So, we, as a collective nation now hold or will soon hold mortgages of houses which are worth a great deal less than the mortgage valuations
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Speaking of this, I recently read an article in which the author, quite seriously, decried that "soon, the only people who can get mortgages are those who can afford them". It would have been funny except that he was serious and was complaining about housing prices being beyond the reach of lower income people; a noble complaint. Thing is, if you can't afford a mortgage any other way than to get an interest-only or a sub-prime mortgage, you have no business buying a house (just my opinion but then again, I'm considered rich even though I had to work hard and claw my way to where I am now, and one way I did that was to sacrifice what I wanted by refusing to overextend myself to buy stuff I couldn't afford).
I don't think the people who've defaulted on their mortgages had no intention of paying. They got squeezed out between their own financial foolishness and the skyrocketing cost of living today. I'm sure if given a choice, they'd stay in the house because they do want it. They just can't pay for it and there's the rub. If they couldn't afford it by a *comfortable* margin with a savings reserve of at least four months' mortgage payments, they can't afford the house. That's how Mr. Leaf and I have managed to buy both our houses. We also refused to do 100% financing with zero down because that's just plain dumb. What you don't pay upfront is all that much more you have to pay in interest AND principal as you go, thus wasting way more money than if you'd scrimped and saved and did without to save up the down payment in the first place.
Sorry for the hijack. :( I'm sure your reader list now thinks I'm a heartless, socially unconscious person for thinking that people need to be more personally responsible and not wait for the government to bail them out or to take care of them from cradle to grave.
I didn't mean they went INTO the mortgage with no intention of paying, only that some people are so very trapped by the ARM, they can't afford the payments so they are skipping out to some other housing and the houses are abandoned.
There was a bit I saw on the news about retirees in Florida mowing the lawns of abandoned houses so the neighborhood wouldn't get filled with crack houses and such. Sad stuff.
*nod* I understood. I think if given the ability to resume payments, folks who've defaulted would likely go back to paying for their houses. I do think it is kind of sad that this has come to pass, though.
I hear you with mowing the lawns of abandoned homes. There's one next to my house so we put the sheep out there periodically so they can mow the pasture over there. I don't mow their yard because I'm not going to waste precious gas on it and there are no fences to keep the sheep in.
There is the whole issue of real estate speculation such as "flip this house" bullcrap... many of those places are not primary residents and thus vacant...
I don't think the people who've defaulted on their mortgages had no intention of paying. They got squeezed out between their own financial foolishness and the skyrocketing cost of living today. I'm sure if given a choice, they'd stay in the house because they do want it. They just can't pay for it and there's the rub. If they couldn't afford it by a *comfortable* margin with a savings reserve of at least four months' mortgage payments, they can't afford the house. That's how Mr. Leaf and I have managed to buy both our houses. We also refused to do 100% financing with zero down because that's just plain dumb. What you don't pay upfront is all that much more you have to pay in interest AND principal as you go, thus wasting way more money than if you'd scrimped and saved and did without to save up the down payment in the first place.
Sorry for the hijack. :( I'm sure your reader list now thinks I'm a heartless, socially unconscious person for thinking that people need to be more personally responsible and not wait for the government to bail them out or to take care of them from cradle to grave.
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There was a bit I saw on the news about retirees in Florida mowing the lawns of abandoned houses so the neighborhood wouldn't get filled with crack houses and such. Sad stuff.
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I hear you with mowing the lawns of abandoned homes. There's one next to my house so we put the sheep out there periodically so they can mow the pasture over there. I don't mow their yard because I'm not going to waste precious gas on it and there are no fences to keep the sheep in.
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