On Fri 01 Aug 2008 10:09:52p, Edwin Pawlowski told us...

>
> "Wayne Boatwright" > wrote in message
>>
>> It could be, but I might not be able to afford the payments at 15 year
>> fixed. I'll certainly raise the question.
>>
>> --
>> Wayne Boatwright
>
> There are plenty of on-line amortization schedules so you can play around
> plugging in different numbers and see the differences. They can be huge
> over the long term.

Thanks, Ed. Yes, I've fooled around with those a bit. Still, it boils
down to what I can afford to pay per month over what I can save over the
long term. It's all a balancing act for us right now.

--
Wayne Boatwright
-------------------------------------------
Friday, 08(VIII)/01(I)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Democracy: Four wolves and a lamb
voting on lunch.
-------------------------------------------

On Fri 01 Aug 2008 09:12:23p, sandi told us...

> (Steve Pope) wrote in
> :
>
>> Wayne Boatwright > wrote:
>>
>>>That's for sure. When we were planning on buying our present
>>>home nearly two years ago, we were told by the lender that we
>>>qualified for more than double the amount that we felt we
>>>could reasonably afford. We went with the amount we felt
>>>comfortable with, and insisted on a 30 fixed rate mortgage.
>>>Doing anything else would have been foolish and would have put
>>>us at the very risk that many people are facing now. We have
>>>refi'd once since then, and are planning to do so in the near future
>>>as rates have continued to drop in our area.
>>
>> That's very sensible. You might also want to look at the 15
>> year fixed. Depending on market conditions, it can be a
>> better bargain.
>>
>> Steve
>
> In case of 'emergency' 30 yr is good AND making additional
> MONTHLY principle payments (WHEN YOU CAN) and you can pay off the
> loan is a lot less than 30 years! Paying on the principle in the
> beginning of the loan saves MUCH interest $.

Thanks, Sandi. That's probably a better option for us, since I'm sure we
could may additional monthly payments at times, but a much larger monthly
payment every month would drain us. We've already made a few extra monthly
principal payments on our current mortgage.



--
Wayne Boatwright
-------------------------------------------
Friday, 08(VIII)/01(I)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Democracy: Four wolves and a lamb
voting on lunch.
-------------------------------------------

Goomba > wrote:

>sandi wrote:

>> Ain't that the truth. Shame on the lenders.

>AND shame on people who borrow more than they can pay reasonable afford
>monthly.

That's going a little far. In most lines of work, you cannot
predict your income from year to year. Maybe some have ultra
secure jobs, say in the public sector, but that is a small
fraction of people in general. The credit risk of an individual
is not an exact calculation, it is just a range of probability.
Buyers and lenders both take a calculated risk.

Steve

Steve Pope wrote:

> That's going a little far. In most lines of work, you cannot
> predict your income from year to year. Maybe some have ultra
> secure jobs, say in the public sector, but that is a small
> fraction of people in general. The credit risk of an individual
> is not an exact calculation, it is just a range of probability.
> Buyers and lenders both take a calculated risk.
>
> Steve

if you're buying a McMansion and can't reasonably afford the payment
(say if one person in the couple lost their job or quit to stay home and
raise kids) and have committed 50% of their net income to a mortgage
payment, they're over extended. Are they keeping up with the Joneses or
just hoping to turn a profit down the road? Is it an unnaturally high
cost of living area? I dunno?... but IMO, one still needs to be able to
live within their means and not at the extent of some other financial area.

Goomba > wrote:

>Steve Pope wrote:

>> That's going a little far. In most lines of work, you cannot
>> predict your income from year to year. Maybe some have ultra
>> secure jobs, say in the public sector, but that is a small
>> fraction of people in general. The credit risk of an individual
>> is not an exact calculation, it is just a range of probability.
>> Buyers and lenders both take a calculated risk.

>if you're buying a McMansion and can't reasonably afford the payment
>(say if one person in the couple lost their job or quit to stay home and
>raise kids) and have committed 50% of their net income to a mortgage
>payment, they're over extended. Are they keeping up with the Joneses or
>just hoping to turn a profit down the road? Is it an unnaturally high
>cost of living area? I dunno?... but IMO, one still needs to be able to
>live within their means and not at the extent of some other financial area.

I think it is very intelligent to live within one's means.
Just as I think it is very intelligent to not make bad investments
in the stock market, or gamble away money at casinos. I don't
however consider it shameful that some people do other than
the most intelligent thing.

If one lied on one's mortgage application, then that is of
course shameful; but if one is honest and it's a straight deal with
a known risk to all parties, then I don't have a problem the
bad financial decisions per se.

I do have a problem with people who consume too much; and to
the extent the overextended fall into that category, I have
some difficulty with them. And they frequently fall into
this category, but the correlation is not perfect. So, a guy who
lives in the suburbs, has two Hummers, and keeps up on his mortgage
payments is more morally flawed than the greener, vehicle-less guy
who bought a flat in the Upper West Side and couldn't keep up the
payments and loses it.

Steve

"Steve Pope" > wrote in message
>
>>AND shame on people who borrow more than they can pay reasonable afford
>>monthly.
>
> That's going a little far. In most lines of work, you cannot
> predict your income from year to year. Maybe some have ultra
> secure jobs, say in the public sector, but that is a small
> fraction of people in general. The credit risk of an individual
> is not an exact calculation, it is just a range of probability.
> Buyers and lenders both take a calculated risk.
>
> Steve

But we're not talking about people that have a job loss or other radical
unforeseen change in income. For the most part, these are people that just
did not think ahead to when the teaser rate went to a real rate in three or
five years. Their plan was to grab as much house now as they could afford
and worry about how to pay when the time comes. When the time came, they
were unprepared. It was in writing on the documents they agreed to and
signed, that the interest would go up at some point.

Most of us had a job loss at some point and managed to cope somehow. You
take to creditor, made a plan, eventually got back on track. In this case,
the people often have the same job and income, just that the mortgage
payments went up as stated in the contract. Instead of buying a 3500 sq.
ft. house on three acres, they probably could have easily afforded a 2000
sq. ft. house on a 100 foot lot. They made bad choices because they wanted
more. I don't feel sorry for them.

Goomba > wrote in
:

> sandi wrote:
>
>> In case of 'emergency' 30 yr is good AND making additional
>> MONTHLY principle payments (WHEN YOU CAN) and you can pay off
>> the loan is a lot less than 30 years! Paying on the
>> principle in the beginning of the loan saves MUCH interest $.
>>
> Excellent advice! This is what MANY, MANY consumer financial
> advisers suggest. www.clarkhoward.com is one of my favorite
> folks. I always add $100/month to my mortgage payment. Not
> earth shattering, but it certainly does help make a dent in
> that principle faster!

Thank you.

When I bought my house I had them make me up and give me an
amortization schedule for my loan. WHEN I COULD I would pay my
PITI and then the next months P. Worked out just fine. :-)

Wayne Boatwright > wrote in
5.250:

> On Fri 01 Aug 2008 09:12:23p, sandi told us...
>

>> In case of 'emergency' 30 yr is good AND making additional
>> MONTHLY principle payments (WHEN YOU CAN) and you can pay off
>> the loan is a lot less than 30 years! Paying on the
>> principle in the beginning of the loan saves MUCH interest $.
>
> Thanks, Sandi. That's probably a better option for us, since
> I'm sure we could may additional monthly payments at times,
> but a much larger monthly payment every month would drain us.
> We've already made a few extra monthly principal payments on
> our current mortgage.

Bank and loan institutions don't like to tell you that you can do
this but you can and it saves thousands and Thousands(!!!) of
dollars going to in interest rather than the principle.

Have your loan co. print you out an amortization schedule and
you'll be amazed how little you are paying toward the principle in
the first 1/2 of you loan. They get their $$$$ up front!!
(I still wanna see that property for sale in your area. Is your
camera fixed yet?) :-)

Goomba > wrote in
:

> Steve Pope wrote:
>
>> That's going a little far. In most lines of work, you cannot
>> predict your income from year to year. Maybe some have ultra
>> secure jobs, say in the public sector, but that is a small
>> fraction of people in general. The credit risk of an
>> individual is not an exact calculation, it is just a range of
>> probability. Buyers and lenders both take a calculated risk.
>>
>> Steve
>
> if you're buying a McMansion and can't reasonably afford the
> payment (say if one person in the couple lost their job or
> quit to stay home and raise kids) and have committed 50% of
> their net income to a mortgage payment, they're over extended.
> Are they keeping up with the Joneses or just hoping to turn a
> profit down the road? Is it an unnaturally high cost of living
> area? I dunno?... but IMO, one still needs to be able to live
> within their means and not at the extent of some other
> financial area.

Exactly. Me and my husband lost both our jobs the month we
purchased the house I live in now. Talk about sweating it!!!
You have to be realistic in what you can afford if there might be a
family problem down the road. How the heck can you make payments
for 6 months or so?!!

Wayne Boatwright wrote:
> On Fri 01 Aug 2008 09:42:45p, Steve Pope told us...

>> That's very sensible. You might also want to look at the 15
>> year fixed. Depending on market conditions, it can be a better
>> bargain.

> It could be, but I might not be able to afford the payments at 15 year
> fixed. I'll certainly raise the question.

After refinancing twice (my original rate was 12.75!), the final
loan was a 15 year loan. It's nice to see an end in sight. We
were lucky to be able to pay it off in a few years.

But if you're at the edge, getting a 30 year loan and paying it
off as if it's a 15 gives you the luxury of backing off that plan
for a time if it's too much.

nancy

dsi1 wrote:
> Goomba wrote:
>> Nancy Young wrote:
>>> Kswck wrote:
>>>
>>>> Read the fine print-does Balloon Mortgage mean anything to you
>>>> idiots? So someone spending more money on a home than they can
>>>> afford-can't be their fault-it's Bush's fault.
>>>
>>> There is plenty of blame to go around, from the majority of the
>>> buyers to the lenders who knew they'd just bundle the paper and
>>> sell it up the line, what did they care if people defaulted?
>>> The whole mess reeks. Some people got rich.

>> And some look to blame anyone but their own poor choices.
>
> I think people should be responsible for their actions but a scam is a
> scam. I was offered a home equity loan at a real attractive rate for a
> term of 2 years or a fixed rate almost 2 pts higher. The scam is to
> switch you onto the more profitable adjustable rate and boy, I had to
> think about that one for almost a full minute before declining. Bait
> and switch is a classic "sales technique" but in most cases, any loss
> is relatively minor.

I can't call it a scam if they told you up front what the deal was.

> However, with sub-prime ARMs you could lose your home. Americans
> losing their homes is not in the best interest of America. Sub-prime
> ARMs allow more people to buy their homes but the bottom line is that
> the banks should not be making loans to folks unable to support the
> payments - duh. It's not in the best interest of America and it's
> citizens.

That's why so many people like me are ****ed off. This whole mess
is affecting *all* of us. I'm not just mad at the people who put blinders
on and bought and furnished houses way out of their league. Believe
me, I'm ****ed off at the banks/etc who made all these bad loans, too.
Now all the furniture stores are begging for customers because they're
in trouble. This ripple affect is killing us.

> scam. Oh, yeah, we should outlaw double digit credit card interest
> rates, just for good measure. :-)

Now, there's a plan! Heh, I mean, dream.

nancy

On Sat 02 Aug 2008 06:09:57a, Michael "Dog3" told us...

> Wayne Boatwright >
> 5.250: in
> rec.food.cooking
>
>> On Fri 01 Aug 2008 10:09:52p, Edwin Pawlowski told us...
>>
>>>
>>> "Wayne Boatwright" > wrote in message
>>>>
>>>> It could be, but I might not be able to afford the payments at 15
>>>> year fixed. I'll certainly raise the question.
>>>>
>>>> --
>>>> Wayne Boatwright
>>>
>>> There are plenty of on-line amortization schedules so you can play
>>> around plugging in different numbers and see the differences. They
>>> can be huge over the long term.
>>
>> Thanks, Ed. Yes, I've fooled around with those a bit. Still, it
>> boils down to what I can afford to pay per month over what I can save
>> over the long term. It's all a balancing act for us right now.
>
> There is a newish family on the street. They had to really stretch to
> buy their house and even took a loss on their old house to get this one.
> That's how bad they wanted this house. The wife works at home. The
> husband makes a really good income but the wife told me that if he lost
> his job they would be in huge trouble. Yet they still spend. They just
> bought a new ski boat. She wants a new mini van. They'll probably buy
> it. I didn't know people lived like that until I moved out here to the
> 'burbs. I don't know if the boat was paid for in cash or if they financed
> it. It's a very nice boat.
>
> Michael

We don't spend extravagantly, but if one of us lost our jobs, we'd be shit
out of luck, period.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

On Sat 02 Aug 2008 05:47:52a, sandi told us...

> Wayne Boatwright > wrote in
> 5.250:
>
>> On Fri 01 Aug 2008 09:12:23p, sandi told us...
>>
>
>>> In case of 'emergency' 30 yr is good AND making additional
>>> MONTHLY principle payments (WHEN YOU CAN) and you can pay off
>>> the loan is a lot less than 30 years! Paying on the principle in the
>>> beginning of the loan saves MUCH interest $.
>>
>> Thanks, Sandi. That's probably a better option for us, since
>> I'm sure we could may additional monthly payments at times, but a much
>> larger monthly payment every month would drain us. We've already made
>> a few extra monthly principal payments on our current mortgage.
>
> Bank and loan institutions don't like to tell you that you can do
> this but you can and it saves thousands and Thousands(!!!) of
> dollars going to in interest rather than the principle.
>
> Have your loan co. print you out an amortization schedule and
> you'll be amazed how little you are paying toward the principle in
> the first 1/2 of you loan. They get their $$$$ up front!!
> (I still wanna see that property for sale in your area. Is your
> camera fixed yet?) :-)
>

Yes, it was fixed and working fine now. But I don't remember what I was
supposed to take a picture of. :-) I posted a couple of cake pictures last
week, both as links from here and on a.b.f.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

"Goomba" > wrote in message
...
> sf wrote:
>
>> Paternalism has nothing to do with it. Sound business practice does.
>> They needed to meet the same logical standards we met when we bought
>> our first homes 30+ years ago. We put no less than 20% down and made
>> payments that were no more than 25% of our income. There was no
>> choice, that's what we did. Our world of financing was a lot less
>> complicated.
>>
>> However, if those slimy lending practices didn't exist there would
>> have been an economic downturn and subsequent inflationary period long
>> before this. Those practices fueled the new housing boom, which is
>> now a big bust.
>>
>
>
> I bought my first house in 1981, when nationally interest rates were 17%!
> I didn't have to put down 20% because of qualifying for a "first time"
> home loan at 9.35%. That rate would be unheard of today in the 5-6.5ish
> range. For a 40k house, my mortgage payment was $369 (taxes and PMI
> included) I was barely out of my teens yet *I* managed to study the papers
> and ask questions and learn about mortgages. Even back then they warned
> people not to spend more than x percent of their income on housing. I
> believe it was no more than 30%.


Good memory IIRC the rule of thumb was 25% of gross or 30% to 33% of net
after taxes & you had to bring in a paycheck stub.


--
Old Scoundrel

(AKA Dimitri)

Michael \"Dog3\" wrote:

> I just kind of popped in here but have gotten the gist of the
> conversation. A close friend of mine has seen my new kitchen and some of
> the remodeling we're currently doing. She has decided to proceed with
> some of her own remodeling and she's going to use my contractor. Her
> house is worth around $500,000 and it is paid for free and clear. She
> inherited it from her parents. She has paid cash for everything most of
> her adult life, and has no credit history. She needs about $100,000 for
> her remodel project. Not one bank would lend her the money with her
> house as collateral because she has "no credit history" even though she's
> provided utility bills, tax statements etc. which were paid on time.
>
> She told me that unless you are in debt up to your eyeballs it is really
> hard to get credit. Anyway, she's going to use cash for the remodel and
> actually got herself a credit card to establish some credit.
>
> Weird huh? We pay cash for everything but we do have credit cards and a
> credit history. Strange thing is we pay all credit cards in full at the
> end of the month. Is that considered good or bad with lenders I
> wonder... To me (and I'm really ignorant on this subject) it would appear
> that the lending/banking institutions set people up for failure and some
> people take the bait. I half way watched an HBO special on this and from
> what I gather, it would seem, that the more questionable your credit is,
> the more willing lenders are to give you credit.

Her problem is the lack of credit history. She could fix that easy enough by
taking out a small loan and paying it back. I could have a similar problem
if I tried to borrow some money because I don't have much of a credit
history. Our mortgage was in my wife's name and we paid it off early. We
had car loans in the past but when we inherited some money about 20 years ago
we paid it off and then set up a "car account", borrowing the money from our
car account and then paying ourselves back with a monthly transfer from our
chequining account. We only use credit cards for convenience an pay off the
balance each month. At this time, we have no mortgage payments, no loans, no
outstanding credit card balance. The only debt we have is a small student
loan that we co-signed for our son.

It is not (always) a matter of them not wanting to loan you money and setting
you up for failure as having a record that shows that you pay off your debts.
However, there are some predatory companies out there who will extend credit
to high risk borrowers. Those poor people are already deeply in debt and
having trouble making the payments on their current loans and accounts. I
have trouble with the idea that companies can loan those people even more
money and then use our legal system to squeeze blood out of a stone. The way
I figure it is that if they are stupid enough to extend even more credit to a
person who cannot pay it back they should be SOL. Maybe that would dissuade
them from lending to high risk customers.

On Aug 1, 9:47*pm, (Steve Pope) wrote:

> However I think the bailout of Fannie/Freddie is reasonable,
> because after all they are government entities.

However Fannie is not [1]. It used to be but not any more. I didn't
check but I think Freddie is private as well.

If anything I would think the two F's were extremely irresponsible as
they would be the ones with the property/mortgage expertise to realise
just how bad the sub-prime mortages were. Anyone with the slightest
knowledge of mortgages and underwriting had to know this was the
equivalent of the South Sea Bubble.


1. "In 1968, Fannie Mae was re-chartered by Congress as a shareholder-
owned company, funded solely with private capital raised from
investors on Wall Street and around the world. "
http://www.fanniemae.com/index.jhtml (under the about tab)

On Aug 1, 9:45*pm, Dave Smith > wrote:
> Goomba wrote:
>
> > > So, you want to play Blame the Victim?
>
> > And do you want to pretend they don't have any responsibility here?
>
> I sometimes wonder who the victim is. There are people/banks/credit companies
> who will lend money to people who have little hope of paying it back. They
> will then try to use the the legal system to try to recoup their loss.
> Perhaps there should be stricter rules about lending.

We don't let people sell cars or food the way the financial industry
seems to have been selling mortgages and other products.

Another problem is that the reward structure for the salesmen usually
pays off well before the banks and the owners are left holding the
bag.



http://www.fanniemae.com/index.jhtml

On Aug 1, 4:40*pm, "Nancy Young" > wrote:
> Goomba wrote:
> > sf wrote:
>
> >>> What *exactly* did Bush have to do with mortgages again? The way I
> >>> see it half the people having mortgage problems were people who
> >>> overbought assuming they were going to make a killing when they
> >>> flipped the house. Housing prices readjusted (look at California
> >>> who led that trend) in many areas because they were just insanely
> >>> overpriced. There were also certainly mortgage lenders who got
> >>> sloppy and allowed unqualified people buy more home they couldn't
> >>> afford which I can find fault with. Yet somehow I don't see how
> >>> Bush (or Clinton before) as being responsible?
>
> >> They did nothing to stop predatory lending practices even though it
> >> was obviously a train wreck waiting to happen.
>
> > And did these predatory practices start in 2000, or perhaps, before?
> > And how much responsibility did the borrowers hold here? Were they all
> > helpless, clueless victims?
>
> How did it come to this, that people had NO IDEA they couldn't
> afford a house 10 times their income? *That it was just SO
> CONFUSING, all those big words like balloon payment. *What,
> the interest rate is going to go up?
>
> I guess we do need paternalist institutions telling us what to do
> because it's just too much to expect us to figure out these things
> on our own.
>
> nancy-
The next time you go see your doctor I'm sure that you will be equally
informed on the adviability of the new modified super-improved gene
therapy that he is suggesting to cure hair loss. Don't forget he gets
paid for that treatment.

Whom do you trust more your banker or your doctor?

John Kane Kingston ON Canada

Michael \"Dog3\" > wrote:

(Steve Pope) :

>> That's very sensible. You might also want to look at the 15
>> year fixed. Depending on market conditions, it can be a better
>> bargain.

>We did a 15 year fixed on this house when we bought it. We paid it off
>in 7 which took a lot of doing, but we managed it. I'm glad we did it
>that way.

That's exactly what we did. At the time, the 15-year first mortgage
was at 13.75%, so paying it off early saved a ton of interest.
The 5-year, balloon 2nd was at 12% and we paid it in 3.

This is all related to the house being a small 1000 sq. ft.
bungalow, so we are not talking huge sums of money, but it
was still very advantageous to not pay the full tab on those
usurious, Volker-era interest rates.

Steve

On 02 Aug 2008 12:47:52 GMT, sandi > wrote:

>Wayne Boatwright > wrote in
85.250:
>
>> On Fri 01 Aug 2008 09:12:23p, sandi told us...
>>
>
>>> In case of 'emergency' 30 yr is good AND making additional
>>> MONTHLY principle payments (WHEN YOU CAN) and you can pay off
>>> the loan is a lot less than 30 years! Paying on the
>>> principle in the beginning of the loan saves MUCH interest $.
>>
>> Thanks, Sandi. That's probably a better option for us, since
>> I'm sure we could may additional monthly payments at times,
>> but a much larger monthly payment every month would drain us.
>> We've already made a few extra monthly principal payments on
>> our current mortgage.
>
>Bank and loan institutions don't like to tell you that you can do
>this but you can and it saves thousands and Thousands(!!!) of
>dollars going to in interest rather than the principle.
>
It depends on your loan agreement. Some limit your prepayment to a
set amount per month or year. We made sure that our agreement had no
prepayment penalty. That helps if you come into some money and want
to finish paying off the mortgage.

>Have your loan co. print you out an amortization schedule and
>you'll be amazed how little you are paying toward the principle in
>the first 1/2 of you loan. They get their $$$$ up front!!
>(I still wanna see that property for sale in your area. Is your
>camera fixed yet?) :-)

John Kane > wrote:

>On Aug 1, 9:47*pm, (Steve Pope) wrote:

>> However I think the bailout of Fannie/Freddie is reasonable,
>> because after all they are government entities.

>However Fannie is not [1]. It used to be but not any more. I didn't
>check but I think Freddie is private as well.

Quasi-government if you like. They are not the same as private
businesses. They are established by Congress, have their own
rules, have special access to Treasury loans, a different
regulatory environment than banks, etc. etc.

In the event of total collapse of the U.S. government, you'd
expect Fannie/Freddie debt to have lower precedence than
Treasury debt. In any less serious circumstances, the
government is not going to default on any of its debt.

Steve

On Aug 2, 8:57�am, "Michael \"Dog3\"" > wrote:
> Goomba > :
> in rec.food.cooking
>
> > sf wrote:
>
> >>> And do you want to pretend they don't have any responsibility here?
>
> >> So, you're blaming the fish for being caught with a very good lure?
>
> > Yup. They hold as much blame as anyone else here. It took two to
> > tango, eh?
>
> I pretty much agree. �People are not forced into buying the bigger house
> and the expensive care. �OTOH, after my friend's deal I just don't
> understand the banking industry.

What's not to understand... just as technology for the lending
industry has become more sophisticated in ferreting out false
disclosures so for people who borrow have become more sophisticated in
using the new technology to mislead the lenders. People have always
hidden their debt obligations and distorted their income, now it's
much easier to be more creative with ones lying by sin of ommission.
Historically lending institutions have always had the upper hand with
searching out ones financials, but no more. There are many reasons
for the recent surge in foreclosures but the primary reason is
applicant's lying, and make no mistake about it, it's diliberate
lying. And with all of today's huge range of new laws pertaining to
discrimination lending institutions are at a great disadvantage. Hey,
I can go on and on about all the scheming, lying scumbags whose unpaid
debts those of us who do pay our bills ultimately end up paying...
were it up to me they'd bring back debtor's prison, and not to sit on
their fat lazy butts, I'd make those low lives get out in the hot sun
all day cracking rocks... and they don't have to but then I'd not feed
them.

Duh'Wayne Pinocchio wrote:
>
> > "Nancy Young" wrote:
>
> >>The guideline I went by was don't get a mortgage more than 1 1/2 times
> >>your annual income. �2 times was stretching it. �Whatever, at least you
> >>knew not to go house shopping in the expensive part of town thinking
> >>you could get it for no money down. �
>
> > It seems no institution has used those guidelines in years. �Back in
> > the day, there was no way we would have qualified for the loans people
> > are given now.
>
> That's for sure. �When we were planning on buying our present home nearly
> two years ago, we were told by the lender that we qualified for more than
> double the amount that we felt we could reasonably afford. �We went with
> the amount we felt comfortable with, and insisted on a 30 fixed rate
> mortgage. �

What a friggin' LIAR! At your age no lender is going to give a 30
year loan.

"Michael \"Dog3\" wrote:
>
> I just kind of popped in here but have gotten the gist of the
> conversation. �A close friend of mine has seen my new kitchen and some of
> the remodeling we're currently doing. �She has decided to proceed with
> some of her own remodeling and she's going to use my contractor. �Her
> house is worth around $500,000 and it is paid for free and clear. �She
> inherited it from her parents. �

To a bank's loan officer that's a red flag.

> She has paid cash for everything most of
> her adult life, and has no credit history. �She needs about $100,000 for
> her remodel project. �Not one bank would lend her the money with her
> house as collateral because she has "no credit history" even though she's
> provided utility bills, tax statements etc. which were paid on time.
>
> She told me that unless you are in debt up to your eyeballs it is really
> hard to get credit. �Anyway, she's going to use cash for the remodel and
> actually got herself a credit card to establish some credit. �
>
> Weird huh?

Nothing weird, she's not being entirely truthful is all, you can bet
your bipee on that. Banks are NOT in the real estate business, they
do NOT want your house. Banks are only interested in ones ability to
repay the loan... your friend may not be in debt (or so she claims)
but very likely she hasn't enough income to satisfy the bank that she
is able to afford all her living expenses and still repay that size
loan. As far as the bank is concened if she has all that much cash
sitting around as she claims she can damn well loan herself the money
for the remodel. Always keep in mind that the process of living is
indeed a debt... banks know that all too well, and banks know with
absolute certainty that living situations change, especially with
those past a particular age.

A bank's biggest nightmare is having to exercise a foreclosure through
probate with heirs... can freeze the property for years... by the time
the bank takes possession they are so far behind just on property
taxes they can never recover the monetary loss, and by then the only
way to dispose of the property is at auction, which won't bring much,
probably hardly enough to pay the taxes plus the property will have
greatly deteriorated. In most cases the bank lets the county take the
property for failure to pay back taxes, and they write off the unpaid
loan as a bad debt, which of course their depositors and those who do
repay loans absorb.

What "exactly" does this post have to do with cooking?

Edwin Pawlowski > wrote:

>"Steve Pope" > wrote in message

>>>AND shame on people who borrow more than they can pay reasonable afford
>>>monthly.

>> That's going a little far. In most lines of work, you cannot
>> predict your income from year to year. Maybe some have ultra
>> secure jobs, say in the public sector, but that is a small
>> fraction of people in general. The credit risk of an individual
>> is not an exact calculation, it is just a range of probability.
>> Buyers and lenders both take a calculated risk.

>But we're not talking about people that have a job loss or other radical
>unforeseen change in income. For the most part, these are people that just
>did not think ahead to when the teaser rate went to a real rate in three or
>five years. Their plan was to grab as much house now as they could afford
>and worry about how to pay when the time comes.

Well, okay, then the statement above "SHAME on people..." could
be a little less sweeping.

Let's say your business is running a restaurant. Your odds of
failure are high. You truly don't know your income over the next
five years. Should you not buy a house at all? That's
too much conservatism IMO.

Steve

John Kane wrote:
> On Aug 1, 4:40 pm, "Nancy Young" > wrote:

>> How did it come to this, that people had NO IDEA they couldn't
>> afford a house 10 times their income? That it was just SO
>> CONFUSING, all those big words like balloon payment. What,
>> the interest rate is going to go up?
>>
>> I guess we do need paternalist institutions telling us what to do
>> because it's just too much to expect us to figure out these things
>> on our own.

> The next time you go see your doctor I'm sure that you will be equally
> informed on the adviability of the new modified super-improved gene
> therapy that he is suggesting to cure hair loss. Don't forget he gets
> paid for that treatment.
>
> Whom do you trust more your banker or your doctor?

Well ... I'm not the one to ask: neither, particularly. But I don't need
a degree to figure out my mortgage payment is going to go up in
a few years when they tell me that right there in the papers. And
that No money down used to be a joke, but now somehow it's a
good idea?

nancy

On Sat 02 Aug 2008 09:33:18a, Nancy Young told us...

> John Kane wrote:
>> On Aug 1, 4:40 pm, "Nancy Young" > wrote:
>
>>> How did it come to this, that people had NO IDEA they couldn't
>>> afford a house 10 times their income? That it was just SO
>>> CONFUSING, all those big words like balloon payment. What, the
>>> interest rate is going to go up?
>>>
>>> I guess we do need paternalist institutions telling us what to do
>>> because it's just too much to expect us to figure out these things on
>>> our own.
>
>> The next time you go see your doctor I'm sure that you will be equally
>> informed on the adviability of the new modified super-improved gene
>> therapy that he is suggesting to cure hair loss. Don't forget he gets
>> paid for that treatment.
>>
>> Whom do you trust more your banker or your doctor?
>
> Well ... I'm not the one to ask: neither, particularly. But I don't need
> a degree to figure out my mortgage payment is going to go up in
> a few years when they tell me that right there in the papers. And
> that No money down used to be a joke, but now somehow it's a
> good idea?
>
> nancy
>

In today's world, many people cannot afford any significant down payment,
yet they can definitely afford their monthly mortgage payment. It would
have taken us years to accumulate a 20% down payment, which in times past
was quite a common "requirement". We did a no money down FHA mortgage, and
we've no problem in making our mortgage payments. We were also not so
stupid as to agree to an ARM.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

Wayne Boatwright wrote:
> On Sat 02 Aug 2008 09:33:18a, Nancy Young told us...
>
>> John Kane wrote:
>>> On Aug 1, 4:40 pm, "Nancy Young" > wrote:
>>
>>>> How did it come to this, that people had NO IDEA they couldn't
>>>> afford a house 10 times their income? That it was just SO
>>>> CONFUSING, all those big words like balloon payment. What, the
>>>> interest rate is going to go up?
>>>>
>>>> I guess we do need paternalist institutions telling us what to do
>>>> because it's just too much to expect us to figure out these things
>>>> on our own.
>>
>>> The next time you go see your doctor I'm sure that you will be
>>> equally informed on the adviability of the new modified
>>> super-improved gene therapy that he is suggesting to cure hair
>>> loss. Don't forget he gets paid for that treatment.
>>>
>>> Whom do you trust more your banker or your doctor?
>>
>> Well ... I'm not the one to ask: neither, particularly. But I don't
>> need a degree to figure out my mortgage payment is going to go up in
>> a few years when they tell me that right there in the papers. And
>> that No money down used to be a joke, but now somehow it's a
>> good idea?

> In today's world, many people cannot afford any significant down
> payment, yet they can definitely afford their monthly mortgage
> payment. It would have taken us years to accumulate a 20% down
> payment, which in times past was quite a common "requirement". We
> did a no money down FHA mortgage, and we've no problem in making our
> mortgage payments. We were also not so stupid as to agree to an ARM.

Actually, while I didn't say so, I was thinking more of the 22 year olds
with no credit history buying $200G houses, no money down. I saw
enough of them on tv shows, they'd wake up one morning, oh, I think
I'll buy a house and by noon they'd be approved for 80/20 financing
with no money down. You have a lifetime of showing your credit-
worthiness. A lot of these cases are not like your situation.

nancy

Wayne Boatwright > wrote:

>In today's world, many people cannot afford any significant down payment,
>yet they can definitely afford their monthly mortgage payment. It would
>have taken us years to accumulate a 20% down payment, which in times past
>was quite a common "requirement". We did a no money down FHA mortgage, and
>we've no problem in making our mortgage payments.

In almost no circumstances are home buyers required to pay 20%
down. Every community has lenders willing to make those 2nd
loans to bring the down payment down to 10%, 5%, or 0% depending
on the free availability of money at the moment.

Steve

On Sat, 2 Aug 2008 16:18:43 +0000 (UTC), (Steve
Pope) wrote:

>Let's say your business is running a restaurant. Your odds of
>failure are high. You truly don't know your income over the next
>five years. Should you not buy a house at all? That's
>too much conservatism IMO.

The real question is should you be in the restaurant business in the
first place. It's a BIG risk! What an idiot for taking the risk.
Same with home buying. Using Goomba's reasoning, none of us should
own one. The risk is too big when you first enter the market.


--
I never worry about diets. The only carrots that interest me are the number of carats in a diamond.

Mae West

On Sat 02 Aug 2008 09:50:21a, Nancy Young told us...

> Wayne Boatwright wrote:
>> On Sat 02 Aug 2008 09:33:18a, Nancy Young told us...
>>
>>> John Kane wrote:
>>>> On Aug 1, 4:40 pm, "Nancy Young" > wrote:
>>>
>>>>> How did it come to this, that people had NO IDEA they couldn't
>>>>> afford a house 10 times their income? That it was just SO
>>>>> CONFUSING, all those big words like balloon payment. What, the
>>>>> interest rate is going to go up?
>>>>>
>>>>> I guess we do need paternalist institutions telling us what to do
>>>>> because it's just too much to expect us to figure out these things
>>>>> on our own.
>>>
>>>> The next time you go see your doctor I'm sure that you will be
>>>> equally informed on the adviability of the new modified
>>>> super-improved gene therapy that he is suggesting to cure hair
>>>> loss. Don't forget he gets paid for that treatment.
>>>>
>>>> Whom do you trust more your banker or your doctor?
>>>
>>> Well ... I'm not the one to ask: neither, particularly. But I don't
>>> need a degree to figure out my mortgage payment is going to go up in
>>> a few years when they tell me that right there in the papers. And
>>> that No money down used to be a joke, but now somehow it's a good
>>> idea?
>
>> In today's world, many people cannot afford any significant down
>> payment, yet they can definitely afford their monthly mortgage
>> payment. It would have taken us years to accumulate a 20% down
>> payment, which in times past was quite a common "requirement". We
>> did a no money down FHA mortgage, and we've no problem in making our
>> mortgage payments. We were also not so stupid as to agree to an ARM.
>
> Actually, while I didn't say so, I was thinking more of the 22 year olds
> with no credit history buying $200G houses, no money down. I saw
> enough of them on tv shows, they'd wake up one morning, oh, I think
> I'll buy a house and by noon they'd be approved for 80/20 financing
> with no money down. You have a lifetime of showing your credit-
> worthiness. A lot of these cases are not like your situation.
>
> nancy
>

True enough.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

On Sat 02 Aug 2008 09:58:54a, Steve Pope told us...

> Wayne Boatwright > wrote:
>
>>In today's world, many people cannot afford any significant down
>>payment, yet they can definitely afford their monthly mortgage payment.
>>It would have taken us years to accumulate a 20% down payment, which in
>>times past was quite a common "requirement". We did a no money down FHA
>>mortgage, and we've no problem in making our mortgage payments.
>
> In almost no circumstances are home buyers required to pay 20%
> down. Every community has lenders willing to make those 2nd
> loans to bring the down payment down to 10%, 5%, or 0% depending
> on the free availability of money at the moment.
>
> Steve
>

You're absolutely right, Steve. I was speaking of "back in the day". It
was common practice to put a minimum of 15-20% down.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

On Sat, 02 Aug 2008 04:34:46 GMT, Wayne Boatwright
> wrote:

>On Fri 01 Aug 2008 09:23:26p, told us...
>
>> On Fri, 1 Aug 2008 22:55:04 -0400, "Nancy Young" >
>> wrote:
>>
>>>The guideline I went by was don't get a mortgage more than 1 1/2 times
>>>your annual income. 2 times was stretching it. Whatever, at least you
>>>knew not to go house shopping in the expensive part of town thinking
>>>you could get it for no money down.
>>
>> It seems no institution has used those guidelines in years. Back in
>> the day, there was no way we would have qualified for the loans people
>> are given now.
>
>That's for sure. When we were planning on buying our present home nearly
>two years ago, we were told by the lender that we qualified for more than
>double the amount that we felt we could reasonably afford. We went with
>the amount we felt comfortable with, and insisted on a 30 fixed rate
>mortgage. Doing anything else would have been foolish and would have put
>us at the very risk that many people are facing now. We have refi'd once
>since then, and are planning to do so in the near future as rates have
>continued to drop in our area.

My point is they are dangling those loans in front of people that they
shouldn't... and they are setting them up for failure. Most of those
people were first time buyers with no previous experience in real
estate. The housing market around here was very tight and when I was
reading about the orchards being converted into suburbs, my "uhoh"
meter went off the charts. But housing nearer the city was
astronomical and new housing was "affordable"... with first time buyer
incentives and iffy loan packages. My own kids paid over $500,000 for
800 sq ft (used) boxes last September. One is in San Francisco, the
other in San Jose. They are hardly McMansions, they are bottom of the
line entry level homes in borderline neighborhoods. I have a lot of
sympathy for the people who didn't get sound financial advice and were
suckered into these predatory loans just because nobody puts the
brakes on lending institutions anymore. That's free enterprise for
you. Blame the victim... it's the American way.


--
I never worry about diets. The only carrots that interest me are the number of carats in a diamond.

Mae West

On Sat, 02 Aug 2008 13:41:06 GMT, Wayne Boatwright
> wrote:

>Yes, it was fixed and working fine now.

What was wrong with it?


--
I never worry about diets. The only carrots that interest me are the number of carats in a diamond.

Mae West

On Sat 02 Aug 2008 10:46:04a, told us...

> On Sat, 02 Aug 2008 04:34:46 GMT, Wayne Boatwright
> > wrote:
>
>>On Fri 01 Aug 2008 09:23:26p, told us...
>>
>>> On Fri, 1 Aug 2008 22:55:04 -0400, "Nancy Young" >
>>> wrote:
>>>
>>>>The guideline I went by was don't get a mortgage more than 1 1/2 times
>>>>your annual income. 2 times was stretching it. Whatever, at least you
>>>>knew not to go house shopping in the expensive part of town thinking
you
>>>>could get it for no money down.
>>>
>>> It seems no institution has used those guidelines in years. Back in
>>> the day, there was no way we would have qualified for the loans people
>>> are given now.
>>
>>That's for sure. When we were planning on buying our present home nearly
>>two years ago, we were told by the lender that we qualified for more than
>>double the amount that we felt we could reasonably afford. We went with
>>the amount we felt comfortable with, and insisted on a 30 fixed rate
>>mortgage. Doing anything else would have been foolish and would have put
>>us at the very risk that many people are facing now. We have refi'd once
>>since then, and are planning to do so in the near future as rates have
>>continued to drop in our area.
>
> My point is they are dangling those loans in front of people that they
> shouldn't... and they are setting them up for failure. Most of those
> people were first time buyers with no previous experience in real
> estate. The housing market around here was very tight and when I was
> reading about the orchards being converted into suburbs, my "uhoh"
> meter went off the charts. But housing nearer the city was
> astronomical and new housing was "affordable"... with first time buyer
> incentives and iffy loan packages. My own kids paid over $500,000 for
> 800 sq ft (used) boxes last September. One is in San Francisco, the
> other in San Jose. They are hardly McMansions, they are bottom of the
> line entry level homes in borderline neighborhoods. I have a lot of
> sympathy for the people who didn't get sound financial advice and were
> suckered into these predatory loans just because nobody puts the
> brakes on lending institutions anymore. That's free enterprise for
> you. Blame the victim... it's the American way.
>
>

In that situation you are absolutely right.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

On Sat 02 Aug 2008 10:51:32a, told us...

> On Sat, 02 Aug 2008 13:41:06 GMT, Wayne Boatwright
> > wrote:
>
>>Yes, it was fixed and working fine now.
>
> What was wrong with it?

Bad circuit board.

--
Wayne Boatwright
-------------------------------------------
Saturday, 08(VIII)/02(II)/08(MMVIII)
-------------------------------------------
-------------------------------------------
Don't start an argument with somebody
who has a microphone when you don't;
they'll make you look like chopped
liver. --Harlan Ellison, on hecklers
-------------------------------------------

On Fri, 01 Aug 2008 12:48:29 -0700, sf wrote:


>>And did these predatory practices start in 2000, or perhaps, before?
>>And how much responsibility did the borrowers hold here? Were they all
>>helpless, clueless victims?
>
>So, you want to play Blame the Victim?

No he is not blaming the victim, in that the victim here is the
taxpayer.
Those who took these mortgages out are not victims. They signed a
contract, knowing that they would be unable to pay if the interest
rate went up. And they knew that the rate would go up, because it
said so in the paper work.
The mortgage brokers didn't care, they were selling the mortgages as
fast as they were signed, the bundlers and purchases of these thought
that they would make money in a turn over.

And now the govt. will take the money that I worked for and pay all of
these fools.
And those of us who played by the rules will be screwed once again.

On Sat, 2 Aug 2008 12:11:14 -0400, (Terry) wrote:

>What "exactly" does this post have to do with cooking?

This is called "thread drift". If you followed the entire thread,
you'd understand, Terry.


--
I never worry about diets. The only carrots that interest me are the number of carats in a diamond.

Mae West

Wayne Boatwright wrote:

> That's for sure. When we were planning on buying our present home nearly
> two years ago, we were told by the lender that we qualified for more than
> double the amount that we felt we could reasonably afford. We went with
> the amount we felt comfortable with, and insisted on a 30 fixed rate
> mortgage. Doing anything else would have been foolish and would have put
> us at the very risk that many people are facing now. We have refi'd once
> since then, and are planning to do so in the near future as rates have
> continued to drop in our area.

We bought this house 16 months ago and we applied for our loan online.
Countryside approved the loan for the amount we requested, and they
asked for zero paperwork (we were both self-employed). Then the loan
officer telephoned us, letting us know that we could get a home loan for
up to 600K. Egads, that would be a whopper of a house, here in the
Louisiana where homes are dirt cheap.

He continued urging my husband into buying a more expensive home, so we
would, "Live in a better neighborhood... the quality of schools are
better.. you will have less crime... make your family proud, etc."

Thanks, but no thanks. We bought the house we wanted, for the amount we
were willing to spend. My husband wondered, if a younger, more
inexperienced couple who were raising a family would have fallen for his
hard sell techniques, especially since he mentioned a better quality of
schools. If you combine a loan officer like him, with a real estate
agent who is trying to upsell you into a house you can not afford, I
can see how problems can arise.

It is buyer beware, but I remember the days when I had to come up with
tax returns, profit & loss statements, etc. to qualify for a loan. Not
anymore. Now I can see why we are having problems.

Becca