20 Year Old Buys Home With $183,000 (toxic) FHA Loan And Just 3.5% Down
"I bought my house for $155,000. And now, after all the fixing, after all the remodeling, my house is worth $255,000. So just within a month period, I made a $100,000," she tells Market Place's Scott Jagow.
I applaud her work ethic, but she has no clue. None. Why is this allowed to continue? And why are we as taxpayers promoting this insanity via the Corporation for Public Broadcasting?
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comments:
Anonymous
said...
You-know-who in Sacramento is anxiously awaiting his 5 foreclosures to drop off his credit report, so he can start all over and steal another $250K to live off for a few years.
I dont know how that house appraised that high. I think we need to redo the appraisal process and that would slow this all down. The appraisal shouldnt be based solely on what other suckers are willing to pay in the area. For example if a home is in an area where average incomes are 53k a year then the house shouldnt be able to appraise for 500k, because the average home buyer in that market could not afford to buy it, and therefore we know its an inflated price. I know that doesnt take into account all factors like people rolling over equity and whatnot. I just think there needs to be a more thoughtful process when determing a homes real value. I'm still not sure how she qualified for a loan of that amount with that income. She must have found a lender that was willing to do it with a juiced up rate. Judging by her really sad ignorance of the housing crash, and belief that her homes value can double in one month I dont think she investigated the purchase that much.
Something many generations-old Americans miss is the cultural differences between themselves and newer citizens from around the world. The typical American is cautious, conservative, sober thinking with regard to credit score, debt, retirement planning, etc. etc.
People with recent ties to South America, Africa, Eastern Europe, and certain parts of Asia have quite a different life experience. In those areas there is often no credit available to the average blue collar worker except that which comes from sources where late payment penalties include kidnapping and murder. In their view, here in the US there is virtually free money available to them with essentially no downside to failure. Foreclose on a house I was given for free? Fine. Reduced FICO? Yawn. Bankruptcy? Big deal. Think about it. If you come here from a place where financial failure equals physical death or dismemberment, how afraid or cautious are you going to be about taking on debt, free money, here in the US where failure equals nothing but a nasty letter in the mail, and then you are allowed to start over again with others perfectly willing to give you more money for a shot at the golden ring?
Bwarny Fwank is working on legislation to spend Federal Billions to bailout these people.
Before the tax increases, or dollar devaluation( did you notice with record oil storage, soft demand, that oil producers want more of those paper dollars for the same amount of oil? ) I thought I would just say "Thank you for paying her debts off."
You deserve it. Oh, and thank your kids, they'll be paying the bonds, notes, debts that were incurred not to pay this lady and million more.
Remember. We are all in this together. Smile. From each according to his ability( that would be you ) to each according to her need. ( that would be her). And some admin fees and pensions thrown in too.
I played the video. (Did anyone else?) It sounded to me like their father did exactly what we've criticized parents for not doing - sitting their kids down and explaining that they shouldn't spend every penny they make and should live on part of their income and save the rest. And the kids listened (even more surprising)! I wouldn't have chosen them to be bad examples. There are plenty of others who qualify.
Listen again, Blue. Daddy also told them that once you have a house it's like free money and you get to buy all kinds of nice things (HELOC, we presume). Daughter has already bought into this idea by thinking that she created $100k "equity" by slapping paint on the walls.
I didn't hear anything about a HELOC, Doug. Couldn't it be that they could get nice things after the house because they'd learned the discipline to save for them as they had for the house? I purchased a house before I turned 24, paid it off in under 15 years, purchased new cars with cash from savings and never paid a cent of interest on my credit cards.
This story reminded me of what I was taught about money by my parents. The kids are living on less than they earn. Give 'em a break.
However, when the dad is saying something like "Go for it [buy the house], you won't get another chance like this for 10-15 years", it sure makes me wonder.
And when the daughter is spending 56% of her income on a house payment, and having unrealistic ideas about her house value, that doesn't really inspire confidence in her financial wisdom.
In the audio interview, she says "Just within a month period [fixing], I made $100k ... so why not do it more?"
Then later, "I see it as an investment. The house is really big for me. ... We're planning to buy apartments to pretty much pay off our mortgages." She didn't buy a place to live. She's a speculator wanting to get more leveraged. She's Casey Serin with a couple of jobs.
Having a good work ethic and knowing how to save is great, but it doesn't preclude you from making dumb financial decisions.
Well, that's two jobs more than Casey ever put any effort into! [laugh]
The couple of apartment buildings I lived in over the years were owned by immigrants. Sweet, hard working guys who treated the tenants like family (and were sometimes taken advantage of as a result). I guess I think of these folks as the next in a line following this tradition. I'll give 'em the benefit of the doubt since they seem to be investing their own salary and sweat into the plan. If they crash and burn, I'll eat my words and turn up my cynical meter (even higher than it's usually set).
I have two great kids who I love more than life itself, despite any whining you might read here. Everything else is peanuts.
You can e-mail me at louminatti at gmail dot com.
14 comments:
You-know-who in Sacramento is anxiously awaiting his 5 foreclosures to drop off his credit report, so he can start all over and steal another $250K to live off for a few years.
Bet on it.
I dont know how that house appraised that high. I think we need to redo the appraisal process and that would slow this all down. The appraisal shouldnt be based solely on what other suckers are willing to pay in the area. For example if a home is in an area where average incomes are 53k a year then the house shouldnt be able to appraise for 500k, because the average home buyer in that market could not afford to buy it, and therefore we know its an inflated price. I know that doesnt take into account all factors like people rolling over equity and whatnot. I just think there needs to be a more thoughtful process when determing a homes real value.
I'm still not sure how she qualified for a loan of that amount with that income. She must have found a lender that was willing to do it with a juiced up rate. Judging by her really sad ignorance of the housing crash, and belief that her homes value can double in one month I dont think she investigated the purchase that much.
I dont know how that house appraised that high.
I'm still not sure how she qualified for a loan of that amount with that income.
I think we all know how this happened. :-(
I'm happy for her...shows that the Obama economic plan is working, now if we can just pass Obama health care so we can have eternal life.
Something many generations-old Americans miss is the cultural differences between themselves and newer citizens from around the world. The typical American is cautious, conservative, sober thinking with regard to credit score, debt, retirement planning, etc. etc.
People with recent ties to South America, Africa, Eastern Europe, and certain parts of Asia have quite a different life experience. In those areas there is often no credit available to the average blue collar worker except that which comes from sources where late payment penalties include kidnapping and murder. In their view, here in the US there is virtually free money available to them with essentially no downside to failure. Foreclose on a house I was given for free? Fine. Reduced FICO? Yawn. Bankruptcy? Big deal. Think about it. If you come here from a place where financial failure equals physical death or dismemberment, how afraid or cautious are you going to be about taking on debt, free money, here in the US where failure equals nothing but a nasty letter in the mail, and then you are allowed to start over again with others perfectly willing to give you more money for a shot at the golden ring?
Bwarny Fwank is working on legislation to spend Federal Billions to bailout these people.
Before the tax increases, or dollar devaluation( did you notice with record oil storage, soft demand, that oil producers want more of those paper dollars for the same amount of oil? ) I thought I would just say "Thank you for paying her debts off."
You deserve it. Oh, and thank your kids, they'll be paying the bonds, notes, debts that were incurred not to pay this lady and million more.
Remember. We are all in this together. Smile. From each according to his ability( that would be you ) to each according to her need. ( that would be her). And some admin fees and pensions thrown in too.
Daddies' beard.
Hey, Lou. Did you know Uncle Bernanke and those crazy guys at the Fed have bought a mall for your kids to pay off? What nice guys. They're the best. Smart too! Car companies, AIG, millions of upside homes, tens of trillions in pension debts, 500 million a day in interest to the Chinese. All for your kids!
I played the video. (Did anyone else?) It sounded to me like their father did exactly what we've criticized parents for not doing - sitting their kids down and explaining that they shouldn't spend every penny they make and should live on part of their income and save the rest. And the kids listened (even more surprising)! I wouldn't have chosen them to be bad examples. There are plenty of others who qualify.
Listen again, Blue. Daddy also told them that once you have a house it's like free money and you get to buy all kinds of nice things (HELOC, we presume). Daughter has already bought into this idea by thinking that she created $100k "equity" by slapping paint on the walls.
I didn't hear anything about a HELOC, Doug. Couldn't it be that they could get nice things after the house because they'd learned the discipline to save for them as they had for the house? I purchased a house before I turned 24, paid it off in under 15 years, purchased new cars with cash from savings and never paid a cent of interest on my credit cards.
This story reminded me of what I was taught about money by my parents. The kids are living on less than they earn. Give 'em a break.
Bluezette-- you may be right. I am just guessing.
However, when the dad is saying something like "Go for it [buy the house], you won't get another chance like this for 10-15 years", it sure makes me wonder.
And when the daughter is spending 56% of her income on a house payment, and having unrealistic ideas about her house value, that doesn't really inspire confidence in her financial wisdom.
In the audio interview, she says "Just within a month period [fixing], I made $100k ... so why not do it more?"
Then later, "I see it as an investment. The house is really big for me. ... We're planning to buy apartments to pretty much pay off our mortgages." She didn't buy a place to live. She's a speculator wanting to get more leveraged. She's Casey Serin with a couple of jobs.
Having a good work ethic and knowing how to save is great, but it doesn't preclude you from making dumb financial decisions.
Well, that's two jobs more than Casey ever put any effort into! [laugh]
The couple of apartment buildings I lived in over the years were owned by immigrants. Sweet, hard working guys who treated the tenants like family (and were sometimes taken advantage of as a result). I guess I think of these folks as the next in a line following this tradition. I'll give 'em the benefit of the doubt since they seem to be investing their own salary and sweat into the plan. If they crash and burn, I'll eat my words and turn up my cynical meter (even higher than it's usually set).
I know this is mean, but it looks like she's eating all the profits.
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