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Friday, September 17, 2010

Lets talk about Mortgages

  A few years ago we as new home owners were doing great. Many of us were buying new homes as fast as they were being built. Allot like my wife and I we bought a home we could easily afford at the time, with her working and myself in a ok job as well. Others bought homes that were priced way out of their range as far as income went, but promises of maintained low interest on interest only loans had people scooping this up as fast as they could. Banks maintained that homeowners would be able to refinance their interest only terms back to 30 year fixed rates in 5 years saving them huge amounts of money in the meantime which they could use on other things. It was a dream come true for first time buyers or was it? No, it happened to be their worst nightmare and they were in for the shock of their lives.

  We all know what happened right? House prices went up and so did appraisals and equity as a result of the frenzy of easy loans. My home almost doubled in value as well. In my wife's and my case we bought what we could afford at the time a modest home in the 150k - 200k range at 7% interest. Our interest was slightly higher due to our new credit history as divorced newly weds. The home however was not a super custom luxury home as often found in AZ it was a normal single family dwelling. Anyhow, we were pleasantly surprised to find our appraisal came in at almost double our purchase price so, it was decided we would take a small equity loan from our home to get our credit paid off on some cards and some other loose debts as well as pay some initial costs for me to return to College to get a degree and hopefully a better paying job. We borrowed around 30k on the equity however it did bump up our monthly mortgage payment to the 2k per month range. Still not too bad since we both had work.

  Then the shit hit the fan. My job came to an end due to lack of work and cutbacks. My wife was OK but now our income had been cut in half. The belt had to be tightened. Then luck kept getting worse, and my wife had a few bouts of shingles, a painful ailment that is a result of chicken pox as a child, very painful in adults. She was hospitalized several times, several scans like ekg's, ultrasound and MRI's, ton's of prescription drugs, as well as several emergency room visits and we were another 5k in the hole.

 We had to use credit to pay for some of that and also pay the bills which we were short on because of the medical bills. Our cars were paid for but I had bought a Harley while still working to get me to school and such much cheaper than the cars, the bike got 50 mpg.  Anyway, it was on payments and they were almost $500/month but we still managed to keep things paid because I was now receiving unemployment benefits which just paid the bills with nothing left over. Incidentally AZ is one of the lowest UI payment States in the Union at $265/month. Then that bubble burst as well when Nancy Pelosi cut unemployment extensions to tier 5 recipients (me). Now were down to just my wife's wage. There are other things that happened as well but I won't bore you with all of the details. Regardless, we now have not enough to pay all the bills and some are sliding into collections. Sallie Mae refuses to grant anymore forbearance due to hardship and is calling 3-4 times a day and threatening us with wage garnishment. If they do that they may as well just come put us on the curb. We would loose the house.

  Back to our home loan and mortgage that this article addresses. Keep in mind my wife and I have never been late on a home loan yet (knock on wood). We have come close a few times but Susie managed to talk our home loan financier into temporarily for 1 year increments into lowering our monthly payment to interest only and attaching a huge balloon payment to the end of the loan. You republicans are probably thinking "oh that was so nice of the bank" but was it really? Washington Federal is a privately held bank and they refuse to renegotiate home loans with us based on the new value of our home since the housing bubble burst and that value is less than half now. We are upside down in our home loan, have me out of work, have 10k in credit card debt, a vehicle loan, have a 70k student loan. People say look at the bright side and Susie and I try to but there are tears in our eyes that's a fact.

  The President seems to completely avoid, miss or intentionally not discuss privately held loans and what to do about getting us into loans we can afford once again. I would like to see him or someone in the political world come to our aide. I remember Obama saying something about a refinance program but where is it? I've never heard anything from my lender Washington Federal or any other legit agent. You get those bulk mail listings that say refinance with us but all they want is for you to have your home appraised so they can make $500 dollars off the appraisal and not give you a loan.

  We really need someone to get the ball rolling on this, the issue is obvious. The banks caused this bubble and then the resulting burst and the banks got bailed out. They need to be forced to fix each and every loan out there. They need to convert the remaining interest only loans to fixed term at actual after bubble appraisals and they need to readjust every other 30 year fixed term loan to a new appraised current value. Help Americans hang onto their homes Government not just the President and the Democrats but the Republicans as well, do not fight each other in the house or Senate, come together and save us before you have more people on the street.

Denying how bad it is.

  Government is in denial, the media are also in denial, I think that the republican majority are in denial that this "Bush" inflicted mess is only a small hic-up in our economy. We're really in a "recession" or a "dip" they would have you believe and for most of the rich in this country it IS business as usual. But for the majority of us its hell.

  Twelve million Americans are unemployed now, yet government still treats this as a small threat to middle income and below poverty America. They allow our unemployment benefit extensions to cease (Nancy Pelosi) and they allow our home's to be foreclosed, not only due to no work but due to pre-bubble inflated home values and mortgages we can no longer live with. Still jobs are no where in sight even after supposedly so many have been created, where? where are those jobs?

  Education? Can you believe a degree can cost $70K ($70,000.00 USD) and be financed by one conglomerate like Sallie Mae? That Sallie Mae is charging 10% or higher interest as opposed to the normal 4-5% previously charged rates? Sallie Mae also will fiance your private and government loans under your own credit initially, but in order to remain financed  later on when your part way through they all of a sudden require a co-signer? That there is no guarantee you'll even receive an interview from an employer in your chosen field by your College upon graduating? Entry level jobs rarely exist. Sallie Mae will offer you the customary forbearance but then will pass you on to collections and call you 3-4 times a day 7 days a week hounding you and threatening you for money or face wage garnishment. If your like me and out of work with only your spouse working a garnishment is like a boot to the curb.

  On top of these terrible things we also have the issue of illegal immigration and what to do with 10 million or more Mexican illegals in this country. States not effected by the immigration issues have no sympathy nor do they understand the strain on financial services and taxes etc in the States that ARE directly effected by Mexican illegals. We have higher deficit due to the reliance of illegals on the medical and financial system of welfare. We have higher crime rates as criminal illegal aliens are committing crimes in our States and then fleeing back to Mexico. Mexican illegals are refusing to help law enforcement agencies with investigations due to their fear of deportation which should happen regardless. Illegals are illegals and must be dealt with as such, illegals have no legal rights as American citizens therefore their children also do not have rights in this country under illegal parents. Although this seems unrelated to the depression it is also a big factor in it. Less strain on each of the effected States means better growth for its legal citizens. The ridiculous lawsuit brought on by Obama towards SB1070 shows his naivety of American security which is deadly after such events as 9/11.

  On top of it the corruption we face at Wall St. and the banks is having a detrimental effect on America. Big business having its hands and fingers in our elections and their results is having a terrible effect on America. We need to stop big business from influencing a purely people matter its not their place. We need government to stop screwing around with the Constitution of the USA, it was written by the people for the people and should only be changed or amended if ALL of America has a vote in it.

  We need job creation on the poor to middle class levels that pay above poverty line and inflation line rates so people can dig themselves out and actually provide not only for the immediate but also for the future. We're in turmoil in America as now the Republicans and Democrats play a finger pointing game as November elections approach. Each blaming each other, we know the Republicans fucked it up but can the Democrats fix it? So far we're not convinced Obama has the right stuff to do it and lets face it time is critical we don't have a decade to give him or any political party for that matter. We need change and we need it over night. We need a government that works as one unit not separate spoiled brats fighting over the best toys.

  While they now make their promises of a better future there are people loosing homes every day, There are people having to go to soup kitchens, there are people going without medication (such as my wife at 61), there are people loosing hope and facing new problems like alcoholism and drug use and mental depression or other illnesses. We need to stop sending money out of country when we need it right here and now.

  We need help Government, we need to you to admit to the shit, we ARE in a depression and you need to work together to get ALL AMERICANS out of it.