Housing cycle starting all over again

JonDough March 20, 2013 How many Giant financial institutions got into big FINANCIAL trouble and we were forced to bail them out; that`s okay but slam the small fry................................ 10 Reply

dragonfire77 JonDough March 20, 2013 I think the brits are doing it right, they`re setting up rules for their banks where if even ONE of them screws up, ALL the banks get punished. 2 Reply

YourSupremeCommander March 20, 2013 Well well, do we see the cycle starting all over again? 8 Reply

sunny5280 March 20, 2013 Not sure what the incentive is to pay bills on time. To obtain a 4% mortgage, a prime borrowing rate, four years after defaulting goes to show there`s little downside to walking away. 7 Reply

G8KeaPoR March 20, 2013 Great so people who aren`t able to qualify for HARP 2.0 because they aren`t on a Freddie/Fanny loan can`t get a refinance but people that have proven to be dead beat home owners and had their homes foreclosed on, regardless of the circumstances, can buy a new home?? With govt backing?? Sorry but this is BS. Fortunately I was able to refinance myself, but there are many others struggling that are paying on time and put in the extra effort that can`t refinance. I don`t feel they should also be on the hook for govt backed loans when these deadbeats default again. Oh and don`t bother responding to tell me they aren`t all deadbeats because you are wrong. They can`t pay their bills they are deadbeats plain and simple. As someone that was unemployed at one time for a year I managed to pay my bills on time and I wasn`t on unemployment. So why couldn`t these people? P1$$ poor planning i.e. lack of savings isn`t an excuse. 6 Reply

Omac_1_man_army_corps March 20, 2013 the bank has a contract with you, if you don`t pay they get the house. its all fair and square. a lot of people make this business decision. 6 Reply

sunny5280 Omac_1_man_army_corps March 20, 2013 The only problem I have with this is the consequences for not paying bills appears to be minimal. Making me question why one should pay their bills. 4 Reply

Omac_1_man_army_corps sunny5280 March 20, 2013 how great should it be? they quit paying the bank got the house. that was the contract. why should there actually be any penalty? 3 Reply

Tom Evans Omac_1_man_army_corps March 20, 2013 The bank doesn`t want the house and I`d think that they would be reluctant to lend to anyone with your particular point of view. Giving up the house is the penalty for not living up to your contractual obligation. It did not satisfy your obligation. 1 Reply

sunny5280 Omac_1_man_army_corps March 20, 2013 It shouldn`t be the same as someone who has been paying on time, every time and thus earned their prime score. 0 Reply

BravoEcho240 Omac_1_man_army_corps March 20, 2013 The penalty is the banks problem. Not mine. This is not a public problem so don`t make public laws/acts that are private problems. 0 Reply

Opie Juan Cannoli sunny5280 March 20, 2013 The example in the story above is atypical. Default on a mortgage and you will see how minimal the effects are. Beyond that, I will refrain from comparing the fiscal policy of politicians in DC to a homeowner who racks up debt that spirals out of control... 1 Reply

BravoEcho240 Omac_1_man_army_corps March 20, 2013 It`s not fair and square when laws are changed to benefit those that made a bad "business" decision. The Mortgage Relief Act put into place in 2007 took the risk off the home defaulter and placed it directly on the taxpayer. In the past banks could recoup their lost investment by clawing back the difference on said homeowner. But now they claim the write-down loss. 1 Reply

JFCanton BravoEcho240 March 20, 2013 The bank always could have claimed it as a loss. The difference is that it doesn`t count as income to the defaulter... but how often is the taxpayer actually going to get money out of a defaulter? Not often. I could see charging them taxes on any cash taken out and never repaid, as a lot of people did. 0 Reply

BravoEcho240 JFCanton March 20, 2013 Yeah, thankfully the 2007 law doesn`t count for cash out or second/vacation homes. 0 Reply

Tom Evans Omac_1_man_army_corps March 20, 2013 You make it sound like giving up the house represents fulfilling your end of the contract. If that was really the case then why would you take a credit hit? 1 Reply

Opie Juan Cannoli Tom Evans March 20, 2013 Your credit rating taking a hit is not a contractual penalty. Your credit rating is a (third-party) company`s assessment of the risk associated with lending you money or extending credit. Obviously, the effect on one`s credit score is a negative side-effect, but Omac is correct to say that contractually speaking, ownership in the house is the only thing that a borrower loses when they default on the loan. 2 Reply

disqus_lyzGXZD8Uy March 20, 2013 Hey baby boomers, Thanks for screwing up the country. Try not to do it again before we young people can clean up your messes. Thanks, Everybody under 40 9 1 Reply

YourSupremeCommander disqus_lyzGXZD8Uy March 20, 2013 The baby boomers generation that fought in WWII so that you and everybody under 40 can have a life today? 5 2 Reply

disqus_lyzGXZD8Uy YourSupremeCommander March 20, 2013 ??? Wow The baby boomer generation was the result of soldiers coming home from WW2 and having lots of babies. Boomers themselves did not fight in WW2, they lived in the most prosperous time of the most prosperous nation in history (USA 1945-2000) and COMPLETELY squandered it. Read a history book. It`s frightening when legions of ignorant people like you are commenting on CNN and suggesting national policies. 16 Reply

YourSupremeCommander disqus_lyzGXZD8Uy March 20, 2013 Calm down Einstein, if you are so smart then what are you doing to change things? oh right, you are helping by posting on CNN, ok I see where you are getting at. 3 5 Reply

Dan YourSupremeCommander March 20, 2013 No. ...just no. You relinquished the right to sarcastically call anyone "Einstein" when you claimed that baby boomers fought in WWII. Dan 21 Reply

Health1au Dan March 20, 2013 Methinks you are arguing with a know-it-all teenager who in fact knows nothing. Hey teen, here`s something that can build wisdom: In your 20s, you don`t know, but you don`t know you don`t know. In your 30s, you still don`t know, but you know you don`t know. In your 40s, you know, but you don`t know you know. By your 50s, you know, and you know you know. Party time! (the late, great George Carlin) 3 Reply

Mandor YourSupremeCommander March 20, 2013 Check me on this, I though the boomers were the ones whose PARENTS fought in World War II? 6 Reply

ned Mandor March 20, 2013 You are quite correct. The baby boom followed the end of WWII when all those horny servicemen (like my dad) came home! 0 Reply

Guest YourSupremeCommander March 20, 2013 I respect the WW2 generation far, far, far more than any selfish "Me generation" boomer 9 1 Reply

1guest2u YourSupremeCommander March 20, 2013 HAHAHAHAHAHAHAHAHAHAHA (pause for breath) HAHAHAHAHAHAHAHAA Hilarious statement. Thanks for that. It seems other comments have addressed the substance I just wanted to thank you. 1 Reply

Michael B YourSupremeCommander March 20, 2013 Baby Boomers like to Boom 0 Reply

uspatriot25 disqus_lyzGXZD8Uy March 12, 2013 I think you meant to refer to the hippies... 0 Reply

Lew March 20, 2013 Oh great, irresponsible former homeowners financing new homes. Perfect. 3 Reply

gsphillips1 Lew March 20, 2013 Did you even read the article? I thought not; you talk like the idiot that you probably are! 0 1 Reply

Sanoran Triamesh March 20, 2013 `Les Christie`, the illusive pimp of the real estate industry, is famous for writing the series "Millionaires in the Making" on CNN. He seems to be on regular payroll from the home-builders :) Most of his `millionaires went bust. No follow up on them. However, now that Bernanke`s freshly printed inflation is inflating the housing bubble again, Les Christie is back, pimping houses again. 3 Reply

Mandor Sanoran Triamesh March 20, 2013 I would not use the word "pimp". But I have to agree with the sentiment. In the last five years of reading articles on CNN Money, I don`t think I`ve ever read one single article by Les Christie that didn`t carry the message of "OMG housing prices are about to go up! Buy right now the deals will never ever be better!!!". If even one article in 10 contained a gloomier outlook, it might be believeable. But as it is, the author sounds about as objective and honest as a late night infomercial speaker. 2 Reply

Health1au Mandor March 20, 2013 I disagree: pimp is appropriate. 3 Reply

BravoEcho240 March 20, 2013 The next time I want a car I`m going to buy the most expensive model and finance the whole thing. Then after two years when it`s depreciated in half not pay on it anymore, wait a year and drive my current beater then "boomerang" into another expensive car. Because it just doesn`t seem like the penalty is bad enough for me NOT to! 5 1 Reply

Brian Mathies BravoEcho240 March 20, 2013 More power to you. Personally I`d rather just play by the rules and do the best I can. Then, if that doesn`t work (it usually does, though) I`d consider what you`re talking about. 0 Reply

BravoEcho240 Brian Mathies March 20, 2013 Yeah, I should have put >sarcasm< at the end of my post. Sorry. 1 Reply

John Canaday Brian Mathies March 20, 2013 In some eyes that would be considered a "lack of character". Character, capability, & collateral are the "three C`s of credit". If a borrower demonstrates a lack of character, it should be on his record at least 10 years to warn future lenders. And they should NEVER qualify for any taxpayer assisted loan insurance program, FHA. VA, FMHA, etc. 0 Reply

Guest March 20, 2013 Good for them! Meanwhile, I STILL sit and wait for housing prices to fall from insane levels while people like them that caused the problem in the first place cycle through again, all with the backing of the US gov`t. 4 1 Reply

A1FXD March 20, 2013 The Middle Class in this country are just poor people who "THINK" they have money. Maybe if we ship a few more jobs to CHINA, that will help. The plain fact is that corporate profits are just not high enough. In the coming election , will not vote Republican, Democratic, or Independent. I am voting Corporate. You gotta go with a winner. 4 1 Reply

Dan A1FXD March 20, 2013 No. That is incorrect. The middle class are people that have some money, but spend way too much of it. Then look in every direction for someone to blame when the music stops playing and they are left to deal with the repercussions of their actions. Dan 8 Reply

Richard Lawrence Ray March 20, 2013 Our lender locked us out of our home after two month delinquency due to my hospitalization. The lender tried to foreclose, but couldn`t, as they lost the mortgage note and couldn`t convince the court they owned the mortgage. We filed for Chapter 7 in 2009, as we could not get back in our house as we were locked out, and the lender kept making noise about foreclosure and deficiency judgment. This started in 2008, the bankruptcy was discharged in 2009. The lender tried for years to foreclose, but no note, no foreclosure. We did get our financial house in order, and were able to get a VA loan in 2012. The lender finally came back, hat in hand, and asked us if we wanted the house back. (after it had been broken into, the copper and air conditioner stolen, and generally trashed) We told the lender that it was their house, they wanted it so bad, they could have it. They offered a financial settlement, not much, but it was a small victory. We took their settlement, but we still get screwed in the end. We better like our new home because as part of the settlement, we surrendered all claims to the property, which counts as a foreclosure sale. In short, the clock starts ALL over, after waiting three years after bankruptcy, we must now wait another FOUR if we should ever want to have a home equity loan or refinance to a lower rate. In short, we wind up being hurt TWICE because of lender ineptitude. 2 Reply

sc2pilot Richard Lawrence Ray March 12, 2013 That is the choice you made when you decided to buy a house you couldn`t afford. 1 Reply

ME March 20, 2013 So in a few years, the whole foreclosure process will start over again. Really, two years after you`ve walked away from a house you couldn`t afford to pay, you`re going to buy a house for $280,000? Seems you`d want to buy something you could be sure to afford on one income, or on a reduced income in the case of a job loss or salary decrease. Obviously I don`t know what these people make, but seems to me like they`ll be in the same position in a few years if the economy takes a tumble again. 2 Reply

lindajloo March 20, 2013 For more than a year, while the foreclosure cycle plodded along, these people made no house payments nor did they pay homeowners insurance, HOA dues. Nice way to save a nest egg, I`d say. Folks who rented apartments and lived in trailer parks during the crisis had to pay. But not them! And now they get to buy another home (at low interest rates and maybe even a foreclosed bargain). And what we doing? Suffering in silence, paying our mortgage. Our honor and good character are worthless -- sent down the very same toilet the year-long freeloaders left behind in their overpriced "little money down" dream house. 2 Reply

GoAwayObama March 20, 2013 I guess lenders dont learn. If people walk away from one mortgage, you dont give them another one two years later. The fact that they walked away and reneged on their word is telling. I`d never lend someone like that money. I want the good person who`s willing to stand by his word and work extra jobs to make ends meet, not the fickle person who walks away at the drop of a hat. When you take out a mortgage, you sign a contract stating you agree to make the payments, no matter if the value of your home goes up or down. There`s no escape clause if your house goes down in value. You buckle down, make your payments, and ride out the recession and your home will be back up in 5-7 years. that`s called character. Something, it seems, almost no Americans have anymore. 2 1 Reply

cnaf March 20, 2013 Clean slate after two years? Wow. What is my incentive to do the right thing and stay on top of my mortgage? eta- yeah, I read about their circumstances...it`s still a quick turn around, and if they can do it why not other defaulters that just got in over their heads? 1 Reply

Tom Evans cnaf March 20, 2013 Two years is nothing when you consider that people were going to wait at least this long anyway for the housing market to bottom out I wonder how long the couple lived in their home after they defaulted? A lot of people have been staying in the home over a year before the bank finally kicks them out. Saving $2300/month probably is where they got the money for the down payment on the next house. All in all a good deal for them. But there is a moral hazard in rewarding people who default on their obligations. A lot of people who took what they considered to be the high road might be now questioning the value of doing the right thing. 1 Reply

baum33 Tom Evans March 20, 2013 I have a friend who is letting the bank foreclose on his home. It`s underwater, due to home equity loans that he took out when times were good. He can afford to pay the mortgage, but has made a business decision to let the bank have it. He has been living mortgage free for two years and he has at least another six months to stay. He has saved all that money and will rent a beautiful home for a few years and have a nice down payment saved for his next home. It`s all legal, however many question the ethics. I say it`s just a business move. 0 Reply

zzbbe cnaf March 12, 2013 − The prudent have been punished here in the USA. They live lean and have been forced to pay for the inept lavish life styles of others.

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Housing cycle starting all over again

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