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With all of these foreclosures? Are many of these from consumers just being careless.?

I would like to hear some examples! I bought a town-home in 2004 for 175k and put down 15k down. Now I its worth 120k thanks to two home right next to me that are vacant due to foreclosure. The one neighbor bought his unit in 1999 when there were 2 year old he bought it for 80k. Well in 2006 he refinanced it for 180k where he got almost 100k in cash. So what did they do, go on lavish trips, go to races all over the place, bought a 30k fishing boat and a new mustang GT. He works as a auto mechanic his wife got laid off from her work, but the funny thing is she just sits around and smokes on her patio. 6 months ago he told me he is not paying his house payment anymore. Cant afford it anymore. So what did they do instead of paying there payment, buy cartons of cigs, cases of beer, went to Florida to deep see fish in June, went to Las vegas in July. We they are now renting a town home somewhere, they had to be out 2 weeks ago. Another she researched a program where the bank gave them 3k to leave! "cash for keys" Now his unit is up for sale for 120k. I have another neighbor that cashed out and went belly up. his unit is 110k. On the flipside I do know folks that have lived frugally and lost there jobs/medical issues. Then foreclosed because they cannot afford there payments. I would like to hear some commits on this?

Public Comments

1. There were people who treated their homes like a private bank. Just take money out and don't worry about paying it back. Those days are over for the most part. Your neighbors are selfish and irresponsible. They signed a contract and then decided to trash it because it did not work for them anymore. The rest of us get stuck holding the bag. But I can't be too harsh on such people. Our Federal government runs up $11 trillion in debt and very few people have a problem with that. If the Federal government spends money that way, then why not the rest of us?
2. It's a combination of people getting adjustable rate mortgages and being unprepared for the jump in payment, rising unemployment, the recession, and irresponsibility. I tend to think the latter, however, is a minority. Your neighbors were obviously irresponsible and didn't deserve the credit they've received. Thankfully, it will be a long time before anyone offers it to them again. The $3000 was so they would leave the house immediately rather then go through the time required to foreclose on the property.
3. Depends on where you live. Some was caused by the housing boom that inflated the prices. Then the bust put many people underwater no matter how careful they were in putting a sizable down-payment. Yes, some people were careless though and got into the sub-prime and balloon and ajustable rate lending and didn't read their documents. And yes, there are some people that just live beyond their means. Then like you said, job loss, illness, etc, were facotrs. I guess it just all depends on the situation and I don't really have the statistics to make a real determination on if the vast majority was due to being careless or not, or just circumstance.
4. Yes there are those that took advantage of the equity in their property. When the property values did not increase so they could again access the equity to pay off these debts they had to go belly up thus causing many foreclosures. A few of these individuals are now blaming the real estate and mortgage professionals for their plight as is the current President. He says he want to have those that were taken advantage of by the system to now be able to refinance their houses at the current value and lower mortgage rates. To me that is giving an ok for these people's bad behavior. Now some were actually take advantage of, but again these same people signed the loan docs. Before signing they should be aware of what they are signing for. Sub prime loans have been around for ages with little or no problems for the consumers. All sub-prime loans have an adjustment period either 2, 3 or 5 years. This is normally explained to all borrowers prior to them signing the loan docs. The mortgage banker or broker tell the borrower that once the property appreciate in value, if you make your payments on time, we or anyone can refinance you into a good rate. What happen this time was the house or property did not increase in value. Since the properties did not increase in appreciation there was no equity. Since there was no equity lenders could not refinance these mortgage loans, thus the borrower was stuck with the consequences of not being able to refinance and had to make the new monthly payments or give the property up to the foreclosure process. I hope this has been of some benefit to you, good luck. "FIGHT ON"
5. some homeboys just not qualified enough to buy any expensive home that cost over 100,000dollars &that is why they lose them
6. Yes, some is from consumer carelessness. It is human nature to spend money if you have it. It burns a hole in your pocket. So, just like you were referring to, many people took out second mortgages on their homes when the second mortgage rates went way down. Some used the money to make improvements, others - with stars in their eyes- bought things that they could have never saved up for ie: boats, cars, trips. The problem was that for some unknown reason everyone expected the value of homes to continue to go up forever. They figured that they would regain the value that they had just pulled out. On the other hand: job loss & mortgage fraud - giving loans to people who really didn't qualify- have played a very big part also. In 1977, The Community Reinvestment Act was passed which forced lenders to make sure that their portfolios were diversified. So that meant giving minorities and people in low-income areas a loan even if they really didn't 100% qualify. Then starting in 1998, the banks started pushing to weaken the authority that the federal government had over their lending practices. And in 1999, Bill Clinton made a change to the Glass-Steagall Act of 1933 which gave banks the ability to offer the full-range of investment services. So with the pressure of the Community Reivestment Act pushing banks to diversify and the new ability to offer more- banks started increasing their sub-prime loan numbers. However, I am a loss-mitigator and I do deal with a lot of legitimate cases. Illness, death, job loss... happens. For the lost part, it is the blue collar workers who aren't prepared as well for those life emergencies. Since they don't make as much, they aren't able to save as much. And, just like in the depression, when the economy tightens up, it is the blue collar jobs that are lost first. Those with educations have an easier time finding new work than manual laborers.
7. Consumers did not think of the future when they signed the papers. Then late on many lost their jobs and took a reduction in pay.