Eithne_Boadicea
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Mortgage modifications: Winning!....?
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My best friend from way back and her husband have 5 kids between the two of them, and her husband is a law enforcement officer. They got behind on their mortgage by 2 payments and appealed to the bank to modify the loan so that they could continue to make regular payments in the future and remain in their home. They had originally put $15k down on the house when they bought it for $275k and had paid it down to about $240k. The bank offered to let them tack on the 2 missed payments if they agreed to add an additional $20,000 in interest to the mortgage. So they are losing their home.
So much for the American Dream and the wonderful loan modifications that were going to help the general public (I mean, help the banks).
 
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paulg_68
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Why didn't your friends accept the modified loan?
Were the payments too high or were they just mad about the extra interest on the back end?
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__Bonk__
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Wow sad. This is happening all over America. The human cost must be great
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ineenia
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He has the money to raise 5 kids and buy a house worth over a quarter of a million dollars.He isn't struggling he is spending too much,there is a huge difference...I don't feel even a little sorry for him.If he stops getting his wife pregnant and moves into a more modest house his fiances will be just fine.
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Abaddon_Ambrosius
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I've requested a couple refi quotes for sh*ts and giggles on my two primary properties.
I don't really *need* the refi, but I want to see what I'm gonna get back here in case I can cash-flow out the 2nd property, to make it more profitable on the rental.
No, I didn't ask the CURRENT mortgage holder for it. I've asked my credit union, and my bank who don't hold my loans currently.
I'll let you know what happens. Should be entertaining.
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Fist_de_Yuma
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If you have the right things going it is easy. I reduced our interest from 6.5% to 2.75%. Paying less and paying it off two years sooner. If you cannot afford something there is little chance of getting someone else to bend over for you. Obama is just tossing money at his friends while pretending he cares. All he cares about is Obama.
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Bobvillas
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ineenia posted:
He has the money to raise 5 kids and buy a house worth over a quarter of a million dollars.He isn't struggling he is spending too much,there is a huge difference...I don't feel even a little sorry for him.If he stops getting his wife pregnant and moves into a more modest house his fiances will be just fine.
I also found this interesting.
Not enough variables are given though.
What does she do for a living?
Is he a police officer or higher in the food chain?
It sounds as though they bit off more than they could chew.
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Modeeb
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Bankers are heartless mofos. I see this on a regular basis, people losing their homes. Tough times dont last tough people do.
We need a peaceful revolution now!
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Thugoneous
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I think they should have paid their mortgage, then the evil f'n bankers probably wouldn't have taken their house.
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Taliesihne
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My first question is whether or not they are underwater?
20k on a 30 year mortgage is not a lot of money as far as an interest rate jack. My head hurts too much to do the math, but my guess it's less then 1%.
The only rational thing I can assume here is that they are already underwater and the 20k just isn't worth it. Which I get. And applaud in a way - sometimes you have to know when to cut your losses. I hope he drags out the process and finds someplace new.
All that said, if this is the case, they aren't 'losing their home'. They are taking a calculated loss on purpose. Which is sad, but they aren't victims.
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SoBaKi
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Fist_de_Yuma posted:
If you have the right things going it is easy. I reduced our interest from 6.5% to 2.75%. Paying less and paying it off two years sooner. If you cannot afford something there is little chance of getting someone else to bend over for you. Obama is just tossing money at his friends while pretending he cares. All he cares about is Obama.
Dude, do you EVER phucking read what you write?\
fists_himself_hard posted:
I got a GREAT rate and things are looking up for me, but, that guy is REALLY only looking out for himself.
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Moe_Nox
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Stupid home owners have done to the housing market what stupid gamers have done to the MMO market. Stop overpaying for crap and force the industry to change.
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sweeny_comodore
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how the hell does a cop with 5 kids afford a 275k home??!
well, apparently, he doesnt.
wtf made them think they could afford a 275k home?
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Taliesihne
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sweeny_comodore posted:
how the hell does a cop with 5 kids afford a 275k home??!
well, apparently, he doesnt.
wtf made them think they could afford a 275k home?
Meh, a 275k home is likely a little north of $1500 a month in mortgage payments. No more then 1750. That's 25% of net pay a month at 50k a year.
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IMHO
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sweeny_comodore posted:
wtf made them think they could afford a 275k home?
I think that is a very important question.
To answer that question : The bank did.
It's the banks fault for not doing their due diligence, yet the banks will make money off these people losing their house.
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Hammerhand21
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A 275k home is modest isn't it? What part of the country is this?
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sweeny_comodore
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Taliesihne posted:
sweeny_comodore posted:
how the hell does a cop with 5 kids afford a 275k home??!
well, apparently, he doesnt.
wtf made them think they could afford a 275k home?
Meh, a 275k home is likely a little north of $1500 a month in mortgage payments. No more then 1750. That's 25% of net pay a month at 50k a year.
then add in insurance and taxes and youre probably talking in the hood of 2500/mo
plus 5 kids??!
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Abaddon_Ambrosius
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Taliesihne posted:
sweeny_comodore posted:
how the hell does a cop with 5 kids afford a 275k home??!
well, apparently, he doesnt.
wtf made them think they could afford a 275k home?
Meh, a 275k home is likely a little north of $1500 a month in mortgage payments. No more then 1750. That's 25% of net pay a month at 50k a year.
Uhm, yeah guys.
In what universe is $275 over the line?
Sure, we have houses worth $190 around here. But... uhm... nobody is living in them. Because they're foreclosed, half-destroyed, in neighborhoods that were crappy to start with and the owners took a hike the second they hit trouble. That's WHY they are $190.
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Moe_Nox
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IMHO posted:
sweeny_comodore posted:
wtf made them think they could afford a 275k home?
I think that is a very important question.
To answer that question : The bank did.
It's the banks fault for not doing their due diligence, yet the banks will make money off these people losing their house.
Careful. Going down that path of thought will be painful to the ideological positions you hold dear. I would advise you to avoid this hurt.
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sweeny_comodore
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Abaddon_Ambrosius posted:
Taliesihne posted:
sweeny_comodore posted:
how the hell does a cop with 5 kids afford a 275k home??!
well, apparently, he doesnt.
wtf made them think they could afford a 275k home?
Meh, a 275k home is likely a little north of $1500 a month in mortgage payments. No more then 1750. That's 25% of net pay a month at 50k a year.
Uhm, yeah guys.
In what universe is $275 over the line?
Sure, we have houses worth $190 around here. But... uhm... nobody is living in them. Because they're foreclosed, half-destroyed, in neighborhoods that were crappy to start with and the owners took a hike the second they hit trouble. That's WHY they are $190.
those houses are $50k in my area
275k is over the line when you recieve a tax payer money and have 5 kids
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paulg_68
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IMHO posted:
the banks will make money off these people losing their house.
No they won't.
If banks made money off of people losing their houses there never would have been a bailout.
Banks get killed on foreclosures.
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sweeny_comodore
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paulg_68 posted:
IMHO posted:
the banks will make money off these people losing their house.
No they won't.
If banks made money off of people losing their houses there never would have been a bailout.
Banks get killed on foreclosures.
actually youre dead wrong on that.
banks make a ton of money on these bad mortgages foreclosing
unless congress has fixed that since the market crashed
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Taliesihne
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sweeny_comodore posted:
then add in insurance and taxes and youre probably talking in the hood of 2500/mo
plus 5 kids??!
Hehe - I take it you aren't a homeowner?
Taxes and insurance would be part of the mortgage - they did not put 20% down and were not at 20% equity, which is what is required to take PMI off the mortgage. An extremely common (read - everyone does this) requirement for someone carrying a mortgage with PMI is that taxes and insurance are paid by the mortgage company until PMI is gone.
Now, I'm not an expert and may have screwed up the technical details, but the basic point I'm making is that until they hit 20% equity in their house, it's very, very, very likely that taxes and insurance were paid by the mortgage company.
A 275k house is a modest house - especially for someone with 5 kids.
I live in BFE and we have a 3 bedroom house. I won't get into specifics, but it's within range of what they were paying. They do NOT live in a McMansion.
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paulg_68
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sweeny_comodore posted:
actually youre dead wrong on that.
banks make a ton of money on these bad mortgages foreclosing
unless congress has fixed that since the market crashed
Please demonstrate your deep knowledge of the subject by telling us where they get the money from then.
Do they get it from the people who aren't paying them? Do they get it from the people they sell the house to for less than the mortgage was for? Where does all this money come from?
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Moe_Nox
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There is nothing modest about a quarter million dollar home.
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Taliesihne
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You mean, besides the fact that a $250,00 house is cheaper then the national average Moe?
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sweeny_comodore
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they place their bets on the mortgages failing.
im not a stock broker. i havent read anything about it months.
if you had a brain yould already know that that is one of the issues which specifically lead to the giant crash we experienced.
forcing bad loans on people and betting against their success.
go google it if you have any questions.
im sure you can find articles written by people more knowledgeable than i am.
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Hammerhand21
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Are the guys who think a 250k house is extravagant living in the ghetto?
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Abaddon_Ambrosius
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sweeny_comodore posted:
those houses are $50k in my area
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Taliesihne
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Hammerhand21 posted:
Are the guys who think a 250k house is extravagant living in the ghetto?
I guess.
We looked for 5 years before we bought. Everywhere.
250K is an extremely average home.
**Edit - Fixed my math. I've been coding all day..my bad**
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Moe_Nox
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Tali, average is average, not modest. A cop with 5 kids is going to have a below average living style, without a doubt.
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Taliesihne
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With 5 kids, he is living below average.
He's doubling up kids rooms and they are beyond cramped for space. No way he has a 5 bedroom house at 250k.
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paulg_68
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sweeny_comodore posted:
they place their bets on the mortgages failing.
im not a stock broker. i havent read anything about it months.
if you had a brain yould already know that that is one of the issues which specifically lead to the giant crash we experienced.
The financial meltdown was due to the fact that the banks were about to get killed on all the underwater mortgages. If they were about to make tons of money off of them like you think then explain why we bailed them out? We bailed them out from their massive incoming profitability? Does that make sense to you?
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If you wish to make an apple pie from scratch... http://www.youtube.com/watch?v=zSgiXGELjbc "Everyone has a chance to become rich." - Groucho48 "Most of the human wealth on earth exists between the ears of live human beings." - theredkay1
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sweeny_comodore
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Taliesihne posted:
Hammerhand21 posted:
Are the guys who think a 250k house is extravagant living in the ghetto?
I guess.
We looked for 5 years before we bought. Everywhere.
225K is an extremely average home.
im north of chicago. about half way between there and milwaukee
even during the housing bubble average prices here were 150k-200k
i paid 130k its 3 levels, 3 bathrooms, 4 bedrooms....
now adays the forclosed homes are selling for well below 100k. they are being snatched up by the local rental companies.
has america gotten so out of touch that 2200/mo for a house payment is average?
thats what happened to the american dream.
it got priced out of reach for the majority of america
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Mastara
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Live there rent free until you have to leave. Stack some money and rent an apartment or house. After a couple years get another house. I knew a guy who was underwater like 100 grand. He filed bankruptcy and somehow or another managed to get the same house for cheaper lol. No clue how he did it but he did. Lucky dude.
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paulg_68 posted:
sweeny_comodore posted:
actually youre dead wrong on that.
banks make a ton of money on these bad mortgages foreclosing
unless congress has fixed that since the market crashed
Please demonstrate your deep knowledge of the subject by telling us where they get the money from then.
Do they get it from the people who aren't paying them? Do they get it from the people they sell the house to for less than the mortgage was for? Where does all this money come from?
They bundled it up with a bunch more mortgages, and sold it to someone else. They took a cut of the original mortgage in fees and such and took a cut of the re-packaging. All the human beings involved got nice salaries and nice bonuses. Eventually, reality hit and the institutions took a bath, but, everyone connected to those institutions made out like...um...bandits.
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Hammerhand21 posted:
Are the guys who think a 250k house is extravagant living in the ghetto?
There is a difference between extravagant and overpriced.
Some of you clearly enjoy the idea of being a mortgage bankers bish for the next 30 years.
$149,900
$75,500
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Taliesihne
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250K in the nearest town with decent schools to me gets you a 3 bedroom house on a postage stamp for land. Or a 2 bedroom with a nice yard.
It gets considerably more where I actually am, but that's why we are here.
It's 300K for a shack anywhere north of me where the real cities and suburbs are.
Our real estate market hasn't completely collapsed though. The war on terror has been very good to the state of Virginia.
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paulg_68 posted:
sweeny_comodore posted:
they place their bets on the mortgages failing.
im not a stock broker. i havent read anything about it months.
if you had a brain yould already know that that is one of the issues which specifically lead to the giant crash we experienced.
The financial meltdown was due to the fact that the banks were about to get killed on all the underwater mortgages. If they were about to make tons of money off of them like you think then explain why we bailed them out? We bailed them out from their massive incoming profitability? Does that make sense to you?
http://www.nytimes.com/2009/12/24/business/24trading.html?pagewanted=all
http://www.dailykos.com/story/2011/10/19/1028037/-Why-Did-the-Banks-Write-So-Many-Bad-Mortgages
http://www.economicpredictions.org/who-is-to-blame-for-the-financial-crisis.htm
The same banks who sold the subprime investments later bet against their own clients
the banks made a ton off the bad mortgages they were pushing on people.
why do you think they were pushing them on people?
or do you think the entire population of unqualified homeowners some how managed to con their way into these loans they couldnt afford?
do you think these people outwitted the banks by sneaking into these subprime loans? or maybe the bankers were just too stupid to realise these people shouldnt be getting these loans?
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Taliesihne posted:
It gets considerably more where I actually am, but that's why we are here.
Well if you understand that then you are smart, and obviously smarter than this cop.
Live where you can afford, and if you cannot, go elsewhere. They were clearly living above their means, which is the problem of our times apparently.
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The wife and I aren't normal.
We live well beneath our means. We were 'approved' for a mortgage that was 3 times what we actually bought.
With no kids and two incomes, we could conceivably pay the mortgage working at walmart if we had to.
I'd lose my Sally though 
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Have to keep the pets, that is especially non negotiable with childless couples.
And as much as it pains me, Swirly is pretty much on target on this. While the banks didn't reap huge fortunes on this, they did hedge their bets in a way that both allowed them to take very little loss on the failed mortgages, AND to bet against themselves in the derivatives market to accomplish this.
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Taliesihne
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He is right that banks have a higher responsibility then the average consumer. They know better.
I'm simply trying to dispel the myth that he's some freeloading hippy living high on the hog - his experience is pretty normal.
You'll note that I'm not buying the victim card though. This looks to me like they made a decision to take a little loss instead of a big one.
Sally isn't a pet btw. If we have to live in a cardboard box, our dogs will be with us.
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http://www.npr.org/2012/01/30/145995636/freddie-mac-betting-against-struggling-homeowners
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It pains me to say this.... but .... Sweeny is right.
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IMHO posted:
It pains me to say this.... but .... Sweeny is right.
sig worthy
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IMHO posted:
It pains me to say this.... but .... Sweeny is right.
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Taliesihne posted:
sweeny_comodore posted:
how the hell does a cop with 5 kids afford a 275k home??!
well, apparently, he doesnt.
wtf made them think they could afford a 275k home?
Meh, a 275k home is likely a little north of $1500 a month in mortgage payments. No more then 1750. That's 25% of net pay a month at 50k a year.
Wow. Uh, no.
A $275,000 loan with 5% down, which is what they did, puts your monthly payment at $1811 a month. Take home after tax per paycheck when you make $50k a year is $1490 a paycheck. $2980 a month take home.
That's an entire paycheck plus $321 out of the second paycheck just for the house payment leaving $1170 total for the month to spend on car payment, food, $4.00 a gallon gas, internet, cell phone, heating the home, home and car insurance....
Jesus, it's no wonder we have record defaults when buyers don't do the actual math.
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Her husband has a teenage daughter from his first marriage. She has 2 kids from her first marriage. They have 2 kids together. She has been a stay at home mom. I know he works for the sheriff's department but not sure exactly how high up the food chain. This is in North Idaho, where California immigrants have raised the cost of housing through the roof for native residents over the past 20 years. A $275k house is pretty reasonable for a family of 7, especially in the town where they live. Even crappy housing is expensive there.
They could have taken the $20k hit but in the end decided it wasn't worth it and are cutting their losses. Still, who thinks paying a $20k penalty for what probably amounts to around $3,500 worth of payments is reasonable?
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sweeny_comodore posted:
the banks made a ton off the bad mortgages they were pushing on people.
why do you think they were pushing them on people?
You and groucho seem to be confusing writing mortgages with foreclosing on houses.
The banks are losing money on every foreclosure. If there was money to be made the homeowners would just sell the house and pay off the mortgage. Duh.
sweeny_comodore posted:
or do you think the entire population of unqualified homeowners some how managed to con their way into these loans they couldnt afford?
If they borrowed money and didn't pay it back, that's pretty much one of the gold standards of cons.
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Hmmm.. Its not a big loss to walk away from that home.
Sometimes you walk away and move on. They hardly put any mney down and the payments can be viewed as rent/luxury.
A bigger loss is for people that buy a property for 600k and put 300k down. Then when they decide to leave and sellit for 500, they are taking a 100k hit+all the payments.
And some people take 1mil+ hits. At least he is still empliyed.
Edit: 275k is only a lot depending on where you live.. We have a house for instance that weve been renting out for 6 years... It has never gone over a month without a tenant. We charge $4500/month to rent with 1 yr terms. Its all relative.
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paulg_68 posted:
sweeny_comodore posted:
the banks made a ton off the bad mortgages they were pushing on people.
why do you think they were pushing them on people?
You and groucho seem to be confusing writing mortgages with foreclosing on houses.
The banks are losing money on every foreclosure. If there was money to be made the homeowners would just sell the house and pay off the mortgage. Duh.
sweeny_comodore posted:
or do you think the entire population of unqualified homeowners some how managed to con their way into these loans they couldnt afford?
If they borrowed money and didn't pay it back, that's pretty much one of the gold standards of cons.
You're right. I missed the word forecaster in the post I responded to.
For foreclosures, things are a bit trickier.
If the banks renegotiate, then, they have to revalue an asset of theirs downwards. No big deal for an individual house, but, if they have to reduce thousands and thousands of houses down to the current market value, then, their balance sheet looks awful and, as they have to keep a certain reserve, they won't be able to trade as high a volume of made up, non-productive financial instruments back and forth.
Someday, of course, those assets will have to be re-valued, but, the folks making the decisions, as with the folks who pushed out the mortgages in the first place, will be long gone, so, who cares?
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Overall the banks lost tons of money on these bad mortgages. Anything they made up front is vastly overshadowed by what they lost in the end. Plenty of executives walked away with lots of money, but not the stockholders.
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paulg_68 posted:
Overall the banks lost tons of money on these bad mortgages. Anything they made up front is vastly overshadowed by what they lost in the end. Plenty of executives walked away with lots of money, but not the stockholders.
I won't disagree with that. My point is what an incredibly stupid system it is where bankers can get incredibly wealthy very quickly by doing incredibly short-sighted stupid things. Yes, the institution suffers, but, that's just a construct no one cares about, anyway.
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So you don't really care that the economy crashed. You're just mad that someone got rich?
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Kordirn
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275,000 for a house in idaho? 
You could get a pretty nice place where I live in Cali for that.
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I could get a pretty nice closet in DC for $275k
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It's all relative. But a lot of it is really about how much a house costs in relation to your annual salary.
If your income household income is around $70,000, and you are well rooted in your community so that you shouldn't have to move, a $275,000 house isn't so ridiculous. IF you have saved and put 20% down up front.
If your household income is $50,000, and you only put 3-18% down, then a $275,000 home is > 5x your annual salary. That's in the "unaffordable" range.
Comps are important, here. If the house costs more because it is located in a place close to everything (saves on gas/mileage), is safe, and has good public schools (so you don't have to pay for private schools)... others will be worth more as well and $275k isn't a stretch in most parts of the country.
There's just a lot to know as to whether this makes sense.
However, the net is: $275k is high but it isn't nosebleed, if you saved up and put money in up front. When you get into $400,000 and more territory for 1,800-ish sq ft homes, THAT is getting nosebleed, because the median income for the US is around $52,000. When you start exceeding 6x and 7x median annual income on non-premium properties, IMO, that is simply unsustainable on a national competitive level.
Not everyone is intended to... or should... have a home. You shouldn't expect prices to get so low that people earning less than median income can afford one.
We STILL have some markets in the US where the pricing on homes is 8x and 10x median income FOR THAT AREA... and the median income is in the $60k range. As I've pointed out, that's unsustainable in a global market. And, the market is in the process of correcting that bubble now. Big time.
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my house i bought in may has gone up 12% in value.
mwahaha
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paulg_68 posted:
IMHO posted:
the banks will make money off these people losing their house.
No they won't.
If banks made money off of people losing their houses there never would have been a bailout.
Banks get killed on foreclosures.
I think this is the main problem.
The owners of the mortgage note get killed on foreclosures. The servicers of the mortgage make a killing.
When you contact the lender and look for a refi or a writedown, you deal with the servicer. Their interests are not aligned with the homeowners or the mortgage holder.
Even when the owner of the mortgage and the servicer are the same big entity (bank of america for example) you see misaligned incentives between divisions causing this market to get all fouled up. The magic free market genie leaves much to be desired sometimes.
ed- mortgage owners also have bad incentives since there is no reason for them to accurately value their receivables (future mortgage payments) when doing so might blow up their financial statements. If you can avoid doing this for as long as possible, we can pretend our financial statements are healthier in the short term...and who knows maybe things will work out in the future. Big writedowns right now can mean bankruptcy, firings, or simply the loss of a bonus or stock options. But if we wait 3 or 4 or 5 years, maybe things will work out, or more likely the eventual losses will be significantly bigger but this will be someone elses problem as decision makers have moved on to companies that are actually healthy.
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Free markets and banks?
That's so quaint. Rekday thinks that banks are part of a "free market".
He's like an innocent little puppy sometimes.
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Kordirn posted:
275,000 for a house in idaho?
You could get a pretty nice place where I live in Cali for that.
The cost of housing in my hometown (where my friend lives) has gone up a ton over the last 20 years or so because of all the (relatively) wealthy people moving up from California in addition to the inflation experienced already. Like I said, their house was for 7 people, it's not like they had game lounges and an indoor swimming pool. That's fairly average for a middle class home in that area.
Where in California do you live? I have some friends in the northern part of the state who are trying to sell a house rather than renting it and the figures she quoted me seemed pretty absurd but I guess are the norm there.
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If they purchased @$275k, and owe $250k, they are definitely underwater right now. Even the best housing markets have seen a 10% decline in property value in the last two years. If he lived near me, his home would now be worth ~$220k.
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tards buying mcmansions caused this mess
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Eager_Igraine
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sweeny_comodore posted:
im north of chicago. about half way between there and milwaukee
even during the housing bubble average prices here were 150k-200k
i paid 130k its 3 levels, 3 bathrooms, 4 bedrooms....
So you're living in a townhome in some dumpy part of Waukegan? Because I doubt you're talking about home prices in the vast majority of suburban communities north of Chicago.
For reference, http://www.realtor.org/research/research/metroprice
Try the pdf links, the 2010 median price for Chicago-Naperville-Joliet was $191.4
From that same link though, median price for Boise City-Nampa was $153.8 in 2009 and $136.2 in 2010 and $115.4 in 2011
$275 doesn't sound that expensive to me, but homes in the burbs around me still cost that kinda scratch.
This is kinda cool too: http://www.chicagotribune.com/classified/realestate/transactions/
Too bad all that data is median data
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Yukishiro1
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In a lot of states if you can come up with the missing cash they can't foreclose on you. Maybe not in an ass state like Idaho.
But something about the story makes no sense. Unless there is a really strange confluence of variables the bank is going to take a bath on the home in the current market. If your friend can come up with the missing payments and keep paying along the schedule otherwise there is no reason I can possibly think of that the bank would rather foreclose.
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theredkay1
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paulg_68 posted:
Which regulation(s) is it which requires lenders to use an outside shop to service their mortgage and requires them to choose one who will not act in the best interests of the total return on the note?
Take your time.
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Yukishiro1
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Rereading, maybe what you were trying to say is that your friend skipped out on two mortgage payments and now wants to restructure the loan so they don't have to repay those two payments and can just go on paying each month, and the bank told them ok, but to do that it's gonna raise your monthly payment a little bit and over the remaining 25 years it's gonna end up cost you 20k more. Which doesn't seem all that unreasonable.
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Hammerhand21
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Thugoneous posted:
I could get a pretty nice closet in DC for $275k
I call BS, please show me a nice place close to DC for that amount, and not int he boonies. I live 35mins outside of DC and nothing is close to that unless you are looking for a condo.
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Szerek
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Hammerhand21 posted:
Thugoneous posted:
I could get a pretty nice closet in DC for $275k
I call BS, please show me a nice place close to DC for that amount, and not int he boonies. I live 35mins outside of DC and nothing is close to that unless you are looking for a condo.
Really, you can't buy an actual CLOSET in D.C. for anything close to 275k? A CLOSET???? Or maybe your reading comprehension is just that bad.
Oh, and by the way, I find it hard to believe that a closet would cost as much as a whole condo since a whole condo has several closets. Or do you buy the condo for like 1.5 mill then sublet the closets for 275k each, osmenthe?
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Hammerhand21
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I guess I need to get some reading comprehension, move along nothing to see here.
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Hammerhand21
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I guess this is why I was kinda surprised when people were saying 275K was a Mc mansion. Living in this part of the country has skewed my view on what most of the country has. I get reminded every time I travel. We vacationed in Idaho a couple years ago, made me sick that I could buy a house on the lake were were staying at with 5 bedrooms, 1.5 acres and water access for like 400k...
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imaloon1
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paulg_68 posted:
IMHO posted:
the banks will make money off these people losing their house.
No they won't.
If banks made money off of people losing their houses there never would have been a bailout.
Banks get killed on foreclosures.
WRONG. They actually get paid the fully insured amount on the home via insurance, resell it in foreclosure and then make the money off of the resale. It's HUGE money and there was a great TED article about it at the height of all this crap.
You sir are way way way way way wrong... Normally you're just wrong but this is a bad one.
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Yukishiro1
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That's because no one wants to live in idaho.
500k around here is cheap. Because everyone wants to live around here.
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SoBaKi
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Mastara posted:
Live there rent free until you have to leave. Stack some money and rent an apartment or house. After a couple years get another house. I knew a guy who was underwater like 100 grand. He filed bankruptcy and somehow or another managed to get the same house for cheaper lol. No clue how he did it but he did. Lucky dude.
Spoken like a true xian. God wanted me to remind you that you're an asshole.
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Abaddon_Ambrosius
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Yukishiro1 posted:
That's because no one wants to live in idaho.
500k around here is cheap. Because everyone wants to live around here.
People paying > 10x the national median income on a mid-line house simply "because they want to right now" is no less stupid than people paying 10x the national median income "because they were sold a financial instrument that allows them to right now."
In fact... it's probably more stupid.
That's to be expected, though. I mean after all, you live there.
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Yukishiro1
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Paying more to live in a better location is not a bad choice. If it was, the smartest people would live alone in the middle of the sudan where they could get a huge house and 10 acres of land for about 1000 bucks.
Good luck with that.
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imaloon1
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Yukishiro1 posted:
In a lot of states if you can come up with the missing cash they can't foreclose on you. Maybe not in an ass state like Idaho.
But something about the story makes no sense. Unless there is a really strange confluence of variables the bank is going to take a bath on the home in the current market. If your friend can come up with the missing payments and keep paying along the schedule otherwise there is no reason I can possibly think of that the bank would rather foreclose.
No Yuki, the banks are insured on the property for the full purchase price. They actually make twice the money on a foreclosure than they do on somebody paying the house off...
There is zero incentive for a bank to not foreclose on anybody. Especially now with that horseshit 25 billion dollar settlement.
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Yukishiro1
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http://www.huffingtonpost.com/2009/10/21/perverse-incentives-lead_n_328378.html
http://news.consumerreports.org/money/2009/10/foreclosures-more-profitable-for-mortgage-servicers-hurt-homeowners-workout-loan-modification.html
http://www.trulia.com/blog/paul_andres/2009/03/foreclosure_or_shortsale
Trulia Article posted:
So what happens when the lender forecloses on a property where the borrower is unable to make the payments? The government may guarantee some of the loans, others through private mortgage insurance and the rest is sold to 3rd party and subsidiary investors at a loss offsetting profit, e.g., the lender forecloses on a home, the encumbrance is $300,000 market value is $225,000 in appearance the bank's net loss is $110,000; through short sale the lender has a loss of $75,000. So why foreclose at a greater loss? The following scenario shows the same situation through foreclosure:
($300,000) - encumbrance
($15,000) - approximate foreclosure cost
($315,000) - total encumbrance taken as loss
$225,000 - market value received from government/PMI or affiliate subsidiary investor
$205,000 - net proceeds from foreclosure REO sale
$425,000 - total proceeds
($315,000) - total encumbrance
$110,000 - net profit
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Kordirn
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Eithne_Boadicea posted:
Kordirn posted:
275,000 for a house in idaho?
You could get a pretty nice place where I live in Cali for that.
The cost of housing in my hometown (where my friend lives) has gone up a ton over the last 20 years or so because of all the (relatively) wealthy people moving up from California in addition to the inflation experienced already. Like I said, their house was for 7 people, it's not like they had game lounges and an indoor swimming pool. That's fairly average for a middle class home in that area.
Where in California do you live? I have some friends in the northern part of the state who are trying to sell a house rather than renting it and the figures she quoted me seemed pretty absurd but I guess are the norm there.
Sacramento right now, but i just moved from the foothills which is what I was comparing your price to. My dad lives in Sandpoint, but I am not sure how much it cost him for his place. Seemed to be cheaper than here though. My parent's old house in the foothills(Cameron Park) which was 5 bedrooms, and 3 bathrooms cost around 250k. Also in a pretty nice area.
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Yukishiro1
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The mortgage servicer is not the same as the bank. If your mortgage was sold to someone else and the bank doesn't own it any more and is only the servicer then yes there may be circumstances where, for stupid reasons, they make more money through foreclosure. But that's in their role as servicer, not as the owner.
The last article is stupid beyond belief and makes no sense. Mortgage insurance doesn't work the way that person thinks. Mortgage insurance covers the loss. You don't get the market value and get to sell the property.
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Yukishiro1
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Kordirn posted:
Sacramento right now, but i just moved from the foothills which is what I was comparing your price to.
Another place no one wants to live because there's nothing there.
But yeah, you can get cheap houses in places where there's lots of land and few people wanting to buy the land. Who woulda thought it.
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Snarf_Igraine
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Coeur d'Alene, Idaho is a resort town, and A LOT of people from California obviously prefer it to California. In fact it rates in the top 50 luxury real estate markets.
http://napaconsultants.com/luxury-real-estate-marketing/category/50-top-luxury-real-estate-markets
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Abaddon_Ambrosius
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Yukishiro1 posted:
Paying more to live in a better location is not a bad choice. If it was, the smartest people would live alone in the middle of the sudan where they could get a huge house and 10 acres of land for about 1000 bucks.
Good luck with that.
Aside from ultra-premium mansions and the like?
Only someone who is totally deluded with no real sense of value is going to get hoodwinked into thinking that living in a housing bubble of 10-12x US median income is "worth it."
News flash: There's nothing you are getting living in x American city & 'burb vs living in y American city & burb that constitutes a 500%-vs-median-income value.
Although... the real estate moguls surely thank you for your gullability.
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imaloon1
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Yukishiro1 posted:
The mortgage servicer is not the same as the bank. If your mortgage was sold to someone else and the bank doesn't own it any more and is only the servicer then yes there may be circumstances where, for stupid reasons, they make more money through foreclosure. But that's in their role as servicer, not as the owner.
The last article is stupid beyond belief and makes no sense. Mortgage insurance doesn't work the way that person thinks. Mortgage insurance covers the loss. You don't get the market value and get to sell the property.
Tell that to SunWest Bank Yuki.... They did and still do...
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Kjarhall
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There are resort towns in Idaho????
WTF is this world coming to?? All you Idabastards stop it and get back in your place - growing potatos and joining militia movements.
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Yukishiro1
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My parents wake up each morning and eat breakfast while they look down at the bay. There are maybe 5-10 places in the whole world that offer anything comparable. They also drive 16 and 27 year old cars, respectively.
Value is not static and objective. What is valuable to one person may not be valuable to another person. It doesn't surprise me you don't understand this.
If you prefer to live in crapville because the housing is cheap be my guest. If you're the sort of person who thinks places are interchangable and essentially all the same crapville is certainly the location best for you.
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Kjarhall posted:
There are resort towns in Idaho????
WTF is this world coming to?? All you Idabastards stop it and get back in your place - growing potatos and joining militia movements.
Who the hell do you think we're selling all our guns and potatoes to?
Nobody in those resort towns wants anybody else within 500 miles of them 
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Hammerhand21
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Abaddon_Ambrosius posted:
Yukishiro1 posted:
Paying more to live in a better location is not a bad choice. If it was, the smartest people would live alone in the middle of the sudan where they could get a huge house and 10 acres of land for about 1000 bucks.
Good luck with that.
Aside from ultra-premium mansions and the like?
Only someone who is totally deluded with no real sense of value is going to get hoodwinked into thinking that living in a housing bubble of 10-12x US median income is "worth it."
News flash: There's nothing you are getting living in x American city & 'burb vs living in y American city & burb that constitutes a 500%-vs-median-income value.
Although... the real estate moguls surely thank you for your gullability.
We are living where we do because it has the best school system in the country.
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Amazing bad logic. One poster seem to think that because I planned well that I'm heartless. Like I should really care about those who don't plan well. I do care. I really wish they had planned well but there is little or nothing I can do about it. Stepping in like a white knight will just have them in trouble again a few years from now.
Another poster thinks a bank will profit from losing a 275k loan because they get a house valued at 150k in return. Are liberals even capable of adding two plus two?
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Yukishiro1 posted:
Paying more to live in a better location is not a bad choice. If it was, the smartest people would live alone in the middle of the sudan where they could get a huge house and 10 acres of land for about 1000 bucks.
Good luck with that.
As long as people understand that a dollar doesn't magically go farther in those nicer areas than in poor/middle class areas, then they're fine. And judging from the amount of foreclosures in those price ranges, people don't understand that.
What...you mean a 5:1 price to income ratio isn't sustainable just because I chose to live in a sought after zip code! THE BANK SCREWED ME!!! 
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