- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: What's your opinion of people who are underwater on their mortgages?
Posted on 6/16/15 at 12:10 pm to TigerPanzer
Posted on 6/16/15 at 12:10 pm to TigerPanzer
I don't give a shite what the value of my home is. I bought it to live in it.
0
Posted on 6/16/15 at 12:10 pm to gorillacoco
They owe the bank the money that was borrowed. As with any investment there are risks.
Anyone who doesn't believe that the homeowner doesn't the full value of the mortgage doesn't believe in personal responsibility.
Anyone who doesn't believe that the homeowner doesn't the full value of the mortgage doesn't believe in personal responsibility.
Posted on 6/16/15 at 12:12 pm to gorillacoco
quote:
Is it their fault that the home lost value? Do you think they owe the bank the full price of the home?
No its not their fault unless they bought in a bad area where a little homework would have told them it was going to tank..
Yes they owe it. Why wouldn't they?
Posted on 6/16/15 at 12:13 pm to gorillacoco
quote:
What's your opinion of people who are underwater on their mortgages
None of my (nor your) business!
Posted on 6/16/15 at 12:15 pm to lsu777
quote:
Never understood people freaking out over being underwater.
Depends on how far under you are. In my case:
• I was nearly $100K under after six years of ownership.
• Obviously I couldn't get a line of equity (what equity?) to make needed repairs, so the place started falling apart.
• Thanks to the economy, I was cut to part time work at 50% of my salary.
• According to things I read, my house would not get back to its ORIGINAL SALE VALUE--until 2022.
Okay chief, see how a person can freak out under those circumstances? And mine weren't terribly different from a lot of other people back between 2008 and 2012.
Posted on 6/16/15 at 12:15 pm to TigerPanzer
quote:
I absolutely would not have been worse off if I simply walked away from the place on a straight foreclosure.
Oh, but what about my God almighty credit, didn't it plunge off the face of the earth? Today my credit score is 797.
If you believe your score would be 797 today had you walked away you are an idiot. Your score is 797 today BECAUSE you didn't walk away. Not sure how you don't understand that.
Posted on 6/16/15 at 12:17 pm to lsu777
quote:
Never understood people freaking out over being underwater. If you could afford the note before and locked in a good rate, why does it matter what your the price does day to day
if the prices of nice homes in an area fall, it's likely there is an economic issue with the area and paying that note becomes more difficult (in the general sense).
quote:
If its an investment than has to be a long term investment.
seeing homes in this way is a big part of why this whole thing started, blew up, and then melted
Posted on 6/16/15 at 12:17 pm to gorillacoco
quote:
Is it their fault that the home lost value? Do you think they owe the bank the full price of the home? Would you sit on a home like that for years to pay back the 60K loss you sustained?
1 - No, It's not their fault. shite happens, but you took the risk.
2 - Yes, they owe the bank what they borrowed.
3 - It depends. As long as the house meets your need, you pay the mortgage and live there. If you have to leave look into renting it or asking the bank to agree to a "short sale". Walking away will screw your credit history.
ETA: I think I'm seeing some bubble prices in New Orleans these days. This may become an issue here if it bursts.
This post was edited on 6/16/15 at 12:21 pm
Posted on 6/16/15 at 12:18 pm to gorillacoco
quote:
mortgages?
Trashy.
Posted on 6/16/15 at 12:18 pm to TigerPanzer
Sounds like you made poor decisions. 100K in six years means you over payed to keep up with the Joneses
Posted on 6/16/15 at 12:22 pm to lsu777
quote:
Never understood people freaking out over being underwater.
Guess it depends on where you were living back then. AZ was one of the states hit the worst by the housing bubble burst in 2008. You couldn't throw a stick without it hitting someone that was foreclosing on their home. Correct me if I'm wrong....but LA never really faced that huge a housing bubble burst back then?
Posted on 6/16/15 at 12:22 pm to gorillacoco
quote:
The conventional wisdom that we're all told growing up is that renting a home or apartment is 'throwing away money', and that the best financial move is to purchase a home as soon as you can afford 20% down. The idea is that you will both create equity in the home over time
Those last two words are the most important part here.
A house, just like any asset, can lose value in the short term. You shouldn't buy a house if your investment horizon isn't long to begin with. If your focus is short-term, renting is probably much less costly. A mortgage can easily cost several thousand right up front after all.
And if your investment horizon is indeed long term, then ignore short-term fluctuations. They happen.
Posted on 6/16/15 at 12:25 pm to Tiger-Striped-Bass
quote:
If you're guided by morals, you pay it back. You borrowed the money and spent it as you wished. You owe the money back to the bank. Not the popular answer I'm sure, thus the preface.
Meanwhile, a Fortune 500 company files for bankruptcy, gets years to restore its financial situation under court protection, pays creditors dimes on the dollar, and then what? The CEO emerges as a hero who ought to run for President.
If I were guided by "morals," they would've lead me and my family to the streets with our life savings in the hands of the poor, pitiful mortgage company.
Ask the Fortune 500 CEO. He knows.
Posted on 6/16/15 at 12:25 pm to gorillacoco
it's none of my business. i don't go around asking friends how they are on their mortgage
Posted on 6/16/15 at 12:30 pm to foshizzle
quote:
A house, just like any asset, can lose value in the short term
Its because people sign up for 30 year adjustable rate mortgages as an investment then plan to jump to a new McMansion in 6 years.
Posted on 6/16/15 at 12:31 pm to Catman88
quote:
If you believe your score would be 797 today had you walked away you are an idiot. Your score is 797 today BECAUSE you didn't walk away. Not sure how you don't understand that.
Even with a foreclosure, my current credit score would be in the 700-750 range: good, or at least, good enough for me. Today I buy zero, zilch, nada on credit. I have a molding B of A credit card in my wallet with 15K credit authorized. For extreme emergencies only.
I am out of the debt game entirely--and will stay so, inshallah Allah.
Posted on 6/16/15 at 12:31 pm to kilo1234
quote:
You pay so much in mortgage interest (and mortgage insurance, depending) over the years that "building equity" is incredibly misleading. Not to mention property taxes, homeowners insurance, maintenance, etc.
Buying a home is not an "investment", it's simply you buying a home vs. renting it.
You analysis is one-sided. Unless you compare it to renting, you can draw no conclusion from the expenses of ownership as investment. When you rent, 100% of your payment is expense. When you own, only the interest portion of your payment is expense, and it is tax deductible. The remainder pays down principal and becomes equity. If the home increases in value, you get a return, in capital gain, on the investment in the property. If the home loses value, you can lose some money, but still its probably not the 100% loss that renting is by comparison.
A bigger problem, in my mind, and one that helped lead to the bubble, is people purchasing properties that they really could not afford. This is pervasive. If people would settle for a smaller home and pay it off more quickly, the wisdom of the investment would be much more apparent.
Posted on 6/16/15 at 12:31 pm to gorillacoco
I'm sitting on $550,000 in equity right and my house is only 8 years old so I can't say that the concept of savings or investing through home ownership is flawed.
You are basically loaning $$ to yourself.
You might as well have argued in 2008 that the concept of investing in a technology company is flawed.
In short, you don't let the events of one 5 year period alter the reality of 100 years of sound investing strategy.
Like most anything else, timing and price is everything.
You are basically loaning $$ to yourself.
You might as well have argued in 2008 that the concept of investing in a technology company is flawed.
In short, you don't let the events of one 5 year period alter the reality of 100 years of sound investing strategy.
Like most anything else, timing and price is everything.
Posted on 6/16/15 at 12:31 pm to gorillacoco
quote:
conventional 'wisdom' of home ownership is flawed
Then just spend the rest of your life paying rent.
Who told you that the conventional wisdom was wrong?
Posted on 6/16/15 at 12:32 pm to gorillacoco
You assume the risk of going underwater when you take on a mortgage. So far so good. The bank, however, does not assume the same risk (see bailout). THAT is the issue.
For the free market to arrive at an actual truthful economic value, the risk must be shared between both parties. And that is why I have no particular beef with people who choose after the banks were bailed out, to walk away from their mortgages. I wouldn't have done it, but when the whole thing is rigged in the bank's favor, I'm not going to waste energy blasting somebody either.
Were they ethical to walk away from ther mortgages? No.
Were they rational to walk away from their mortgage? Yes.
For the free market to arrive at an actual truthful economic value, the risk must be shared between both parties. And that is why I have no particular beef with people who choose after the banks were bailed out, to walk away from their mortgages. I wouldn't have done it, but when the whole thing is rigged in the bank's favor, I'm not going to waste energy blasting somebody either.
Were they ethical to walk away from ther mortgages? No.
Were they rational to walk away from their mortgage? Yes.
Page 2 of 6
Back to top
Follow TigerDroppings for LSU Football News