Project Lifeline - More Mortgage Welfare

Oh my! You wish it were so, but alas it is not, poor PissStain.

Pouvre, pouvre PissStain!
 
Watermark said:
It's easier sitting on your couch at home to condemn and say it'd never happen to you than to actually go through the situation.
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I can never tell when you are trolling or when you are serious. Anyone who has bought or has attempted to buy a home/condo has gone through the same thing. You first have to sit down and figure out how much money you have for a downpayment. You obviously know what you make and can try and project what you will make going forward. Based on that you can create a range where you feel comfortable buying.

I went through it in San Francisco and everything I looked at and liked was just out of my price range. Too bad for me. I couldn't afford anything I wanted so I didn't buy.
 
cawacko said:
I can never tell when you are trolling or when you are serious. Anyone who has bought or has attempted to buy a home/condo has gone through the same thing. You first have to sit down and figure out how much money you have for a downpayment. You obviously know what you make and can try and project what you will make going forward. Based on that you can create a range where you feel comfortable buying.

I went through it in San Francisco and everything I looked at and liked was just out of my price range. Too bad for me. I couldn't afford anything I wanted so I didn't buy.
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Then why did it fail on such a massive scale?

WHy don't these "idiots" appear all the time? Why just now that the loan sharks make an appearance?
 
Well, I'll agree, the way I argued this thread wasn't very well thought out, but I still don't think it's a good idea to just let the whole mortage system fail. I'm le tired. ZOMG?!
 
Watermark said:
Then why did it fail on such a massive scale?

WHy don't these "idiots" appear all the time? Why just now that the loan sharks make an appearance?
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It was the interest rate environment that swelled the ranks of these idiots. When you have interest rates drop to 40 year lows, more people are going to believe that they can afford more than they can. They see a $300k loan at 3% with a $1200 payment using an ARM and think, I can afford that. (as long as rates stay low). Rates bounce to 5% and all of the sudden they are paying $1600 a month.

The other reason was as desh mentions.... they saw the equity continue to build in their homes year after year, so they started taking out equity loans to buy new cars, tv's, travel, etc.... thinking that they could always refi later with additional equity that would "inevitably" happen.

No question.... the lenders should have stopped them. But the borrowers also should have stopped themselves.
 
Superfreak said:
It was the interest rate environment that swelled the ranks of these idiots. When you have interest rates drop to 40 year lows, more people are going to believe that they can afford more than they can. They see a $300k loan at 3% with a $1200 payment using an ARM and think, I can afford that. (as long as rates stay low). Rates bounce to 5% and all of the sudden they are paying $1600 a month.

The other reason was as desh mentions.... they saw the equity continue to build in their homes year after year, so they started taking out equity loans to buy new cars, tv's, travel, etc.... thinking that they could always refi later with additional equity that would "inevitably" happen.

No question.... the lenders should have stopped them. But the borrowers also should have stopped themselves.
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true.
 
Superfreak said:
It was the interest rate environment that swelled the ranks of these idiots. When you have interest rates drop to 40 year lows, more people are going to believe that they can afford more than they can. They see a $300k loan at 3% with a $1200 payment using an ARM and think, I can afford that. (as long as rates stay low). Rates bounce to 5% and all of the sudden they are paying $1600 a month.

The other reason was as desh mentions.... they saw the equity continue to build in their homes year after year, so they started taking out equity loans to buy new cars, tv's, travel, etc.... thinking that they could always refi later with additional equity that would "inevitably" happen.

No question.... the lenders should have stopped them. But the borrowers also should have stopped themselves.
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It is not a wise idea to finance depreciables, and absolute foolishness to finance consumption items.
 
Troglodyte27 said:
It is not a wise idea to finance depreciables, and absolute foolishness to finance consumption items.
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I agree completely. Yet, unfortunately there are many out there who either don't care or don't know that it is a bad idea. I just hope that I am not going to get stuck for their bill.
 
Superfreak said:
I agree completely. Yet, unfortunately there are many out there who either don't care or don't know that it is a bad idea. I just hope that I am not going to get stuck for their bill.
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Don't worry, you will.

My little Honda turned 250,000 miles yesterday - I practice what I preach.


An example I see everyday -
The guy I share an office with - I like the guy, but he worries / frustrates me. Last year, his car died, so he needed another one. He asked, so I helped him work out what he could afford: a $12,000 used vehicle - target was a Toyota Avalon. What he wound up needing was an Infiniti G35 coming off a three year lease fro almost 2x$.

He and wife have one child, baby two on the way. He's had two relatives die in the last year - less than 30 yo. One of them was a house fire where the babies Mom was killed too - relatives fighting over who gets the babies - and the life insurance...

He and wife STILL don't have a will despite it all. I've mentioned it a couple times. He can't "afford" to pay a lawyer.

He's on the phone right now making some vacation plans... I know he tapped into his 401(k) to pay toward the car. He has been here for 9 years and has <$900 in his 401(k).

I think that some days, I'm more scared about his family's future than he is.
 
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Troglodyte27 said:
Don't worry, you will.

My little Honda turned 250,000 miles yesterday - I practice what I preach.


An example I see everyday -
The guy I share an office with - I like the guy, but he worries / frustrates me. Last year, his car died, so he needed another one. He asked, so I helped him work out what he could afford: a $12,000 used vehicle - target was a Toyota Avalon. What he wound up needing was an Infiniti G35 coming off a three year lease fro almost 2x$.

He and wife have one child, baby two on the way. He's had two relatives die in the last year - less than 30 yo. One of them was a house fire where the babies Mom was killed too - relatives fighting over who gets the babies - and the life insurance...

He and wife STILL don't have a will despite it all. I've mentioned it a couple times. He can't "afford" to pay a lawyer.

He's on the phone right now making some vacation plans... I know he tapped into his 401(k) to pay toward the car. He has been here for 9 years and has <$900 in his 401(k).

I think that some days, I'm more scared about his family's future than he is.
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there is a balance as well however. you cant live like shit while your young only to be cash rich when your old and dont need it.

its a balance.

Example:
I dont spend allot on cars. I pay the least amount possible. Right now my car payment is $220 a month. Additionally, for heating i would LOVE to just turn the oil up and not do any work. instead i get $500 worth of logs delivered in march and split and stack them myself. i don't have to turn the oil heat on all year.

I do this so that i can go on vacations without concern for money.

Am i irresponsible? prob not. I live in a modest 2500sf house on 5acres in MA that will be paid off in 10years, i have been saving an average of 15% of my salary since my first month working and im only 33.


The key is to not spend money on crap. but I wont go so far as to say that in the prime of my life im going to live like im in college so that i am rich when im an old man.
 
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