Posted on 02/20/2009 4:23:31 AM PST by smartyaz
They probably bought the house for 600k, and mortaged it for the “assessed” value of $800 k, pocketing 200k and living the high life for the past couple years, until they spent all the money.
Now they are “victims”. That is they type of scam that has been going on all across the country, thanks to the “community re-investment act” and the “ACORN- Fanny Mae-Freddy mac” scam of bundling up all these mortgages and selling them on world wide bond markets as A-one long term investments that many insurance companies, pension plan management c’s bought into.
Many of Bushes proposals never saw daylight because he was too stupid to realize what was already going on. Later, he tries three times to modify this “community investment” Acorn,freddy mac, fanny mae scam operation, and close these lending practices, but they all died on the floor.
The arroz con pollo is now coming home to roost.
Leni
And Fannie mae & Freddie Mac would buy it so Howell Raines & Jaimie Gorelick could make millions in bonuses and the two entities could kick back millions in campaign contributions to the corrupt scum in Congress.
Let's parade and profile "Garcia the Bus Driver" up front and personal.
That should be a hoot!
sw
Well, you could be right, but the article does say that she bought it for $800K, not that she mortgaged up to $800K.
Either way, it's difficult for me to see how she and her husband ever thought they'd be able to afford the place. This is sort of basic arithmetic. If both her husband and she are working, perhaps they're grossing $120,000 or even somewhat more.
I don't know what her rate is, or her taxes, but assuming optimistically that she's at 5% or even a little less, she's got about $5,000 per month in mortgage payment. At the old standard of 28% of income for one's mortgage, that requires household income of over $210,000 per year. Unless her husband is making well over $100K himself, it's unlikely that they were anywhere near that.
That said, not everyone in difficult straits quite deserves what they're getting. I live in the Washington, DC area, and housing is pretty expensive here, and in some places, got pretty crazy up until a couple of years ago. But a lot of folks have white-collar jobs, and it's not unusual for two-income families to exceed $100K per year, or even $200K per year. Thus, a lot of families afforded decent homes because both spouses made good incomes.
But as layoffs ripple through the region (and we don't have it as bad as many), folks find themselves losing 30% or 40% of their household income, and that $3K or $4K mortgage that was doable when household income was $150K or more now looks a lot uglier with only $90K or $110K.
So, what's the family to do? Well, they could downsize...
...Except that house that they paid $500K (and that was a 30 year-old, 2,000 sq ft fixer-upper in a decent, but not great neighborhood, not a new McMansion) with 20% down (that's 100 grand) and roughly $15K in closing costs (pretty typical in Maryland - one of the one or two states with the highest residential real estate closing costs) is now worth $375K. Or even less. If they can sell it. And the realtor doesn't work for free. And it's a buyer's market, so they'll have to go half on the closing costs. Meaning that there will be roughly $345K to pay off a $400K mortgage. Ouch.
Here, it makes sense to try to persuade lenders to lower interest rates, as for many of these families, a couple of percent or so on the mortgage may very well be the difference between enabling a family to stabilize their financial situation at a lower income level and foreclosure.
I have a friend in just about this position. His ex-wife (who shares the mortgage payment and the house with him, as they have children) lost her job, and thus her ability to share the mortgage payment. She has found new work, but for substantially less money. And that's likely how things will remain until times get better. It was a tough fight, but they got their lender to reduce their interest rate by 3%, which will save them probably around a thousand dollars per month.
And the lender won't have to foreclose, won't have another piece of REO, won't lose all interest (and home value through deterioration of the property) for the year or so it would take to sell it, and will likely lose none of the principal that they'd have lost if they'd have foreclosed and had to sell.
The problem is that the actions of some people who have been very irresponsible have hurt other people who HAVE been responsible. Anyone can lose their job. In ordinary times, if it came to it, a family could sell their house and downsize. But with home values down by 20%, 30% and more in some markets, even responsible folks are getting it in the neck.
sitetest
To paraphrase Dennis Miller - I have no problems helping the helpless. I have no desire to help the clueless.
Are Minta Garcia and her husband illegals?
Should be:
to make sure that excessive numbers of bad loans were not being made.
I hang my head in shame for trying an auto-spell check!
In secularizing the bad loans,
Should read:
In securitizing the bad loans,
knew they could charge exhortation front end fees
Should read:
knew they could charge exorbitant front end fees
UGH... Well, I meant well...
Mark
Bus drivers in Houston can make $100K a year with OT.
The fact that the busses are largely empty and extremely inconvenient notwithstanding. After all, they're taxpayer subsidized to the tune of a 1 percent sales tax.
bttt
Did you notice that at the end of the video the CNN guy mentioned that “after Geitner presented his plan to bail out the banks, the stock market tanks” and that the Obamabots had to go on the defensive: “we’re not saving the Dow we’re saving families”?
Truth to power!
Does a car salesman encourage you to step up in size, model or options?
Does a clothing salesman try to sell you up? Or add accessories?
Does an appliance salesman try to sell you more bells and whistles?
Answer: Of course, they do! It's their friggin' job!
Ultimately, it's up to the customer to a.) decide what they want, b.) whether they can afford it and c.) make their own decisions.
Consumers should not have to be protected from the consequences of their own decisions.
Indeed, there was something "out of the ordinary" going in the mortgage business.
Don't you realize what it was?
It was Fannie Mae and Freddie Mac -- so-called GOE's (Government Owned Enterprises) -- who were eagerly buying these mortgages. And, thus, assuming the risks. Indeed, Freddie and Fannie were offering lenders both encouragement and coercion to make such loans.
The federal government was rewarding lenders to make such loans -- and threatening them with punishment if they did not. All because the Democrats in Congress were pushing "affordable housing" -- even for those who couldn't afford it.
I agree and I don’t recall complaining about them trying to push more money at me. I was stating a fact.
I thought you were also disapproving. If not, my mistake.
Every day, I am getting more and more angry. These *boo hoo, save me 0bama* people are all demonstrating they are ignorant of simple English and simple math.
“Bus driver Minta Garcia admits that she and her husband bought more house than they could afford, “
GREED.
The more it’s rewarded, the more there will be of it.
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