Why are so many people losing their homes to foreclosure? - AfroChat - African American

Babydoll · March 28th, 2007, 05:39 PM

Behind Foreclosures, Ruined Credit and Hopes - New York Times

Foreclosures are skyrocketing all over the country. Who's at fault..the mortgage companies or home owners?

Phatkatt_76 · March 28th, 2007, 06:11 PM

Our next door neighbors just had this HUGE lock placed on their doors !!! WHOA !!!!!!! It's truly not a laughing matter, but I think this occurs because some folks are trying to keep up with the Jones'. Seek financial counseling and let's stop biting off more than we can chew.

poeticasylum1 · March 28th, 2007, 06:42 PM

There are a number of reasons on both sides.
Bad financial decisions, (trying to keep up with the joneses)
Its seems people dont want houses they financially comfortable in. They think like a renter... If my note 1200.00 then im cool. Never mind that the utilities can be high as 500 to 600 dollars as well. Dont forget the carnote. And one of the biggest of them all... taxes. Many people dont pay their taxes year round, apart of their note and insurance. So at the end of year here is Christmas.... and people dont think about it.

The other side, is predatory lending.
certain loans.... are a no no no no
morgages are going 40 to 50 years now.
Beware of the real estate mogul who can get you in a new home for little or nothing. We live in Amerikkka.... NOthin' is free.

charliekilothree · March 28th, 2007, 07:43 PM

A lot of people got those ARM (Adjustable Rate Mortgage) and did not count on their payments shooting through the roof. When I was in the housing market back in 1994 I knew what I could afford and bought a house according to my means. I had a neighbor next door to me foreclosed a few years ago. It's not a pretty sight but happens all the time. With all of the foreclosed homes on the market along with the normal homes, there is a glut on the market.

Istlota · March 28th, 2007, 10:18 PM

A friend of my son's, a young guy in his mid twenties, has been into what I would call the predatory mortgage loan racket for a few years now. The kid has made some SERIOUS mad loot. He drives a high end BMW, owns a couple of homes, and, without blinking an eye, poured mega-bucks into a wedding extravaganza at Disney World about a year ago. To most people, he is a success story. But, not to me because I know where all that money he made came from -- everyday people who worked like dogs and pinched pennies to have the American Dream -- their own home.

MzKwietStorm · March 29th, 2007, 10:31 AM

At the age of 21, I purchased my first home last year. I made sure that I would be able to afford everything and even if I were to loose my job, I had a savings that would cover my mortgage payments for 4 months. People are so bent on having the American dream (car, house, family), that sometimes they take the first offer that will allow them to get that much closer to that dream. They take the offer, unaware of the consequences. I think the foreclosure rate is a mixture of the customer and the lenders fault. In that article, it stated that most lenders didn't even verify if the customer's income would be able to pay the loan, that makes no sense.

ardamus · March 29th, 2007, 10:41 AM

I purchased my spot about 3 years ago. I'm glad I got it in my 20s. Some people I know are still struggling to even get their first home in their 40s.

Istlota · March 29th, 2007, 01:04 PM

Don't be too hard on the buyers. The process of buying a home, obviously, is more complex than it need be. Most of the reasons for that have to do with dealing with all the people who have their hand out --- lawyers, insurance companies, realtors, the government etc. Many people do not realize that buying a home is like going to war - with you on one side and everybody else [realtors, lenders, lawyers, insurance companies, government) on the other.

DBlack · March 29th, 2007, 03:39 PM

I'm a certified residential appraiser in Georgia, so I have some insight to the problem.

Bottom line is Banks are making it too easy for the financially strapped and sub par credit applicants to buy more home than what they can afford.

Mortgage broker/lender pressuere appraiser to "get the maximum value" need to do the loan. Appraiser succumbs to pressure and gets the higher value.

Fast forward to 3 years, Homeowner can no longer stay afloat of mortgage because his ARM rate has increased. HOme is foreclosed.

Lender/Banks is unable to sell foreclosed home for the appraised value and therefore suffers a loss.

Nyela · March 29th, 2007, 08:13 PM

I agree with the concensus. It's both.
Sad part is, most blacks are miseducated when it comes to their financial affairs and responsibilities. Most are not taught the importance of saving and investing. Most aren't taught how to establish and maintain a budget. Most don't realize it's financially sound to live beneath your means.

Lenders prey on that miseducation. They dangle trinkets in your face and hope you take the bate. By the time you realize what's happened, you have no cushion to fall back on and they laugh at you about that all the way to the bank.

Just a little side note:
One oraganization that I have learned a tremendous amount from regarding financial responsibilities is Crown Finanacial. The CEO is Howard Dayton...he's a christian man and has never accepted a dime for his work with that ministry. My insight about money has grown by leaps and bounds because of his books, radio shows and seminars. I highly recommend it...