I Want It Now!!!

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

Lenn Harley wrote a blog today  "UNDERWATER"??? WHO'S UNDER WATER?? WHAT'S UNDER WATER??"  that I commented on.  Lenn's blog covered more than one issue, but one of the issues that she touched on was on credit problems that people are having today.  Lenn stated that "about 40% of the American consumer has damaged credit due to the loss of their home, loss of their job, loss of their credit." 

This got me thinking about the number of people that come to me each day to be Pre-Approved to purchase a home, and have credit issue on their Credit Reports.  The biggest issue that I see on the Credit Reports of people who have damaged credit, whether they presently homeowners or not, is how they have over extended themselves.  The reason for this most of the time is because of all the STUFF that they purchase, that they can't afford.  So part of the comment that I left on Lenn's blog was:

The majority BY FAR of the credit issues that I see on a daily bases is still due to financial mismanagement of people buying far more STUFF that they can't later pay for. Our society today seems to feel that they are ENTITLED to every toy that there is, and do not seem to think about how they are going to pay for the toys, as a result I see Credit Reports daily that are filled with accounts in collection. People seem to be spending more and more, and giving less and less thought about how they are going to pay for the more and more, after all they have an ENTITLEMENT to have all the STUFF. They are not just underwater, they are drowning in the I want, therefore, I must have attitude.

People today just don't want to wait until they can afford what they want to purchase.  Today if you want it, you purchase it, whether you can afford it or not.  Purchase today, and if you can't pay for it tomorrow so what, just don't.

Unfortunately this attitude is not limited to the STUFF, it is also part of the mentality that got many people in trouble with their mortgages.  They wanted the house, even though in their heart they knew they could not afford the monthly payment, but they wanted it, and wanted it NOW.  So the Lender, who today takes all the blame, but does not have access to all of their debts.  For example the only debts that a Lender knows about are those that show up on the Credit Report, but those are not all the debts.  For example, the Lender does not see, the day care fees, gas bills, food bills, cloths bills, entertainment, etc.  Those are all part of their monthly expenses, but the Lender does not have access to that information.  The only ones that have access to that information are the people themselves.  So the only ones that truly know whether they can handle the monthly payment that a Lender is approving them for on a house, are the ones purchasing the house.  But with the attitude of I must have it NOW that I spoke earlier in this blog, many of the decisions were I want it NOW, and I will figure out on how to pay for it later.

Don't get me wrong, not everyone who is in trouble with their mortgage got in trouble because of this attitude.  Some got in trouble for reasons that they did not have any control over, like loss of job, or medical issues.  But that is not what I see as the majority reason for why people are in trouble with their mortgages.  What I see is a combination of the two situations that I have talked about.  The first is that they took on a monthly payment that they knew from day one was to much for them to handle, but they wanted that house, and they were going to have it no matter what.  And the second was that they could afford the monthly payment, but were not willing to do without all the STUFF.  So they bought the STUFF, and the STUFF in combination with the mortgage payment was to much, and they found themselves drowning.

I see one of these two situations almost on a daily bases, and I would venture to say, that other Loan Officers that look at as many Credit Reports as I do, most likely are seeing the same thing.

 

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Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage. 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & a #FL Licensed Lender who can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

Comments (25)

James Quarello
JRV Home Inspection Services, LLC - Wallingford, CT
Connecticut Home Inspector

As an inspector I can tell you there are many homes filled with a lot of stuff. Many of these homes with a lot of stuff are short sales. The foreclosures have already been cleared of the stuff. I believe this entitlement mentality is a deep societal ill. Living within your means, that's just crazy talk George. ;)

May 11, 2011 04:07 PM
Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results

George - wanting it all and wanting it right now has been the downfall of many and not just todays generation but ours as well ..... the American Dream turned nighmare

May 11, 2011 04:22 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jeff yes it has been very easy to get credit in the past and to some extent even today.  But just because we can get the credit does not excuse us from using common sense in using it.  People seem to have stopped being responsible for their actions.

Debbie I see very few young people with any money.  Most are doing 100% financing or Mon and Dad are gifting them the money.  Saving seems to be a thing of the past.

Deborah, I had two like that today, and when I told each one that they had to wait at least 2 years from bankruptcy, the response was "you mean I have to wait".  Yes you have to wait.

Christie, the wants have become needs, and they will satisfy those so called needs no matter the consequences.  It is getting out of control.

Andrea, the only way that could have happened is if they had put down something like $400,000 and had very little other debt.  The only other way that it could have happened is if it had been a Stated Income Loan, or No Income & No Assets Loan.  In both of these cases they would not have given their income and would have been approved because they had excellent credit.  But you said that they gave their income, and it was $28,000.  There is no way that could have been a Fannie Mae, Freddie Mac, or FHA Loan even in the good old days.  Now this my sound funny but I rarely look at the HUD-I, that is done by my Closing Department, but to the best of my knowledge, I have not seen the income listed on the HUD-1, just the costs involved in the loan.  It isn't any of the Sellers business to know what the Buyer makes in income, and if it is on the HUD-1 that would be there for them to see.  Did you see the HUD-1 yourself.  And now you have me curious, and I am going to get a HUD-1 from the Closing Department tomorrow and look for the income on it.

James I bet you see a lot more on your end of the business when it comes to STUFF than I do.

May 11, 2011 04:33 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Kathy unfortunately you are right, and we are old enough to know better.

May 11, 2011 04:34 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

George you are right about the attitudes of many today. It is a me 1st society. That attitude leads to a great many downfalls.

May 12, 2011 12:36 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Bill, it sure does.  I didn't even mention above things like cell phones.  I see kids that are 6, 7 years old with smartphones with all the bells and whistles on it, and I sit there and think to myself this families cell bill has to be $200+ a month.  But they have to have it, because all their friends have it, and it just keeps going on and on.

May 12, 2011 03:06 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Andrea, I checked this morning with my Closing Department, which looks at a lot of HUD-1's each week, and it was as I thought, the income never shows up on a HUD-1.  I am wondering if that person is confusing the Downpayment, or money to bring to Close with income.  In fact no assets (bank info)  show up on the HUD-1.

May 12, 2011 03:10 AM
Al & Peggy Cunningham, Brokers
RE/MAX West Realty Inc., Brokerage - Brampton, ON
Our Family Wants To Help Your Family!

George, we really thought with all we have just been throught, people's attitudes had changed. Apparently not.   Problem is, we are still raising the 'entitlement' attitudes in today's young ones, aren't we?

May 12, 2011 03:39 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

George: Thanks for the post. I think we're a consumption based and throw away society. It's sad. In other countries, they often don't have access to what we have. Perhaps we could learn from their simpler ways. Thanks!

May 12, 2011 05:50 AM
Barbara Altieri
Better Homes and Gardens RE Shore and Country Properties - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

George -- I am astounded by the number of people who don't have any savings. I am sure you see it as well.  I can remember depositing my $5 (that was a LOT) birthday gifts from my grandmother right into my savings account as well as any other money I received or made as a kid. It started WAY back then and it still goes on. It was just a way of life. I bought when I could afford to.  I never felt like I was entitled to anything.  I had to earn it.  When did all this entitlement start? 

May 12, 2011 03:44 PM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

George, this is so right on and so symptomatic of our society's mindset. The only buyers we have in our society that are not over extended are those that were born outside of this country. We have a generation of people that want everything their parents have without waiting to save the money to buy those goods. That same group is also teaching their children the same selfish tendencies. It will not go away ant time soon, unless the credit mindset disappears, and that can only happen with a major financial meltdown.

May 13, 2011 01:12 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning George,

Our government shows us all how to budget! Borrow from Peter to pay Paul and when in doubt "print" money!

May 14, 2011 01:41 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Al and Peggy yes we are, and that may be because many in our age group have that entitlement attitude as well.

Paul you are right.  My parents and I cam from Portugal and counted every penny and did not throw away anything, because if they could not use it someone else might be able to.  They worked very hard and made minimum wage most of their life.  Nothing was bought unless they had the money to buy it.  The only things that I can remember them buying on credit was their first and only house, which they paid off, and a couple of cars which were paid off very quickly.

Barbara same here.  I can even remember us having savings accounts in elementary school.  Each week with would bring in change to put in our envelopes and the money was deposited in each of our individual accounts.

ED.......... BINGO my friend.  Mon and dad have it so they should have it as well, in fact they should have bigger and better.  What they forget is that mom and dad worked very hard to be able to purchase what they have, and in many cases waited a long time to get it.

Dorie, you are right, and that is why we need to use common sense, which is something that those in our government seem to be lacking in.

May 14, 2011 05:18 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

George... excellent post.... we must be thinking along the same lines this week. I just wrote a post today, not in your exact words... but the underlining theme is that people want it now.. you stated this...

"People today just don't want to wait until they can afford what they want to purchase.  Today if you want it, you purchase it, whether you can afford it or not.  Purchase today, and if you can't pay for it tomorrow so what, just don't."

Bingo...  and my post talked more about those realtors that are commenting that mortgage guidelines have gotten tougher. I think the main issue is the credit scores... and in most cases, those with not so good credit will have lower credit scores. Good post here.

jeff belonger

 

 

May 14, 2011 07:15 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jeff, the buying on credit mind set of this country has to change, as well as the I want it and therefore MUST have it attitude in order for us to make a true economic recovery.

May 14, 2011 07:39 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

George... I couldn't agree more... hell, you and I would love to lend to everyone... more money for us. But haven't we learned our lessons from 2002 to 2005?? As you stated, "I want it now"...  people can work on their credit and still buy in 6 months... not the end of the world...

jeff belonger

May 14, 2011 08:44 AM
Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

This post should have been featured.  Credit is a big deal and sometimes we need to wait to get what we really want. It's hard in today's society where we get everything, to include information instantly.  The credit card gives us this false sense of being able to have everything now.  Problem is is that a lot of folks think that low monthly payment doesn't cost them anything and it ends up costing way more in the end.

May 14, 2011 02:37 PM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

George - Yes, I'm seeing the same too along with the exhorbitant dti ratios to go with it.  I see people with horrendous dti ratios (60%>) who are shocked when I tell them they couldn't possibly qualify for a loan.  It often makes me wonder if they have some other income that they're not reporting.

May 15, 2011 05:06 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jeff apparently people have not learned their lesson.  I read a blog last week in which a Realtor was asking for the return of the Subprime Loans.  I don't need to say anything more about that :)

May 16, 2011 05:04 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Brenda, you are right.  The problem is that by the time how much they realize what it is really costing them, they are knee deep in debt.

Donne, so I am not the only one looking at those DTI Ratios in the 60+ .................. LOL

And giving people an answer that they just don't want to hear.

May 16, 2011 05:09 AM