The mortgage bomb looms

[kapkomet]

For the exact reason Nuke stated above. Folks don't think BEFORE signing the dotted line. Failure to use their common sense and jump in with both feet exceeding the SOL they can afford.

You are absolutely right, but a lot of times, in a high pressure sales situation, people don't think. Yes, it's let the buyer beware, but really, how much of that is really true?

 

It's like these high interest rate payday loan places. I've been asked to interview with them, and they pay really well, but I refuse to interview, because to me, it's morally bankrupt to make THAT much money off of people who are in a bad situation. I hate that our system punishes people who make mistakes, and I won't prey off of people like that.

 

Steff, it is my opinion that you should consider yourself lucky that you have the knowledge, and the means to learn and educate yourself. Most people don't. I consider myself very lucky in that regard. If we help ONE person think that comes to soxtalk, then I feel our discussion has been well worth it.

Edited October 11, 2006 by kapkomet

[Steff]

Exactly. But too often we go crying to the government for protection from our own stupidity.

 

 

 

Enablers are bad.

[southsider2k5]

ANyone know of any good places to look for forclosures?

 

Your local newspaper will list all auctions, and they usually occur at the county courthouse. Do your research ahead of time, because they are sold for cash, and they are all as-is.

[Steff]

Your local newspaper will list all auctions, and they usually occur at the county courthouse. Do your research ahead of time, because they are sold for cash, and they are all as-is.

 

 

 

Any idea on houses that the taxes aren't paid on...?

[southsider2k5]

Except they don't. And actually, I don't agree anyway. I learned that stuff from my parents because I needed to know. Great - I was fortunate. But secondary education is supposed to prepare kids for adult life. To me, finance is just as important as math or English or history. It should be included.

 

I am NOT saying we need to teach home maintenance or meal plans.

 

They have no clue. Why do you think the credit card companies are on college campuses nailing kids as freshmen away from home for the first time, during their first days on campus?

[Soxy]

When I was going through the mortgage process this spring, I relied a lot on advice from my dad. But I also did a lot of research on my own. I didn't expect my broker to hold my hand and explain everything--I came in with specific questions about what I needed to know. Ultimately, I don't think it's just about parents giving their kids lessons, but I think people need to take their own initiative to figure this stuff out.

 

And as a result I have my own lovely fixed rate 30 year mortgage, with matching escrows for taxes. Awwwwww.

[NorthSideSox72]

ANyone know of any good places to look for forclosures?

I would have to go see if its still true, but, at one time, you could trade futures and options on bankruptcy and foreclosure rates at the CME.

 

SS2K5, are those contracts still out there? Any open interest?

[kapkomet]

Any idea on houses that the taxes aren't paid on...?

A lot of times you can see this on a county website.

[southsider2k5]

Any idea on houses that the taxes aren't paid on...?

 

That would be the ones (I assume you are talking about property taxes) What happens is in order for the city/county to foreclose they have to make an annoucement of their intentions, which gives the property owner their last legal notification. The notices are usually printed in a legal notices area of the classifieds of a local newspaper. Within that it will give the property location and the intended time of sale. Now the owners have up until that sale starts to pay their back taxes, so not all sales end up at the auction...

 

I have no idea how the bank foreclosure stuff works.

[Steff]

You are absolutely right, but a lot of times, in a high pressure sales situation, people don't think. Yes, it's let the buyer beware, but really, how much of that is really true?

 

It's like these high interest rate payday loan places. I've been asked to interview with them, and they pay really well, but I refuse to interview, because to me, it's morally bankrupt to make THAT much money off of people who are in a bad situation. I hate that our system punishes people who make mistakes, and I won't prey off of people like that.

 

Steff, consider yourself lucky that you have the knowledge, and the means to learn and educate yourself. Most people don't. I consider myself very lucky in that regard. If we help ONE person think that comes to soxtalk, then I feel our discussion has been well worth it.

 

 

Kap, I totally agree with you, and it's a shame, but stupidity (harsh word but you get the point) can not be used as an excuse. If you're smart enought to save some $$ and realize property is the best way to invest that $$, then it is your responsibility to know all the facts.

 

The guy that bought my step-daughter and her hubby's place in Plainfield owns a couple dozen of those places. Paid 2+ million cash. A bit of irony, the place is now infested with mice.

 

Trust me, I know how fortunate I am. I'm crazy lucky that the deals I made 10+ years ago paid off.

[Texsox]

You are absolutely right, but a lot of times, in a high pressure sales situation, people don't think. Yes, it's let the buyer beware, but really, how much of that is really true?

 

I remember when I was buying my first house. I received some good intended advice to stretch a little a buy a little more house than was comfortable to pay for today, because each year my income would be growing. Because it was the owner of the company I was working for telling me this, I followed the advice. But there was a difference of a 30 year fixed and an ARM. I knew what my payments would be, I also had a good guess about the tax situation and figured on a couple increases over the next couple years.

 

Bottom line, I was glad I did that. The extra room was great once we started having kids. Without stretching I would have been moving again in a couple years. I was also careful in staying within reason. I knew too many people that were house rich and cash poor.

 

So I understand how some people fall into the siren song of a nicer house than they can afford today. I also understand how the seemingly logical statement of your income will be increasing every year works. It doesn't even have to be high pressure. Just have the person stand in the four bedroom house with the big deck, three car garage, and huge master suite then in the three bedroom, two bath, with the 2 1/2 car garage, and no deck and ask them which place they want to live in today for the same money?

[Steff]

That would be the ones (I assume you are talking about property taxes) What happens is in order for the city/county to foreclose they have to make an annoucement of their intentions, which gives the property owner their last legal notification. The notices are usually printed in a legal notices area of the classifieds of a local newspaper. Within that it will give the property location and the intended time of sale. Now the owners have up until that sale starts to pay their back taxes, so not all sales end up at the auction...

 

I have no idea how the bank foreclosure stuff works.

 

 

 

My jag uncle is running my grama's house into the ground and doesn't have the money for the taxes - which went unpaid last month - so I am on the hunt to obtain that property. It's commercial and I can turn a quick big buck on it.

[southsider2k5]

I would have to go see if its still true, but, at one time, you could trade futures and options on bankruptcy and foreclosure rates at the CME.

 

SS2K5, are those contracts still out there? Any open interest?

 

Bankruptcy's were delisted in 03.

 

On the housing end they look like they only have contracts on housing and commerical real estate futures, but not foreclosures.

[mreye]

I remember when I was buying my first house. I received some good intended advice to stretch a little a buy a little more house than was comfortable to pay for today, because each year my income would be growing. Because it was the owner of the company I was working for telling me this, I followed the advice. But there was a difference of a 30 year fixed and an ARM. I knew what my payments would be, I also had a good guess about the tax situation and figured on a couple increases over the next couple years.

 

Bottom line, I was glad I did that. The extra room was great once we started having kids. Without stretching I would have been moving again in a couple years. I was also careful in staying within reason. I knew too many people that were house rich and cash poor.

 

So I understand how some people fall into the siren song of a nicer house than they can afford today. I also understand how the seemingly logical statement of your income will be increasing every year works. It doesn't even have to be high pressure. Just have the person stand in the four bedroom house with the big deck, three car garage, and huge master suite then in the three bedroom, two bath, with the 2 1/2 car garage, and no deck and ask them which place they want to live in today for the same money?

 

Don't lie. You built your first house with logs.

[southsider2k5]

My jag uncle is running my grama's house into the ground and doesn't have the money for the taxes - which went unpaid last month - so I am on the hunt to obtain that property. It's commercial and I can turn a quick big buck on it.

 

It does take a while for residential property to end up on the market, I want to say something like a year, at least in IN... I don't know if it is different in IL or in commercial property. I would call the courthouse of whatever county the property is in, because odds are the auction will happen there.

[Texsox]

I have no idea how the bank foreclosure stuff works.

 

At least here, some of the banks have real estate division that sell off these homes. Typically the homes are vacant for a number of months, on up to a year as the forclosure process moves ahead. Other banks and mortgage companies will go through a real estate firm to sell them. I believe that Texas State Bank actually has a group that maximizes income on these properties by leasing some and selling others. It's a separate income center as far as I know.

 

 

Don't lie. You built your first house with logs.

 

When I was looking to relocate to Wisconsin, I found a beautiful log home. I would have loved that house. 2,500 sq ft, on five wooded acres, cool loft.

[Steff]

It does take a while for residential property to end up on the market, I want to say something like a year, at least in IN... I don't know if it is different in IL or in commercial property. I would call the courthouse of whatever county the property is in, because odds are the auction will happen there.

 

 

My guess was at least a year.

[HuskyCaucasian]

Your local newspaper will list all auctions, and they usually occur at the county courthouse. Do your research ahead of time, because they are sold for cash, and they are all as-is.

wait, so to get a foreclosed home, I have to have a check ready to pay? I cant take out my own loan?

[Steff]

wait, so to get a foreclosed home, I have to have a check ready to pay? I cant take out my own loan?

 

 

Don't think so. I do believe it's just like siezed vehicle auctions. Cash and carry.

[southsider2k5]

I remember when I was buying my first house. I received some good intended advice to stretch a little a buy a little more house than was comfortable to pay for today, because each year my income would be growing. Because it was the owner of the company I was working for telling me this, I followed the advice. But there was a difference of a 30 year fixed and an ARM. I knew what my payments would be, I also had a good guess about the tax situation and figured on a couple increases over the next couple years.

 

Bottom line, I was glad I did that. The extra room was great once we started having kids. Without stretching I would have been moving again in a couple years. I was also careful in staying within reason. I knew too many people that were house rich and cash poor.

 

So I understand how some people fall into the siren song of a nicer house than they can afford today. I also understand how the seemingly logical statement of your income will be increasing every year works. It doesn't even have to be high pressure. Just have the person stand in the four bedroom house with the big deck, three car garage, and huge master suite then in the three bedroom, two bath, with the 2 1/2 car garage, and no deck and ask them which place they want to live in today for the same money?

 

We got approved for double what the wife and I figured we could afford. Our realtor kept telling us to try a little higher price to find what we wanted. The appraiser valued our house at a number higher than what we paid for the place, so the banker tried to talk us into taking the extra money out for extra stuff...

 

In other words, the forces trying to get you to over extend are pretty much everyone but yourself.

 

 

Don't lie. You built your first house with logs.

 

Logs? They didn't have axes back then... His first house was a cave.

 

 

wait, so to get a foreclosed home, I have to have a check ready to pay? I cant take out my own loan?

 

It doesn't matter how you get your money, you have to have it that day at the auction.

[Texsox]

wait, so to get a foreclosed home, I have to have a check ready to pay? I cant take out my own loan?

 

Two different processes that could have someone lose their home via forclosure.

 

One is defaulting on the mortage. The bank will make certain the taxes are paid so they can gain back their loan. These almost never show up on tax sales. The bank sells the property and either realizes a gain or a loss on the money that was loaned. Usually it's about a break even after fees, etc. It really depends on the amount of the down payment and the current market conditions when the bank sells.

 

Two is not paying the property taxes. These homes are usually paid off and the people can't pay the taxes. These are the ones the government would be selling. You are competing against full time speculators with lots of experience. Good luck and buyer beware.

[HuskyCaucasian]

It doesn't matter how you get your money, you have to have it that day at the auction.

Damn, well, I guess I'll have to wait until my inheritance gets to me from my grandparents. No way I can just go buy a foreclosed house with cash on hand. and it's too hard to get a loan and HOPE you can get the house you wanted.

[Texsox]

Damn, well, I guess I'll have to wait until my inheritance gets to me from my grandparents. No way I can just go buy a foreclosed house with cash on hand. and it's too hard to get a loan and HOPE you can get the house you wanted.

 

Actually not as hard as you might expect. Most lenders will have a pre-approval process. But the foreclosure market is not as easy as it looks. You are against professionals who do this for a living. They have trained eyes for spotting issues, and know the market conditions.

[HuskyCaucasian]

Actually not as hard as you might expect. Most lenders will have a pre-approval process. But the foreclosure market is not as easy as it looks. You are against professionals who do this for a living. They have trained eyes for spotting issues, and know the market conditions.

true. And believe me, I'm in no hurry here. I'm at least 3-4 years before I am looking to own. By that time my wife and I will be moving to Iowa. So, not until then.

[Steff]

Actually not as hard as you might expect. Most lenders will have a pre-approval process. But the foreclosure market is not as easy as it looks. You are against professionals who do this for a living. They have trained eyes for spotting issues, and know the market conditions.

 

 

While the money might be easy to get - which I don't believe from what I know - getting into the auction is not. Those interested must meet a set of qualifications to participate. There are registration materials and a collateral or a bond must be provided.