Posted on 12/07/2009 10:58:22 AM PST by Lorianne
So unlike what some of the posters' strawmen here, they didn't lose jobs or get sick. Unfortunately there was a lot of that going around. Now it's the taxpayers who are getting the ultimate bill. Too many people treat loans as income.
The executive management of Countrywide helped fuel this problem. They bailed on the company and have started a new one buying up these bad mortgages.
So they made money on the first mortgage and are now making money cleaning up the mess they largely helped create.
Why do people clamoring for personal responsibility only look to the borrower?
“Too many people treat loans as income. ‘
The IRS does when there is a short sale.
Your own tagline refers to a culture of “Borrowing money you cannot pay back.”
This couple admit to being guilty of it.
Used to be anyone could file for a Chapter 7. Now that is not possible. There are just many people out there who can’t get out because they make too much. They have to file a Chapter 13. I am not sure what the laws are for people who have lost their jobs. For some people they got into the mess because they wanted too much, more than they could afford. For the newly unemployed people, I have a lot of sympathy.
The whole thing is pathetic.
Shows you that nothing just happens out of the blue. People knew what was coming because they are the ones who planned it.
True, and as much as I despise the IRS they have logic on their side. If and only if the debt is forgiven, a loan becomes income. Until that time it is still debt, not income. The IRS is yet another reason not to mine the value of your residence for money to be squandered on lifestyle.
“Some of us **somehow** managed to escape that lifestyle. I wonder how that happened? Could it be, uh, personal responsibility? “
You miss the point jane. But you are free to sit in your glass house and throw stones.
I wonder how the holders of the primary mortgages feel about this idiocy.
That is the true point of this article. THE RULES HAVE CHANGED, AGAIN.
More of that HOPE AND CHANGE.
Over half of the people who got into loan modification programs are in default again in a year, so apparently they spend everything they get. Of the people who did home equity loans to pay off credit card debt because thy'd maxed out their cards, I read a statistic that 60% of them have maxed out their cards again in 24 months.
Yeah, like most of our WELFARE system, and our entire BANKING system.
>> When the very foundation of the system is rotting away what does it matter whether they had borrowed too much.
I think they would likely disagree. Those that didn’t borrow too much aren’t in foreclosure, and are likely more able to weather a financial downturn.
>> The banks made this mess. They ENCOURAGED people to live that lifestyle. Remember Visa and the priceless vacation add?
Banks are to blame for irresponsible lending. Borrowers are to blame for irresponsible borrowing. An individual family cannot rightly blame their financial situation on bank advertising and being granted a loan they shouldn’t have asked for.
SnakeDoc
None of that surprises me. I have always thought that had to be the dumbest thing a person could do. Or maybe it was just deliberate.
Years ago we knew this guy and his wife, that would spend, go bankrupt, get more cards after that, go out and buy stuff and default as soon as they could.
He ended up getting fired from his job stealing from the cash register. There was never enough for him. LOL
No. Our government made the mess when they changed the law and forced banks to give out economically unsound loans.
They ENCOURAGED people to live that lifestyle.
They do allow people who think that's the way to live, to make the attempt. They (your government) promised the banks that they would 'bailout' the failures, with your money. The banks were left very little choice, and many people exploited this.
What you said about borrowing money that you can’t pay back sounds cruel, but it is wise. My husband and myself got into finacial troubles some years ago.
We made a pact to not spend money we do not have. We have a meager lifestyle, but we do not have any debt but the roof over our head and a car. No charge cards.
The people who have recently lost their jobs due to the economy, I have sympathy for them. Most of them would work and pay their bills if they were employed.
Yes.
And those are the type of people who have been forced out of work primarily because of poor decisions in government.
And they will get hit the worst.
The couple this story mentions have been in financial trouble way, way before this latest CHANGE IN BANKING RULES.
Because the lender did not hold a gun to these people's heads. They had a choice to make, and they chose poorly. I am not absolving the lender from culpability. When you get down to it, though, it is the borrower's responsibility to know the details. Didn't the article even state that the knuckle heads doing the refi's spoken about didn't even consult a lawyer at anytime during the process; or at least until AFTER they were up the creek.
Explain to me why I am supposed to feel sorry for people who obviously made dumb decisions. To me, it's like an addict whining about their sorry lot in life. I will show you Christian compassion, for God's sake, though own up to your stupidity and change your behavior.
“When you get down to it, though, it is the borrower’s responsibility to know the details”
If I’m lending money its my legal responsibility to make sure the borrower qualifies and that the property value will support the loan.
“Explain to me why I am supposed to feel sorry for people who obviously made dumb decisions.”
So you’re perfect?
Does no one use cash anymore?
We bought a home we could afford...$60,000 total after closing costs, taxes and other fees. Fixed interest rate of 6% because we managed our credit well. We use cash to fix the house. If we didn’t have the cash, it didn’t get remodeled. When we come into a little extra funds, half goes in the savings, half is for remodeling part of the house. We understood we couldn’t have everything we wanted at 21 and 26 years old. Now, at 24 and 29, we just refinanced the remainder $47,000 last year at 4.75% fixed. Our mortgage payment is less than many people pay for rent for a one bedroom apartment.
It’s not hard to manage your life if you don’t think you deserve everything on a silver platter.
The lender did not hold a gun to their heads and force them to take a loan on twice what the property was worth.
Sounds like someone had a gun to the lenders head or should have.
“$60,000 total after closing costs, taxes and other fees.”
Even today $60k won’t buy a termite infested house in the hood around here.
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