Hindsight

NEW -> Contingent Buyer Assistance Program
<p><strong><em>So explain to me how this makes the bank, "the victim".</em></strong> </p>

<p>They aren't. Everybody loses. It's like a casino booking a bet they know the bettor can't pay off and the casino can't pay off either. </p>

<p>Subprimer would gladly pay for his house (neg. equity and all) but nobody will talk to him because he's current. If he was a douchebag and quit paying for 90 days they'd give him a workout. But banks are stupid. </p>

<p>Why aren't you getting this? Why isn't SCG getting this?</p>
 
<p>Subprimer, like bluemoon have mentioned. "You're not alone. Alot of people have gone through or are going through the same thing you have mentioned." </p>

<p>And yes, while some see your experience as nothing more than a cold business transaction. But then there are those who can sympathize with you that the whole experience can be emotional. And there's nothing wrong with that. </p>

<p>I'd thought that you posted this subject matter so that you can seek public opinion and advise. Unfortunately, as we have seen. Instead of understanding and showing compassion, some are giving you the "beat down".</p>
 
<p>"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."</p>

<p>I (a renter) am also screaming inside because the banks were allowing people to "buy" houses with NO MONEY DOWN! Sorry subprimer, but you do not deserve that which you can't afford. I would like to think that it will be much more than 2 years before you can purchase a house again. Minimum 4 or 6 years would be fair, I think. Just so long as it is after my purchase.</p>

<p>I read about the kids having to change schools & stuff and I feel bad. Then I think WTF about me! I HAD a down payment 4 years ago, but knew the market was BS, so I didn't buy. Instead, people who should not have been purchasing houses (like you, subprimer) were buying the homes I should have been buying. Well, now its time for you to get back into line BEHIND ME! If I can rent for 4+ years, so can you. Is there anything unfair about this?</p>

<p>Now as far as feeling sorry for the banks, please...</p>
 
<p>Common sense sez that subprimer and the bank should be able to come to some sort of mutually nondistructive agreement in which both give up something and both are better off for it. Both.</p>

<p>But the bank won't or can't communicate.</p>
 
If I had the forsight to analyize the real estate trends and be able to accurately predict the mortgage melt down and still bought then yep I am a moron. I am just a guy who wanted to take the next logical step in life. Looking at everyone I know who bought a house at any point in their lives, no one said it was a mistake. I was not running around willy nilly buying a house with no money down,laughing it up ,enjoying a charmed life, we had a down but unfortunatly we had a bad broker who showed us payment wise how we would be better off hanging on to it and putting it to better use elsewhere. Now that cash is gone as the slow economy has drained our savings as my income has slowed a bit. Paying down the first, not going to happen there are just too many other drains on the bank account. I would love to go back to my $1,650 a month apartment at this point, and dont worry major I doubt I will ever want to buy a house again. The agony is knowing in three years we are facing a serious issue and want to prevent it and having people tell me I should not have is a mute point, this I know, cant unring the bell. What to do? Stay and roll the dice that 3 yrs. from now we will be in better shape ? Cut our "imaginary" losses and short sale or forclose? Three years is alot of payments to make knowing it may be for nothing. Not whining just venting a bit.
 
subprimer - look at your second to last sentence "Three years is alot of payments to make knowing it may be for nothing" - chances are it will be for nothing as your rate will likely be a lot higher, say this sentence out loud three times and think whether it makes sense to keep on making payments for nothing. Just stop paying, save money while you are not making payments until the sheriff shows up at your door and then go back to renting a place for 2000K/month. then you can rent in the area of your choice that feeds into whatever school you want your kid to go to and your are good to go. Like you said, you cant unring the bell, i hate to sound like an ass, but if you just cut your losses now, you will feel the weight lifted off of your shoulders and can get back to enjoying your life instead of spending the next three years worrying about this albatross.
 
The way things are developing I think subprimer's idea of waiting is the best one. At the rate things are going we should be looking at the bottom in a year or so. It's premature to play foreclosure chicken with the bank while prices are still elevated. Plus there are "rescue" plans starting to get bandied about. Barney Frank's proposal actually looks pretty reasonable. In general I think the system will get pretty nice to people like subprimer just because it *has* to. The banks/feds are going to need everybody who can reasonably own a house to do so. Just don't pay off the second because it's probably going to get reduced one way or another anyway. Plus having cash will enormously improve your bargaining position.
 
If you can afford the payments, do the right thing and stay where you are. If you can't, look for an apartment now while your credit is still good. Then give the house to the bank.
 
<em>"Plus there are "rescue" plans starting to get bandied about."</em>





I have a post coming out about this on Monday. I think the all bailout plans are doomed to fail, and their purpose is nothing more than to sustain denial in borrowers in similar circumstances to subprimer. I think there is very little chance of the market bottoming out in the next year or two, and I think there is even less chance of subprimer being far enough above water (or any amount above water for that matter) to qualify to refinance. I agree with qwerty, he should probably sell now and move on.
 
A week or so ago, Warren Buffett was being interviewed by Becky Quick. She asked Mr. Buffett what he thought of the various bail out plans. He said they were a bad idea, because they will all have unintended consequences. I agree. And I think the consequences will be much worse than the problem.
 
I<em>n general I think the system will get pretty nice to people like subprimer just because it *has* to.





</em>They didn't in the 90's.
 
<em>In general I think the system will get pretty nice to people like subprimer just because it *has* to.</em>





It does? Is that for reasons of the system's self interest, or some other reason? Unless there is a subpoena or a gun involved, I'm pretty sure that no one *has* to do anything.
 
I<em>n general I think the system will get pretty nice to people like subprimer just because it *has* to.


</em>"They didn't in the 90's. "



Not only that, but the fact is "being nice" to people like subprimer means the lenders get screwed which just makes the credit all that much tighter in the future (driving prices down further).



Unless the tax payers are suppose to bail all these people out. However, with unemployment rising and tax base shrinking...what to do? Cut the school budget!

...Oh, they did that already?
 
The lenders are screwed anyway. It's just a matter of how.



By the "system" I mean the government and the banks. Both of them need the housing collapse to be minimized - the larger it is the worse for the overall economy (bad for the politicians) and lower eventual prices (bad for the banks). One critical aspect is how many people will get foreclosed on - every foreclosure is extra direct loss to the banks *and* one more household unable to buy for a while, driving prices down. So the system needs to stop avoidable foreclosures - basically ones like subprimer's. The system is already starting - look at Frank's plan. There's already been some jawboning via Hope Now and some real intervention via FHA Secure.



This didn't happen in the 90's because it didn't have to. The 90's were half the drop in California and 1/3 the drop nationwide, and we never got to the situation where people who could comfortably make payments were nonetheless better off walking. Plus that drop in no way endangered the financial system.
 
It is not the housing drop which is endangering the world's financial systems. The housing unwind is just the first and most sensitive factor in the macro problem which is debt and leveraged debt. Everything the Fed does will just be more of the same that created this mess and will just create larger problems. There is no fix. There are not even any bandaids.
 
I don't feel sorry for anyone, least of all the homeowner, who had no skin in the game, and still doesn't. The bank is taking it in the shorts, which is its comeuppance, but the subprime borrower is not a victim--far from it. If you reduce "victim" down to who lost the most money, for sure it's the bank. By the way, subprimer, unless you start making principal payments, too, you'll never have any skin in the game.



Here's John Mauldin's take on the matter.



http://www.investorsinsight.com/otb.aspx
 
The jst of this thread is seems to be how to escape a bad situation without experiencing some pain.



There will be pain, so Mr. subprimer, bend over and take it like a man. Really, there are worse things in life than a finanical setback. It seems Americans have turned into wooses who expect to always lead charmed lives.



When I was college my best friend from HS got meloma and died 3 years later. Giving back your house to the bank, getting a cheaper rental and taking a hit on your credit will smart, but it's not cancer.



Get some perspective dude!
 
Alan, I have plenty of perspective, I have not had such an easy life and comparing me to your buddy who died of cancer,WTF is that ? I am working on my masters degree from the school of hard knocks, I have taken many a lump before and am sure that I will see more. SoCalGal is absolutely correct I have no real investment in this house so I just take the credit hit and go bact to paying 16% on car loans, I will look into how to do a short sale if anyone has any input on that I would appreciate it.
 
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