This follows right along with the Ed McMahon/Evander Hollyfield home foreclosure I posted a ways down the board. Gotta love stupid people with houses - they create some of our best buying opportunities! :evil
Unbelievable!! Such a great show with a lot of people with huge heats trying to help families that really need it. Then the family just pisses it away. They’ll be back in the same situation they were before and I’m sure they won’t get the help now. This is really a shame. It’s very disrespectful to every single person who had a hand in helping that family out.
Let’s not grab the torches and pitchforks just yet.
As usual, the media only reports what it wants.
First, did you read what they built? How exactly is it helpful to the family to build a mini mansion in the middle of a lower middle income neighborhood? Not only is it not a salable property (who’d buy it?), but the taxes alone would be enough for the family to be forced to take out a loan or face a tax foreclosure.
Second, it was ran over lightly, but said that they borrowed money for a failed construction business. If that is true, than a) a new, failed construction business, especially in this market, wouldn’t be surprising, and b) we should be applauding them for at least trying to do SOMETHING. That’s more than most.
Third, they got a loan on the property. Wow. A lender was actually dumb enough to loan against a mini-mansion in the middle of that neighborhood. And you’re blaming the homeowners? Personally, I believe that the bulk of this would fall on the lender and the appraiser dumb enough to value the property in that price range. Additionally, if the family couldn’t afford the payments on the mortgage, at least, initially, then they shouldn’t have gotten approved for the loan in the first, yet they did. Again, where does the blame really fall?
Raj
They were given $250,000 and told to consult a financial advisor. The lender isn’t responsible for their inability to make the payment. They sought out the money!!! I’m really tired of people blaming the lenders…people need to take responsibility for their own mistakes instead of blaming everyone else!!! They sought out the money with good intentions I’m sure; however what makes it the lender’s fault when their business didn’t work and they couldn’t make the payments??? Should the lender just roll over and give them ANOTHER free ride?
Yes, I agree that greed from lenders willing to give everyone under the sun money just to do a deal is not a good business practice and should not be done. Even in a highly taxed area, the amount they would need to save for the property taxes should not be more than what they could expect to pay for average rent for a small place. These people had the mortgage paid by the entities that helped them. Yes, it’s good that they tried to do something. But as we’ve seen not all people are meant to go into business. Borrowing the max you can against your new mini-mansion that was given to you because you were in a situation where you needed it is not the smartest move in the world.
I’ll say this for these people and all the others that got into the ARMs they couldnt’ afford:
It’s not anyone else’s fault but your own if you put your family into somewhere you couldn’t afford. It is not my responsibility, your neighbor’s responsibility, or the government’s responsibility to bail you out. Would you like to give me a subsidy for a stock that is down from where I bought it? OK, then I don’t want to give you a handout for your house either.
I’m so tired of our society placing the blame on others and expecting the government to come to the rescue when they make a stupid move.
Sorry Roger,
Your wrong on this one…
These people had a $500,000 CUSTOM BUILT HOME…THAT HAD NO MORTGAGE!!! They could have all got part time jobs at WALMART and paid for the up keep on a brand new home. Yes, their taxes went up, their utilities too, but there is NO WAY they didn’t BLOW the opportunity of a LIFETIME here. NO MORTGAGE, NO MORTGAGE, NO MORTGAGE! GET IT?? Banks are in business TO LOAN MONEY. I am sick and tired of all the crying going on out there about the big bad banks. I never took out 90% of the equity in my house to start a business. I never took out 15 credit cards and maxxed them all out. I never LIED on a mortgage application to get a loan. I never bought a car I couldn’t afford to put GAS in.
THEY, not the BANK, decided to ROLL THE DICE and start a construction business during THE BIGGEST construction slow down in the history of this country!!! BRILLIANT!!! Yea, let’s blame the banks :banghead :banghead
The vast majoity of Americans are MORONS. We have a NEGATIVE .6 annual savings rate, live like there’s no tommorrow, and know as much about our personal finances as most people know about cold fusion.
These people BLEW IT… It wasn’t a banks fault…it’s all THEIRS!!!
I’m not blaming other people for their or someone’s mistakes. I’m merely pointing out that there is blame that needs to be handed out properly.
The primary focus on this is that they borrowed money against something that somebody “gave” them, then lost it. That’s the uproar. The question I pose back to you all that think this is how many things have you been given in your lifetime that you either sold, given away, or plain thrown out? Should you have kept it indefinitely simply because it was given to you?
Yes, the family borrowed money against the house, and now are facing foreclosure because of it. So are alot of other people in the world today. I believe that they ARE paying for their decisions.
I don’t know the details on this particular situation and I’ve rarely watched the show. I think it’s a joke. Someone said that the family was given an additional $250K and “suggested” to consult a financial advisor. Well, that makes it better doesn’t it? Giving money to someone that A) obviously had money management issues and B) isn’t used to that kind of money is just the same as throwing it out the window.
The lender isn’t responsible for their inability to make the payment.
Yes, to a certain extent, they are. First, the family “qualified” for the loan under the lender’s guidelines. So, according to the lender, at some point, they COULD make the payments. So, other than the fact that this property was "given’ to them, what makes it any different from any other foreclosure on the market?
Second, the lender is responsible determining the value of the property (lender hires the appraiser). In simple english, this property wasn’t worth anywhere near $450K. As stated, this property cannot be sold. No one is going to pay anywhere near what this should be worth if it was in the right neighborhood. The lender had it valued in a vaccum, basically. This is one of the very few cases where I think that the lender actually DOES hold alot of the blame.
Raj
Jake,
I’m not disagreeing that the family was stupid. They were.
The only thing I was pointing out was that people are ready to throw this guy to the dogs because the property was given to him and he blew it.
Again, besides that fact, what makes this any different from any other pre-fore out there?
Raj
Raj,
If the bank hires a an appraiser then itsn’t it the appraisers’ fault??? Almost ever piece of property in the US is not worth what it was in the height of the real estate nonsense. Does that mean that lenders weren’t following the policies that put forth to prevent losses? No it just means that real estate values were artificially inflated that our “I deserve the best even if I can’t afford it” attitude in America got the best of us. How do you know that this family could not afford the mortgage at the time it was given? You are assuming they had a stated income loan.
This subject really irks me because I am a lender for a small bank in Florida. I’m a prudent lender; however I’ve had people telling me that they are unwilling to scrub floors to save their house. I had one woman want to give her house back to bank because it lost value!!! The media makes just fuels the fire by not taking “accountability” into consideration. It is NOT the bank or the government’s position to protect someone from themselves. If you didn’t understand what you were signing you shouldn’t be a homeowner. You didn’t do the homework required to educate yourself on home mortgages.
Sorry for the venting!!! just my 2 cents
Don’t appologize… Your absolutely right…100%!!
The thing that kills me is now that the BUST is here, these dopes just want to walk away!! They couldn’t sign the paper work fast enough when prices were rising at a level that just couldn’t be sustained and now that the bill is due they want out???
Another thing that drives me nuts…I started a construction company 20 years ago. I DID NOT BORROW A PENNY TO DO IT!!! My construction company BUILT my construction business. I can’t even get my mind around how these idiots could possible SPEND $450,000 starting a construction business. Don’t get me wrong I KNOW how they could do it, but I don’t know WHY???
We just had this TV show come to a City 15 minutes from me. I went down to the set just to see (technically) how they build a home in 7 days. It was very interesting. Especially talking with some of the specialty subs they use for foundation work, panelized exterior wall system, ect. The producers of the show literally shut down this neighborhood for 7 days, 24 hours a day. People who lived there were allowed to come and go as they pleased and from talking with a few, they seemed geniunely happy that the family was getting help. The producers RENTED peoples front lawns on the street for $2000/week!!! They used them to set up tents so crews could build sub sections of the home out of the weather. In addition to the $2000 rental…EVERY HOME OWNER on that Street received a NEW DRIVEWAY and had their front lawns sodded for NOTHING!! I actually went back a few weeks later to see how this was going. All of it was done by local Pro’s, with no cut corners on ANYTHING!! As far as I could see this was an absolute FIRST CLASS OPERATION in every imaginable way. I’ve been in construction my entire adult life. I worked on Bridges that spanned Bays, hi-rise commercial construction, retail and residential. I’m not easily impressed.
They impressed me!!
These dopes got EXACTLY what they GAMBLED FOR…They bet it all on one number and lost it all. Theres not a banker on EARTH responsibile for 1 red cent of that loss. These people had the world by the @ss and THEY BLEW IT!!!
All these nit wits had to do was either sell the home, or LIVE in it for FREE for the rest of their lives. They chose another option…let’s bet the farm on Dad’s new construction business!!! We’ll finance it with EVERY PENNY of equity we have in our newly built, NO MORTGAGE HOME!!!
I think much of this boild down to a lack of financial education. People who don’t know any better, think its a good idea to use the equity in their home to use as income. Much of it is because they don’t have the sense to ignore the commercials and other people that say its a good idea. They figure the banker knows more about money than them,it must be a good idea! What gets me is the fact they took out SO MUCH MONEY to start a business. Why not start VERY SMALL and then grow as the BUSINESS grows. It sounds like this guy wanted to PISS WITH THE BIG BOYS before paying their dues. I agree with fdjake, these people had it MADE. Don’t tell me they couldn’t afford the taxes. That’s :bs. Everything that’s happened to them is THEIR FAULT! What pisses me off is that money and effort could’ve gone to someone who would’ve appreciated it…maybe…
I think that this is a good example of: people choose thier lifestyle and their comfort level, and if you try to raise them above their level, you are generally just wasting your time and money.
For $450,000 every person in that family could have been given a full ride scholarship to a top business colege and trained how to use and manage money.
For $450,000 Dad could have been trained in how to run and manage a construction company, been given all the eqipment, had employees set up, and had a top rated manager hired and paid for to teach him for the next 2 years, so he wouldn’t lose it all.
Not that you could have gotten any of them to accept a couple of years of training on how to be successful. Too much effort. A free house? OK. Learn how to take responsibility? Not this week.
If you give a big chunk of money to someone who doesn’t know how to manage money, they are going to blow it.
High finance might be beyond many common folks, but balancing the household budget is simple enough that millions of people lacking so much as a high school education have figured it out. It’s not that hard.
If anyone gets to adulthood, has a couple of kids, and is still mystified about how to manage their paycheck, there is only one reason for that. They willfully refuse to live within their budget. They don’t want to know how to balance th checkbook, because if they don’t know know how they think thay can’t be held responsible if they spend money they don’t have.
The money given to that family could have been put to better use. It certainly didn’t help them out in any way, or improve thier lives.
Education has nothing to do with it.
I was recently watching a few minutes of a call in financial advise type show. The caller was an Registered Nurse and was happily Married to a Doctor. Here’s a shining example of what is drastically wrong in this country…
Dr. husband has a 5 year contract with a local Hospital for $250,000 plus bonuses (nice to know your health care is based on a BONUS system)
Here’s their data…
Bought a Mc Mansion at the peak for $650,000. Wife has had numerous realtors appraise McMansion and it looks like they’d be lucky to get $400,000 for it. Mortgage payment is $4500/ month
Wifey DOESN’T WORK :banghead :banghead :banghead
Both drive vehicles that cost them approx. $3000/month
Credit card bills total $70,000!!!
Student loans for the newly minted DR. total over $200,000.
These people have a combined college education that encompasses over 18 YEARS!!!
You can’t TEACH people this stuff. I firmly believe you either are RAISED by people who understand it, and thus YOU get it. Or you learn from creating a DISASTER like the Doctor and his unemployed RN wife.
They now UNDERSTAND. But my money says there is not a person in this world who could have talked them out of the debt prison they are now living in.
The scary thing is…this is COMMON in our country now.
Believe me…we are ALL going to pay DEARLY for this BS. It’s like a bunch of drunken teenagers running around with a no limit credit card. The only problem is that teenager IS OUR GOVERMENT and our Citizens.
I don’t watch this show every week, but I have seen enough shows to see generally what the MO is for them to help families. Of course everyone knows the “makeover” includes destroying the old home and replacing it with an impressive customized home. Every family on the show has a “story.” They don’t just get on the show 'cause they’re poor. It’s usually some heart-warming story of a family hardship or tragedy. OK. So they get the home built. Usually somehow any mortgage they had in the past is paid by someone else and the new house is given to them and they don’t have a new mortgage. Sometimes the family gets one or two new vehicles as well. I’ve also seen full scholarships for their children too. I have yet to see anyone on there just get a large sum of money like $250K just handed to them in cash. So I don’t think that was the case here.
I agree that there is nothing wrong with borrowing against a house… the issue they had is that they never managed to produce income high enough to earn that house. It was given to them. So they had no experience generating and managing high loan payments or a business in that size.
They borrowed $450k to open a business, when most likely had no clue how to run a business. Money doesn’t make money, business people make money.
Interesting discussion… However I am trying to find out how do I get into the program… I could use an Extreme Makeover on my home… :O)
Do you think they would be impressed if I told them that I am a new investor trying to make it big in the real estate business… that I am a really, really, really nice guy… and that a free house would really help me… :O)
After I get the free house I will let you know if I will be able to manage it and don’t lose it after few months… :O)
Have a nice evening!
I see that some people got my point, others didn’t.
I’m not defending the family losing their home. They DO need to be held accountable for their actions. That wasn’t the point.
IF you can look at this objectively, then you can truly see the pure obsurdity of this deal. It really shows just how stupid lending practices became.
Everyone wants to blame ONLY the people in foreclosure, and they do need their share of the blame. However, lenders do have (or should) to share a good portion of it, too.
Everyone out this (this case makes my point here) is NOT financially responsible. IF they are offered money, they will take it, period. That’s what happened in many cases. Now everyone is paying for it, including those that didn’t get sucked in.
This case: The lender should have never loaned anywhere near that much money against this house. As stated (although differently), it’s a diamond in a mound of coals. The absolute best price that you’d get for it is for a high grade lump of coal, yet the lender is loaning against the diamond. That’s just plain stupid. I’ll ask, if ANY of you all were the lender, would you have loaned the money?
And no, I’m not making any assumptions on the type of loan given. All I said was that they had to have qualified for the loan under whatever guidelines the bank gave. If that was a stated loan program, again, the lender bears some responsibility for the deal, then. Their guidelines for the loan helped create the problem.
And the appraiser SHOULD be held accountable for this as well. To get a $450K loan, then the appraiser would have had to value this property at a minimum of $450K to about $575K. From what I’ve seen, that’s just plain stupid, too.
The homeowner’s are to blame, sure. But there is alot more blame that needs to be handed out, too.
I’ll give you a personal example, too. I purchased a little property back in '03 or so for about $30K. It had a tax value of $100K. I went to get my loan for $30K, thought everything was okay until we got to the closing. The attorney had paperwork from the lender for $80K LOAN. Of course, I stopped right there and called the lender and asked what the heck he was doing? His answer: EVERYONE is getting the max that they loan (80% of tax value), thought I’d like it too. Just keep the $50K, it’ll be alright.
I made him change it. Not many would have. They would have taken the $50K and blew it. In that case, where would the primary blame have been, with the borrower that requested a $30K loan and got handed an $80K, or the lender dumb enough to do it?
Raj
ABC should take a cue from the Government
and “Bail out the home owners”
To see how messed up the government
is watch the You Tube Video I posted Mon
on the bottom of our My Space forum.
www.TheReiClub.com and see if you agree
with what is said here.
I would not be surprised at all if there was some “family advisor” or “hanger on” who put them into this deal. It is the same with lottery winner. People come out of the woodwork when someone wins the lottery which is essentially what this family did. Their old house was paid off, their new house was paid off, AND they were given 250K. These people blew threw this money VERY quickly. I am shocked that ABC let this happen. I would have thought that they would put something into the deed of trust preventing this or put the house into a trust.
I’ve always felt the home and funds should be placed in a trust to avoid mismanagement. These people aren’t going to become financially savvy just because they have some money. They will act like they always have.