STOP THE INSANITY, MY HEART HURTS

By
Mortgage and Lending with Ross Mortgage Co

Last night I got a call from a nice young man who is a manager at a fast food rest. 10.50 and hour and his mortgage payment is 1660.00 a month. He is married and his wife makes the same.  He applied alone to a Lender, recommended from a friend at Church. ( My brothers keeper) Come to find out the home was bought last year for 60k, flipped and sold to him for 140k and appraised at 160k.  Go figure. By the way the house is in Detroit.

Back in the day, we had to save for a down payment, qualify for the payments and have satisfactory credit.  Why is it that Investors allowed people to purchase homes with no money, no job and bad credit.  Did they not see the train wreck coming? 

Now a days when I qualify a newbie they do not want to hear the truth.  They find a lender that will accommodate their "WANTS", and then eventually they will commit financial suicide.  I get a call once a week for help.  What are we to say?  Let me get my magic wand and everything will be okay. Ha....It is exhausting.

My heart hurts for those people who bought homes they could not afford, were not educated them to the cost of homeownership, and most of all selling a bill of goods that was not worth it in the first place.  What are your thoughts?

Comments (8)

Dave Woodson
Dave Woodson - Chesterton, IN
Not the Average Agent
Yea, that kills me as well.  We have to educate our buyers and even our sellers. 
Dec 18, 2007 02:33 AM
Colleen Fischesser Northwest Property Shop
NextHome Experience - Chelan, WA
A Tradition of Trust in the Pacific NW since 1990!

Ouch Debra, the hits just keep on coming don't they? My feeling is if I'm honest and they don't want to hear it, then I've done my job and can live with myself. I sure hope you're able to help the young couple in your post.

-Colleen

Dec 18, 2007 02:35 AM
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

It does make me wonder what Wall Street was thinking when they offered stated income loans to people with bad credit, but the real focus here needs to be on the people who wanted to put themselves in this position.

Didn't this guy know that his after tax paycheck wasn't going to cover a $1600 house note?

 

Bob Mitchell

ValueList Real Estate Services, Inc. 

Dec 18, 2007 02:44 AM
Carol Zingone
Berkshire Hathaway Home Services Florida Network Realty - Jacksonville Beach, FL
Global Realtor in Jax Beach, FL - ABR, CRS, CIPS

It's so true - the buyers are fixated on getting the house they want, no matter the cost to them in the long run.

I agree with Bob - someone should have pointed this out to him; it's easy to make some simple, quick calculations to educate our buyers to reality.  Still, it's sad.

Dec 18, 2007 02:51 AM
Debra Ananda
Ross Mortgage Co - Livonia, MI

When a buyer wants a home and a liar and cheat wants to sell him a home, there is no education just fluff.  I've heard it now for the past 2 years and I cry each night.  However the one's I did tell "YOU DO NOT QUALIFY" and they went out anyway, well....they still don't want to hear it now.  They want relief and it's not coming.  I just pray that we get back to normalcy, and that those that qualify, qualify..those that don't, wait, save and be patient. Additionally brown bag it, save your money and everything will be great!

Dec 18, 2007 03:01 AM
TANYA PEARSON
NORTHSIDE REALTY - Raleigh, NC

I completely agree with you Debra. Luckily, I have not had any of my clients to endure the agony of foreclosure due to ARM loans or the like. Yes,  a lot of my clients were 0% down-payments but used a FHA loan. It is crucial to educate your clients on the home-buying process as well as finding the right loan that fits their needs. The couple you are referring to in this post may want to consider downsizing, selling their home since it appraises for $160K, fixing up their credit and jointly applying for a home where the payments will be GENUINELY AFFORDABLE FOR BOTH OF THEM.

If they don't understand the logic of that, than there is nothing more you can do. I sleep a lot easier at night knowing that I educate and guide my clients the best I can on their home purchase. Nowadays, people are so fixated on keeping up the Joneses.

Dec 18, 2007 03:19 AM
Debra Ananda
Ross Mortgage Co - Livonia, MI

Bianca,

 The lender fudged the appraisal.  The home is maybe worth 85,000-90k.  That's what I mean when I say my heart hurts. Many people are being taken advantage of.

 

Dec 18, 2007 03:34 AM
Anonymous
B

Bottom line, people are stupid!  They don't want to hear it then they want to blame you for everything.  Debra does an excellent job educating the public and has taught me a tremendous amount of worthwhile information.  I probably know more than the average realtor due to her diligence. 

MONEY is the root of all evil!  The mortgage industry (NOT YOU DEB) got these people into this mess along with all uneducated Realtors.  All people see is $$$$ they don't see how things are affected or they simply don't care.

What burns me is the people who are trying to steal every deal they can from sellers right now.  They want everything, and then some.  

I had a gentlemen that Deb did the mortgage for bank owned where we were battling a 2000 difference.  DUH when I broke it down to 'it's only gonna be $20 more a month' it made them feel better.  I told them if you can't afford another 20 bucks in your mortgage payment then you shouldn't be looking for a house.

 

 

 

Dec 18, 2007 08:24 AM
#8