In Miramar they are bailing out people losing their homes to foreclosure: City officials ask banks to rescue 'American dream'. In the Herald article they mention a woman who:“Bought a sprawling Miramar home for $459,900 almost two years ago using 100 percent financing and two mortgages. Now she can't afford the $2,800 payment (not including taxes and insurance), and her home in a gated community is in the process of foreclosure. She owes $502,000 on it. It's has been appraised at $439,000.”
The woman said:
“My American Dream turned into a nightmare.”
Well, woman — duh -— that is because you made stupid decisions and I am angry with you. First you couldn’t afford a sprawling home to begin with. You should have bought a small, older house you could afford. Second, you had no business getting 100% financing. You should have put 20% down. Third, you are 46, what have you been doing with your money for the past 26 years? You should have been saving. Because you did three very, very stupid things doesn’t mean the rest of us should bail you out with tax dollars. You are young, go bankrupt or get foreclosed and start again. Why are we always bailing out people who make colossal mistakes?
If Miramar really wanted to help these people they should have done it BEFORE the people made these risky loans, educating them against 100% financing. And, a note to Miramar: Don't use tax dollars -- our State tax dollars -- to bail people out of their mistakes. That is wrong, and in addition:
The American Dream is not owning a sprawling single family home. People have to have some common sense (well they voted for Bush twice, so I guess that is asking a lot). If people can only afford to rent, then rent they must. Everyone is not destined to be a buyer especially if they do not have a decent down payment. The down payment is a good indication that you are a qualified buyer. What happened to that minor detail in today's market? What happened to 20% down?
However, there is good news for all of you with the 100% financing:
You didn’t lose any real money. Think of your payments thus far as rent and then it will be easier for you to accept foreclosure with the same devil-may-care attitude you went in with buying that dream house.
One last word of caution: The American Dream is not living in a house you can’t afford. It is actually living with as little stress as possible. The woman in the article has plenty of stress now and so do a lot of others who bought into the American Myth with no money down.
(Also see my post about my aunt and her interest only loan: "Mortgage Lender Scum")
29 comments:
the bailout, like the savings and loans all over again
I agree with you 100% that we should not bail out people that acted irresponsibly by acquiring houses they couldn't afford. But I would like to know if this blog is following the "Rosie O'Donnell" path to continously bash President Bush and the Republicans. If so, I don't think I can stomach anymore insults and will not read your blogs anymore.
I have praised Republican Governor Crist over and over. I am a registered independent. Why do commenters make generalizations about we bloggers?
This is a blog friend. We express our opinions. That is what blogging is about. Are you not open to read differing opinions? If you do, you might find you have more in common with others. I am open to judge Republican Crist by what he does not his party affiliation. I am also open to judge the President -- who I believe has lied to the American People. Read my post about the Curse of Lawrence of Arabia.
If my distaste for Bush makes you not want to read this blog, I reluctantly must say: Don't.
I must tell you I am personally invested in this issue because I have two relatives that have interest only loans. It just has made me crazy. My sister almost had her home paid for -- she took equity out and has a adjustable interest only loan. I just cannot believe it and then my 85 year old aunt has the same plus a second mortgage with a balloon. This is why I am so upset by this subject. So I am emotional about this...does it show?
I support your right to express your feelings and ideas, but why do you have to call STUPID those of us that voted for President Bush. On the other hand, I could call SUPER STUPID those that voted for President Carter. Both parties make mistakes so don't blame only one party.
I'll still check you once in a while because I believe you have a great blog. Don't confuse, though, passion with fanaticism!
As someone with his own blog, I have to defend this site. I admire the bloggers here in putting forth how the rich are getting richer and the middle class is getting squeezed. For the record, I am a conservative, vote Republican about 90-percent of the time, and may have some disagreements with some of the opinions. However, Comment # 2 needs to understand that both political parties have become corrupted to the core. Since both are beholden to special interest groups, neither one has a stake in the common man. The Republicans are opening the floodgates to illegal immigrants to help their big business interests, the Democrats are welcoming them in because it advances their big government agenda. That's just one example. I love this blog because even though I no longer live in South Florida, my parents and other family members do and they are getting squeezed while the rich line their pockets and the poor are rewarded for failure.
Get real no one is going to bail out the people who took out the loans most likely it will be the corporate lenders and the national homebuilders if they get in trouble.
The big government agenda of the corporate owned and paid for Democrats, Where is it at? If only they would expand the government to actually help the people we would actually get something from our government except what we have received from the Republicans like "interest only debt financed" drug company welfare, war, war reconstruction and tax breaks for the super rich. If our great conservative leaders like Reagan and Bush go on such binge spending sprees can we expect anything less of our the citizens.
Carter came closer to peace in the middle east than anyone since- I wouldn't call that being a failure. Maybe some of you people have been spending too much time watching Fox, MSNBC, or CNN or any corporate media for too long. People are not stupid for doing anything, including voting for Bush, Natasha Sejias or anything else - they are usually just mis-informed. Also, John Kerry was a terrible canidate, who could have voted FOR him, it was only a vote AGAINST Bush anyways.
It is a very stupid idea for elected officials to take the hard earned tax money from hard working taxpayers to give it to people who made stupid financial decisions.
That is just middle class welfare.
this is a very good dialogue. It is about time democrats and republicans started talking and seeing what they have in common. Lunkhead --- I like you..
Okay, I will not call you stupid for voting for Bush, if you will tell me: "Would you do it again?"
anonymous starting with GET REAL
they - Miramar - already are using $60,000 of State dollars, according to the article, to bail out people.
What is wrong with middle class welfare when the middle class pay most of the taxes? The problem really comes in when the middle class pay taxes for to subdize the government and services for the wealthy. I mean isnt the problem so often identified here is that the wealthy are not payin for the true costs of their externalities or environmental impacts?
In the case of Iraq, how many wealthy have paid for the war with their lives, that burdan just falls on the poor and under class.
I am opposed to bailing out stupid people who make stupid financial decisions. It sets a terrible example.
Tax money should be spent on police, fire and schools and roads. Excess money needs to be spent for drainage, curbs, gutters and other important quality of life issues.
Quality of life suffers when city leaders are beholden to special interests, especially developers. It is happening in San Antonio too, although not on the grand scale that it is in Miami.
The American dream is life, liberty, and the pursuit of happiness.
Now, how that got mangled with housing is a trist of marketing and self-deception than anything the founding fathers had envisioned.
People didn't make "Stupid decisions". They were tricked by the largest organized crime syndicate in history. The Fed is well aware of the blatant fraud that took place over the last 5 years. Brokers altering contracts after they're signed, bait and switch. False promises. Falsified applications. Kickbacks. Inflated appraisals, servicers fabricating foreclosures...this story will be in the history books for eons.
The entire public didn't just get stupid all at once.
If you relied upon the Rupert Murdock lead media you would be pretty stupid too.
Anonymous said...
I support your right to express your feelings and ideas, but why do you have to call STUPID those of us that voted for President Bush.
>>>Because you quite simply...are.
What is happening now is the culmination of 20 years of easy money by the Fed. The final crescendo came in 2002. This was when the Federal Reserve under Greenspan and Bush unleashed a trillion dollars of liquidity into the monetary system to prop up the still overvalued stock market. This liquidity was multiplied exponentialy through the financial system by the extremely imprudent lending practices of the past five years. There is more liquidity in the system now than ever before. This liquidity has created a mountain of debt for the households of this country. We have hocked our children's future to throw money at overvalued assets. The assets(stocks and houses mainly) will revert back to their historic values. In the case of real estate this will be about a 40% drop in price in most of the bubble areas. This will happen no matter what the government does. The important outcome will be that attitudes will change. People have to understand that debt needs to be paid back. The Great Depression was a godsend for this country. The speculation of the roaring 20's was squeezed from the system. Through much pain The Great Depression created a nation of savers from the speculators of the roaring 20's. This generation of "savers" created our strong economy of today. Unfortunately the grandchildren of these savers have become speculators and the government is enabling them. Hopefully we will have another Great Depression and squeeze the speculation and bad government from our system. The only other alternative is to sell our assets to China and teach our children Mandarin.
If anyone disagrees with anything I have said I would like to hear. Please think about what you say.
I didn't call anyone stupid for voting for Bush. I said people should use common sense.
"Never make a bad move quickly"
This would apply to BOTH US Real Estate and Politics in this situation.
Thank you for your blunt and honest comments. I work for a counseling agency that is trying to "rescue" these so called "innocent" people from losing their homes. Quite frankly, it's sickening. These people have made stupid decisions, buying houses they clearly can't afford and then they want help to get bailed out. I don't think so. What happened to personal accountability? When you get greedy, then you need to be able to deal with the consequences like the big boys do. YOu want to buy a $500,000 house on a $30,000 income, then you probably are CLUELESS about reality!
Oh great big brother please bail me out of this mess.....The worst thing that happened in the last 5 years is the number of Americans that were foolish enough to take all of their equity out of their house. Now their value is gone and they want us to hold the bag.
It is so easy to get caught up in the game of keeping up with the joneses, unfortunately the jonesese just lost their house to foreclosure.
People that vote for imbeciles deserve to be called imbeciles. People that vote for the same imbecile more than once are destined to make the same mistakes over and over again.
what a charmer you are.
do you know the woman involved?
do you know her circumstances, or whether she was trying her best for her children or family?
should you be angry about someone trying to better themselves?
i totally agree no one should pay to bail her out, but why are you so judgemental about her.
i always thought social mobility was a hallmark of the american dream, so i'm surprised to see such "know-your-place" attitudes on open display.
Last Anonymous:
A half a million dollar house is a lot of house in Florida. You don't have to know the woman to know: She couldn't afford it with no down payment and an interest only loan. I can afford a lot more than my condo, which has no mortgage. However, it didn't make sense so I stayed in my small condo...People have to ask themselves: Does this make sense? Does no down payment ever make sense?
How is a bailout for someone who bought a house they could not afford (the operative phrase here) any different than a government bailout for someone about to get their shiny new Ferrari repo-ed?!
I see no difference....
Rather than looking at this one example lets see some data on this issue. >I bet that most subprime homeowners are most likely minorities, lower income, first time home buyers and most likely owning some 120,000 condo rather than a 500,000 home.
Rather than looking at this one example lets see some data on this issue. >I bet that most subprime homeowners are most likely minorities, lower income, first time home buyers and most likely owning some 120,000 condo rather than a 500,000 home.
last responder
i have looked at a lot of foreclosures...see the index on the right.
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