DISQUS

Marco · 10 months ago

It used to be that it was hard to get a home loan unless your monthly payment came to 1/3 or less of your monthly takehome income. This kept defaults down, as it was a prudent formula. People could do those calculations on their own and decide on how much house they can *really* afford. Instead, recent folks abdicated their responsibility, and said "Well, if the bank will lend me X amount of money, I must be OK, and it will all work out (SmileSmileSmile)." I agree, tough luck, stupid. Go into default.

Marco

michele · 10 months ago

Yeah, he's a whiny twit. His 6.3% isn't bad. My parents had a house bought in the Carter years with a 12% rate, probably average for that time.

My investments have halved in the last five years. My car's bluebook has tanked since I bought it. And although I still think I'm pretty hot, my body's street value has plummeted since I hit 40. Wahhh! Where's my bailout?

Stacy · 10 months ago

Love your blog and thought process. I totally agree!

Anonymous · 10 months ago

His monthly payments on the fixed mortgage should be the same as they were before the house value dropped so why would he have trouble with payments?

Andrea · 10 months ago

I don't think he's asking for a bailout so much as pointing out that the current proposals award bad behavior. It doesn't sound like his behavior was bad.

First of all, I'd like to point out that depending on where you live, $460k isn't all that off of what a 3-4 bedroom home in a neighborhood with decent schools would cost. My inlaws' 3-bedroom house would probably go for $600k now (they built in the 1970s).

Think about it. A schoolteacher may not make that much money, but a PR executive probably makes six figures, so between them they can probably afford their home. He points out that he and his wife both have good jobs and "have never missed a mortgage payment." Their house has dropped in value, so theoretically if they tried to sell it right now they'd be taking a not insignificant loss.

I read this as him saying, "Look, my wife and I didn't get in over our heads. We didn't buy a house we couldn't afford, as is evidenced by the fact that we've been making our monthly payments. This housing crisis has hurt us, too, in that we've suffered a great depreciation on our home. Why is it that the people who got stupid ARMs for houses they couldn't ever afford are getting a bailout and we, the responsible people, get nothing?"

That's how I read it.