In America, it's far more shameful to owe money than it is to steal it

[Harleyman 12]

Back at the beginning of the 1970s when I bought my first house the monthly mortgage payments had to be no more than 1/4 of your monthly income.

If the payment was greater than 1/4 of the gross monthly income the loan was refused.

Of course houses were dirt cheap back then but the average hourly pay was around 9 dollars an hour.

In California property values shot up way past the rises in income so that by 2000 a large percentage of potential homeowners didnt qualify for loans.

 

Something went out of whack after that because people were getting loans and moving into new homes with no money down and making payments on the interest only for a few years but then when it was time to start making payments on the principal the monthly mortgage payments skyrocketed and they couldnt afford to pay them so the banks foreclosed.

 

The worst place hit by the housing market collapse is Florida I think.

There are whole condiminium and town house developments lying vacant.

A complete and utter basket case

[js2012 10]

You don't know your arse from your elbow.

 

Yes i do.

But thanks for your concern.

[Halibut 12]

Yes i do.

But thanks for your concern.

 

Doesn't worry me too much - ought to worry you though!

[js2012 10]

Doesn't worry me too much - ought to worry you though!

 

What should?

[Rupert_Baehr 10]

Back at the beginning of the 1970s when I bought my first house the monthly mortgage payments had to be no more than 1/4 of your monthly income.

 

That sounds about right. Your mortgage repayment isn't the only cost in running a house. Add in property tax, heating, lighting, maintenance and insurance and the whole lot should not exceed 1/3 of your income if your expenditure is to be 'balanced'.

 

The worst place hit by the housing market collapse is Florida I think.

There are whole condiminium and town house developments lying vacant.

A complete and utter basket case

 

Much of the house market problem in Florida doesn't originate in Florida. The repossession rate there isn't very high, because the number of houses bought on mortgages is comparatively low.

 

I bought a piece of land there just under 3 years ago intending to build on it next year. The land itself is unchanged but its estimated value has halved. - Not that that is going to be a problem in itself; because nearby houses have (in the main) also fallen dramatically in price. There are a few sellers who have refused to drop their prices - and their houses will be sitting empty for quite a while.

 

The place in which we intend to live usually has about 20-30 houses on the market; at the moment they've got 160. According to the agents, there's plenty of interest in the houses which are offered for sale, but most of the enquiries include the phrase "...when I sell my house in...". Florida is seeing a problem with house chains - albeit short chains - and the market is very slow indeed. The 'new start' numbers are low but a large number of houses which come onto the market do so because the owners have died. The rate at which they're doing that hasn't changed significantly, but many of the potential buyers are stuck with houses they can't sell in their home states.

[Stormy 10]

There is an interesting article in Rolling Stone this week. It is about the fraud at the heart of the Financial crisis. The huge Ponzi scheme set up in Wall Street that caused the global recession when it all came tumbling down. The guilty got bail outs with public money. The victims in the US, those losing their homes portrayed as being guilty.

 

 

 

http://www.rollingstone.com/politics/news/17390/232611

 

This system stinks like a pile of dog poo.

 

Its not often I agree wholeheartedly with what you say Wildcat, so on this occasion I shall make a point of noting that you are bang on the money with this. Thanks for the article, it was very interesting reading.

Ireland's turn is next. This whole episode is a complete tragedy for millions of innocent people with those responsible not being held to account, and in fact being rewarded with tax receipts. A total disgrace.

[Stormy 10]

I regret the thread title now because it has distracted from the point of the thread. The title of the Rolling Stone article seemed to dry, so I used the last line of the article because it had impact.

 

It was in no way intended to be a US bashing thread. In the UK we can't talk from any moral high ground. Our banks are just as involved and furthermore complicit in tax havens and avoidance, and to cap it all we elected a bunch of Tories earlier on this year!

 

A usefull clarification, but I didn't see the thread as US bashing. I think some have indeed missed your point.

 

Thanks for your contribution I certainly don't doubt the individual examples you cite, but also note you say many of those suffering lost their jobs. That is what irritates me a bit, we get distracted by examples of individual victims we can say maybe in some sense deserved it, whilst missing and being distracted from where the real problems originated and who is responsible.

 

Again, I agree with you. Make no mistake, some people have been irresponsible with what they borrowed, but they shouldn't have been allowed to, and certainly not been encouraged to. Innocent people have been caught up and in some cases have been foolish, but the real crooks are those at the top.

[Cyclone 10]

Maybe I missed something, but how exactly did the banks screw anyone over, did they force money into peoples hands?

Sure they got stupid with there lending criteria, but that caused them as much difficulty as it caused for the borrowers. There's anger about the bailouts, but it appears to come from people who haven't considered the alternatives...

[Sierra 22]

I regret the thread title now because it has distracted from the point of the thread. The title of the Rolling Stone article seemed to dry, so I used the last line of the article because it had impact.

 

It was in no way intended to be a US bashing thread. In the UK we can't talk from any moral high ground. Our banks are just as involved and furthermore complicit in tax havens and avoidance, and to cap it all we elected a bunch of Tories earlier on this year!

 

 

 

Thanks for your contribution I certainly don't doubt the individual examples you cite, but also note you say many of those suffering lost their jobs. That is what irritates me a bit, we get distracted by examples of individual victims we can say maybe in some sense deserved it, whilst missing and being distracted from where the real problems originated and who is responsible.

 

 

Oh, that's ok. We shouldn't be so sensitive anyway.

 

It doesn't bother me as much as it used to. After how many years now I'm starting to see where you all are coming from.

 

As for this whole mess, let's face it. It feels good to spend money. It's great to walk into a high end store, car dealership, or restaurant and say, "I want that, and that, and one of those". And if you have kids? What parent can resist wanting their child to have what they didn't? The thing that makes me saddest of all about our present situation is my children didn't have the same wonderful environment growing up in California that I did. And my grandchildren definitely won't have it! Longtime residents like Harleyman and natives like myself could write a novel about how much this state has changed, and the U.S. in general.

 

Also, people develop a sense of entitlement. They get used to spending like drunken sailors. I should be able to have that! They Have it. Why not me?" What some people don't get is that some work very hard to afford what they have. And for those that don't? Well, life just isn't fair. Get over it. Probably a huge contributer to this is that the haves and have nots are thrown together more often over here. The high school my son attends has students who drive brand new luxury cars to school but also has students who live below the poverty line and are eligible for a free lunch. Girls whose parents think nothing of dropping a few thousand on a quinceanera,

 

http://en.wikipedia.org/wiki/Quincea%C3%B1era

 

and girls whose parents have to scrimp to buy a thrift store dress so they can attend the prom. No kidding. Some of the quinces my daughter has attended were unbelievable, over the top affairs. I've been to weddings that haven't been nearly so nice! Wow.

 

And you are abslutely right, the big crooks are at the top, as always. But let me tell you, there was a hell of a feeding frenzy going on for awhile there. Anybody and everybody got in on the action. The employees were so unprofessional at one title company, my husband and I walked out. Where was the title officer? Having her nails done!!! She'd left her "secretary" in charge. A girl barely out of high school who popped her gum in our faces and was missing half the loan docs when she sat down, and worse, wasn't exactly sure which ones! We had to explain to her which ones she needed! Good Lord.

 

I think if you were here and saw with your own eyes exactly what is going on...the rot is spreading, like a cancer. People who are still gainfully employed and could afford to make their mortgage payments are saying, "Why should we keep putting money down a rathole? It'll be years before this house is worth what we owe on it, let it go". And they do. They walk away and leave the bank holding the bag. They figure it's worth the hit to their credit. They rent a similar house close by for waaay less that what their payments were. Let the landlord pay the taxes, and if the toilet overflows or the water heater takes a dump, call him/her, and let them deal with it. Or else, they do what the Vashon Island people did, they leverage the heck out of the first house, use those funds to buy the second house, then let the bank have the first one.

 

For those who have lost their jobs, yes it's terrible. Many are out of work, even those with college degrees are struggling. Somebody moved the goalposts while we were sleeping, and this is how things are now. I had the chance to talk with the man who came to fix our bathroom tile. He's formerly a general contractor, at his peak, he had over 100 employees. He's down to just two now, himself and one of his sons. He told me, ""I'm so afraid, but I think this is the new normal!" As with anything, there will always be those who are resilient, who adjust and adapt because they have to. And doubly bad in the US, many have employer sponsored health insurance, so when you lose your job, you lose your health benefits as well.

 

Maybe I missed something, but how exactly did the banks screw anyone over, did they force money into peoples hands?

Sure they got stupid with there lending criteria, but that caused them as much difficulty as it caused for the borrowers. There's anger about the bailouts, but it appears to come from people who haven't considered the alternatives...

 

I'd say yes and no on this. No, because people should always be proactive and remember, the bank is not your friend. They do NOT care what happens to you. Their goal is to make money. Ditto for real estate salespersons, mortgage brokers, and title company employees. All of them, their goal is to sell that property, get you to sign. And another thing, we took a good long look at the deed that would have been sent to the county recorder's office, and it had the wrong address! That was the last god*amn straw! "C'mon baby, let's go! My husband yelled, "we'll call you!" as we walked out the door. I didn't know whether to laugh or cry! It was bad, OMG. As my grandpa used to say, "what's wrong with you, kid?! Act like you got good sense!" These people failed to use good sense.

 

Yes, because in many cases people were misled and lied to. Now, this does NOT absolve them of their responsibility to educate themselves. Banks used to have safeguards in place. For instance, refusing to lend money to anyone they deemed at risk of not repaying the loan. In many cases, they were forced to remove those safeguards because the former rules weren't "fair". Oh dear. Well, there was a good reason they were there! I hope these guys are happy now! Arrgghhh!

Edited November 19, 2010 by Sierra
Got ahead of myself!

[TJC1 10]

Does any of our US members know what the rental market is like out there at the moment?

[poppins 10]

Does any of our US members know what the rental market is like out there at the moment?

 

Like what TJ ,renting a Florida home ? I imagine you'd get a great rent for almost nothing now

[Harleyman 12]

That sounds about right. Your mortgage repayment isn't the only cost in running a house. Add in property tax, heating, lighting, maintenance and insurance and the whole lot should not exceed 1/3 of your income if your expenditure is to be 'balanced'.

 

 

 

Much of the house market problem in Florida doesn't originate in Florida. The repossession rate there isn't very high, because the number of houses bought on mortgages is comparatively low.

 

I bought a piece of land there just under 3 years ago intending to build on it next year. The land itself is unchanged but its estimated value has halved. - Not that that is going to be a problem in itself; because nearby houses have (in the main) also fallen dramatically in price. There are a few sellers who have refused to drop their prices - and their houses will be sitting empty for quite a while.

 

The place in which we intend to live usually has about 20-30 houses on the market; at the moment they've got 160. According to the agents, there's plenty of interest in the houses which are offered for sale, but most of the enquiries include the phrase "...when I sell my house in...". Florida is seeing a problem with house chains - albeit short chains - and the market is very slow indeed. The 'new start' numbers are low but a large number of houses which come onto the market do so because the owners have died. The rate at which they're doing that hasn't changed significantly, but many of the potential buyers are stuck with houses they can't sell in their home states.

 

 

I saw a couple of townhouse developments in Charlotte county that had been abandoned by the developers. Brand new but not a single occupant and other condo developments are under occupied. They're really nice inside, all mod cons with a community pool and clubhouse but the only occupants were snowbirds who all migrate north again when spring comes.

That leaves the developer stuck with a large perecentage of the association fees or seeing the place go to rack and ruin.

A few months ago half built homes in a development about 30 miles from my place were being demolished by the developer. It's ugly