How will I get a house now? (Thank you Senate a-holes)

[LittleBlue]

http://apnews.myway.com/article/20080624/D91GO9J80.html

Thanks for the housing "rescue." First you let the Fed massively inflate home prices. Then, just when home prices are falling to pre-mania levels, you step in with a $300 billion bailout of people who took a chance and lost on housing.

Essentially the Senate is using my tax dollars to ensure home prices remain high, thus pricing me out of the market. I am 25 and living in a big expensive city that was already unaffordable. The people who borrowed took a risk, like I will take some day. They lost. It defeats the purpose of investing wisely, knowing the government will bail out any foolish investment.

Make the damn banks forgive the loans, they're the predatory lenders. Why should I pay for it?

[texastoast]

1. Waking up to corporate predation?

You are so right.

I spoke with my financial advisor and here's what he said about Bear Stearns: "If they didn't bail out Bear Stearns, then every single creditor of Bear Stearns would have fallen with them."

So now, what will the story be that justifies our government bailing these corporate assholes, led by Phil Gramm?

Oh, best we get busy and make sure we have a Dem House and Senate as well as a President or the deregulation will continue.

But a lot of folks will say that government shouldn't regulate business.

And this is what happens because business is just too corrupt to regulate itself.

[Bluebear]

2. Yes, far better that those people all lose their homes. "They lost".

"knowing the government will bail out any foolish investment."

You sound like a bitter old Republican, no offense.
And take heart, Bush is threatening to veto the legislation.

[YellowRubberDuckie]

3. I personally hope he does.

The bail out isn't going to do a GD thing for our economy and will only cause problems for good mortgage companies, like the one I work for.
Duckie

[Bluebear]

4. I'm not interested in "helping the economy" in this case.

These are people's homes. If the government can bail out Chrysler and Bear Stearns, they can make affordable mortgages available to people in need.

[texastoast]

9. That's not part of the plan

You see, they get your stuff you've worked for. As long as we have the lobbyists, the corporations will take all you have. I've watched it get worse and worse over the decades.

They have made it legal to lure folks, not disclose the ramifications to those folks, then pull the rug out from under them. Our bought and paid for government has done this for business.

But don't ever think they will do it for you with the makeup we have now.

[lonestarnot]

46. Hell yeah!

:applause:

[lakeguy]

5. you sound like someone who already owns a home

it's damn near impossible for my wife and i to find a house because we are first timers. when you are already in the game, it's easier to make a shuffle.

there are a lot of people in our boat and we aren't 'old rethugs'

[Bluebear]

7. It shouldn't be an either or. I hope you get your house.

But I don't want people to lose their homes thanks to shady mortgage practices.

[AlCzervik]

8. Well said.

[LittleBlue]

17. Offense taken.

I'm not a bitter Republican. I'm a first-time home buyer who is having his tax dollars used to fix the game so I can't afford a home. This is a bank bailout and nothing more.

You sound to me like a corporate shill who owns a home, no offense.

[Bluebear]

18. Pffff worrying about all your tax dollars , sounds pretty GOP to me

[LittleBlue]

56. Holding government accountable is GOP?

What happened to fiscal responsibility? I thought Bush was spending like a drunken sailor, at least that is my belief. Now I'm not supposed to worry about where that money is going because a bunch of banksters and crooked politicians cooked up this bill?

[AlCzervik]

20. do you think the rest of had our homes handed to us? Since we're older than you we

remember the savings and loan bailout along with many other bailouts. Do you think one of them has ever actually helped we the people?

[LittleBlue]

58. Exactly my point

This bailout is for corporate America. Providing subsidized housing through tax money will not solve the problem. The problem is predatory lending and the average joe's lack of financial knowledge.

[Gormy Cuss]

22. I couldn't afford a house at 25 either. I lived in an expense market too.

I noticed that connection. I had a good salary with raises every year and I lived in the Boston area during the last bust. Guess what? Even after the bust only the shittiest condos became affordable.

The housing bailout is wrong for several reasons (first and foremost because it's really a LENDER bailout wrapped in a homeowner gift wrap) but with or without it if the pricey market you live in is Boston, NYC, San Francisco, DC, or a handful of other metros you're not going to be able to afford a dwelling for a few years. Why? Because the lending standards are tightening back to where they were before the anything-goes days of the past decade.

[AlCzervik]

23. we had to move out of state to buy an actual house. We had a condo in mass

and we sold it and relocated.

[Gormy Cuss]

27. I knew dozens of people with underwater mortgages in the last bust.

Most of them owned condos in poorly rehabbed triple deckers. After the bust I could afford housing 20 miles out, but not within 5 miles of my job. I had cheap rent (thank you, downstairs landlord) and made the choice to save until I could afford a better place closer in.

[AlCzervik]

28. we're stuck here for another 5 years and then hopefully we'll be headed down your way.

that's the plan anyhow.

[Gormy Cuss]

49. Come to the Inner East Bay...

We haz BART.

[AlCzervik]

50. i am really looking forward to living someplace walkable again, as much as i make fun of Meffa

i never needed a car, i took the orange line into work and there were buses everywhere.

[flvegan]

39. Bluebear, see, the difference is that your hostility is soundly directed.

Unlike the OP.

[AlCzervik]

6. you should have bought "Pre-mania" and since you didn't you also took a risk by waiting.

[dems_rightnow]

11. Ignoring the "mania coming in 3 months" alerts.

Shouldn't do that. :sarcasm:

[LittleBlue]

15. I'm 25, pre-mania I was in high school

Oh please.

[Bluebear]

16. You could have been working 9 years now saving for a down payment, so sorry.

You took a chance and lost. :sarcasm:

[LittleBlue]

34. I could have saved every year

and not had the money to buy a house. I don't even qualify with my income to buy a million dollar townhouse.

These comments are inane.

[Mojorabbit]

43. I was in my mid 30's before

I could afford a house and my hubby is a physician and I was a nurse. We saved up a down payment little by little over years while scraping by on almost nothing while he started his practice from scratch and paid off his huge school loans. It wasn't handed to us. I am not the least bit adverse at helping people who might be able to keep their home if their mortgages can be renegotiated to a fixed payment they can afford. It isn't like we have
seen the bottom yet in housing prices.
Next year should be a lot worse when more mortgages reset.

[anigbrowl]

26. The OP is only 25. He wouldn't have been able to get a loan 10 years ago.

I'm actually with the OP on this one. I do feel sorry for anyone at risk of losing a house (it happened to me in the early 1990s when I lived in the UK) but at the same time, a lot of people over-extended themselves and bought a place they couldn't really afford because they didn't read all the fine print and think things through (and I include myself in that).

The OP is right in that people who were financially conservative (as in not borrowing beyond their means) are going to end up paying both directly and indirectly for the people who for people who overreached themselves, and that's not fair either. People getting thrown out of their homes is a Bad Thing, people being unable to buy a home is also a Bad Thing.

My advice for the OP: buy some cheap land which has potential - maybe because it's in a very windy area, or could be agriculturally productive, or even because it's being foreclosed. Even if you make crap money in some minimum wage job, take a look around the net - you can buy undeveloped land for as little as a thousand bucks (outright, not down) or get a mortgage on some cheap rural land...google 'farms for sale' and browse around. Some property can be bought very cheaply indeed, and the payments on a $50,000 or less mortgage would be manageable for almost anyone.

We're going to have a nasty recession, but it won't last forever, and there's property going cheap right now. If you buy a small investment like this and wait 10 years, it's probably as good as money in the bank...in fact, it might be better due to inflation. You don't have to live on it, and it's not irresponsible to buy it as investment if you're thinking about the long term - where a lot of speculators have been burned recently is in making the assumption that they could 'flip' some property after a year or two and cash in.

[shireen]

54. "buy some cheap land which has potential "

good advice. i was ready to buy my first home when this mess hit us. i was thinking along the same lines, buy cheap land with potential. however, it really depends on location location location. here in maryland, it's impossible to find something decent within a manageable commute to work. it's really frustrating.

[anigbrowl]

64. Well, don't necessarily buy it to live on

You'd have to do a bunch of research and so on. But if you knew that some place was likely to have significant industrial development or economic activity coming, then that usually means lots of people and people want homes and goods and services. As an example, if you'd noticed a few years ago that there was going to be a lot of oil shale exploration in Montana/north Dakota, and bought some land near a road outside one of the towns involved, then it would probably be worth a pretty penny now. You get the idea.

[bbinacan]

10. This bill should not pass

WTF happened to responsibility? People bought more than they should and I don't blame the banks. I blame the buyers. Because of this crap, my Mom had a hard time qualifying for a mortgage after my Dad's untimely death. Here are the financials. 600k in IRAs, 320k house with no mortgage, wants to buy a 240k condo and has a credit rating of 799. The catch? She can't provide 2 years of proof of income because it was going to Dad and not Mom. We had to do a parental loan where my brother has to put the mortgage in his name. I would have done it but his credit score is higher than mine.

Total BS.

[Bluebear]

12. Yes, people were sooo irresponsible because they didn't read the fine print.

When the builder said "I'll set you up! Your payments will be low, low, low!" And never disclosed what an ARM means or how high their payments could go.

But you "blame the buyers". Because it's never the seller's fault, right?

[anigbrowl]

65. Well the fine print is not just there for decoration. 'Caveat emptor' and all that.

Anyone who bought a mortgage with a teaser rate and didn't consider the possibility that payments were going to go way up was asking for trouble. Yes, sellers should be honest but they have no responsibility to educate the buyer. If I put some piece of tat on eBay with a high reserve price and say how wonderful and attractive it is, as long as I don't explicitly lie about it it's not my fault if people overestimate its value. A seller wants as much of a buyer's money as they can get, and buyers should remember that. It's called bargaining.

[Indenturedebtor]

69. I'm with you on this Bluebear. I blame the sellers more than the buyers

"Oh you were too ignorant to know that you were getting screwed? You didn't read the 480 page document written in legalese?"

Give me a break. Most of the people effected by this whole bubble were just trying to buy a home, plain and simple. Stop blaming the victims.

Furthermore this "adjustment" is doing a lot to destroy our economy.

The high prices of the market have more to do with the fact that wages haven't kept up with inflation than with home buyers/owners.

You don't blame all the greedy milk drinkers for the fact that milk costs 4 times as much as it did in 1970 do you?

[bbinacan]

77. The buyers were idiots. n/t

[silverojo]

13. Speaking of responsibility

Why didn't your mom build up her own credit rating, when everybody knows how important it is.

Also, if she's got a 320K house with no mortgage, and the condo is only 240K, she doesn't need credit. She's got enough to pay cash for the condo, and turn a nice profit besides. Plus, she'd have saved all the thousands of dollars she'll be paying back in interest! And with 600K in IRA's, she's hardly skating on the edge of poverty.

She should be responsible enough to handle her own affairs, instead of making her husband and her kids take responsibility for her.

(See how that "responsibility" argument can work both ways?)

When there was a death in our household, I took over responsibility for our financial affairs as soon as we got the life insurance money. We made the decision to downsize our lifestyle, paid cash for a home, and we're able to live quite well.

THAT'S responsibility. Losing your house because you lost your job, got sick, etc., and can't pay the mortgage payments isn't a lack of responsibility...it's bad luck, pure and simple.

There, but for the grace of God, goes you. Be thankful instead of resentful, m'kay?

[Bluebear]

14. Well said. nt

[boomerbust]

41. love the avatar

<<<<<<<<<<<<<<<

[bbinacan]

78. That's the dumbest damned thing

I've heard in quite a while. Look numb nuts. The mortgage will be used only long enough to sell the house. When it sells, she will pay the mortgage on the condo off. If she takes the money out of the IRA, it's taxed. In order to get the condo, she had to have a pre-approval letter. That's why we did what we did. Sheesh.:eyes:

edit to add: She's got a credit score of 799. Can you top that?

[rucky]

21. Loan officers are supposed to be licensed professionals.

and people go to professionals because they supposedly have a better understanding of finance than the average bear. If a doctor or lawyer suggest damaging action, it's malpractice. This wasn't just one or two bad apples - the was wholesale fraud: stated loans, i/o exploding ARMs, and a strategy that speculates on future interest rates & equity gains was an incredible risky strategy - and I doubt most borrowers a) thought of the strategy themselves or b) fully understood the risk. That's what got people upside-down on their homes. These loans were recommended, originated, underwritten and approved by the mortgage banks. They hold most of the blame.

[bbinacan]

79. That's bullshit. n/t

[nadinbrzezinski]

30. But we can bail out Bearn and Sterns, I am really missing the logic here

oh I get it

Bail out the big corpos who created the environment and punish the little people who "should have known better."

:sarcasm:

Why is it that this is reminding me of the GOP MO?

[Bluebear]

44. 'Why is it that this is reminding me of the GOP MO?' - because it is exactly their MO.

:toast:

[nadinbrzezinski]

48. Problem is that many kids take the kool aid, even today

[LittleBlue]

57. What?! Who said anything about a Bear bailout?

I don't go for bailouts, whether big corps or anyone. If these lenders have been deceived or defrauded, then let them take it to the courts. Make the corporations eat their loss.

[dysfunctional press]

19. you're 25 and you're bitching because you can't buy a house...?

when i was 25 i had 2 roomates and we were renting out the bottom half of a house. i didn't have a mortgage until i was 34.

[LittleBlue]

29. I work my ass off for a decent salary

I'm not rich, but I do save my money. In the area I live in a townhouse of about 1800 sq feet is $1.4 million. A 700 sq foot condo is $350k.

Neither are actually worth that much, but the irresponsible Fed and bankers have flooded the market with cheap money. Now I have to pay my tax dollars to make up for their mistake. I don't have a problem paying tax dollars to help people; I do have a problem paying to bail out banks due to risky investments. You do know that the banks strongly support this legislation, right?

[dysfunctional press]

36. i worked my ass off for a decent paycheck too- doing high-rise construction work in chicago...

i even rented a place on the "gold coast", 1/2 block from oak street beach- marylin miglin was my landlady- but i never had any allusions of actually owning a place there, or even in any of the luxury high-rises i worked on.

i honestly don't understand why ANYONE would be so pissed off at 25 about not being able to buy a place in a very expensive area- that's not how it works.

[WindRiverMan]

45. WTF ...why are you living there?

YOU need to take some accountability as well, and realize that you live in a freaking ridiculously high area. Why? Is it near the ocean? Big fancy city? Do you like the nightlife, maybe broadway shows? What's the appeal. I have a 3000 sq ft farm house, a barn, a shop (coverted into kennel house for my dogs), ten acres of land and all of it is worth a whopping 300K cause I live in bumfucked wyoming, where the wind blows like hell, the winters leave snow up to your ass, and the summer heat takes the paint off your car. I made the decision to move here because I did not feel like paying hundreds of thousands of dollars to live in a crappy ass suburb with Mr. and Mrs. Rethuglican Jones. I suffer the climate and the few ammentities my small town has to offer, but I sure do enjoy my home. I wont ever go back to city life...EVER.

[dysfunctional press]

51. we're halfway to what you have...

we sold our city two-flat, and used the 300% profit over 10 years to buy a 1-acre place on the fringes of suburbia- it's not really rural (enough), but it's probably the best i can hope for, given my physical condition. but at least we get to have a nice garden, a woodshop, and enough room to have a lab(rador retriever). next year with a little luck, we'll be putting in a pond-ette.

and who knows...in five years if we can get back what we'll have in it, maybe we can make the jump to even farther from the city. if i haven't grown to totally detest winter by then.

[anigbrowl]

66. Sounds like it's awash with job opportunities

Some people like cities because they're born in one. Other people like them because that's where you can go to get work fairly easily and make a decent amount. I live in San Francisco, which is one of the most expensive real estate markets in the US. I don't like the high cost of property here, but what am I supposed to do? My other half is a native of the town, she's not too enthusiastic about moving to LA (where I would get some business benefit) or anywhere else. We discuss the idea of buying outside SF, but I can't just tell her to up and leave the place.

[Super Soaker Sniper]

32. At 25 I was living rent free,

in an Army barracks in Korea. :)

[dysfunctional press]

63. this generation's sense of entitlement boggles the mind...

boo-hoo, i'm 25 and i can't afford a luxury condo in mid-town manhattan...WOE is me...cruel, cruel world...:eyes:

[anigbrowl]

67. Pretty dishonest of you

That's not what the poster was saying at all.

[dysfunctional press]

76. oh really...?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=3514733&mesg_id=3515317

[rox63]

24. I'm 45 and I was finally able to buy a condo 3 years ago

Until then, I was a renter. Jeebus, cry me a friggin' river... :eyes:

[msongs]

25. gee maybe yu could move somewhere housing is more affordable on YOUR budget? nt

[LittleBlue]

33. You mean away from my family?

Gee thanks for that brilliant piece of advice. I have to move away from my family because a group of bankers need rescuing.

[AlCzervik]

35. plenty of us did just that because we lived in expensive areas and couldn't to buy a house.

[nadinbrzezinski]

38. Some of us even moved across borders

talk about being away from home

[AlCzervik]

40. my bil did that, he came here from Iran in 1980 with not much but he's worked really hard

and he lived like a rat for a lot of years and he and my sister bought a house.

[FlyingTiger]

62. Gosh, you mean you might not get to have EVERYTHING you want?

How many people in the entire country haven't had to make compromises on enormously broad life goals? Maybe 1%? I doubt the number's even that high.

Here's the choice. If you're three years past college age, you can either:

A) Live in a self-described "big expensive city" without much space,

or

B) Decide that owning a house is more important to you, and buy one where someone younger than 90% of the working population can actually afford it. Oh, yes, and sway your head to the sound of the world's tiniest violin playing for the fact that you're not living close to your family, just like most of the rest of the country.

Forgive me if I can't find any sympathy for your "plight."

[LSK]

73. why would you move away from your wife and kids? bring them with???

:shrug:

[gristy]

31. I can certainly see your point

Take heart that this bailout is not going to do much to prop up the housing market. If you've been saving, you should be able to get in in the next couple years.

[Stinky The Clown]

37. Shove it up yer bootstraps, binkie

The people getting bailed out, for the most part are nothing worse than dumb, and in all likelihood just victims of a system gamed to enrichen the big developers and real estate tycoons. No speculators are getting bailed out. Just ma and pa who did what they could to better themselves.

[flvegan]

42. "Make the damn banks forgive the loans"

You don't know much about finance, do you?

Granted, I think your mental emotion is in the right place and that's a good start.

The proper thing isn't loan "forgiveness" it's loan responsibility. Loss mitigation and modification of current loans should be the absolute be-all end-all goal for the market.

The lenders and investing idiots are just too stupid to get it. Know why? Because they wouldn't know economics if it ran them over with a fucking bus.

[LittleBlue]

55. Actually, I do.

I'm a CPA who occasionally audits banks. My point is to make the banks pay for their own mistakes. Hawking negative amortization to people with no income verification is risky. The risk of loss should reflect this.

[flvegan]

59. Well then

as an asset/liability poster, you'd get my response, yes?

Who truncated the mistakes that banks made? Your problem or miss is that you're dealing with real property. Folks losing their homes.

[lonestarnot]

47. Well if your into swooping in on someone's tragedy run down to the courthouse and make a fucking bid

[Bluebear]

52. Exactly.

Self-absorbed cretins eh?

[lonestarnot]

53. arg. yes!

:puke:

[SahaleArm]

60. You should have jumped on the Ninja ARM + Heloc gravy train years ago.

That way you could have bought a Hummer and Yacht and then waited for the post-bubble Congressional loan modification. Just think a free ATM - no consequences...

[FlyingTiger]

61. Wow, somebody call the waaaaaahmbulance.

You're twenty-fucking-five and you're complaining that you can't buy a house?

Golly gee willickers, mister, you must have it rough.

[leftofthedial]

68. why do you hate America?

[Greyhound]

70. You have a valid point, but you put it very badly.

This obscenity has nothing to do with the victims of the real estate scam, but it does ensure that the lenders will not lose.

The "deregulation" of 2000(?) was necessary in order for the money running out of the stock market to have a place to hide, this caused the otherwise unjustified hyper-inflation of the housing market. It is, in fact, the only method possible to inflate house prices beyond the average citizen's ability to pay, and that in turn generated the funds to dump into the hedge funds so that the money is there to steal the work and equity of the suckers as the economy crumbles.

This was a triple play for the ruling class at the expense of everybody else. 1. steal the $$ from the pensions. 2. force the suckers into the stock market where the market makers can extract more of their money at will. 3. use those ill-gotten gains to inflate the prices of real estate and extract more money when the prices go up. 4.use that money to create an unregulated "by invitation only" club to fund buying up the remaining assets at a tiny fraction of their worth.

[dixiegrrrrl]

71. I am on your side, Little Blue

My "kids" and my younger brother are pushing 40. They live in Seattle. which became un-affordable in 1985.
They all can afford to rent small apartments, have good muni transportation, but the jobs are getting scarce, low pay, higher taxes now.
There is no way they can afford to save enuff for a house down payment.
No housing under 200 K and none of them are dumb enough to do the tiny down, huge balloon payment process.

The only reason I have a mortgage is because a relative died and left money,which, added to savings, made a retirement house affordable in the South. I had to wait until retirement to buy a house.

Versus: 1960, when a married couple on one one income could afford a nice house for 20 K, same house is now selling for 280 K.

It is NOT our "fault" that a combination of deliberate corporatist policies have added up reducing options for most people today.
I have no idea why realtors are not screaming about this. Who do they think will be buying overpriced houses in the next few years???

[Bluebear]

74. The people in trouble now, "girrrrrl", are not those that bought houses in 1960

[LSK]

72. well you could wait until your 30s, save like crazy and put 20% down???

Why are you entitled to a house at age 25????

And dont give me that expensive big city crap, I live near Chicago.

[hogwyld]

75. Spoiled much?

At 25, I was sleeping under the arresting gear of an aircraft carrier. I'm 45 now, and we moved into our house 2 1/2 years ago. Either move to a cheaper place to live, or wait 'n whine. The choice is yours.