In Granada Hills, Calif., Natalie Brandon is fighting to keep the three-bedroom ranch house she bought in 1985 for $105,000. Mrs. Brandon, 51, does medical billing for doctors; her husband is a dispatcher for a local gas utility. Last year, she got a $625,500 mortgage from Argent, now owned by Citigroup. Her 7.99% interest rate isn't set to rise until next June, but she already is behind on payments.The house was bought for $105K about 22 years ago and they now owe $625K?!? Where did that money go? That means they took out over $500,000 in cash on the property. They didn't buy a house back in 1985, they bought a bank they thought they could withdraw from endlessly. Had they just paid their first mortgage, they'd be 8 years away from owning the house outright and their payment, assuming a 30-year, 7% mortgage, would be $764 per month.
What's wrong with this picture?
K T, yup, I can see why you had difficulty. It's difficult in this "me" world to address this very real "social" ill without coming off as "Eeevil Prosperous Guy".
ReplyDeleteThe Poor people!! How heartless can you be? These people were duped by eevil corporations into taking out a half million dollars.
Yes there's a very real problem in the sub-prime industry. But is it fraud? Nope. I'm just an eevil, heartless guy I guess.
Because at "closing", when the notary sits across the table from me, I draw the process out by (Heavens), Reading and Understanding each document before I sign it.
I,(we), just refi'd the main home so that my Cubs could continue to live in it with the ex half the time. Did a 5/1 ARM, but simply to "force" a sale within 5 years.
Bailing out people who make dumb decisions is not the way to teach them responsibility.
I've always followed, and pass on to my Cubs, my Grandfather's wisdom. "Never refinance unless you're buying more land, never sell unless you're done buying".
Always worked for me. Retirement? The Government doesn't have to chip in for me. Social Security, if it's around, will be some really nice cruises.
Wollf
K T Cat,
ReplyDeleteSimply amazing. We are only going to encourage more bad behavior with bail outs and interest rate cuts. If this keeps up, Ron Paul's ranting about the Federal Reserve may actually start to make sense to people. I heard on the news today that mortgage interest rates are at a one year low. It seems unlikely that this is the result of lenders tightening standards, such action would reduce supply and drive up rates. If it is the result of government intervention, then we are just encouraging more bad loans.
Re: ACORN's 10 point plan. Like how they back-loaded the plan. Lull us to sleep with vapid, crayola-I.Q. "shoulds" before the left-right combinations starting at #7 to talk about how to dig into our piggy bank to "solve" the problem.
ReplyDeleteNice visual marketing, I might add.