Sub-prime Mess

Started by RobertR1 • 30 replies • 1964 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Thought this would prove interesting to those folks that believe as long as there neighbors are upper class, this mess don't bother them. When this was labled the Sub-prime problem many people thought this would not effect their real estate picture as their are was all wealthy owners. Of course now, if they want to sell out they can't find a buyer for their homes. Our neighborhood hasn't have hardly any foreclosures YET, but the market appears dead. Maybe it will pick up in the spring and later this year (maybe).

Lawsuits!

So a study released by Navigant Consulting Inc. last week was hardly a shock. The study shows that the number of subprime mortgage-related lawsuits filed in federal courts in the last few months have already outstripped the number of savings and loan (S&L) suits in the early 1990s.

According to the study, there were 97 such cases filed in the first half of 2007; a number that nearly doubled in the second half of the year to 181 for a total of 278 filings in 2007. There were 559 cases handled by the Resolution Trust Company during the S&L collapse, but these cases were over multiple years. Also, the subprime figures compiled by Navigant include only filings in federal courts.

Jeff Nielsen, managing director of Navigant Consulting said in a press release, "The S&L crisis has been a high water mark in terms of the litigation fallout of a major financial crisis. The subprime-related cases appear on their way to eclipsing that benchmark."

Forty-three percent of the 278 suits were borrower class actions, 22 percent were securities cases, and 22 percent were commercial contract disputes. The remainder was bankruptcy, employment, and other cases.

The study found that virtually every participant in the subprime mess is being sued. Fifty-six percent of the defendants are Fortune 1000 firms with mortgage bankers and loan correspondents representing the largest category of companies at 32 percent. However, mortgage brokers, lenders, homebuilders, servicers, title companies, appraisers, and loan servicers are all getting a share of the subpoenas.

Nielsen said "This appears to be just the beginning. We are already observing a steady acceleration of continuing litigation activity into 2008. The course of regulatory investigations, the prospect of government intervention and marketplace variables may affect the volume of filings, but the explosion of cases in 2007 suggests a daunting forecast of what is still to come."

Navigant Consulting is a NYSE firm providing consulting services to government agencies, legal counsel, and large companies. It focuses on industries undergoing substantial regulatory and structural change.

DonnaS (Tennessee)
Posts: 5,671

Posted:

MY BFF ROBERT,

Thank you for the very interesting reading. There are so many studies and opinions on this crisis that it overwhelms my brain. Who caused this mess? I start at the bottom of the "food chain" and it was us, the consumer for not having enough sense to figure out that any picture that looks so rosy, we might as well grab it and worry later if things change. Younger people just bought over their heads and abilities to maintain the payments after the ARM loan went up in costs. If I didn't have cash in my piggy bank, my Mom said that I could not buy a toy. Those were the rules at my house

Then we had the loan institutions. Wow!! "Have I got a deal for you"!! Wasn't someone higher up watching out for the consumers? Probably too busy watching what was going on in other parts of the world instead of the homeland. Now we could get very off track here with the pros and cons of our Government but Lets Not Go There.

So now we all have to pay the price, even those of us who have our homes paid for long ago. Now I have to bail out the greedy banks and institutions and I am not liking that idea. My association has to redo a budget for a couple of years and forgo projects that need doing or else hit the payers hard--again. I'm not liking that either.

GeraldT4
Posts: 1,022

Posted:

DonnaS - Don't forget the other culpable party which is the Developers that were strong-arming or at the very least influencing buyers to use their mortgage company in order to get upgrade incentives off the purchase price. That is unless the owner's were paying cash or could get a more competitive interest rate elsewhere. This occurred, I know it for a fact and thankfully didn't need the Developer to get my deal. At the end of the day I agree with what I believe you are saying in that it's the consumer that is ultimately to blame.

MicheleD (Kentucky)
Posts: 4,491

Posted:

My oh my, we must also not forget another player: Wall Street.

Someone isn't overlooking Wall Street's role:

Regulators eye Wall Street role in housing bust
State, cities go to court and may pave way for private suits

(Associated Press)
updated 5:07 p.m. ET, Mon., Feb. 18, 2008

BOSTON - Regulators are trying to punish Wall Street for mortgage finance practices that expanded home ownership and spread risk among a host of new players — but also may have duped borrowers and investors who supplied cash to fuel a housing boom that's turned bust.

A handful of state securities regulators and a couple foreclosure-blighted cities have fired the opening shots with lawsuits trying to prove that investment banks and big lenders are guilty of more than just bad business decisions and failing to foresee looming mortgage troubles. Some regulators say greed and fraud underlie much of the subprime mortgage mess that has spread across the broader housing market, triggering a spike in foreclosures.

Aside from the civil cases, the FBI is looking at possible criminal action, focusing on what Wall Street firms knew about the risks of mortgage securities backed by subprime loans, and whether they hid risks from investors.

(read more: http://www.msnbc.msn.com/id/23224905/ )

DonnaS (Tennessee)
Posts: 5,671

Posted:

See!!!, We're not just pretty faces here! Maybe together we could solve all of this bull. Look what you started Robert

BrianB (California)
Posts: 2,820

Posted:

i think it was the gun manufacturers... I mean, without them, then there wouldn't have been millions of people with guns held to their heads, forcing them to buy homes they couldn't afford, sign up for loans with huge balloon payments, refinance one home to buy another on speculation, etc..

Cause there's no way people would do those things, without being forced, right?

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Of course my world is restricted pretty much to what happens locally,and it looks to me that we also have to think of the realtors, agents and on-line brokers. In HOA's and Condo's you have sort of a closed entity. The developers most always have a Real Estate arm, the have a builders arm, and a broker or mortgage arm, a decided disadvantage for the buyer that don't know the local banking business and since lots of buyers are from out of town, looking for help on the mortgage payments, any comments by realtors that present a favorable picture they tend to just go along with what they are told. They certainly make little effort to find out about the associations they will be living under. I am not accussing anyone specifically, but I do know in the last couple of years the practice of buying property here has changed from local bank to Mers on line and the # of property sold as second home has increased dramatically.
Then a condo rider is added and a second home rider is attached to get a better mortgage rate and the units are then put on the rental market. Now if this messs gets worse and effects the Tourist rental market there will be more foreclosures. Of course all this activity is now driving down the value of property and more folks will find themselves upside down in the mortgage (you owe more om the property that you can sell it for.) Then the big rates of the exotic ARM kicks in.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Brian,
I know what you mean, but this mess is effecting those that didn't have the gun pointed at their head, probably like you and I.

DJ1 (Ontario)
Posts: 798

Posted:

Mess, what mess. Things are just fine. There is no Trillions of dollars of debt. It's all just paper.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Hey DJ,

As long as the Government keeps those darn printing presses cranking out the dollars, there's no mess. Yeah, right I'm ready to go back to the simple life, someplace in the woods, making moonshine and growing my own food. At least it won't have poison in it. AND NO MORTGAGE

BobS10 (Connecticut)
Posts: 39

Posted:

A disturbing trend, at least up north here, has been first time buyers having a whole different concept of a "starter home" than what probably a lot of us had when we started out.
A McMansion is NOT a starter home!

MicheleD (Kentucky)
Posts: 4,491

Posted:

This, to me, is B.S.:

" Cause there's no way people would do those things, without being forced, right? "

So is the allegations of starter homes all being "McMansions."

There are a lot of people who just simply do NOT understand the housing market, are not savvy in loans and all the real-estate-speak, and many of them are simply trying to get the American Dream, or WERE trying to do it.

My own daughter is probably more typical of the type of consumer who is searching for a home of their own and have no clue that there are predator lending practices out there, nor do they understand a lot of what they THINK they know. Fortunately, she had her parents to help navigate the field for her.

Were there greedy people trying to make a fast buck?

Sure, but most of the people on whom this market is collapsing are the good old middle class who were just trying to buy a home and take care of their families.

Did many of them expect their jobs to be outsourced? Did many of them expect their health insurance premiums to double, triple and quadruple in 1, 2 and 3 years?

It's a shame and there are people in the various industries in key positions who should have or could have read the writing on the wall, and they had their OWN eyes on the $$$.

Anyway, blame the victim. Another tried and true American Core Value.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Michele,
I don't see ant effort here to blame the victim. A couple of tongue in check remarks is all.

But you are absolutely right that the professionals involved first pressured the legislatures to create the system that allowed them (some) to make a lot of money. But now the public, including those hurt should jump on the political process that created the condition to allow for this to happen and I am still seeing, Arms, Balloons and no-docs mortgages advertized on the net.

You are sounding very bitter about all this and I suppose with reason but on this thread I don't see any rush to blame the people that got caught in this mess. We all may have done the same thing years ago, if we were riding high or thought we were.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

I add: In the twentys when my folks were first married, my father felt he had a good job and they bought a house. The tire business went south, many local people lost their homes and at that moment their life changed dramactically with the depression and it was 50 years almost before they could afford to buy another house. I surely hope and pray this generation that is being hurt so bad don't have to wait another 50 years.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Michelle,
I always look at the core of an issue. In my very simplistic rationalization I think that-- If there were NO idiots who use Cocain, Meth, and all of those horrid poisons, there would be no problems with drugs in the world. No market, no sales. no drugs with ruination of lives.
So if all of the people who over extended themselves,had not, there would be none of the mass forclosures. Yes, there will always be some unfortunate folks who lost jobs or had a catastrophy but the basic cause is over extension of abilities to pay. Sorry, simple rationalization

GeraldT4
Posts: 1,022

Posted:

There will always be hazards in the road. Unfortunately for those over extending themselves in home purchases the hazards were either ignored, or not understood, could be the fault of mortgagors (borrowers), or perhaps the fault of the mortgagees (lenders), or a little bit of both. But there must have been some fine print that went unread by the mortgagors (borrowers). I find it hard to believe that in this day an age anyone putting 10% down on a home doesn't understand the basics on financing, and that anything less than 10% carries with it consequences. Owning a home, and real-estate purchases for most is a pyramid process, start small and grow the investment over time to trade up. I agree wholeheartedly with DonnaS and RobertR1 and sympathize entirely with MichelleD and borrowers that were not as fortunate to have financial oversight as her daughter did.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Quote:

Posted By GeraldT4 on 02/22/2008 5:18 AM
I find it hard to believe that in this day an age anyone putting 10% down on a home doesn't understand the basics on financing, and that anything less than 10% carries with it consequences.

I agree with almost all of your post except the part. I don't find it hard to believe at all. Do any of us really have any idea how many people out there don't know how to even balance a checkbook?

A lot. And it's symptomatic of more than just a hobbled education system or a business environment that favors pluckers over pluckees.

And I don't know who it was that said I sounded bitter, but that's a little bit hyperbolic, isn't it?

Bitter would imply that I had somehow myself fallen prey to some of these pathetic lending practices and that I'm crying pity party tears of some kind. I can assure you, I have not, I did not, and I do not. Financially I'm at a very good place, and so is my husband. Between us, I have been able to retire early in life and he owns his own business. We have 3 homes, one main home and 2 investment properties.

However, I see the erosion of the middle class as something about which we should all be greatly concerned. And the subprime mess strikes at the very core of the middle class. And it is catastrophes in these sorts of industries that will help to make it a slam dunk.

If I'm bitter about anything it would go way back to when the new bankruptcy legislation was passed.

To this day I cannot believe that our legislatures did such a thing.

To me, that was the beginning of the end and the recent subprime mess is just another nail in the coffin.

This has less to do with "over-extending" than it does with the rich getting richer and the poor getting poorer, and the middle class getting boinked from both ends!

But I digress. =]

DonnaS (Tennessee)
Posts: 5,671

Posted:

Michelle,

"If I'm bitter about anything it would go way back to when the new bankruptcy legislation was passed."

Do you mean the great new idea that if you are behind in your payments,, that the Govt. will allow you to have like a very long time to go without paying? I cannot remember the terms but if that is it, I think that we the people out to hang them all out to dry (whoever drafted and signed this). I too am tired of paying for others mistakes and poor judgement. We should not get political here but it is relevent to the O.P.

MicheleD (Kentucky)
Posts: 4,491

Posted:

No, I mean the part that was a love letter to lenders. The part that imposes heavy new costs on bankruptcy filers and hits poor and moderate income families devastated by high health care costs especially hard, while at the same time STILL ignoring bankruptcy abuses by companies and wealthy people.

The part that prevents people who suffer adverse shocks that substantially reduce their ability to pay their debts -- the majority of people for whom debt relief was intended. You know, the people whose illnesses turn into disabilities because they cannot pay for medical care; whose families become homeless because they cannot pay rent; whose children drop out of school in order to work.

The part where opportunists to the system are STILL allowed to be opportunists, yet the people for whom debt relief is crucial cannot easily get it.

That part.

Looks like more people truly fell for the bank industry's "big lie": that the majority of bankruptcies are sought by opportunists, people trying to abuse the system. Not so. But I guess it makes people feel better to think that way. The point is that if you plug up one hole, you could well cause damage to other areas.

Or refer to a Businessweek article back in October that addresses the "law of unintended consequences" regarding bankruptcy reform.

The subhead says it: "For consumers, debt relief is harder to come by. And that's adding to housing woes."

http://businessweek.com/magazine/content/07_44/b4056080.htm

I'm just saying that I may know first hand one or two "bad eggs" who try to "beat the system," but I know first hand many many more who have done nothing more than try to live within the system and through no fault of their own (some through auto accidents, some through cancer surgeries or strokes, some through unexpected TWO INCOME family job losses), are now in situations they never would have believed could have happened to them, living in the "richest country in the world."

Just saying.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Gerald,
Why would the sub=prime mess be hard to believe about folkis putting 10% on a house. They bankrupt themselves with 20 % or more credit card bills at the extreme, and Pay Day lenders get " I think I remmeber) something like 600% or more. GI's from the second world war rebuilt the country on no downpayment home loans and the GI Bill.
Different times I suppose.

GeraldT4
Posts: 1,022

Posted:

Quote:

Posted By RobertR1 on 02/22/2008 3:25 PM
Gerald,
Why would the sub=prime mess be hard to believe about folkis putting 10% on a house. They bankrupt themselves with 20 % or more credit card bills at the extreme, and Pay Day lenders get " I think I remmeber) something like 600% or more. GI's from the second world war rebuilt the country on no downpayment home loans and the GI Bill.
Different times I suppose.

RobertR1 - I stated, "I find it hard to believe that in this day an age anyone putting 10% down on a home doesn't understand the basics on financing, and that anything less than 10% carries with it consequences".

I did not state that the sub-prime mess is hard to believe about folks putting 10% on a house.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Gerald, Read your post #382 above in this thread. What did I misquote? Maybe I am confused.

GeraldT4
Posts: 1,022

Posted:

RobertR1 - There is no post #382, only #384 of which I've quoted. Again I stated, "I find it hard to believe that in this day an age anyone putting 10% down on a home doesn't understand the basics on financing, and that anything less than 10% carries with it consequences".

I did not state that the sub-prime mess is hard to believe about folks putting 10% on a house. You are confused.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

No Gerald, Iam not confused. I am stupid for even posting anything at all about what you said. But I will try very hard to not make that mistake again.

GeraldT4
Posts: 1,022

Posted:

RobertR1 - You are incorrect in what you said I posted. I clarified you. Please don't make the same mistake again, especially after I quote what I wrote and you insist on continuing. Your conduct on this site towards me is getting increasingly harassing and I request that HOATalk monitor you.

BrianB (California)
Posts: 2,820

Posted:

michele d:

I guess i should step up and defend my statement that you feel is BS and "blaming the victim". I wrote "Cause there's no way people would do those things, without being forced, right? "

Can you show me where people were forced to buy these things? If they were not decisions made of their own free will, then they were made under duress, and not legally binding. Has anyone proven that they were forced to do these things? I bet not. I bet in every case, these folks bought these homes because they wanted to.

"There are a lot of people who just simply do NOT understand the housing market, are not savvy in loans and all the real-estate-speak, and many of them are simply trying to get the American Dream, or WERE trying to do it."
If they do not understand something, then why are they doing it? One of the first things i teach my employees is the mantra "I will perform no task unless it is safe and I am trained to do so". These folks, you say, were not "savvy" and not educated in buying houses. THen why did they? WHy didn't they LEARN, EDUCATE THEMSELVES, before they did? Why should people get some kind of sympathy because they decided that, despite knowing NOTHING about an issue, they jumped in and did it?

I don't know how to defuse a bomb, survive in the arctic, or drive a race car. THus, you do not see me trying to do either. And, should i try, i expect no sympathy should i mess it up. It was my fault for not learning the rules before i tried it.

Your daughter is lucky. SHe sought help/training, and was guided to smart decisions. it seems she would make a smart employee (she didn't do the task until she had some training). WHy should i sympathize with people who refused to listen to advice being given? There were plenty of people out there saying how bad these loans were, plenty of venues offering free, solid advice to buyers.

"Were there greedy people trying to make a fast buck?" As you point out, yes there were. It's called capitalism, and has existed in this country for 300 plus years.

"Sure, but most of the people on whom this market is collapsing are the good old middle class who were just trying to buy a home and take care of their families. Did many of them expect their jobs to be outsourced? Did many of them expect their health insurance premiums to double, triple and quadruple in 1, 2 and 3 years?"

My dad was 40 before he had saved enough money to buy his first home. He didn't expect to be 25 and own a 4 bedroom, 3 bath home with 3 cars in the driveway. He scraped and saved and scrimped to achieve his "american dream". He saved enough to get him by when his job ended, he called it "planning ahead". It's something we don't do now, we simply rail that our job loss was "unforseen". SOmehow, my dad always new his jobs could go at any time, or that costs would rise, and he saved for them. He stopped spending all his money when he got it, and started spending LESS than he earned, and putting the rest away.

People today are awash in the idea that a starter home is 3 or more bedrooms, and that they can have it, with the SUV and Honda in the Driveway (the SUV for the 3 kids and pulling the quads to the trails on the weekend). I believe the American Dream isn't "getting everything you want when you want it", but I think i am a rarity in that. Most people my age do tend to believe it is their God given right to own a home, drive 3 cars, eat out whenever they want, and buy everything they desire when they desire.

My neighbors were never happier than when they managed to get a line of credit on their home in order to pay all their credit card bills, and the got an interest only type mortgage... Ten years of living in that home, and they sucked out all their equity to get an interest only loan and be trapped forever making payments. This "situation" was forced upon them so that they could have money to pay their bills, which included" two newspapers a day that sat in their driveway and were never read, cell phones bills and airtime so they could talk to each other while shopping, daily lunches and dinners at trendy "cafes" and bistro's, airplane trips to see their kids and other families several times a year, landscapers to maintain their house and pool, three cars for two drivers, plasma TV's, movie rentals every other day or so, HBO, CInemax, and ESPN, etc.

"Anyway, blame the victim. Another tried and true American Core Value."

Yes, i do assign blame to these "victims". I also assign blame to the banks and others who assist them. I sympathize with people who make poor choices, but I do not wish to listen to them whine, and play the "poor me" game. I am sorry they made such poor choices, I am sorry we all must pay for them, but if I don't hold SOME responsibility at hand for them, then I simply enable them to go out next time and do the same thing, all over. Because if it is never their fault that anything happens, then they will never learn or change their behavior.

MicheleD (Kentucky)
Posts: 4,491

Posted:

BrianB said: " If they do not understand something, then why are they doing it?"

Very simple. They didn't know what they didn't know. If people don't know that they don't know, and THINK they understand something, but really don't. . . good grief, that statement above is just as much B.S. as the other ones. I certainly didn't have the knowledge I have now with the first house I bought. Should that naivte have prevented me from taking the plunge? A lot of these people may have been naive, they may have had a trust in the players they shouldn't have had.

And are you seriously equating buying a home with diffusing a bomb? Again, way to bring out the hyperbole.

Bully for your dad. Bully for my dad. Bully for your employees. I'm standing here giving you all a round of applause. Thank god for the "boot strap" generation, eh?

Again, I believe Gerald's assessment is probably the most on-target of anyone's I've read so far:

"Unfortunately for those over extending themselves in home purchases the hazards were either ignored, or not understood, could be the fault of mortgagors (borrowers), or perhaps the fault of the mortgagees (lenders), or a little bit of both. "

Yes, indeed the "buyer beware" truism exists because as buyers we should all beware. There is risk in everything you invest in, including your home. But did ANYONE foresee the landscape that was looming on this one? Naturally first-time buyers are a lot more aware this minute, TODAY, because of what has just unfolded, but in the years leading up to this, none of them had a clue this could happen industry wide like it did. If ANYONE did, they didn't sound any alarm, did they? At least not one loud enough to be heard.

If they had any idea that what they were getting into would unwind this way, you are correct, they most likely would not have done it. But again, hindsight is 20-20, life lessons learned the hard way, yada yada yada,

My point is quite simple - there is plenty of blame to go around. There were plenty of players, at all levels, who knew what they were doing, and there are plenty of victims who did not and now have a horrible mess -- some of them to the point where they have lost their homes and whatever savings they may have had before then entered into the market.

In the meantime, I will continue to believe the way I do, you will continue to believe the way you do.

We can all feel confident in our own opinions.

Have a nice day.

BrianB (California)
Posts: 2,820

Posted:

I will concede to your "loud enough to be heard".. there were plenty of nay sayers predicting that the housing bubble wouldn't last, that it was a matter of time before bond marketers got caught dipping in the housing market, that decreasing the standard for huge loans, credit debt, etc. would come home to roost.. but, in the euphoric high that was the market, people ignored it. we didn't want to hear it, we didn't want to change our ways.

Anyone who remembered their basic economics 101 exercises, who remembers the S&L scandals, who remembers the gas crisis of the 70's, the recession of 81/82, the stock collapse of 2002/2002, or the big depression, "knew" it was coming. All those folks were cautioning us to use good sense, play it safe, and be cautious, but we didn't. We spent. Consumers, politicians, bankers, everyone fed at the trough of good times.

The warnings were there, in our history. They just weren't loud enough to rise above the level of hysteria, pandering and marketing out there.

I am glad your dad was there to educate you, and you were there to help educate your daughter. I am glad my dad was around to show me a few things too. It's too bad the world isn't filled with more of the type of common sense and helping that your family showed. We need more of that.

MicheleD (Kentucky)
Posts: 4,491

Posted:

I thought it was interesting that this topic was started not as question about or directed to a specific ongoing situation, but as a general discussion topic. Since this is simply a general discussion, and I think it's all pretty much been talked out, this will be my last comment on it. I will try to make it as succinct as possible regarding my position.

We all agree that there were people in the layers of the sub-prime debacle, and the subsequent housing market quasi-collapse, who were there to make the buck with no concern for the long-range or ultimate consequences. And, for the record, I do agree a great deal with your last post, Brian.

Where we differ, it appears to me, is in our ability to parse from that to what degree there were victims and to what degree there weren’t.

What I see are considerably more victims than some others here do. That, no doubt, comes from our own personal filters. What I know, from our area of the country, anyway, is that a considerable number of people (over the years that this was coming to a head) ended up accomplishing something that possibly for generations of them had been out of reach in their families.

They bought a home.

Many of the buyers were on the upper end of the working poor or in the middle to lower end of the middle class, people for whom such a purchase was not possible years ago. Now, so it appeared to them, there were creditors and banking professionals and real estate agents all indicating that this dream, this ability to buy a home, was NOT as unreachable a goal as they had always believed.

Those that already had some sort of low-end housing were now finding that they could, in fact, move out of the depressed neighborhoods and into some of the more livable, more desirable, areas of town. Those who didn't already have a low-end home found that they didn't have to settle for a junk house in a depressed area or neighborhood. They could move into a moderately priced home in a relatively nice part of town. The median price of a home in our area is roughly $133,000, up 3 percent from last year. So we’re clearly not talking McMansions here.

And yes, many of the buyers, too many of them, were not savvy enough nor sophisticated enough to understand the risks they were taking. They did not know what they should have needed to know. They did not know, for example, that if a bank or mortgage finance company did not think they could repay that they would not give them the loan. In other words, they believed that if the banks or finance companies were willing to give them a loan, how bad a risk could they be? We all know the typical song and dance about how hard it is to get approved for a house loan. So if they DID get approved, someone must believe in them, right?

They committed the ultimate crime, many of them, of thinking with their hearts instead of their heads.

These people weren't just a statistical blip, they were the target market.

Today, some of the people who were approved for loans early last year are having a more difficult time obtaining similar financing now.

To the extent that many of the homeowners were of this makeup, I have extreme and utter empathy (notice I said "empathy" and not "sympathy" – two distinctly different emotions).

Thanks for the discussion.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Well said Michele,

I happen to live fairly close to Hilton Head, SC which has also had explosive growth and lots of expensive housing. Even times shares forecloseures seem to be significant. Purely a just but from the #of foreclosures in the papers this whole mess has had a domino effect across the Board. My specific cluster area has been very fortunate, although that is strictly a guess because I am not privy to the # of folks in gated communites are not paying their fees.

I agree it is time to move on.

JoanneL (Virginia)
Posts: 22

Posted:

I think the blame should be spread around between the lenders and real estate agents showing properties to prospective buyers who clearly can't afford adjustable rate mortgages. Ultimately, buyers need to review the terms of the loan carefully. What we want vs. what we can afford is the reality check when purchasing a home.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here