SO upset and frustrated!!

[HsvTeacher]

Sorry you can't see it, but before the housing market crashed, there were instances when banks gave out loans knowing that the individual could not afford the monthly payment. I don't think it's so much like that now, but it was being done before the crash.

My SIL is a mortgage underwriter, and she worked for one of the major housing lenders before the mortgage "crisis." She would often turn down loans, because she knew the borrowers couldn't afford the payments. However, the lender would force her to write the mortgage anyway.

That still doesn't excuse personal responsibility, though. If a person is responsible enough to own a house, he/she should have also been responsible enough to have done their research before signing the papers.

 

[ols386]

My SIL is a mortgage underwriter, and she worked for one of the major housing lenders before the mortgage "crisis." She would often turn down loans, because she knew the borrowers couldn't afford the payments. However, the lender would force her to write the mortgage anyway.

That still doesn't excuse personal responsibility, though. If a person is responsible enough to own a house, he/she should have also been responsible enough to have done their research before signing the papers.

I understand, but it did happen in some instances.

And no, it doesn't excuse personal responsibility.

 

[tlbwriter]

No, another poster was just using those numbers as an example.

Okay, then I'm confused. You said people were given loans they couldn't afford. Someone asked if this was an example of what you were talking about, and you said yes, it was. But now you're saying you don't actually know of anyone given that kind of loan. So what are you basing your opinion on?

THis isn't my statement, but I think what this pp and I are talking about, is that the govt' pushed these banks to loan. Pushed hard. Appraisers were told to inflate the values for the banks.

Still doesn't explain why those people couldn't say "no." If a house that should have been worth $200K was appraised for $300K because someone pushed for it, and I can't afford the payment on a $300K mortgage, I shouldn't take out that loan.

 

[nathalee81]

While I have several comments on things being said here, I will make only one. While I agree with only buying what you know that you can afford, I wouldn't feel too sorry for these banks. They sold these loans, knowing full well that they would probably never be repaid, and then they sold them off to other companies by bundling them with good loans. They didn't care one bit, they were just looking to make the money up front and then screw the next bank.

I know in our area, banks are having an extremely hard time filing for foreclosures because on one even knows who hold that mortgage. YOu have banks trying to foreclose on property that isn't even theirs. They are getting into some serious trouble too. These banks are in it up to their elbows and they knew, the crap was going to hit the fan, and they didn't care.

Again, not saying that people should buy what they can't afford, but not everyone falls into this category.

I totally agree with this. I know the people who obtained loans they couldn't afford were irresponsible in their own right, but the banks were no better. Then when things started to fall apart the banks were BAILED out, but the people in the houses were on their own. In all honesty the banks made poor business decisions and should have failed. If the people have to suffer the consequences of bad decisions, businesses should have to do the same.

Also, for all of those who say you would never declare bankruptcy? I have some sad news for you-unless you are a very wealthy family you are just one major medical illness away from bankruptcy. It is a sad truth, but I have seen it happen many times.

To the OP, I am sorry about your situation. I hope your husband finds a great job-and that your situation improves.

 

[NHdisneylover]

I totally agree with this. I know the people who obtained loans they couldn't afford were irresponsible in their own right, but the banks were no better. Then when things started to fall apart the banks were BAILED out, but the people in the houses were on their own. In all honesty the banks made poor business decisions and should have failed. If the people have to suffer the consequences of bad decisions, businesses should have to do the same.

Also, for all of those who say you would never declare bankruptcy? I have some sad news for you-unless you are a very wealthy family you are just one major medical illness away from bankruptcy. It is a sad truth, but I have seen it happen many times.

To the OP, I am sorry about your situation. I hope your husband finds a great job-and that your situation improves.

I did not say never (nor do I recall anyone else saying that)--I DID say to avoid it if at all possible and if not know there will be repercussions.
Hospitals are pretty good about working on payment plans if you are up front with them and truly making attempts to pay but also still paying your mortgage.

 

[ols386]

Okay, then I'm confused. You said people were given loans they couldn't afford. Someone asked if this was an example of what you were talking about, and you said yes, it was. But now you're saying you don't actually know of anyone given that kind of loan. So what are you basing your opinion on?

Still doesn't explain why those people couldn't say "no." If a house that should have been worth $200K was appraised for $300K because someone pushed for it, and I can't afford the payment on a $300K mortgage, I shouldn't take out that loan.

I don't know anyone who makes $1500 and received a $1200 loan, those numbers were used as an example. But there were banks who gave loans out to individuals who they had to know up front that the borrowers could not make the monthly payments.

If your monthly income is $500 (for example), and your house payment is $600a month, then you cannot afford the payment. Even if your monthly income is $500 and monthly mortgage if $300, you still will not be able to make the payment because you have other living expenses as well.

And no, the borrower should not accept a loan if they already know they cannot make the monthly mortgage payment.

 

[nathalee81]

I did not say never (nor do I recall anyone else saying that)--I DID say to avoid it if at all possible and if not know there will be repercussions.
Hospitals are pretty good about working on payment plans if you are up front with them and truly making attempts to pay but also still paying your mortgage.

And there comes a point where a payment plan isn't going to cut it. I am talking about cancer or a lifelong ailment that is going to max out your lifetime maximum on your insurance.

I apologize about the use of "never"-perhaps that was a generalization. I just meant that people shouldn't be so quick about judging those who have to declare bankruptcy.

 

[ols386]

I totally agree with this. I know the people who obtained loans they couldn't afford were irresponsible in their own right, but the banks were no better. Then when things started to fall apart the banks were BAILED out, but the people in the houses were on their own. In all honesty the banks made poor business decisions and should have failed. If the people have to suffer the consequences of bad decisions, businesses should have to do the same.

Also, for all of those who say you would never declare bankruptcy? I have some sad news for you-unless you are a very wealthy family you are just one major medical illness away from bankruptcy. It is a sad truth, but I have seen it happen many times.

To the OP, I am sorry about your situation. I hope your husband finds a great job-and that your situation improves.

Agreed.

I did not say never (nor do I recall anyone else saying that)--I DID say to avoid it if at all possible and if not know there will be repercussions.
Hospitals are pretty good about working on payment plans if you are up front with them and truly making attempts to pay but also still paying your mortgage.

Yes, hospitals will allow you to make regularly scheduled payments on medical bills as long as you explain your financial situation and work out a payment plan with them.

 

[luvmy3]

When we applied for mortgages for our various houses, we "qualified" for about 3 TIMES as much as we were comfortable paying. We knew what our finances were and what we wanted to spend on a house. I think the main problem is that you get these young people into a banker's office, they have a rough idea of what they can spend and then the BANKER is telling them they qualify for that much more and since that is their job, they must know what they are talking about. What needs to happen, and is around the country from what I hear, is that first time home owners need to be educated on what to expect from homeownership.

One thing that really caught us off guard was the increase in utility bills from our apartment. They weren't huge and we could handle them easily, it was just surprising.

We have always kept our house payments to 1/4th of DH's TAKE HOME pay. We have never really factored in anything I make into that equation because I was mainly a SAHM but we also knew when we bought our first house that I would stay home with the kids so we bought accordingly. When our friends bought what they could easily afford on two incomes, they were suddenly faced with the fact that they could not have one of them stay home with their kids. It was kind of a rude awakening for them.

Yes, what needs to happen is first time buyer need to educate themselves.

When we were looking at houses, we were told what the average cost of utilities was for the previous year, we knew pretty much what to expect. I don't know if thats common practice, but it was when we were looking.
We were approved for a very large mortgage, and we decided that we wanted something that wasn't even half of what we were approved for. We could have afforded a huge mortgage, but we knew that things would change as far as adding to our family, adding new expenses like new cars, vacations etc. Or that things could change like dh losing his job. I don't think people need to be educated about those things, its just common sense but unfortunately we as a society want the biggest, the best and we want it now and if the bank says I can afford it, well then who am I to argue.

As for your friends, how can it be a rude awakening to figure out you can't afford something when you make less income? Did they not keep track of any of their finances, ever? I mean it doesn't take genius level understanding of math to know what you bring home versus all your bills that have to be paid

 

[NHdisneylover]

And there comes a point where a payment plan isn't going to cut it. I am talking about cancer or a lifelong ailment that is going to max out your lifetime maximum on your insurance.

I apologize about the use of "never"-perhaps that was a generalization. I just meant that people shouldn't be so quick about judging those who have to declare bankruptcy.

Those things are true tragedies--and a big part of the reason why I like the healthcare system in Germany better. However, they really are NOT the norm. Even then, if you have insurance you generally have a fair amount of time before the lifetime payments maximum is reached to sell a home, etc. It is crappy that you would have to think of that at such a time, but it is reality. I have known three people who have had that type of truly serious medical issue. In all 3 cases they made great efforts as soon as it looked like there was any chance that they could run into eventual huge medical bills to make sure their spouse and children would not be put in the position of losing a home due to those bills. I think it must have been terrible for them to even have to worry about it. I know that all 3 had smaller homes than the bank would have approved and were probably really grateful for that when tragedy struck.

The vast majority of the stories you hear on these boards and in real life are not as dire though. They are a lost job. They are short term but very high medical bills. Etc.

They are tough situations, but manageable if someone gets right on the ball and starts planning and negotiating how to deal with it ASAP instead of hoping it all goes away and waiting until bills pile up to do anything.

Time and time again I see or hear of people who wait until they have already ruined their credit to try to talk to the bank or the hospital or whoever--or they never even try. Time and time again I see many of those people place the blame on the bank for giving them loan, or their employer for not providing insurance (even people who COULD afford private insurance but chose to have large house, new cars and yearly vacation instead). Time and time again I hear many people telling these people it is no big deal, declaring bankruptcy is not a problem and will not even hurt them much in the end because so many people do it these days--and then when people believe that they end up like the OP. Really hurt by these past decisions they made without adequate information. It makes me sad.

 

[m&m's mom]

My speedometer on my car says 120- I don't drive that fast.

The grocery store is full of "bad" food- I don't buy it (well not ALL of it anyway)
There are tanning salons- I don't go.
Fast foo don every street corner.
All of these places heavily advertise to get me into their businesses- but it's up to ME to exercise personal responsibility.

 

[Carly_Roach]

Getting back to the OP: I'm sorry to hear that your DH lost this opportunity based on a technicality (2 months away from meeting their criteria).

On the bright side: so many people have had to declare bankruptcy for whatever reason that I suspect the bankruptcy-free requirement for employment will eventually be removed from all employer policies. It's already gone from most employer policies. Your DH just happened to hit one of the industries where they're still stuck in the old way of thinking.

There were simply too many lay-offs, too many jobs leaving the country and too many people who didn't have healthcare but DID have medical emergencies happening in a short period of time. The old adage of detemining someone's "character" based on whether or not they ever declared bankruptcy is no longer valid. It might have been true when banks followed regulations, people as a whole were more moraly upstanding and jobs were plentiful. But banks haven't followed regulations since the 80's, most people will lie about anything and everything then justify their reasons for lying when caught, and jobs....well, you know how that goes.

When these old-school companies start to lose too many good, experienced, qualified candidates based on their outdated rules about bankruptcy, they'll drop that contingency. I know it doesn't help you right now, but please know that times are a-changin'.

 

[SaraJayne]

Getting back to the OP: I'm sorry to hear that your DH lost this opportunity based on a technicality (2 months away from meeting their criteria).

On the bright side: so many people have had to declare bankruptcy for whatever reason that I suspect the bankruptcy-free requirement for employment will eventually be removed from all employer policies. It's already gone from most employer policies. There were simply too many lay-offs, too many jobs leaving the country and too many people who didn't have healthcare but DID have medical emergencies happening in a short period of time. The old adage of detemining someone's "character" based on whether or not they ever declared bankruptcy is no longer valid.

It might have been true when banks followed regulations, people as a whole were more moraly upstanding and jobs were plentiful. But all of those criteria have gone by the wayside. Banks haven't followed regulations since the 80's, people will lie about anything and everything then justify their reasons for lying when caught as though lying is normal for everyone, and jobs....well, you know how that goes.

When these old-school companies start to lose too many good, experienced, qualified candidates based on their outdated rules about bankruptcy, they'll drop that contingency. I know it doesn't help you right now, but please know that times are a-changin'.

I hope it will never be removed.

And "so many people"? Really? I find it interesting that on a message board dedicated to vacationing, so many people seem to have declared bankruptcy.

Is there a connection? I don't know, but I do know that a majority of people in the country have NOT declared bankruptcy.

 

[Arielle22]

Getting back to the OP: I'm sorry to hear that your DH lost this opportunity based on a technicality (2 months away from meeting their criteria).

On the bright side: so many people have had to declare bankruptcy for whatever reason that I suspect the bankruptcy-free requirement for employment will eventually be removed from all employer policies. It's already gone from most employer policies. Your DH just happened to hit one of the industries where they're still stuck in the old way of thinking.

There were simply too many lay-offs, too many jobs leaving the country and too many people who didn't have healthcare but DID have medical emergencies happening in a short period of time. The old adage of detemining someone's "character" based on whether or not they ever declared bankruptcy is no longer valid. It might have been true when banks followed regulations, people as a whole were more moraly upstanding and jobs were plentiful. But banks haven't followed regulations since the 80's, most people will lie about anything and everything then justify their reasons for lying when caught, and jobs....well, you know how that goes.

When these old-school companies start to lose too many good, experienced, qualified candidates based on their outdated rules about bankruptcy, they'll drop that contingency. I know it doesn't help you right now, but please know that times are a-changin'.

I don't see higher level positions or ones that deal with finances ever having the requirement removed. As previous posters stated, in some positions it is a government requirement as well.

 

[Missy1961]

Getting back to the OP: I'm sorry to hear that your DH lost this opportunity based on a technicality (2 months away from meeting their criteria).

On the bright side: so many people have had to declare bankruptcy for whatever reason that I suspect the bankruptcy-free requirement for employment will eventually be removed from all employer policies. It's already gone from most employer policies. Your DH just happened to hit one of the industries where they're still stuck in the old way of thinking.

There were simply too many lay-offs, too many jobs leaving the country and too many people who didn't have healthcare but DID have medical emergencies happening in a short period of time. The old adage of detemining someone's "character" based on whether or not they ever declared bankruptcy is no longer valid. It might have been true when banks followed regulations, people as a whole were more moraly upstanding and jobs were plentiful. But banks haven't followed regulations since the 80's, most people will lie about anything and everything then justify their reasons for lying when caught, and jobs....well, you know how that goes.

When these old-school companies start to lose too many good, experienced, qualified candidates based on their outdated rules about bankruptcy, they'll drop that contingency. I know it doesn't help you right now, but please know that times are a-changin'.

I guess you didn't read the whole thread. Yes, there are some good smart people who have had to declare bankruptcy because of medical bills, but these "outdated" rules are in place for a reason. In many cases, it isn't the company that demands it, but the SEC. And think about it: would you want someone who has had issues (for whatever reason) to be able to deal with lots of money or give advice on investments?

 

[kamik86]

I guess you didn't read the whole thread. Yes, there are some good smart people who have had to declare bankruptcy because of medical bills, but these "outdated" rules are in place for a reason. In many cases, it isn't the company that demands it, but the SEC. And think about it: would you want someone who has had issues (for whatever reason) to be able to deal with lots of money or give advice on investments?

The SEC isn't the only one. Any jobs with government security clearances as well (risk of taking bribes or selling information) has the same requirement. We are mandated to report any major change in finances to our security departments. (So even if you already have the job declaring bankruptcy can have you lose it).

 

[tlbwriter]

I don't know anyone who makes $1500 and received a $1200 loan, those numbers were used as an example. But there were banks who gave loans out to individuals who they had to know up front that the borrowers could not make the monthly payments.

Okay, someone made up an example and you said "yes, that is what happened," even though you have no evidence or experience with this particular example. Is that what you're saying? You just think this is probably what happened to people? Even though it didn't happen to you, or anybody you know, and you haven't read about it happening to anyone else in a news story or anything like that? That's what I trying to get at. You have an idea in your head that banks gave loans to people when any reasonable person would know they couldn't make those payments, loans that would quite obviously fail under any acceptable debt-to-income ratio. But you can't give a single actual example of this happening?

 

[lillygator]

Sorry you can't see it, but before the housing market crashed, there were instances when banks gave out loans knowing that the individual could not afford the monthly payment. I don't think it's so much like that now, but it was being done before the crash.

the individual is at fault and should not have taken the loan out....I don't feel sorry for the banks,. but I don't feel sorry for the individual either.

Getting back to the OP: I'm sorry to hear that your DH lost this opportunity based on a technicality (2 months away from meeting their criteria).

On the bright side: so many people have had to declare bankruptcy for whatever reason that I suspect the bankruptcy-free requirement for employment will eventually be removed from all employer policies. It's already gone from most employer policies. Your DH just happened to hit one of the industries where they're still stuck in the old way of thinking.

There were simply too many lay-offs, too many jobs leaving the country and too many people who didn't have healthcare but DID have medical emergencies happening in a short period of time. The old adage of detemining someone's "character" based on whether or not they ever declared bankruptcy is no longer valid. It might have been true when banks followed regulations, people as a whole were more moraly upstanding and jobs were plentiful. But banks haven't followed regulations since the 80's, most people will lie about anything and everything then justify their reasons for lying when caught, and jobs....well, you know how that goes.

When these old-school companies start to lose too many good, experienced, qualified candidates based on their outdated rules about bankruptcy, they'll drop that contingency. I know it doesn't help you right now, but please know that times are a-changin'.

I hope it is never removed...

op sorry about your situation, hope your dh can find something soon.

 

[golfgal]

He should talk to someone at the UC commission. He should be able to make about $180 a week and maintain his UC benefits, unless he turned down more hours.

Not in every state-many states you can't work at all or you lose your UC and the UC is often MUCH more then someone would make working at another job.

Yes, what needs to happen is first time buyer need to educate themselves.

When we were looking at houses, we were told what the average cost of utilities was for the previous year, we knew pretty much what to expect. I don't know if thats common practice, but it was when we were looking.
We were approved for a very large mortgage, and we decided that we wanted something that wasn't even half of what we were approved for. We could have afforded a huge mortgage, but we knew that things would change as far as adding to our family, adding new expenses like new cars, vacations etc. Or that things could change like dh losing his job. I don't think people need to be educated about those things, its just common sense but unfortunately we as a society want the biggest, the best and we want it now and if the bank says I can afford it, well then who am I to argue.

As for your friends, how can it be a rude awakening to figure out you can't afford something when you make less income? Did they not keep track of any of their finances, ever? I mean it doesn't take genius level understanding of math to know what you bring home versus all your bills that have to be paid

Often it was done under the assumption that they would be making more down the road or most often, they were just used to making that much money and lived accordingly. They could have adjusted by spending less but it's a hard adjustment for many to make too. The point being, live of a lower income to start and there is no adjustment.

 

[ilovemk76]

I totally agree with this. I know the people who obtained loans they couldn't afford were irresponsible in their own right, but the banks were no better. Then when things started to fall apart the banks were BAILED out, but the people in the houses were on their own. In all honesty the banks made poor business decisions and should have failed. If the people have to suffer the consequences of bad decisions, businesses should have to do the same.

I agree up to a point. If the banks failed then people who were only depositors would have lost too. Without a banking system the US would have gone into another depression.

Also, for all of those who say you would never declare bankruptcy? I have some sad news for you-unless you are a very wealthy family you are just one major medical illness away from bankruptcy. It is a sad truth, but I have seen it happen many times.

To the OP, I am sorry about your situation. I hope your husband finds a great job-and that your situation improves.

See below why on major medical would not send us into bankruptcy. We may have to downsize our home and life but bankruptcy would be a remote possiblility.

And there comes a point where a payment plan isn't going to cut it. I am talking about cancer or a lifelong ailment that is going to max out your lifetime maximum on your insurance.

I apologize about the use of "never"-perhaps that was a generalization. I just meant that people shouldn't be so quick about judging those who have to declare bankruptcy.

In the past your statement was true but not anymore. The new healthcare bill removed all lifetime limits. So even a lifelong ailment would not force us into bankruptcy. We might need to sell the house but as long as we keep our insurance the bills are paid. We owe the first $2500 and then they pay 100% and they waive the $2500 if it was paid the year before and the illness was still being treated. It is possible we would have to pay the $2500 every other year, but I an not sure. So an illness would not cause us to go in to bankruptcy. Add to that we also carry LTC and LTD insurance.