‘Walking The Mortgage Plank’ In Colorado
The Rocky Mountain News reports from Colorado. “Colorado continued to lead the U.S. in the foreclosure rate in August. RealtyTrac showed 6,079 homes in Colorado are in some stage of foreclosure, more than 150 percent higher than a year ago and about 60 percent higher than July.”
“Economist Tucker Hart Adams, who said there will likely be a recession in Colorado next year, in large part because of problems in the housing market, said the reports back her pessimistic viewpoint. ‘I hope I am wrong,’ Adams said. ‘But I have never had this kind of reaction to one of my forecasts before. A lot of people are telling me that they are already seeing this in their industries.’”
“Realtor Ed Jalowsky said he is seeing more expensive homes going into foreclosure.”
“Adams predicted consumers will cut spending ’substantially’ by year’s end and throughout next year because their budgets are strained. Colorado ranks eighth among states in delinquent bill payments, and Colorado homeowners have the nation’s second-lowest level of equity in their homes.”
“She pointed out housing sales and construction are declining while the supply of homes on the market is expanding. Housing prices, she said, will fall.”
“It started two years ago. Anthony Stewart (and) his wife learned that a third child was on the way. Being self-employed, they had no health insurance. They still owe the hospital $17,000. The $17,000 landed in collections.”
“Yes, they would refinance their home, pay off the hospital debt, plus bring down their credit card debt. A banker friend steered them to a mortgage broker, who told them that despite their credit woes and low credit scores, she could get them a mortgage at a rate no higher than 7 percent. Weeks passed. And the offered rate continued to climb: 7.8 percent, 8 percent and higher.”
“Finally, at the closing table, the broker told them their new loan would be 10.8 percent, and adjustable.”
“The mortgage on his home would climb to nearly $5,000 a month now, from the $3,000 per month he’d been paying since buying the house. ‘I know, I know. But quite frankly,’ he lamented, ‘I really, really needed the cash. Worse, they made it sound like they were doing us a big favor by giving us this loan. It’s my fault. I made a huge mistake.’”
“Now, two years later, the adjustable rate mortgage is about to adjust. He figured out the monthly loan amount likely will total no less than $7,000. There is at least $100,000 equity in the house, Anthony Stewart said, confident and insistent that he is not mentally overpricing what he still owns. ‘It’s there. I just can’t access it,’ he said.”
“If only he had said ‘no’ when he sat at that table two years earlier, gotten up and just walked away. ‘You know, I was living the American dream,’ Anthony Stewart says. ‘I had savings, stocks, was living in a nice home in a very nice community, and I always paid my bills. Now, I’m wiped out.’”
I hear people suggest ‘rolling’ personal debt into a refinance or home equity loan, basically taking an unsecured debt and collateralizing it with the home. ‘Think of the tax advantages! It will have a lower rate!’
Not to mention a 30-year amortization. Nothing like continuing to pay for that vacation, Hummer, plasma, etc. long after it’s a distant memory.
Better yet; cigarettes, resturant bills and movie tickets. Nonessentials that have long ago been used in the period of 2 hours and paid for over 30 years.
Don’t forget beer.
during my weekly rounds driving around boulder county, i received no less than three calls from lenders (us bank, advantage bank and equicredit) offering not only 100% financing, but they’ll throw another $25,000 on top of the loan and secure it to the house. i’m listening to this as i driving through longmont looking at houses that my customers want to refinance, even though they are already over 100% ltv, imho. i zillow them first and then drive by to confirm that the borrowers are off their rockers as to value, saving me tons of work spinning my wheels. there are a ton of for sale signs out there and most appear vacant. don’t these lenders ever look out of the window?
Lender’s don’t give a rat’s a$$ whether or not FBs can ever repay the loans. And why should they? Before the ink is even dry on the mortgage paper, they’ve already bundled them up as MBSs and sold them to a GSE, hedge or pension fund. But not before collecting their points & fees of course.
Lending’s a great game when the profits come 100% risk-free. Too bad for mr Taxpayer though, when those too-big-to-fail GSE “implicit guarantees” come home to roost.
If there is a taxpayer bailout, this is guaranteed to happen again. Lenders will learn nothing if they do not lose a lot of money.
I completely agree, but am not optimistic about the chances of Congress actually allowing the GSEs (and irresponsible banks/lenders) to fail –as it should.
Let’s face facts here: the Federal Reserve system was setup to protect the banks. Not the taxpayers, not the USD, not the borrowers, but the BANKS. “Privatize profits, socialize risks” is the lenders mantra today, and it has served them well (Google LTCM & PBGC). They have created a monster moral hazard, and I just don’t see how this is going to change anytime soon –barring some rather unlikely 1930s financial meltdown anyway.
Congress + banks/lobbyists = mutual aid society.
HARM I agree, LTCM set a terrible example. What should have happened is after the FED stepped in to stop total chaos, the banks should have been forced to pony up equity equal to the FED bail out. The FED should have unloaded this equity within a year.
Before unloading their equity, the FED should have changed the corporation by laws to ensure disgruntled shareholders fire the entire boards and senior management of the banks. After that I think the lesson would have been learned, and inflation would have been much more restrained.
Oliver
I totally agree. However, the cost of letting them fail could bring on a second great depression. It will be a choice between bailing out the banks, or putting 40% of the population in bread lines. Everyone is going to be screaming for the government to act. I just wish we did not have to save people from their own stupidity.
HARM,
Right on! That’s why I’m even having a hard time calling them “lenders” these days, bag-men more like.
True. And I guess we can call MBS/CMO investors “bag-holder” men
.
“Before the ink is even dry on the mortgage paper, they’ve already bundled them up as MBSs and sold them to a GSE, hedge or pension fund. But not before collecting their points & fees of course.”
Welcome to Wall street…bring your personal lubricant!
“Before the ink is even dry on the mortgage paper, they’ve already bundled them up as MBSs”
Except for the “inflated income loans” many people have been taking out…doesn’t fraud kick back the paper to the loan originators, leaving them holding the bag?
doesn’t fraud kick back the paper to the loan originators, leaving them holding the bag?
—————————
I’ve been wondering about this. Since so many of the brokers/originators have been small shops set up during the boom times, what’s to stop them from closing up and fading away?
Anyone here know how this works???
Lies, Lies and more lies!
People will hopefully be ready to correct any mistakes made in blame when this unfolds. We can’t afford to be led around by the hand by the media. They will lay the blame in a thousand different places. They won’t make it happen because they are a portion of the problem.
Can any one explain to me the logic of having three kids, a stay at home wife and NO health insurance. If that is your situation, I would be in a very modest house. $3000 a month in Colorado must be a pretty nice place, esp. with the two fat rides parked out in front.
The American Dream should be something you live after you’ve provided for the basics. Having no health insurance and 4 kids, ugh.
Maybe he could, oh, I don’t know, RENT a house?
>‘rolling’ personal debt into a refinance
It’s actually a really cool concept, because buy doing so, you free up all of your credit cards so you can spend your *ss off again. See how finanshullee sufistikated us Americans can be?
Ben- You’ve agitated me out of my cave!! The slow trickle of people who refied to buy the Humvis, or pay off the credit cards has become a stream of giving the home back and filing a bankruptcy. San Diego will be the poster child for the nation. Our apts. to condo conversions have been unprecedented and are the sentinel species in what is happening in the market. We’re up to about 60 house/condos being given back now out of my office. I have a flood of real estate professionals filing because they have no income from the market!! Sad, but true. . .
BK lawyer,
Thanks for your insights! So, it seems the condo conversion buyers are the first to fail (at least WRT BK)? It’ll be interesting how this plays out.
BTW, I believe I’m seeing some expensive homes about to be foreclosed on. They were on the market for less than the purchase price (2005) and, after being on the market for many months, are now sitting empty w/o any signs of new buyers and the signs are down. Keep an eye on them. (near $1M homes)
“There is at least $100,000 equity in the house, Anthony Stewart said, confident and insistent that he is not mentally overpricing what he still owns. ‘It’s there. I just can’t access it,’ he said.”
There is NOT $100,000 equity in the house. How do I know this? Because he has not done anything with any financial credibility thus far. So what makes me think his daydreaming spell is over?
testing testing testing
That’s a good point. He is about to turn over the keys and still thinks he has $100k in the thing. That goldmine in his mind probably led him to overspend along the way.
I don’t understand this story at all. I must be missing something. I have a fever today so it must be messing with my mind.
Hope you feel better, dear!
Anthony Stewart is like a bug that’s about to meet a windshield. He has a dim perception that he’s in trouble, but lacks the intellegence to realize he’s going to get splattered.
A lot of people are going to learn a hard lesson about debt. Credit card companies, hospitals, etc., can sue you, they can garnish your wages, they can hound you into bankrupcy, they cannot, however, take your house or force you to finance equity out of your house. They did it to themselves by borrowing against the house again and again. No matter what these people are up against many will find out that homelessness svcks, big time. Don’t they have a class in highschool to warn these chumps not to put their primary residence on the line?
The house is in Superior. Superior homes have been leading the trend since 2001.
Awooga! Awooga! Diving, diving….
Anthony Stewart is like a bug that’s about to meet a windshield. He has a dim perception that he’s in trouble, but lacks the intellegence to realize he’s going to get splattered.
Reminds me of a joke? What is the last thing that goes thru the mind of a bug when it hits a windshield?
It’s *sshole.
Woohoo!!! Colorado houses for everyone!!!
Woohoo!!! Bold face type for everyone!!!
Most people in Colorado Springs, at least, seem to have an almost bovine complacency when it comes to the housing market. I would say 85% of my friends and acquaintances here (and 100% of the females) are aware of soaring inventories and foreclosure rates, yet continue to believe the “It’s different here” mantra of the local NAR shills. The area is getting a big influx (around 15,000) of military personnel and their families, which everyone seems to think will keep the local housing market and economy (overwhelmingly service-based) chugging right along.
The only trouble with the above scenario, is that military personnel, especially the junior enlisteds who will make up the bulk of the influx, tend to not be very good money managers — witness the infestation of pawn shops and payday loan places outside every military bases. Also, local builders seem to think that each of these incoming soldiers will be buying their own tract house — there’s been massive overbuilding, and judging by the incentives, desperation is setting in. Also a lot of military families rent, rather than buy, given the frequent changes of assignment.
In short, I think we’re moving from a “It’s different here” to a “I never thought it could happen here” phase-shift.
- “Adams predicted consumers will cut spending ’substantially’ by year’s end and throughout next year because their budgets are strained.
That is a LIE.
Because fuel cost are dropping - folks will feel as if they have more to spend and will continue to piss away every dime they touch. After all, they ‘deserve it now’ - ‘why wait’ - ‘you are worth it’.
A Defense Department study published last month found that members of the military use payday loans three times as often as civilians.
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/09/AR2006090900101.html
So much for supporting the troops. Those credit company leaches should be ashamed.
It’s unfortunate that some 20 year old from MO doesn’t know who his true enemies are.
I have rental property in Colorado Springs and my realtor there is trying to convince me to buy more with the standard lie “the market is just returning to normal”. She also said that 6000 troops are being transferred there next year as if that’s going to put a dent in the severely overbuilt, overpriced Springs market.
So how many (more) is *she* buying at these prices? Is she putting her money where her mouth is?
A place just went on the market three places away from a good friend of mine. (We both live in semi-rural areas on five acre plus horse properties: but her area is more closely encroached by suburbia than mine.) She picked up the flier and we went over it together.
This is your basic old style rancher, about 2400 square feet finished, part of it on a lower level (obviously once a basement.) The other part of the basement seems to have been made into a double garage. The flyer states that the original house (sixties or seventies) was gutted and redone inside.
The property is six acreas, zoned for horses and some agricultural. As far as I can tell from the road, it is not completely fenced, nor is there any cross fencing. Most of the property is prairie or shrub tree.
The strangest feature is the single outbuilding, which was originally built as a semi tractor trailer pad and cover, and was later enclosed. It is a huge thing, but I would be baffled as to what I would do with it. It would make a lousy barn, but I suppose you could park a couple of RV’s in it.
Pluses:
Great views (same as my friend) of Pikes Peak and the Front Range, looking down into Colorado Springs.
Ten minutes away from North Colorado Springs, and I-25.
Set back from road enough to give a little privacy.
Good school system.
Minuses:
Road is heavily traveled, a main route into the south Black Forest.
Property across road is due for fairly dense development. We have been amazed we have been permitted to trail ride there as long as we have.
Buyer beware: the water from wells in that area will eat your plumbing. You must filter it: it is safe to drink, and horses love it, but you probably won’t want to drink it yourself after you smell it. My friend just expects to replace her pump on a regular basis.
And they want 769,000 for this jewel!
‘There is at least $100,000 equity in the house, Anthony Stewart said….”It’s there. I just can’t access it,” he said”
Just another stage of denial. The new “but I am rich, I just cannot get to my money right now.
I know a girl who carries around her mortgage papers to show people how much “equity” she has, cause she has no money in her pocket and she wants to impress people by how “rich”, she is.
So the answer to why consumers are so confident is….?
Mr Stewart’s mortage payment went from 3000 to 5000 per month. Let me ge this straight. He owed the hospital 17,000 and he’s paying an extra 2000/month. So for one year (12 X 2000=24,000) he’s over paid the debt by 7000 in increased mortage payments.
Makes sense to me?
That $17 grand was not their ONLY debt:
“Yes, they would refinance their home, pay off the hospital debt, plus bring down their credit card debt…”
yeah, but the lender was doing him a ‘big favor’ by giving him that loan.
yeah, but the lender was doing him a ‘big favor’ by giving him that loan.
lol - And the hangman was doing me a ‘big favor’ by providing me all the rope I needed –and a chair to boot!
Not too much rope - just enough to keep your feet an inch above ground!
Curt,
What I’m struggling with is if Anthony is self employed it might have just taken a few weekends a month or a little extra hustle to come up with the 17K (or enough to keep the hospital off his behind). Id rather have a few 30,60,90 day lates for ultra-sounds on my credit report than what he’s fixin’ to face?
I suppose it’s tempting to hit the ol’ house ATM vice hitting the street looking for new clients or a little extra work! (That or tell your creditors you’re getting a part time job to help keep current). W-2 employees may not be able to get over-time or have a lot of choices, this guy did.
I think this guys main problem is he never heard of birth control when you don’t have health insurance .
All -together -now sing …Rocky Mountain highhhhhhhh.
That’s right. If I were in his shoes I would send the CC companies whatever loose change I happen to have every other month and gave the hospital a couple hundred more a month to keep it out of collections. Never put your house in jeopardy to satisfy an unsecured debt.
Actually, as long as he made regular payments to the hospital, he could probably have kept them satisfied with $500 a month. He must have had some whopping credit card bills, probably the real reason for the refinance, but it sounds better to say that you are in trouble because of a hospital bill instead of because you ran your credit cards up so high.
I know because we moved to a different county right before our second child was born, and the insurance didn’t pay as much as it would have if we hadn’t moved, which we found out afterwards. It took us over a year to pay off the bill (c section), but the hospital never gave us any trouble because we sent them money every month.
Good point, I know people who have done this. They just made regular payments to the hospital, whatever they could afford until it was paid off. People just don’t have that mindset anymore. This is also why our health insurance is sky high. People believe that health care is a basic entitlement in this country.
People believe that health care is a basic entitlement in this country.
It should be. We spend more on health care in this country than all other industrialized countries and rank 23rd in overall health. I know many people here will probably be against it, but single-payer health care works, and works well. Ask a Canadian friend, I have. And don’t believe the crap our media spews about this. They are about as accurate with that stuff as they are about RE. OK, I know, off topic.
Dr. Spike,
Totally agree with that. For those who want “premium” care, they can pay in addition to the “free” basic care.
Problem is, the health care industry has very deep pockets and can convince the politicians and sheeple that it’s in “everybody’s” best interests to maintain our “for profit” system.
Of course, we would need a closed system (only citizens & legal residents) for this to work, but I truly believe it’s the way to go.
When you read the full article, Stewart’s money-management strategies become even more incomprehensible.
Being self employed and having no money management strategies (or highly unrealistic ones) is a recipe for disaster.
He ALREADY had a $3000 monthly mortage payment BEFORE his troubles began. That’s what, a $500,000 mortgage? In Colorado? The guy was clearly a big spender.
If I were 42 years old and owned a small business like an auto repair shop and had two small kids, I would not be living in a $500,000 house — especially not if I lived in CO, where a $200,000 house can be awfully nice and is more than adequate for the average family. Instead, I’d be devoting all of my spare cash to my business, or saving it if the business did not yet require any additional capital.
No sympathy for this guy, he was just financially illiterate.
Mostly being self employed in Colorado means being a painter or a dry wall guy or similar. These guys do small jobs and earn peanuts with no insurance.
They say there are four seasons in Colorado, winter, winter, winter and construction. Construction is a huge portion of the economy and a lot of the population barely hangs on by being “self employed” as a sub-contractor doing informal work, some on the books and some not, often pulling in $20K or $25K per year.
The scary part is these people are buying expensive houses using option-ARMs and they don’t even understand what they are getting into.
I am hearing this same story over and over and over again in Colorado. People are getting in way over their head and it is going to get very ugly there.
why colorado?
why not mississippi, or alabama or maine.
most physically fit state in the union = colorado.
most foreclosures = colorado
a conundrum possibly
no appreciation in an ether-induced lending market. you wait to see what happens in california when their toxic loans bubble up now that the appreciation has stopped.
Colorado is a boom bust state, at least recently. We got trashed by the oil bust in to 80’s and then by the tech bust in the 90’s. Now it’s going to be the housing bust. The gold rush days weren’t kind ot Colorado either, and agriculture here really sucks, though people still try it. It’s a beautiful state, but very hard to live here.
Unlike the south there’s no history of frugality here people like to live it up big while the going is good and worry about the future when it arrives. Unfortunately it arrives quite often.
Sounds like my kind of state!
LOL
What a mess….with banker friends like that steering him to a 10.8 ARM when everyone else is getting 6% or lower Anthony does’nt need enemies. These bastards must have known this guy was in way over his head but the sharks took his money anyway. Now, he is ruined. Poor bastard!
Instead of advising the guy to sell now the lender figured they would take the last bit of loanable equity he had and put him on a bad loan . Still , I don’t know why he can’t get out by selling . There is more to this picture than he is telling us. I wonder if his business is going down the tube also or he might be trying to set up for a BK.
If there’s 100K there, I’m not sure why they don’t put it up for sale and rent . . .
That’s what I’m trying to figure out. Seems the answer to his problems is right under his nose…RENT!!!
These people were screwed before they went to they went to the mortgage broker. If they had just put the $17,000 on a credit card, even at 15% plus percent they would have been better off. Oh, but I guess their credit cards were already all maxed out.
With their payments for the last 2 years and the upfront fees the mortgage broker has made their money. The lender will then sell the loan to investors and the “ailing loan registers on the trading books as a loss, gets mixed up with other trading activities and-presto!-It vanishes from shareholders’ sight”.
So it behoves the lenders to inflate the value of the property as much as possible, to gain as much short term profit as possible, to get their money back quick and have the investors and then eventually the taxpayers and FDIC pick up the tabs.
In quotes, from this weeks Business Week article.
it’s interesting to think that people really are paying 10% mortgages because home prices doubled because of the boom. Essentially, it’s like having two 5% mortgages on homes at 1999 prices.
The lender just squeezed the last little bit of juice out of this guy.
The very least Anthony Stewart could have done was simply to try negotiate with the hospital a one time payment of 50 cents on the dollar or something like that. A CC cash advance for this purpose would have been an extreemly smart thing to do, even when factoring in the CC transaction fees.
Many medical bills are being settled like this. The prospect of getting something vs. nothing can be appealing to some medical collections.
What is the worst thing that can happen had he tried to negotiate? (They can say “no, come hell or high water we know we can get you to pay up.” Nobody gets the firing squad, or the Chineese water drops torture.)
But did this FB even try to negotiate?
I have heard this before. A guy I know went to settle a (they said) 30K hospital bill. He brought in a check for 12k or some such amount and said: “You can have this check in exchange for a receipt stamped paid in full, or, I can cash this check, hide it under the mattress, and go file BK, you decide.” They took the 12k.
maybe the hospital would have accepted a large upfront $2000-$3000 CC payment , and Mr Anthony could have negotiated a modest payment schedule of $200-$300 a month for the remainder of the balance, or what ever the Hospitals financial dept would have decided that he could afford to pay. He could have told the hospital that he would up the payments as soon as things got better for him job wise(contracting work picked up). This would buy him time till he could go back later and work out a deal to re-negoitate pmts up or down. My experience is that Hospitals will work with you on payments if you show that you are making best efforts within your financial abilities to pay off the debt.
As his credit rating was already shot, even using cc’s would have been a bad deal, with 10-15% interest rates.
Yes, it is a bad idea to use a home equity loan to bundle your non-secured CC, hospital debts, but folks do it all the time.
I don’t feel sorry for him and don’t think he should be allowed to have debts forgiven in bankruptcy. He made the irresponsible decision to, instead of purchasing health insurance, to buy a new house, fancy cars, have 3 kids and probably lived like a king eating out often and more. If Colorado did what Mass Gov Romney is trying to do, requiring people to purchase health insurance, it would force people to be responsible.
Weird.. another Pat. Hi Pat.
I agree with you Pat. I buy my own health insurance. I rent because I prefer to have a landlord carry a mortgage, not me. (I do not eye with envy any equity that the lanlord may be building; nor do I envy any postive cash flow he may be getting from me. I am happy for him/her and glad to see that a win-win scenario was achieved for both parties.) I do not drive fancy cars. (I drive a 2001 Honda.) I fix my own meals with ingredients that I buy at a grocery store. (Imagine that.)
I have no problem with this guy’s lifestyle if he had the income to pay for it. Seriously. I mean this. If my rental house was surrounded with BMW’s and Cadillacs in the neighborhood then this would not bother me at all, as long as they have the financial resources to pay for it. Just as I would not want others to envy me because of what I have, I would not envy others. (Actually, I do have alot of equity in the stock market. I simply do not feel a need to parade around town in a fancy car.)
So why is it so terrible to expect everybody to “play by the rules” and live within their means? Why is it ok for people to live a life of pretentious luxury that is not sustainable and only leads to a big pile of doo doo?
And why is there an expectation that somebody with “compassion” should show up at this clown’s doorstep to clean up his mess? What if the cost of “compassion” is bringing - say - $100,000 to the table so this clown can get out from under this house and debts scott free; where would this $100,000 come from?
And even if this clown was fortunate enough to get $100,000 worth of compassion from somewhere, then wouldn’t this be a subsidy for his outlandish lifestyle? It has been said that if you subsidise something you will get more of it.
Just exactly what business does a self-employed “automotive-services manager” (when I was a kid we called them grease monkeys) have buying a house that requires a THREE THOUSAND DOLLAR PER MONTH mortgage payment?
The same business that a (former) Taco bell night manager has buying 17 “investment” properties on credit: click here to read all about “SDCIA Jeff”, or “Mr. Pine Box” as we Patrick.netters like to call him.
Yeah, I remember reading that.
Seriously: This guy is self employed, has no health insurance yet has a wife and 3 kids, somehow bought a house with a $3K/month payment, and if you read the rest of the story he at one time had “fancy cars” that he had to sell.
WTF is wrong with people these days? EVERYONE is entitled to live like a friggin king?
Woohoo - check out this new post on the SDCIA:
I have been very successful with my business and real estate. I have been acquiring real estate for 8 years now very aggressively. I now have about 12 properties. Ocean Beach, downtown San Diego, Oceanfront in Oahu, HI.
Some of my properties have loans that are higher than the current market value (due to refinancing aggressively).
I would like to hire an experienced investor that has experience with changing markets, negotiating with lenders, and Short Sales.
I am willing to pay an hourly rate and/or offer any of my properties at a large discount.
Any help or suggestions of who to contact or what to do in this humbling situation are welcome.
This guy has been practicing the fine art of FBing for the past 8 years and now has so many properties that he now seeks professional help trying to unload them? And is now seeking some “humbling” advice?
Well, it has been a very nice past 8 years for you as you have financed yourslef into a lifestyle that only kings can kill for. And now It is time to face the music a-m-i-g-o, you are ruined!
If I was to return to the consulting business to help this F’B I would be charging my normal $250/ hr plus sec help, milage,postage,and misc.Cash with $2000 retainer up front. I would probably have to file a mechanics lien (after filing my timely preliminary notice) when he tried to stiff me. On second thought, with little or no equity, I should just wait and deal with the lender after foreclosure.
Posted ” have been very successful with my business and real estate. I have been acquiring real estate for 8 years now very aggressively. I now have about 12 properties. Ocean Beach, downtown San Diego, Oceanfront in Oahu, HI.”
You were not successful, you were lucky and now you do not know what to do.
You could always post signs on telephone poles that say “Real Estate apprentice wanted - make $50,000 a month”. I’ve thought about posting some of those just to see what kind of idiots respond.
Jeff has to be the biggest blowhard on the planet. I’m sure we won’t be advised when his little empire blows up but I’d love to be a fly on the wall at Casa Jeff when it happens.
It took two full pages of reading that dreck to get to the pine box comment. WOW is all I can say. WOW…….
Josh
““Mr. Pine Box” as we Patrick.netters like to call him.”
Ouch!
“The mortgage on his home would climb to nearly $5,000 a month now, from the $3,000 per month he’d been paying since buying the house. ‘I know, I know. But quite frankly,’ he lamented, ‘I really, really needed the cash. Worse, they made it sound like they were doing us a big favor by giving us this loan. It’s my fault. I made a huge mistake.’”
What an idiot!!! No wonder we are a debtor nation. How can a person sleep at night knowing he has mortgaged his family and his future this much. WOW. By the grace of God.
“No wonder we are a debtor nation.”
i think the big philosophical question that our wise and erudite posters must confront is, “is this reversible?”
the alternative, obviously, is the utter debasement of our currency.
i think the big philosophical question that our wise and erudite posters must confront is, “is this reversible?”
the alternative, obviously, is the utter debasement of our currency.
I’m not so sure. The reason guys like this got into trouble was an excess of credit. When he and the thousands like him fall back to reality, they’ll stop buying the frivolous crap that’s kept this economy growing. That, my friend, is deflation.
I think the bigger question is will the Fed do a bailout ala S&L crisis. The only way to do that is through inflation.
you are agreeing with me. the only way it’s reversible is through painful restraint, resulting in deflation. but a more dangerous alternative is equally likely — a gov’t bailout, which will result in hyperinflation, i.e. debasement of the currency.
Oh, love those Colorado booms.
We went through the oil and housing bust of the 1980s and even left the state for a year. After finding out about the housing crash, we returned to Denver and had the shopping spree of a lifetime. Thousands and thousands of HUD owned houses at fire sale prices. It seems that the blue HUD signs and empty houses started appearing slowly but increased to a torrent in the span of about 2.5 years. Whole townhouse developments turned over. Amway-style RE auctions every month. Foreclosed house tours. Deals made in minutes with HUD and VA for homes.
I’ll never forget the townhouse deal we made in 1987. The town house was recently sold new at $75k but was listed as a foreclosure for $48k. We noticed that a VA townhouse next door had just sold for $37k so we called up HUD and also offered $37k. The HUD guy made a deal right on the phone….said they couldn’t take 37K but would be OK with 41k. I said OK and we closed in 3 weeks. Wild!
Well, we were able to buy a nice house $65k in 1988 which we paid off in 3 years….it was a major building block in our financial independence.
Might be fun to do it again.
A friend just moved to the Denver area and didn’t like the rental he had found beforehand after getting there. Two days later, he’s bought a brand new condo townhouse from a builder in Commerce City. ( First time buyer with minimal savings and I doubt he’s going to want to live in it for more than a few years.)
Anyone on the ground there able to tell me if this was just a bad decision or an awful decision, based on the area and market there?
Commerce City is home to the Denver area’s oil refineries, which frequently stink, and is definitely a low income demographic. (Do you like the stars of the Jerry Springer show? Then you’ll LOVE Commerce City!) And it’s in Adams County, ground zero for foreclosures. Other than that you haven’t provided enough info to judge whether it’s a bad deal or not. But, I’d be doubtful.
denverken,
Yikes! Doesn’t sound like an area that I’d want to ride out a housing decline or crash in. I’m guessing that the guy in question put very little down and likely went with builder financing options. Are condo projects and incentives springing up like daisies there too? I just don’t see this ending happily.
you’re being much too kind in the description. the only neighborhoods are “hoods” and you forgot the 3000 railways lines weaving through industrial parks, the power plant and the bfi recycling complex. yuck!!
Have a friend who became a realtor in Fort Collins……….last year! How is that market?
The Fort Collins market sucks. See:
http://realtytimes.com/rtmcrcond/Colorado~Fort_Collins~bjjohanningmeier
Anthony Stewart’s problems have only started, and he is not a bright bulb (I’m guessing a 20 watt bulb in the fridge).
First off, who can carry a 3k/mo mortgage? The income needed for this is pretty high ( I make around 100 and wouldn’t touch a payment like that!). And then have it go to 5k/mo and not excreat massive amounts of fecal matter immediately? How dense can one be, or how much denial can one be in? That is 60k/yr for your roof? WTF!!!
After Anthony Stewart is driven into the ground like a wooden post and crushed financially, emotionally and on every level, he will see that the “phantom” 100k does not exist.
The place will go on the courthouse steps (if he is lucky) and he will get a nice juicy 1099 for the difference of the loan and the sale. If he is unlucky, it will be an REO which will continue to drop in valuation making the pending 1099 simply bigger and bigger and bigger….
That is when his storage unit (with his furnishings he bought with his CC’s, since they don’t fit in the apartment he is renting) will be emptied by the IRS.
Anthony Stewart will lose his wife and kids along the way, one of the first casualties of these events is the marriage. Since his wife was a “stay at home” wife, she will get spousal support, plus child support for 4 kids.
His problems are only starting, Anthony Stewart will eat from dumpsters for many years to come. If he is the norm, then I need to buy some Cup-o-Soup stock, as they will be the dinner of choice for a new generation!
“There is at least $100,000 equity in the house, Anthony Stewart said”
“It’s there. I just can’t access it,” he said.
“He sold most of what he and Kerry had, including the fancy cars”
“You know, I was living the American dream,” Anthony Stewart says. “I had savings, stocks, was living in a nice home in a very nice community, and I always paid my bills.
“Now, I’m wiped out.”
No, you idiot, sell the freaking house and rent for a while until you can build up your savings. Now for this to happen, you will have to actually *save*, and not buy fancy cars.
On one level I feel sorry people like this, but on another, deeper level I have to say “it’s just a flesh wound, walk it off and get back to providing for your family”.
Sure, you may *love* the house you are in. But it’s JUST A HOUSE. Sell it, rent for a while (you can actually RENT houses, you know), and regroup.
If you are religious, think of it as God’s way of saying that you have your priorities mixed up, and it’s time to fix it.
If you are not religious, think of it as the universe reminding you that there is risk in everything, sh*t happens, and you should always have a fallback for when it does.
As Arioch said, $3K per month is a very large payment for housing, much less $5K+. So this idiot buys a fancy house, fancy cars and ***doesn’t buy health insurance for his family***????????
I feel very sorry for their kids. It’s likely they’ll have a troubled youth, thanks to entirely avoidable, stupid decisions by their parents. Sad.