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TMFBent (99.85)

The Poor Victims...

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November 16, 2008 – Comments (10)

New York Times, official home of bleeding-heart reporters who can't tell the difference between stupid financial decisions, unsupportable greed, and untenable costs of living.

In June 2006, the couple headed south and bought a house for $220,000 in Tamarac, Fla., with no money down. Five months later, their tenants in Michigan stopped paying, and the family had to carry two mortgage payments, just as the adjustable-rate mortgage on their Michigan home reset to a higher interest rate. They lost the Michigan home to foreclosure in February 2007...

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Bankruptcy lawyers report that they have been having more consultations with middle-class families with six-figure incomes — including many who either bought a home during the boom or pulled out most or all of their available home equity just keep to up with the cost of living...

“There are a lot of foreclosures that haven’t taken place yet because people still have available credit,” said Jeffrey H. Tromberg, a bankruptcy lawyer in Fort Lauderdale, Fla. “We don’t see them until they’ve maxed out their credit cards.”

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“My clients are basically good people that got into a home the best way they could and can no longer meet their obligations because their income has gone down,” said Roger P. Croteau, a lawyer in Las Vegas who concentrates on bankruptcy. “There is no equity to pay off their credit cards, and they are maxed out. They haven’t saved enough because of housing costs.”

Ellen Stoebling, a bankruptcy lawyer in Las Vegas, added: “People are using their cards to try and hold onto their property for as long as possible in hopes they can somehow talk some sense into their lender and stay in the property.”

See? It's nobody's fault. They were all doing the right things. It's just that it didn't work out, so the rest of us, who were lucky enough not to have borrowed more than we can afford, should fix this.

Dudes, this is pretty screwed up right here...

 

10 Comments – Post Your Own

#1) On November 16, 2008 at 2:49 PM, johnw106 (61.34) wrote:

Ok I admit I am clueless. How can someone on a six figure income not be able to keep up with the cost of living? Do people like this ever consider buying a 15,000 Chevy and sell or trade the 50,000 Cadilac? Maybe cancel the subscriptions to the country clubs and spas? By pass the 500 dollar dinner at the chic resturant and go for thr 40 dollar dinner at the Outback?

And then after they drain the equity out of the property and max out six credit cards; they wonder why the economy is in the tubes and the 300k house they took out a 600k mortgage on will not sell for 700k because they added a 15k swimming pool.....

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#2) On November 16, 2008 at 3:31 PM, starbucks4ever (99.54) wrote:

So the cost of living has gone past the six-figure threshold? How very interesting. If $100,000 a year has not been enough for them to keep their stomachs full, then you've got to wonder how come  blue-collar workers making $30,000 a year are still in the land of the living :)

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#3) On November 16, 2008 at 5:22 PM, ikkyu2 (99.51) wrote:

Clearly the problem is stated right there in the article: the lenders have no sense!  They're wanting to foreclose because they're not getting their payments!  How senseless of them!  We better talk some sense into those lenders right away!

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#4) On November 16, 2008 at 5:36 PM, milpo (95.77) wrote:

It is not how much money you make but how much you are able to keep.  We all know that.  Unfortunately, the idea of dumping a house is a hell of a lot easier theoretically than realistically.  The marketplace is frozen.  It is not that there are no people out there willing to buy your house for $200,000 when you paid $350,000 with a 10% down payment, it is just that they can't find a mortgage. 

And yes, it is  precisely the banks unwilling to renegotiate.  Drop the interest rate and extend the term.  Why not?

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#5) On November 16, 2008 at 6:00 PM, russiangambit (29.94) wrote:

> then you've got to wonder how come  blue-collar workers making $30,000 a year are still in the land of the living :)Actually, I do wonder. If they spend $500-600 a month on food, $1000 on shelter, $100 on clothes, $100 on utilities $200 on gas per month per family, and that is a bare minimum for family that is $2000 a month. I am sure I am missing some other necessary expenses here, like medicine and such. It will easily go to 30K a year. I am assuming they pay no taxes, and so other subsidies them through property taxes and income taxes. So, in reality 30K is not even enough to live on , they get hidden subsidies from other tax payers to the tune of 10K a year at least.

 

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#6) On November 16, 2008 at 7:40 PM, johnw106 (61.34) wrote:

Milpo. I was reading an article in my local paper Friday. It seems a lot of mortgage/real estate brokers here in Florida have a big problem. They have the loans lined up. They have banks with ready cash at good rates. Its the sellers who are gumming things up.
The sellers refuse to accept that the houses they bought at the top of the bubble for , example , 300k are now priced at 250k. The sellers simply refuse to sell for less than their asking price. Many have added small additions or maybe a pool,new sod in the yard etc. And they cant get it through their head that the bubble market has popped and that the property has gone down in value even though they have improved the lot.

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#7) On November 16, 2008 at 10:57 PM, devoish (98.73) wrote:

The sellers simply refuse to sell for less than their asking price

Seems a similar issue exists with the sellers of cars, the sellers of engineering services, the sellers of financial services, the sellers of burgers, the sellers of furniture, the sellers of manual labor, the sellers of executive services, the sellers of fruits and vegetables...

Why why why must we all resist another step backwards. If all you others would just move a little step back it would mean I got ahead.

I love Free Markets marketing.

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#8) On November 17, 2008 at 12:18 PM, guiron (21.61) wrote:

Well, the couple may have a point. The lender has an investment, and a foreclosure on a house with less value than the loan, and in a tough selling environment is going to be a pretty bad outcome. The lender would probably do best by trying to work something out, if they value the investment.

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#9) On November 17, 2008 at 2:43 PM, saunafool (98.64) wrote:

johnw: Bypass the 500 dollar dinner at the chic resturant and go for thr 40 dollar dinner at the Outback?

Dude, you've got to be kidding. Outback? Really?

Seriously, I really don't like this bailout business. I'm coming to the conclusion that no bailouts for anyone is the right answer because it seems that when you approve bailouts for greedy Wall Street wankers, then everyone "deserves" a bailout.

That is, of course, except for financially responsible individuals who didn't buy more house than they could afford and don't have any other debts. I think all of us responsible suckers are going to be pretty hacked off for the next several years.

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#10) On December 05, 2008 at 3:08 PM, WeenTang (54.59) wrote:

It's not like the government will get out of hand with the bail outs. I mean, it's not like everyone will be talking about whether a $700 Billion financial bail out is too much then argue for weeks over a $25 - 34 Billion Auto bail out, only to wake up one morning and find out the Imperial Government has pledged $8.6 TRILLION through a laundry list of bail out programs.  Something like that would NEVER happen.

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