Posted on 01/31/2015 6:50:08 AM PST by dynachrome
When they moved into the house in November 2005, Kofi was earning $82,740 as an IT consultant for a government contractor, and Comfort, then 43, was making $30,000 as an administrative assistant. But in the overheated mortgage market of the time, they said everyone told them that they could buy a $600,000 house.
They made a $60,000 down payment and all their mortgage payments for more than 2½ years — through September 2008. But the house was financed with subprime loans, which reset to higher rates after short time periods, creating what are known as “shock payments.” The Boatengs said they could not make their new higher payment, and, in the middle of the 2008 mortgage crisis, they could not refinance.
(Excerpt) Read more at washingtonpost.com ...
The attitude they have:
“It wasn’t that we didn’t manage our money,” Comfort said. “We know in America, everyone owes something. We couldn’t get things done the way we expected. It happens to everybody.”
"
From the article:
A growing debt
How one family went from no debt to owing more than $1 million.
*Debt does not include interest or other fees
July 1997
The Boatengs arrived in the United States
DEBT: $0
1999
Purchased a used Toyota Corolla for $2,000
CARS: $2,000
DEBT: $2,000
May 2000
Took out a mortgage on a three-bedroom town home in Germantown.
CARS: $2,000
MORTGAGE: $128,900
DEBT: $130,900
2000
Purchased a new Nissan Altima for $12,000.
CARS: $14,000
MORTGAGE: $128,900
DEBT: $142,900
2003
Comfort began to take out student loans.
2002-2005
Refinanced their Germantown home several times to fund improvements and to pay off some debt, including the cars.
MORTGAGE: $128,900
CASHOUTS: $95,000
DEBT: $223,900
July 2004
Refinanced their Germantown home to borrow $60,000 for the down payment on a new house in Fairwood, outside of Bowie.
CARS: $14,000
MORTGAGE: $128,900
CASHOUTS: $155,000
DEBT: $283,900
November 2005
Took out two loans to buy the new home in Fairwood.
GERMANTOWN MORTGAGE: $128,900
GERMANTOWN CASHOUTS: $155,000
FAIRWOOD MORTGAGES: $554,683
DEBT: $838,583
September 2006
Refinanced to consolidate the two loans on Fairwood home and some debt.
GERMANTOWN MORTGAGE: $128,900
GERMANTOWN CASHOUTS: $155,000
NEW FAIRWOOD MORTGAGE: $612,276
DEBT: $896,176
2006
Took out personal loans after their tenant in Germantown failed to pay rent. Comfort obtained two $20,000 business loans.
GERMANTOWN MORTGAGE: $128,900
GERMANTOWN CASHOUTS: $155,000
FAIRWOOD MORTGAGE: $612,276
PERSONAL LOANS: $15,000
BUSINESS LOANS: $40,000
DEBT: $951,176
August 2011
Bank valued the home in Fairwood at $378,216. This was $238,839 less than what they paid.
2013
Comfort completed a master’s degree after taking out roughly $60,000 in student loans.
GERMANTOWN MORTGAGE: $128,900
GERMANTOWN CASHOUTS: $155,000
FAIRWOOD MORTGAGE: $612,276
PERSONAL LOANS: $15,000
BUSINESS LOANS: $40,000
STUDENT LOANS:$60,000
DEBT: $1,011,176
January 2015
The Boatengs are still living in the Fairwood home. They have not made a mortgage payment in more than six years.
Sources: Post analysis of financial records
How To Bum On The Books?
I’m currently reading, ‘The Fifth Witness’ about the murder of an unscrupulous lending officer (though most likely strong armed by the likes of Bawney Fwank) who was in the process of repossessing homes.
It’s hard to know which side to root for! ;)
No loan undertaken by a sentient adult should in any way manner shape or form have any provision that surprises. Sorry.
JMHO: Nobody should by a house that costs more than $250,000 unless they can pay cash. The exception would be if it's a revenue source such as rental apartments.
When mortgages became politicized into tools of social engineering, the fundamentals flew out the window. There’s no good reason to pile debt upon debt when you’re already in financial distress, it’s not a way out it just delays the day of reckoning. Too-easy financing has led to boom and bust cycles, which are bad. People were encouraged to buy more than they could logically expect to be able to repay under the best of circumstances, which is also bad. Why do the bean-counters think that this is a good thing?
Well that gets abused too much and they get stiffed.
Sometimes multiple houses all have poxes.
Pretty much what my ex did, on a slightly smaller scale. Finally got my head back to ‘dirt level’ after 5 years!
Again, if I had shot him back when he deserved it, I’d be out of prison by now, LOL!
Tough Life Lesson, but you gotta laugh. Most days.
Oh no, not more of these sob stories!
I’ve read a gazillion of them since 2008 ... I thought they had died down a little lately.
I guess the media is back on the job trying to propagandize us about ‘underwater’ borrowers.
Such stories are one way that God tries to get the ears of people to realize that earthly wealth isn’t the be-all and end-all of existence.
The borrower gets burned and so does the lender. Often, both were significantly unwise.
One has to know their limitations. Physical, mental, financial, etc.
I mean what’s the big problem. Declare bankruptcy already....
And sometimes, moral. That isn’t always obvious. One can be spoiled by a posh circumstance and then when it goes to lean times, one is not prepared for the attitude adjustment.
“if I had shot him back when he deserved it, I’d be out of prison by now, LOL!”
A guy named Jimmy Velvit wrote a song with that title. Funny stuff! (genders reversed)
It is simply not feasible for a couple earning $113,000 annually to pay off a $540,000 mortgage. A conservative rule is a mortgage of no more than twice your annual income. Three times is a challenge. Five times is guaranteed failure.
Part,of the reason the homes in that area are so expensive is that the banks approve idiots like this for loans. The competition from under qualified buyers drives prices up. Thank you, government, for deciding everybody deserves to own a home they can’t afford.
Banks keep houses like this on their books at “book” value, because other wise it show up as a loss. It’s how these people can live for free.
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