Originally Posted By NikkiLOVESMickey I have another example of someone who's attitude, and not his intelligence, is off-putting. At one of my workshops this summer, there was a gentleman who moved back to New Orleans to teach post-Katrina (he'd been living in Atlanta sine 1979). This individual, while intelligent, was an expert on EVERYTHING, from home repairs to computers to the state of Louisiana's education system. Whenever someone brought up any topic, be it private conversation or otherwise, he would put his 2 cents (it was actually more like $50) in, whether his expertise was wanted or not. Honestly, if I had a conversation with a fellow teacher about the pain of childbirth, he'd probably jump in and tell us he knew what we were going through. He was absolutely obnoxious - ridiculously intelligent, but obnoxious. When he wasn't spreading his knowledge on every subject known to mankind, he was telling us how bad New Orleans was compared to Atlanta and how many problems our area had. We all know that New Orleans has many, many problems, many of which existed before Katrina, but he'd sit there and go through his laundry list each and every day as though we lived under a rock. Telling a group of New Orleanians about the problems in the city is akin to telling someone with a cast on that they have a broken bone. Finally, it got to the point where we told him in no uncertain terms that he was being boorish and rude. He stopped bad-mouthing the city, but he never stopped contributing his knowledge to our discussions. He was ridiculously annoying. I don't resent him, or anyone else, for having a college education or a graduate degree. I resent when that education is wielded over me as though I'm far too stupid to have reached an intelligent conclusion myself. I'm sure the same can be said for most (certainly not all) people.
Originally Posted By RoadTrip So many arguments, so little time... <<She got a ROCK bottom rate on a Foreclosure and is putting about 5% of the total home loan into renovation. She will MOVE IN with about 30% equity. She is putting down ZERO and I totally agree!>> Come on DVC… we both know that is a special instance. The key there is that she walked in with 30% equity, not 10%. I don’t think that is what barboy had in mind. <<Why not take your own advice? You have been stuck to that University for a thousand years yourself. You could have started your own business too and maybe you could have retired 10 years ago.>> Actually I did just that. About 23 years ago a friend of mine asked if I would be controller for a business startup he and a friend were doing. Although I would not be considered one of the “foundersâ€, I was offered an equity stake in the company if I signed on. So I was one of 5 people showing up the first day carrying in our card tables and chairs. The company was quite successful… at the end of three years we had over 100 employees and revenue in excess of $5 million per year. Unfortunately as often happens in such cases, my friend and the other founder started fighting over should be entitled to what. They were able to pull together when the company struggled in the early days, but when the money got big they started fighting over it. They filed lawsuits against each other and I decided it was time to leave. My friend planned to start another company with the presumed proceeds from his suit, and I was going to join him. After spending a couple of months helping my friend write up a new business plan, I decided I better get a paying job in the meantime so I could feed my family. So I looked for a job back at the University and was hired. Unfortunately, by the time my friend and the other guy were done suing each other they had to sell the company to a competitor at a significant loss to pay for the lawyers. My friend got a judgment in his favor, but it was a moral victory and nothing else. I decided I wanted to stay at the University and my friend decided he was probably better off without a partner anyway. My friend started another business. We never talk dollars and cents, but I assume he is doing very well. Last year he bought a $1.4 million dollar house. That buys quite a house in Minnesota. I stayed at the University because I started to see what vbdad has experienced; benefits being cut, pensions being taken away, jobs outsourced, etc. I decided I could put up with the modest salaries in trade for the security and good benefits. For me, that decision has worked well. <<gas was under $1 a gallon>> No it wasn’t. The last time gasoline was under $1was March 22, 1999. On September 10, 2001 it was $1.51.1. Source: <a href="http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html" target="_blank">http://www.eia.doe.gov/oil_gas...ory.html</a> <<Consider the following very true story which likely will frustrate you:>> It doesn’t frustrate me at all, although I do think they belong in jail. THEY are precisely the reason the mortgage market and housing has gone to hell.
Originally Posted By RoadTrip <<I don't get why what you spend on a car is an issue at all. Do you know what the differnce between a $25,000 car and a $40,000 car is over your lifetime? Absolutely nothing.>> Do you call $577,732 absolutely nothing?? The difference in monthly payment between a $40,000 car loan and a $25,000 car loan over 5 years at 6.0% is $290 per month. Take that $290 per month and invest it at 6.0% over 40 years and you have $577,732. That type of thing is precisely why guys like you end up broke. You have a darned good income and decided what the hell? Why shouldn’t I drive a Mercedes if I want? So you do. And then after a lifetime of hard work the economy goes south. You’ve got a $40,000 Mercedes in your garage and $0.00 in savings. I’ve got a $25,000 Dodge in my garage and $577,732 in savings. Don’t whine to me about how no one can afford to do anything any more. It is all about the choices you make.
Originally Posted By RoadTrip <<There comes a point where it truly doesn't pay for someone to work, it's a point that many folks miss (the ones who think you should work in a Burger King rather than sit home and watch TV or lie out near the pool).>> You are 100% wrong on this. This is why we have generation after generation of the underclass in America’s urban areas. They were all too darned good to work for Burger King at $7 per hour. What will a lifetime of sitting on your butt waiting for a better job get you? Absolutely nothing but a sore butt and a fat belly. What would going to work at Burger King for $7 per hour get you? Well, if you do a decent job and show some stability you will be an assistant manager inside of a year. Big deal. Assistant managers at fast food joints make about $25K per year to start. Stay at that a year or two and you will be manager. They make about $40K per year to start. Still not outstanding, but now you are at about $20 per hour instead of $7 per hour. Is $20 per hour perhaps worth your precious time? What is better? $20 per hour or a sore butt and a fat belly?
Originally Posted By barboy ///I do think they belong in jail./// In jail? Now I'm confused. What criminal act did they commit? If you're talking about fraud-- it just won't fly because there was no fraud on the borrowers, appraiser or mortgage broker. The lender took the risk and lost. The lender agreed to handing over $210,000 based on the borrowers' credit scores/income but most of all based on the market value of the subject property. The lender was 'banking' on the fact that they had a secured interest in the residence and that the residence would command enough in the open market if the borrower were to default. The lenders, both the first and second lien holders, each ratified or accepted an independent appraiser's finding on the current market value on the property. Furthermore the borrowers submitted bonafide documents in the form of tax returns and payroll stubs--- thus, no fraud. Countless borrowers have done 'cash out' refinances for far more than $210,000--- it just so happened that like many residential real estate markets during that time housing skyrocketed only to come falling back to earth come '06 and continuing to fall as I write this. The state has no criminal recourse, none. But a lender could possibly sue the borrowers and seek a 'deficiency judgment' but I doubt that is going to happen for 4 to 6 reasons.
Originally Posted By NikkiLOVESMickey <<What will a lifetime of sitting on your butt waiting for a better job get you? Absolutely nothing but a sore butt and a fat belly. What would going to work at Burger King for $7 per hour get you? Well, if you do a decent job and show some stability you will be an assistant manager inside of a year. Big deal. Assistant managers at fast food joints make about $25K per year to start. Stay at that a year or two and you will be manager. They make about $40K per year to start. Still not outstanding, but now you are at about $20 per hour instead of $7 per hour. Is $20 per hour perhaps worth your precious time? What is better? $20 per hour or a sore butt and a fat belly?>> Thank you Trippy - that was exactly my point.
Originally Posted By Spirit of 74 <<Spirit- You live in affluent community, you own TWO automobiles (at least one of which is Benz) and you're actually going to post that you're hurting? If you're hurting, sell the Benz! If you're hurting, sell the house and move to a less affluent neighborhood! There are people in this world who can't afford A car, much less a Banz, and you're going to post on here that you're hurting - I wish I was in your kind of pain, my friend.>> Nikki ... with all due respect, things aren't black and white and simple as some would like to see them. I am hurting. And I have no desire to place my problems on the web for all to see and read about. I'm hoping to sign a lucrative contract in the near future, but it doesn't change things today. I'm not going to go trade my Benz in for an '01 Impala in the meantime. And moving is simply not an option right now -- and I'm glad it isn't. If you're going to start bringing in Darfur and having the necessities of life and compare that to folks in the USA, I'll just bow out and let the PERSONAL RESPONSIBILITY BRIGADE take over with their propaganda that most people who are suffering are doing so because of their own poor choices ... in other words, it's sad but they got what was coming to them. I was planning on taking another break from the LP on 7/17 -- to celebrate DL's B-Day and all -- but maybe I'll just bow out sooner again. I just don't want to go back and forth endlessly with people who think the world all comes down to themselves and their decisions. I believe in personal responsibility, but we live in a country where we let our leaders and Big Business off the hook. It's a do as I say and not as I do dichotomy. I find it vile and repugnant. And yes, anti-American (the real America, not the wave the flag you bought at the WalMart for 'W' variety). Instead of blaming welfare mothers, professionals who lost their $75,000 a year jobs and aren't eager to take their two degrees and work for $7 with teens at BK so that companies could overseas their job, and people who have the nerve to drive Mercedes-Benzes, why don't we start blaming government and their policies that have made the lives of individuals insignificant. I am amazed at what a nation of apologists we've become. It's not the fault of our leaders, our companies. It's us. You know what? I don't buy that. I see the realites around me. But I've grown weary yet again of the back and forth. So I'll bow out and catch you all in a few months! Enjoy your summer!
Originally Posted By X-san ***I also completely disagree with your assertion that a house is a want and not a need. It is far more economical in the long run to purchase a home than to throw money away on rent, and therefore makes more sense. I'm not the only person who is naive, my friend.*** Nikki, who are you directing this to? I'm the one who wrote that, but I didn't write that specifically...I wrote "nobody needs a *bigger* home". But in any case, you're wrong. Owning property is NOT always the best solution. As with most things, it depends on the circumstances.
Originally Posted By X-san ***Furthermore the borrowers submitted bonafide documents in the form of tax returns and payroll stubs--- thus, no fraud.*** No Doc Loans were being touted as "an easy solution" by lenders all the way up until most of them were bankrupt or nearly so. I even wrote about it here on LP, with links to their advertisement pages (which were quite amazing..."no docs, no money down, no problem", that sort of thing).
Originally Posted By RoadTrip <<I see the realites around me. But I've grown weary yet again of the back and forth. So I'll bow out and catch you all in a few months!>> You will only stick around if everyone agrees with you? That is really lame Spirit. I love having you around, and respect what you say. But at the same time if I disagree with something you say I will express that viewpoint. As you express your viewpoint if you disagree with me. When the going gets tough the tough get going. They don't go scampering off with their tail between their legs!! You are better than that that Spirit... please don't lead us to believe otherwise.
Originally Posted By barboy ///I even wrote about it here on LP, with links to their advertisement pages (which were quite amazing..."no docs, no money down, no problem", that sort of thing)./// Yes, I remember your postings about lenders closing doors. Those topics very much interested me since I used to buy residential broken down/rat shacks add value to them and then sell or hold as rentals in the north and east parts of the Bay Area. I don't do that anymore as my days of crawling under black widow infested homes and shopping Home Depot daily are over. I like drinking beers on Rosarito Beach, Mex. much more.
Originally Posted By RoadTrip <<This couple bought their house in the East Bay(outside of Oakland, CA) in Dec. '03 for $588K. They signed loan papers for say $600k($12k went for inspections, appraisals, prorated taxes, closing costs) They refinanced the house at 100%, 'neg. am' ****that is paying less than interest only*** in July '05 for approx. $825k. and pocketed about $210k (after fees, appraisals etc.) By early this year they walked from their house which they now owed about $865k(due to the 'neg. am.' feature) because it plummeted down to around the $550k mark and the husband was fired/laid off.>> What absolutely amazes me is that you can possibly think those actions were justified. I guess it shows the difference between the coasts and the heartland. The vast majority of people here could never think of doing something like that. Surely no one, regardless of the market, could EVER think negative amortization was a good idea. Sure it was offered. I could buy cocaine on the street corner at work too, but that doesn't mean it is a good idea. If you don't see something terribly morally wrong with the scenario you described there is absolutely nothing I can say to you. You will dismiss it saying it all was legal and I guess it was. But not everything legal is morally correct. To walk away from a mortgage two years after pulling $210K in value out of the house? That is completely disgusting. That is why good honest people who weren't looking to game the system are now loosing their homes. Feels good, does it? To you, it probably does. Lets look at the situation if these folks had done what the SHOULD have done. They would have put 20% down on the $588K home which would leave them with a $470,000 mortgage. They would not have pulled equity out of their home like they did, especially when it exceeded 80% of the assessed valuation. They would have not put themselves in a situation where they were DECREASING their equity every month. If they had not done all of those stupid things, where would they be today? They would owe less than $470K on a house still valued at $550K. They would be making payments on a $470K mortgage instead of an $865K mortgage. That would save them approximately $2,365 per month. They would not be upside down in their mortgage and they likely could have kept their home because of the lower payment. What they did was criminal. If not legally, morally. The fact that there are folks like you out there who present it as a good idea makes me want to puke. As I said, people gaming the system like that have resulted in honest hard working people losing their homes. You have convinced me of one thing. I will write all of my congressmen and senators relaying to them the situation as you told it, and request that any assistance to homeowners be denied anyone how ever pulled out 100% of equity and/or took on a negative equity mortgage.
Originally Posted By NikkiLOVESMickey <<Nikki ... with all due respect, things aren't black and white and simple as some would like to see them. I am hurting. And I have no desire to place my problems on the web for all to see and read about.>> If you have a paid off luxury car sitting in your driveway and aren't hurting enough to sell it, then you aren't really hurting. You're not hurting the way some people are hurting, such as my cousin, my sister. Didn't you recently post about booking flights for trips hither and yon? Yeah, I feel your pain. <<Instead of blaming welfare mothers, professionals who lost their $75,000 a year jobs and aren't eager to take their two degrees and work for $7 with teens at BK so that companies could overseas their job, and people who have the nerve to drive Mercedes-Benzes, why don't we start blaming government and their policies that have made the lives of individuals insignificant.>> You want to blame the government for nearly everything, seemingly. I live in a city where people, instead of using government subsidized housing as a temporary solution, have used it as a permanent solution, and GENERATIONS of families live in these drug ridden projects. They are so reluctant to try and make their lives better that they are fighting and have even rioted to keep these ridiculous excuses for homes open even though they've been condemned as a result of Katrina. I work in a school system where parents encourage their children to fail tests and get classified as special needs so they can receive a check from the government. I worked at Charity Hospital where a patient undergoing occupational therapy said he was only interested in getting his trigger finger back. It's very easy for you, Spirit, to work your white collar job and say from your affluent community that its the fault of the government. As someone who works in a public school system and worked at one of the most infamous charity hospitals in the country, I can tell you FROM EXPERIENCE that it's not all the fault of the government. Come spend a month with me, or a month with some of my friends who still work at University Hospital (where Charity is now based) and see what we see. <<But I've grown weary yet again of the back and forth. So I'll bow out and catch you all in a few months!>> Spirit, I've posted to you about three times on this issue. You'd swear I'd been yammering in your ear for weeks. Whatever. <<I'm the one who wrote that, but I didn't write that specifically...I wrote "nobody needs a *bigger* home". But in any case, you're wrong. Owning property is NOT always the best solution. As with most things, it depends on the circumstances.>> X, I was addressing that to davewasbaloo because I thought he said buying a home was a want, not a need. When I say it's good move to buy a home, I mean in general. Of course there are circumstances where it isn't, but in general it is a good move. If you're financially stable enough, and you can afford a quality home in a neighborhood that will help increase your property value, it can be a good move.
Originally Posted By barboy It looks like I was right after all.... you do sound a bit frustrated. And by the way I never told/encouraged those people to buy, refinance nor walk from their home--- they did it on their own and independently of me knowing until after the fact...... so you need mellow out and grab a brew--- you'll live longer. ****And furthermore I am a lender too so don't talk to me about gaming systems/ ethics/criminality. I sold one of my houses back in July of '06 to a young couple and I carried back $175k with a secured, but second lien against the property. They have been making interest only payments to me but now the property I sold them is worth 150K less so if they defalt I may not see anything. So far they are in good standing but they could walk away at any time**** Oh, and I drive a '08 MBenz CLK convertible 550 model steel grey with the AMG style package--- a beautiful machine that turns heads.
Originally Posted By RoadTrip <<Oh, and I drive a '08 MBenz CLK convertible 550 model steel grey with the AMG style package--- a beautiful machine that turns heads.>> I don't care what you drive as long as you don't start pissing and moaning about how times are so damned tough. For anyone who drives an '08 CLK, times aren't too tough. I'm glad it appears you are backing off a bit on your support of what those other folks did. I accept that you didn't advise it, but I would also hope that you don't agree with it. I would hate to see you get stiffed on what people owe you, just as I hate to see anyone walk away from an obligation that they willingly took on. Hope you can keep that CLK running well. Just don't complain to me that times are tough, OK??
Originally Posted By X-san ***X, I was addressing that to davewasbaloo because I thought he said buying a home was a want, not a need. When I say it's good move to buy a home, I mean in general. Of course there are circumstances where it isn't, but in general it is a good move. If you're financially stable enough, and you can afford a quality home in a neighborhood that will help increase your property value, it can be a good move.*** Yes it certainly CAN be a good idea. But keep in mind that just because that has been true in America for the past century, doesn't mean it will continue to hold true going forward. Living in Japan I can tell you that they're coming up on 20 full years of that NOT being a good idea, and so the idea that if you buy and keep the house for a lifetime will always work out is not necessarily so (and the situation with the housing market in America today is EERILY similar to Japan of the early 90's...scary). In any case, whether or not it is a good idea doesn't change the fact that it's not a "need". It's a "want". And certainly saying "we need a bigger house", while understandable, is not quite right. Like I said, nobody "needs" a bigger house. Unless the house in question is, in reality, actually falling apart from age OR, perhaps you have SUCH a big family that you no longer fit (in general though, as long as you have 3 or so bedrooms you can fit most families into small homes).
Originally Posted By barboy ///Just don't complain to me that times are tough, OK??/// Hold on there.... yes I am the first to say times are tough; just not tough for me these days or past years. In fact my standard of living is pretty high since I don't work, I have no dependents and my discretionary income(money after all my obligations... house, food, car) is about $275K per year. So yes, I can easily afford a nice car like that convertible CLK. As to that party who owes me $175K---- I already assume I will not realize the principle due to the housing crisis..... in fact I wrote them a letter asking for only $100K if they pay before '09--- we'll see. ////I'm glad it appears you are backing off a bit on your support of what those other folks did. I accept that you didn't advise it, but I would also hope that you don't agree with it./// I didn't commend nor admonish them---- I was just interested in their story. And here is a side to the story you should understand: they had no idea that the market was going to collapse, obviously---- in fact for all they knew it could have just kept going up, up, up for the foreseeable future, thus protecting the second lien holder. And they certainly didn't foresee being laid off/fired as that came more recently. So they tried to negotiate with the banks to keep the place but the banks weren't going to give an inch. I can't blame the lenders since they already were in deep. So instead of waiting around to be kicked out they just walked away.....shamed, ruined credit and all. And as to ethics/morality they did leave the place spotless and kept watering the lawns to make the place sell faster for the lender. Most 'walkers' don't even do that.
Originally Posted By NikkiLOVESMickey <<And certainly saying "we need a bigger house", while understandable, is not quite right. Like I said, nobody "needs" a bigger house. Unless the house in question is, in reality, actually falling apart from age OR, perhaps you have SUCH a big family that you no longer fit (in general though, as long as you have 3 or so bedrooms you can fit most families into small homes).>> I completely agree.
Originally Posted By X-san ***In fact my standard of living is pretty high since I don't work, I have no dependents and my discretionary income(money after all my obligations... house, food, car) is about $275K per year*** Dude, "pretty" high? Stinking rich now qualifies as "pretty high" I guess.
