Homeowners need to practice responsibility
Tina Griego’s column on foreclosures makes some good points (“ ‘Bad here’ as homes are lost,” July 16).
However, it would be interesting to know how many of the home buyers knew right up front that they were biting off more than they could chew and either didn’t care or expected to be bailed out by someone or something.
If you buy a home and know the mortgage payment will in all likelihood jump alarmingly high, do you plan ahead for it, saving as much as possible, or try to refinance before things get out of hand?
I’m sure some do, but I’d like to know how many of those people went out and financed SUVs, big screen TVs, ballet lessons for the kids (nice but not necessary), trendy clothes, vacations, etc.
Credit is not a gift, it’s a responsibility. I suspect that not just house payments but credit card spending contributed to a great many of these foreclosures.
Personal responsibility goes along with home ownership, as everything else in life. So I’m not so sure that I see many of these people as victims.
Marjorie Hughes, Littleton
Do not forget the low life companies that will not give citizens morgages but only illegals. How they talked them into buying a home knowing full well they could not afford the balloon payment due.
Posted by on July 19, 2007 04:46 AMif tina wrote the article I do believe I know who she was talking about with all the foreclosures. she is all for the illigals and when anything happens to them she cries.
Yep credit is earned and not a gift to anyone. there are people out there who will sell a house and finance it for you with out a credit check and when you miss a payment or two toss you out on the street.
To a large degree humans are no better than sheep. We follow quite well and do not question quite enough. When dealing with people who supposedly know more than ourselves we tend to believe what they tell us and too frequently don't read the fine print or don't necessarily understand it and are too embarrassed to asked the detailed questions to understand it. Financial paperwork associated with mortgages are designed for obfuscation and you will not find a summary page that clearly lays out what your payments will be. In most cases as you make your way through the process you get to the end and find out no one told you about all those little details that now going into your mortgage payment. By the time they get to closing they have released their rental properties or possibly sold their other homes, household goods are packed up and ready to move. To say stop is too painful and shocking at that point. Then too there are unscrupulous folks out there in the mortgage/home seller world that give buyers unrealistic expectations. I know my sibling is in a home too much for their income because of such behavior. Heaven only knows what the mortgage broker put on the paperwork to the banks because it could not have been truthful. They were in transition from military to civilian life and did not have a job yet. The home requires they make at least what they made in the military which is not always possible to do with some military career fields and in fact it hasn't happened. Were they wrong for accepting the mortgate, yes, but it was more the case of being naive and having their viewpoint and overly optimistic expectations continually reinforced by the people trying to sell them that house. Everyday we read in the paper that economy is growing, it is booming even, and everyone is supposedly benefiting but reality is that is not true. We are continually being bombarded with information that promotes unrealistic expectations of income growth when in reality many jobs are actually quite tenuous as more large companies close their doors around here. Replacement jobs are hard to come by and usually pay much less.
Posted by Kelsey on July 19, 2007 07:51 AMI am tired of people blaming the Mortgage Industry for people's choices. People signed the papers, and should have read the terms of their loan. The current foreclosure epidemic is not limited to Colorado, and was caused by a number of factors. Real estate has driven the economy and thus- rates had been artificially been pushed low to fuel the American dream of home ownership. Everyone from the annoying Realtor everyone knows to Home Depot profited from liberal loan programs. Now the price is being paid and everyone wants to jump on the Mortgage Broker and blame them.
I agree with Marjorie's comments... but also choose to leave room for sympathy toward those going through foreclosure. Not everyone in that situation is there due to poor choices. Sometimes life is hard, people loose jobs etc. Think it is ugly now wait a year... it is going to get worse!
I am tired of people blaming the Mortgage Industry for people's choices. People signed the papers, and should have read the terms of their loan. The current foreclosure epidemic is not limited to Colorado, and was caused by a number of factors. Real estate has driven the economy and thus- rates had been artificially been pushed low to fuel the American dream of home ownership. Everyone from the annoying Realtor everyone knows to Home Depot profited from liberal loan programs. Now the price is being paid and everyone wants to jump on the Mortgage Broker and blame them.
I agree with Marjorie's comments... but also choose to leave room for sympathy toward those going through foreclosure. Not everyone in that situation is there due to poor choices. Sometimes life is hard, people loose jobs etc. Think it is ugly now wait a year... it is going to get worse!
How can anyone be supprised that those among us who can't qualify for a real loan get themselves foreclosed when they can't come up with the payments on their "deal?"
And I bet Tina is the first to scream that "the system" isn't woring for all the folks when some of those same folks get turned down.
And who ultimately is asked to pick up the tab when failure spreads through the system? Yep, you guessed it. Enough said on that subject.
Owning a home is NOT a right unincumbered by responsibility.
Posted by hank on July 19, 2007 08:05 AMIf I read the article correctly,Tina and her husband need financial advice.When refinancing over and over again and taking money out of the equity over and over ,plus I thought she said she thinks she owes more on her home than the origanal price,but thinks the market in her area will make up for it. She paid $179,000 for a 922 sq, ft, home.
More than likely she paid closing costs each time ,which were probably tacked onto the loan.
If she paid closing costs she probably doesn't have that great of a credit rating.I don't think she is in a position to understand the dynamics of home ownership or to give advice or complain.
My husband and I have never paid closing costs on a re-fi. Our last closing cost us $3 notary fee for a 4,8% 15 year fixed loan.Not one penny more for closing costs and nothing was tacked on and no equity was touched.
Tina Griego needs some financial classes so maybe she will understand herself the best way to buy a home and keep paying the mortgage down ,not making the mortgage go up.
As far as the Mortgage Industry taking advantage of stupid people,they are good at it.
A mortgage company loaned my brother who has claimed bankruptsy twice,can't keep a steady job,has had about 6 cars repossed,had a tax lien on him,wasn't working at the time ,lived with a woman who makes $1,900 a month in SSD a loan for
$180,000 home loan ,with at least $8,000 in closing cost which was paid for with a 2nd mortgage on the property. The interest rate was 7.8% adjustable. They were in forclosure in 3 months. They are white and extremely stupid.Instead of paying the mortgage they were buying furniture,comuter,new big screen TV, and here's the creme' de' le' creme, 2 brand new 2006 Grand Ams fully loaded.
These people were getting money from leap to pay their utilities,because their bill was so high because the girlfriend had to keep the heat on 77 degrees because the bird liked it.
They were getting free food from any food bank they could hit.
These two are the perfect example of stupid white trash and they are still mooching of the system and will be for the rest of their lives.
So though there is a high number of illegals getting home loans then going into foreclosure,the Mortgage Industry is color blind when promising anyone with any situation they can own a home and use any tactic or lie to close that loan. They walk away with their commission and a trail of damage behind them.
Subprime mortgage lender's and rotten real estate agents need to be held accountable for this high foreclosure mess by taking advantage of stupid people.
You don't need to lie to stupid people to take advantage of them. It's what our economy is built upon. If you lie, you can get sued for lying. That's why banks and mortgage companies aren't getting sued.
Here's a novel idea: READ THE CONTRACT AND LIVE WITHIN YOUR MEANS.
p.s. It's not an immigration issue. Money is money and dirt is dirt. Lenders don't care where you come from and where you go. The money and dirt are staying.
Posted by Brainiac on July 19, 2007 09:07 AMIt is not the lenders fault I am sorry to say. The borrower has the responsibility to read and understand the contract they are entering into before they sign it.
It is the american culture to get the big house and the new cars but the reality is lending corporations are in buisiness to make money and so yes they approve some loans that are higher risk. Thank God they do. while there are those that are high risk because of stupidity there are some that are high risk because of circumstances in life.
My wife and I left a Pastoral job that provided a house and cars to us as a benefit so when we resigned we had very little reported income. New jobs and no home or car we baught a car and fiananced it then went after a home loan we got one at a higher interest rate than we would have liked but we knew what kind of money we had coming in and what our monthly payments were going to be so BEFORE signing the paperwork we worked out our entire budget. When asked if we wanted the lower payment of an ARM while tempting my wife said although it costs more per month we will take a fixed rate loan so that we know what we will be paying with no suprises.
If a consumer enters into a loan and based on their poor choices enters into forclosure there is no reason to feel bad for them. Yes things in life come up. But lenders do wor with people if there is a documented good reason (medical, or death) that may cause an issue. But overextending yourself just to get into the dream house I am sorry you bring that on yourself. What is the solution to the forclosure problem? Consumers need to quit spending what they do not have and quit using a refianance to get more cash and ARM's to get into a house they cannot afford otherwise.
So quit blaming lenders and real estate agents, it is the consumer that signs the paperwork, it is the consumer that initiates the relationship, It is the consumer that starts the buisiness procceedings, it is the consumer that has to furnish the require information and fill out the applications. So when it goes bad it is the consumer that is to blame sorry but it is the facts.
Posted by SP on July 19, 2007 09:16 AMI'm not surprised that so many people are losing thier homes in Colorado.
My wife and I are both middle managers who make decent money. We don't live an extravagant lifestyle, and we don't have a lot of debt -- but our house payment takes a huge chunk out of our income.
When I see a new family move into the neighborhood with three kids and only the father has a job, it doesn't take a rocket scientist to figure out that they are going to have a hard time making $2500 per month house payments.
When my wife and I started out, we lived in a one-bedroom house that was practically falling down. It took years of hard work to be able to afford what we have now.
That's seems to be the root of the problem: Too many youg families want to move right into a $500K home as their first house. Unless they're making really good money, few people can afford to do that.
It might be depressing to start out small -- but it makes you appreciate that big house once you have "paid your dues" so to speak.
Posted by Republican Guy on July 19, 2007 09:25 AMI mostly agree with you RG, except the part about "depressing to start small". My wife & I, social worker & graphic artist, started small and like it cozy. Being the eco-liberals and all, we rue the wasted materials & energy spent heating/cooling unusable features like the massive McMansions vaulted ceilings. (It reminds me of the t-shirt with a hamster on a wheel that says "the more you have, the more you need.")
Anyways, the mortgage company approved us for twice the amount we ultimately borrowed (we were sure they had made a mistake, but they said no) but we told our realtor our price range and stuck to it. Also, got out from under that ARM loan within 2 years & into low fixed. Now we have mucho appreciation.
This same type of story appears in papers throughout the country. What Griego and others don't tell is the other side of the story.
Obtaining a mortgage has become much easier in the last 3-5 years. As a result, homeownership has spiked tremendously.
This increase alone accounts for the majority of the increase in foreclosures.
Add to this the number of people who purchased investment property during the boom in hopes of a quick turn or to rent out. Todays sluggish market keeps the resale option off the table, and finding a renter, let alone one who'll pay enough to cover your mtg payment is hard to come by.
While the number of foreclosures has increased, the percentage of total homeowners in foreclosure has remained relatively stable.
Posted by KW on July 19, 2007 10:22 AM"POOR AND STUPID"...they will always be among us. And there will always be those among us who claim that they are "victims" of a system stacked against them.
Tina needs to take a closer look at how she and her husband nearly blew out their own brains with a potentially lethal financial bullet of their own chosing. If her column fairly presented their financial thinking regarding their own home financing in the recent past, I have little hope for their financial survival. They couldn't be trusted to make the proper change at their local Safeway. Its obvious that intelligence hasn't entered their own gene pools.
Unless lightning strikes, Tina will remain poor. She appears to be very qualified.
I love the folks who are so quick to absolve the mortgage industry (which has been 'self-policing') of all guilt in this. As a rule, you don't get the contract, written in obscure legalese instead of English, until the day of the closing. Why not allow the potential buyer to get the docs a day before closing to take them to an attorney (or legal aid) to translate them into understandable language? If you don't think the mortgage companies are counting on the naivete, inexperience - or stupidity of the average first time buyer, think again. And yes, in the past several years, mortgage companies have chosen to qualify folks who perhaps shouldn't have qualified - after all, they had the house & could foreclose & resell it. What they didn't count on was how many unscrupulous mortgage companies (and realtos, who often don't care - they get their cut up front) were doing the same thing
Posted by on July 19, 2007 12:59 PM"Why not allow the potential buyer to get the docs a day before closing to take them to an attorney (or legal aid) to translate them into understandable language?"
You can. And you can have more than just one day to accomplish this. All you need to do is request this from the mortgage co. Even if you're using a broker just make sure they know up front of your desire.
I'd much rather have to be responsible for my actions vs. having nanny government outlaw many types of mortgages simply because they feel they know what's best for everyone.
Minnesota just recently decided most alt forms of income and asset documention is above their residents comprehension so they ruled:
- All programs require that income and financial resources be fully documented by tax returns, payroll receipts, pay stubs, bank records, or other similarly reliable documents that support the borrower’s ability to repay the loan.- All AUS decision that does not require income verification (for example, LP’s Streamline Accept Plus) can not be used and all income must be documented as per bullet point one
- Stated Income, No Ratio, NINA, No Doc and SISA loans are no longer allowed.
- NegAm loans are no longer allowed
- Loans with Prepayment penalty are no longer allowed
As I said earlier, foreclosures as a percentage of total homeowners hasn't really changed. But those who wish to have more control over you and your mortgage decisions would hope you believe it's all the lenders fault.
Posted by KW on July 19, 2007 02:17 PMHow many people take a calculator to closing and actually crunch the numbers themselves or even know what they are reading and signing
Almost everytime my husband and I have bought or refinanced a house the numbers were wrong,except our last loan.
My husband luckily is a math genius and a former real estate agent when we lived back east. So we have no problem when buying,selling or refinancing a home.
We bought our 1st home when I was 21. We refused to sign anything until our real estate attorney looked at it and explained what we were signing. At that time we were not familiar with buying a home.
In Maryland it is normal to have a real estate attorney for buyer and seller do the closing.Perhaps that would be a good idea for people who don't understand how to buy or sell a home. Hire a real estate attorney to protect you.
The first person a home buyer comes into contact with is a real estate agent. If they are honest they will look at a buyer's financial situation and tell them truthfully whether they can afford to buy a home or not.That is not happening. The crooked real estate agents are setting up
Sounds like Amen's brother didn't fall too far from the tree...
Posted by AWP on July 19, 2007 02:30 PMI agree with KW.... the market for a while was too speculative, with too many jumping in looking for fast wealth and/or not planning accordingly in terms of their finances. Foreclosures are a consequence of such frenzied behavior.
It's terrible that a family may have to endure a foreclosure, but hopefully they will take the time to learn from the process and be better educated the next time they choose to buy a home.
Posted by Dan on July 19, 2007 04:39 PMThe letter writer is right, credit is a responsibility it is not a gift. Too bad for the lenders that they treated credit as a gift giving it to poor credit rating consumers in order to gain an extra buck in the form of higher interest rates.
These are sophisticated businesses who should have known better. It is apparent that their greed had overcome their sensibilities and started lending money to people who cannot manage to pay off their home entertainment system let alone their house.
AWP, How did you come to that conclusion. If you read my prior posts,you would have read that my husband and I know exactly what we are doing when buying or selling a home.
By the way is your credit so good that when interest rates were 6% you had banks sending you by UPS letters for a 4,8% 15 year fixed loan ,with not one penny closing cost? I highly doubt it.
By the way what's your mortgage situation or can't you afford one.
I owned my own business at age 20 and bought my 1st home at age 21.I am now in a situation where our finances are great so I can stay home and raise my children and we are fully insured and always have been.
You sound a little pitiful.
Posted by Can I get an AMEN! on July 19, 2007 07:25 PMNice try Tracey, but my mortgage was paid. In full. By the time I was 38.
Posted by AWP on July 20, 2007 08:47 AMKW said:
Obtaining a mortgage has become much easier in the last 3-5 years. As a result, homeownership has spiked tremendously.
This increase alone accounts for the majority of the increase in foreclosures.
KW, you're right, although I would say it's been easier to get for longer than 3-5 years now...I remember when I first moved to Colorado in 2001, I was getting door hangers every day advertising for mortgages.
And the reason it's so easy to get a mortgage these days is because of the major deregulation of the lending industry that started back in the eighties, I believe. Once they let states determine interest rates on loans (credit card loans, too), we saw a major increase in credit usage in this country.
So for all who are harping about people not having personal responsibility these days and who want the "$500K" house, it's not that people have changed...it's that lending laws and rules have changed.
Posted by mytwosense on July 20, 2007 11:19 AMToo bad for the lenders that they treated credit as a gift giving it to poor credit rating consumers in order to gain an extra buck in the form of higher interest rates. These are sophisticated businesses who should have known better.
Should have known better? Why do you think they're loaning so much credit to such high risk customers? Please, they know exactly what they're doing: making a hefty profit off charging high interest rates and late fees, and then eventually owning the customers' homes through foreclosures. A cycle known in the industry as "Loan To Own."
You can always count on Can I get an AMEN! for a sanctimonious letter.
Posted by ssdd on July 20, 2007 03:47 PMI see the trolls are out.
Posted by on July 21, 2007 10:35 AMDid any of you read in the Rocky this week about the illegal who bragged to his neighbors that the house he was in was the third one he bought with false (stolen) ID ? That last one he bought he stripped of all the copper before he skipped out on the mortgage AGAIN. It seems some have the process down pat and we keep letting them. Who is stupid????
Posted by C on July 21, 2007 11:21 AM