Use access key #2 to skip to page content.

HarryCaraysGhost (75.65)

Forcloseure- A case study



May 14, 2010 – Comments (4) | RELATED TICKERS: HOV , C , BAC

The following story is true, only the names have been changed to protect the innocent

Today I was speaking with a freind of mine from work, he mentioned that he had a court date for a foreclosure hearing coming up. Basically he was looking for my sympathy, and wanted my rally cry against the banks.

This seemed odd to me since we earn roughly the same amount, and even though our hours were cut last year with a little belt tightening I was able to manage. As it stands now were back up to 40 hrs/wk and since theres a backlog of orders that means O.T

Heres the Q&A

Q: Dude why, what kind of mortgage did you get

A: 30yr fixed at %6

Q: Okay... so whats your monthly pament.

A: (not going to disclose that here but it was about %70 of his monthly income)

Q: why so high, what was your down payment

A: I got an FHA loan at %3 down

Q: Dude what are you nuts, If I recall you had money after you bought, actually you probably put $15 grand in renovations into the place. Why did you not just pour your entire life savings into the down payment. Then you could probably recoup it all in 6 mnths while paying less then rent.

A: Well the banks were offering me and even bigger loan and I thought I might be able to flip that house and get an even bigger one.

Q: So what was the caliber.

A: Huh

Q: The caliber of gun they held to your head while you signed the papers.

A: (Expletive deleted)

Q: So what are your plans now, and do you have any credit card debt and at what rate.

A: I owe 3 grand at %19 on my credit card (upon seeing my look of horror he quickly said) but thats down from the 10 grand I owed. Not paying a mortgage I was really able to put a dent in that credit card bill. But going foward I plan on living in the house that I no longer pay for and drag it through the court system for as long as possible. Then take everything that is not nailed down and pawn it.     Phase III of my masterplan, move my family of five into a small apartment (obviously I'm paraphrasing)

Q: So because you have the financial intelligence of a one-handed retarded monkey, your willing to shirk your responsibilities- knowing full well that you are a detriment to society and contributing to your childrens misery. ( it's always fun when you can quote UltraLong in real life :)

A: well this is where the conversation turned ugly, what was said after is not suitable for reprint on Caps


My heart goes out to all the people who lost their homes due to layoffs or illness, but I have no sympathty for those who feel that the system owes them, while having a complete lack of financial skills.

4 Comments – Post Your Own

#1) On May 14, 2010 at 5:46 PM, AltData (32.00) wrote:

You should turn him on to the Motlet Fool and send a copy of the 13 Foolish steps.

Maybe a recovery group could be started. ( Hello, my name is________, and I've been living below my means for ________ weeks. I am now on the ________ Foolish step.)

Mismanaging money is sad and the withdrawal symptoms from being addicted to credit can be ugly.

Report this comment
#2) On May 14, 2010 at 5:48 PM, AltData (32.00) wrote:

Poor spelling is sad too.

"Motlet" is Motley.  Duh!

Report this comment
#3) On May 14, 2010 at 6:46 PM, HarryCaraysGhost (75.65) wrote:

Blesto yes it is sad. what really ticks me off is that he knows that I would have been more then willing to sit down with him and pour over all the numbers and figure out the best plan for his financial future.

I think he did'nt ask because deep down he realized my answer would have been much like a parent telling their child they can't have more candy. No young man you may not buy things that you cannot afford! I guess instant gratification was more alluring.

Maybe I will turn him on to The Mullet Fool (kidding :)


Report this comment
#4) On May 15, 2010 at 8:28 PM, sholessjoe1919 (97.99) wrote:

Step 1Change Your Life With One Calculation

Our nomination for the eighth wonder of the world goes to… the formula for compound interest! Quite simply, this basic… more »

Step 2Trade Wisdom for Foolishness

Who would deign to call themselves a “Fool”? Certainly not anyone from the world of Wall Street. We, on the other hand,… more »

Step 3Treat Every Dollar as an Investment

Imagine what it feels like to know that every single dollar decision you make is the right one. Imagine no more. With a… more »

Step 4Open and Fund Your Accounts

IRAs, 401(k)s, CDs, MMAs, oh my! Here are step-by-step directions on what to put where and, roughly, how much and for… more »

Step 5Avoid the Biggest Mistake Investors Make

Fools are investors, not speculators. We’re buy-to-hold, business-focused investors with a long time horizon. Our… more »

Step 6Discover Great Businesses

Stocks aren’t pieces of paper, but stakes in a living, breathing business. Fools look for well-managed companies… more »

Step 7Buy Your First Stock

You’ve paid off your credit cards, open and funded your brokerage account, and done your research. It’s business time!… more »

Step 8Cover Your Assets

Don’t forget the Fool’s four rules for asset allocation: Don’t invest money that you’ll need in the next year, invest… more »

Step 9Invest Like the Masters

There’s more than one way to skin a cat. Growth guru Peter Lynch, value kingpin Warren Buffett, and global maven Sir… more »

Step 10Don't Sell Too Soon

Selling a stock is just as big a decision as buying. There are five primary reasons to cut bait with a stock: You find… more »

Step 11Retire in Style

Retiring in style rests on making the most of tax-advantaged savings vehicles like your 401(k) and IRA, investing in… more »

Step 12Pay It Forward

Foolishness doesn’t stop with you, friend. Pass on the good money-saving/money-making mojo to three friends who could… more »

Step 13Make friends and influence Fools.

The Motley Fool isn’t some static web page or a set of articles, but a dynamic, thriving community of Fools just like… more »

Report this comment