Need some help with real estate, who is edumacated?

[Return of the Yarii]

Not really the governments fault, mortgage companies did not need to charge a variable rate! Fixed rate is all there should be. Also the government did believe in deregulation which might not have been the smartest thing and contributed but certainly not the cause. Mortgage companies have people that check risk of the loans and they new that those people would more than likely not be able to pay when there rates went up, but the only thing they saw were the dollar signs and there business swelling from all the loans they could get and exorbitant fees they charged. I must add that there were shareholders to keep happy also. Then came the huge bonuses and then rates went up and people could not afford and lost there home to foreclosure.

Then the assholes did not want to work with people to help fix the problem and the government rewarded the mortgage company and bailed them out but not the people who's houses were getting foreclosed on.

In my opinion those banks should have went belly up with no bail out help at all and the people in charge should get some prison time and have there assets seized and taken. Obviously the nation would be in a little bit worse shape at this point but there has been no lesson taught, the only thing they learned was that they can fuck the system and then get bought out by the government and then still get there millions in bonuses courteous of the taxpayers. Who I should mention are still not getting help with their mortgages.

This is only true to a point, yes I agree banks are partially to blame and the government less to blame but everyone is missing the one party that is most to blame....its the consumer. Too many people these days are "house poor" barely affording their mortgage on their home and living paycheck to paycheck. I dont buy for a minute that all the people out their w/1, 3 or even 5 year ARM's didnt know what they were getting into. They knew the possibilty that their mortgage might go up but didnt care and now that they cant pay their unfortunate situation needs to be visited on the 90% of people that can afford their house? Its like the car thing, I have many friends who have 50k+ cars, all leased and paying upwards of 500-700 per month to say they drive a nice car.....funny thing is they dont have anything to speak of other than the car which isnt even theirs to begin with.

The OP with no disrespect lends into this whole situation...here is a 21 year by his own admission lives w/parents, more than likely no credit history to speak of and no solid income stream and yet he/she thinks its wise to buy a multi family house? I also agree w/the person who said No Doc mortgages are gone but even though when they were around you needed to put down 30-40% as there was always an assumed higher risk since you cant verify your income. Finally I agree w/some of the others that its going to be near impossible to find a company to finance the OP so I would recommend less house shopping and start shopping for a mortgage. General rule of thumb in the mortgage industry is you can generally get approved for 3x your annual salary i.e. annual salary 50k = 150k loan amount.

[dvlnblkdrs]

well , the government rules relaxed during this time.. so when there are less guidelines, more likely to loan money to people...


if guideline states you need 50k in assets to qualify for a 200k loan, and before it was 100k... if u have 50k.. u got the loan...

and most of these loans were stated income.. in otherwords NOT VERIFIED and assumed was truth.. and the people who originate the loan for those tended to boost the amount up in order to make it work.

so it is not always the mortgage companies fault... i worked in the same mortgage company as my mom for 3 years as an all around assistant, so i saw a bit of everything...

[ChinoCharles]

The truth is you're both right. You're all right. Everyone messed up.

Part of this is that a lot of people are completely and totally ill-prepared when going in to buy a house. You need money and you need to know what you're getting yourself into... not just one or the other. Banks need to take some blame too, though. As we now know, their mistakes tend to cost us taxpayers a lot of f#cking money.

And anyway, if you don't have 20% down to put on a house in this market why are you even considering doing this? Do you know how much prettier your annual rates are going to look with that down payment? You'll save thousands of dollars.

[Nexus1155]

I know what everyone is saying, i also hear that it will be expensive, i know there are programs that allow me to pay off my principal and interest at the same time, thats why i am opting for something cheap in my area, pay off $1000 to the mortgage and $500 to the interest on every payment...

And honestly, i will never be able to save for a down payment of $40,000 until i am 28 and i will still be living with my parents at that time, what a loser(no offense to those who do...)

In all honesty, i do not want to live in an apartment and rent, its just stupid and its basically throwing money away...lots of money... maybe a condo that i can rent to own but thats besides the point.

And i do have a credit history which goes back 5 years and i've bought one car and helped to buy a second...and theyre both paid off already...

If the bank does give me a loan, that is a risk on their behalf. If i lose, they end up making more money unless I file for bankruptcy, which i obviously cannot do or i will be screwed and they will most likely see it as that and i will be locked into payments forever...so they win..

Sorry for the run ons....

personally if you want to know my income you can message me see how it fluctuates from very good to very bad on occasion(700 one month,5000 the next) but id rather not divulge others fully into my business on a public forum

[dvlnblkdrs]

camell..

first of all.. as far as gen pop..COMMON SENSE IS NOT ALL THAT COMMON!! believe it or not!

and as far as the loan contracts.. PEOPLE DONT READ 90% of it if any at all! by the rep not explaining to them what a variable apr is(since some people dont know and most people dont think to read into the loan program they are getting into) they get their commission and the people get their homes..

and idk about where you live, but where i live, its quite common to see someone living at home with family or in a really crappy apartment, but driving a luxury car.. all about image.. i cant tell you how many loans i had seen just in processing stuff where someone had 500-1k for a car note! you would be surprised at the amount of fraud people tried to get away with.. people like to live beyond their means sometimes.. big eyes small wallet=bad credit sometimes though...

if people are going to be ignorant about something so important as their credit and if they can even live in the home they are buying and not reading contracts and such.. why shouldnt someone take advantage? i cant tell you how much money the loan reps were making 5yrs ago.. lets just say they were all in 5-6 figs a lot of time.. that says something HUGE!!!!

[firemachine69]

Originally Posted by camelll

I agree with you return of th yarii to a point, but the people that run the financial industry in this country are supposed to be, we will say more intelligent than the average consumer and they should not have loaned the money to these people that they knew would not be able to afford them when the arm increases started. Then they refused to help out!

They should have know this by the loan application and looking at there debt to income ratio as well as net worth. I do believe that the consumer should have a real idea about what they can afford and what they cannot afford and those people lending them the money (who should be smarter and have an interest in keeping their company afloat and share holders happy) should have given them this information, the correct information, not the if you can sign we will lend information, when they applied for their loans.

I think a lot of lenders misrepresented the way the loans worked to people that were of less intelligence than them. This simple fact coupled with the overly inflated prices in the housing market and credit card debt the average American carries bit them in the ass and now everyone is paying for it. The whole world financially is in a state of distress because of this.

If they would have allowed these people to stay in there homes and worked with them to reduce payments or something this problem might not have gotten so bad. The consumers do bare some fault as a lot of Americans live above their means to keep up with the Joneses or what have you, but the main blame lies with the people who should have been the wiser and denied these loans, but no they seen there profits swell along with their bonuses and it all collapsed. They lied to the consumers they lied to their investors and shareholders shit they even went on TV and said everything was okay then 5 days later they are talking about bankruptcy! They are no different than the people who ran enron! Put them in jail, seize and freeze their assets and put them and their families in the same boat with everyone they screwed over. They never should have been deregulated.

See what essentially happened was a loosening of the rules to allow idiots with mortgages they could not afford when the rates went up. They used an idealistic figure of person not using more than 40% of their net income to pay debtors (and remember, EVERYTHING - cellular phone, insurance, etc.- count), and an extra 20% in liquid savings. Of course, as many know, this has effectively zero correlation with the real world. I'm about 5% below the maximum, and I live with my mother (paying rent, but still). The mortgage companies ran with it, figuring a safe "new" debt-level figure was 60% - perfectly suitable in a social communist world where we all let someone else take care of our problems. Of course, the added 20% load was used up by just about everyone a long time ago, and the safety net that the savings "invested" into the home equity vanished overnight. As we all know, we saw the house of cards come crumbling down afterwards...

I'm positive some of them said it was likely a bad idea, and told the government and "higher ups" this could only end in disaster, but people are greedy and believe "that each kid and pet needs their own bedroom", not to mention four bathrooms in the house.


Nexxus:

I read ya dude. I started a company, and had HUGE fluctuations of income. Sadly, the bank's want to see:

A) large cash reserves for the slower times
B) a near-bulletproof plan
C) equity (existing buildings, etc.)

I tried to do what you are thinking about starting in the good economic times, and it didn't turn out all too good for me.

P.S. a twelve page business plan is not enough.


Sometimes, some people just will never be able to manage and budget for things going wrong, and those are the perfect candidates for renting.

[dvlnblkdrs]

it all would have worked out fine if not for the giant inflation that happened.. that made everything worsen so much more.. it worked just fine before a 100k shack in compton began selling for 500k