Everyone has a sob story from the housing bubble. Many have cast themselves as victims and martyrs. Most are victims of their own lack of financial sense.
The crown of emptiness, As night descended slowly Maybe it's an illusion, One fake dream, one grey plastic Reality of tears and of repentance. I felt my life crossing like A stream of sadness
Wearing a martyr's crown The crown of sadness The crown of emptiness
Why do people tell sob stories? Is there real motivation to appeal to the sympathy of others in order to gain some special advantage? Should we feel bad for people who borrowed too much and give them a break? Should we let people experience the consequences of their poor decisions? If we give in to the victim mentality, we encourage people to engage in risky and foolish behavior. Why wouldn't they if they believe others will bail them out?
BALTIMORE -- A Baltimore woman fighting to keep her home has set up a mini-residence outside the state capital and is on a hunger strike in hopes of bringing more attention to the effects that foreclosure has on people.
Lauren Rymer, of Baltimore, said she's watched how the economy and other issues have forced people out of their homes.
The primary issue that has forced people out of "their" homes is the fact that they quit paying on the massive debts they took on to acquire them. Remember, Responsible Homeowners are NOT Losing Their Homes.
She started a hunger strike against foreclosure and said she's prepared to remain at the corner of Maryland Avenue and State Circle -- right across the street from the state house in Annapolis -- for as long as needed.
"I feel like I'm really representing a lot of people out here," she said.
Yes, there are many people just as foolish as this woman.
Rymer works for a nonprofit agency. She said she bought her two-bedroom southeast Baltimore home with an interest-only loan and still owes more than $200,000 on the mortgage.
In other words, she couldn't afford this house from the beginning. The only reasons people use interest-only financing is because they are ignorant, or they can't afford the fully amortized payment. Since she works for a non-profit, she doesn't make much money, and she doesn't have prospects for a big raise any time soon. Why would she take out an interest-only mortgage under those circumstances? Do you think she was banking on future mortgage equity withdrawal? I do.
She claimed she doesn't live beyond her means and sought help after the property taxes on her home went up 55 percent in the past couple of years.
The taxes are paid with her mortgage bill. Rymer said when it jumped from an affordable $1,500 a month to $2,100 a month, she couldn't keep up.
This womans taxes went up $7,200 a year during a period when home values declined. I call bullshit on that one.
She said she didn't realize she could have challenged the property tax assessment until it was too late.
"I just didn't understand why -- at this time when times are so rough and the governor called three weeks before for (federal) banks to stop moving forward with foreclosures on their clients -- the state government was moving forward with a foreclosure on mine without trying every possible channel to help me stay in my home," she said.
Borrowers are now entitled to have lenders and the government go to extreme lengths to help them, right? Is that the new entitlement that has come out of the housing bubble?
Rymer said her mortgage had been bundled and sold several times, finally ending up in the hands of the Maryland Department of Housing and Community Development. In less than 45 days, she could lose the house she's owned for four years.
Wait a minute. She hasn't owned anything. She is renting money from the bank with an interest-only loan. Further she is underwater and has no equity. She owns nothing. (see Money Rentership: Housing and the New American Dream).
She is being evicted from a house that has her name on the title because she is failing to make her rent payment on the money she borrowed. This is closer to an eviction than a foreclosure.
The foreclosure notice was taped to her front door on Election Day, she said. Rymer said she wants a few minutes with Gov. Martin O'Malley to tell him it's not just about the amount of foreclosures.
"Everyone that's being affected is a human being ... are people that want to have a home, and that's why they bought homes," she said.
The MDHCD told 11 News that it can't discuss a homeowner's file but it will always work with homeowners to explore every viable financial option. The agency said it has set up a meeting with Rymer about her problem.
And at that meeting they will tell her that if she catches up on her mortgage payments she can keep living in the house, and if she doesn't, she needs to get out to make room for someone who can. What else is there to say to her?
Our culture of victimhood has plenty of great stories from the housing bubble. Some of these stories are sad, but most are people dealing with the consequences of their poor decisions.
Brenda from Las Vegas I have read all the stories and really do completely understand the concerns of all. My husband, son and I moved from California to Las Vegas in 2001 when the housing market was just starting to climb. We sold our Cali house in 3 days...made a little profit and purchased a new home in Vegas for a good deal. Hubby had a job as Engineer for Lucent Technologies and made 90K so I didn't have to work anymore. It was heaven! Then 9/11 came to pass... 25 percent of his department was laid off so we went from living really well to being financial paupers overnight. It took him over a year to find a job that paid less than half of what he had been making... and I went to work for the Clark County School District being severely underpaid for my skills. We had to re-fi our home twice to make ends meet and not lose our home. Now our house payment is 3K a month plus utilities and many bills. We are deep in debt just surviving day to day fighting to hang on as we don't want to walk away. We would re-fi again to lower the payment but our home will not appraise for the amount we need in order to do so at this time. We purchased our home for 274K and now owe 390K. If not for taking out a monthly sum from his retirement portfolio of 2,500 we would have lost all.
So somewhere along the way did this family ever consider cutting back on some of their entitlements? Perhaps a loss of income should be matched with a decline in spending? They took out $116,000 and still couldn't make ends meet? What didn't these people do wrong?
Denise from Indianapolis Two years ago I bought my home on a two-year arm, being convinced by the mortgage company I would be able to refinance before the two years were up. Well, the two years were up in September and no one will touch it. I am now being told I owe more than my house is worth. On Sept. 1 my payments went from $850.00 a month to $1,233.00, and Nov. 1 it's going up another $50.00. I am a single mom and only bring home $1,500.00 a month. I am now two months behind. The mortgage compant is not willing to work with me at all. Their only advice was to conact a realtor, which I have to pay for, and try to do a quick sale. If I can't pay my payments, how can I pay a realtor? I am losing a home that I love. The American dream is huge joke!
Listening to mortgage brokers was her mistake. Not understanding the terms of the contract she was signing was another. Those mistakes are costing her the family home.
Justine from Greeley, Colo. I have been in the mortgage industry for 40 years this fall. I have been dedicated to responsible lending. Because of the greed of the CEO and upper management of mortgage companies and banks, who left with their millions in salary and bonus each year, those of us dedicated to financing homeownership responsibly are now faced with loss of income. And I am personally faced with providing for an invalid husband and trying desperately to hold onto my own home.
How many other mortgage brokers feel the same way?
Shannon from Kansas City, Mo. My stress levels are so high that Xanex have become my best friend. My husband and I are in our mid-30s with 4 children. We both work in the corporate world and I attend college for my bachelor's degree at night because we cannot afford for me not to work while I go to school. We fell into one of those adjustable mortgages and were completely scammed to the point our mortgage went up $900 more per month and we were forced into foreclosure and bankruptcy. The bankruptcy courts do not allow us any extra money for savings so when things like life occurs and gas prices, grocery prices, cars breaking down,death in family, medical bills occur we are just completely screwed.
If two corporate employed working Americans can't make it, how do people in third world countries get by? Letting go of a few entitlements would probably help get off the Xanax.
"Average Joe" from Georgia I am 35 years old and working since high school. In the heat of the moment, I purchased a pricy home, expensive home gadgets and a porsche. Now I am bankrupt.
Do you think he sees any cause and effect in his actions and the outcome?
Mike from Merced, Calif. My wife and I bought a house we could afford. Had a 30-year fixed. We made all the payments, never refinanced. Then we got divorced and needed to sell the house. Fifteen months later, we have our second offer. Due to all the forclosures we are losing around $60,000 just to get rid of it. $6,000 out of pocket at closing, the rest is the 20 percent, plus down payment and the $13,000 worth of loan we paid down. We were responsible. We paid. Now we are losing what we had invested. Those of you who banked on good interest rates "down the road" have taken the rest of us down with you. Additionally, everyone is talking about bailing out those near foreclosure, but who's helping those who did it right, but lost tons of money? I can't even write it off as a loss on my taxes!
That is a sad story. These people did nothing wrong, but they are being wiped out anyway.
Jennifer from Red Lion, Pa. Because of the housing slump our family was able to finally afford our dream home. There are two sides to every story.
Amen, Jennifer. Amen.
Four years squatting... and counting
Today's featured property is playing the short-sale game. It appears on the MLS periodically while the negotiations over who loses what goes on. It was listed last week when I spotted it, and now it is gone again.
The property was purchased on 4/8/1999 for $349,000. The owners used a $313,920 first mortgage and a $35,080 down payment.
On 1/31/2000 they refinanced with a $346,500 first mortgage and got back most of their down payment.
On 8/30/2000 they obtained a stand-alone second for $35,000.
On 6/27/2001 they refinanced with a $388,000 first mortgage.
On 9/3/2004 they got a $162,500 stand-alone second.
On 7/8/2005 they refinanced with a $765,000 first mortgage.
On 9/29/2005 they got a $42,500 HELOC.
Total property debt is $807,500.
Total mortgage equity withdrawal is $493,580.
Total squatting time is 48 months so far.
Foreclosure Record Recording Date: 09/28/2010 Document Type: Notice of Sale
Foreclosure Record Recording Date: 10/14/2008 Document Type: Notice of Sale
Foreclosure Record Recording Date: 07/19/2007 Document Type: Notice of Sale
Foreclosure Record Recording Date: 02/26/2007 Document Type: Notice of Default
This guy went delinquent sometime before November of 2006. He has not made a mortgage payment for as long as the IHB has been around.
How many rent or mortgage payments have you made while you have been an IHB reader?
Home Purchase Price … $349,000 Home Purchase Date .... 4/8/1999
Net Gain (Loss) .......... $284,560 Percent Change .......... 81.5% Annual Appreciation … 5.6%
Cost of Ownership ------------------------------------------------- $674,000 .......... Asking Price $134,800 .......... 20% Down Conventional 4.21% ............... Mortgage Interest Rate $539,200 .......... 30-Year Mortgage $127,282 .......... Income Requirement
$2,640 .......... Monthly Mortgage Payment
$584 .......... Property Tax $0 .......... Special Taxes and Levies (Mello Roos) $112 .......... Homeowners Insurance $80 .......... Homeowners Association Fees ============================================ $3,416 .......... Monthly Cash Outlays
-$433 .......... Tax Savings (% of Interest and Property Tax) -$748 .......... Equity Hidden in Payment $203 .......... Lost Income to Down Payment (net of taxes) $84 .......... Maintenance and Replacement Reserves ============================================ $2,522 .......... Monthly Cost of Ownership
Cash Acquisition Demands ------------------------------------------------------------------------------ $6,740 .......... Furnishing and Move In @1% $6,740 .......... Closing Costs @1% $5,392 ............ Interest Points @1% of Loan $134,800 .......... Down Payment ============================================ $153,672 .......... Total Cash Costs $38,600 ............ Emergency Cash Reserves ============================================ $192,272 .......... Total Savings Needed
Property Details for 39 SONGSPARROW Irvine, CA 92604 ------------------------------------------------------------------------------ Beds: 4 Baths: 2 full 1 part baths Home size: 1,946 sq ft ($346 / sq ft) Lot Size: 5,136 sq ft Year Built: 1976 Days on Market: 81 Listing Updated: 40464 MLS Number: Y1005246 Property Type: Single Family, Residential Community: Woodbridge Tract: Cust ------------------------------------------------------------------------------ According to the listing agent, this listing may be a pre-foreclosure or short sale.
Huge price reduction! Seller eager to sell property. Beautiful house located in a highly desirable area of Woodbridge. Very quiet neighborhood. Close to shops and schools. Seller had plans to add almost 400sq feet of living area. Blueprints will be provided to buyer at no cost. HOA provides many amenities including community swimming pools, two man-made lakes, tennis courts, sand volleyball courts plus much more! Big backyard!
IHB Special Event
Tonight, Wednesday, November 10, 2010, at 6:30 until 9:00, there will be an IHB special event at Dave and Busters in the Irvine Spectrum. We will be gathering in the patio room to the left as you enter.
I want to invite all the fund investors to come out on Wednesday evening. I can give you an update on my progress in person. Also, anyone else considering investing can come out and talk to me about getting in before the November 18 closing date. I would like to invite all the lurkers out there to attend as well.
Everyone is invited to a night of real estate talk, free appetizers and drinks, and a chance to meet with some reporters who find these IHB gatherings interesting. Please come out and show your support for the IHB.
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