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Who brought a check to both Home Closings?
Old 10-31-2008, 06:56 AM   #1
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Who brought a check to both Home Closings?

Back in 1996 when we sold our townhouse for 122K and owed 126K I had to bring a check to the closing for over 6K. We had purchased the townhouse in 1987 at 150K and the place lost value at that time, the last housing downturn before the run up. We never complained we just worked more saved more money paid our mortgage never took out home equity to buy Stuff and then bought a new house that was 245K that day and put down 20K that we saved and lived in it until 2006 just before the market died and sold it for 550K. Again we had never taken out home equity and when we sold it we owed 211K. Our new place has lost value, we bought for 335K and if we had to sell maybe 270K but we have no mortgage and no home equity lines on the house taxes are 250 a month so why should we bail out homeowners?? Why can't these people pay their mortgages and refinance?? Crazy, but I lost money back in 1996 on that townhouse but never complained. Am I being stupid for not wanting the government to bail anyone or any company out??
Kinda see this happening in many places..

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Old 11-01-2008, 05:50 PM   #2
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Refinancing is a problem because lender's did not want to refinance an upside down loan.

Sometimes people don't have enough money to pay, especially if interest rates went up. Or they lost a job. Or their budget was too tight.

But we don't bailout because of individuals, we bailout because of the effect on the nations economy if we do not.


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Old 11-01-2008, 06:23 PM   #3
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Originally Posted by Yankees Rule View Post
Am I being stupid for not wanting the government to bail anyone or any company out??
This reminds me of when Trump was going bankrupt - he told the banks I owe you too much for you to let me fail; so extend me credit.

I don't think you are stupid. It all depends how the program is administered.

Originally Posted by Yankees Rule View Post
Kinda see this happening in many places..
It is called the victim society. I was a victim of X and not responsible for my decisions, so help me.

I remember the concept starting with the idea that the criminal is not responsible for his actions because his actions were a result of his environment - society.
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Old 11-01-2008, 07:42 PM   #4
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Whether to have a bailout is not the question... it's been decided. The question is where the bailout money will go: to the corporations or the homeowners. I tend to believe that giving it to homeowners would address the country's woes more efficiently. Foreclosures waste perhaps 10% of the property value in frictional costs to real estate agent (6%), closing costs, legal fees, and oversight of the foreclosure process. Not to mention the few percent that the buyer will need to pay in closing costs to get back into another property down the road, a few percent for moving, and a few percent for other transition costs like furnishing the new home and lost work time to move. So if a bailout payment of a few percent of the property value can save the banks from taking the 10% hit, and save the homeowner another 10%, that's better for all than just handing the bank 10% in cash and going ahead with the foreclosure.

Most homeowners do not have enough financial education to understand the vagaries of how home prices can vary. And even if they were to get that education many wouldn't have the intellect or interest to take it to heart and really understand the risks they were taking with the leverage of 95% or 100% financing and adjusting rates. So most homeowners bought their homes on faith that the "wise" knew what was right for them. One of the major "wise" authorities was the US government, which pushed homeownership on its citizens by creating Fannie and Freddie to make homeownership more attractive.

I'm not defending the homeowners who took more risk than they should have; I've always been more conservative with real estate investment than others and it pains me to see others getting bailed out. But the reality is that most people really didn't know, and didn't have the capacity to know, what they were getting themselves into.
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Old 11-02-2008, 04:32 AM   #5
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I did, several times. Purchased last 5 homes for CASH. Why can't I get a BAIL OUT?
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