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Nearly 1 in 10 Homeowners Face Loan Problems

Discussion in 'Political Discussion' started by weswelker#83, Jun 5, 2008.

  1. weswelker#83

    weswelker#83 Rookie

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  2. otis p. driftwood

    otis p. driftwood Rookie

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    First graph from your story:
    About 1 in 11 American mortgages were past due or in foreclosure at the end of March, according to a report released on Thursday, a figure that is rising fast as home prices fall and the job market weakens.

    Could someone tell me what falling home prices have to do with whether or not people can pay their mortgages?
  3. weswelker#83

    weswelker#83 Rookie

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    Wow, Continental airlines just layed off 3,000 people today......
  4. weswelker#83

    weswelker#83 Rookie

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    WOW, United airlines ground 70 planes and cut as many as 1100 jobs , and Fidelity Investments is cutting 550 jobs ....

    Honey, I lost my job making xx.xx an hour today. I thought I was going to be there forever. I have to get a job at blank. We are probably going to lose everything.
  5. otis p. driftwood

    otis p. driftwood Rookie

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    Just a few more months and everything will be okay!
  6. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    The job market is doing OK - for a slowdown. Your problem is you mention every job loss but not job gains. Although there's a net loss right now it's not nearly as bad as you make it out to be. Just like NAFTA - it's cost the U.S. jobs, which the Libs mention, but it's created more; which they don't mention.

    As far as the loan problem - a small part of it is people losing their jobs. A bigger part is them getting loans they couldn't afford. Lots of people made bad decisions, getting loans they knew they couldn't afford when they re-set but assuming they could sell at a profit. Don't come crying when your auto profit maker doesn't come through. There's no sure things and the housing market sure isn't one of them even though lots of people assumed it was.
  7. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Sounds like a lot of people owe more than the house is worth.. know that to be true from some of the young'uns I know who bought houses about 3 years ago...
  8. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    No sh!t. a.paul's point is that doesn't affect the mortgage payment unless they got an adjustable loan.
  9. otis p. driftwood

    otis p. driftwood Rookie

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    Yeah, that was my question. My house value went up, then came down, but I've still managed to pay the mortgage.
  10. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    Clearly it affects those who have to sell, if their job moves, they're laid off or they have to move for whatever reason. And there'll be some of them but a very small minority. The bigger group would be those who got an adjustable loan and assumed they could re-finance before the reset. But now they can't re-finance because they're upside down. There's probably a lot more of them. Then there's some who probably say "screw it, my house isn't a cash cow anymore, I'm walking". And speculators/flippers who bought and assumed they'd sell in a year.
  11. Real World

    Real World Moderator Staff Member

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    People who don't understand Economics 101, should ask questions, as opposed to posting, and showing their ignorance.
  12. otis p. driftwood

    otis p. driftwood Rookie

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    To whom are you referring?
  13. Real World

    Real World Moderator Staff Member

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    Sadly, the people I'm referring to probably wouldn't be able to figure that out. :eek:
  14. otis p. driftwood

    otis p. driftwood Rookie

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    Well, since I did ask a question I guess it wasn't me :D
  15. weswelker#83

    weswelker#83 Rookie

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    Multimillionaire Ed McMahon is $644,000 behind on his mortgage too . :D
  16. otis p. driftwood

    otis p. driftwood Rookie

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    And that's relevant because why?
  17. weswelker#83

    weswelker#83 Rookie

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  18. Real World

    Real World Moderator Staff Member

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    M&M's somehow think that irresponsible people, living beyond their means, is indicitive, or the fault of, economic conditions. Evander Holyfield's 109 room mansion is being auctioned off, and I guess that's cuz Evander can't find a job in this economy.
  19. FootballYouBet

    FootballYouBet Rookie

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    Falling home prices not only affect your ability to refinance; which affects people stuck at ballooning variable rates; but if you find yourself in the position where you need to sell the home because of job loss or other circumstances, and you don't have much equity in it; you may not even be able to sell it at a break even point.

    Let's say for example that 3 years ago you bought a $400,000 home with 10%(40k) down. That $40k was all the money you ever had. Let's say that the home is worth now 10% less (national average for housing market decline). There goes your equity and your 40k. At this point if you are able to sell the house for 360k you'll break even right? Wrong. You still haven't paid the real estate agents and lawyer, which amount to about 4% of the sale. Assuming that the home now sells for 360,000, you're talking another $14,400 you'll need to break even. In this case above, a person with a variable rate loan who cannot afford the mortgage any longer cannot even sell the home at break even. In the case above, the person who needs to sell the home because of job loss or other circumstances cannot afford to pay the mortage and likely does not likely have $14k lying around to pay the realtor and lawyer.
  20. otis p. driftwood

    otis p. driftwood Rookie

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    Yes, that's fine and anyone should be able to figure that out.

    Still not seeing what it's got to do with actually making the mortgage payment, however. Unless you're going to try and tell me that every person who's in ww83's story has had to move for some reason.

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