Things generally happen here in the midwest after most of the country has already experienced it…Probably the same thing here…Meaning, the worst has yet to come.

I have a down payment and would like to buy a house and help stabalize the market. However, I refuse.

These people aren’t paying their mortgage and the banks are not repossing the properties. How long before they get sick of letting people live rent free?

The future market will be flooded with foreclosure auctions from these defaulted loans. It would be dumb to buy a home today, as it would immediately lose value once all this shadow inventory hits the market.

Banks are delaying their repossession of defaulted loans; that means I have to delay my purchase of real estate and continue renting.

Brett-

We are hosting a free first time home buyer seminar that may show you why it truly is a good time to buy. Reply back if intrested.

How does falling home values affect someone paying their traditional mortgage, unless they chose not to pay it?

How many people are falling behind on purpose with the hopes of getting free help?

Theres a lot more going on here than just the segment of people who have lost their jobs…..

While it may be a good time to buy now, next year will be even better. Housing prices will be lower due to rising unemployment and this shadow inventory being held because of the lack of repossessions and foreclosures.

It makes no sense to buy a house for $200,000 this year when I can just buy it for $185,000 next year.

Falling home values affect someone paying their traditional mortgage in many ways:

If they become significantly underwater they become stuck in their home, unable to move unless they can come up with the difference. If they have a financial emergency they are less likely to be able take out a home equity loan. And of course they are overpaying in terms of their monthly payment.

Is your home really an investment? Do you really hope/need/expect to make money on the back end? Is that the determinant that drives one to buy a home these days? What about basic values such as shelter, quality of life, safety and privacy? I can’t see the future, but I imagine that home values will continue to fall, but that is only one part of the equation: rates, personal income, life goals, etc.

It’s bad, relative to 2005. It’s probably going to get worse…but picking the bottom won’t do as much for your pocketbook as it will your ego, methinks.

Making a house payment can be really tough especially when one of the homeowners has lost their job. My husband lost his job in August 2008 and we have struggled trying to keep up hoping not to fall 90 days behind. My husband was able to get a job in January 2009 but last month the hours were cut from 40 hours to 32. But making approximately $21K less a year really hurts when the house payment is based on the pre-layoff salary. Hopefully with God’s help things will work out for all those whose houses are on the line with the mortgage companies. A good paying job would help tremendously.

homeowner –

My basic values such as shelter, quality of life, safety, and privacy are provided for quite nicely by renting a house. So yes, buying a house is an investment decision.

I will help you keep the house that you were never really able to afford in the first place my child. But first, please stop spitting out kids and realize that it’s not such a bad thing to rent. Quit acting as if you deserve to live in a house.

I think Brett has been watching too many “flip this house” television shows. A house is not an investment that you purchase with the intention of making a quick profit - it’s your home, where the landlord doesn’t tell you that you can’t have a dog, or you have to move, or you have to move FAST because he lost the property in foreclosure, or your rents going up, but he can’t make any repairs or do any maintenance. It your home - where your wife makes wonderful memories for you at Thanksgiving, and you grow flowers for her in the backyard, where you raise your kids and have Cub Scout and Girl Scout meetings in your basement, and then you all have ice cream to celebrate a great meeting. Your street is where you get to know all your interesting neighbors, and where you cry when your kindergartner gets on the bus, with his little backpack. What are you thinking? You are missing out on a great experience - you might die of cancer next month or get killed in a plane crash - and missed out on the fun of owning a home. You know, following your logic - you should not buy a good steak, because it’s just going to end up in the toilet, anyway. Or you should buy a car, because next year that car will cost less - so just take a bus for a year! Or you shouldn’t buy nice clothes, because next year you can buy the $60 shirt for $1.00 at Goodwill. Before the real estate investment bubble, you had to live in your house for 7 years just to break even, when you figured in the maintenance costs, closing fees and sales commission. That’s where we are headed - back to old days. So go buy a house - and you’ll make money in your 8th year of ownership.

Let’s see, Chrysler closes (taking with it numerous suppliers), Inbev cuts thousands of jobs, steel industry in the tank, Sara Lee shipping almost 300 jobs overseas (picking on them because it was a recent story, many other Sara Lees in this country) hundreds of carpenters, electricians, welders, plumbers are laid off because no one is building residential or commercial, retail stores are closing faster than you can count them and we wonder why we are in the mess we are in when it comes to foreclosures. No the under lying reason for all of the above is a different story.

Brett Doyle, what’s wrong with you?

This is why I squat in houses instead of buy them. No out of pocket expenses and I live like a king!

The tidal wave of resets hasn’t even begun to hit yet. Subprime was the warm-up. Starting in 2010 and lasting through 2012, all the big ticket Option ARM (adjustable rate mortgages) will be resetting. Many of these free-spending Americans showing off their McMansions while paying “interest only” will see payments double or even triple. Forget about it.

Housing was the biggest bubble creating in American history. Many of these crapola developments didn’t have people living in them, just flipping them. They weren’t communities in the making, but wastelands, tearing up prime agricultural and wild land for the sake of a few land speculators and greedy politicians — who have ruined your communities.

Those carpenters, plumbers, painters, etc. better find other employment. The fantasy is over. McMansions are over. Oh, didn’t even mention what will be happening to commercial real estate as mega-debt deals hit the rollover periods and no bank will refinance these strip mall speculators.

Welcome to the third world people. Long live Bush! Long live Obama!

I would like some information on the First Time Home Buyer Seminar that was posted By Bill Cooper. I want to see if I can get this tax credit. Where and when will this event take place?

Anyone in trouble with their mortgage should check out NACA.com. They are a NON-PROFIT advocacy group with 40 offices throughout the United States and one here locally in St. Louis. This group has contracts with banks and are able to stop foreclosures until they can review your situation and they work with the banks to modify your loan at no cost to you. LET ME REPEAT THAT — NO COST TO YOU!!!!! I know how good they are because I just got my mortgage modified down from a 7.24% adjustable rate mortgage to a 2.25% 30-YEAR FIXED RATE. It cut my payment in half. They are awesome, empathetic, sympathetic and wonderful to work with. Check out NACA.com for more information.

No folks, the reason people are lagging behind on their mortgages is because they bit of WAY more than they could chew….hmmmm, do i buy a 400,000 dollar house on 40 grand a year? Guess I can because the government will give me an ARM. Then, because they have no house payment, they proceed to go out and blow a crapload of money on stuff like flatscreens and new cars every 2 years, oh, but now here comes the “reaper”, or should i say, the interest rate they should have been paying all along. Bottom line folks, not everyone is destined to own a house. I know its the american dream, but not everyone has the determiation and discipline it takes to own a home. What really frost my loins is that I, responsible joe taxpayer, whos been a homeowner for 18 years, gets to “subsidize” these people through government bailouts of fannie mae and freddie mac. Gee, if I went out and blew my paycheck on stupid crap instead of paying my mortgage and living like a peasant (ok, maybe thats an exaggeration), would the government bail me out? HECK NO, Id be out on my derriere in the street so fast it would make my head spin. Thats whats wrong with society these days guys, not obama and not bush. NO ONE is held accountable for their actions anymore. Its a crying shame, but, i feel no pity for a person who thinks they can live in a 5 bedroom 3 bath 500,000 dollar house on 45,000 a year. Doesnt work that way.

Brett,

You are probably anticipating correctly that home prices will be significantly lower next year at this time. But don’t forget that there is also a good chance that interest rates will increase by at least a point or more (hyperinflation here we come). So your total cost of ownership might be the same, and you could gain a year toward equity in the meantime.

Good luck predicting the bottom!

This is CRAZEE talk. The economy was BOOMING under Bush and now it’s BOOMING under Obama.

I totally agree bordercollie. We rented for 12 years. Threw away $75,000 in rent. Thatmoney could have been towards the equity of our home. But at that time we could not afford to replace the hot water heater if is died, or replace the furnace if it died. Or even reseal our driveway. So once my husband worked his way up and went full time at his job, and we were done with paying childcare every week, we could afford a home. HOWEVER -unlike many of these people that cannot afford their house payments, we did not move to The WEST COUNTY SUBURB and “get more for our money”. We staying with in our means and we can afford our house payment. So many took out mortgages that the brokers told them they could afford and did not take a mortgage that they ‘could afford”. It is sad. I feel bad for many that have lost their jobs. But in that case you need to pay the mortgage first, utilities second (no Direct TV no cell phones) and have only the basics. You have to have a place to live. And food to eat. All the other is extras. If you cannot afford the car or truck payment - call the bank and let it go back. Not worth loosing the house instead. Just my opinion. I sure hope the economy picks up. I think we are just getting into the middle of this recession. We have alot more job losses coming and more people relying on public aid and food pantries. So sad but we as americans have allowed all our industry to go over seas. now we have no jobs let in this country. When is everyone going to wake up. SO sad

irishlady -> 2.25% 30-YEAR FIXED RATE…was that a typo, or is the APR actually 2.25% and, if it isn’t a typo, can anyone go thru that service, regardless on if they have been on time or not on their current mortgage payments?

brian w.
here is the website for irish lady’s comment
https://www.naca.com/index_main.jsp?language=null

2.25% is impossible. Lowest possible interest rates available in this market today are in the mid 5’s.

It may well be that these past due homeowners are in fact actually working with their finance company at this point in time. That was our case, over the last 3 mths our company told use not to make a payment while they worked though using the stim. package to help us refinance our home. This infact made us legally default on our loan, and we received a forclouser notice. Let me tell you that was a very nervous time. It was also a tremendous boon, we were able to take the money freed up by not paying our house payment and payoff most of our past due bills. We are now set into a refinced loan and have not only saved our home, but also went a long ways towards putting us back where we were 2 years ago when my wife lost her job. We are very thankful for the help that was given us. It has been a long 2 years of deepening decline, but we are at last seeing daylight ahead.

I understand Brett’s concerns but my thoughts are: 1. Will the - tax breaks - be a good as they are know? I’ve heard of 8K gov’t and upto 5K in some areas…NOT the city of course. 2. - Interest rates - will they be as low as they are today. 3. The – inventory - will be less desirable the longer you wait because the houses (foreclosures) will need a lot of work.

But most importantly people please don’t buy a house based on your current rent situation, many of those in trouble now did. I pay 1K in rent so I can pay the same in MTG WRONG….there are a lot of other expenses involved with homeownership. Single folks beware don’t tie yourself and money down money down in hopes of buying the American Dream. Most importantly couples PLEASE don’t buy a house based on both incomes as a Rule one income should be able to pay all bills including car payments. So if one loses their job you won’t be so strapped….this is what happened in conjunction to those who bought more house than they realistically could afford. Best wishes

Brett, I read your comments and just wonder why you are buying a house at all. In fact, I wonder why many Americans even buy a house. First off, most people buy a house to stop throwing money away. Rest assured, when you rent, you are generally throwing money out the window. Also, rent will generally go up in time. When you buy a house you have stopped the payment escalation. Your price is set. Sometimes home values go up and sometimes they dont. Thats a risk we all take. In most cases they do go up in value but so do most other homes. It’s all relative.

When you say that housing prices will be less next year then you must have a power that most dont have. Right now, prices are great and the loan rates are great. Too many buyers think they are so smart to wait and then when prices rise they are kicking themselves. I wish you luck but I dont see you are correct. I would be looking strongly for a house today. Prices are really good.

Dont forget, all the money you pay for rent can never be recaptured. Dont be to smart because it may bite you in the rear. I have had many clients who thought they were so smart and more often then not they lost in the end. Don’t be one of them.

When are all these people going to quit sponging off the wealthy in America. Why don’t these people just go out and get jobs. There’s jobs everywhere! All you have to do is walk in to a place these days and they’ll hire you. Everyone knows that all this recession talk is just to scare people. I see people lighting their cigars with $50 dollar bills and using money like confetti. Thanks to George Bush this is the best economy we’ve ever had in all of history. He was the Greatest President ever in History and the whole world loves him except the liberals in America.

Sad to say I’m in the business of foreclosure. If you got an ARM, that’s your problem. We live in this instant gratification society. Must keep up with the Jones’. THOSE DAYS ARE OVER! High end is OUT! You got a loan you never should have been given. Not all your fault, I admit. Have the dream home right away, big tv’s, whatever. If you spend more than you make there is a HUGE problem. Pay the minimum on your credit cards, you’ll be in debt forever. I can’t say I enjoy kicking people out of their homes with kids, actually it sucks! I just hope we all learn from this. I’m SO da__ jaded at this point it’s sad!

Superdave, rent money provides me with a place to live, so it isn’t “throwing money away”. If I owned real estate I’d just be “throwing money away” on depreciation, interest, property taxes, insurance, maintenance, opporitunity cost of my down payment, etc.

The threat of rising rates is not a reason to buy. Higher interest rates would further stiffle any housing recovery. If a house isn’t worth $900 today, then it certainly isn’t going to be worth $1200 a month from now just because rates rose. It just means house prices will need to come down that much more to become affordable.

The deliquency rate for PRIME mortgages has tripled over the last year. And those are the best loans that were underwritten! The default rates on all the creative financing like subprime, 0% down, option arm, ALT-A, undocumented loans, etc will be much higher.

Since loan defaults are up sharply, rising foreclosures will depress home values, pushing more homeowners underwater. And when people are underwater they walk away from their bad investment… even if they can afford the monthly payment. Strategic default as they call it.

Increased unemployment, deliquencies, option arm recasts, huge housing inventory, foreclosure backlogs, etc all pretty much guaranteed house prices have further to fall.

In such a nation [as ours], there is one and one only resource for loans, sufficient to carry them through the expense of a war; and that will always be sufficient, and in the power of an honest government, punctual in the preservation of its faith. The fund I mean, is the mass of circulating coin. Everyone knows, that although not literally, it is nearly true, that every paper dollar emitted banishes a silver one from the circulation. A nation, therefore, making its purchases and payments with bills fitted for circulation, thrusts an equal sum of coin out of circulation. This is equivalent to borrowing that sum, and yet the vendor receiving payment in a medium as effectual as coin for his purchases or payments, has no claim to interest. And so the nation may continue to issue its bills as far as its wants require, and the limits of the circulation will admit… But this, the only resource which the government could command with certainty, the States have unfortunately fooled away, nay corruptly alienated to swindlers and shavers, under the cover of private banks.

I sincerely believe… that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.

[The] Bank of the United States… is one of the most deadly hostility existing, against the principles and form of our Constitution… An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?

The art and mystery of banks… is established on the principle that ‘private debts are a public blessing.’ That the evidences of those private debts, called bank notes, become active capital, and aliment the whole commerce, manufactures, and agriculture of the United States. Here are a set of people, for instance, who have bestowed on us the great blessing of running in our debt about two hundred millions of dollars, without our knowing who they are, where they are, or what property they have to pay this debt when called on; nay, who have made us so sensible of the blessings of letting them run in our debt, that we have exempted them by law from the repayment of these debts beyond a give proportion (generally estimated at one-third). And to fill up the measure of blessing, instead of paying, they receive an interest on what they owe from those to whom they owe; for all the notes, or evidences of what they owe, which we see in circulation, have been lent to somebody on an interest which is levied again on us through the medium of commerce. And they are so ready still to deal out their liberalities to us, that they are now willing to let themselves run in our debt ninety millions more, on our paying them the same premium of six or eight per cent interest, and on the same legal exemption from the repayment of more than thirty millions of the debt, when it shall be called for.

Most of these posts are ridiculously ignorant of the math involved in owning vs. renting. You are not necessarily “throwing your money away” on rent. You are not necessarily making the right choice to walk away from a house you bought recently in a declining market.

A lot of what influences whether either of the above is a good move is what the future holds. While the future is anyone’s guess, there are CLEAR signs that houses are going to get cheaper in the next few years. How much? A lot. When you see new unemployment numbers each month topping 400k, 500k, even 600k, those are big numbers. Obviously, many of those people will be losing their homes. There will be others that decide that the $400k they signed up for on a house that is now worth $200k is worth walking away from.

Don’t listen to the “experts” in any field — take a huge dose of skepticism, realism, or pessimism… whatever you want to call it. There are specific mathematical formulas (available online) that point out the time-cost-of-money issues in renting vs. owning.

Brett is absolutely correct in holding on to his money until real estate prices fall further. We’re not at the bottom, so why should he buy? (In the first years of homeownership, you are paying the INTEREST AND LITTLE OF THE PRINCIPLE.) I don’t think we will see a bottom before end of 2010. Maybe much later. Houses will never be worth zero… but how much should it really cost to put a house up? It used to be that houses were built BY HAND. POWER HAND TOOLS DIDN’T EXIST prior to WWII. The labor hours to build a house are a small fraction of what they used to be. Houses should be cheap! And the land? Anyone’s guess what that is worth — it’s completely supply and demand. Yeah, god isn’t making any more of it, but there are MILLIONS of untouched acres. Think about it.

My own view is what we are seeing is the complete collapse of debt in the U.S. economy. The U.S., on local, state, and federal levels, has been maintaining a high standard of living by living off debt — in effect, living off future wealth (wealth that isn’t there). That can’t go on forever, and it is coming to an end.

The govt’s approach to stimulating the economy through greater debt is going to end up catastrophically. I must not be alone because people stockpiling food and ammo is becoming commonplace.

Don’t forget, the politicians have implemented incentives for people NOT to pay their mortgage.

Irishlady is right. Loan modifications are below the prime lending rates that you may see advertised. The key to getting a Loan Mod is that you have documentable hardship such as losing a job, reduction of income, illness, death in the family. The companies that do these interface with your current lender, so this is not a refi. Also, it is not a substitute for a refi. The process takes 6-12 weeks. You don’t have to be behind in your payments but proving that you are heading for trouble is required. Also, you can be upside down on your house. Please know that Jay Nixon has been working to close down the LM companies that have been taking people’s money and delivering nothing. There were plenty of companies that exploited a situation. I do them for a fee, but the payments are in installments with half of the money being paid once completed. NACA is a good way to go, but they are so backed up. I don’t want to violate any posting rules here nor do I want to look like I am advertising without paying, but I would help those that are interested or explain what I know about the LM’s if you can email me. There are so many financially responsible people that have been blindsided by this economy and job loss that are fighting foreclosure. Please keep the faith.

According to the NACA website for new home buyers you have to become a memeber. Pay $50 bucks a month for upwards of 5-10 years.