My husband and I bought a house last June. We had lived in a mobile home for 15 years, and I, at 45 years old, felt like I deserved a “real house.” We spent the last five years diligently putting every spare penny into debt-retirement and credit repair, and saving as much as possible.
We waited until home prices were down and interest rates were low (we got 6.25%, 30-yr fixed). I made up a spreadsheet of all our financial obligations to make absolutely sure we could cover the expected mortgage payment. We even managed to scrape up 20% down!
Then, back in October, John lost his job. A month later, I lost mine. :eek: Our entire income is $1,100.00/mo from unemployment. We have paid all our bills on time, including the mortgage, so far, because we had a bit in savings from selling the trailer (not much - a 20-yr-old single-wide doesn’t have much equity…). Now that’s nearly exhausted, and still no job on the horizon, despite applying for at least 2 per week for 5 months.
If I had been some schmuck buying a huge house on a tiny salary, with no savings and no money down, or had an adjustable-rate mortgage with a balloon payment, I would qualify for a “bailout.” If I had been irresponsible and just sort of stopped paying my mortgage when I lost my job, I’d get a bailout. But, essentially, I’m being punished for being responsible. :smack:
I still have to pay my share of the gazillion-dollar federal money in taxes, but I won’t see a penny, because I’m not a deadbeat. I feel like such an idiot! :smack::(:eek:
I hear you. We did the same thing, waiting and waiting in our rental while all around us people bought houses they couldn’t afford. It’s frustrating that their lack of math skills might be subsidized by my tax dollars, but I see the logic of it. Enough people all doing stupid things at the same time can screw us all over. As frustrating as helping them is, I think we just need to bite the bullet.
Perdita, I feel for you. I do know you and your husband will land on your feet, even if you have to deliver pizzas* to make ends meet. You have the mindset…you may be broke, but you are not poor.
If I can suggest…call your mortgage company NOW. Let them know the situation. Communication at this time is very very important. They may be able to work something out with you. But they can’t do it if they don’t know what’s going on.
*I’m not kidding about this. From what I hear, you can make enough to give yourself some badly needed breathing room. I’m considering it myself after we get back on vacation, just to speed up paying off some bills.
Are you sure you don’t qualify? I was checking the guidelines a few hours ago and it seems to me that you may qualify for relief under the Homeowner Stability Plan.
I have no advice for you, just sympathy. Just remember the strategies you’ve used so far are sound and honourable.
The amounts of money being dumped into black holes is depressing and scary, and I abhor what appear to be rewards for idiots and the conniving. Bitterness is no recourse.
Or even better, you could be like the husband and me, with an affordable mortgage we’ve paid on time, little debt, him working and watching our retirement funds go in the toilet because of this whole mess. AND getting to pay even more taxes to fix that mess. AND people demanding even more.
Being responsible is definitely no longer the way to go.
We’re being fucked 6 ways from Sunday in this mess. My only experience in the adult world was in the mortgage business (5+ years.) Suffice it to say that’s gone and I can’t even make a third of what I was making anywhere else. And we bought in Phoenix, in the spring of 2006. Our house is worth 37% of what we paid for it. Foreclosure is literally the best option for us right now, from any viewpoint. Foreclosure is never supposed to be the best option.
I have seen over 100K in equity go up in smoke. I just paid on time and followed the rules. The bankers did not follow the rules. They caused this horrible mess ,not the home buyer.
Foreclosure brings a new problem. Your credit is in the crapper and you still need a place to live. Where do you get the money for an apartment or house rental. The rental may well cost more. You can walk away,but to where?
There are some nice tent cities growing rapidly.
It seems to me it’s not an either-or situation. A lot of buyers took out adjustible rate mortgages which were almost certain to have payments which would increase substantially after 2 or 3 years. If this was done without a realistic plan for making the higher payments, then it seems to me that such buyers bear some responsibility too.
Granted, a lot of these buyers were unsophisticated people who were fast-talked by shady mortgage brokers. But still.
ETA: I don’t know the details of your personal situation and I’m certainly not accusing you of being irresponsible.
Eh, 4 months of not paying our mortgage would be enough to pay a year of rent in a bigger, newer house. I know a lot of landlords and none of them would turn you down if you paid first and last month up front - but I wouldn’t put up more that that in these troubled times.
First, let me say that I feel for you. My wife was pushing to buy a house at the peak of the bubble, but I refused – in my estimation, there just wasn’t any way we could do it and not be living month-to-month, even if things had remained neutral. So, having just missed being in a similar situation, I’m sorry that your being responsible didn’t work out as cosmic justice dictates that it should.
But I have to wonder – if you’d done things irresponsibly, would you really be in a better position? Or would you have been able to qualify for help, and yet still be even worse off than you are now (i.e., the “help” wouldn’t be a net gain)? I only ask because I’m not in your position and don’t know the details…perhaps I’m just looking for a (teeny-tiny) silver lining in a bad situation.
At any rate, I hope things turn around for you soon and that you weather this storm.
No, the home buyers are responsible. If they signed any contract without understanding it - not just reading, but actually understanding it - they’re idiots and completely culpable.
Are the banks complicit? Yes. Are they solely responsible? No, not unless they somehow forced someone into a deal. If you’re making an investment as significant as a house, you are 100% responsible for it. If things go south and you feel cheated? Tough shit, life sucks.
No one has the right to own a home, and banks are in the business of making money, not being nice to you. It’s your responsibility to make sure you’ll be able to afford a home before you sign the mortgage.
Thank you, it still stings. People look at us like we’re stupid now when we tell them that, but they’re a bunch of fucking Monday morning quarterbacks. Part of the reason we bought was the unrelenting chorus of older, “wiser”, more experienced people telling us you’re throwing your money away renting, real estate is never going down, get in the market now or you will not own property in your lifetime.
If you were a truly responsible homebuyer, you would have waited until you got a stable job as a corporate tax lawyer before you even contemplated buying a house.
I bought a small ranch in 05 just before the market started sliding and I figure I owe about 15K more than it’s worth right now. I’m seriously thinking of stopping payment on the mortgage, stuff the cash in coffee cans, and then when they come looking for their money just claim I’m the victim of a serious gambling habit and need help. Hey, I figure if they can knock 15K off the principal, lower the rate 2%, I really think I could kick this high stakes poker addiction.
Then I’ll take the cash and build that deck out back I’ve been wanting but cant afford.
