Who is Responsible?

[dellinger63]

Is it a homeowner who is up to date on mortgage payments? One who is up to date on their mortgage and also has never missed a payment? What about a former homeowner who though taking a slight loss, sold a few years ago and has been renting ever since?

Let me share a story told to me by a fellow DT’er who wants to remain anonymous. Don’t remember if it was emailed, private messaged or spoken but that doesn’t really matter. A Dter and anonymous is all that’s important.

In the swank, Spanish Trails’ subdivision of Las Vegas two almost identical families moved into neighboring homes bordering the 17th Fairway paying $1 million each in the summer of 2001. There was trouble from the start as although neighbors, the Black and the White family never got along, had nothing in common other than their six digit salaries and although civil to each other were far from friendly.

In the Spring of 2008 Mr. Black became concerned over the fact he had lived in and paid the mortgage on a million dollar home yet after its value had risen to $1.25 million the home across the street put up for six months at $1.1 million hadn’t sold. He also began reading news articles of mortgage companies that were going out of business and forecasts housing prices weren’t going to rise anytime soon and may continue to go down.

The Black’s put their home up for sale, the Summer of 2008 asking $1 million and several months later when weighing their options accepted a low ball offer of $900K, losing 100K in the process. Rental homes at the time were very reasonable and got cheaper every year after. Although it was a hassle moving every couple years, and they were living in ‘someone else’s home’ the Black’s made do and Mr. Black knew he had made the responsible decision for his family.

Meanwhile Mr. White was so unconcerned that same summer he refinanced his mortgage and used the equity he had attained over five years to build a backyard pool and spa. After all his nemesis next store would be moving soon and it was time to celebrate.

Skip ahead to February of 2012 when, during a speech, President Obama declared it is the responsibility of American’s to take care of homeowners, who because of no fault of their own, have watched their home values diminish and are now upside down on their mortgages. He further explained that Las Vegas was among the hardest hit in the nation with values cut in half.

While Mr. White celebrated, Mr. Black responsibly vomited.

[jms62]

Originally Posted by dellinger63

Is it a homeowner who is up to date on mortgage payments? One who is up to date on their mortgage and also has never missed a payment? What about a former homeowner who though taking a slight loss, sold a few years ago and has been renting ever since?

Let me share a story told to me by a fellow DT’er who wants to remain anonymous. Don’t remember if it was emailed, private messaged or spoken but that doesn’t really matter. A Dter and anonymous is all that’s important.

In the swank, Spanish Trails’ subdivision of Las Vegas two almost identical families moved into neighboring homes bordering the 17th Fairway paying $1 million each in the summer of 2001. There was trouble from the start as although neighbors, the Black and the White family never got along, had nothing in common other than their six digit salaries and although civil to each other were far from friendly.

In the Spring of 2008 Mr. Black became concerned over the fact he had lived in and paid the mortgage on a million dollar home yet after its value had risen to $1.25 million the home across the street put up for six months at $1.1 million hadn’t sold. He also began reading news articles of mortgage companies that were going out of business and forecasts housing prices weren’t going to rise anytime soon and may continue to go down.

The Black’s put their home up for sale, the Summer of 2008 asking $1 million and several months later when weighing their options accepted a low ball offer of $900K, losing 100K in the process. Rental homes at the time were very reasonable and got cheaper every year after. Although it was a hassle moving every couple years, and they were living in ‘someone else’s home’ the Black’s made do and Mr. Black knew he had made the responsible decision for his family.

Meanwhile Mr. White was so unconcerned that same summer he refinanced his mortgage and used the equity he had attained over five years to build a backyard pool and spa. After all his nemesis next store would be moving soon and it was time to celebrate.

Skip ahead to February of 2012 when, during a speech, President Obama declared it is the responsibility of American’s to take care of homeowners, who because of no fault of their own, have watched their home values diminish and are now upside down on their mortgages. He further explained that Las Vegas was among the hardest hit in the nation with values cut in half.

While Mr. White celebrated, Mr. Black responsibly vomited.

^^
Exception == Rule

[Danzig]

Originally Posted by jms62

^^
Exception == Rule

i seriously doubt that when talking of underwater homes, million dollar properties on golf courses are what is in the mind of the president.

of course talking of countless small properties up and down main street and winding country homes just isn't quite as fun to think about, is it? nor the fact that people who can't sell their current home due to lowered values certainly aren't in the market for their next purchase either. multiply that by thousands, and then go talk to construction companies and their employees and then get back to me. you can also talk to the businesses and industries who are hurting because there is no demand for building materials.
none of that is exactly sexy, but it's the current climate....and once again, while american workers suffer, banks make .

[dellinger63]

Originally Posted by Danzig

i seriously doubt that when talking of underwater homes, million dollar properties on golf courses are what is in the mind of the president.

:.

In order to save an average of $300/month, which is what the President used as an average what size of mortgage are we talking?

To refinance from 6.5% down to the current 3.87% you would need to be in the 200K range for 30yrs. From 5% to 3.87% in the 500K range. Not value mind you just amount of loan.

[Danzig]

all i know is the current interest rates on 15/30 year mortgages are great. we refinanced just to cut time off, i'll pay the house off in half the time with barely an increase in monthly payment.
the issue isn't underwater-most people owe more than the house is worth when they make the purchase because of no money down.
the issue is when they get ARM's and the payment goes thru the roof and they can't afford it when it jacks up. i have fixed, and would never, ever have done otherwise. anyone who did is paying now-thru the nose. or they give up and give back their house.
right now the rent demand is incredible, so rent will rise. eventually it'll price people back into buying again because it'll be cheaper.

he's probably referencing people going from a high interest rate due to an ARM to a lower fixed. that would save a lot of people a lot of money.