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Old 10-10-08, 10:24 PM   #1
mepi
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Housing Values - what to do

I bought my house 3 years ago at the height of the housing market and got a good 30 year loan with a fixed good rate that everybody could have received who bought in the complex. It seem like everybody else around me must have done something different because they are in foreclosure. The value of my condo has dropped more than 60% because of these deadbeats and the garbage banks who loaned them the money to them. Right now, I can afford my payment without any probelm, but I am in and industry that i know is going under and I am guessing I will be laid of very soon. Most people that I know say that I should just give up my condo to the banks and let them deal with it because of their shotty loan practices. Ethically, I think it is totally wrong because I can deal with the payment and entered into the contract with them, but I always have in the back of my mind that they loaned money to crap people who they knew would never be able to make payments.
It is just horrible seeing somenody paying 1/2 the payment that I am paying to live in basically the same place.
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Old 10-10-08, 10:29 PM   #2
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alot of people facing the same problem as you
my industry is another thats failing slowly..not long before its gone.
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Old 10-10-08, 10:30 PM   #3
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The value of my condo has dropped more than 60% because of these deadbeats and the garbage banks
No.
You just overpayed.

The price of your "condo" is coming back to earth (after being wildly overinflated).
It sucks that you bought at the worst possible time.

But it's worth what it's worth, and it's not your neighbors' fault.

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Old 10-10-08, 10:49 PM   #4
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Didn't you get mortgage insurance?

Can you get your house reassessed so the taxes will be lower?
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Old 10-10-08, 10:55 PM   #5
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Bikepacker67 is basically right, buuuut the monetary banking system we're all playing in, is dishonest to it's core, down to the fact that the very "money" you borrowed came off a printing press and has no constitutional backing.

I'd get with your "lender" (if you can find him) quick, and tell him what a hard time you're having in these awkward times, and that unless you can renegotiate better terms, you may have to walk. I might do a little research to find out if "he" even owns your loan, as it may have been sold many times over, maybe even lost. I might even wonder if the original papers could even be produced in a quiet title action.

Some are even buying another house/condo at the best possible deal, and sending in the keys to the other.

I am not a lawyer, and some of this can severely damage your "credit rating", but it's not unethical or against the law to negotiate better deals.

A little food for thought...

http://www.nytimes.com/2007/11/15/bu...prod=permalink

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Old 10-10-08, 11:08 PM   #6
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I'm a Realtor and I can tell you that walking away from that condo will cost you big-time on your credit report. If you are making your payments the bank won't talk to you. However, Countrywide is setting up a program to help keep people in their homes. It isn't happening yet but will be very soon.

If you have a different lender then you have a couple of choices. If you can pay your mortgage but feel that you won't be able to afford it for very much longer, you can try the loan workout (call your lender and have paperwork to show hardship). You can try to list your home as a short-sale and hope someone makes an offer, and hope as well that the bank accepts the short-sale. You can keep paying your mortgage and sit tight until home values increase. The market is cyclical. When you bought your home it was a seller's market. Now it's a buyer's market. In a few years it'll be a seller's market again.

Yes, it sucks to pay on a home that's not currently worth what you paid for it. Just know that the value will come back. Keep looking at the big picture to see where your equity lies. Weigh the cost of walking away vs. the cost of keeping you home despite the current inequity. Talk to your accountant to get the tax implications of keeping vs. losing your home.

I don't envy you, and yet I deal with people in your same situation; and in even worse situations. Not everyone has to lose their home. SBW had a good idea -- go to your county assessor and see if you can be reassessed for your taxes. That's a start on getting more money in your pocket.

Good luck!
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Old 10-10-08, 11:23 PM   #7
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I'm 24. I've never owned a home. I am renting a room with 2 guys I met on craigslist. I'm about to quit my job, move to hawaii, and take up a simpler/better life not in an office. I don't care to ever own a home. I have been telling my family for a while that their house is not an asset. My parents house appreciated in value nearly double in the 15 years they lived in it. To me it still wasn't worth it considering the insurance they had to pay. The property taxes, school taxes, upkeep, mortgage. The list goes on for the types of expenses you have when you buy a home versus rent an apartment or even rent a home. I doubt they came out on top in the deal.

This isn't to say I will never own a home. This is to say I don't see the point in it. I used to invest in stocks several years ago. I was immersed in it. My mother would fight me by saying I need to have cash and be liquid. I wasn't even in college yet. What did I need $1k-$3k for? So I went against her advice and played the markets. My point is I find it funny how they're now tied up in this housing mess and are sunk with their 401k. That is as illiquid a position as one can get.

That is why I'm quitting my job and moving for another life. When I get tired or bored I will have little worries and responsabilities to debtors and I can do as I please. Sure I'll be saving money, but for what? For the peace of mind that I won't be tied to a desk or any job and that I can go anywhere in the world for work and not be reduced to selling myself short on what I want to do.

Why buy a home?
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Old 10-10-08, 11:25 PM   #8
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If you have a different lender then you have a couple of choices. If you can pay your mortgage but feel that you won't be able to afford it for very much longer, you can try the loan workout (call your lender and have paperwork to show hardship).

In a few years it'll be a seller's market again.
I have heard that a field of professional advocates is developing for this sort of thing, I would seek one out.

Wish I could believe the second part, but that's going to take one enormous load of "free" money from somewhere to effect. I'm not sure that hyper inflation is going to have the desired affect.
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Old 10-10-08, 11:27 PM   #9
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Didn't you get mortgage insurance?

Can you get your house reassessed so the taxes will be lower?
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Old 10-10-08, 11:30 PM   #10
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Bikepacker67 is basically right, buuuut the monetary banking system we're all playing in, is dishonest to it's core, down to the fact that the very "money" you borrowed came off a printing press and has no constitutional backing.
Well, it didn't actually come off a printng press, and actually was never really money at all.
It was only the magic fairy dust of fractional banking, which equates indebtedness with future wealth.

Basically your average ponzi scheme - but with a taxpayer bailout.
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Old 10-10-08, 11:31 PM   #11
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I'm 24. I've never owned a home. To me it still wasn't worth it considering the insurance they had to pay. The property taxes, school taxes, upkeep, mortgage. The list goes on for the types of expenses you have when you buy a home versus rent an apartment or even rent a home. I doubt they came out on top in the deal.

Why buy a home?
These are very good points.

I think it's great to go do things while you're young, but there does come a time (at least in most of our lives) when you will start to have so much cool stuff, that you will need a permanent base of operations to keep it all, because moving it all the time becomes very tedious.
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Old 10-10-08, 11:36 PM   #12
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Given this market, anyone who is 24, who ISN'T renting, is a damn fool.

Rents are cheaper than mortgages - and you don't have to replace the water heater... HELLO???!
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Old 10-10-08, 11:38 PM   #13
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If you still owe more than the place is worth, and default, you may still end up owing the money. If there's a foreclosure and an auction that brings in less than you owe, you're still on the hook for the difference, I think.
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Old 10-10-08, 11:39 PM   #14
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By paying rent, no matter how much or how little, you are still paying for insurance, school taxes, etc . . . but indirectly.
Have you ever seen a market for used rent receipts?
I bet rents are a real bargain in Hawaii!
However, you're an adult and can make your own decisions.
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Old 10-10-08, 11:43 PM   #15
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It is not a problem for me making my payments right now. I did get my propety taxes reduced by about 50%, the county was very good about notifying everybody.
My gripe is that everybody was afforded a 30 year fixed rate of 4.5% or 4.75%. The payment (after taxes) is less than rent would be. There was no reason for the banks to loan out these arm loans, no documentaton loans, or whatever crap they did. I live well within my means. I didn't over extend myself on my loan, own my car outright, and have no credit card bills. I now have to pay an inflated price because the banks gave loans to people who could not afford a simple payment. Business wise, it is an easy decision to just walk away, ethically I know I just have to deal with it. It seems totally wrong that the banks loaned money to these deadbeats ( I realize some people got caught up with loosing jobs etc.. and that happens). At least 10% of the units in my complex are in foreclosure and I am sure 10% have already been foreclosed on. Innocent people are getting caught up in this crap.
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Old 10-10-08, 11:45 PM   #16
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By paying rent, no matter how much or how little, you are still paying for insurance, school taxes, etc
Ahhhh.... no.

Not in this market.
It is cheaper to rent (right now) than to own.
Landlords are over the proverbial barrel.
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Old 10-10-08, 11:48 PM   #17
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To me it still wasn't worth it considering the insurance they had to pay. The property taxes, school taxes, upkeep, mortgage. The list goes on for the types of expenses you have when you buy a home versus rent an apartment or even rent a home.
Landlords aren't in it out of a sense of charity. They're trying to make money, and their expenses for all those things have to be paid out of the rent they collect.
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Old 10-10-08, 11:49 PM   #18
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Business wise, it is an easy decision to just walk away.
And that's exactly what you SHOULD DO.

It'll take a decade or more to recoup value, and less than seven to rebuild your credit.
Get out NOW. Stop being emotionally attached.
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Old 10-10-08, 11:53 PM   #19
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Landlords aren't in it out of a sense of charity. They're trying to make money, and their expenses for all those things have to be paid out of the rent they collect.
Yeah, but you can only charge as much rent as the market will support. You're in competition with all the other landlords out there. In my area, rents are about 30-50% of mortgages. And that's not even including all the other expenses of owning a house. My property taxes alone are in the 5-digit range. No way can I even come close to recovering any of that by charging rent!

As for the OP, if you like the house and area you live in, and can secure a job, then I stay hang in there and tough it out. HOWEVER, in the last housing recession in CA starting in the late '80s, it took a full 10-years for prices to break-even. Given inflation, it was actually only worth 1/2 of the original price. So really more like 15-years to break even.

You just have to ask yourself if the money you're spending on the house can be earning better rates of return. If you can rent for 1/2 of your housing-expenses now and put the rest into other investments that are getting 10-20%, that may be a better deal.

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Old 10-10-08, 11:58 PM   #20
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I bought my house 3 years ago at the height of the housing market and got a good 30 year loan with a fixed good rate that everybody could have received who bought in the complex. It seem like everybody else around me must have done something different because they are in foreclosure. The value of my condo has dropped more than 60% because of these deadbeats and the garbage banks who loaned them the money to them. Right now, I can afford my payment without any probelm, but I am in and industry that i know is going under and I am guessing I will be laid of very soon. Most people that I know say that I should just give up my condo to the banks and let them deal with it because of their shotty loan practices. Ethically, I think it is totally wrong because I can deal with the payment and entered into the contract with them, but I always have in the back of my mind that they loaned money to crap people who they knew would never be able to make payments.
It is just horrible seeing somenody paying 1/2 the payment that I am paying to live in basically the same place.
aww man - feel for ya.


I'm still shell-shocked when the bastid beotch of a thorn in my side neighbor of 20 plus years - an ill 82 yr old with minimal in the bank, no income and on social security - qualified for a $120,000 mortgage. I mean I looked at the house with my Mom when we were thinking of (at one time) blending in again and buying a house - and the neighbor GOT THE MORTGAGE and when asked - Hey Betty - how the hell are you going to pay for this - she said - Eh, I'm sick, we all know it, probally only have a few years (she has all sorts of bad things on her insides)---- I'm going to live well for a couple of years and when I go my sons will take care of it.

Color me: stunned

While I'm sure the sons will take care of the house, etc ---- it's that mentality that just floors me.



Sorry you got slapped in the side of the head as a result of people who shouldn't have qualified ....
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Old 10-11-08, 04:13 AM   #21
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These are very good points.

I think it's great to go do things while you're young, but there does come a time (at least in most of our lives) when you will start to have so much cool stuff, that you will need a permanent base of operations to keep it all, because moving it all the time becomes very tedious.
That's why I bought at the tender age of near 40. I was pretty PO'd when my apartment was converted into a condo during the boom. The mortage they wanted was about 3 X what I paid in rent. At that point, I moved and started saving and waiting. I thought I got a good deal 2 years after the boom, but that was before the big drop. It is aggravating to have a mortage that's bigger than what the place is worth. But I will stay and pay as long as I am able. It will come back in the long term, and a default now would put me in the back of the line for a mortgage for the same amount of years.
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Old 10-11-08, 04:16 AM   #22
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As for the OP, if you like the house and area you live in, and can secure a job, then I stay hang in there and tough it out. HOWEVER, in the last housing recession in CA starting in the late '80s, it took a full 10-years for prices to break-even. Given inflation, it was actually only worth 1/2 of the original price. So really more like 15-years to break even.

.
But in the meantime, you are paying off the house. if you rent, you pay off someone else's house.
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Old 10-11-08, 07:58 AM   #23
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I'm 24. I've never owned a home. I am renting a room with 2 guys I met on craigslist. I'm about to quit my job, move to hawaii, and take up a simpler/better life not in an office. I don't care to ever own a home. I have been telling my family for a while that their house is not an asset. My parents house appreciated in value nearly double in the 15 years they lived in it. To me it still wasn't worth it considering the insurance they had to pay. The property taxes, school taxes, upkeep, mortgage. The list goes on for the types of expenses you have when you buy a home versus rent an apartment or even rent a home. I doubt they came out on top in the deal.

This isn't to say I will never own a home. This is to say I don't see the point in it.
Home ownership is not for everyone. In fact, I'd go so far as to say it's not a good fit for most people, and that lending agencies constantly promoting it as the "American Dream" are performing a disservice.

Owning a home is a major responsibility, but it's highly advantageous for people who don't move around much. Once you pay your house off, you can live well for a few hundred a month. My wife and I could flip burgers and still easily afford to live in our nice house.

On the other hand, a lot of people really get strung out in debt. Many people pay so little principal in their mortgage payments that they're really just renting from the bank and taking on the responsibilities of home ownership. That's a bad deal.

Very few people in their 20's should own homes. You need to move around, try things, and see what works for you. You don't need to even think about getting a house until you're interested in settling down.
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Old 10-11-08, 10:32 AM   #24
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Well, it didn't actually come off a printng press, and actually was never really money at all.
It was only the magic fairy dust of fractional banking, which equates indebtedness with future wealth.

Basically your average ponzi scheme - but with a taxpayer bailout.
I know....but you're probably one of the few around that understands this.

If you go telling people how the financial system actually works, it just sounds like "crazy talk", as it quickly exceeds their belief paradigms.
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Old 10-11-08, 10:50 AM   #25
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Oh good grief!! Save your watches... the BS and stupidity running rampant in this thread is amazing!!

Mepi - you're doing the right thing, despite the urgings of irresponsible people like Bikerpack67, by owning up to your obligations. People who advocate walking away are well, I'll refrain from going further to avoid violating the TOS, but suffice it to say the utter lack of responsibility reflected in a statement like that is a big part of what got us to where we are these days.

There's also quite a bit of plain and simple stupidity in this thread. I mean, do we REALLY think the government's got no authority to coin money? Sheesh.... Next thing he'll tell you is to save money, don't pay your income taxes because the government has no authority to tax you, either. Good grief.

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No.
You just overpayed.

The price of your "condo" is coming back to earth (after being wildly overinflated).
It sucks that you bought at the worst possible time.

But it's worth what it's worth, and it's not your neighbors' fault.
More ignorance. Property value is hugely impacted by nearby similar properties and those in foreclosure typically go for less than market value. That drags down the market value of properties that would otherwise bring a higher sale price.

Did he overpay? Maybe. In the market of 3 years ago, he probably got a fair price. Today, it certainly seems that he overpaid, but that's with the benefit of hindsight.

It's worth what it's worth, but part of that MAY be his neighbors' fault if they bought more than they could afford and are now defaulting, artificially deflating the value, much like it may have been artificially inflated 3 years ago. If his neighbors were seduced into buying more than they could afford and are now "just walking away", they certainly do have a degree of culpability in the fall of market prices.

Mepi - as with most things, your best bet is to go speak to some experts... not a bunch of opinionated, holier-than-thou anonymous idiots.

Last edited by skiahh; 10-11-08 at 11:01 AM.
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