HEY! Where can I go to get the government to pick up 15% of my mortgage principal? I am going to stop paying my mortgage TODAY so I can qualify! People who are responsible and only buy a house they can afford are FOOLS!!!!
What a refreshing view of the problem...and absolutely true. This is why it absolutely pi$$es me off when Congress suggests jumping in and using my money to bail out these parties. It was a private transaction where both were greedy and at fault and I fail to see why this is my problem and why my money should be used to fix it.
This is refreshing. Because of their attitude, I expect they will land on their feet and build wealth again.
Some people...........
“They had obtained an adjustable-rate loan to buy the house,...”
Root cause ping. I do have to agree with you that it is refreshing that these individuals are not trying to shift the blame.
Yes, this was a good read. I’m glad there is someone out there taking responsibility and not looking to blame others.
I’m in somewhat of a mess myself, and it is clearly my own fault.
While things were going well, they drew $119,000 out of their real estate transactions and another $100,000 in a home equity loan, presumably for lifestyle spending. This left them with no cushion when business turned against them.
If they had simply reinvested their profits in their real estate transactions and not taken out that home equity loan, they would have a quarter million dollar cushion to break their fall.
Moral of the story is that for 99% of the people real estate is someplace to live, not an investment. This expense must be handled very conservatively and minimized at every turn, because the amount of money can swamp the careless quite easily.
This used to be common wisdom, and every first-time home buyer was warned about this by pretty much everyone they talked to. Somehow this common wisdom was lost. It looks like people are figuring it out again.
A refreshing look. We all make mistakes and we learn from the suffering.
They also put the money they made on each house into the next one they bought. They didn’t burn the money on BS as they traded up.
The fatal mistake was getting an ARM. They would still be in their house with a conventional loan. Not sure why someone would us a ARM if they planned on keeping the house?
Gary is one of an increasingly rare species. I bet he and his wife recover and do nicely down the road. I hope so.
Despite the WI and CA residency, there is no way that these people are “liberal”...
I have NEVER seen a lib accept responsibility for their choices.
They turned a quarter of million dollars from real estate since 99, so what’s the problem?
"The banks loaned money to all kinds of people they shouldn't have, including us," Gary said. "This situation we're in is one of our own making. We were not taken advantage of."
Whole ball of wax...but surprising to see it recognized and in print...
People need to decide for themselves how much house they can afford. Just use the old tried and true formula: Mortgage not to exceed 1/4 of monthly income. Indeed, smart ones would go even lower, leaving a buffer.
And tell the lenders, who now 'qualify' people on the most convoluted criteria ever designed, to stuff it.
Watch words: Thou shalt not covet more than thy can afford.
Kudos to the couple for not blaming anybody for the catastrophe that caused.
That said, I am simply amazed by man’s capacity for stupidity when they are in denial and don’t want to believe anything that contradicts their preconceived notions. “See honey, the home has shot up like a meteor therefore past performance DOES necessarily predict future returns, right???”
I am even more dumbfounded by the sheer exhausting numbers of otherwise intelligent people who behaved with such massive stupidity only by burying their head in the sand and pretending that the party would go on forever and ever.
Unfortunately, stupidity hurts.
My lady heard a story from a friend in CA who was talking about $800,000 properties now selling for $300,000, but I told her that things had not fallen THAT far, yet. Maybe I was wrong?