Hindsight

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subprimer,





It is stories like yours that call out for something to be done about the price volatility in California residential real estate markets. People should not have to time their house purchases to the swings in market prices or the availability of financing terms. You did exactly what you should be able to do, but due to circumstances, it is going to cost you. It is really a shame. For all the flippers and foolish HELOC addicted spenders we profile and carry on about, there are stories like yours that are not told enough.
 
Wait a minute. "Stories like yours..." What "stories?" What has subprimer lost? Not a dime that I can see. He had no skin in the game (purchased with 100% financing) and he's still got no skin in the game. All that's going to happen is that subprimer will move out of his current dwelling and into another dwelling. He has lost absolutely nothing but his hope of owning this particular home. The bank was and continues to be entirely at risk. What's "really a shame" about subprimer moving on? He apparently was a subprimer going in and he's still a subprimer because his credit will take a hit. Otherwise, if you're going to pity anyone, it should be the bank that has lost thousands and thousands by its decision to lend to subprimer.



Perspective, people. Try to put it in its proper perspective. In this case, the "victim" is the bank.
 
<em>"What has subprimer lost? "</em>





He is faced with losing his home because he will not be allowed to refinance even though he could afford the payments on a fully-amortized loan with his current loan balance. When responsible people cannot continue to be responsible, something is very wrong.





Most of the people on this board, including myself, are merciless with the foolish and irresponsible. He is not one of them.
 
IR,



I agree. There are many like 'subprimer' where they're able to afford a traditional loans. Yet, can't refi b/c like you have stated due to the current market conditions. Very unfortunate.
 
But he hasn't lost "his" home. subprimer was a homeowner in name only. He's no worse off (except for blemished credit) than if he was renting and the landlord said, "Time to move." (Always a risk when renting.) In fact, he probably has less into the deal than first and last month's rent (security deposit that a tenant must provide). Why doesn't he bring to the closing table the down payment he would've brought had he been qualified via the underwriting guidelines by which he's trying to qualify now? 'You can pay me now or you can pay me later." He apparently can't afford the home he's living in so, like a renter who can no longer afford the rent, he's got to move to other housing. I see the bank as the sole victim here. The bank gambled on subprimer. The bank lost. In fact, because of the tax deductibility of mortgage interest, subprimer's ahead of the game! It'll take the bank years and years to recoup its loss.



Furthermore, subprimer can live in the bank's house until the bitter end (sale on the courthouse steps), thereby recouping, through free housing, the money stake that, realistically and actually, he doesn't even have in the property.



Tip: subprimer, don't make the bank throw you out via unlawful detainer. Future landlords hate that.
 
<p>Subprimer,</p>

<p>Thank you for sharing your experience with us. I am sure alot of future first time buyers whom stumble onto this site will thank you, also.</p>

<p>Through it all. What is important is your health and the love of family and friends. </p>
 
<p><em>The bank gambled on subprimer. The bank lost.</em></p>

<p>So explain to me how this makes the bank, "the victim". </p>
 
reason, I'm merely suggesting to subprimer that he keep the proper perspective about what has happened instead of feeling like a victim. How has he been victimized? He had no money for a down payment, yet the "super broker" helped him acquire beneficial ownership in an ostensibly appreciating asset. The real estate market, always cyclical, trended down. If the worst thing that ever happens to subprimer is that he must move from one rental (which is essentially what he is/was) to another, he will have lived a charmed life.



Uh, Trooper, if we use "money" as the sole criteria for victimhood, the bank is the only party to the transaction who lost money--lots of it. subprimer said he had no money in the deal (100% financing) except the monthly payment--which housing expense he would have in any event.



Again...perspective. Life IS the struggle for perspective.
 
<< Man....how can you guys all suggest just walk away first without at least trying to get a short sell approved? They walk away with no impact to credit and they won't have to pay taxes on any of the losses....according to the bill that just got passed. >>



It's important that this myth be utterly dispelled. There's absolutely positively no difference--either to one's FICO score or one's ability to qualify for a mortgage in the future--between (1) short sale; (2) deed-in-lieu; or (3) foreclosure. They are each equally a negative hit to FICO. One of these three choices is no better (or worse) than the other. Each requires a minimum of two years "seasoning"--that is, time between the event and qualifying for a new mortgage--at every institutional lender I can think of.



The Mortgage Forgiveness Debt Relief Act of 2008 applies to all three events.
 
Gee I never looked at that way, I can just go from one dwelling to another and live a charmed life, sweet. I am a victim of circumstance only and I loose plenty. Sure if you look at it on paper its cut and dry but what about my child who may have to switch schools, having to move again and again due to being renters wich is what brought us to the buying situation in the first place not to mention the fact that it pretty much just sucks. I am kind of screaming inside because my lender who felt comfortable loaning me the $$ with nothing down two years ago is uninterested in rolling it into a conventional loan now. They say I must go into default before they will talk to me, nice. It is real easy to get angry about it, sure we are ok now but when the adjustable hits what then? Why not just leave now if they won't help prevent it and get on with my charmed life.
 
<p>A short sale may not be good for the borrower, but I think it is good for the bank--they get another paying person in there right away, probably no real estate commision, no destruction of an empty house, no interruption of income stream, except for maybe one month. And they probably couldn't sell to a new buyer for as much as the short Buyer is paying.</p>

<p>And I think it is really stupid that they won't talk to subprimer. It's possible that something not too horrible for either side could be worked out. But the banks don't have enough people to do this stuff.</p>
 
Why should they talk to subprimer? Does he have extenuating circumstances, which are defined as (1) layoff due to reduction in force; (2) death of the primary breadwinner; or (3) medical emergency? He's worrying about an event [rate increase] scheduled to occur THREE YEARS FROM NOW, but he wants the bank to rescue him as he comfortably makes the payments HE AGREED TO MAKE.



subprimer, you're absolutely NOT a "victim" of circumstances. You are, however, the victim of stinkin' thinkin'. You're someone who bought a house thinking it would go up in value and it didn't. You can always spend the next three years pulling together a down payment, as you probably should have before you bought the house. The bank was willing to take the risk with you...and the bank lost. All you have to do is move to another location--which can be within your child's school district, of course--and continue living your life without missing a beat. The bank, however, is doubled over with losses.



Stop whining. Seriously.



The bank probably won't approve a short sale. The homeowner must prove hardship. What hardship does subprime have except that he's bummed out? I don't think "bummed out" qualifies as hardship.
 
Subprimer:

I would sit tight and put your money toward paying off the second Or just save it.

I spent part of the day watching Barney Frank's committee. It was discussing different ratings of commercial and muni bonds but the mood was crystal clear. Moody sent a tough broad-type who tried "we will do what we always did" attitudeand she got hit, hard from both sides of the aisle. Muni bond ratings and maybe monolines as well are toast.

Housing Wire talks of a bill to shield mortgage servicers from liailities from loan modifications etc.

And no one knows what the FED is going to do with the SIVs it is accepting in trade for treasuries.



In short, all of the tea leaves suggest to me that the whole financial structure will look very different three years from now. And in your favor
 
How is subprimer a "victim of circumstances" (his words)? He purchased an asset that he hoped would appreciate in value. It didn't. If the asset had appreciated, as he planned, we wouldn't be having this conversation. He'd be making his payments and thanking the "super broker" for putting him into an appreciating asset using NONE of his own money. Had he put money in the stock market, would he be a "victim of circumstances" if the stock declined in value? How is this any different? An asset is an asset. But the asset didn't go up in value, so he's now a "victim" (of whom or what?) and the person who facilitated his purchase is a "super broker?" (I don't think he means that as a compliment to the broker.)



I'm constantly blown away by consumers' illogical thinking processes.
 
SoCalGal



If the prouerbe be true,?that a fishe beginneth first to smell at the head,?the faultes of our seruantes will be layed vppon vs.

[1581 G. Pettie tr. S. Guazzo's Civil Conversation iii. 51]
 
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