Halloween Is Gonna Suck This Year.......
- Thread starter Moparlady
- Start date
Dr.Jass
Pastor of Muppets
Well, had they not given mortgages to those for whom a simple credit check would have proven they couldn't afford to own a home, we wouldn't have this problem. Now the federal government wants to spend our money bailing out Fannie Mae and Freddie Mac, including giving them money for "endangered" loans that haven't even defaulted yet? Perhaps not... I pay enough taxes already. Thank God my mortgage has nothing to do with either of those organizations.
If your brain is working on drawing a parallel with the federal government and the Chrysler Corporation in the late '70s, stop now. The U.S. of A. did not give Chrysler one red cent in that bailout. They simply guaranteed loans to Chrysler so it could get back on its feet. The only taxpayer money spent on that was paying the people who signed the paperwork. Chrylser repaid those loans something like a decade early, too.
If your brain is working on drawing a parallel with the federal government and the Chrysler Corporation in the late '70s, stop now. The U.S. of A. did not give Chrysler one red cent in that bailout. They simply guaranteed loans to Chrysler so it could get back on its feet. The only taxpayer money spent on that was paying the people who signed the paperwork. Chrylser repaid those loans something like a decade early, too.
learical
While I'm in this straight jacket, I can't be
A bit of an over-simplification. "hey, your credit isn't so good right now, but you're back on your feet. On a conventional loan, you can't afford this house, but we'll do an interest only loan for the first two years. You make all your payments on time, and your credit will be great in 2 years. We'll refinance you before the balloon payment hits, and you'll be fine." Except who knew that the house now won't appraise for what it did 2 years ago? So you can't refinance. so you lose your house.
Dr.Jass
Pastor of Muppets
Not really... that's why credit checks go back a minimum of 7 years: "Wow, you trashed the shit out of your credit six years ago, but now you're doing OK. Still, we have no reason to believe you won't trash it again, so even though you look pretty good at the moment, TFB. See if you can maintain this trend for a couple years now that you've got that higher-paying job, but your history shows you'll end up living beyond your means again and will have credit trouble again shortly."
I demolished more than half the interior of my house, and with it still in that state it appraised for more than the amount I paid to own it when the market went soft. Housing prices may stagnate, and they may even dip a little here and there, but they never, ever drop and stay there. What's the standard balloon? 15 years? I've never heard of one less than five, and that guy had extraordinarily bad credit in the first place.
When I bought this place my credit was horrible... that's why I bought this place. It was cheap, and I knew that I could make the payments if I had to flip burgers to do it. The bank through which I went realized why my credit was bad (divorce) but had enough faith in me to take on the mortgage if only because they knew me personally.
On the other hand, in the last few years Freddie Mac and Fannie Mae have been giving away mortgages like it ain't no thang... including refinancing. They refinanced a friend's house out to $55,000, even though the place is worth $30K on its best day.... they tossed in the extra for improvements he'll never make. He did the refinance because he wanted a truck, which he got by using the "improvement" money. If he defaults on the loan, his credit may go to hell and he'll lose the house, but the truck is his and no one can touch it, because he paid green cash money he got from Fannie Mae. He accomplished this even though his credit rating was worse at the time than mine has ever been. He'd been in foreclosure twice on that very property twice within the last 7 years.
At no point did anyone say, "We're gonna check back in a year, and if those improvements haven't been made, we're gonna go Mogul on your ass."
They gave away money that they had no way of covering or recovering. He's not even close to being the only case of such stupidity. Sad thing is, now that I'm considering doing a refi to legitimately improve my home, I probably won't be able to do so because of loans like that.
I demolished more than half the interior of my house, and with it still in that state it appraised for more than the amount I paid to own it when the market went soft. Housing prices may stagnate, and they may even dip a little here and there, but they never, ever drop and stay there. What's the standard balloon? 15 years? I've never heard of one less than five, and that guy had extraordinarily bad credit in the first place.
When I bought this place my credit was horrible... that's why I bought this place. It was cheap, and I knew that I could make the payments if I had to flip burgers to do it. The bank through which I went realized why my credit was bad (divorce) but had enough faith in me to take on the mortgage if only because they knew me personally.
On the other hand, in the last few years Freddie Mac and Fannie Mae have been giving away mortgages like it ain't no thang... including refinancing. They refinanced a friend's house out to $55,000, even though the place is worth $30K on its best day.... they tossed in the extra for improvements he'll never make. He did the refinance because he wanted a truck, which he got by using the "improvement" money. If he defaults on the loan, his credit may go to hell and he'll lose the house, but the truck is his and no one can touch it, because he paid green cash money he got from Fannie Mae. He accomplished this even though his credit rating was worse at the time than mine has ever been. He'd been in foreclosure twice on that very property twice within the last 7 years.
At no point did anyone say, "We're gonna check back in a year, and if those improvements haven't been made, we're gonna go Mogul on your ass."
They gave away money that they had no way of covering or recovering. He's not even close to being the only case of such stupidity. Sad thing is, now that I'm considering doing a refi to legitimately improve my home, I probably won't be able to do so because of loans like that.
