So splain to me how one Walks away from a mortgage?

[TheShiznit]

how hard is it to figure out that you cant live in a 600k house on 40k a year?

 

Show me one cogent example of someone attempting to live in a 600K house on 40K then I would agree....find a more plausible example.

[Bill Swerski]

Who is in a better position to know whether there will be a potential problem....someone/something that has been through this business on many many occasions...or someone who has never entered the arena.

 

I would say that the borrower is in a better position to foresee a potential future financial problem than the lender. The borrower knows exactly how well he/she is doing at work (e.g., prospects for a raise vs. being fired or laid off) and has a better idea of how his/her personal life could result in a better (marriage) or worse (divorce) financial situation down the line. Lenders can gauge quite a bit by looking at a borrower's credit/employment history, but the borrower knows his/her unique situation the best.

[dmarc117]

lenders should also use the keepingupwiththejones cost factor.

[Ursa Majoris]

I would say that the borrower is in a better position to foresee a potential future financial problem than the lender. The borrower knows exactly how well he/she is doing at work (e.g., prospects for a raise vs. being fired or laid off) and has a better idea of how his/her personal life could result in a better (marriage) or worse (divorce) financial situation down the line. Lenders can gauge quite a bit by looking at a borrower's credit/employment history, but the borrower knows his/her unique situation the best.

If lenders still applied the standards they used to e.g. you can borrow up to x times your proven income, much of this would not have come to pass. While I hear what has been said about making the "American Dream" open to more people, that doesn't absolve the lenders of the responsibility to make sure what brokers were sending in was doable for the borrower.

 

BTW, I firmly believe that there should be no bailouts of either side in this mess - both lenders and borrowers need to learn a lesson at their expense, not mine.

[dmarc117]

If lenders still applied the standards they used to e.g. you can borrow up to x times your proven income, much of this would not have come to pass. While I hear what has been said about making the "American Dream" open to more people, that doesn't absolve the lenders of the responsibility to make sure what brokers were sending in was doable for the borrower.

 

BTW, I firmly believe that there should be no bailouts of either side in this mess - both lenders and borrowers need to learn a lesson at their expense, not mine.

 

 

+1111111

[TheShiznit]

+1111111

 

I think we can all agree on that....but it is more fun to focus on assigning blame!!!!!

[westvirginia]

If lenders still applied the standards they used to e.g. you can borrow up to x times your proven income, much of this would not have come to pass. While I hear what has been said about making the "American Dream" open to more people, that doesn't absolve the lenders of the responsibility to make sure what brokers were sending in was doable for the borrower.

 

BTW, I firmly believe that there should be no bailouts of either side in this mess - both lenders and borrowers need to learn a lesson at their expense, not mine.

 

 

I don't know - did the gov't strong arm banks to making more high-risk loans in some way? If so, the banks might deserve the bailout. If there is some truth to this, I'd like to see it come out. Like to see both the prez candidates tap dance on this one.

[Perchoutofwater]

BTW, I firmly believe that there should be no bailouts of either side in this mess - both lenders and borrowers need to learn a lesson at their expense, not mine.

 

I agree 100% unless the banks were "encouraged" by the government, then possibly I can see bailing them out to some extent. Under no circumstances can I agree to bailing out the borrowers.

[TheShiznit]

I agree 100% unless the banks were "encouraged" by the government, then possibly I can see bailing them out to some extent. Under no circumstances can I agree to bailing out the borrowers.

 

Encouragement goes both ways....lol....so the banks "encouraged' the borrowers to take the loans.....who cares.....the Gov't encourages the banks....possible bail out....makes no sense...either way....both knew better....and the banks have more experience.

[Perchoutofwater]

Encouragement goes both ways....lol....so the banks "encouraged' the borrowers to take the loans.....who cares.....the Gov't encourages the banks....possible bail out....makes no sense...either way....both knew better....and the banks have more experience.

 

There is big difference between the government "encouraging" business, than a bank saying I'll loan you some money. When the government "encourages" businesses they rarely have a choice but to follow that encouragement.

[westvirginia]

Encouragement goes both ways....lol....so the banks "encouraged' the borrowers to take the loans.....who cares.....the Gov't encourages the banks....possible bail out....makes no sense...either way....both knew better....and the banks have more experience.

 

 

Encoragement might go both ways, but the gov't has the option of the use of force - something the lenders can't really do.

[TheShiznit]

Encoragement might go both ways, but the gov't has the option of the use of force - something the lenders can't really do.

 

somewhat true...but when you go to a bank...who should know what they are doing...and they tell you that you should be able to afford this and that...and show you three ways from sunday....it is just my opinion that tactic should count too.

[Ursa Majoris]

I don't know - did the gov't strong arm banks to making more high-risk loans in some way? If so, the banks might deserve the bailout. If there is some truth to this, I'd like to see it come out. Like to see both the prez candidates tap dance on this one.

 

I agree 100% unless the banks were "encouraged" by the government, then possibly I can see bailing them out to some extent. Under no circumstances can I agree to bailing out the borrowers.

 

Your anti-gubment fervor is so intense, especially WV, that you're almost wearing the

 

I'm gonna want to see a smoking gun on this before I believe it. If it's there it will eventually come out. In the meantime, I'll continue to point the assfinger at stupid borrowers, crooked brokers, lazy bankers and even lazier buyers of the bundled securities.

[westvirginia]

Your anti-gubment fervor is so intense, especially WV, that you're almost wearing the

 

I'm gonna want to see a smoking gun on this before I believe it. If it's there it will eventually come out. In the meantime, I'll continue to point the assfinger at stupid borrowers, crooked brokers, lazy bankers and even lazier buyers of the bundled securities.

 

I can see where you'd say that, but I don't really believe in conspiracies. How could you keep stuff quiet when that many meglomaniacs are involved? I just believe that government's main purpose, like any other person or entity, is to perpetuate it's own existience. If there was some benefit to be derived from this I can see our elected officials pushing it. And this board is not the first place I've heard of this happening. And since the mainstream media seems to be aligned with the ruling class today, I just can't see that we have a real watchdog anymore. And without a watchdog, I'm skeptical of ANYTHING gov't.

[AtomicCEO]

How hard is it to figure out that the person you're lending the $600k to will never be able to pay it back?

 

ding.

 

And who's going to lose the most in that situation? The guy with bad credit... or the guy out 600K?

[muck]

FWIW, the gov't has encouraged home owners for years to take on mortgage debt ...

 

Anyone else itemize their deductions?

[Ursa Majoris]

FWIW, the gov't has encouraged home owners for years to take on mortgage debt ...

 

Anyone else itemize their deductions?

Of course. Does anyone with a mortgage not itemize?

[rocknrobn26]

If lenders still applied the standards they used to e.g. you can borrow up to x times your proven income, much of this would not have come to pass. While I hear what has been said about making the "American Dream" open to more people, that doesn't absolve the lenders of the responsibility to make sure what brokers were sending in was doable for the borrower.

 

BTW, I firmly believe that there should be no bailouts of either side in this mess - both lenders and borrowers need to learn a lesson at their expense, not mine.

 

The "X" used to be 2.5X w/ 20% down, and 2X w/ little or nothing. I agree w/ the rest of what you said, and I'll go back to what I told several people asking my advice....................DON'T EXCEED 25% OF YOUR GROSS FOR PAYMENT INCLUDING TAXES!

[muck]

The "X" used to be 2.5X w/ 20% down, and 2X w/ little or nothing. I agree w/ the rest of what you said, and I'll go back to what I told several people asking my advice....................DON'T EXCEED 25% OF YOUR GROSS FOR PAYMENT INCLUDING TAXES!

 

Since everyones situation is different, I'd put it a different way:

 

$_______ for food, utilities, clothes, gas and other requirements and 'near' requirements

+____% of that amount to deal with for urgent items, contingencies, inflation, etc.

 

...then, base the housing cost as a % of whatever is left over...

 

So, if you spend 50% of the difference on housing, then the other 50% is used for non-required items (birthday gifts, lattes, etc) and also for savigs, debt reduction, vacations, etc.

[Chavez]

I agree 100% unless the banks were "encouraged" by the government, then possibly I can see bailing them out to some extent. Under no circumstances can I agree to bailing out the borrowers.

The gov't "encourages" people to have kids, should we subsidize day care for everyone?