Posted on 05/30/2005 6:19:28 AM PDT by Flavius
Edited on 05/30/2005 6:35:29 AM PDT by Sidebar Moderator. [history]
PHILADELPHIA - To walk Thayer Street in northeast Philadelphia is to count, door by door, the economic devastation afflicting a working-class neighborhood. On a single block, 18 of the 42 brick rowhouses have gone into foreclosure in the past three years.
There's Marciela Perez, who fell ill with cancer, lacked health insurance and stopped making mortgage payments. Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver who took on too much debt, lost his job and fell behind on his mortgage.
"Mortgage companies convinced us to refinance, and each time our bill went up," O'Mara said as he surveyed his narrow street from his shaded front porch. "You fall behind and they swoop down on you."
Excerpt msnbc.msn.com
We own a home jointly with my in-laws,we just refinanced.rolled our first and second into one loan took no money just a straight refi on fixed interest rate of 5.9% 30 yrs. dropped our house payment by a couple hundred a month so if we want an extra thing or two thats how we will pay for it,cash using what we save on our lower house payments!
My goodness, all those victims from the "working class" neighborhood in the first couple of paragraphs. I wish I could live in a non-working class neighborhood where I didn't have to worry about mortgage payments and otherwise paying back money that I borrowed.
At 59, I finally own my home outright. My wife and I sold our house in California for an obscene amount of money, paid off every debt we had, and bought a home twice as large in Minnesota, for half what we sold for in California.
No mortgage. No payments. Life's sweet.
The real issue is the ability to plan ahead.
As a small landlord I have had tenants with low incomes but who would start accumulating money for February's rent payment right after they made the one for January. These people almost never get into trouble, and if they do, they see it coming well in advance and I will always give them more time if they ask before they are late.
The other type is ones who start thinking about the rent two or three days before it is due. They are frequently late, no matter what their income, they bounce checks, and are in general bad credit risks.
I will almost guarantee that every one of those in the story were in the second category...
"Mortgage companies convinced us to refinance, and each time our bill went up,"
Uhm, whose fault is that? I guess it's the Mortgage company and not you, right?
Maybe if people understood that you personally can't spend more than you make forever then we would start requiring Congress to quit spending more than the IRS collects, also. Gov't debt is just a reflection of society's values. After all, doesn't a people who can vote freely deserve the gov't they get?
Dead on right. I'm about to pick up a sizeable mortgage and VERY seriously considering interest only.
"... in U.S. history has delivered riches. They repeatedly tap their homes for equity and use the cash to purchase granite countertops, a BMW, even a trip to the Super Bowl "
Eh? What 'riches'?
A BMW financed with an equity loan?
I'd rather pay cash for a YUGO! Thank you very much....
_---------------------------------------------
Why? Unless you have the income and the discipline to pay down the principal by the end of the interest only period taking such a mortgage is a sucker's play.
Did we really need to know the frequency of his former sex life?
Worse yet, there is a company in Dallas that is advertising a 1.75% interest only mortgage. Except that the actual interest rate is at 5%, so not only do you never touch the principal (...ple?), you accumulate even more debt.
I went to a mortgage company sales meeting once, and they served drugs in Kool-Aid that made everyone agree to refinance...
Why is personal responsibility such a problem?
"he advised homeowners to make their mortages ARMs"
I hope he was being sarcastic:
Having faith in Greenspan is idiotic.
ARM's are just simply foolish at the rate one can get today.
Yup. Life has never been bleaker. All is lost. The sky is falling. We're all gonna die. Our children and grandchildren will not survive either.
Did you calculate how quickly you would pay off the house if you left the mortgage payment the same and took the lower interest? When I financed my house, adding about $200 per month halved the term of the mortgage.
Freepmail me an email address and I can send you a spreadsheet to play "what if". I'll need to know if you make your payment monthly or every other week (another interesting trick that can save some $$.
Let's stop laying our problems at the feet of the Feds. We are supposed to be independent, making our own decisions and abiding by them.
To me, fault lies squarely in the hands of the real estate conglomerate.
Everyone is telling us that our home is not just a home, it's "an investment". Sell and you reap huge profits. So do the realtors, bankers, home improvement companies, etc.
And then there is "us". Greed, and two earner incomes, are destroying the family. Kids do not need a "village". They need a parent at home, a rock, someone to cling to. Families should feel secure in that home, not wondering how they will make the next payment on it, including taxes.
It makes no sense because Greenspan is jacking up short term rates, which is what ARMs are based on. Longer term rates like on the 10 year note are actually going down.
-Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver...-
Does being barrel-chested or rawboned and crew-cut have any possible significance to the story? Please stop the romance novel reporting!
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