Thursday, October 11, 2007

Too Stupid To Own

“I feel burned,” she said. “I’ve always been one who paid the bills on time. I always did things the right way. If they had counseled me (correctly), I could’ve made my payments.”

We will get to the story in a minute but It is my story and I get to rant first. Hell No! Listen stupid and listen good. You got lucky. You are still stupid but at least you are no longer sinking deeper. You made bad decisions, you overspent your income, you lied. "Counselling" doesn't work when you lie babe.

Here's the MSN story. Additional excerpt:
How to lose your home in a few easy steps

Toothman ended up buying a $415,000 condo in June 2004. The mortgage was entirely under her name, since her sister could not qualify. But the two agreed to split the monthly payments of $2,400.

For a year, Toothman struggled with her half of the payment. Her monthly take-home pay was $2,000. She started eating at her savings to pay the mortgage.

Toothman tried to refinance the loan to lower the monthly payment, but she was unable to qualify.

In late 2005, Toothman decided to sell. But prices were already falling, and by early 2006, the condo was worth less than the outstanding balance of the mortgage, putting her "under water." ...

Toothman’s nightmare got worse. In July 2006, the monthly payment on the two loans jumped nearly 50 percent to $3,600. For two months, Toothman maxed out her credit cards to meet the payments.

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13 comments:

Salt Lake Mortgage Guy said...

First, M & M

Peripheral Visionary said...

Am I missing something? The market was so happy dreaming about all of the sweet™ passive income™ that would come when the rates get cut again, and all of a sudden it's dropping like the price on a Modesto REO.

Rob Dawg said...

Who knows what the teaser rate of $2400/mo was based upon. As of June she was paying 10% interest. I'm willing to entertain her being a victim.

A freakin' $1500/mo condopartment for only $4000/mo in order to capture $2000/mo depreciation? She's damn lucky this only cost her $82k.

formul8 said...

Financial stupidity sure is expensive...

Sac RE Agent said...

yeah, she was taken advantage of. by her own desire to chase the shiny object.

i'm lost on how anyone, buying a first-time home, would not talk to multiple individuals about the pros and cons of buying that house. the lender sends up a red flag that says her sister can't buy, but that's okay for her.

seems crazy that so many people can understand financial terms when buying a car but are so completely lost when introduced to an ARM on a home loan. they're all seeing that same crazy shiny thing that casey was chaz'n.

Peripheral Visionary said...

WOW!

Anybody who has any investments had better check them now, the bottom is dropping out of this market. Dow is down 300 points from its intraday high and still dropping like a stone . . .

Property Flopper said...

Let me get this straight... this is a 30 year old woman - Otherwise bright and able to care for herself...

Why should we be sorry for her? She is an adult. If she were told she was too ignorant to buy, she would be irate. Given the type of loan she took, I suspect she was rejected by more conventional lenders and shopped around until she could find one who said yes. No sympathy!

Had she gone to Vegas and lost the 80k, nobody would say "Poor dear, it's not your fault".

She was dumb, it was her own fault, she suffers the consequences of her actions.

JohnDiddler said...

a bank financed her fair and square on her income alone. tell me where toothman lied or take down your libelous accusation. i'm waiting.

Rob Dawg said...

$415,000 loan. $24,000 income. 17:1 ratio. $2000/mo income. Teaser rate DTI: 120%. Full amortized rate DTI: 180%.

She robbed a bank with a pen. Retract? I shout out loud that she commited fraud. I'm hardly on shaky ground even without the math you see here. I'd love, nay invite a libel/slander suit on this issue. There's this nifty bit of the legal process called discovery. With copies of her her loan docs in my hands I'd be willing to settle out of court for a check in the high 5 digit range. $82,000 sounds about right.

chris said...

Robbed a bank with a pen, Dawg? Nay, I pronounce her a "patsie" or equivelent. The only reward for her crime was given to the seller. She was only given the "right" to say she "owned" an apartment.

Sac RE Agent said...

But atleast she's got her priorities straight now as she asked, "who's gonna be interested in someone with $82,000 in debt?".

Rob, I think you need to throw in the added income for renting out the room to the sister. Still some ugly numbers.

Pleather Murse said...

They lost me at "$415,000 condo."

Dimes said...

The obvious question here is why did she leave the Navy? If she were in a naval officer in San Diego, her monthly BAH would be almost as much as her current take-home pay. Why leave a well-paying job with a tax-free housing allowance to do whatever the heck she was doing in San Diego? For that alone she's too stupid to feel sympathy for.