December 19, 2007

So many people financed their spending these past few years with the Housing ATM. Not anymore. The Big Lie is over.


A house should never have been an open wallet. A house should never have been an ATM or a no-limit credit card. A house should never have been a retirement account. A house should never have been a lottery ticket. A house should not have been a replacement for a job.

A house should have been, and should always be, a home.

Everyone thought they were rich (or getting rich) these past few years. They ignored what was happening to America (manufacturing? who needs manufacturing? habeus corpus? ah, that's silly!) because the price of their home was going up and they could suck out the 'equity' and go blow it however they saw fit.

No more.

Now, people are behind on their payments on that mortgage they can't really afford. Millions have lost their jobs. The housing ATM is out of order. And money really doesn't grow on trees.

Have yourself a subprime little Christmas

Jackie Castleberry won't be playing Santa Claus this year.

She usually buys her grandchildren, nieces and nephews lots of gifts around the holidays -- bicycles, educational games, clothes -- but this year she is just struggling to keep her North Las Vegas, Nevada, house.

The interest rate on her four-bedroom home loan shot up in October and she is $6,000 behind on her payments. She now owes $168,000 on her home, which once was worth $220,000 but is now worth about $150,000.

In the past, when times were tough, she would borrow against her home's equity -- that's no longer possible.

"I was always seen as the person that's giving, but it's kind of affected this year," said Castleberry, a former casino buffet supervisor who now makes $11 an hour, 30 hours a week, supervising children before and after school. "This year, I can't see anything right now as far as gifts."

Castleberry is just one of thousands of homeowners nationwide who can no longer finance their spending by tapping into their once inflated, now depreciating home equity. Others can no longer afford their higher monthly payments due to a reset in their adjustable rate mortgages and have been foreclosed.

29 comments:

Anonymous said...

Casleberry is symptomatic of the Joe Six-Pack mentality of Americanos. She is a loser and doomed to destitution with her current financial practices. She should be ashamed of herself.

There was another loser here complaining they could not pay their property taxes because their home did not appreciate enough to borrow against for the tax money.

My Fellow Americans, Wake UP. The game is over. YOU are doomed if you need a loan to pay your property taxes. Walk Away Fast.

Please stay away from me . I do not want to catch what you have.

Why not call your Realtor? Tell them you are a victim. Ask for help. Write down their response and post it here...

Welcome to America. Welcome to Hell.

Anonymous said...

Homes were never intended to be "investments" like some sort of IRA or a checking account. This is the great tragedy of the current economic situation. Houses have been treated like a money bin. We are all suffering now as a result.
How am I suffering? Well, it seems I'm always out of money these days on fixed income plus what I can earn on my own selling stuff.
Second, although I have money in the bank enough to put a good sized payment on another place I cannot do so because the hugh price increases of the last few years in housing negates the logic of buying in at my age.
I cannot leave a decent legacy either. My children are still dependent and living at home despite college degrees and they are still trying to pay for their loans.
Everything I had done should have pointed to a successful end. Yet, because of this almost unbelievable run of greed in housing, I an totally stagnated and can't make a move in any capacity.
I'm also mad as hell that our government is trying to bail out this financial greed scheme. Very mad.

Nevada Mojo Rising said...

Gee, wonder how much she still owes on credit cards from last years spree?

Ed said...

Aww shucks. I say we all send her a check so her urchin grandkids get their bikes under the tree.

What do you say HP?

Rom said...

Why does she have a four bed-room house? Should have sold and rented a smaller place.

happy homeowner in the stix said...

If she's got 4 bedrooms, can't she rent one or two out?

Roommates suck, but it beats foreclosure....

Anonymous said...

Awwwww, that poor dear....

The House-ATM dosen't work anymore.

The kids will cry, Christmas is ruined,

Oh please, Oh, Please can't someone help?

She was just doing what she thought was best, why should the kids suffer...

Breaks my heart.

HAHAHAHAHAHHHAHHAHAHAHHAHAAHAHAHAH
HAHAHAHAHAHA HAH HA HHAHAHAHAHHAHAH

Sigh....

BWAHAHAHAHAHAHAHHAAHHAAH AHA HA HA HA HA HA HAAHAHAHHAHAHAHAHAHAHHAHA

*cough....*

Merry Christmas.

tater said...

quote: "I was always seen as the person that's giving, but it's kind of affected this year," said Castleberry

Earth to Grandma Jackie: You are not a "giving" person; you are a "taking" person. You took the bank's money, and financed your lifestyle through financial ignorance, by using your home as an ATM machine.

I hate to say it Grandma Jackie, but the interest rate clock is ticking, and your bank is no longer Santa's helper. That same bank that you thought was sooooo sweet and helpful, has now turned into the Grinch that stole Christmas. Forget the lights; forget the tinsel, because they're probably bought with borrowed money too.

You have a problem that has infected million of people here in the U. S. alone. You have been addicted to the money from the home-equity/ATM. The first thing that you need to do is to remember your life BEFORE you had used the home-equity loan as an ATM. GET BACK TO THAT LIFE. That's the first step back from the brink. Another thing that you could do is to tell your kids and grandkids why you can't give them any gifts this year. MAKE them learn not to use BORROWED money as a form of wealth.

That home that was once your bastion of safety has now become a money-eating monster that will drain your very zest for life. And, in the end, there is only one person to blame. (HINT: Look in the mirror.).

Here's hoping that you all have a merry Christmas and a happy New Year.

Anonymous said...

Living (and borrowing beyond existing means) for the perpetuation of an image of being a caring and giving person... yep, that speaks volumes.

Anonymous said...

The only way to fix this is to bring back debtors prisons. Bankruptcy should only be allowed in the case of illness or death of a working spouse. Too many fraudsters are gaming the system and causing this burden on society. White collar criminals need to be publicly flogged or bullwhipped. When you give these fraudsters and criminals an inch, they will take everything you have and even demand more.

Anonymous said...

Reality bites

haggis said...

Anon 12:24

You're exactly why this bailout is a travesty. You've lived within your means, played by the rules, gone without, and now your tax dollars will be used to bail out idiots.

Make sure you get your dissatisfaction out there to your local politico. I think a lot of people are in your shoes but feel their voice won't be heard. It's really important to speak out where it counts (OK the blog is good but a letter to your local representative is better).

Cheers, Haggis

Anonymous said...

a grandmother with a mortgage? that is not how it is suppose to work.


Uh wait, I guess she could be in her 30s and be a grandmother.

Anonymous said...

Well Granny, it was fun while it lasted, huh?

Anonymous said...

.


I can't for the life of me understand how someone can't see that this wasn't a smart move before they did it?

Arrogance, greed or sheer stupidity......what?

A good friend of mine , who I also work for from time to time. Within the last year to 18 mos has borrowed against his home and his business to buy Toys!

First a very custom gold Rolex showed up. Next a custom built V-8 powered sandrail (dunebuggy) not to mention the huge toyhauler trailer to take it to the desert 2 to 3 times a year!

Next we have a, once again, custom made to his specifications (colors, power, interior...yada) powerboat. Plus a trailer of course.

Now if that ain't enough, his 22 yr old son bought a custom boat just like ol' dads, only without so much power.
Sidenote: the kid has little or no work, and just spent 10 days in Cabo San Lucas.

This kid, like so many others never has any money.....so how did he do it?
Easy terms.....ah yes. With his dads blessing and co-sign signature This kid now has $875 a month payments for the next 15 years!!

Remember I said they were custom!

There are other trinkets as well, but the crux of my question is Now that things are slowing down whats that stuff gonna be worth?

This guy is a grading contractor and work has all but ceased!

Is it panic time or just Firesale time.....or pawn shop?



.

bank dick said...

" can't for the life of me understand how someone can't see that this wasn't a smart move before they did it?

Arrogance, greed or sheer stupidity......what?"


Anon, your profligate friend and his son will enjoy their toys, blow off the lenders, and then people like you will pay higher fees and taxes to bail the lenders out from their predicament.

Now what were you saying about smart moves?

Andy in San Diego said...

"She now owes $168,000 on her home, which once was worth $220,000 but is now worth about $150,000."

Shouldn't that read:

"She now owes $168,000 on her home, which once was supposedly worth $220,000 but is now supposedly worth about $150,000."

Peter T said...

Consumption of home equity was often "indirect" spending: The credit card was charged and then paid off by taking a loan with lower interest against the house, allowing to repeat the credit card spending cycle. People are still charging credit cards this Christmas, albeit less than expected, but what will people choose to do in January and February when they can't pay off the debt with home equity anymore?

Kenduffelsniffenspotzen said...

Game over. She should find a nice Condo to rent. Then drop the keys to her home off at the bank. The banks, savers, lenders, they're the real losers.

Andrew Hac said...

In dire time we see the true face of humanity.

Now we see the true face of the majority of the Americano. Shallow, selfish, pompous, self-righteous, greedy piggy, irresponsible to society and environment, arrogant, bully, liar, and last but not least: IGNORANT.

I hope this housing bubble will teach the Americanos about the value of life. That there are other things beside money that can make a person content and happy in life.

God-damn, I have SUV and McMansion !

Frank@Scottsdale-Sucks.com said...

You just described Scottsdale to a tee.

in 2005 you'd have thought it was Beverly Hills with all the bling, jewelry, Bentleys, and everything else.

(Granted they were all driving the entry-level Bentley GT/Continental which is made by Volkswagen in the Volkswagen factory, showing their gullibility and need for status over quality even more.)

Bars, clubs, and restaurants were all packed all the time and you didn't even bother going out on a weekend without an advance reservation.

Now it's all over. No more money. It turns out none of them ever had any wealth, it was just Housing ATM money. Not only has the ATM shut off but now it has to be paid back.

Suckers.

Anonymous said...

I wish I had said that: My Compliments, my feelings exactly (except substitute late model corvette and tract house (both paid for) in suburbia N. Calif.

GREAT POST:

Andrew Hac said...
In dire time we see the true face of humanity.

Now we see the true face of the majority of the Americano. Shallow, selfish, pompous, self-righteous, greedy piggy, irresponsible to society and environment, arrogant, bully, liar, and last but not least: IGNORANT.

I hope this housing bubble will teach the Americanos about the value of life. That there are other things beside money that can make a person content and happy in life.

God-damn, I have SUV and McMansion !

My Comments:
Awesome Post! THANKS.

1sillywabbit said...

She is a very giving grandmother. She's about to give those keys to the bank. I guess Christmas dinner won't be at grandma's house next year.

eric in vegas said...

North Vegas? Ahahahahahahaha

In three years (maybe two) that place with be "worth" less than $100k easy. North Vegas is going to be slaughtered when we reach bottom.

Anonymous said...


Uh wait, I guess she could be in her 30s and be a grandmother.


there was a story the other week about a 29 yr-old grandmother. She had a child when she was 14 and her daughter waited until the was 15. After a few more generations, that inbred ghetto clan will wait until they're in their 20's before they burden society with more crackbabies.

Eric Ogunbase said...

This is one of the few times that terrible credit worked in my favor. I remember the great "Housing Boom" in San Diego. A bunch of my co-workers were buying houses, while I was stuck in my apartment. I remember feeling this sick sense of envy.

"Wow! They're living the American dream! I just want a house with a yard for my kids to play in. Life would be great," I said to myself back in 2002.

I even went and applied for financing. My mother told me, "Son, whatever you do. Do NOT get into any of those adjustable mortgage products. Why would you make debt service on something where the payment can astronomically jump? Whatever you do, don't do it."

I listened. I only wish she'd been able to convey that to my stepfather.

Now, my parents have these two albatross properties around their necks, and I don't know if they can make the payments.

I want to feel bad, because they're my parents. But I don't. Because they're adults. They signed on the dotted line. They agreed to the 2/28 ARM. I didn't.

It sucks that they made the bad decision. But what sucks even more is that my kids and I are going to be paying for their mistakes for years to come. That pisses me off most.

Anonymous said...

Well actually Frankie you are as usual wrong. It doesn't have to be paid back, not with the bailouts coming that will forgive the loans. And even without that, most people put $0 of their own money into it, so they walk away with $0. It was living large on someone else's dime for a few years. Drive a Bentley for free for 3 years, while dining out at 5 star restaurants and living in a McMansion...all with someone else's money....not a bad deal if you ax me.

If anything you are the sucker for missing out.

TM said...

Have no fear, if the housing ATM is tapped, there's always the 401k:

http://tinyurl.com/2gr6dd

That's right, people would rather decimate their retirement funds than stop spending.

Anonymous said...

"It doesn't have to be paid back, not with the bailouts coming that will forgive the loans"

No bailout proposal will forgive anyone of their loan obligations, you stupid half-breed!