With bidding stalled on some of the least desirable residences in Detroit's collapsing housing market, even the fast-talking auctioneer was feeling the stress.
"Folks, the ground underneath the house goes with it. You do know that, right?" he offered.
After selling house after house in the Motor City for less than the $29,000 it costs to buy the average new car, the auctioneer tried a new line: "The lumber in the house is worth more than that!"
As Detroit reels from job losses in the U.S. auto industry, the depressed city has emerged as a boomtown in one area: foreclosed property.
It also stands as a case study in the economic pain from a housing bust as analysts consider whether a developing crisis in mortgages to high-risk borrowers will trigger a slowdown in the broader U.S. economy.
The rising cost of mortgage financing for Detroit borrowers with weak credit has added to the downdraft from a slumping local economy to send home values plunging faster than many investors anticipated a few months ago.
At a weekend sale of about 300 Detroit-area houses by Texas-based auction firm Hudson & Marshall, the mood was marked more by fear than greed.
"These people are investors and they know the difficulty of finding financing. They know the difficulty of finding good tenants. They're cautious," said realtor Stanley Wegrzynowicz, who attended the auction.
HOW LOW IS LOW?
The city, which has lost more than half its population in the past 30 years and struggled with rising crime, failing schools and other social problems, largely missed out on the housing boom that swept much of the country in recent years.
Prices have gained less than 2 percent per year in the five years since 2001, when the auto industry entered a renewed slump.
Steve Izairi, 32, who re-financed his own house in suburban Dearborn and sold his restaurant to begin buying rental properties in Detroit two years, was concerned that houses he thought were bargains at $70,000 two years ago were now selling for just $35,000.
At least 16 Detroit houses up for sale on Sunday sold for $30,000 or less.
A boarded-up bungalow on the city's west side brought $1,300. A four-bedroom house near the original Motown recording studio sold for $7,000.
"You can't buy a used car for that," said Izairi. "It's a gamble, and you have to wonder how low it's going to get."
Detroit, where unemployment runs near 14 percent and a third of the population lives in poverty, leads the nation in new foreclosure filings, according to tracking service RealtyTrac.
With large swaths of the city now abandoned, banks are reclaiming and reselling Detroit homes from buyers who can no longer afford payments at seven times the national rate.
Michigan was the only state to see home prices fall in 2006. The national average price rose almost 6 percent but prices slipped 0.4 percent here, according to a federal study.
The state's jobless rate of 7.1 percent in January was also the second highest in the nation, behind only Mississippi.
HOW MUCH CAN YOU BUY FOR $1 MILLION?
Mayor Kwame Kilpatrick was greeted with applause when he announced last week that two condominiums in the city's revitalizing downtown sold for over $1 million each.
But investors, including some from out of state, proved far more cautious at Sunday's auction.
In the most spirited bidding of the day, a sprawling, four-bedroom mansion from Detroit's boom days with an ornate stone entrance fetched just $135,000.
Dave Webb, principal at Hudson & Marshall, said Michigan had become a "heavy volume" market for his auction firm in recent years, although bigger-money deals were waiting in California, a market he said was ready for the first such auctions of repossessed property in years.
"These people that are buying have got to look at holding on for five to seven years," he said. "The key is holding power."
Even with the steep discounts on Detroit-area properties, some buyers handed over their deposits with a wince.
"I'm not sure it's congratulations," said Kirk Neal, a 55-year-old auto body shop worker who bought a ranch in the suburb of Oak Park for $34,000. "My wife is going to kill me."
Realtor Ron Walraven had a three-bedroom house in the suburb of Bloomfield Hills that had listed for $525,000 sell for just $130,000 at the auction.
"Once we've seen the last person leave Michigan, then I think we'll be able to say we've seen the bottom," he said.
I fight that battle every day in the conflict of where I work and how they do business. It isn't fair at all. But you should be schooled in how much you bring in before you go and take an investment like a house, where you are going to be tied in for life.
I can say I have never heard of "interest only loan".
Glad to hear you're fighting the good fight. I don't disagree with you either. I mean people need to take some personal responsibility as well.
Here's a great website that explains interest only loans better then I can.
Nothing wrong with that if you've got the resources (the friend, that is .... there is definitely something wrong with anyone who would buy a Hummer), but to go into debt for a car when you already have a perfectly good car doesn't make sense to me.
Now after a few pages of me preaching against car loans, I will say that for my next car I may be willing to take on a small amount of debt if necessary to buy a hybrid. I'm probably a couple years away from a new car, so I might not have to, but I think I could justify that to myself if I were saving money on gas and being more environmentally responsible.
Thanks for the link. Who in the world would just pay back interest and leave the pricipal at where you started. It is nice to say you are owning a home. But you want to see the bottom line go down year after year. Not just stay there.
I agree. You should only buy used cars and you should only pay in cash.
Whether you can afford it or not, the gigantic hit that you take in depreciation almost immediately just makes very poor financial sense to truly consider buying a new vehicle.
(Just watch as I get bashed for these opinions.)
all depends on what you buy.....buy a ford GM hyndai big SUV and yea you'll loose your shirt...but a Honda ....toyota....and your good to go. I, finally for the first time, bought a new car about a year ago.....and its worth as much now as the day I bought it....well 95% and it gets 30 MPG.......and freakin blast to drive.....Mini Cooper.
a couple of weeks ago, we went for a walk around the neighborhood. There is a laundromat close by. Parked out front was a HUGE Ford Expedition, with the 22 inch aftermarket rims, pimped out...the owners where inside doing their laundry...I guess those rims were more important than a washer and dryer in their home...
they probably don't own a home most likely pay rent but i do agree with your premise people would rather drive around in a 60thousand $ car then to pay a mortgage.......
I find it odd in areas where trailers (or manufactured homes as they are popularly known around here) are the preferred method of housing, the same people have brand knew $30,000 to $40,000 pick-up trucks or Yukons sitting in their drive.
I find it odd in areas where trailers (or manufactured homes as they are popularly known around here) are the preferred method of housing, the same people have brand knew $30,000 to $40,000 pick-up trucks or Yukons sitting in their drive.
whats really right and whats wrong....everyone has different priorities....if you want to drive an expensive car...worth more than your house....go for it. I wouldn't do it.....but more power to them. Just hope the kiddies are being fed.
all depends on what you buy.....buy a ford GM hyndai big SUV and yea you'll loose your shirt...but a Honda ....toyota....and your good to go. I, finally for the first time, bought a new car about a year ago.....and its worth as much now as the day I bought it....well 95% and it gets 30 MPG.......and freakin blast to drive.....Mini Cooper.
Yup, I'm currently driving a lovely Honda Accord.. very reliable - holds its value well and has relatively low emissions...
Who are these Joneses anyway, and why does anyone care what they do? Honestly, I'm sitting here trying to think what any of my neighbors drive, and I can't. I know they have cars, and I know I see them every day, but who pays attention to such things?
I start to notice other people's cars when I'm in the market for a new car and thinking about what I might like. The rest of the time, they're just vehicles buzzing by.
Oh, and I notice when I see really silly looking 50ish men in bright red sports cars. That's just funny
Hey! When my children are finally totally independant - I will buy a sports car! I'll be old - but I like the small manuverable car - with power.. don't laugh at me Hippie
I'll probably keep my Accord for long trips and get me a cool Mini Cooper - or a VW GTI or maybe one of them cool little Honda convertables to drive everyday.
How much sense does it make to buy something that only seconds later looses thousands in value? Tell me?
You're better off buying a $500 beater and running it into the ground every few months.
$500 cars probably are not very safe. I get hit by a hummer while in a beater car? i'd probably be stuck in the ground after that.
like in anything, if you have the money to buy something better, go for it. I but dislike the people who buy Ferrari cars yet only drive to starbucks. or the people who buy $200 BOSS shirts yet only wear it for a season or 2. waste is a bad thing.
Hey! When my children are finally totally independant - I will buy a sports car! I'll be old - but I like the small manuverable car - with power.. don't laugh at me Hippie
I'll probably keep my Accord for long trips and get me a cool Mini Cooper - or a VW GTI or maybe one of them cool little Honda convertables to drive everyday.
A Mini Cooper or VW I could handle. The Honda would even be ok, I think. Just don't get anything like a Corvette that's on obvious penile replacement, and for the love of god, stay away from fire-engine red ... then I promise not to laugh
"Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity." ~ MLK, 1963
New car payments can be expensive all by themselves, but don't forget about the insurance payments. Insurance for new cars now is astronomical, and if you are a guy you take more than just one shot to the nuts for it no matter how good your driving record is.
A Mini Cooper or VW I could handle. The Honda would even be ok, I think. Just don't get anything like a Corvette that's on obvious penile replacement, and for the love of god, stay away from fire-engine red ... then I promise not to laugh
they probably don't own a home most likely pay rent but i do agree with your premise people would rather drive around in a 60thousand $ car then to pay a mortgage.......
way to jump to conclusions!
a person can own a home AND a washer and dryer and STILL go to the laudromat. Stuffing huge comforters in a home washer is not a good idea and laundry still needs to be done if something at home breaks.
as long as someone has a job and can pay their bills on time...and isn't getting public assistance... I don't care how they spend the money they earn.
New car payments can be expensive all by themselves, but don't forget about the insurance payments. Insurance for new cars now is astronomical, and if you are a guy you take more than just one shot to the nuts for it no matter how good your driving record is.
Thats true... I didn't get full coverage when I paid cash. But I am old now and my insurance isn't too bad - and I have teenagers that occationally drive my car - so I don't mind too much..
but overall Insurance is the biggest rip-off in the world of owning a car.
Thats true... I didn't get full coverage when I paid cash. But I am old now and my insurance isn't too bad - and I have teenagers that occationally drive my car - so I don't mind too much..
but overall Insurance is the biggest rip-off in the world of owning a car.
I totally agree with you on the car insurance being a rip-off. It seems your fucked either way. Its against the law not to have it. When you do have it you pay a small fortune for it, and when you actually are in an accident, even if it isn't your fault they can raise your rates or just drop you all together. Paying my car insurance is my least favorite bill to pay each month.
As for owning a car. I recently bought a new truck, Ford Ranger, and while I knew driving off the lot the resale price took a huge drop, I really didn't care. I plan on paying it off soon, and I plan on driving it for 10 years, if possible. I think if you are trading your car in every two years for a new one and you are always making a car payment its just stupid. I'm really looking forward to the day where I can take that car payment money and put it towards something else, or save it.
a person can own a home AND a washer and dryer and STILL go to the laudromat. Stuffing huge comforters in a home washer is not a good idea and laundry still needs to be done if something at home breaks.
as long as someone has a job and can pay their bills on time...and isn't getting public assistance... I don't care how they spend the money they earn.
trust me, the people in my example were not washing huge comforters...
since you mention public assistance...I drive through a local housing project from time to time...and the streets are filled with big, honkin' SUV's...with d's on 'em....
If we can assume that a reliable car is a necessity in our society.. I'd argue a new car makes better financial sence - as repairs and down time represent significant cost.. and if you buy used - you are have more frequent replacement.
I buy new - and keep them about 10 years... I keep up the maintenance and have no troubles at all - a far better financial move than going through three or 4 used cars with repairs and mystery when you turn the key...
I disagree...but only if the "used" car is less than two or three years old (the key is to buy one still under warranty)...
I paid $8k under the sticker price for a one year old Honda with about 15000 miles on it. Still had lots of warranty. I can't see spending $8k on repairs needed after 15000 miles.
So long as someone can afford it and it makes them happy, who cares what they do with their money? Well, taking at least a small amount of environmental, etc issues into consideration.
trust me, the people in my example were not washing huge comforters...
since you mention public assistance...I drive through a local housing project from time to time...and the streets are filled with big, honkin' SUV's...with d's on 'em....
what's a d?
if someone wants a nice car instead of a washer and dryer, who cares? I actually love going to the laundromat... it's cheaper than doing it at home and it's nice to do 6 loads at one time and be done with it.
My sister-in-law lives in a 2 million dollar house and she takes her garbage to the dump herself instead of paying for the service. Because of that, people in her neighborhood think she's weird and they call her the dump lady.
my brother doesn't own a couch but he has a 52 inch plasma television. He's perfectly content sitting in a bean bag chair.
Maybe I'm heartless but I don't think people getting welfare and food stamps have any business driving a brand new car with 400.00 a month payments.
if someone wants a nice car instead of a washer and dryer, who cares? I actually love going to the laundromat... it's cheaper than doing it at home and it's nice to do 6 loads at one time and be done with it.
My sister-in-law lives in a 2 million dollar house and she takes her garbage to the dump herself instead of paying for the service. Because of that, people in her neighborhood think she's weird and they call her the dump lady.
my brother doesn't own a couch but he has a 52 inch plasma television. He's perfectly content sitting in a bean bag chair.
Maybe I'm heartless but I don't think people getting welfare and food stamps have any business driving a brand new car with 400.00 a month payments.
Is that wrong?
If anyone calls you hearltess because of that then they are idiots. I think your absolutely right.
A Mini Cooper or VW I could handle. The Honda would even be ok, I think. Just don't get anything like a Corvette that's on obvious penile replacement, and for the love of god, stay away from fire-engine red ... then I promise not to laugh
sooo...I know I'm veering....but you brought out penile replacement....and started laughing....thanks.......but getting serious....do you feel that there's the slightest chance a male may purchase such a machine for other reasons....I can think of and relate to too. First the technological appreciation...for instance...a Corvette as an almost balanced 50/50 weight distribution so handling is optimal...and blast. Independent suspension that helps it stick to the road. 400HP that will sink you back into the seat...aluminum engine that's beutifully machined. The second is art....the curves on a 71 Corvette are nothing short of beutiful...sloping fenders..when you sit at the wheel...you look down a tunnel...between the bulging fender and the raised hood. When you look at it...its a peice of art.....and made out of fiberglass......and to the other senses...the sound of the sidepipes.....negates the need for a stereo...as the stereo sound of the pipes is beutiful. ...........
Now have to agree when I see the 62 year old male..gold chains..gold rings...suntan lotion on his bald head.....in a new RED vette...he may be compensating.....
Thanks for the link. Who in the world would just pay back interest and leave the pricipal at where you started. It is nice to say you are owning a home. But you want to see the bottom line go down year after year. Not just stay there.
I presently work for one of the largest mortgage companies in the US. Interest only loans are really only good for one purpose - flipping homes. If you are in the business of buying, fixing up, and reselling homes, then interest only loans are the way to go.
What kind of started this whole mess for both average people and for lenders was the rising property costs in certain areas of the country. For instance, some parts of California are so expensive in which to purchase property that only two options are really available for the average Joe - move to a less expenseive area or take out an interest only loan with the hope that interest rates stay low and you are brining in a lot more money when the principal comes due, generally after the first 10 years of the mortgage.
As interest rates climb, which everyone who was willing to do a little bit of research or even pick up a newspaper or listen to the nightly news knew they would, the monthly payments on interest only loans continue to rise and not a dime of principal has even been paid. In essence you are making a monthly payment on a home and have no equity whatsoever to show for it, therfore, you have no ablity to refinance at a lower rate. If you do refinance to a fixed rate loan, then you are immediately paying principal and interest. If a person couldn't afford that option two or three years ago, chances are they cannot afford that option now, which is going to result in a huge amount of foreclosures.
Contrary to popular belief on this board, banks do not like forclosures. The costs associated with foreclosing on a property far outweight any possible profit that could be made from reselling the property. My company services close to six million loans and continues to grow. If even 1% of those loans are foreclosed on, that is 60,000 properties which this company will have to pay foreclosure fees on, upkeep fees on until the property is sold, realtor fees on, etc. The housing market is now so saturated with homes for sale that properties are not selling, causing this process to go on for months or even years at a time. Lenders of this magnitude are not staffed in house to sell homes. We are in the business of lending money, not selling homes, which is why we offer loss mitigation in order to keep the borrower in their home. Unfortunately for those who over extended their means to purchase a home in the first place, not even loss mit will help.
With all hope, the interest only loan will be replaced by the 40 year mortgage, which insures both the customer from the risk of rising interest rates, and also protects the lenders from the risk of mass foreclosures. Obviously, the 40 year mortgage will have headaches of its own (if you buy a home in your 30s, forget about retiring), but from the looks of it will be much better than the interest only loan.
Maybe I'm heartless but I don't think people getting welfare and food stamps have any business driving a brand new car with 400.00 a month payments.
Is that wrong?
I see nothing wrong with what you say at all. I think a lot of people in this country are of the attitude that something needs to be handed to them, not worked for to obtain. This is one area where the US lags behind many countries in the world - attitude.
if someone wants a nice car instead of a washer and dryer, who cares? I actually love going to the laundromat... it's cheaper than doing it at home and it's nice to do 6 loads at one time and be done with it.
My sister-in-law lives in a 2 million dollar house and she takes her garbage to the dump herself instead of paying for the service. Because of that, people in her neighborhood think she's weird and they call her the dump lady.
my brother doesn't own a couch but he has a 52 inch plasma television. He's perfectly content sitting in a bean bag chair.
Maybe I'm heartless but I don't think people getting welfare and food stamps have any business driving a brand new car with 400.00 a month payments.
Is that wrong?
First two subjects are about how wealthy people can do what ever they want...then when it comes to the poor...not...what gives.
What gives......now my noisemaker freind...understand him supporting your last statement...you know as people that are on entitlements should get off their arsches and get to work and everything republican....
Comments
http://news.yahoo.com/s/nm/20070319/ts_nm/usa_subprime_detroit_dc
Houses cheaper than cars in Detroit
By Kevin KrolickiMon Mar 19, 11:48 AM ET
With bidding stalled on some of the least desirable residences in Detroit's collapsing housing market, even the fast-talking auctioneer was feeling the stress.
"Folks, the ground underneath the house goes with it. You do know that, right?" he offered.
After selling house after house in the Motor City for less than the $29,000 it costs to buy the average new car, the auctioneer tried a new line: "The lumber in the house is worth more than that!"
As Detroit reels from job losses in the U.S. auto industry, the depressed city has emerged as a boomtown in one area: foreclosed property.
It also stands as a case study in the economic pain from a housing bust as analysts consider whether a developing crisis in mortgages to high-risk borrowers will trigger a slowdown in the broader U.S. economy.
The rising cost of mortgage financing for Detroit borrowers with weak credit has added to the downdraft from a slumping local economy to send home values plunging faster than many investors anticipated a few months ago.
At a weekend sale of about 300 Detroit-area houses by Texas-based auction firm Hudson & Marshall, the mood was marked more by fear than greed.
"These people are investors and they know the difficulty of finding financing. They know the difficulty of finding good tenants. They're cautious," said realtor Stanley Wegrzynowicz, who attended the auction.
HOW LOW IS LOW?
The city, which has lost more than half its population in the past 30 years and struggled with rising crime, failing schools and other social problems, largely missed out on the housing boom that swept much of the country in recent years.
Prices have gained less than 2 percent per year in the five years since 2001, when the auto industry entered a renewed slump.
Steve Izairi, 32, who re-financed his own house in suburban Dearborn and sold his restaurant to begin buying rental properties in Detroit two years, was concerned that houses he thought were bargains at $70,000 two years ago were now selling for just $35,000.
At least 16 Detroit houses up for sale on Sunday sold for $30,000 or less.
A boarded-up bungalow on the city's west side brought $1,300. A four-bedroom house near the original Motown recording studio sold for $7,000.
"You can't buy a used car for that," said Izairi. "It's a gamble, and you have to wonder how low it's going to get."
Detroit, where unemployment runs near 14 percent and a third of the population lives in poverty, leads the nation in new foreclosure filings, according to tracking service RealtyTrac.
With large swaths of the city now abandoned, banks are reclaiming and reselling Detroit homes from buyers who can no longer afford payments at seven times the national rate.
Michigan was the only state to see home prices fall in 2006. The national average price rose almost 6 percent but prices slipped 0.4 percent here, according to a federal study.
The state's jobless rate of 7.1 percent in January was also the second highest in the nation, behind only Mississippi.
HOW MUCH CAN YOU BUY FOR $1 MILLION?
Mayor Kwame Kilpatrick was greeted with applause when he announced last week that two condominiums in the city's revitalizing downtown sold for over $1 million each.
But investors, including some from out of state, proved far more cautious at Sunday's auction.
In the most spirited bidding of the day, a sprawling, four-bedroom mansion from Detroit's boom days with an ornate stone entrance fetched just $135,000.
Dave Webb, principal at Hudson & Marshall, said Michigan had become a "heavy volume" market for his auction firm in recent years, although bigger-money deals were waiting in California, a market he said was ready for the first such auctions of repossessed property in years.
"These people that are buying have got to look at holding on for five to seven years," he said. "The key is holding power."
Even with the steep discounts on Detroit-area properties, some buyers handed over their deposits with a wince.
"I'm not sure it's congratulations," said Kirk Neal, a 55-year-old auto body shop worker who bought a ranch in the suburb of Oak Park for $34,000. "My wife is going to kill me."
Realtor Ron Walraven had a three-bedroom house in the suburb of Bloomfield Hills that had listed for $525,000 sell for just $130,000 at the auction.
"Once we've seen the last person leave Michigan, then I think we'll be able to say we've seen the bottom," he said.
Glad to hear you're fighting the good fight. I don't disagree with you either. I mean people need to take some personal responsibility as well.
Here's a great website that explains interest only loans better then I can.
http://www.mtgprofessor.com/Tutorials2/Interest_Only.htm
Because of my outdoor pursuits of camping, kayaking and boating, it's a 6-cylinder Jeep Cherokee. I'd plan on buying something similar in the future.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Make sure it is American built!
Right now, it's just in my savings account, but I should probably put it into something that will earn a bit better interest rate.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Thanks for the link. Who in the world would just pay back interest and leave the pricipal at where you started. It is nice to say you are owning a home. But you want to see the bottom line go down year after year. Not just stay there.
Exactly. At the end of the five years, I have plenty to pay cash for a car and I can keep the interest I made over that time.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
He pays the insurance.. drives it to work - drives it to college.. there are educational opportunities everywhere...
Yup, I'm currently driving a lovely Honda Accord.. very reliable - holds its value well and has relatively low emissions...
Hey! When my children are finally totally independant - I will buy a sports car! I'll be old - but I like the small manuverable car - with power.. don't laugh at me Hippie
I'll probably keep my Accord for long trips and get me a cool Mini Cooper - or a VW GTI or maybe one of them cool little Honda convertables to drive everyday.
$500 cars probably are not very safe. I get hit by a hummer while in a beater car? i'd probably be stuck in the ground after that.
like in anything, if you have the money to buy something better, go for it. I but dislike the people who buy Ferrari cars yet only drive to starbucks. or the people who buy $200 BOSS shirts yet only wear it for a season or 2. waste is a bad thing.
Deal!
way to jump to conclusions!
a person can own a home AND a washer and dryer and STILL go to the laudromat. Stuffing huge comforters in a home washer is not a good idea and laundry still needs to be done if something at home breaks.
as long as someone has a job and can pay their bills on time...and isn't getting public assistance... I don't care how they spend the money they earn.
Thats true... I didn't get full coverage when I paid cash. But I am old now and my insurance isn't too bad - and I have teenagers that occationally drive my car - so I don't mind too much..
but overall Insurance is the biggest rip-off in the world of owning a car.
I totally agree with you on the car insurance being a rip-off. It seems your fucked either way. Its against the law not to have it. When you do have it you pay a small fortune for it, and when you actually are in an accident, even if it isn't your fault they can raise your rates or just drop you all together. Paying my car insurance is my least favorite bill to pay each month.
As for owning a car. I recently bought a new truck, Ford Ranger, and while I knew driving off the lot the resale price took a huge drop, I really didn't care. I plan on paying it off soon, and I plan on driving it for 10 years, if possible. I think if you are trading your car in every two years for a new one and you are always making a car payment its just stupid. I'm really looking forward to the day where I can take that car payment money and put it towards something else, or save it.
trust me, the people in my example were not washing huge comforters...
since you mention public assistance...I drive through a local housing project from time to time...and the streets are filled with big, honkin' SUV's...with d's on 'em....
I disagree...but only if the "used" car is less than two or three years old (the key is to buy one still under warranty)...
I paid $8k under the sticker price for a one year old Honda with about 15000 miles on it. Still had lots of warranty. I can't see spending $8k on repairs needed after 15000 miles.
what's a d?
if someone wants a nice car instead of a washer and dryer, who cares? I actually love going to the laundromat... it's cheaper than doing it at home and it's nice to do 6 loads at one time and be done with it.
My sister-in-law lives in a 2 million dollar house and she takes her garbage to the dump herself instead of paying for the service. Because of that, people in her neighborhood think she's weird and they call her the dump lady.
my brother doesn't own a couch but he has a 52 inch plasma television. He's perfectly content sitting in a bean bag chair.
Maybe I'm heartless but I don't think people getting welfare and food stamps have any business driving a brand new car with 400.00 a month payments.
Is that wrong?
If anyone calls you hearltess because of that then they are idiots. I think your absolutely right.
Now have to agree when I see the 62 year old male..gold chains..gold rings...suntan lotion on his bald head.....in a new RED vette...he may be compensating.....
I presently work for one of the largest mortgage companies in the US. Interest only loans are really only good for one purpose - flipping homes. If you are in the business of buying, fixing up, and reselling homes, then interest only loans are the way to go.
What kind of started this whole mess for both average people and for lenders was the rising property costs in certain areas of the country. For instance, some parts of California are so expensive in which to purchase property that only two options are really available for the average Joe - move to a less expenseive area or take out an interest only loan with the hope that interest rates stay low and you are brining in a lot more money when the principal comes due, generally after the first 10 years of the mortgage.
As interest rates climb, which everyone who was willing to do a little bit of research or even pick up a newspaper or listen to the nightly news knew they would, the monthly payments on interest only loans continue to rise and not a dime of principal has even been paid. In essence you are making a monthly payment on a home and have no equity whatsoever to show for it, therfore, you have no ablity to refinance at a lower rate. If you do refinance to a fixed rate loan, then you are immediately paying principal and interest. If a person couldn't afford that option two or three years ago, chances are they cannot afford that option now, which is going to result in a huge amount of foreclosures.
Contrary to popular belief on this board, banks do not like forclosures. The costs associated with foreclosing on a property far outweight any possible profit that could be made from reselling the property. My company services close to six million loans and continues to grow. If even 1% of those loans are foreclosed on, that is 60,000 properties which this company will have to pay foreclosure fees on, upkeep fees on until the property is sold, realtor fees on, etc. The housing market is now so saturated with homes for sale that properties are not selling, causing this process to go on for months or even years at a time. Lenders of this magnitude are not staffed in house to sell homes. We are in the business of lending money, not selling homes, which is why we offer loss mitigation in order to keep the borrower in their home. Unfortunately for those who over extended their means to purchase a home in the first place, not even loss mit will help.
With all hope, the interest only loan will be replaced by the 40 year mortgage, which insures both the customer from the risk of rising interest rates, and also protects the lenders from the risk of mass foreclosures. Obviously, the 40 year mortgage will have headaches of its own (if you buy a home in your 30s, forget about retiring), but from the looks of it will be much better than the interest only loan.
I see nothing wrong with what you say at all. I think a lot of people in this country are of the attitude that something needs to be handed to them, not worked for to obtain. This is one area where the US lags behind many countries in the world - attitude.
What gives......now my noisemaker freind...understand him supporting your last statement...you know as people that are on entitlements should get off their arsches and get to work and everything republican....