seen happen in my area is that people are trapped. There have been cuts in local companies (job losses), and people can't find a new job and can't sell their house for what they presently owe. So they are stuck.

In other cases, they were transferred for work, and can't unload their house. I'm glad I have no reason to need to move and I'm not upside down because I'm pretty conservative financially. I owe a lot less than my house is worth, even though it's worth less than it was at the top of the bubble.

The thing is...a lot of lenders haven't really tried very hard to work with people so they could stay in their homes. Particularly people with ARMs and balloons are in a world of hurt. The more lenders can be encouraged to help keep people in their homes, rather than foreclosing, the less the market deflates.
 
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StandUpChuck said:
That house won't last. Offer full price, but ask the sellers to pay your downpayment. Im guessing however, that it's a foreclosure, so there may not be any money for the seller's to do that.

Make sure you're represented by a realtor.
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I would but I'm short about $7k on the down payment. :(

What are the benefits of a realtor?
Haven't explored that aspect yet.
 
This is the way it's done in all third world dictatorships.

Several of us warned the idiots for a long time this type of dictate was coming and now here is another example of the usurpation of the Constitution and now the basic rule of law is now at stake.

Those who stand for nothing fall for anything.
 
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phattonez said:
If it has to be liquidated, better to do it now then stay stuck with the problem that we have now.
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You have it all wrong.. first we need to poor (pun) 3 trillion dollars into trying to stem the flow. Then go ahead and let market forces do what they are destined to do no matter what Big Brother, in all of it's ineptitude, does.

That's the Nanny State way.

BTW katz… I’m involved in real estate. If market forces had been let to run their course this would all be over with and the market into an up swing. But Noooooo…… Barry will just keep this downward spiral going until we are all in a bread line.
 
Glinda said:
And through no fault of their own, but rather as a direct result of the greedy and unscrupulous mortgage brokers and lenders who set the foreclosure extravaganza in motion by trading hyper-inflated junk.
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Wrong......

The current mortgage crisis came about in large part because of Clinton-era government pressure on lenders to make risky loans in order to “make homeownership more affordable for lower-income Americans and those with a poor credit history,” the DC Examiner notes today. “Those steps encouraged riskier mortgage lending by minimizing the role of credit histories in lending decisions, loosening required debt-to-equity ratios to allow borrowers to make small or even no down payments at all, and encouraging lenders the use of floating or adjustable interest-rate mortgages, including those with low ‘teasers.’”
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Clinton Pressure to Promote Affordable Housing Led to Mortgage Meltdown|OpenMarket.org

This is fact, not liberal talking points.
Let me tell you a story...

In 2004, I purchased my home for $194,000. Over the course of the last six years, I've invested a lot of sweat and at least $50,000 toward improvements - completely rebuilt the gutted 1/5-mile gravel road, planted an enormous lawn, fruit trees, arbor vitae, 30+ rose bushes and hundreds of bulbs and assorted other plants, built an 8 x 12' greenhouse, three raised vegetable beds, an 8 x 12' Tuffshed, added a large deck on the front of the house and a roof and enclosure for the back deck, put in new carpet, new interior paint, new water heater, new kitchen sink/fixtures and Insinkerator, ran electrical lines to the outbuildings, new septic pump, completely rewired the garage, and on and on and on.

Two years ago, my home was assessed at $269,000 (before the roof/room was added to the back deck).

Today, the state assessor values my place at $187,000. Imagine its current "value" had I never invested a dime.

Now explain to me how I can possibly be faulted for the loss of value to my home. Please.

I'm all ears.
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If you had been paying attention to your biggest investment you would have seen this comeing for a country mile.. you weren't, it happened.
Pray tell, who do you suppose is going to buy it? All the unemployed people out there whose homes are being foreclosed upon?



And when millions of jobs disappear because the economy is in a pit... Then what?



I think it's clear you have no real understanding of how we've come to the point we have.
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No, you don't know how we got here..... all you have is liberal talking points to shift the blame and "poor me"
 
phattonez said:
So you're really going to tell me that people didn't know what they were getting themselves into? They didn't know the risk with adjustable rate mortgages? Come on. People are not stupid.
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That is totally wrong....... a vast majority of people that buy homes are stupid, they don't bother to research the investment before they make, what could arguably be, the biggest expenditure of their life. How is that not stupid?
 
Catz Part Deux said:
One thing I've seen happen in my area is that people are trapped. There have been cuts in local companies (job losses), and people can't find a new job and can't sell their house for what they presently owe. So they are stuck.

In other cases, they were transferred for work, and can't unload their house. I'm glad I have no reason to need to move and I'm not upside down because I'm pretty conservative financially. I owe a lot less than my house is worth, even though it's worth less than it was at the top of the bubble.

The thing is...a lot of lenders haven't really tried very hard to work with people so they could stay in their homes. Particularly people with ARMs and balloons are in a world of hurt. The more lenders can be encouraged to help keep people in their homes, rather than foreclosing, the less the market deflates.
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Oh there are definitely people down on their luck.

I'll disagree with the banks not working w/people. Short sales are often the first step, and the whole premise of the short sale is the bank forgiving the part of the debt that cannot be recovered through sales since the FMV is much lower now than time of purchase (Glinda's property would be a prime example of a house that would likely be a short sale since she bought at top of the market and made improvements). Banks will eat a heck a lot of the loan with a short sale and the homeowner avoids foreclosure.

Harry Guerrilla said:
I would but I'm short about $7k on the down payment. :(

What are the benefits of a realtor?
Haven't explored that aspect yet.
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Catz Part Deux said:
One thing I've seen happen in my area is that people are trapped. There have been cuts in local companies (job losses), and people can't find a new job and can't sell their house for what they presently owe. So they are stuck.

In other cases, they were transferred for work, and can't unload their house. I'm glad I have no reason to need to move and I'm not upside down because I'm pretty conservative financially. I owe a lot less than my house is worth, even though it's worth less than it was at the top of the bubble.

The thing is...a lot of lenders haven't really tried very hard to work with people so they could stay in their homes. Particularly people with ARMs and balloons are in a world of hurt. The more lenders can be encouraged to help keep people in their homes, rather than foreclosing, the less the market deflates.
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The problem with that is if lenders let people stay in the homes when they can't afford the payments, they can't afford the rent either.

Lenders are much better off short selling the house or foreclosing. In both instances they can resell the home and charge the loss back to the borrower.

An other big problem with letting people stay without paying is, they tend to tear the home to pieces.. they don't do maintenance and in most cases, strip the home of everything including the kitchen sink.
 
Catz Part Deux said:
The thing is...a lot of lenders haven't really tried very hard to work with people so they could stay in their homes. Particularly people with ARMs and balloons are in a world of hurt. The more lenders can be encouraged to help keep people in their homes, rather than foreclosing, the less the market deflates.
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How can they? Banks are more upside down than the homeowners.
 
Harry Guerrilla said:
I would but I'm short about $7k on the down payment. :(

What are the benefits of a realtor?
Haven't explored that aspect yet.
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You know that little piece of advice I just gave you about asking the seller to make your downpayment? That's one of the advantages to having a realtor. They write stuff like that into your offer and negotiate terms like that for you. The other is that they will be able to put together a market analysis for you to make sure you are not paying too much for a property. They will take steps to ensure you've got safety nets in case the property you're interested in buying turns out to be a major money pit. In most states, the buyer pays nothing for real estate respresentation (the commission is paid by the seller). The only time (usually) that the buyer pays for representation is when the house is listed For Sale By Owner in which case, someone has to pay the buyer's rep, and it won't be the FSBO seller.

You never want to contact the listing agent directly to inquire about a property. They have the seller's best interest at heart, and they are not resprenting you. You could get hosed big time.
 
Harry Guerrilla said:
I would but I'm short about $7k on the down payment. :(

What are the benefits of a realtor?
Haven't explored that aspect yet.
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They are bound by rules that protect you and all of your interests. You, being a buyer, they don't cost you a penny.

Just make sure you go with a Realtor (member of the National Association of Realtors), not just a real estate agent.
 
StandUpChuck said:
Oh there are definitely people down on their luck.

I'll disagree with the banks not working w/people. Short sales are often the first step, and the whole premise of the short sale is the bank forgiving the part of the debt that cannot be recovered through sales since the FMV is much lower now than time of purchase (Glinda's property would be a prime example of a house that would likely be a short sale since she bought at top of the market and made improvements). Banks will eat a heck a lot of the loan with a short sale and the homeowner avoids foreclosure.
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That is a possibility, but you have to get the note holder to agree.. and you best have it in writing or it never happened.
 
This sums up Obama's idea of fairness and personal responsibility

Dear Responsible Home Buyer: You Wasted Your Money
by Brian Sullivan


Here's the scenario -

Five years ago you bought a home for $300,000. You put down $50,000 and took out a fixed rate loan for the $250,000 mortgage. Over the past five years you've been paying principal. You didn't refinance, instead living with an older kitchen or bathrooms and a used car. You now owe $225,000, having paid $75,000 in real payments to a bank over the years.

At the same time, another couple bought a similar home on your street for the same price. But unlike you, they put down just $5,000 and took out an interest only loan for $295,000. Three years ago they refinanced their house in a hot market and borrowed $50,000 in 'equity' to install a fancy new kitchen, complete with all the latest and greatest amenities. That 6 burner Viking stove looks great, but now they owe $345,000 and are paying no principal.

Then housing took its fall.

A third neighbor defaults and the home sells for $225,000. Appraisals tumble. You now realize your home is worth less than you paid, but at least you aren't completely underwater.

Not so for the neighbor with the new kitchen. He realizes he's more than $100,000 upside-down on his mortgage and paying no principal. Though employed and can afford his monthly payments, the house suddenly looks like a burden, not a benefit. He considers walking away and mailing in the key.

Now comes the President's new housing plan.

Under it, banks are under pressure to cut not just his payments but also his principal balance. All on the back of the already cash-strapped FHA.

So let's assume that unlike the other housing plan (HAMP), this one works and Mr. 6 Burner Stove gets his lender to slice $100,000 off his balance and dump the difference onto the FHA (and thus the taxpayer).

He now owes $245,000 to your $225,000. But you spent $75,000 real dollars not including interest on your loan. He spent $5,000 and has a fancy new kitchen.

Basically you just blew $75,000 bucks.

And oh yeah, your taxes will probably go up once the FHA needs a bailout.

That, in essence, is the 'new' housing plan from the White House. Does it sound like the "new era of personal responsiblity" the President spoke of in his inauguration?
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StandUpChuck said:
You know that little piece of advice I just gave you about asking the seller to make your downpayment? That's one of the advantages to having a realtor. They write stuff like that into your offer and negotiate terms like that for you. The other is that they will be able to put together a market analysis for you to make sure you are not paying too much for a property. They will take steps to ensure you've got safety nets in case the property you're interested in buying turns out to be a major money pit. In most states, the buyer pays nothing for real estate respresentation (the commission is paid by the seller). The only time (usually) that the buyer pays for representation is when the house is listed For Sale By Owner in which case, someone has to pay the buyer's rep, and it won't be the FSBO seller.

You never want to contact the listing agent directly to inquire about a property. They have the seller's best interest at heart, and they are not resprenting you. You could get hosed big time.
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One way around that is for the agent a buyer is working with, to contact the FSBO and get a pocket listing (limited to that buyer only and very limited in time). The seller then pays the commission (usually lower than normal) and is usually happy to as most FSBO's don't sell.......... ever.
 
Crunch said:
That is a possibility, but you have to get the note holder to agree.. and you best have it in writing or it never happened.
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Dang straight. Heck, it needs to be written in blood! :lol: And then the bank will just change the terms anyway.



Crunch said:
One way around that is for the agent a buyer is working with, to contact the FSBO and get a pocket listing (limited to that buyer only and very limited in time). The seller then pays the commission (usually lower than normal) and is usually happy to as most FSBO's don't sell.......... ever.
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You're right, that's the first step to try. Most FSBOs don't even want to talk to agents much less pay any commission as low as it may be. The buyer's rep owes it to their client to try with the seller, though.
 
They could have skipped all this and just cut taxes and given the 700B back to the people. What an example of a wasteful bureaucracy .
 
StandUpChuck said:
You know that little piece of advice I just gave you about asking the seller to make your downpayment? That's one of the advantages to having a realtor. They write stuff like that into your offer and negotiate terms like that for you. The other is that they will be able to put together a market analysis for you to make sure you are not paying too much for a property. They will take steps to ensure you've got safety nets in case the property you're interested in buying turns out to be a major money pit. In most states, the buyer pays nothing for real estate respresentation (the commission is paid by the seller). The only time (usually) that the buyer pays for representation is when the house is listed For Sale By Owner in which case, someone has to pay the buyer's rep, and it won't be the FSBO seller.

You never want to contact the listing agent directly to inquire about a property. They have the seller's best interest at heart, and they are not resprenting you. You could get hosed big time.
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I think I'm going to wait to have the cash for the full down payment, to get a better rate with the lender.
I may try to see if I can get the buyer to give the down payment or part of it and save the rest of the cash.

That would be a great deal.
 
Harry Guerrilla said:
I think I'm going to wait to have the cash for the full down payment, to get a better rate with the lender.
I may try to see if I can get the buyer to give the down payment or part of it and save the rest of the cash.

That would be a great deal.
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Forgot about this little misconception... you can't have the seller pay for your down, it's against the law.

That said, you can have the seller pay for your closing costs up to (I'd have to check if it has changed in the last week) 6% of purchase price on conventional, USDA, and FHA loans..... I forget what it is on VA.
 
Crunch said:
Forgot about this little misconception... you can't have the seller pay for your down, it's against the law.

That said, you can have the seller pay for your closing costs up to (I'd have to check if it has changed in the last week) 6% of purchase price on conventional, USDA, and FHA loans..... I forget what it is on VA.
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That's cool, either way I want to get a good deal. :mrgreen:

I've been working on this for past year and that info helps a ton.
 
Harry Guerrilla said:
That's cool, either way I want to get a good deal. :mrgreen:

I've been working on this for past year and that info helps a ton.
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Post 55 was the important one.
 
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