People Aren’t Going To Offer What The House Is Listed For
The Morning Call reports from Pennsylvania. “Charline Pillinger and boyfriend Christopher Dorsey wanted more space for themselves and their five children, so they moved out of a $500-a-month two-bedroom apartmen. The couple had no savings and earned only $40,000 combined, but they still qualified for a mortgage to buy the $124,000 home in May 2005. The investment, they now know, was a disaster.”
“Pillinger and Dorsey…say they never saw it coming when they were buying their homes. ‘I was very confused,’ Pillinger said.”
“Neither made more than $20,000 per year, nor did they have much money saved. With a bankruptcy in his past, Dorsey’s credit rating was so poor he couldn’t be on the mortgage application, so it included his income but was in Pillinger’s name only, according to the documents provided to The Morning Call by the couple.”
“Less than a decade ago, a lender would have told them to stay in the apartment, save money and rebuild Dorsey’s credit.”
“Pillinger said she did not understand the paperwork, and that her financial ignorance and excitement over buying a house led her to sign her name to an adjustable rate on a $99,200 first mortgage. It had a manageable $603-a-month beginning payment, but an interest rate that could swing from an opening rate of 6.125 percent to a crushing 11.125 percent.”
“She also took out a second loan for $24,800 to cover the down payment. That loan, costing them another $217 a month, is due in 15 years and packed a second punch: a balloon payment of more than $20,000 at the end.”
“‘I didn’t know nothing about a balloon payment,’ Dorsey said.”
The Washington Post. “More than 700 homes were in foreclosure in Montgomery County between April and June of this year, up from 49 during the same period last year, said Maryland Labor Secretary Tom Perez, offering a sobering picture yesterday of how the surge in foreclosures is affecting the affluent county.”
“Prince George’s County continues to have the highest percentage of homes in foreclosure in Maryland. More than 2,300 foreclosures have been recorded in the county this year.”
“In Montgomery, there were more foreclosures in the first quarter of this year than in all of 2006.”
“‘Sometimes there’s a perception that a place like Montgomery County is immune to something like this,’ County Executive Isiah Leggett said.”
The Baltimore Sun from Maryland. “Borrowers who stretched to qualify for more flexible loans have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts say.”
“‘You’re seeing nicer homes, higher-priced homes,’ agreed Jeff Rogers, an associate broker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. ‘You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages.’”
“Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006. Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu of Baltimore.”
“‘Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity,’ Basu said. ‘I don’t think we’ve begun to see that impact in a major way.’”
“Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer.”
“Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas.”
“‘With more inventory, it’s a buyer’s market now,’ Marshall said. ‘People aren’t going to offer what the house is listed for.’”
“Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity, or even negative equity, has grown, particularly in cases of pricier homes with more recent mortgages.”
“‘Because we’re seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties,’ or buyers other than the lender,’ said Donald Miller, national sales director for Express Auctions, of Baltimore.”
“Miller said about 30 percent of the homes sold through his company’s foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general.”
“One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said.”
“The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000.”
“Evelyn Ray, a real estate agent in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients.”
“‘Now, people just cannot afford the houses that are out there,’ said Ray. ‘I have about 30 buyers who are just waiting. They either can’t afford the houses they want or are just scared or waiting for prices to come down, or they can’t sell.’”
The Daily Reflector from North Carolina. “Second homes accounted for 36 percent of all residential property sold in the United States last year, according to the National Association of Realtors, and the abundance of rivers and beaches make eastern North Carolina a prime destination for recreation-loving baby boomers.”
“Real estate agent Serena Sullivan said speculation buying contributed to driving up housing costs, with investors looking to cash in on quickly escalating prices. Atlantic Beach also is undergoing a transformation with condominium complexes replacing old hotels and mobile home parks.”
“‘There’s a lot of inventory at the beach right now,’ Sullivan said. ‘There’s a great selection for people.’”
“Maria Wilson, VP of Coldwell Banker Coastal Realty in Washington, said the housing market nationwide is undergoing a correction after the bubble burst last year. A stagnant market in other areas of the country has a trickle-down effect, she said.”
“‘The market in other areas has affected us somewhat, but we still have a brisk second home market,’ Wilson said. ‘We still have people who are selling their properties in other places and coming down and buying. It just isn’t as immediate as it was. I can’t say that we’re not affected by that, but we aren’t as affected as some other areas are.’”
“David Harrell and his wife recently got a taste of the shock value when pricing condos in Atlantic Beach. They…wanted a vacation retreat more convenient to their Greenville home.”
“‘I love Myrtle Beach because there is so much to do there, but it is a long ride,’ said David Harrell. ‘Real estate is really high. When you look at what people bought these places for back in 2002 and 2003, it’s at least double for them (now). It kind of bothers me. It’s ridiculous. That’s been my holdup. It’s so expensive.’”
The couple had no savings and earned only $40,000 combined, but they still qualified for a mortgage to buy the $124,000 home in May 2005. The investment, they now know, was a disaster.
LOL @ the 124K investment. This money will buy you a spot for a toolshed in CA.
Couple of things to laugh at here. The other is that although their income is low, they did not grossly overspend for a home.
3Xincome = max home price. So, they were only about 4K over where they should have been at the max. Now, I do understand that when you are lower income you should not spend as big a propotion of your income…
But it’s still a he** of alot better then the 10X income figure that the morgage broker here in Palm Beach gave me. If I could find a home I really wanted for 3X my income (just mine, not household) I would probably jump all over it. Problem is, my income is top 5% for the area, and using 3X that number puts me in the worst neighborhoods in S. FL. Something doesn’t add up with those numbers!
Anyone else notice 7 people in a two bedroom apartment???????
Bet that was fun!
crowded yet responsible and frugal IMHO.
“crowded yet responsible and frugal IMHO.”
Yup.
That’s how I grew up, only it was 3 bedrooms! It’s amazing how smart my dad was with his”8th grade education”, especially compared to some of today’s MBAs
That’s all they could afford while reaising the next generation on their limitediincome and eductaion. They weren’t doing too bad either. Rather frugal I would say.
Some of your comments about this couple are disturbing. Save your “got what you deserved” attitude for those who actually deserve it. To me, this couple and their children might be the least among us, but I’d be willing to wager that they’ll get the front seat in another realm while the likes of the Wall street robber barons get a seat on the floor in the back of the room. These people in the article aren’t leaders, they are followers and will go in whatever direction they’re led. The fact is that they were led down the path by some unscrupulous scumbag who only had his interests in mind, not the couples. You reap what you sow…. you trash the least among us, and you will be trashed in the end. God promised that.
Come hang with me for a couple of days in person and then let me know what you think.
TX I appreciate your Brooklyn humor but thats not what I was referring too although it was crass in this case. The contempt for this couple is outlandish.
“Some of your comments about this couple are disturbing. Save your “got what you deserved” attitude…”
No one has said the got what they deserve.
I take that back after reading more.
IThe attitude and contempt is quote obvious. Nobody had to say it literally.
It’s obvious but I can’t point to any supporting data. Hmmm…
Denial…. it’s the new koolade of choice.
Thanks bible thumper, but what if others adhere to the Roman, Islamic, Machiavellian, or Chinese view of the world? Guess that would make you irrelevant, now wouldn’t it?
No bible here Cupcake. It’s call conscience, something you just don’t have. May others have the mercy on your offspring that you so desperately lack.
I’d say a couple making a combined $40k a year with FIVE KIDS (gee, I wonder whose fault that was?) deserve all the ridicule I can heap on them.
Why?
One of the basic rules of property: If you buy it, you may end up owning it.
exeter, I’m not seeing contempt in the above comments. (Well, at least compared to a lot of other posts.) The point was made that if they had been given a 30-fixed loan they probably would have been ok - they were almost within the income range which is rare anymore.
It fact, prior to your post people seemed to think they were frugal and living within their means. What specific comment got you so riled?
However, I am seeing later comments that are unnecessary.
She also took out a second loan for $24,800 to cover the down payment. That loan, costing them another $217 a month, is due in 15 years and packed a second punch: a balloon payment of more than $20,000 at the end.”
“‘I didn’t know nothing about a balloon payment,’ Dorsey said.”
Pay on the loan for 15 years for 39060.00 of payments then owe 20000.00 more at the end? That is 59060.00 over 15 years for the original 24800.00. This is just ridiculous.Loan sharks are still going strong.
Wonder how many teeth these two have between them?
Ooops, that was cold.
Well, I imagine since they are getting reamed on their loans there is no money left over for teeth.
Snaggle tooth come to mind.
I don’t know how many teeth but they had the fortitude to have 5 children and raise them. That’s a heavy burden. Derision is not what people like this need as they raise the next generation to pay for all the silly entitlements we have for the retirees.
Well, you may not like this comment but I don’t think people like that should be breeding.
Would you rather we import the next generation which will be another generation behind. That need to learn the language and the culture. Demographics will not be on our side if don’t produce children here. They benefit a; of us even the childless as someone has to replace the retiring workers and pay for the government expenditures.
Unfortunately, PhD’s are not having children in record numbers.
“Fortitude to have 5 children” - Ha, I like that. Put a raincoat on that fortitude.
Wish my wife had more “fortitude.”
Or that Papa Bear had more “raincoats.”
Well they certainly gave up their lives to raise 5 children. Selflessness and devoition, in my opinion, require alot of fortitude.
What in the hell are you talking about, selflessness and devotion? Go see the movie “Idioacracy” at least the 1st 10 min for a very good example of what is going on here. It has absolutley nothing to do with these people being good parents….it has everything to do with where is this country is heading.
Those horrible fornicating poor people. If they really wanted to be rich and famous, they would be so they must like being poor.
“Would you rather we import the next generation which will be another generation behind. “
A very good point. Someone has to breed the next generation, and its no secret that the higher up the economic ladder one resides, the less likely one is to breed.
The problem with importing the next generation is that it will dramatically change the social fabric of our nation.
As long as they keep my bedpan clean and dress my bedsores, they can change the cultural fabric all they like.
Ah, but there’s the rub Russ. They won’t be changing your bedpan or anything else but your wallet…
America, starting with L.A., is being turned into the 3rd world, and its new inhabitants will rob you blind and leave you for dead. Life is cheap and principles very expensive where they come from. If you doubt it, try getting a flat tire in the wrong neighborhood here without a gun and see what kind of “help” you receive.
http://www.youtube.com/watch?v=fAYnc_-ddlw
From IDIOCRACY - America, meet your future.
With all due respect to exeter, I am laughing so hard right now, TX. That was hilarious!
Also, Mr. Fink, you are spot on. These folks actually managed to find a home 3X income. The sad part is that with his shoddy credit, no down, and the low income, they probably were led away from a fixed rate mortgage.
While I laugh at the tooth comment, I do find this sad. Aren there any honest lending people left, aside from this blog?
Good Grief OCDan. This couple’s income is totally insufficent for a family of 7. The fact that house was only 3 times income is immaterial.
“I don’t know NOTHIN” about birthin’ babies!”
Oh wait, maybe not.
“‘I didn’t know nothing about a balloon payment,’ Dorsey said.”
Aha! She’s smarter than you think. By using the double negative, she’s admitting to prior knowledge and trying to get away with it. There’s no way that you can’t not deny that!
Two kids only please, even if you have “lots of love to give”.
It is almost understandable that she “didn’t know nothing about the ballon payment” when you look at those numbers! The interest rate on that loan would make the mob and Visa/MC blush!
This is clearly a case of undoing the loan. If I were a judge, I would throw the whole lending company in jail for this.
Also, while I like your comments TX, your one about breeding is wrong. Clearly some people should not, but all we know about these people is what this article tells us. Read up on Dickens, his Christmas Carol has a lot to say to all of us whole want to limit human population growth.
Please. IMO, no couple should have more than 2 kids.
What did Dickens say about air and water quality?
I will say that last June we did an 80/20 to avoid PMI and weren’t told that the 20 had a balloon payment. I noticed it at closing. We didn’t care though, we’re on schedule to pay off the 20 in year 3 and the 80 in 15 is our goal. We just didn’t have money for a down payment since we barely broke even on our last house…well actually had the money but we were saving it for my wife to stay home for 6 months since she was pregnant.
That’s why the usuary laws need to be reinstated. Who was their loan broker on that second…Paulie Walnuts?
Left alone, they were doing ok for themselves.
And as for those 5 kids, at least these folks were paying their own way. Now that the loan brokers are done with them, guess these folks may well need ACDC, and other taxpayer help.
Once again, privatize the profits, socialize the costs.
The loan app should have been declined. I agree usuary laws need to come back. I have heard al the “we would not be able to extend credit to the poor” arguements, and believe that is a good thing. There is WAY too much credit around. Other scams include payday loans, bank and credit card fees etc. ATM overdraft fees are a biggie. used to be if you did not have the money in your account the transaction woul dbe declined… today you get the $20 and a whopping overdraft fee to boot, sometimes many fees.
I fail to see how 11.125 percent is a bad rate for a top reset rate.
If you think so, you’ve never had an ARM before. Nearly 100% have a lifetime cap of 5-6% over initial rate, with max intial resets of 2% and 1% after that. That’s standard. They reset once per year, normally at prime, if the max can reach it (that’s 8.5% for now). Prime is what people used to pay before credit spreads became flatter than a pancake.
When I bought my first house in 1999, the intial rate on my 30 year fixed was 8.5%. That was considered a great rate at the time.
When I refi’d to 5.125 into a 5 yr arm in 2002 (knew I wasn’t going to stay in the house more than 3 more years), my max rate was *GASP* 10.125!!!! Please, run for the hills!
I’m surprised both by the ignorance of the writer of this piece (or their attempt at sensationalizing a normal ARM loan) and some of the ignorance posted here. A sad day, truly.
That’s one hell of an assumption. NO WAY is this couple paying their own way. I’d be willing to bet you that this family already receives food stamps, medical and WIC.
They probably weren’t paying their own way for the five kids. Even before they got into this mess, they were undoubtedly receiving free lunches and breakfasts for the school-age children, and more than likely government-provided health insurance for the children (called CHIP in Pennsylvania).
I come up with a 10.3% rate. That’s pretty low for being the junior lien on a 100% financed likely a sub prime credit. Considering it’s lower than the spread on the first, the second credit seems downright reasonable. I’m not sure why it’s been so difficult for people to understand that one of the big reasons a home was the path to wealth for so many was that the debt was financed at a fairly tight spread over government bond rates (even though the leverage was quite high). That made it easy to earn a real return.
They should have waited until they had better credit, but I don’t think the ballooned second was responsible for the downfall here.
With the roughly 3x income purchase, they should have gone fixed. They could have afforded it with rates where they were.
No, they shouldn’t have “gone” fixed. They should have “been” fixed!
LOL!
TXchick if i said that i would be banned.
but 5 kids and she hooks up with a bankrupt man too..
Patronizing and elitist comments. As if you have contributed anything that my grandchildren will remember.
5 kids is a bit extreme, though, when you don’t make a lot of money. I’m sure they get assistance which - as a single mom who gets no assistance, but also doesn’t make a ton of money - definitely doesn’t sit real well with me.
I agree that the comments are a bit elitist…however, is the new standard to what is “valuable” (even humor-wise) whether a comment will “contribute anything that your grandchildren will remember)? Sounds a bit elitist…
And for clarification, I don’t qualify for assistance - but nor do I want to. I re-read my comment and it almost sounded like I was upset that I don’t get any. I’m not, believe me.
What’s wrong with getting assistance?
Well said NOVA.
I was raised to work hard for the things you want. Not to reach for whatever handout you can get. I have no issue with diability assistance or even some welfare situations. But I’m not in favor of assistance being given to those who just keep having more and more kids they cannot afford. Not fair to taxpayers (IMO) and not fair to the kids either. As for the couple in the article, I’m not saying that’s them. I don’t know their exact story. I’m generalizing.
“What’s wrong with getting assistance?”
If a church or community group wants to use voluntarily donated funds to provide assistance, that’s fine. When the government institutes and supports a dependent class with our tax dollars, that’s not fine.
That the writer would even think to pose such a question is mind-boggling to me.
Well, if I haid paid my taxes over the years, and suddenly find myself in a situation where I need assistance, why should I fell bad about that? If I am laid off from a job of 10 years, should I feel bad about collecting unemployment and perhaps foodstamps to feed my family while I find another job?
No, In Colorado, you shouldn’t feel bad. That would be a temporary setback and situation for you - not a lifestyle which it is to many.
I agree with you Tx.
Here’s what I haven’t contributed: more hyperconsumers in this already overpopulated world.
I have not contributed any either. From our perspective, this gluttony otherwise known as American consumerism is gross.
Maybe the Chinese could move to Halifax:
“Atlantic Canada faces population ‘death spiral’
Some towns will ‘just cease to exist,’ experts predict
Charles Mandel, The Ottawa Citizen
Published: Wednesday, July 18, 2007
HALIFAX - A low fertility rate, combined with a high proportion of seniors in Atlantic Canada could lead to a population collapse in some economically depressed areas of the region, experts say.”
Hyperconsumerism is gross. It is obscene. No question about it. I flinch in disgust at the TV progarms that promote it and how the attitude filters down into the sheeple. I see our society declining monthly.
However, “going forth and multiplying” is neither gross nor any part of hyperconsumerism.
I find that most hyperconsumers do not have families. After all, kids are just an impediment to buying that BMW, boat, vacation house, etc.
There’s a house for sale in our neighborhood — 6000 square feet, owned by a retired couple, who own two more like it. (I think the upkeep, taxes, and housing bubble are “sticking it to them”, though. They are anxious to get rid of at least one at this point).
That’s probably more exemplary of “hyperconsumerism” than 7 people living life in two bedrooms (which is not so hard - girls in one room, boys in the other, Mom and Dad on the sofa). (Reminds me of the Barbara Corcoran story, except they had 10 kids and lived that way).
Hyperconsumerism. Sheesh. Before you make that comment, see how they are living. They may have none of the toys most of us here have, i.e. RV, motorcycle, BMW, MB, etc. The kids may not have any of the high end tech toys, either. Gettin all over people. Get off yer high horses people. Instead of complaining about the number of people in the world, complain about where they live, i.e. desert, and the system we live in.
Ahhhhh, back to farming.
Sure, consuming and paper/money pushing is no way to keep the economy alive, but sustainable family farming is different. I know we aren’t going back. Well, we will someday.
Colorado your comment about single people being hyperconsumers might just hit a little home to some here on this blog. Watch yer back.
My dad had a high school education, grew up in the Oklahoma Dust Bowl. Mom the same education, except she grew up in the SE Ohio coal fields. Never a huge amount of money in the house, dysfunctional in a lot of ways.
The five kids are (in order of birth):
-A Maintenance Supervisor for a Air Charter/Management Company (me)
-A semi-”Blue Collar” type, with his own pot-farm in his closet (to each his own, I guess)
-A Psycology major, currently between jobs (relocating after her husband passed away). Previously, an Admin Asssistant for a VP at a Fortune 500 company
-An MBA with a Fortune 500 company
-A Border Patrol Agent
There are some on this board who would say that my parents had no business having two kids, much less five. I would say it’s not how many kids you have, but what they accomplish as adults is what’s important.
And if it make’s a difference, three of the five of us are currently renting….:)
And no, we were never on any kind of public assistance.
5 children? wow I don’t want *any* children. Heck I don’t even want a wife. A nice cuddle, slow dance or hangout with female friends is all I need. Ill never be tied down!
These people won’t be any worse off than they were before. So they are back in an apartment; it’s not like they lost any of their own money, or damaged their credit any more. They got off better than a lot of flippers.
i don’t see them as any better or worse than a ton of other FB’s. no shortage of folks out there living in 600K homes that are also over their head, shit out of luck and stuck with payments they can’t meet. so i don’t care much for the gratuitous insults, because at the end of the day, it’s only one more example of serious mistakes being made, due to lack of diligence in knowing the playing field. caveat emptor.
‘I was very confused,’ Pillinger said.”
That’s what she said every time she and her boyfriend had another kid.
Alright now, simmah down now . . . SIMMAH DOWN !
Sure, everyone has an opinion to add, after all, thats the freedom & beauty of this blog. We get some latitude to exchange ideas/info/insults/retorts.
I think the truly mean-spirited comments about this couple are out of line, but I do support yout right to express them.
I mean it’s obvious from the ” “‘I didn’t know nothing about a balloon payment,’ Dorsey said ” comment they aint rocket scientists.
I’d rather reserve my real scorn for the true predators & scammers who bought 9 nine houses or refi’d 4 times ,THEN whined about it!
These people seem to just want what we all want: a little better life for themselves. Is that so bad ?
Of course, I get pissed when I see poor people smoking $5.00 a pack name brand cigarettes & buying alcohol by the case before getting the necessary basics, like maybe a decent car or clean clothes.
Hey, everyone needs some recreation, life isnt about living like a monk , and some can afford Aspen while others enjoy a brewski but jiminy crickets when you spend a lot of your meager income on vices, you lose a lot of my sympathy.
And I’ve been rich and poor, learned how to make-do & learned NOT to make the same mistakes, while returning to financial solvency, so spare me the snarky replies.
Then again, say what you will, this IS America with a constitution in force, at least last time I checked.
WTF - my innocent comment created such a flaming mess? I just thought it was funny that in some parts of the country houses sell for $120K, I guess CA conditioning to seven-figure prices took its toll.
Your comment was not the cause. The flaming mess was inevitable.
I can get a nice house for 50k in the NW part of Pennsylvania at todays inflated prices. Wow they really got ripped off badly! I smell a foreclosure!
When will those falling energy prices trickle down to the nearest gas station?
ECONOMIC REPORT
CPI increases a moderate 0.2% in headline and core
Falling energy prices offset higher food prices in June inflation report
By Rex Nutting, MarketWatch
Last Update: 8:43 AM ET Jul 18, 2007
WASHINGTON (MarketWatch) — U.S. consumer prices increased a moderate 0.2% in June, with falling energy prices offsetting rising food prices, the Labor Department said Wednesday.
It’s the smallest increase in the seasonally adjusted consumer price index since January.
Excluding volatile food and energy prices, the core consumer price index also increased 0.2%, the government said.
Inflation was just a bit stronger than expected. Economists were expecting the CPI to rise 0.1% and the core rate to rise 0.2%. See Economic Calendar.
Consumer prices are up 2.7% in the past 12 months; core inflation is up 2.2%. In May, the CPI rose 0.7% while the core CPI was up just 0.1%.
http://www.marketwatch.com/news/story/june-cpi-increases-moderate-02/story.aspx?guid=%7B6DB72C1A%2DBA01%2D47C2%2DBEC0%2D0AB50F4E7EAE%7D
“‘I didn’t know nothing about a balloon payment,’ Dorsey said.”
Stupid is, as stupid does!
“‘I didn’t know nothing about a balloon payment,’ Dorsey said.”
Or English.
Darn it wmbz, you beat me to it!
Throughout this debacle, it has frequently been pointed out that people should have known what they are getting into, etc…
I agree that for the majority of people, they should have known better and have no right to whine. But, it is a fact that not everyone has average intelligence. IMO, these poor people weren’t exactly being greedy or trying to flip a house for quick cash - they simply don’t seem to be bright enough to realize that just because the bank approved it doesn’t mean they could swing it. And, at a very low income, 3X is still a lot since they are buying food and clothing for 7 people.
I guess my point is these people are guilty of not being real smart, but the bottom-feeders that made money off them knowing that they would be screwed really make me sick.
People who thought they were real-estate geniuses and only started whining when their investments didn’t go their way also make me sick.
Thank you, Lurkeeloo. Having read through the that long rambling boneheaded set of posts above, it’s great to find someone gets it. I know a number of families like that couple, and most of them aren’t being slick. They just have a reasonable dream of a backyard for their 5 kids, a kitchen you can turn around in and a garage a guy can call his own space.
Many things may have led them to their situation, but dreams like these built most of this country. Give them a break.
Amen. We can all go off about hyperconsumerism and the such. However, the bottom line is most people just want a place to call their won without any mortgage or tax (in a perfect world) on it. Heck, we rent, but I would be lying if I said I didn’t want to own. That said, own is the word. Downpayment of 20-30%, 15-20 yr. fixed rate. No more than 3-4X income, dep. on where I buy.
Sheesh. For people to get all uppity about 5 kids a home in PA of all places. I could see if this couple lieved in South OC and wanted to pay 700K on 40K, but 3X income for a small place for the family in the beautiful country of PA. Come on. Give these people a break. Okay, you want to get on them about teeth or English. I understand the humor in that. I am also not trying to put them in a complete victim’s role. However, let’s look at this loan.
124K. If we get them a no down for 30 years and can do it a 7% for 30 years, let’s see the numbers. They will pay, what, about 850/month + HOA (if any) + taxes + insurance. Let’s say they are at a grand a month. Now, they say they make 40K a year. Assuming they only bring home 3/4 of that, they are netting 32K a year, or, 2600/month. 2600-1000=1,600 after mortgage nut.
Of course other factors, such as job stability come into play. However, these people should have been able to swing this bill. Unfreakinbelievable! If anything, they are guilty of not getting someone who could read the documents and tell them what they were getting into. That is all they are guilty of. Nothing else.
This loan, even at 100% financing, of course w/o a 2nd, could have easily been managed, provided they have no other debt. Crimineys. a grand a month was only 2X the rent they were paying.
I could only hope that OC would get to numbers like these.
Now here is hyper-consumerism again. You make 20K a year and you want
“a backyard for their 5 kids, a kitchen you can turn around in and a garage a guy can call his own space”.
Well my dad had the same dream and he also had 5 children, guess what he did. He went to college and then graduate school at night with 5 kids and a full time job at a bank. Guess when he got his wish to have a house with a yard and all that. After, 4 of his 5 children had graduated college. So these people also can have anything they want as long as they are willing to pay the price for it.
Please. Their combined income in PA is 40K. Not bad, if in the country. Again, as Fink said, the mortgage was 3X income. Don’t blast these people without first knowing more than the article states and doubly blast them using fundamentals.
Again, they SHOULD HAVE GOTTEN someone to read the contract. I will not argue that point.
But for some of you to complain that fundys are all outta whack and then blast these people is just nuts. What next? Some of you were pissed the Bantering gave in and bought. Too bad. He found something that fit all his paradgm/models/ fundys/ etc. I love this blog, but don’t get all bitter when someone goes after what they want.
Again, they should have gotten/hired someone to read the documents. I blame them for that. However, the numbers in the article work, so don’t say they bit off more than they could chew. Their mistake was not going over the docs properly, not greed. Now, if they wanted a 200-300K, I would have no argument that they were being greedy. But come on, a 124K home, that is 200X rent. Some of you are being a bit overzealous. Heck, I live in LaLa land and wish things would crater, but I am not that pissed at this couple. I am more pissed that my neighbor just bought nearby for a ridiculous amount of money.
Between you, me and OCDan the range of their condition, and of many like them is probably covered. But I can’t help wondering Rent - if the current ‘loan products’ were available in your father’s day would he have resisted the siren call and made it to grad school? Just seems that the factor of safety for small mis-steps in personal finance has been reset to below 1.
“However, these people should have been able to swing this bill.”
The numbers work, unless you have 5 extra mouths to feed, bills, etc!! Hell, I’d be nervous as a single guy to be in that situation.
I don’t fault them for wanting a place of their own. But they’ve made choices that their income can’t support. How is that fair to those kids? How is that fair to the rest of us who pay taxes, and who subsidize their kids’ education (especially those of us with no kids)?
The lenders did something very wrong to these people, but these people are completely irresponsible if you ask me.
No argument there. My beef is with everyone getting on these people about buying too much or having too many kids.
Should they have gotten the loan? My gut told me no from the get-go, but for reasons other than overpopulation and hyper-consumerism. Geez, I can think of people doing a lot more damage than them.
Come on Sleepless. With 7 people to feed it depends on where you live, cost of living, frugality, etc. I am sure the grocery bill of those 7 in the PA is about what it takes me to feed 4 in the South OC. Sure, my pay is higher, but it is relative.
Stop trying to nit pick these people. Trust me, you guys no I am usually a hang em all high guy, but this case I have a little sympathy.
Besides, some of you got pissed last week at bantering for finally buying. Heck, he found something that fit all his parameters. Don’t be so bitter sounding at times.
How is this nitpicking? You’re saying $228 per month per person is a long term livable situation?? That amount needs to pay for the electric bill, phone bill, food, clothes, car payment and maintenance, etc. What else have I missed? They had no savings and will have no future savings.
The conclusion is obvious. Something has to go. Either the house or the kids. I stand by my comments.
JayinMD,
I understand the importance of education and why you and I pay for it. There are intangibles that I as a single person get from an educated society.
However, you as a parent also get a tax deduction for your kids for 18 years. I don’t. That’s what I mean by subsidized. Why am I taxed twice?
By the way, I’m not planning to have kids. There, I saved you some money.
OCDan,
You’re absolutely right. But I’d wager next months salary that these people are cutting it much closer at not making ends meet than otherwise.
There are two given facts that are heavily weighing my comments. One, the guy’s already been bankrupt. Two, they have NO savings.
$1600 each month to pay monthly bills to support 7 people and no backup plan.
Sounds like a great strategy for raising a family.
” But, it is a fact that not everyone has average intelligence.
Correct. By definition half the population is below the median, which is about an IQ of 100.
According to the new Ditech ads, “People Are Smart”. I’m gonna write in and thank them for the compliment, and see if I can get me some of that there subprime.
Yes, Colorado, the fact that by definition half are below the median was exactly my point. Somebody is going to have an IQ of 81. I think as a society, those with more ability to discern and interpret facts should not blatantly take advantage of those with significantly less. If these people were older and suffering from dementia, or had an IQ of 70 (which would classify them as mentally retarded) we would expect the perpetrators to serve time. I’m a big believer in personal responsibility, work ethic, etc., but there is some grey area when it comes to blaming people who have been hurt by this bubble. In my view, some are irresponsible because they should have known better, and some are victims because they trusted people they shouldn’t have and didn’t have what it takes to know better.
I agree.
I can imagine the conversation:
Realtor: Soooo . . . you only make $40K combined?”
Buyer: “Yeah.”
Realtor: “Well, then why do you only want a $124K home? You
could qualify for almost anything in the Valley, even WITH your
low credit score.”
Hey, they got robbed! What about those 15K/year strawberry pickers in California w/the 700K house?
““‘I didn’t know nothing about a balloon payment,’ Dorsey said.””
As I said yesterday, the *real* foreclosure pain won’t start until early next year, when the first reset wave births its first foreclosures…
“[Borrowers] were being set up for failure with some of these mortgages.’””
Again, notice the wording…”borrowers were being set up for failure” vs. “borrowers set themselves up for failure”. Yes, I know that some of the borrowers were uneducated about what they were signing…however, my advice is, if you don’t understand the documents, forget about the “excitement” of “buying” (getting ‘p0wned’ by) your first house, don’t sign the documents. The End.
Good catch - and a poignant example of how the MSM feeds the American victim mentality.
…one lady said she felt like committing suicide. She has little kids and if she loses her home, she has no place to go.
This tearjerker stuff irritates me. I have a child, too, and I rent. If you “lose your home” you do have places to go.
Unlike buying a home, you usually have to have good credit and a job to rent (unless you get government assistance).
Not according to one of yesterday’s threads. Now rather than selling to anyone who can fog a mirror, they’re renting to them.
The more I read about how bad this is becoming and how the dollar is going into the toilet and how the incredible mess in Iraq continues on it’s merry way, driving the nation further into debt, and how inflation (ignoring the fake government numbers) is eating up incomes leaving little to save for buying a house or anything else come to that, the more I push out my time frame for a housing recovery. I’ve been hovering around 2011 but I might add another year to 2012.
We need to change the 2 term time limit to 3 terms, re-elect Bush so the $ drops to $3 for 1 Euro. That will also solve our immigration problems. We will be crossing the Atlantic in rust buckets and entering europe illegally to clean their toilets for a few bucks a day.
When we stop to pull the brochure from the post supporting the For Sale sign my wife tells me “stay alert and keep the engine running!” Why? Because everytime we stop now someone comes rushing out of the house volunteering to give us a tour of the inside.
Desperate situation calls for desperate measure and action…
Long live the DESPERADOS !!!
I already have the car in motion when my wife is pulling the flyer. (We like to see price drops for fun). BTW, a house in Crescent, Iowa (a small town 15 minutes from Omaha, NE), there is a plain Jane brick ranch that’s been for sale for a year and has dropped from $410K to $360K. Though still overpriced by 60% @ 360, it’s still a meaningful drop!
$360 K in Iowa???
Jeepers, plain jane ranches go for under 200K out here.
How many acres? Are we talking actual farm here? If not, they’re smoking crack (or more likely meth). You can buy a monsterous house in Cedar Rapids, Des Moines, or the Quad Cities for that much. Iowa is cheap–if I could stand the cold, I’d move back there, but my husband would divorce me.
Good god! I can get a $50k house in Iowa, Pennsylvania, Ohio, West Virginia and several other states at *todays* inflated prices! Ill be looking at $35k or so at bottom ~2010!
“Why? Because everytime we stop now someone comes rushing out of the house volunteering to give us a tour of the inside.”
Wow, now that paints a vivid image. LMAO. I needed the levity after reading through some of the posts above.
Dezinna clearly failed to understand the dire implications of the new loan but accepted responsibility. ”I’m not blaming anybody because really, whose fault is it?” Dezinna said. ”It’s mine.”
Finally, someone who will take accountability for their decisions.
If Pillinger didn’t understand the paperwork and Dorsey had severe credit problems, why in Sam H3ll did they go ahead and become mortgage slaves? They are not from south of the border, so I assume they just wanted to sign themselves up for slavery. Populate the debtors prisons now!
It’s because they see everybody else with nice stuff and they want their “American Dream” too!
And they were getting plenty of political cheering to do so. See the American Dream Home Ownership program, signed in 2003 by w, and his rah rahing ownership rates hitting more than 64% of the population. His Ownership program was supposed to help with down payments issued as gifts from “faith-based” groups.
Guess his faith is wearing a little thin…ain’t heard a peep from the boy on “ownership” recently.
He’s created an ownership society alright but it’s not what his supporters think it means.
I think it’s the creation of a self-enslavement society, where the banks own you - and China owns the banks. Thus I invest in Asian stocks in my mutual funds so I can at least own some of China and its ilk.
I believe they call it “pwned.”
Joseph Mason, a finance teacher at Drexel University in Philadelphia who also has worked for the U.S. Treasury and subprime lender Ameriquest, said the market should work itself out.
It’s unfortunate when families are hurt, Mason said, but bailing out people who he says made bad decisions sends the wrong message to people who paid their bills.
Couldn’t agree more.
I agree that no one should be bailed out for bad judgement. What concerns me is that a whole industry has built it’s self around loaning monies which cannot be repaid. Relatively small short term commissions were made at the expense of huge long term losses. This kind of corruption must have been known to regulators 5 years ago, yet they turned a blind eye.
Or, the regulators were not empowered to rein it in. Did you know, that during the 1990’s, the securities industry lobbied the Congress, in the dead of night, to keep the SEC’s enforcement budgets flat?
That meant no additional capacity to enforce the rules, in the face of a stock bubble that drew in millions of Americans. No extra people, no extra toner for the copying machine, nothing.
Welcome to Washington.
It’s about all you can do when you’ve allowed the manufacturing section to be outsourced and now you have a service society, and mortgages are a service. You let that dry up and it’s toast. Guess they figured 5 more years until doomsday is better than not quite doomsday right now (2002). Service society is a joke. The only thing that comes to mind when I hear that is “sucky phucky? sucky phucky? 5 dolla. Me ruv you rong time.” LOL That’s about what it will be too. Americans making cheap junk for 40 years for $3/day to sell back to China.
Shame on the companies for taking advantage. But I put all of the blame on the consumer. READ the contract. If you can’t READ the contract, then don’t SIGN the contract until someone reads it for you.
All the blame?
LOL
We need more tax dollars going to public schools now to teach retards to read contracts and develop critical thinking skills. LOL
Sadly, sometimes you just can’t teach a pig to rollerskate, no matter how much you spend.
The housing headlines are pretty bad right now and it’s the “summer seling season”. This coming winter is going to be painful for a large number of owners/investors that will need to carry all this inventory into the Spring ‘08 selling season. Ouch.
Real Estate at (cheesy and overcommercialized) Myrtle Beach is DOUBLE what it was in 2003.
Why? Why on earth should anyone in his right mind throw down enough to buy an EXTRA HOUSE on something that was worth just ONE house four years ago. Sure real estate goes up slowly over time, but DOUBLE in 4 years? These people are all smoking crack. With interest rates being higher, the prices should be DROPPING. A 50% drop in price is inevitable. The pain is going to be legendary.
I think you’re missing the big picture. First, this is the beach so the quality of your life will increase exponentially when you wake up and see the sun rising over the Atlantic. Can we really put a price on that? I didn’t think so. Second, interest rates may be ticking up but they are still at historic lows. I don’t mean to scare you but this could change drastically in a fairly short period of time, leaving you priced out forever. Finally, there is an incredible selection right now which puts you in the driver’s seat as a potential buyer. Let’s try not to dwell on the price as that’s only one factor in a somewhat complex decision. (jk)
You must have either heard or delievered (I hope not) that speach many times, because it almost had me going. So well worded and obsures the facts so expertly; like a snake crawling into my bank account and sucking all the money out!
Yes, you can put a price on that; you just did it when you told me this sh**box costs 800K for 700 sq/ft on the beach that will be destroyed during the next hurricane. So, yes, it’s very easy to put a price on that!
“Can we really put a price on that?”
That reminds me of a townhouse I was looking to rent last year in DC, which overlooked the Potomac. The Realtor(R), in her English accent, said something along the lines of, “Look at the view, isn’t it just priceless,” to which I retorted, “yeah, but it’s not worth the 500 extra bucks to me.”
“First, this is the beach so the quality of your life will increase exponentially when you wake up and see the sun rising over the Atlantic.”
Precisely the reason the RE in East Greenland and Pantagonia is selling like hotcakes
“Why? Why on earth should anyone in his right mind throw down enough to buy an EXTRA HOUSE on something that was worth just ONE house four years ago.”
Alex, what is “Because at some point in the near future a retired couple from the Bronx will spend twice as much again to spend their golden years surrounded by 23 year old tattooed scumbags on Harleys and crotch rockets.”
That place was a friggin’ sh!thole. I just drove through there 2 months ago on my way to Florida for vacation. What a dump.
Has anyone notice 6 or 7 cars parking at a house (daily)? I have noticed that in Montgomery County (most affluent county in MD) where I live. I think we will see more of that soon. This suck because MC used to be a great place to live. Now anyone with a liar loan (or two) can move there and trash it. So sad.
HEY HEY we had up to 9 cars parked in our driveway growing up.
My dad, mom , me, my 2 brothers, had cars plus our tenants had 2 plus their 2 kids had a car each when we all were home for summer from college.
We had a big paved driveway and no side yard.
Driveway? More like parking lot!
This is my biggest problem with the DC area. You may fork over the 600k for a nice house and have a SFH holding up 4 families on your left and a low income townhome complex on your right. Montgomery county may be the worst managed county in the US. They should have kept all of the high density around the metro and made everything else SFH’s, and pass laws to limit how many immigrant families can live in one SFH… Wait, I cantbelieve I said that… i hate more laws..
Just what we need, more laws to tell people what they can and can’t do with their property. Maybe if it’s financed, yes. But if you actually own it, who is anyone to tell anyone else what they can or can’t do with what they own?
Well, Andy, many people don’t like the idea of multi-family houses being next to them. Given that, the multi-family house reduces the resale value of the neighbors by virtue of a reduced pool of buyers. In essence, the multi-family house has stripped the neighbors of their houses’ previous values. When one person’s action has an adverse effect on another person, it’s time to start talking laws.
The housing bubble is an unintended consequence of zoning laws that followed that train of thought.
I don’t follow you…
The bubble was a result of three big factors and a more direct resulting factor. Low rates and income tax cuts boosted demand for ownership of housing while zoning laws prevented that housing from being built in the places most people live. The poor underwriting that followed was the result of the belief that foreclosures won’t occur (or won’t matter) because the home will be worth more than the loan no matter the borrowers income. In places where zoning allowed the construction of homes, prices increased but not to unsustainable levels even with worse underwriting.
Notice where bubble valuations occurred, prices are the most out of whack to salaries in places with very strict zoning laws (California, I-95 corridor, etc). They are high but not 10x income in places like Houston, Atlanta, etc with far less strict zoning requirements.
Underwriting appears to be worse in places not thought of as bubble zones:
see slide 10
http://www.ofheo.gov/media/pdf/Exchequer71807.pdf
Wow, this really is a national issue, last time the housing bubble was isolated to Cali and select other places in the early 90’s. Now we have a national problem with so many homes I can’t see how this will not be an unavoidable recessionary catalyst. What a freaking joke, what a setup by the central bank, this will be interesting to see how this all pans out….reminds me of Rome in so many ways. Scary thing was this all happened in the last 7 years…just amazing!
All real estate is local… local to the United States.
It’s hardly limited to the U.S. This is more of a global issue.
Most of Western Europe, Oceania, and the wealthier Asian countries (except Japan) will get clobbered by their own housing bubbles.
Ok. Real Estate is local… Local to Earth.
AND, it’s a great time to buy because they’re not making any more Earths. Look at that view too. Who could put a price on it?
ROTFLMAO. That one was REALLY priceless…
LOL. That was an actual LOL too. Not one of those cheezy not actually LOL LOLs.
Why haven’t I heard anyone say that it will pick up in the Spring? That’s what they said after May 2006. Every single week you heard real estate was going to pick up in the Spring.
Sure it will pick up the spring. Spring 2010.
you guys have got to go on beazers website and check out their spec inventory, what do you know the valley of the sun, in Phoenix they “only” have 167 homes for move in…far exceeding anything else, denver 2nd with 106, houston 94, surprisingly Florida markets not so bad, at least not as bad as Phoenix, I mean that is horrible!
500K houses in Aurora? I wonder if they are in the DIA flight path?
I thought that it was interesting that all their Denver communities (with 1 execption) are east of I25 in prarie land.
I’ll add a recent field observation from coastal NC. My family has vacationed on Topsail Island for the last seven years, usually on the week of the 4th or the following week. We rent a beach house with another family for a week (costs about $900/family). So I have a 7 year perspective on Topsail.
The island is massively overbuilt, with very few open spaces left, but a hurricane in the past that did a lot of damage has kept most development behind a barrier of sand dunes, and the beaches are nice for surfers and wimpier body-boarders, like myself.
Last year we noticed construction everywhere on the southern end of the island - non-stop sawing and pounding during the daylight hours - as they filled in many of the remaining empty lots. This year, almost no construction, but “for sale” signs everywhere, lots with “reduced” added to the sign. According to the real-estate ads in the local paper, prices ranged from about $0.5M to $2.5M (ocean front commands a big premium).
For the first time, it seemed like development was moving inland. Lots of bulldozed, swampy woodlands about 30 minutes from the island where new developments were going up. Construction had moved to this area, but, in my opinion, the area has no appeal for second home owners (imagine a sandy field with lots of tree stumps, no shade and 90+ degrees and 95+ humidity all summer long), and the McMansions that were going up were wildly inappropriate for local residents.
Probably the most intersting observation came from my wife, who noticed that the beach was about 1/2 as crowded as usual. If you walked a little distance from the public access points, you probably had a good stretch of beach to yourself.
My suspicion is that middle-class discretionary income for vacations has just about dried up, and the tourist season at Topsail was not a good one….
A few days ago someone posted a similar story about upstate New York - how their favorite vacation spot was fairly barren of people, a very unusual situation. The good stuff again.
Strathmere NJ. 10 years ago a nice little quite beach town. Hopefully it’ll get back to that.
Parents had a house in Strathmere; sold it in 2002. Damn, I miss that place. Monster homes going up all along Ocean Drive. Not much room to build, though; surely it’s still pretty quiet there?
Where the hell is Strathmere?
Is that still their town motto?
Small, quiet town (shhhhhh!) just south of Ocean City. The residents WISH that was their motto.
So many people got screwed by this bubble. Sorry but the vast majority of these cases point a strong finger back at the scumbag lenders and the thieves on Wall Street.
REGULATION is what is needed. AND LOTS OF IT.
Where in the Constitution does it say the government can regulate an industry to protect consumers from voluntarily, contractually patronizing it?
Where does it say they can not?
They regulate drinking age.
They regulate smoking age.
They regulate prositution.
They regulate advertisements.
etc., etc., ad nauseum…
Generally, it is referred to as the Commerce Clause- this same clause was used to end legal segregation.
Ding, ding, ding, ding, ding! But watch out for the Robert’s Court; the reach of the Commerce Clause is surely going to be limited, and soon, too.
Yes, except they are hypocrites. They will still be the first to step in and overturn state laws (on Commerce Clause grounds) legalizing medical MJ.
If they’re going to create money out of thin air then they better regulate the hell out of it. Honest money (gold and silver) needs no regulation. Even weights and measures is just a convenience.
mr. market is gonna regulate it.
EXACTLY! In a few years, the same people who are now complaining that the poor and minorities were taken advantage of by evil subprime lenders will be ones complaining that poor and minorities do not have enough access to credit markets (especially with mortgages).
It will definitely come full circle — damned if you do and damned if you don’t.
“I don’t know how many teeth but they had the fortitude to have 5 children and raise them. That’s a heavy burden. Derision is not what people like this need as they raise the next generation to pay for all the silly entitlements we have for the retirees.”
EXACTLY! let’s get rid of all this social security madness, keeping only welfare for the poor. why asking these people to pay for social security for fat asset-holders? more means testing so that no middle and upper class receives social security is what we need!
it’s a ponzi scheme anyway, the sooner the crap ends the less ugly the ending.
Is anyone watching Bernanke’s testimony this morning? Man, that guy is in a tough position, they’re grilling him about the declining dollar, overprinting the currency, the falling housing market, the middle class squeeze/wage stagnation, and inflation. Whether he lowers or raises rates, he’s screwed. Sounds like a good thread to me.
i guess the answer is no
Hey Ben -
Great post. Lots of fun interaction here; a nice temporary diversion from the usual discussions here, but also providing insight into the mindset of the on-topic posters.
“Charline Pillinger and boyfriend Christopher Dorsey wanted more space for themselves and their five children, so they moved out of a $500-a-month two-bedroom apartmen. The couple had no savings and earned only $40,000 combined, but they still qualified for a mortgage to buy the $124,000 home in May 2005. The investment, they now know, was a disaster.”
The Age of Imbecility is upon us. For a vision of the logical conclusion of the uncontrolled downbreeding of cretins, enjoy this clip from Mike Judge’s IDIOCRACY:
http://www.youtube.com/watch?v=fAYnc_-ddlw
Stay tuned the Lehigh Valley is crashing. Watch our prices go back to 1998 levels or worse. Our homes values bubbled over 100% in 5 years and they are coming down. The numbers reported are worse. I way homes that are priced around 160k sitting for 6 months to 1 year and no bites. Most of the home bought during the bubble here was NJ & NYC commuters escaping thier bubble. Once they get here it doesn’t take long to realize a 3-5 hour commute SUCKS. Along with that you will need a new car for the commute, maintenance of all those miles, gasoline and you’re talking about another 1k a month too live here. Take that 1k and you could have bought in NJ & NYC and drove much less than 3-5 hours. They kept thinking, “Prices always go up”, “Better buy now or you will be priced out forever”. They made locals rich and kept most locals out of the market but that’s ok, once prices drop back to normal by 2010 or 2011 the locals will be buying 250k homes for 125k. Isn’t like dandy!
Stay tuned the Lehigh Valley is crashing. Watch our prices go back to 1998 levels or worse. Our homes values bubbled over 100% in 5 years and they are coming down. The numbers reported are worse. I way homes that are priced around 160k sitting for 6 months to 1 year and no bites. Most of the home bought during the bubble here was NJ & NYC commuters escaping thier bubble. Once they get here it doesn’t take long to realize a 3-5 hour commute SUCKS. Along with that you will need a new car for the commute, maintenance of all those miles, gasoline and you’re talking about another 1k a month too live here. Take that 1k and you could have bought in NJ & NYC and drove much less than 3-5 hours. They kept thinking, “Prices always go up”, “Better buy now or you will be priced out forever”. They made locals rich and kept most locals out of the market but that’s ok, once prices drop back to normal by 2010 or 2011 the locals will be buying 250k homes for 125k. Isn’t like dandy!
Honestly, these people need to go to jail. They committed fraud. The knew FULL WELL what they were doing, but imagined that house prices would only go up.