August 15th, 2023 by MG
As Arizona gets more and more exposure on the internet through TV and Google, we seem to becoming a much more and more vocal group.
It’s August 15th, 2023. Foreclosures are going up in the hundreds of percent, analysts are predicting extreme danger to the financial sector, and many people are waking up and realizing the true cost of home ownership.
So what’s on your mind?
The “House of Pain” is upon many. I see pricing pressure to the downside for multiple years. We are only in year 2 of the peak of housing and the downward pressure is just picking up. This will be a very interesting historical event.
Just think, there was a time when you could buy any house without any money down and without proving your income. It was obvious to me housing would get a beating.
The greed mongers are only beginning to get their just deserves. Wait until people start losing their jobs.
This is getting really bad. With credit drying up they are having more trouble funding even people with good credit. The banks are spending more to service their debt leaving less to borrow to others. The days of credit backed securities are gone nobody will buy them since they really don’t know what they are worth mark to market. 40% losses may be a little low in some areas and should the job market take a few hit’s we will be in a recession.
Everyone wants a home….like with food sometimes our eyes are bigger that our tummies. I don’t want to see anyone lose their home…but I don’t see a lot of ways out of this mess. I was really shocked when I saw the housing prices. You are in for very deep problems and for several years till it corrects and folks can afford homes again.
i new it was coming and its going to get worse. i have friends that are just going to walk away from their houses, let the bank deal with it. i will be glad then this all finally hits bottom at the end of 08
Thank you FICO. I got approved for stated no doc mortgage 2 yrs. ago without even having a job. It’s time the banks started looking at Income / Cash Flow rather than a arbitrary score that can be manipulated anyway. Mortgages are simple – how much cash do you have, how much $ do you make and how do you pay your bills. FICO scoring should thrown into the dumpster with the rest of those brokers who qualified / approved people at the low end of an ARM – to make a commission – instead of the adjusted rate. Guess they’re have some difficulty selling a portfolio of all these struggling loans now :-).
Time to STOP blaming the banks and mortgage companies. All they did was agreed to lend you low life trailor trash people money and you all new that you had to pay it back. Now that you have to start paying back the home loan at a fair market rate, you all are crying. Guess what, you never should have bought a home in the first place. What were you idiots thinking when you got an interest only loan or a no interest loan? Did you really think a company is going to lend you money for as long as you need at no interest or that they would not make you ever pay back the principle? Personally, anyone losing there home due to the payments goings higher deserves what they get. Anyone losing there home due to a loss of a job or sickness or other legitimate reasons, then I truly feel for them, but not for the greedy idiotic low lifes who never deserved to be a home owner in the first place.
Greed is nothing new, and our government will never stop it.
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country…corporations have been enthroned and an era of corruption in high places will follow, and the money of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.”
President Abraham Lincoln
The lenders were to greedy to: 1. Investigate the obvious poor risk who came in with outlandish income figures. 2. To point out the pitfalls of the ridiculous types of loans being offered. 3. To try and discourage and explain the problem of long commutes. The buyers overlooked Newton’s Law of Gravity, everything that goes up, has to come down. The obvious rule of Supply and Demand went out the window with the wash water.
The lenders get blamed for everything. They get blamed if they lend too much and they get blame if they don’t lend enough. How about blaming the people. Hasn’t anyone heard of taking responsibility for there own actions. No one forced people to go to these lenders, these lenders weren’t making predatory loans. These home owners voluntarily applied for the loans. These home owners never should have bought a house and now they all are crying fowl. WHAAAAA WHAAAAA WHAAAAA – do what most of us have done, get a good job and buy a home that you can afford!
this is why you gotta live on a budget and stick to it.and do your best to create a cushion of at least 1000 bucks in the bank when my wife and i bought our house 20 years ago thats what we did so if something happened we could at least make a payment or 2 but houses where a lot cheaper then.i feel bad for todays young couples unless they come from a rich background they really dont have a chance to buy a good starter home
I live in one of those “fringe communities” and am doing just fine. Why? I live within my means. I didn’t buy the latest trends like Plasma TVs, iPhones, or Monster Trucks. I don’t buy Starbucks, and my basic cable service is just fine because I’d rather run than sit in front of 900 channels of digital cable. I might not have all the “man-toys”, but I also have zero credit card debt, zero car payments, zero student loans, and a mortgage that only requires one income to pay and still have plenty left over.
Anyone could buy a home – the issue is how greedy and materialistic do people really have to be?
When I bought my 1400 sq. ft. home in Goodyear back in late 2004 for $130,000, my loan was 5-year fixed interest only loan. I re-financed last March for a 30-year fixed and received $10,000 cash out for tiling/landscaping, etc, and I still have $50,000 in equity and my payment is only $75 more a month. So these ‘predatory lenders’ made me a lot a $$. Buying a house in an investment, a RISK. There are no guarantees. Take responsibility for yourself. Get three jobs if you have to, I would if I had to.
my sympathy…but don’t kid yourselves, this will take years to burn off. I estimate a 25% valuation decline overall, with very few properties undamaged. Typically the more expensive slower moving properties fare better, condos/townhomes the worst. Best strategy right now is to raise savings and wait it out, but don’t buy till the bottom arrives… in approx 3 yrs, maybe. I was a realtor in Phoenix in the 80′s.
Gee, I thought “the free market” was the answer to all financial problems of the country. I thought you conservatives believed “the free market” will solve all of society’s ills and make everything equal. Well, I guess that just ain’t so, is it? It looks like “the free market” is greedy and is looking for the quick buck. Maybe the Republican plan to deregulate the mortgage industry may not have been such a great idea. Maybe the Republican loosening of credit regulations wasn’t such a good idea after all. Republicans were warned this would happen. As usual they didn’t (and don’t) listen.
We are just beginning to see this market turn, most people and the media have been in denial the whole time. If you are an investor with multiple homes you should just walk unway unless you have positive cash flow because you won’t be able to sell that house at a profit for at least 10 years. If you were stupid enough to get a variable rate mortgage at a time of historic low rates you probably can’t refinance now for what you owe. Suck it up or walk away. Wait until the big homebuilders start walking away from the huge tracts of land that they paid way too much for. This is going to make the S&L crisis look like a baby burp.
I guess I was one of the stupid people who just decided not to make a fortune by selling my 10 year old home at the height of the market like everyone else in my neighborhood. So, now I have a home that is affordable, and I bet the only guy in the neighborhood that has a mortgage under $150,000.
Interesting Stat – My business assists homeowners either in foreclosure or nearing foreclosure. A year ago there were a number of ways I could help someone because, on average, they had some equity in their home. However, in the past 6 months, 90% of the homeowners I have worked with have no equity in their home and have had to sell their homes short of what they owe. Today, I spend the majority of my time negotiating deals with banks. And the worst has yet to come.
I blame mortgage companies for taking ridiculous risks on people who couldn’t possibly afford a home.
I blame new homeowners who don’t have simple math and judgment skills to know whether or not they could afford a new home.
I blame everyone involved for the greed, because 2 years ago, it was a “given” that you would make $100,000 in 6 months in the real estate market.
Those days are over, now we get back to reality, and remember, just because house prices are cheaper than they were last year, doesn’t mean they’re “cheap.” They’re coming from artificial highs.
It’s like saying Mercedes that usually go for $50,000 start selling for $150,000 and everybody gets in a mania. Then the buble bursts and the Mercedes drops to $110,000 and people think it’s cheap. Wrong, it should be $50,000 so it still has further to go.
I am 30 years, old, make $45k a year and am a single male. There’s no way I could afford a decent home even though I make “OK” money. I think after this is all said and done, I’ll be able to afford a good home when prices get back to normal levels. I blame greedy people for the reason I’m not in one right now.
When I refinanced in 04, the mortgage dude was pimping his low rate adjustable mtg to me. I used my big fat brain, and said hmmmmmmmmm, this loan is cheap now, but in the future it will be very expensive. So I made a very smart decision, “which wasn’t hard for me since I do that all the time”, and I opted for his 15 year fixed at 4.75% loan. my payment only went up $160 a month from the thirty year loan at 6.0%, and now I’m happy. see, it’s not always the lenders fault people, sure their trying to make a profit, but at some point we need to do a little research, and make decisions that are best for us, and not for the lender. there is a sucker born every second.
I was quite surprised when I purchased my current home: ($740k) and I qualified for a “no-doc” loan. They didn’t even ask for a bank statement/tax return… We are self-employed, wich used to mean the same as “un-employed” in the eyes of the banks. We used to have to show more documentation than I ever could imagine… IRS statements, tax-returns, payroll information, they even asked to see our website. We had to give up all our bank statements, 1099′s, W-2′s, K-1′s, financials, etc. ect. So, I was quite surprised when my last mortgage company asked to see nothing. Granted we had a 30% down payment, excellent credit, no debt and money in the bank. We were prepared, but they didn’t know that. In my mind they were taking a huge risk on us, and the risk paid off. However, how many times has this bank gambled and lost? This is why there are so many foreclosures. I do blame the banks for lending the money to the un-deserving, because people will do anything to get into a home. It’s not like they will turn down a loan because of their financial situation. They feel “if the bank is lending me the money, then I must be qualified.” The banks are to blame, as are the slimy mortgage brokers who are, at times, worse than a used car salesman.
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