I guess I don't understand how this happens. If you can't afford something, don't buy it! If it sounds "too good to be true," it probably is! Besides, if you can't afford to buy, rent! I'm not sure when people decided that they have a RIGHT to own a home. Hell, Nutz and I both rented until we could afford to buy our house. I remember some of our conversations during our house-hunting phase. Neither one of us wanted to spend more than $200k (and we didn't) because we refused to live paycheck to paycheck (which I've done before...damn teacher salary). It's our first house and it's probably not our retirement home, but that's okay. How many young people (single or married) do you know who get their "dream house" the first go-round? My point, I have a hard time "bailing out" or even feeling sorry for people who "lived beyond their means." Yes, we'd like to drive new cars, but we don't. We'd like to take a nice vacation (or 2 or 3 or 4) each year, but we don't. We both work and don't necessarily love our jobs but realize that we must provide for our family. So, the next time you decide to spend $50k on a new car, $300 on a Wii for your kid, or $250k on a house, ask yourself if you can REALLY afford it. If not, don't buy it! I'm tired of working my butt off only to take care of people who've made bad choices (multiple times and never learn) or people too lazy to get a job. It might not be the job you've always wanted but maybe it'll help pay the bills and provide your family with health insurance. Sometimes you just have to "suck it up" and take one for the team. Besides, it's not the government's job to take care of you, isn't that what families are for? You can bet that either one of our families would help us out if we needed it and we'd do the same. So, instead of looking to the government for assistance, perhaps you should pick up the phone and call your family. Many years ago, several generations lived under one roof to make ends meet. I've lived with my parents and both sets of grandparents during transitional times in my life. If you can't depend on your family, who can you depend on?
Rant over...Crackerz
It’s also called ‘underwater,’ or owing more on a mortgage than one’s home is worth
By Josh Brown
The Virginian-Pilot
Josh Brown, (757) 446-2318, josh.brown@pilotonline.com More than 33,000 homeowners in Hampton Roads owed more on their mortgages than their homes were worth at the end of 2008 as home prices continued to fall, according to a report released Wednesday by a mortgage research firm.
That’s roughly 13 percent of all mortgages in the local market, according to First American CoreLogic, which is based in Santa Ana, Calif., and tracks mortgages across the country.
The firm’s quarterly report, which broke out Hampton Roads data for the first time, also said that an additional 10,000 mortgages will be “underwater” if home prices in the area decline 5 percent from their current level. Homeowners who purchased at the peak of the local housing boom, especially with little or no down payment or an interest-only loan, are the most susceptible to finding themselves “underwater,” or “upside down” – owing more than a home is worth .
Falling home values can erode any equity homeowners have in a newly purchased or refinanced home. Home prices in Hampton Roads have slid 13.7 percent in the past year, according to Real Estate Information Network Inc., the local multiple listing service. The median sale price for existing homes in January was $194,000, down from $224,900 a year ago.
“The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until home prices and the economy begin to stabilize,” Mark Fleming, chief economist for First American CoreLogic, said in a news release.
Economists and real estate experts say owing more on a home than it’s worth is one of the most common precursors to foreclosure.
“Certainly these are the types of people who, given any change in their economic status, are likely to throw in the towel,” said James Koch, an economist at Old Dominion University.
Across the country, more than 8.3 million homeowners owe more than their homes are worth, representing about 20 percent of all outstanding mortgages, First American CoreLogic reported. The majority of such “negative equity” mortgages are in states such as California, Florida, Texas and Michigan. In Virginia, 19.6 percent of all mortgages were underwater.
The company said in its report that most of the increases in those mortgages in the months ahead probably will come in markets that have not already seen deep declines in home prices.
The “worrisome issue” going forward, Fleming said, is not just the severity of negative equity in the states hardest hit thus far “but the geographic broadening of negative equity that is expected to occur throughout the year.”
Brian Holland, president of Virginia Beach-based Atlantic Bay Mortgage Group, said many of the region’s upsidedown loans could be attributed to mortgages guaranteed by the Department of Veterans Affairs with no down payments.
“Your typical VA buyer is going to fund 100 percent,” said Holland, whose firm handles such loans from 19 mortgage offices in Virginia and the Carolinas. “After fees associated with the sale, they’re automatically underwater.”
The report comes on the same day President Barack Obama released guidelines on his administration’s foreclosure prevention and homeowner refinancing program. The program is expected to aid as many as 9 million troubled U.S. homeowners, including some with negative equity whose loans are financed or backed by Fannie Mae or Freddie Mac.
The number of homes for sale with asking prices far below what is owed on the house has been increasing steadily in the past few months, said Barbara Wolcott, president and chief executive of Prudential Towne Realty.
“The ones who are really impacted by this are the ones who have to sell,” she said. “Then you’re forced in to a short-sell situation.”
A “short sale” means selling a house for less than the amount the seller owes the lender. Lenders agree to take a loss on the short sale to avoid the added costs of a foreclosure plus trying to maintain and resell the property.
The process often takes several weeks to finalize, Wolcott said. As more local homeowners take that route to sell their home, short sales will take even longer, she said.
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