If all of these banks and lending 'institutions' are evicting people and foreclosing their homes

[DainBramaged]

who is going to be out there to buy them? Have any of these buttholes asked themselves that question? No one is buying anything now.


What the hell is going on here? What is the plan? How could they be so fucking stupid to have abandoned property in such massive volumes on their hands?

[Idealism]

1. Realistically, these homes now sitting empty,

shouldn't have been built in the first place. Just because Bush said universal ownership is a good thing still doesn't mean everyone is qualified or entitled to own a home.

[jwirr]

4. They would have been perfectly fine if the loans had been made

under the kinds of regulations the existed when our grandparents bought their homes through government housing programs. What is going on here is not more housing than we need but the MCMansion syndrome. Many people were given loans for homes that were too expensive for their budgets. This means that when they should have gotten a smaller home they were encouraged to buy bigger and more expensive. Drive through a small town someday and look at the older homes. Many of them are tiny two bedroom homes. That is what our grandparents bought for low interest and 30 year loans.

[Idealism]

8. The problem wasn't the loans

The problem was us. If we had good enough credit, assets, and income-to-debt ratiots, we could've gotten a real, legitimate mortgage (15/30 year fixed), but people most Americans don't have good credit, are in debt up to their eyeballs, and one paycheck away from bankruptcy, who would be able to qualify for these homes you speak of? Yes the loans they packaged them to us were terrible, but we wouldn't have gotten the worst pick of the mortgage-types litter if we didn't have such shitty credit to warrant a special "baloon" mortgage just to get us into a house.

[jwirr]

9. I never found credit for housing that easy to get. That is why I am homeless.

I do know that you are right for some people but I wonder what is meant by predatory lender if it is not something the lender is doing?

[Idealism]

10. Predatory lending is a nice catch-phrase really

Its another way for the public to blame everything on "the other guy" and to shift responsibility onto an evil entity. Think about this, do mortgage brokers come to your place of work to sell you a loan? No, at some point you went to them thinking you deserved a home. No one is clean in this scam, just some people played bigger roles than others.

[jwirr]

16. No, realators steer us toward them.

[Stephanie]

12. You're blaming the victims of these fraudulent, predatory lenders?

These companies use bait and switch tactics, then they raise the rates, raise the payment, make it impossible for the homeowners to pay, THEN they blame the victims for falling for it. How do they expect people to pay when they do everything in their power to force them into a position where they CANNOT pay?

[Idealism]

15. Please understand something

We came to them first. What made us think, with a $15/hour job with 20k in credit card debt that we could afford a $350,000 house? Why did we need a house? Why did a migrant strawberry picker who speaks no english think it was okay to borrow every cent needed to buy a $720,000 house? If you don't read the fine print in a mortgage contract you shouldn't be allowed to sign the papers for it. When has this market not been 'buyer-beware?'

I am not solely blaming the victim, I blame everyone of us who was involved. From the gullible purchaser of the mortgage, to the dishonest loan originator, to the corrupt property appraiser, the ignorant rating agencies, and finally the utter contempt the banks who underwrote this paper showed for risk. To call this a ponzi scheme would be to not do it justice. Half of these financial geniuses even on Wall Street didn't understand why this junk paper was rated AAA, or why it was so profitable- it didn't matter to them to figure out the "why" unless it didn't perform like they were told it would. There was a great deal of people who were caught saying "this won't ever happen" and not enough people trying to slap them around.

[HughBeaumont]

14. I bought a 50-year-old 4-bedroom home for 108,000.

I'm surprised as all hell that I was able to get it, considering 4 bedroom is 4 bedroom no matter what the age. But it's just as I was talking about in this thread; the 1200 sq/ft home is no longer in vogue even as a starter house and builders just aren't going for "modest" any more. Granted, my home needs work, and we're getting a lot done, but it's just amazing how no one wanted homes like these when they were available.

My house is relatively easy to clean and keep up and my mortgage payment is a breeze compared to the 4-digit monthly income-suckers people are saddled with to pay for that McCastle they feel the need to have.

[DoctorMyEyes]

2. They should have worked out payment plans

It was in everybody's best interest to make a deal. Empty houses fall apart quick and foreclosure is expensive.

[DainBramaged]

3. That's my point, vandals, weather, garbage, there goes the neighborhood

[DoctorMyEyes]

5. And it's a GOOD POINT!

Our current house was a previous foreclosure, from before the "bubble" burst. The bank spent a ton of money doing the foreclosure and ended up selling it to HUD for practically nothing. We bought it through HUD for much less than the previous owners had purchased it for several years prior.

If the bank had let them sell at a more realistic price (like the one we paid) they wouldn't have lost any more than they probably did in the foreclosure process itself.

This house sat empty with a weedy overgrown yard for two years. It was a blight on an otherwise decent neighborhood. We were lucky to still have our plumbing and stained glass windows when we moved in. Someone stole most of the antique oak trim and teenagers had been hanging out in the back lot drinking and smoking.

I can only imagine the havoc having a dozen houses like ours was simultaneously being uncared for and screwing up a neighborhood.

Edited to add: I live in Pittsburgh and Pittsburgh has a particularly fucked up set of ordinances and tax laws that actually provide an incentive for homeowners to just cut their losses and walk away from their houses.

[MadMaddie]

13. Many cities are requiring the banks to maintenance the empty

properties because they are becoming magnets for illicit activities. If the banks don't keep uup the property they start getting fined.

[Independent_Thinker]

6. Every railcloud hides a rainbow ...

I am in San Diego, CA and the sales of homes has been pretty brisk here. The price drops have allowed a lot of first time homeowners to get into homes. Also, as an economist, anytime the market correct itself to properly price assets is a good thing. I personally think that a lot of folks got into homes that they should never have - bad lenders, cheap money, and banks making stupid decisions for a profit and not for the longterms benefit of the shareholders. this caused the run up in the home prices. take for instance a guy that works for me. he is mid-level management and makes about 100K/yr. He purchased a home for $950K and is now being transferred to an office overseas. he will probably loose the house, but I think that getting three mortgages and paying out over 5K/month in mortgage shows studpidty. Not sure we should bail out the stupid. But the prices here have dropped a little bit and sales are going pretty good.

[aquart]

17. And West Nile virus in deserted swimming pools and ornamental ponds.

[Ilsa]

7. In some cases, the banks will rent them out until the market

improves, and then they will sell the properties. I've seen it done before; I worked in a workout bank in the late 1980s. It was brutal.

[gravity]

11. That is why we are in the mess to begin with

When banks gave out the loans to begin with, they assumed the worst case scenario was that the house were to foreclose and they would recover the costs of the loan selling the house. Now that they can't recover the costs, banks are in deep shit.

[defendandprotect]

18. Obviously, they're not maintaining. nor securing the properties ...

what about insurance ...

who's monitoring any of this--???