^Word.
WNY has been fairly insulated from this whole debacle because of the relatively stagnant home values / cost of living.
You will still see people who overeached though… people that bought “big” homes on “starter” home budgets… because they could get approved.
yup, you gotta move to cali. if you want to try and snipe a home that should have sold for $500K but sold for $700K and now you can get it for $300K. so it’s not like they’re giving them away.
Oh come on. Now how am I supposed to live in a nicer house than I can afford? There has to be a way. Why shouldn’t I get to live in a nice house? I work hard.
Maybe if I get an interest only loan with a low introductory rate I could afford the payments. By the time the rate goes up I’ll be making more money anyways…
Mostly unrelated to this thread, but I think You’ll appreciate it… as told to me by an old co-worker.
He knew a neighbor in Clarence who had it all figured out. Decent job for WNY, prolly in the 200k/yr range. Stay @ home wife, couple of kids.
They had a decent starter home in Williamsville, but then Clarence started ‘booming’. He went ahead & took out ~300k in credit cards (nearly at once, so the LOCs weren’t showing on the CBR, so the lenders didn’t “know” about each other) & took out as much of a Heloc as he could.
They bought a piece of land in Clarence, built a nice 4k sq ft house, and bought the wife a new small lexus SUV.
Put everything in solely in her name.
Sold the old house to payoff the mortgage & heloc.
He filed bankruptcy on all the cards.
???
Profit.
“predatory” lending can be played both ways…
Though, this was as told like 4 years ago.
Wow. That dude sucks. Like he was starving on $200k in Williamsville.
Paid for house in Clarence.
200k/yr job
In 7-10 years (if not alot sooner), his credit will be fine / good-enough.
Her credit is presumably decent, with ~300-400k in equity, I’m sure she could get a HELoan if they really needed something, credit-wise.
Then again, he’d better hope she doesn’t kick him out of the house… :lol:
Fuck that, that dude is my hero. For once the guy who is constantly getting screwed by the system in taxes here in NY while getting next to nothing back found a way to use the system.
It is funny how this is headline news because the banks aren’t able to profit from equity because of the market right now.
This shit has been going on for years but, the banks were at least breaking even and usually making big profits.
Maybe I don’t understand what he did? Didn’t he screw his lenders by declaring bankruptcy on $300k in CC debt?
From the sounds of it he fucked the credit card companies. You know, the same people who offer someone a 2.9% rate and then jack it to 35% because a payment was a day late. Sorry, not a lot of sympathy when they get the no lube shaft.
I JUST WENT THROUGH THIS SAME THING!
I have been with my cc compnay for over 20 years and they claimed I had a late payment and jacked me to 32%+!
I flipped out and told them I was not a risk because I was never late in 20 years!
They dropped back down but it is still a rip-off.
I normally don’t carry a balance but with building I have charged a lot lately, waiting a draw from my bank.:smash2:
:word:
Fuel to the fire:
http://www.reuters.com/article/gc03/idUSN1444854320080214
WASHINGTON (Reuters) - The value of existing single-family homes in U.S. metro areas fell by a record 5.8 percent in the fourth quarter from the same period in 2006, the National Association of Realtors said on Thursday.
The quarterly survey of metro region prices showed that prices fell in all regions, with homes in the West tumbling 8.7 percent and prices in the South off 5.4 percent, the second-sharpest decline in the country.
The price decline was the sharpest since home values fell 2.7 percent from the fourth quarter of 2005 to the same period of 2006.
Of 150 metro regions surveyed in the latest report, 77 saw prices drop.
The median existing single-family home price was down 5.8 percent to $206,200 in the fourth quarter of last year compared to $219,000 during that same period in 2006.
Playing the interest rate, over purchasing, ANY financial game requires a LOT of homework. Too many people didn’t do their homework and now they’re paying for it.
AT THE SAME TIME, too many banks didn’t do their homework and now they’re paying for it.
Who’s more at fault: the person who borrowed every dime they were allowed using an inflated offer; or the bank for making that offer?
In this situation it’s the bank, they took the gamble that these people would be able to pay it off or that the equity in the home would build at a fast enough rate. Didn’t work, now the banks are fucked…and when banks get fucked the whole US economy takes it in the ass.
Ahem… i 100% agree with JayS on this… with the exception that the banks are still at fault for offering that much credit.
Wife and i were pre-approved for $400k+… we spent half that on a revenue generating property.
People get themselves in way over their head.
Bernanke: Economy Went From Bad To Worse
By Jeannine Aversa, AP Economics Writer
Manufacturing.Net - February 14, 2008
WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke told Congress Thursday that the country’s economic outlook has deteriorated and signaled that the central bank is ready to keep on lowering a key interest rate — as needed — to shore things up.
In prepared remarks to the Senate Banking Committee, Bernanke said the one-two punch of the housing and credit crises has greatly strained the economy. Hiring has slowed and people are likely to tighten their belts further, as they are pinched by high energy prices and watch the value of their single biggest asset — their homes — weaken, he warned.
‘‘The outlook for the economy has worsened in recent months, and the downside risks to growth have increased,’’ Bernanke said. ‘‘To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so.’’ Bernanke also said that the ‘‘virtual shutdown’’ of the market for subprime mortgages — given to people with blemished credit histories or low incomes — and a reluctance by skittish lenders to make ‘‘jumbo’’ home loans exceeding $417,000 have aggravated problems in the housing market.
Unsold homes have piled up and foreclosures have climbed to record highs.
‘‘Further cuts in homebuilding and in related activities are likely,’’ Bernanke cautioned.
Given all the dangers facing the economy, the Fed ‘‘will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,’’ he said, indicating additional rate cuts were likely.
The Federal Reserve, which started lowering a key interest rate in September, recently turned much more aggressive. Over the span of just eight days in January, it slashed rates by 1.25 percentage points — the biggest one-month rate reduction in a quarter-century. Economists and Wall Street investors believe the Fed will cut rates even more at its next meeting in March and probably again in April.
Bernanke said his forecast is for the economy to continue to endure a ‘‘period of sluggish growth.’’ That would be ‘‘followed by a somewhat stronger pace of growth starting later this year’’ as the effects of the Fed’s rate cuts and a newly enacted stimulus package begin to be felt. The $168 billion package, which includes rebates for people and tax breaks for businesses, was speedily passed by Congress last week and signed into law on Wednesday by President Bush.
Even though Bernanke’s forecast envisions an improving economic picture later this year, the Fed chief said it was nonetheless ‘‘important to recognize that downside risks to growth remain, including the possibilities that the housing market or the labor market may deteriorate to an extent beyond that currently anticipated’’ or that credit will become even harder to secure.
That’s why, for now, Bernanke indicated the Fed is still inclined to lower interest rates.
Yet, that could change, depending on how the economy and inflation unfold.
‘‘A critical task for the Federal Reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated to foster our mandated objectives’’ of promoting healthy employment and economic growth while keeping inflation under control.
Inflation should moderate, Bernanke said. Yet last year’s steep run-up in oil prices is a reminder that the Fed can’t let down its inflation guard and must keep close tabs on the inflation expectations of investors, consumers and businesses. Those expectations can affect their behavior, which can affect the economy.
‘‘Any tendency of inflation expectations to become unmoored or for the Fed’s inflation-fighting credibility to be eroded could greatly complicate’’ the Fed’s job, he said.
Yea, I just read that earlier too.
So, did you look into refi’g your construction mortgage yet? 
oh boy, if the rates drop a bit more, im going to refi my 30 yr fixed @ 5.875% to a 15 year fixed!!! that will be phenominal…
Ehhh… Todays national average is 5.10%. I’d wait until its at least a full point, IMO.
how would a couple points drop make it all of a sudden worth going from a 30 year loan to a 15 year loan?