Foreclosure rate

[Guest]

...and Lantana is helping lead the way!

I always wondered how couples in their early 20s could afford to buy a house (ANY house, Lantana or elsewhere) since the vast majority don't have any savings or current equity to put towards a down payment. Shoot, I struggled to pay my $580 apartment rent when I was 25.

Ahhh, the joys of a zero-down ARM loan. I know a lot of people want to lay the blame at the feet of "predatory lenders." And to a very, very small degree I can see that. But all that is doing is avoiding taking responsibility for their own financial goof. But the lender didn't explain, they cry. Well, if you are going to sign your name to a bunch of forms that give you $300,000 (that you deep down know you can't reasonably pay if the rate goes up even a half percent) and you don't read the fine print and/or get outside advice, who's fault is that?! If it's too good to be true...

I'd love to see a statistic on the average age of the foreclosed homeowner who had a zero-down ARM loan.

[Common Sense Al]

I like what Dave Ramsey says on the subject. Before you buy a house, you need to have an emergency fund and a good down payment (at least 20% or so). People who don't have this are inviting Murphy into their spare bedroom.

One financial setback should not cause someone to lose a home if they have a proper emergency fund. I bet many people don't have this.

Renting is often a much better idea even though some people think it's wasting money. They'd rather play with fire and buy a house they can't afford.

Also, people don't realize how expensive a home is (dues, utilities, maintenance, taxes, etc.).

As for responsibility, I believe it falls on both the lender and the buyer. They both have responsibility to know what they're getting into.

I plan to teach my kid to handle money correctly and stay out of debt!

[HEAD]

I bought 3 years ago with a good old fixed rate loan. I know I could have done better at the time, but I also know the risks in doing that. There have been many people in my area that have come and gone since I got here because they were in over their head. Like Wombat said, if you are living on the edge, it doesn't take much. Last summer's electric bills did it for some people I know.

You can't blame the lender, they are trying to sell you something that you want. Nobody forced you to buy a bigger house than you can afford, or the big SUVs or going on 3 trips every year. Everybody decides how to live their lives and nobody should tell them how to do it. If they run into trouble becasue of thier decisions, they have only 1 person to blame.

[Guest]

I just can't seem to get my head around the thought of blaming my lending officer if I screw myself over with a loan that is structured in a way that I can lose my house with a single adjustment from the Federal Reserve.

If the people signing for these loans were minors, I'd buy it. But these are adults, albiet poor judges of financial awareness.

[Common Sense Al]

I just can't seem to get my head around the thought of blaming my lending officer if I screw myself over with a loan that is structured in a way that I can lose my house with a single adjustment from the Federal Reserve.

If the people signing for these loans were minors, I'd buy it. But these are adults, albiet poor judges of financial awareness.

Yes, but the lender is suppose to help you and shouldn't try to get you into a loan that you can't afford so they can make $$$. I think they bear responsibility as well. Many people who are adults get conned, but that doesn't mean the unscrupulous con artists don't bear any responsibility. They are scum.

[Guest]

Okay...I'll say the blame lies mostly in the consumers lap...80-20%. The borrower STILL must read the detail of the loan - ESPECIALLY a non-traditional loan that has lots of twists and turns. Personal accountability/responsibility is a lost moral in the U.S. of A. We always like to blame the other guy when given half a chance.

You and I sit, it seems, on opposite sides regarding this issue It's all good.

[admin]

The number of foreclosure filings climbed 27 percent in the first quarter compared with the fourth quarter of 2006 and 35 percent from a year earlier, according to a report released by RealtyTrac, an online marketer of foreclosure properties.

Read more here...

[Muppit]

I have been amazed since coming to America (foreigner) how easily people are happy with being in debt. Due to this crazy point scoring system that is called credit, people seem to mislead themselves into thinking they are in a strong financial position, because they are paying their bills.

However many people in my experience of my age group (I'm 29) seem to be paying debt with more debt.......the banks and car companies are still looking at credit score, and they think these people are financially viable.

However this seems to be a generation of 0 equity and have to have it NOW. I am disappointed in myself that I have let myself get into this a little bit, not such there is a real posibility of loosing anything because I have gone about doing things the right way (equity etc) however I can see certain circumstances arising where I could have to dip into that equity to get by....

[Common Sense Al]

Well the federal gov't doesn't set a good example by constantly spending more than they take in... and by the taxes I (and everyone else pays), they sure do take in a lot. You'd think they could limit their spending.

I'm glad Dave Ramsey seems to be getting so popular. He says that normal is broke and you don't want to be normal.

[Muppit]

Guess it depends if they want to keep trying to save the world at the expense of itself....

[Guest]

I'm curious, Muppit...how do people buy homes in Europe (I'm not sure why I assume that's where you're from... ), or wherever you call home? And how do the homes compare to over here, amenity wise, size, etc?

How are large purchases made if not with credit? I've grown up with the idea of credit, so to not have it is a foreign concept. Debt, on the other hand, is something I'm not willing to do - except for a mortgage. Of course, that's a HUGE debt, isn't it. I guess I accept that, for some reason, but I don't accept credit card debt anymore. Maybe because I get something back when I sell...

[Muppit]

Yep England to be exact. Well comparison of house size is not viable as I am from London. Something the size we have here 4,000 sqft would be about $4M rather than $400K. So people have small places (generally).

A lot of people rent as the housing market is pretty hard to get into for youngsters, unless they have pretty good jobs. Banks will only lend people up to 5 times their salary (not sure how that applies here)

People obviously utilise credit facilities there as well, but it is more the mentality of living at the extremities of ones means that is the foreign concept here to me.

I think the major difference is that people seem to be in a little less of a hurry to acquire things back home, and there is definately not the competition that exists here between neighbours and friends. I think that that breeds a little more financial stability, as people tend to acquire things a lot closer to the time they can actually afford it.

Unfortunately we all want the stuff when we are young, but if we look at our parents (I assume in the US as well) thy did a lot of grafting before they got what thy have today. We as a generation seem to expect thatcomfortable lifestyle now wthout as much effort....the only way to do that is borrow money we don't have.....

Does that help?

[Guest]

We as a generation seem to expect that comfortable lifestyle now wthout as much effort....

Very, very true. The Age of Entitlement is what we ought to name this particular era in American history.

I spent quite a bit of time in southern France when I was in the USAF. There, it seemed young people were in no hurry to fly the coop. Most of the people I knew in their 20s still lived at home with up to three generations of family. They were completely unconcerned with their future (or current) careers - and seemed happy as a clam. They didn't want for anything, either.

Our (America's) captialistic and competitive nature does two things: One, it allows us to be world leaders in every conceivable business arena, and by a long shot (side bar: And people worry about our education system. When we quit being world leaders of industry, I'll worry about educational systems. Maybe the next generation will suck, though. I know first-hand that the generation coming up doesn't have much work ethic, which relates back to the first line above.)...but two, it also creates a culture of me and mine that is more destructive than anything else.

Fortunately for the rest of the world, we could generally care less about soccer or we'd find a way to dominate AND mess the sport up all at the same time

[Common Sense Al]

Our (America's) captialistic and competitive nature does two things: One, it allows us to be world leaders in every conceivable business arena, and by a long shot (side bar: And people worry about our education system. When we quit being world leaders of industry, I'll worry about educational systems. Maybe the next generation will suck, though. I know first-hand that the generation coming up doesn't have much work ethic, which relates back to the first line above.)...but two, it also creates a culture of me and mine that is more destructive than anything else.

I'll have to disagree that we are "world leaders in every conceivable business arena". Take a look at some of the amazing things that are happening in other parts of the world, like in Dubai (just one example I have seen in the news):
http://www.hospitalitynet.org/news/1540 ... uery=dubai

I also heard they are planning to build the first high-rise building with rotating floors. Pretty cool... Imagine an office in the building where your view slowly changed as the entire floor rotated. I don't see anything like that here or planned here.

Anyway, the longer we deny that our education system needs some serious improvement, then the greater the ultimate damage will be.

[Guest]

One-off ideas don't lead industy, they make a cool building or a cool theme park...I meant from an over-arching perspective we lead in most medical discovery (the FDA puts a stop to a lot of good technology and testing), technology discovery, business innovations, etc.

That doesn't mean nobody else comes up with great stuff...but we lead the world in a general sense when it comes to innovation and discovery.

When there are issues to solve, who does the world turn to for answers? The argument that we cause most of the issues is mute