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Ok, I’m a little frustrated. After all the efforts to stabilize housing seem to have failed, it appears the next attempt will be the “principal forgivenessâ€. Bank of America is going to be the first to actively spearhead this policy. This I feel is the ultimate unfair practice.
So going forward, is there risk to purchasing real estate anymore? Why wait for prices to continue to go down rather than just buy TODAY? Why continue to rent from a landlord when I can be a home debtor?
If I am worried about job security, so what? If I lose my job or get my hours cut, so what? I can live in my house free of any obligations for months or even years without making a payment. Do you think you can do that with a rental? How soon do you think your landlord would be knocking down your door to get you out?
If I buy now and prices continue to go down, so what? Bank of America will reduce my principal loan balance.
If I can get a house with FHA financing and only 3.5% down and have the support of the US government on my side to keep me in my house I just don’t see the risk in buying a house anymore. So my credit may get a ding but that seems a small consequence for only having 3.5% skin in the game and the backing of our government’s agenda to keep me in my home.
It looks like renting is for fools at this point. Am I missing something here?
dont_getit
2010 Mar 24, 9:45am
I couldnt agree more with the comments! I have been thinking the same really hard. It looks like the house values will not go down at any cost in the area I am looking at. The houses which are even priced at 2005 level are getting sold. I have been really wondering what am I missing? Now, I am waiting for my lease to get over. I will start to look in another 2 months, and buy it at the cost of american tax payer. Its not wise to be renting, when you can have free ride from anyone.
Whatever. I'm proud of the people walking away from their homes right now. I wish I had enough forsight to borrow as much as I could and then walk away, kinda the same way corporate America sucked the life out of so many good companies to feed their profits.
just because you can doesn't mean you should....just because you can, doesn't mean you should...just because you can doesn't mean you should...repeat...
...this can only end badly
"...and the American tax-payers "
Where in the plan is there anything about taxpayers paying for it?
"So if you owe $400,000 on your house and your house is only worth $200,000. We would like to give you a new mortgage of $190,000."
If you're BAC, you've got these choices:
1) Foreclose, and get $170K after costs of foreclosure. $230L loss
2) Reduce principal, and take a $200K loss.
This is a no-brainer. They're just facing reality. And they lock people in for 5 years to get the reduction.
If I can get a house with FHA financing and only 3.5% down and have the support of the US government on my side to keep me in my house I just don’t see the risk in buying a house anymore. "
I don't see why that is such a good deal when rent is cheaper than the mortgage + HOA fees + taxes...
I wish I had enough forsight to borrow as much as I could and then walk away, kinda the same way corporate America sucked the life out of so many good companies to feed their profits.
That does not seem like good foresight to me. If you bought that $400K house mentioned above with $20K down, and then walk, lose your $20K + whatever payments you made + your credit rating. How do you calculate that as a profit?
I know people who bought homes for 70k and borrowed up to 230k. I'm talking about borrowing hundreds of thousands of dollars and using the money to pay for student loans, credit cards, vehicle loans, contributions to children's college funds. I'm thinking big, not piddlely 20k.
Then, 5 years later you tell a sob story to a desperate company looking to make a loan..... I should've been more dishonest.
Have no fear, this forgiveness is taxpayer subsidized -- whether it be through TARP or the bargain basement bonanza at the Federal Reserve's Discount Window. Trust in the fact that nothing is ever written off.
Also, this means that local comps will not reflect the actual write-down price, so comps/house prices will stay high, as well as property taxes.
NEW RULES!
I should’ve been more dishonest.
In case you hadn't noticed, amnesty and mercy are reserved almost exclusively for fuck-ups and takers. I guess virtue is its own reward, and life isn't fair, etc.
I know people who bought homes for 70k and borrowed up to 230k. I’m talking about borrowing hundreds of thousands of dollars and using the money to pay for student loans, credit cards, vehicle loans, contributions to children’s college funds. I’m thinking big, not piddlely 20k.
Then, 5 years later you tell a sob story to a desperate company looking to make a loan….. I should’ve been more dishonest.
Ah, yes, that is a profit. I missed the part where anybody did anything dishonest though. Some people lucked out in the bubble. No doubt about it. Take note that those people could have sold their home for a $230K profit, the exact same profit they took in the cash out refinance (I assume).
Theft by any other name...
It's dishonest on many levels. For one, it's dishonest in that it preserves the illusion of home values being higher than they are, as the listed sales price for that home will not reflect that forgiven balance but rather what it closed for during the bubble.
My same thoughts Ausitin. There were and are bogus sales prices during the bubble years. Not to be trusted. The process is badly badly broken. Its "institutionalized, goverment backed" Illusion!
dont_getit
2010 Mar 24, 3:07pm
If you’re BAC, you’ve got these choices:
1) Foreclose, and get $170K after costs of foreclosure. $230L loss
2) Reduce principal, and take a $200K loss.This is a no-brainer. They’re just facing reality. And they lock people in for 5 years to get the reduction.
They can do whatever they want, but they shouldnt be coming back begging for bailout. Period.
Theft by any other name…
It’s dishonest on many levels. For one, it’s dishonest in that it preserves the illusion of home values being higher than they are, as the listed sales price for that home will not reflect that forgiven balance but rather what it closed for during the bubble.
You said it yourself I think in another thread. The onus is on the buyer to do their research. For you and me, it's good to know that "comps" do not include properties where there was a reassessment and principal reduction.
For you and me, it’s good to know that “comps†do not include properties where there was a reassessment and principal reduction.
I haven't read that anywhere. Besides, my argument is that the comps *should* include these properties in their averages, but at the newly assessed value. Otherwise it's a distortion of the data available to any potential buyer doing his due diligence.
For you and me, it’s good to know that “comps†do not include properties where there was a reassessment and principal reduction.
I haven’t read that anywhere. Besides, my argument is that the comps *should* include these properties in their averages, but at the newly assessed value. Otherwise it’s a distortion of the data available to any potential buyer doing his due diligence.
Well, maybe is should, but absence of disclosure is not dishonesty, unless it's expected because of legal requirements or a deliberately false statement. When I negotiate a salary in a new job, it would be nice if I knew what everybody else was getting paid, but I'm not going to accuse my perspective employer or the other employees of dishonesty for failing to disclose what arrangements they've made.
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“No one can do what Countrywide can”!
Remember that happy and positive home loan campaign on TV. Month after month, year after year, it played on TV offering exotic home loan packages to many so that they could “tap” the equity in their house.
Not surprisingly, this slogan of lies and deception is still making promises. Somewhere in the cold dirt about 6 feet underground you can still hear the whispers. Even though Countrywide is now officially bankrupt (both financially and morally) and was taken over by the savvy Bank of America, it appears that there is a new round of bailouts that will be offered to select homeowners whose mortgage was originated with Countrywide.
If you have been paying your mortgage regularly every month as a contributing member of society, making good on your financial promises, living with Integrity, setting an example for the next generation and are perhaps feeling burdened by the tough financial times, then unfortunately you don't qualify. And as a disclaimer, for everyone who has lost equity, jobs and/or suffered financially due to this crisis, I fully sympathize.
If you have had to undergo or are facing a short-sale or foreclosure, due to a difficult financial situation and have a loan that is not originated with Countrywide, then again, I'm sorry but you don't qualify for what Countrywide can do!
Okay, let's get to the good news. If you bought a house during the peak years of the housing market, and used Countrywide Financial to get either a coconut, mango or passion fruit home loan then you pass phase one. If you still have a paying job but have decided that you no longer want to make your house payment, then you pass phase two. If you have been squatting in your house without making a payment to the bank and have been saving thousands of dollars for at least 2 months and for some even years, then you pass phase three. If you pass all three tests then please feel privileged! Countrywide, Bank of America and the American tax-payers would like to indulge you with your strong stomach of self-entitlement to the American dream. We would like to write off up to 30% of the money you owe on your mortgage principle.
Now wait, if you got an upside-down pineapple cake loan from Countrywide, where you willfully decided (or maybe were “tricked”) to pay for only part of the interest you owed every month, then hold on. The best is waiting for you. We would like to wipe out any mortgage debt you owe that is over the current value of your house. But we also want to give you a 5% bonus as a head start to your new mortgage. So if you owe $400,000 on your house and your house is only worth $200,000. We would like to give you a new mortgage of $190,000. After all, you made a wise choice with Countrywide and no one can do what Countrywide can!
#housing