Such a sad day, our neighbors of 20 years...

[brerrabbit]

It happens when people buy into the fact that house prices will always go up. It happens when unscrupuilis mortgage companies and banks see more profits to be had. It happens when governmental taxing authorities tie property taxes to accessed values and refuse to cut spending even when tax revenues decrease and make up the shortfall by taxing more. It happens when Congress decides it is the right not priviledge that every American has a right to own a home regardless of whether they have the means to support such ownership. It happens when 85% of the people in the US (or something like that number) live within 100 miles of a coast where all the natuaral disasters occur like hurricanes, mudslides, and earthquakes and as a result insurance prices skyrocket. It happens because we as a society buy into consumerism and over extend ourselves financially without regard for the fact that recessions happen and people lose jobs. For all these reasons and many more it happens all the time. We just rarely see it in such large numbers like it is currently happening.

 

[jodifla]

I guess, for some, I don't understand the forclosure crisis. How does it happen? If you own a home for 20 years, that says stability to me!! We and most of our neighbors have lived in our house since 1997, and we have been untouched by this forclosure business because we have a stable loan that we have had forever. So, I'm not understanding or I am missing a piece of the puzzle, becuase more of the people that I have met are losing their house because they either foolishly refinanced or they bought in the last 5 years or so.

My mom lives in a senior village, and there are forclosures there, and I think that is the saddest thing ever, honestly. It's heartbreaking to think of a senior citizen going through that, but how does it happen?

In our area, it's happening because all the people in the family have lost their jobs and have run through all their savings. Even if you have your house paid off, there are taxes to pay. And they can't sell their house at any price because no one is buying.

 

[wdwfan16]

Are leaving their home, due to foreclosure.

We have lived next door and shared a driveway for 20 years. The house was in their family for 55 years and today they are leaving. It is very hard because soon we will be leaving due to the same issue. Probably within a few months or less. It's been very stressful and very sad. I don't even know what to say to them.

I'll never be able to come down this street again once we leave. It will be too painful. The worst part is, my brother is away training for his next deployment to Afganstan and who knows if he will be able to come home to his house. I don't think so and that eats at me the most.


Don't mean to be a downer but I just wanted to let it out.

How do you lose a home to foreclosure when it was in the family for 55 years?

OP I am sorry to hear you will lose your home.

 

[wdwfan16]

very sorry to read this.
I just read a report saying we are not out of this housing issue yet (per the people in DC/ white house). This is so sad.

On the news last Friday they said that the number of homeowners a month last on their mortgage is down, sorry I don't remember the numbers, but the number in foreclosure (over 3 months behind) is up. It looks like in the short term it will be worse but in the long term it will be better.

 

[wdwfan16]

I guess, for some, I don't understand the forclosure crisis. How does it happen? If you own a home for 20 years, that says stability to me!! We and most of our neighbors have lived in our house since 1997, and we have been untouched by this forclosure business because we have a stable loan that we have had forever. So, I'm not understanding or I am missing a piece of the puzzle, becuase more of the people that I have met are losing their house because they either foolishly refinanced or they bought in the last 5 years or so.

My mom lives in a senior village, and there are forclosures there, and I think that is the saddest thing ever, honestly. It's heartbreaking to think of a senior citizen going through that, but how does it happen?

In our paper on Sunday there was an article about retirees. It said that 1/3 of all retirees now have a mortgage and/or CC debt. That was not the case a decade or so ago.

 

[bumbershoot]

It happens when people buy into the fact that house prices will always go up. It happens when unscrupuilis mortgage companies and banks see more profits to be had. It happens when governmental taxing authorities tie property taxes to accessed values and refuse to cut spending even when tax revenues decrease and make up the shortfall by taxing more. It happens when Congress decides it is the right not priviledge that every American has a right to own a home regardless of whether they have the means to support such ownership. It happens when 85% of the people in the US (or something like that number) live within 100 miles of a coast where all the natuaral disasters occur like hurricanes, mudslides, and earthquakes and as a result insurance prices skyrocket. It happens because we as a society buy into consumerism and over extend ourselves financially without regard for the fact that recessions happen and people lose jobs. For all these reasons and many more it happens all the time. We just rarely see it in such large numbers like it is currently happening.

It also happens with homeowners decide to use their paid-off house as a bank, and take out a mortgage (or two) to pay other things, then can't pay it back.

FIL did this. Lost a paid-off house in a nice area of a nice suburb of Seattle.

Everyone says that those who grew up during the Depression knew better, but he himself grew up during the Depression, selling papers for pennies a day to help support the family, but grew up greedy and silly. ]


Not saying this is the case with the OP's neighbors or the OP or OP's brother, but you had that one glaring omission (homeowner's fault for taking out loans on paid-off house) in your long list.


Thanks to FIL and then later, BIL's partner, MIL has now lost two homes to the stupidity of people in her life. She rented an apartment and liked it, but now has moved into rental senior housing. Don't feel bad for her, she LOVES it! It's quiet, safe (secure building), it's quiet, quiet and more quiet, she has everything she needs, and she is happy there. If she still had the original house, she'd be spending money to pay those taxes, hiring people to work on the house, could'nt get anywhere from the hill they were on in bad weather, etc. She's much happier now, so not all "and now the Seniors have to rent" stories are bad.

 

[Friendly Frog]

It also happens because in these times if you loose your job you can expect to be out of work for quite a while. If you are over 50 you can expect to be out of work a very,very long time.

You still have taxes, insurance, medical costs, food, gas, lights, cobra (if you are lucky) phone, and repair bills for all those unexpected things you don't count on happening but which do. And, this is all if you are "debt free", which most people are not.

Unemployment is not that much and how many people have enough money saved to survive unemployed for much over a year or two. ( If that!) Then consider that many of the baby boomers had to pay 13 percent interest rates ( in the 70's) just to get into a house. That left them with very little money left over to put into savings. Then as time went on and interest rates dropped where they could save, well interest rates on savings dropped too. Think about it, how much money would you have to have in savings to live off of the interest when it is like .5 percent, or LESS. Anyway, this is one possible way someone who has been in a house for 20+ years could loose it.

No, I have not been foreclosed on, and I am ok for now, but I know that you can be responsible and still get in trouble. I lost my job, then became ill. You know what, unemployment will not pay you if you are not well enough to be working. See how fast you can get in trouble when you loose your job and then become ill! (And if you become ill and can not get insurance, you can loose a life's savings in a matter of months. )

rant over.

 

[missypie]

My aunt lost her home to foreclosure. She had lived in the house since at least the 60s. She took out repeated home equity loans, but didn't put any money back into the house. Byt the end she was glad to let the house go and move into an apartment because her home was in such poor repair. There's a whole lot of fault in that situation...hers for taking out the multiple loans and the mortage company's for continuing to lend on a rattletrap house that wasn't worth much.

 

[missypie]

No, I have not been foreclosed on, and I am ok for now, but I know that you can be responsible and still get in trouble.

I do agree that most of us are one job away from foreclosure. Even if we have saved three months worth of expenses like the financial folks advise, lots of people are out of work for 6 months, a year or more.

 

[wdwfan16]

My aunt lost her home to foreclosure. She had lived in the house since at least the 60s. She took out repeated home equity loans, but didn't put any money back into the house. Byt the end she was glad to let the house go and move into an apartment because her home was in such poor repair. There's a whole lot of fault in that situation...hers for taking out the multiple loans and the mortage company's for continuing to lend on a rattletrap house that wasn't worth much.

Both were wrong. The point people forget is the ones who used the home as an ATM should not be made the victim. They spent the money on stuff, vacations, eating out etc. so it is not like they only had a mortgage and then it was whisked away from them.

 

[bettymae1121]

I do agree that most of us are one job away from foreclosure. Even if we have saved three months worth of expenses like the financial folks advise, lots of people are out of work for 6 months, a year or more.

Which is why those so-called "experts" are now changing their tune to 6 or 8 months expenses. If they were so smart, they'd have recommended that amount to begin with...

Even at 8 months, if you are out of work for 2 years or find your self in a layed-off-found-a-job-at-half-the-pay-oops-layed-off-again merry go round, you're still up a creek without a paddle.

 

[missypie]

Which is why those so-called "experts" are now changing their tune to 6 or 8 months expenses. If they were so smart, they'd have recommended that amount to begin with...

Even at 8 months, if you are out of work for 2 years or find your self in a layed-off-found-a-job-at-half-the-pay-oops-layed-off-again merry go round, you're still up a creek without a paddle.

And really, having 6-8 months living expenses in a safe, liquid account is a whole lot of money for most people to save!

I know that there is a whole lot of blame to go around in the mortgage/foreclosure crisis, but I do hope it will make people stop and consider in each instance whether home ownership is always the right option. The assumption that real estate prices will always go up has been shown to be wrong. If a person moves a lot (and doesn't work for a company that will buy the house), it could be a financial disaster if one has to sell at the time of a big dip in the market.

 

[LuvOrlando]

OP, I am so deeply sorry that this is happening to you and people you care about.

I've been wondering lately if there is anyone anywhere who really doesn't know someone crushed by the Depression we're now waist deep into? Every so often I see in the news someone trying to say we're pulling out of it and I wonder... who exactly is getting better???? No-one I know, who do they think they are kidding? It makes me so mad

PS missypie, I agree and think owning a home is very over-rated. For some reason everyone wants to own their home, but you know what, you DON'T own your own home until it's paid off. Until then the bank owns your home so very few people actually ever own a darn thing. We have a house because my DH insisted but I wanted nothing to do with it. Let someone else absorb the risk of home ownership I thought. At least I was able to talk him into a modest home and keep us out of a McMansion when everyone was getting them. Uggh, I would have gladly paid rent to someone else who had to deal with taxes, property values, changing neighborhood, loss in investment.... the whole lot of it. When someone buys and things go south the poor souls get crushed, but when someone rents and things go south, all they have to do is move. I wish I was a renter right now with a big fat pile of money in the bank instead of a bit of paper that says how much my house SHOULD be worth, what good is an appraisal when no-one is buying?

 

[missypie]

OP, I am so deeply sorry that this is happening to you and people you care about.

I've been wondering lately if there is anyone anywhere who really doesn't know someone crushed by the Depression we're now waist deep into? Every so often I see in the news someone trying to say we're pulling out of it and I wonder... who exactly is getting better???? No-one I know, who do they think they are kidding? It makes me so mad

I think it will get worse before it gets better, at least real estate wise. People desparately want to believe it's better...c'mon, Depressions are depressing! It's difficult to stay depressed. But lots of owners are going to lose their properties this year - even high end, landmark properties are being posted for foreclosure.

I know a guy who had a job dependent on the real estate industry. So did his wife. Last year at this time they had a very nice combined income. Now it's zero, because both got laid off.

 

[Carly_Roach]

Both were wrong. The point people forget is the ones who used the home as an ATM should not be made the victim. They spent the money on stuff, vacations, eating out etc. so it is not like they only had a mortgage and then it was whisked away from them.

I know many people who didn't spend the money on stuff, vacations, and eating out. They lost their jobs, couldn't find another (or found another at 1/2 the salary), went through their savings while working a minimum wage job and waiting for a better job. They had to take out home equity loans or use credit cards to pay the taxes, food and utility bills.

I'm not saying there weren't foolish people out there trying to make others think they were still living a good life with all the accumulation of high end goods, but here in Michigan I know more people who were borrowing to get by than were borrowing to go on vacation. Some slid down to the bottom quickly in the early 2000's, others who budgeted and watched every penny (even the borrowed ones) coming in and going out took years to make that slide down to the bottom and lose their homes in 2009 and this year.

If there's a silver lining, it's the fact that so many people up here have either been foreclosed on or have declared bankruptcy that they are becoming the norm rather than having to bear the stigma and/or feeling bad as "the one who couldn't handle their money". They could handle their money, they just couldn't make it based on the wages they used to make when they were in high school or college.

 

[Disney Doll]

This is such a multi-faceted issue.

There are the unscrupulous lenders who got people into mortgages that thye technically could not afford. Of course, I would add to that the caveat "Let the buyer beware". Most people know thei income and budget. If the mortgage company is telling you that they will give you X amount, and you think that X amount is too much for your budget to handle, nothing says you have to take X amount. DH & I did it. We were told we could mortgage twice what we were asking for. We were told we were idiots and should buy "more" house. We didn't. We bought what we thought we could comfortably afford, not what the bank thought we could comfortably afford. Many of our friends went in the other direction and bought more than they needed and are now paying the price for it. They would smirk about coming over to our "little house" but now, we are still comfortably living in our little house while they are living in their even littler rented condo, having lost their big house. And it was mainly because of society's attitude that they glommed on to... "I want it all and I want it now".

There is the belief that people should be able to live exactly where they want for their entire life. I live in a pretty nice suburban town and we are looking at taxes etc. this year with an eye toward "What do we cut in town so that all the people who want to live here and really can't afford to can stay?". Now, I don't want to sound heartless, but I'm not sure why there are some folks in my town who think it's my responsibility to subsidize them so they can continue to live somewhere that they really cannot afford to live anymore. If the day comes when I cannot afford to pay my taxes, I don't think I will think that everyone in town should sacrifice some of the "niceties" that our taxes pay for so I can continue to live in a place that I technically can't afford. And while I won't think it's "fair" that I can't afford to live here anymore, I also won't think it's fair to think that my neighbors who CAN afford to live here should live with fewer of the quality of life things my town offers so I can stay. It costs money to live in a nice town, and if one doesn't have th emoney, then one doesn't have the money. There are other otwns in my area that I would have been my first choice to live in rather than the town I do live in. Unfortunately for me, I could not afford the cost of living in those other towns, so I chose THIS town...still nice, but, truth be told, not MY first choice. And I didn't think that the people in the other towns should have changed their tax structure or anything else so that I could have afforded to live there.

 

[Colleen27]

I guess, for some, I don't understand the forclosure crisis. How does it happen? If you own a home for 20 years, that says stability to me!! We and most of our neighbors have lived in our house since 1997, and we have been untouched by this forclosure business because we have a stable loan that we have had forever. So, I'm not understanding or I am missing a piece of the puzzle, becuase more of the people that I have met are losing their house because they either foolishly refinanced or they bought in the last 5 years or so.

There are a number of ways. If you bought a home 20 years ago, you're probably still making payments. Missed payments mean foreclosure. Yes, having more equity should make it easier to sell to get out of the situation, but in this market a timely enough sale isn't likely.

On top of that, some areas have lost so much real estate value that even a home bought 20 years ago and never refinanced can be worth less than what is owed. Our old house sold for 81K in 1997 and 99K in 2004 (when we bought it); comparable homes in the neighborhood now are selling for 20-30K. So being there 20 years wouldn't be any assurance of owing less than the current market value.

 

[Colleen27]

I've been wondering lately if there is anyone anywhere who really doesn't know someone crushed by the Depression we're now waist deep into? Every so often I see in the news someone trying to say we're pulling out of it and I wonder... who exactly is getting better???? No-one I know, who do they think they are kidding? It makes me so mad

It is getting better for the people who matter - Wall Street has mostly recovered and executive bonuses are on the rise again. So long as that's the case, no one seems to care much that it is still getting worse for millions of Americans.

 

[PeterPan09]

It is getting better for the people who matter - Wall Street has mostly recovered and executive bonuses are on the rise again. So long as that's the case, no one seems to care much that it is still getting worse for millions of Americans.

I got laid off in July, and I was lucky enough to find a temp job in September. It's much less than I was making before, and I have NO benefits whatsoever-and I'm lucky that I have it. I've used a TON of my savings to keep my head above water and I'm still so grateful. So many people are in such worse shape.

I've chosen to take a permanent job that pays even less, because that job offers benefits and a chance for advancement. And again, I'm giving thanks to God that I got that job, because even though I'll likely never catch up to where I was-I at least have a chance to get reasonably back on my feet.

But, that's ok, the people who led our country down the tubes with their risky investments, caused the recession and the massive job losses still got their bonuses this year and they're all doing fine-so that's all that matters. Look, I'll buy that the American public got greedy and addicted to easy money-but we had role models that we followed. Wall Street showed us how and the financial "experts" told us we could have it all just the way they did. Of course, what they didn't tell us is when the bottom fell out someone would rescue them, but we'd be left to fend for ourselves.

 

[missypie]

PeterPan09, that's another crisis that will hit more quietly in the coming years. There will be so many people who had dutifully saved for retirement, but had to use it all to get through a period of unemployment. There will be all of these older workers who can't retire and all of these retired workers living very modestly. Then the experts will go on TV and say that we didn't plan ahead and blame us for not saving money for retirement.