Thursday, March 23, 2006

Housing Hangover

A reader sent in this link to this ABC video (thank you). The party is over for some, it's now the next day, and the hangover is killing them. Part of me feels sorry for them and part of me wonders "what did you expect?" I mean, everyone knew this was going to happen (rate resets), or should have known. People have been talking about it for a long time now. No one made you take out that "toxic" loan. And the frightening thing is that this is just the beginning; it's only going to get worse, foreclosures are up YOY, and the ripple effects of all of this will effect us all.


Blogger David said...

it is scary the lack of research that goes into such huge financial decisions. More power to the bloggers like yourself for getting the infomation out there.

Mar 23, 2006, 9:50:00 AM  
Blogger Matt Norris said...

Told you so...

ABC plagiarized my blog! (ok, not really, but I need to inflate my ego)

Mar 23, 2006, 9:58:00 AM  
Anonymous Anonymous said...

$3000 a month and she can't handle it? Does she even work? She clearly eats. I don't see how anyone can have any sympathy for fools like this.

Mar 23, 2006, 12:28:00 PM  
Blogger Wickedheart said...

Obviously not a well thought out decision. I bet they didn't factor in the airconditioning bills for that monster house and Texas property taxes. Both have to be costing her a small fortune.

Heidi's problem is Champagne tastes and a beer pocketbook.
I don't feel sorry for her because she could have very easily bought a very nice home in Texas that she could afford without a crazy loan.

Mar 23, 2006, 1:53:00 PM  
Anonymous Anonymous said...

I have no sympathy that she can't afford her giant home that was clearly much more than she needed. Great time to be buying foreclosures in TX methinks.

I always boggles my mind that people are willing to go on national TV and basically say "I am a moron". If I had made such a poor decision, I certainly would not want the entire country to know about it.

Mar 24, 2006, 11:05:00 AM  
Blogger marine_explorer said...

$3000 a month and she can't handle it? Does she even work? She clearly eats. I don't see how anyone can have any sympathy for fools like this.

Well, most of the country doesn't see wages like the SF Bay, but I bet they're wasting money elsewhere on stupid overpriced junk. Not to mention, it looks to me they clearly overbought to climb the social ladder. That looks like a 3500+ sqft home, and had they actually thought this through, it's likely they would've cleared their mortgage with a home around 2000 sqft. Did they ever stop to consider buying under their means? The world shouldn't pity these people; they followed a mania and burned themselves.

Mar 24, 2006, 7:16:00 PM  
Blogger Matt Norris said...

I wonder how much her home cost initially? I just bought a 2600 sq. ft home, brand-new construction, in Missouri, and the payments don't even begin to flirt with $3,000. In fact, they're about half of that, including tax and insurance escrows. The purchase price on my home was $209,000.

Now, I know prices are different in various parts of the nation, but it still seems strange that her payments jumped like that unless:

1) She was in an adjustable rate mortgage (she probably was)

2) She chose to take a Pay Option mortgage with an adjustable interest rate (which basically would mean that her initial payments were causing her loan balance to increase, and on top of that, the rate started adjusting after a relatively short period of time)

In short, she probably:

1) Bought too much house

2) Bought too much house using a bad mortgage program

You could probably make the claim that it was her fault, but I'd also love to meet the loan officer that convinced her that taking that program was a good idea...

Mar 26, 2006, 4:21:00 PM  

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