You're not being punished - you just aren't able to take advantage of all the benefits offered to the less-responsible.
Me, neither. Like you, I bought a home before the peak of the bubble (in 2000), have never missed a payment, etc. I have been pre-paying my mortgage, which basically means that I've been throwing money away for eight years, equity-wise.
However, we are on track to own our home outright in another eight years. The value of the house doesn't matter for that - we will own it whatever its value is.
We won't be able to move into another house, which is particularly unfortunate for us, as my husband and I bought a large(ish) place thinking that we'd be starting a family... and now have decided not to have kids. We have 2000 sq ft, but need only slightly more than half that. Energy prices are rising, and we're afraid we won't be able to take out a home equity loan to pay for replacing the windows in our 100+-year-old house.
It sucks. We want to move, but realistically, we can't. But that's the way it is - the economy is a gamble, and owning property is, too. We lost.
I am watching from the sidelines on this as well (from up in Canada) and would be LIVID if the Gov't bailed out people who took on too much mortgage and too much credit.
I was listening to NPR the other week while driving through NY state and a woman called in with the same story - too much house, not worth the same, credit card debt so needed another mortgage to refinance and the radio announcers are siding with her saying 'it's not your fault... it's the evil bankers who prey on people like you'
WTF?!?
No one said that house values would go up for ever - it's your responsibility to know that when you apply for a mortgage.
I believe it's all down to entitlement and keeping up with the Jones. Where do these people get off thinking they 'deserve' a $400,000+ home when they make $40,000 a year?
For people who got into new mortgages without knowing the terms... it's their own fault.
I completely agree! I just bought a house, responsibly, 30 y, fixed rate!
I pay the mortgage, but Why should we! I love the home, wouldn't trade it for anything, but now I get punished for being responsible.
They probably wouldn't let me renegotiate because we bought in July/aug of this year, and i really don't want to lose the house.
But after being screwed by the country, corporations, and banks the infamous 'they' expect me to be loyal!
At this point i hope the whole country goes down in flames. it would suck beyond all reason, but in the years after we would have responsibility and respect restored.
Tried to get the cupon but it says its expired??????? whats up with that? Just heard about it on the "today" show today!! 16th Oct. Anyone know where to get it??
I was offered a refi deal 3 years ago, and I read everything. When I realized what I would be getting into, I told the representative to leave my home, politely of course. There is never an excuse for ignorance. Bottom line...it's up to you to sign, and read what you sign. This is your responsibility as an adult, and you can't cry foul later because you didn't do your homework.
While I'd like to believe I'm like you, sticking to my list and buying the cheapest consistently-good, time (and taste!) tested product, I'm actually more like your husband, with one caveat.. I don't buy things with the coupon because they're "on sale" ... I hoard those coupons as long as I can, until things are REALLY on sale. For example, when back-to-school time rolled around, both chains near us (Jewel/Osco/Albertson's; and Dominick's/Safeway) had a variety of those super-sugary cereals on sale for an outrageously low price of $2/box. That's when I turned to my coupon stash, where I had multiple coupons for specific brands - .75 off Hyper-Choco Puffs; 1.00 off any two Frosted Sugar Flakes; $1.00 off any two Big Bad Corporation products ... you can see where this is going. The funny thing was, they also had one of those blinky red light coupon dispensers offering $1.00 off any two... so even the ones I didn't have a coupon for, I had a coupon for. Needless to say, I bought so much sugary cereal we still haven't run out. And the kicker - on one of my stock up trips, there also happened to be a mail-in-rebate for $10 off if you bought 10 Big Bad Corporation products in one shopping trip. I think they ended up paying *me* to eat their cereal.
There are a few name brand products I will not skimp on - toilet paper; dish soap; laundry detergent... so I always use coupons on those, even if they're not on sale (though I like to buy in bulk from Costco, sometimes I don't plan ahead well enough to do so), but I will leave the coupon on the shelf for some other shopper if the store brand staple (pasta, canned anything, etc) is cheaper than the "ON SALE" name brand + coupon.
There are people who had decent 30-year-fixed mortgages and were told they should refinance to get lower payments without being told that the payment amount could change and that the number of years remaining on their mortgage would change.
I was a first time home buyer five years ago, and I refinanced since then. I was pitched all the same ideas, but it took very little effort on my part to educate myself regarding the basic difference between what I was being offered. I do not feel sorry for the people signing on the dotted line, and I consider them completely irresponsible. They should lose their house if they can't pay.
You are forgetting to factor in the cost of high VENDOR FEES that are burdening the vendors. If the fees were reduced by the venues to a reasonable and fair price, the savings could be passed onto the consumer.
You have every right to be angry as hell. You did it the right way and got screwed - that's not supposed to be the American Way. But, I guess that's an idea long lost in the past.
I'm pissed as hell. I stayed out of the market knowing it was a bubble. I rented and will end up paying for all those homeowners who are upside down on their mortgages. No one's explained to me why this is fair.
I think after the election there will be a revolution. Dem's will steal a couple of states through transparent voter fraud. Ohio is shaping up as the best example.
I'm less angry than you because I've heard stories of people who had done the right thing but then were talked into refinancing by bankers who didn't reveal the terms (except in the fine print). There are people who had decent 30-year-fixed mortgages and were told they should refinance to get lower payments without being told that the payment amount could change and that the number of years remaining on their mortgage would change.
But I'm still angry because it seems like the people who made these mortgages are not having to suffer--they repackaged them and sold them. The idiots who bought them are getting paid gigantic severance pay instead of being fired from the companies they failed. And yes, flippers also should not be helped.
Personally, I don't much care if home values suffer. I heard that the problem is that it's a lot harder to get credit now (which I personally also don't much care about--yes, people will have to use their own money to buy things). But that in turn means that industries that rely on credit (such as car dealerships) are going to be in big trouble, and thus there will be a lot of unemployment. I do care about unemployment, but that just makes me want to spend money on unemployment and maybe retraining, not buying crappy loans and kissing morons.
If it makes you feel better, I suspect that all these folks who are getting help (except the escaping CEOs) are probably having to deal with a lot of bureaucracy and not all the people who could use help are going to get it. I'd much rather be safe having done the right thing than trying to live just on the right side of the edge. So many more things can go wrong using the latter strategy.
I would not make any decision on possibility that the government will help. Any homeowner bail out is speculative at best. From now until the end of January, any funds hot off the Treasury presses will go to bail out negligent lenders, investment bankers and Bush / Paulson cronies who developed the derivative Ponzi scheme.
If some of these people living in McCastles end up with lower house payments than I have on our modest house (and mortgage) I will be seriously angry.
This whole idea is going to turn into a nasty mess if certain people are rewarded for bad behavior and get these luxury homes written down to the level of average homes in mortgage total and payments.
Sorry, I find most of these places are just an invitation to overeat mediocre, extremely unhealthy food just because it's "all you can eat!" I tend to order off the menu at Chinese restaurants that have a buffet because the buffet food tends to be not that fresh but I eat too much of it anyway. I would rather save up my money to eat somewhere with better food than blow it on a buffet.
Thanks for pulling together such a comprehensive and diverse collection of posts from around the blogosphere. I think in these challenging times, there is a great opportunity for Financial Bloggers to inject some wisdom and different perspectives into the financial community.
Over at BehaviorGap.com, we're really focused on investor behavior and it's impact on long term investment results.
I was just discussing this the other day with people: what is our incentive to do the right thing anymore?
If people are given the option to do the right thing or take the easy way and get free money, they will take the free money. Why wouldnt they? It seems that there will just be another bailout when they wear out this one.
It is a downward spiral, and there seem to be no consequences. If you cant pay for your house, maybe you shouldnt have it anymore.
The situation is infuriating, but it'd be political suicide for any politician to actually allow people to fail. And there's no candidate who's preaching the virtues of personal responsibility so... don't look to the next president for lessons about how to avoid this kind of crap in the future.
I don't do any of the above, I go by price per unit. Which Mac n' Cheese is cheapest, brandname/storebrand/Costco? I don't have brand loyalty, I have survival of the fittest when it comes to my pennies.
Certain items get no compromise however. Wife picks the toilet paper and she gets the toilet paper she wants. I don't debate and I live longer. If I buy juice, I scour over the package to see where the fruit is coming from (especially orange juice). Once I identify that the fruit isn't coming from Brazil or some other country, I crack the numbers and go that route.
I keep track of it all using my HipsterPDA and show the item and price per ounce. If there's a sale, I whip out my cell phone and do the math on the fly. If it comes out cheaper to what's on my cheat sheet, I make the purchase.
I'm more in your camp as well. I avoid most of the processed food that you can get with coupons. I also am now trying to make most of our household cleaners, so I don't need coupons for that anymore. I now just clip them for soap, shampoo, etc. It still can bring in nice savings, especially when you stockpile items by matching coupons with sales.
Some good points brought up here. At this point in time I believe the days of buying and selling "fixer-uppers" are over. The reality is buying a house that needs some work is the only way some people can afford to enter the housing market.
You touched on a few real estate topics (capital gains,liquid assets, home comps, renovation costs et.) that potential homeowners need to pay attention to when looking to buy.
you could quit your job and get:
section 8 vouchers (for housing)
food stamps
welfare cash payments
WIC vouchers (for food for kids)
Medicaid
free pre-school (Head Start)
free methadone clinic services
You don't take advantage of these things either. Other than bigger dollar amounts, what is the difference?
You're responsible; irresponsible people will probably always make you angry.
Who's better off in the long run?
You're not being punished - you just aren't able to take advantage of all the benefits offered to the less-responsible.
Me, neither. Like you, I bought a home before the peak of the bubble (in 2000), have never missed a payment, etc. I have been pre-paying my mortgage, which basically means that I've been throwing money away for eight years, equity-wise.
However, we are on track to own our home outright in another eight years. The value of the house doesn't matter for that - we will own it whatever its value is.
We won't be able to move into another house, which is particularly unfortunate for us, as my husband and I bought a large(ish) place thinking that we'd be starting a family... and now have decided not to have kids. We have 2000 sq ft, but need only slightly more than half that. Energy prices are rising, and we're afraid we won't be able to take out a home equity loan to pay for replacing the windows in our 100+-year-old house.
It sucks. We want to move, but realistically, we can't. But that's the way it is - the economy is a gamble, and owning property is, too. We lost.
I am watching from the sidelines on this as well (from up in Canada) and would be LIVID if the Gov't bailed out people who took on too much mortgage and too much credit.
I was listening to NPR the other week while driving through NY state and a woman called in with the same story - too much house, not worth the same, credit card debt so needed another mortgage to refinance and the radio announcers are siding with her saying 'it's not your fault... it's the evil bankers who prey on people like you'
WTF?!?
No one said that house values would go up for ever - it's your responsibility to know that when you apply for a mortgage.
I believe it's all down to entitlement and keeping up with the Jones. Where do these people get off thinking they 'deserve' a $400,000+ home when they make $40,000 a year?
For people who got into new mortgages without knowing the terms... it's their own fault.
I completely agree! I just bought a house, responsibly, 30 y, fixed rate!
I pay the mortgage, but Why should we! I love the home, wouldn't trade it for anything, but now I get punished for being responsible.
They probably wouldn't let me renegotiate because we bought in July/aug of this year, and i really don't want to lose the house.
But after being screwed by the country, corporations, and banks the infamous 'they' expect me to be loyal!
At this point i hope the whole country goes down in flames. it would suck beyond all reason, but in the years after we would have responsibility and respect restored.
Tried to get the cupon but it says its expired??????? whats up with that? Just heard about it on the "today" show today!! 16th Oct. Anyone know where to get it??
I was offered a refi deal 3 years ago, and I read everything. When I realized what I would be getting into, I told the representative to leave my home, politely of course. There is never an excuse for ignorance. Bottom line...it's up to you to sign, and read what you sign. This is your responsibility as an adult, and you can't cry foul later because you didn't do your homework.
While I'd like to believe I'm like you, sticking to my list and buying the cheapest consistently-good, time (and taste!) tested product, I'm actually more like your husband, with one caveat.. I don't buy things with the coupon because they're "on sale" ... I hoard those coupons as long as I can, until things are REALLY on sale. For example, when back-to-school time rolled around, both chains near us (Jewel/Osco/Albertson's; and Dominick's/Safeway) had a variety of those super-sugary cereals on sale for an outrageously low price of $2/box. That's when I turned to my coupon stash, where I had multiple coupons for specific brands - .75 off Hyper-Choco Puffs; 1.00 off any two Frosted Sugar Flakes; $1.00 off any two Big Bad Corporation products ... you can see where this is going. The funny thing was, they also had one of those blinky red light coupon dispensers offering $1.00 off any two... so even the ones I didn't have a coupon for, I had a coupon for. Needless to say, I bought so much sugary cereal we still haven't run out. And the kicker - on one of my stock up trips, there also happened to be a mail-in-rebate for $10 off if you bought 10 Big Bad Corporation products in one shopping trip. I think they ended up paying *me* to eat their cereal.
There are a few name brand products I will not skimp on - toilet paper; dish soap; laundry detergent... so I always use coupons on those, even if they're not on sale (though I like to buy in bulk from Costco, sometimes I don't plan ahead well enough to do so), but I will leave the coupon on the shelf for some other shopper if the store brand staple (pasta, canned anything, etc) is cheaper than the "ON SALE" name brand + coupon.
There are people who had decent 30-year-fixed mortgages and were told they should refinance to get lower payments without being told that the payment amount could change and that the number of years remaining on their mortgage would change.
I was a first time home buyer five years ago, and I refinanced since then. I was pitched all the same ideas, but it took very little effort on my part to educate myself regarding the basic difference between what I was being offered. I do not feel sorry for the people signing on the dotted line, and I consider them completely irresponsible. They should lose their house if they can't pay.
You are forgetting to factor in the cost of high VENDOR FEES that are burdening the vendors. If the fees were reduced by the venues to a reasonable and fair price, the savings could be passed onto the consumer.
Someone or some organization should take these hard learned lessons and focus on educating America's next generation about doing it a better way.
You have every right to be angry as hell. You did it the right way and got screwed - that's not supposed to be the American Way. But, I guess that's an idea long lost in the past.
I'm pissed as hell. I stayed out of the market knowing it was a bubble. I rented and will end up paying for all those homeowners who are upside down on their mortgages. No one's explained to me why this is fair.
I think after the election there will be a revolution. Dem's will steal a couple of states through transparent voter fraud. Ohio is shaping up as the best example.
Oh, well, I'll just bend over now.
I'm less angry than you because I've heard stories of people who had done the right thing but then were talked into refinancing by bankers who didn't reveal the terms (except in the fine print). There are people who had decent 30-year-fixed mortgages and were told they should refinance to get lower payments without being told that the payment amount could change and that the number of years remaining on their mortgage would change.
But I'm still angry because it seems like the people who made these mortgages are not having to suffer--they repackaged them and sold them. The idiots who bought them are getting paid gigantic severance pay instead of being fired from the companies they failed. And yes, flippers also should not be helped.
Personally, I don't much care if home values suffer. I heard that the problem is that it's a lot harder to get credit now (which I personally also don't much care about--yes, people will have to use their own money to buy things). But that in turn means that industries that rely on credit (such as car dealerships) are going to be in big trouble, and thus there will be a lot of unemployment. I do care about unemployment, but that just makes me want to spend money on unemployment and maybe retraining, not buying crappy loans and kissing morons.
If it makes you feel better, I suspect that all these folks who are getting help (except the escaping CEOs) are probably having to deal with a lot of bureaucracy and not all the people who could use help are going to get it. I'd much rather be safe having done the right thing than trying to live just on the right side of the edge. So many more things can go wrong using the latter strategy.
If you go to "My Monopoly" it says what you rolled, where you started, and where you landed. You can check to make sure the spaces are right.
I would not make any decision on possibility that the government will help. Any homeowner bail out is speculative at best. From now until the end of January, any funds hot off the Treasury presses will go to bail out negligent lenders, investment bankers and Bush / Paulson cronies who developed the derivative Ponzi scheme.
If some of these people living in McCastles end up with lower house payments than I have on our modest house (and mortgage) I will be seriously angry.
This whole idea is going to turn into a nasty mess if certain people are rewarded for bad behavior and get these luxury homes written down to the level of average homes in mortgage total and payments.
we could split
maybe that guy is just excited and not "bragging". stop whining and start an effort towards winning if you want a chance.
Sorry, I find most of these places are just an invitation to overeat mediocre, extremely unhealthy food just because it's "all you can eat!" I tend to order off the menu at Chinese restaurants that have a buffet because the buffet food tends to be not that fresh but I eat too much of it anyway. I would rather save up my money to eat somewhere with better food than blow it on a buffet.
Thanks for pulling together such a comprehensive and diverse collection of posts from around the blogosphere. I think in these challenging times, there is a great opportunity for Financial Bloggers to inject some wisdom and different perspectives into the financial community.
Over at BehaviorGap.com, we're really focused on investor behavior and it's impact on long term investment results.
I was just discussing this the other day with people: what is our incentive to do the right thing anymore?
If people are given the option to do the right thing or take the easy way and get free money, they will take the free money. Why wouldnt they? It seems that there will just be another bailout when they wear out this one.
It is a downward spiral, and there seem to be no consequences. If you cant pay for your house, maybe you shouldnt have it anymore.
The situation is infuriating, but it'd be political suicide for any politician to actually allow people to fail. And there's no candidate who's preaching the virtues of personal responsibility so... don't look to the next president for lessons about how to avoid this kind of crap in the future.
I don't do any of the above, I go by price per unit. Which Mac n' Cheese is cheapest, brandname/storebrand/Costco? I don't have brand loyalty, I have survival of the fittest when it comes to my pennies.
Certain items get no compromise however. Wife picks the toilet paper and she gets the toilet paper she wants. I don't debate and I live longer. If I buy juice, I scour over the package to see where the fruit is coming from (especially orange juice). Once I identify that the fruit isn't coming from Brazil or some other country, I crack the numbers and go that route.
I keep track of it all using my HipsterPDA and show the item and price per ounce. If there's a sale, I whip out my cell phone and do the math on the fly. If it comes out cheaper to what's on my cheat sheet, I make the purchase.
I'm more in your camp as well. I avoid most of the processed food that you can get with coupons. I also am now trying to make most of our household cleaners, so I don't need coupons for that anymore. I now just clip them for soap, shampoo, etc. It still can bring in nice savings, especially when you stockpile items by matching coupons with sales.
It's great to have regular readers and commenters. Thanks for the feedback.
Some good points brought up here. At this point in time I believe the days of buying and selling "fixer-uppers" are over. The reality is buying a house that needs some work is the only way some people can afford to enter the housing market.
You touched on a few real estate topics (capital gains,liquid assets, home comps, renovation costs et.) that potential homeowners need to pay attention to when looking to buy.