Leader

Collapse

Announcement

Collapse
No announcement yet.

CNBC Ganging Up ON Underwater Borrower

Collapse

300x250 Mobile

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • CNBC Ganging Up ON Underwater Borrower

    This is an incredible must-watch clip. The homeowners do not stand a chance against thinking like this. This had to have been a set-up to get their propaganda across.

    This is a clip of a borrower calling the show questioning why he should continue to pay for a home for which he owes so much more than it is worth. The guy bought the home for $600k and put a 50% down payment on it. Now he owes $350k due to neg-am but the value has dropped from $600k to $270k. This guy has been destroyed losing $300k cash. He wants to stop the pain. The loan adjusts in a year and his payments will double.

    The hosts, including Tyler Matheson the CNBC boss, gang up on this guy relentlessly essentially blaming him saying a) you made a contract that you must repay b) even if you have to give up your kids education you made a commitment c) you will drag down all your neighbors value d) you will not be able to ever buy or rent d) you are getting 'value' by staying in the home because its a place to live e) you have to take responsibility for your action f) you likely lived beyond your means and now you have to sacrifice g) pay extra to principal to make it up. etc

    The fact is -- with $300k down this is one of the good guys. He was duped into buying a $250k home for $600k because of the high-leverage, risk taking of the financial insti's that allowed people with zero money down, terrible credit and no jobs to bid up this neighborhood making it appear the home he bought was really worth $600k. He likely is not saving much money because the lion's share is going out to this massively depreciating asset. If we walked now the pain goes away. His credit is hurt for a while but if he keeps everything else current if won't hurt him for long. His credit will recover quicker than the house will recover in value. His loan is a purchase money loan so there is no recourse if he exercises his right to foreclosure. Suggesting that the he dips into his kids college education to make up the difference is a crime. This man has already paid with his life's savings.

    http://www.cnbc.com/id/15840232?video=1051375048&play=1

  • #2
    It sounds like he wants to walk away from the house not because he can't afford the payments, but because he's ****ed that his loan is for more than what the house is worth. I do not agree with that kind of mentality. Maybe he should also walk away from his car payments then, too? It sucks that the house has lost so much valuation, especially since everybody seems to assume the price of a house will always go up, but that's the reality you must face as a property owner.

    This guy is from California... honestly, who really didn't think the prices of homes in California were way overpriced and have been for years? Except for the ones who were still purchasing them, of course.

    Comment


    • #3
      If you look at it from an investment angle, the guy invested money into something of value. The value decreased. He gambled and lost. Kind of what happens when you buy stocks and the value goes down.

      I'll grant you that buying a home was considered a very safe investment, but things change. I had the same thing happen with a stock option years ago. The main difference between the two is that this guy borrowed money from a third party to make his investment. He still owes that third party the money regardless of the current value of his investment.

      When I got hit by the decline in stock value, the money for the stocks was out-of-pocket money. The value went down and I lost money. I didn't stiff a third party and renege on a contract.

      Once again, it comes down to how a person assumes debt and what type of spending they engage in. I purchased my house for about $120K about 12 years ago. I took an ajustable rate mortgage. My wife and I bought nothing for years. No cable, no cell phones, no internet access, no new cars, no frills. We saved our money and refinanced to a fixed rate as fast as we could. My mortgage payment is about $750/month. Now that our salaries have increased, we can afford all of the frills. We invested wisely and kept our debt low. We could have bought a $300K house. We thought the move would be unwise because of the size of the mortgage payment.

      Our house climbed in value to about $350K over the years. In today's market, it's probably only worth about $240K. Oh well, that happens. At least I didn't take out a second mortgage or home equity loan and my debt is basically unchanged.

      The guy in the article sounds like he bought something too expensive for his income. He gambled and rode the wave of the housing market. He probably made no effort to spend or save wisely and probably actually overspend. Now he's stuck and he's upset. Just because investing in a house was once considered a safe investment, it didn't mean it would always be one. If there was any one thing that was 100% safe to invest in and gave high returns, we'd all be rich. Alas, any investment has risks.
      "Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince" - Unknown Author
      ______________________________________________

      "That government is best which governs the least, because its people discipline themselves." - Thomas Jefferson
      ______________________________________________

      “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.” - John Adams

      Comment


      • #4
        Originally posted by Stormy View Post
        The guy bought the home for $600k and put a 50% down payment on it. Now he owes $350k due to neg-am but the value has dropped from $600k to $270k.

        The fact is -- with $300k down this is one of the good guys. He was duped into buying a $250k home for $600k because of the high-leverage, risk taking of the financial insti's that allowed people with zero money down, terrible credit and no jobs to bid up this neighborhood making it appear the home he bought was really worth $600k.
        "Duped?" Please.

        This guy wasn't duped at all. If you somehow made enough money to save up $300K, you are likely no fool. Face it, this guy wanted to live the high life like everyone else. He could have easily found a three or four bedroom apartment to rent, and then he could be buying a home paid for in full with that $300K he had saved.

        People like this guy want me to cry a river for him. Are really to believe that this guy has such a big heart that had his home doubled in value and he sold it for say $1M, that he would be offering $400K of that $1M to charity? Of course not, it would have went right into his personal bank account. Now that his personal bank account is about to read $0.00 instead of say $925,000.00, he wants more of my money via taxation to put into his bank account.

        Comment


        • #5
          He sounded like he was a decent person ..... trying to find a weasly way of getting out of his situation with the least hurt for himself. I have compassion for all of these people who are decent people stuck in bad situations. Did they take risks? Did they try to ride the wave into houses that they really couldn't afford? Sure, maybe. But decent people doing shaky things need to stand up and take their lumps. Why should I have to pay for their risks?????? I could have taken a jump and gotten a house well outside of my means. But NO! I am a conservative person in PRINCIPLE ..... AND in PRACTICE. I have a house (and cars, and stuff) that is within my means. Again, why should I!!!!!!!!!!!! have to take a hit for ...... idiotic behavior/risks like this? Why should people like this be bailed out and allowed to live in houses outside their means (I know, not really this guy's situation)?

          That is before we even get to the people that NEVER should have had houses in the first place. How in the world did it ever get to the place where foof stamps and welfare checks were used as sources/proof of income when drawing up loans??????? Now these people can EASLIY just walk away. No hit whatsoever. It just hurts the rest of us. I wonder how many of these people are getting bailed out ....... who never should have bought ANY house at all?????

          Space for rent .........

          Comment


          • #6
            It amazes me that people I know were denied home loans because their income as police officers was too low, even though they were going to make sacrifices in their spending habits and lives so they could continue to live in our area, which has high home prices.

            Yet, if you had no job and no down payment you got a loan. The people who accepted the loan and the bankers who gave it out are criminals in my view

            I say let the banks and the other companies fail. Hopefully out of the ensuing meltdown we can bring our nation back to what it was intended to be back in the 1780's when the framers of our nation created it.

            Comment

            MR300x250 Tablet

            Collapse

            What's Going On

            Collapse

            There are currently 6229 users online. 351 members and 5878 guests.

            Most users ever online was 26,947 at 07:36 PM on 12-29-2019.

            Welcome Ad

            Collapse
            Working...
            X