I want to scream. Our bank won't open up a home equity line large enough for me to build an addition on my house even though I can easily afford the monthly payments. Thanks to all of you jackasses who borrowed money you couldn't afford to pay back someone like me who plays by the rules gets screwed. Seven years ago when I bought my house the bank was willing to lend us DOUBLE what we ended up borrowing and now they won't even give us 20% of that amount. I knew it was bad out there but this is stunning to me.
F you banks (and idiot borrowers)
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speedracer
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The banks you knew of your entire life don't exist anymore. If the loan/offer isn't predatory bordering on unconscionable, they're not really interested.
[quote name='speedracer']The banks you knew of your entire life don't exist anymore. If the loan/offer isn't predatory bordering on unconscionable, they're not really interested.[/QUOTE]
Sad but true.
There is no profit in giving money to people who can actually pay it back (or can pay back more than the minimum payment)
- edit Here's a pretty decent documentary that's up on Netflix Instant
http://movies.netflix.com/Movie/Max...strkid=1314672220_0_0&trkid=222336#height1749
Sad but true.
There is no profit in giving money to people who can actually pay it back (or can pay back more than the minimum payment)
- edit Here's a pretty decent documentary that's up on Netflix Instant
http://movies.netflix.com/Movie/Max...strkid=1314672220_0_0&trkid=222336#height1749
zionoverfire
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Yep, mortgage money is damn hard to get these days. I put 20% down, have great credit a stable job, bought a house with very affordable monthly payments and still spent weeks jumping through hoops at that was even after the initial pre-approval.
Try getting a loan through a credit union, they are slightly more interesting in actually loaning you money.
Try getting a loan through a credit union, they are slightly more interesting in actually loaning you money.
Dead of Knight
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[quote name='zionoverfire']
Try getting a loan through a credit union, they are slightly more interesting in actually loaning you money.[/QUOTE]
This is what I was thinking.
It should be fun in the next few years whenever my husband and I buy our first house/condo. We plan on putting more than 20% down but it should be fun since it will be our first house for both of us. Fun meaning worse than being hit by a brick repeatedly.
Try getting a loan through a credit union, they are slightly more interesting in actually loaning you money.[/QUOTE]
This is what I was thinking.
It should be fun in the next few years whenever my husband and I buy our first house/condo. We plan on putting more than 20% down but it should be fun since it will be our first house for both of us. Fun meaning worse than being hit by a brick repeatedly.
mykevermin
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[quote name='javeryh']I want to scream. Our bank won't open up a home equity line large enough for me to build an addition on my house even though I can easily afford the monthly payments. Thanks to all of you jackasses who borrowed money you couldn't afford to pay back someone like me who plays by the rules gets screwed. Seven years ago when I bought my house the bank was willing to lend us DOUBLE what we ended up borrowing and now they won't even give us 20% of that amount. I knew it was bad out there but this is stunning to me.[/QUOTE]
If the banks followed the rules, we wouldn't be in this mess.
If the banks followed the rules, we wouldn't be in this mess.
I have to say, you can blame the borrowers, but really, it's like putting food outside and expecting animals to not eat it. They put the money out there, did they expect people to refuse it? I remember once applying for financial a few years back and the woman was surprised I didn't want the loan, she seriously wouldn't believe me.
Paco
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[quote name='javeryh']I want to scream. Our bank won't open up a home equity line large enough for me to build an addition on my house even though I can easily afford the monthly payments. Thanks to all of you jackasses who borrowed money you couldn't afford to pay back someone like me who plays by the rules gets screwed. Seven years ago when I bought my house the bank was willing to lend us DOUBLE what we ended up borrowing and now they won't even give us 20% of that amount. I knew it was bad out there but this is stunning to me.[/QUOTE]
Have you considered claiming HOOD RICH status to get a loan? I heard the banks love people who classify themselves as HOOD RICH.
Have you considered claiming HOOD RICH status to get a loan? I heard the banks love people who classify themselves as HOOD RICH.
[quote name='mykevermin']If the banks followed the rules, we wouldn't be in this mess.[/QUOTE]
I just can't believe no one saw this coming. They did tell me that I could borrow up to the amount I have in my account but those funds would be used to secure the loan... so I wouldn't be able to spend the money in my account as long as the loan was outstanding. When I asked the guy why anyone would take that loan (and pay interest on it) instead of just paying cash out of their account he said he had no idea. He couldn't even guess. It's insane.
I just can't believe no one saw this coming. They did tell me that I could borrow up to the amount I have in my account but those funds would be used to secure the loan... so I wouldn't be able to spend the money in my account as long as the loan was outstanding. When I asked the guy why anyone would take that loan (and pay interest on it) instead of just paying cash out of their account he said he had no idea. He couldn't even guess. It's insane.
[quote name='javeryh']I just can't believe no one saw this coming. [/QUOTE]
No, alot of people saw this coming (seriously, watch that documentary I linked to, it was made in 2006) but the people in charge didn't care because they were blinded with greed.
[quote name='javeryh']They did tell me that I could borrow up to the amount I have in my account but those funds would be used to secure the loan... so I wouldn't be able to spend the money in my account as long as the loan was outstanding. When I asked the guy why anyone would take that loan (and pay interest on it) instead of just paying cash out of their account he said he had no idea. He couldn't even guess. It's insane.[/QUOTE]
Well, that's the point. They make money on interest/late fees. A responsible guy like you isn't a cash cow like somebody who doesn't have and will pay the minimum payment for years.
No, alot of people saw this coming (seriously, watch that documentary I linked to, it was made in 2006) but the people in charge didn't care because they were blinded with greed.
[quote name='javeryh']They did tell me that I could borrow up to the amount I have in my account but those funds would be used to secure the loan... so I wouldn't be able to spend the money in my account as long as the loan was outstanding. When I asked the guy why anyone would take that loan (and pay interest on it) instead of just paying cash out of their account he said he had no idea. He couldn't even guess. It's insane.[/QUOTE]
Well, that's the point. They make money on interest/late fees. A responsible guy like you isn't a cash cow like somebody who doesn't have and will pay the minimum payment for years.
mykevermin
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[quote name='javeryh']I just can't believe no one saw this coming.[/QUOTE]
There are two dominating theories out there (there are others, but these are the only plausible ones):
1) Very few folks did see it coming, and banks thought housing prices would appreciate infinitely (an absolutely necessary prerequisite for any ARM lending). This seems plausible since banks were more than happy to package up mortgages into collateralized debt obligations, trading them back and forth as if baseball cards. This is also supported by how cheaply people like Steve Eisman bought credit default swaps from banks for - they thought he was handing them money over, since the principle of the CDS is that they only pay out if the mortgages go bad in significant percentages (which they did).
2) A lot of folks did see it coming, but as long as they made money (and many did), they would let the institution fall on itself. It didn't matter if Bear Stearns collapsed, as long as you could store enough nuts (metaphorically speaking, as these nuts were the outrageous salaries and bonuses of people at places like Goldman Saches) for the winter.
3) A mixture of (1) and (2). Pretty likely, and supported since institutional groupthink dominates financial institutions (i.e., a lot of idiots who follow the flavor of the month, and only a few who stand to benefit from it). Moreover, the first rule of financial institutional demise is that you don't talk about financial institutional demise - the fear of the self-fulfilling prophecy and all that. I.e., if Jim Cramer came out tomorrow and predicted Bank of America was going to crash, if enough people closed their accounts and demanded their funds (that BoA doesn't have the assets on-hand to cover), they would crash. That's the tenuous nature of financial markets - you can't actually *say* shit's
ed up, because then shit will be really ed up. I think that last sentence gets its point across, even if it doesn't read that way.
If you're a glutton for leisure reading, check out Michael Lewis' book "The Big Short." It portrays what appears to be a realistic picture of the banking industry since the repeal of Glass-Steagal in 1999, and runs contrary to what all of my banker friends say ("everyone saw it coming"). No they didn't, hombre.
There are two dominating theories out there (there are others, but these are the only plausible ones):
1) Very few folks did see it coming, and banks thought housing prices would appreciate infinitely (an absolutely necessary prerequisite for any ARM lending). This seems plausible since banks were more than happy to package up mortgages into collateralized debt obligations, trading them back and forth as if baseball cards. This is also supported by how cheaply people like Steve Eisman bought credit default swaps from banks for - they thought he was handing them money over, since the principle of the CDS is that they only pay out if the mortgages go bad in significant percentages (which they did).
2) A lot of folks did see it coming, but as long as they made money (and many did), they would let the institution fall on itself. It didn't matter if Bear Stearns collapsed, as long as you could store enough nuts (metaphorically speaking, as these nuts were the outrageous salaries and bonuses of people at places like Goldman Saches) for the winter.
3) A mixture of (1) and (2). Pretty likely, and supported since institutional groupthink dominates financial institutions (i.e., a lot of idiots who follow the flavor of the month, and only a few who stand to benefit from it). Moreover, the first rule of financial institutional demise is that you don't talk about financial institutional demise - the fear of the self-fulfilling prophecy and all that. I.e., if Jim Cramer came out tomorrow and predicted Bank of America was going to crash, if enough people closed their accounts and demanded their funds (that BoA doesn't have the assets on-hand to cover), they would crash. That's the tenuous nature of financial markets - you can't actually *say* shit's
ed up, because then shit will be really ed up. I think that last sentence gets its point across, even if it doesn't read that way.If you're a glutton for leisure reading, check out Michael Lewis' book "The Big Short." It portrays what appears to be a realistic picture of the banking industry since the repeal of Glass-Steagal in 1999, and runs contrary to what all of my banker friends say ("everyone saw it coming"). No they didn't, hombre.
zionoverfire
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[quote name='Dead of Knight']This is what I was thinking.
It should be fun in the next few years whenever my husband and I buy our first house/condo. We plan on putting more than 20% down but it should be fun since it will be our first house for both of us. Fun meaning worse than being hit by a brick repeatedly.[/QUOTE]
Don't worry the bricks come later when your kid reaches 2.
It's a good plan. I have a friend who bought in with 3% down and even though the market here has been flat and he bought the house 3 years ago he can't afford to sell because he doesn't have enough equity to cover his end of the closing costs.
Having 20%+ in allowed us to skip PMI, cut down on the mortgage payment and even if the market goes down a little we can still get out if we absolutely need to move.
It should be fun in the next few years whenever my husband and I buy our first house/condo. We plan on putting more than 20% down but it should be fun since it will be our first house for both of us. Fun meaning worse than being hit by a brick repeatedly.[/QUOTE]
Don't worry the bricks come later when your kid reaches 2.
It's a good plan. I have a friend who bought in with 3% down and even though the market here has been flat and he bought the house 3 years ago he can't afford to sell because he doesn't have enough equity to cover his end of the closing costs.
Having 20%+ in allowed us to skip PMI, cut down on the mortgage payment and even if the market goes down a little we can still get out if we absolutely need to move.
Dead of Knight
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[quote name='zionoverfire']Don't worry the bricks come later when your kid reaches 2.
[/QUOTE]
Thus why we don't on having kids anytime soon. 3 cats are more than enough.
[/QUOTE]
Thus why we don't on having kids anytime soon. 3 cats are more than enough.
[quote name='javeryh']I want to scream. Our bank won't open up a home equity line large enough for me to build an addition on my house even though I can easily afford the monthly payments. Thanks to all of you jackasses who borrowed money you couldn't afford to pay back someone like me who plays by the rules gets screwed. Seven years ago when I bought my house the bank was willing to lend us DOUBLE what we ended up borrowing and now they won't even give us 20% of that amount. I knew it was bad out there but this is stunning to me.[/QUOTE]
Well 2 things happened... the price of homes has decreased and most banks have dropped their LTV amounts from 90-100% down to 60-80%.
Basically if you were trying to get a Heloc on a home worth 125K and 100K owed on it from a bank with a 75% LTV... 125K - 100K = 25K which is your equity and then 25K * .75 = 18,750 which is what they would give you in a line of credit.
[quote name='javeryh']I just can't believe no one saw this coming. They did tell me that I could borrow up to the amount I have in my account but those funds would be used to secure the loan... so I wouldn't be able to spend the money in my account as long as the loan was outstanding. When I asked the guy why anyone would take that loan (and pay interest on it) instead of just paying cash out of their account he said he had no idea. He couldn't even guess. It's insane.[/QUOTE]
There's 2 reasons that people will do a cash secured loan. To try to build or rebuild credit if they can't get anything else. Or they would rather keep the money they accumilated and not spend everything they had on a purchase and this is the cheapest loan they can get. Say I don't own a home so for quite a few purchases I have to get either an unsecured loan, a credit card, or I can use my savings to secure the loan. Unsecured = 10% rate... credit card = 14-30% rate... cash secured 3.25%
Although the bad thing is... people can be turned down for cash secured loans...
Well 2 things happened... the price of homes has decreased and most banks have dropped their LTV amounts from 90-100% down to 60-80%.
Basically if you were trying to get a Heloc on a home worth 125K and 100K owed on it from a bank with a 75% LTV... 125K - 100K = 25K which is your equity and then 25K * .75 = 18,750 which is what they would give you in a line of credit.
[quote name='javeryh']I just can't believe no one saw this coming. They did tell me that I could borrow up to the amount I have in my account but those funds would be used to secure the loan... so I wouldn't be able to spend the money in my account as long as the loan was outstanding. When I asked the guy why anyone would take that loan (and pay interest on it) instead of just paying cash out of their account he said he had no idea. He couldn't even guess. It's insane.[/QUOTE]
There's 2 reasons that people will do a cash secured loan. To try to build or rebuild credit if they can't get anything else. Or they would rather keep the money they accumilated and not spend everything they had on a purchase and this is the cheapest loan they can get. Say I don't own a home so for quite a few purchases I have to get either an unsecured loan, a credit card, or I can use my savings to secure the loan. Unsecured = 10% rate... credit card = 14-30% rate... cash secured 3.25%
Although the bad thing is... people can be turned down for cash secured loans...
[quote name='javeryh']We've got almost 20% down on our house now. Our rate is ridiculously low though - we've refinanced twice in the past year so we are still at 30 years (and we've been in the house for 7) but our monthly payments are $1,000 less than they used to be.[/QUOTE]
I really have to ask... why refi twice in a year?
I really have to ask... why refi twice in a year?
[quote name='Afflicted']I really have to ask... why refi twice in a year?[/QUOTE]
The first time we saved about $900 per month in mortgage payments. About 6 months later the bank called and said the rates dropped again and we were able to save another $100 per month even including closing costs on the refinance (or something like that). We figured the extra $100 in our pockets every month made sense over 30 years.
The first time we saved about $900 per month in mortgage payments. About 6 months later the bank called and said the rates dropped again and we were able to save another $100 per month even including closing costs on the refinance (or something like that). We figured the extra $100 in our pockets every month made sense over 30 years.
Trancendental
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[quote name='Msut77']http://www.rollingstone.com/politics/news/17390/232611?RS_show_page=0[/QUOTE]
I agree Msut.
Blaming the borrowers is blaming the victim.
I agree Msut.
Blaming the borrowers is blaming the victim.
Those who took the money weren't "all victims", but yeah:
http://www.avclub.com/articles/matt-taibbi,47077/
AVC: You relay the travails of a non-English-speaking Mexican immigrant making $9 an hour who was sold a $615,000 house. The loan went through because the lender falsified the documents without the buyer’s knowledge. To play devil’s advocate: Why is someone who makes $9 an hour even shopping for a house? Yes, there are predatory lenders, but nobody who makes just above minimum wage can possibly think they can afford a six-figure loan. Is this particular type of homebuyer to blame on some level too?
MT: On some level, sure. But I think the common misconception about all of this is that the reason all of these people were suddenly buying these houses was because the government was forcing banks to lend to all of these people. Exactly the opposite was true. These securitization practices were suddenly making it possible for banks to take that guy’s worthless loan and chop it up and disguise it as a triple-A rated security and sell it off to some fund in China or Holland. It’s basically like taking oregano and selling it as weed to somebody. They just found a way to do that, and as soon as they figured out they could get away with taking all these bad loans and selling them off to people who didn’t know what it was, then they suddenly started looking for people to give those loans to.
I didn’t put this in the book, but at the height of this crisis, there were literally guys from lenders like Countrywide going out into the street and 7-Elevens in the middle of the night looking for people to lend houses to. The tail had begun to wag the dog at that point. There was such an unbelievable demand for these assets, these loans, that these banks were just constantly ordering more and more and more because they knew they could ship it off somewhere else.
http://www.avclub.com/articles/matt-taibbi,47077/
AVC: You relay the travails of a non-English-speaking Mexican immigrant making $9 an hour who was sold a $615,000 house. The loan went through because the lender falsified the documents without the buyer’s knowledge. To play devil’s advocate: Why is someone who makes $9 an hour even shopping for a house? Yes, there are predatory lenders, but nobody who makes just above minimum wage can possibly think they can afford a six-figure loan. Is this particular type of homebuyer to blame on some level too?
MT: On some level, sure. But I think the common misconception about all of this is that the reason all of these people were suddenly buying these houses was because the government was forcing banks to lend to all of these people. Exactly the opposite was true. These securitization practices were suddenly making it possible for banks to take that guy’s worthless loan and chop it up and disguise it as a triple-A rated security and sell it off to some fund in China or Holland. It’s basically like taking oregano and selling it as weed to somebody. They just found a way to do that, and as soon as they figured out they could get away with taking all these bad loans and selling them off to people who didn’t know what it was, then they suddenly started looking for people to give those loans to.
I didn’t put this in the book, but at the height of this crisis, there were literally guys from lenders like Countrywide going out into the street and 7-Elevens in the middle of the night looking for people to lend houses to. The tail had begun to wag the dog at that point. There was such an unbelievable demand for these assets, these loans, that these banks were just constantly ordering more and more and more because they knew they could ship it off somewhere else.
Trancendental
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[quote name='Msut77']Those who took the money weren't "all victims", but yeah:[/QUOTE]
Yes, it's a grey area, and it's taken advantage of by those looking to politicize what happened. As we see on these boards, the American rich have their own brand of "useful idiots"
Yes, it's a grey area, and it's taken advantage of by those looking to politicize what happened. As we see on these boards, the American rich have their own brand of "useful idiots"
[quote name='javeryh']The first time we saved about $900 per month in mortgage payments. About 6 months later the bank called and said the rates dropped again and we were able to save another $100 per month even including closing costs on the refinance (or something like that). We figured the extra $100 in our pockets every month made sense over 30 years.[/QUOTE]
that's great! the reason I was asking is that from what I've heard is that generally if it's not been more than a couple of years since you did your last refi then it's typically not worth doing due to closing costs eating up the savings from the lower rate.... that I didn't think rates had changed all that much in the last year or so...
that's great! the reason I was asking is that from what I've heard is that generally if it's not been more than a couple of years since you did your last refi then it's typically not worth doing due to closing costs eating up the savings from the lower rate.... that I didn't think rates had changed all that much in the last year or so...
[quote name='Clak']I have to say, you can blame the borrowers, but really, it's like putting food outside and expecting animals to not eat it.[/QUOTE]
This only applies if you believe that people are stupid, instinct-driven creatures without inhibitions,self control or any idea of responsibility.
This only applies if you believe that people are stupid, instinct-driven creatures without inhibitions,self control or any idea of responsibility.
[quote name='Clak']Eh, they have inhibitions.[/QUOTE]
A chance for a quick pay out can short circuit the dozen or so brain cells (even smart people) usually saved for rational thought.
Which, like I said people doesn't make people completely innocent but does not excuse the banks at all for enticing people and making money off all this either way.
A chance for a quick pay out can short circuit the dozen or so brain cells (even smart people) usually saved for rational thought.
Which, like I said people doesn't make people completely innocent but does not excuse the banks at all for enticing people and making money off all this either way.
bread's done