[jetson]

Who are some of these people who on this site? Yes I think alot of people have been manipulated by Realtors and lending institutions in Calif. It used to be where your financial situation had to fit a cetain formula to qualify for a loan. Between sleazy Realtors and money hungry lenders they are handing loans out to anybody. Realtors suck alot of Mexicans into these home loans as well as wannabee get rich quick types telling them they will clean up. A Mexican bought a 1400 sq ft house across from me with a $ 4,500.00 interest only loan payment a month. He makes $ 48,000.00 dollars a year. How the hell does one qualify for a loan like that without some sleazy s**t going on. He told me he is in deep doo doo as housing prices drop. I don't see how these lenders are letting people walk out their doors after making loans like that. Ultimately the lenders eat it as foreclosures take place.

[Theo]

The man in trouble is an idiot. An ARM when rates were so low? Idiot. He's failed his family.

[bert]

The Philbrooks are reaching far beyond their grasp. Life for the greedy is always going to have sever problems.

[old and tired]

Am I supposed to feel sorry for these morons? What's the point of this article? That some people are living way over their heads? That's news?

Anyone who's only taking home $4,000 a month shouldn't be carrying "two hefty car payments". These people have chosen a lifestyle over security.

[montag813]

leapfrog to 9.375 percent in one go, and from then on rise incrementally to a maximum of 12.375 percent. They weren’t aware that their variable rate was tied not to the prevailing mortgage rates but to a market index based out of London, which circulates money at a far higher rate of interest than does the fixed-rate-mortgage market. The final poison pill--a $7,300 penalty if they chose to seek new financing during the first three years--discouraged the Philbrooks from refinancing once high rates kicked in. Not understanding the first three provisions, the couple were not fully appreciative of the dangers of this refinancing clause.

What is all this shit? 10yr rates have barely budged upward in 2 years. And the Fed only increased rates 3.5%. How could someone be paying 13%? I think some mortgage brokers need to be doing jail time.

[montag813]

Watching all this from New York City, it is disturbing but things here seem to be just fine. Prices keep climbing, people keep buying. Not as much as before of course. But even people who can't get their desired price for a condo can rent it out and easily pay for their mortgage and maintanance. The super strong rental market in NYC is permitting many sellers to ride this out. At least so far.

[RetiredArmy]

“Loan officers, they’ve replaced car salesmen as the shadiest people you deal with,” John said, bitterly.

Dear John: Who twisted your arm and made you sign those documents? Who made you accept the deal? Did you actually think interest rates would always stay that low, for the next 30 years till you paid your house off? Dear John: Shut up. You signed the deal. Live with it. Just as with car salesmen, you could have always walked away from the deal. Your fault. Accept the responsibility for it.

[CobaltBlue]

I dunno what people can do to preserve their assets and their credit ratings when they are in over their heads, and the ARMS are adjusted too high for them to pay, except file bankruptcy.

Don't believe the people who tell you that the new bankruptcy laws made it impossible; they don't know what they're talking about.

And, if you have a personal objection to the entire concept of bankruptcy, too bad. It's the law.

And, if you're afraid you won't get credit after Chapter 7, don't be offended, but "ha ha ha." Creditors LOVE to lend to people who were discharged in bankruptcy, because that means they can't file bankruptcy for another 8 years.

My bankruptcy clients get credit offers in the mail immediately, which I think is wrong, but hey, that's capitalism, and I believe in capitalism.

[N3WBI3]

Overnight, the monthly payment on the $195,000 loan went from $1,350 to $1,841. Factor in the payment on the smaller, second loan, and the Philbrooks now were paying $2,250 a month servicing their mortgage. Since Karen and John bring home a total of about $4,000 after taxes each month from their three jobs

Ok so their after Income 4,000$ and their mortgage was 1,350$ So their payments we 33% of their income. This is on the extreme end of 'ok' but when you borrow that close to the edge you damn well better have a fixed mortgage.

My mortgage runs about 24% of my monthly income and thats fixed (well the expense side of things). My wife and I decided to buy on the pizza delivery theory, if I lost my job and delivered pizza's (and my wife got a part time job) we could keep the house. It meant buying something small (1K sq ft) but in five years or so we will upgrade. In the mean time I am paying about 15% more than an apartment would cost and my family has stability.

[kittymyrib]

When you watch "House Hunters" on HGTV and see homes in CA that a Texas welfare family wouldn't live in selling for $400,00, one can only surmise that everyone on the Left Coast has taken total leave of their senses. For $300,000, you can live in a mansion with property here.

[Liberty Valance]

Quick! Everybody get completely out of real estate
and invest in a proven winner!



Guitars by ~ Esteban ~

[toddlintown]

"They opted for an interest-only, adjustable-rate mortgage and counted on the value of their house continuing to rise as a way to build up equity. ..."

They're morons.

[Centurion2000]

In the Philbrooks' case, John and Karen borrowed almost the entirety of the $244,000 cost of their modest North Highlands home: One loan was written for $195,000 at 6.375-percent interest; another financed the remainder of nearly $45,000 at 9.125 percent. The rate on the small loan was fixed. But on the large loan, the rate was fixed for only two years, and after that it was variable.

John said the Realtor who arranged the loan verbally assured him it would never go up by more than a quarter of 1 percent at any time. In fact, in the (very) small-print clauses attached to that loan were four poison-pill provisions.

Having not understood the small print of their contract, the Philbrooks were unaware that the loan’s rate would never be lower than its starting rate--meaning all the risk attached to the variable rate fell on them.

Idiots that cant read shouldn't be making real estate deals without a third party adviser helping them. I signed an enlistment contract ... after that I make sure I READ EVERYTHING and understand all of it before doing ANY deal.

These people were complete fools to agree to these terms. A little research would have save their lives.