Bush said buy a house (regardless of price) - the "ownership society". Greenspan talked about how Americans would have benefited if they had gotten into ARMs vs. fixed rate loans. Unregulated mortgage brokers talked folks into negative amortization loans because they earned higher commissions there.
And John Q. Public went along for the ride, especially when that mortgage broker told him he could take $100,000 out of his house and go blow it on cocaine and hookers (and everything he ever wanted at Wal-Mart too)
So now we have this.
The number of property foreclosures in metro Atlanta this year is on track to double 2005 foreclosures.
Real estate database Equity Depot, which has tracked foreclosures in Atlanta for 15 years, recorded more foreclosures in a 13-county metro area through the end of July than were reported in all of 2005.
"We're just touching the surface of this whole adjustable-rate mortgage problem," said David Cook, president of Alpharetta-based Equity Depot.
Now, years of easy mortgage credit, including adjustable-rate mortgages, and low interest rates have created a stratum of homeowners vulnerable to a softening housing market or any economic setback.
"Yes, we're seeing what I would say is a substantial increase in the number of homeowners who are struggling to make their mortgage payments due to increased interest payments on their loan," Hunt said.
In six months, Hunt said, CCCS has tripled its housing counseling staff, and the agency plans to add more staff to cope with increased demand.
Hunt said local consumers are often confused about the potential risk adjustable-rate loans can pose.
"The first explanation we hear from our clients is that they didn't realize or fully understand the terms of the [loan] contract," Hunt said. "They knew it would escalate, but they didn't realize how much [more payment] a small increase in the interest rate would generate."
September 19, 2006
Millions of families about to lose their homes - ARMs and negative-amortization loans wreaking devastation (thank you Alan Greenspan)
Subscribe to:
Post Comments (Atom)
31 comments:
YES
Living for the Matrix. . .give that last kilo of blood for the Man. . .CitiBank forever with minimum payments. . .maybe Bush can change the law to force children and grandchildren to pay their parents debt??? Hope the Rapture comes soon for all those Bush voters. . .
oh
I'm glad to see there is no problem some retards can't blame on Bush or Cheney. Let me guess, the HP is part of that 9/11 conspiracy where THE MAN robs your bank account, screws your wife, and eats the last piece of cake.
The Matrix was a movie dumbass.
Everyone is responsible for the choices they make - not Greenspan. This includes choosing a mortgage that you can't afford or that might come back to bite them in the ass.
It is not surprising that some citizens have gotten into a difficult financial position. What percentage of those mortgage holders are functionally innumerate? How about illiterate? There are many people in the US who know how interest works, and haven't overbought. They aren't the ones making the news though.
The number of mortgages held by people who really can't afford the house will increase the pain and suffering of everyone trying to sell during the bubble collapse. Mish has an interesting commentary today on the Florida bubble situation.
I am not in the mortgage business, I don't flip houses, but I'm sure this downturn won't be good for business.
Exactly...
People should be responsible for their own actions. I was not priced out of a home, so that people could easily bail-out when they had the chance.
financial illiteracy is one of the top problems we face as a country. Kids in school receive hardly any education about managing money, debt, mortgages, stocks, bonds, retirement planning, etc.
And now we (and they) pay the ultimate price
I first and foremost blame the people - anyone stupid enough to buy a $500,000 1-bed condo in Phoenix. Anyone stupid enough to sign a negative-am loan. Anyone stupid enough to extract their housing paper gains and go blow it on a hummer.
But I also blame a team of corrupt, sometimes evil people. Mortgage brokers, realtors, the NAR, builders, bush, greenspan, the media, appraisers, bankers, wal-mart, china and congress all have blood on their hands in my book
My Mother would offer some simple advice for the poor innumerates and illiterates who now find themselves in a jam.
It translates from German as "If you don't learn, you're going to feel."
Just wait till the prevaling attitude becomes "hey, the neighbor let their house go because of the ARM, it's not a bad thing, everyone is doing it, it's not our fault!"
Other foreclosure data are even more serious. These are changes in foreclosures rates between July and August 2006
Florida up 50%
California up 50%
Colorado up 60%
Bill
I got 4 words for you! Pennies on the dollar!!!!!!!
"Kids in school receive hardly any education about managing money, debt..."
The best comment I've ever heard. Way to go Keith. Frankly, I've been motivating my daughter to save. 20% of monies she'd received from relatives as b-day or christmas gifts goes to savings and she'd only need to spend for shopping the 80%.
re kids education in the usa... it is not school.. the edumbication system here is a baby sitting system. Having the word 'school' in the name of the establishment doesn't automatically qualify it as a school.
to the quoter of "if you don't learn, you're going to feel." how do you say it in German? thanks.
No one goes around saying that the sun will come up tomorrow because very few people need to repeat things they are entirely sure about. Yet people on this site have been repeating that the housing boom is about to implode for what four years now? So far it has not happened and there is very little hard evidence to suggest it will anytime soon. By historical standards inventory is moderate, rates remain low, and prices have only declined marginally or not at all. Mortgage delinquencies remain well below long-term averages.
As for a housing led recession Morgan Stanley's Richard Berner says "the deceleration in housing wealth will have at most one-fifth the impact on consumer spending that some fear."
Even if prices do retreat somewhat there's still no financial panic, no blood on the streets, and no descent into anarchy. That's a dime novel version of America promoted by a bunch of talk radio theorists, misguided loners and conspiracy theory misfits. Sorry to deflate your housing bubble bubble. Now go home and watch your X-Files videos.
George said: Yet people on this site have been repeating that the housing boom is about to implode for what four years now?
George, how do you possibly know what people on this site have been saying for the last four years? You must be awfully worried to be watching these folks for that long...
Keith,
I see you did some selective editing from the source article by leaving out this sentence:
Georgia laws make non-judicial foreclosures fast and easy and have long helped keep the state high in national rankings.
What most of these people don't comprehend (hey, they didn't comprehend the neg-am loan, so why stop there) is that you don't just "let the house go back to the bank".
They think "I don't have any cash invested, and I owe $100k more than I can sell the house for, so I give the keys back, the banker shakes my hand and tells me better luck next time, right?"
Sorry Jake, if you give the house (or car, or whatever) back, the bank is going to SUE YOUR BUTT for the balance. And they will win. And you will have your wages garnisheed until the end of time.
So you might as well start your BK proceedings when you hand those keys back...
I think this sort of fits with this thread's topic:
The Ant and the Grasshopper
OLD VERSION:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.
The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed.
The grasshopper has no food or shelter, so he dies out in the cold.
MORAL OF THE STORY: Be responsible for yourself!
MODERN VERSION:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.
The grasshopper thinks he's a fool and laughs and dances and plays the summer away.
Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving.
CBS, NBC, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food.
America is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?
Kermit the Frog appears on Oprah with the grasshopper, and everybody cries when they sing, "It's Not Easy Being Green."
Jesse Jackson stages a demonstration in front of the ant's house where the news stations film the group singing, "We shall overcome."
Jesse then has the group kneel down to pray to God for the grasshopper's sake.
Tom Daschle & John Kerry exclaim in an interview with Peter Jennings that the ant has gotten rich off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his "fair share."
Finally, the EEOC drafts the "Economic Equity and Anti-Grasshopper Act," retroactive to the beginning of the summer. The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government.
Hillary gets her old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of federal judges that Bill appointed from a list of single-parent welfare recipients.
The ant loses the case.
The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he is in, which just happens to be the ant's old house, crumbles around him because he doesn't maintain it.
The ant has disappeared in the snow.
The grasshopper is found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.
---------------------
I would write the housing collapse version, but don't have time at the momoent. Besides, there are lots of creative people here who might take a stab at it.
Boomorbust:
You've given a very good info about not being able to just simply return the house keys to the bank and walk away. There's very little discussion about it in this blog, but I think, if you can elaborate some more about the process, it will really wake up a lot of people, escpecially in the verge of foreclosure.
http://lifeafterthe oilcrash. net/OriginalArti cles/ThrivingPar tTwo.html
Thriving in the Age of Collapse, Part II:
What Can Young Professionals and Aging Baby Boomers do to Prepare for America's Collapse?
By Dmitry Orlov
(Editor's Note: Part I of this article is available here. Dmitry Orlov lived through the collapse of the Soviet Union. In this installment he offers his advice on how young professionals ("yuppies") and aging baby boomers can prepare for America's collapse. -Matt)
Yuppies
The first personal profile I will consider is of "Chris", a professional in his twenties, who lives in a large urban area in the Pacific Northwest. Chris earns some $60,000 to $90,000 a year, contributes to his employer's 401-k program, and carries massive student debt. Thankfully, he is in good health. Among his many marketable skills, none are directly applicable to an energy-scarce environment. He is a fantastic bore at parties, compulsively attempting to hold forth on the subject of resource depletion and economic collapse, and, needless to say, his parents, friends, and fiancée do not wish to hear any more about it, but love him just the same. Being uncertain of the future, he rents. Chris is a regular North American workaholic, working 50 to 60 hours a week. Chris had never given politics, oil, or the looming economic collapse much thought, until somebody handed him a copy of Mike Ruppert's book, but now he is a true believer.
The Grasshopper now has an ACLU lawyer......and a communicable disease! They go hand in hand!
Speaking of the ACLU and Lawyers in General.......inspired me!
I gotta go take a Dump!
oh oh everyone should check out these vids:
http://bullnotbull.blogspot.com/
bookmark it !!!
"You've given a very good info about not being able to just simply return the house keys to the bank and walk away."
One addition: If you walk away (and possibly even if you BK), the unpaid balance becomes "Forgiveness of Debt". As in TAXABLE INCOME.
What's your current tax bracket?
Say hello to Mister IRS...
Anon, your story about the grasshopper and the ant is brilliant, and very well written.
The Ant and Grasshopper is one of the best posts ever on HP.
I am a liberal and totally agree that the dems will use this to pander to the idiots.
Ant and grasshopper story: I cry foul! I'm a liberal-leaning democrat, but for crying out loud; my parents came up in Great Depression Part One, and man, did we ever watch every dime while growing up. Hippies know how to live on the cheap. Conservative Republicans not only do not have a corner on saving (no pun intended), but let's face it - the ones in charge right now are simply not acting like conservatives. That story would have worked if you left out the slam on dems. This whole thing should be a unifying moment for everyone who didn't fall for the Big Housing Ponzi Scheme of the Century. "Live within your means" is an American value, not lib or con. Sufferin' Moses, ease off it.
I was the one that posted the Ant and Grasshopper, but I am not the author. I don't know who the author is, but I believe it was written during the 90's, both because I recall reading it some years ago and due to some of the names invoked.
In this light the clear hit on the dems, might rather have been a hit on the party in power.
Either way, I think there is an Ant and Grasshopper story to be told for the housing bubble.
George W. Groovy,
You're an idiot! You seem to neglect the very obvious fact that home prices in many area are way overpriced and far too unaffordable with respect to people's incomes.
Home Builders
remodel loans Tips for building or remodeling your dream home.
Learn The Secret Today
Find The secret to the secret at http://loans4bills.com/. If you want to find out how you can get california refinance home mortgage home equity loan help visit us
Post a Comment