[frankthetank]

That really doesn't suprise me all that much. I swear, a job at McDonalds will put you in a nice house (not 720K) without much down. Hell they are so creative that you can BORROW your down payment. Good luck banks with your loans.

[oowolf]

In a year of two the house will sell for a couple boxes of strawberries. ROFL

[dbruning]

$15,000 a year income?
$3000 a month mortgage as a best case thing.
Lord help them.
Hope they kick that banker in the balls, cause he's doing some pretty lousy math.

[MD]

Just a few short years ago this sort of activity would be considered criminal.
Total insanity reigns.

[auscanman]

Well, according to 'The Secret' they just didn't want that house enough!

[birchm]

$this->bbcode_second_pass_quote('auscanman', 'W')ell, according to 'The Secret' they just didn't want that house enough!

[seldom_seen]

Historians 100 years from now will reference stories like this as the last stage of the American Ponzi Scheme before the pyramid collapsed.
Game over.
There's no return of the dot com bubble, or Housing boom 2.0 that's going to save our asses this time.
I hope everyone enjoyed the last 50+ years of relative peace and abundance and economic security. It was a great time, but it was a fluke, an errant deviation from the standard. A hydrocarbon hallucination. Time to get back to reality. Damn, wish we still had a planet, that would help.

[TT]

$this->bbcode_second_pass_quote('seldom_seen', ' ')Damn, wish we still had a planet, that would help.

[sicophiliac]

Hmmm sounds alot like what happened to a coworker of mine. He and I are pest control techs and I would estimate hes earning only around 35,000 a year give or take. His wife works too but she does janitorial or house cleaning work so odds are shes probably making less than he does. None the less he got approved for a loan to buy the house of roughly around 750,000 dollars. The agent supposedly "went in" on the house with him so he could afford the payments which are only around 3900 a month after the agent "helped out" . What a nice guy huh lol. Well even with the "help" he still has been falling behind on his mortgage payments. I asked him about it and he said the realestate agent told him "dont worry you can refinance in a year or so and lower your payments.." Given that my coworker is a Mexican immigrant who speaks poor english and reads english even worse I figure he got shafted big time by this guy, especially since the agents name is on the title of the home.

[Madpaddy]

This is beginning to stink to me. These people are esentially paying 3 or 4 times what they would be paying in rent for the "privilege" of pretending to OWN a home. Somebody is making money big time. Another example of wealth transfer from the almost destitute to the property developers, estate agents etc.

[dissimulo]

I don't care how many times you refinance - even if your interest rate is 0%, it will take you 48 years to pay off a $720K house on a $15K salary. And that assumes you don't eat - which would be difficult to sustain for 48 years.

People are fools. They deserve what they get.

[emersonbiggins]

Well, we renters certainly have our work cut out for us...
For comparison, the article states that the S&L fiasco cost an estimated $150 billion.
$this->bbcode_second_pass_quote('', 'S')ubprime bailout? $120 billion
More than 1 million borrowers may be at risk of defaulting on their mortgages. Assisting them all wouldn't come cheap.
Money Magazine By Stephen Gandel, Money Magazine senior writer
April 13 2007
NEW YORK (Money) -- Want to pick up the check for every homeowner who got saddled with a risky mortgage? It's a big one - on the order of $120 billion.
Lawmakers and consumer groups in recent weeks have been calling for assistance for those at risk of defaulting on their mortgage.
On Wednesday, Congressional Democrats led by Charles Schumer (D-N.Y.) advocated steering hundreds of millions of dollars into nonprofits to help the growing number of homeowners who are having trouble paying their mortgage.
But economists and industry experts say the cost of a bailout would be significantly more than that.
Christopher Cagan, director of research at First American CoreLogic, says rising mortgage payments on adjustable rate loans will force 1.1 million homeowners into foreclosure over the next 6 years. He estimates the cost of paying off the debt for those borrowers would be $120 billion.
A spokesperson for Sen. Schumer says the senator is not suggesting the government should pay off borrowers' loans in full. The spokesperson says Schumer believes a mixture of counseling and restructuring of the loans would bring down the costs of the program considerably. He says Schumer hasn't finalized a plan, and that Schumer has said banks and lenders should foot part of the bill.
But even a partial bailout plan would cost far more than a few hundred million dollars. ...
CNN article

[Madpaddy]

The last gasp of the property market in Ireland was to offer 110% mortgages so anybody who bought with one of these products is already in negative equity from the start. Property prices have not risen here for 6 months and latest reports indicate a year on year fall of up to 10% in some areas. Add that to the official (underestimated) inflation rate of 5.1% and you have a -25% return on investment. The keys are going to start getting thrown into the bank managers office in very large numbers anyday now. Builders are closing down sites all over the country to try and keep up demand on new homes. We have a general election coming up too which is making developers and prospective homebuyers nervous as all the political parties are talking about reforming stamp duty on houses which is up to 9%. At the peak of our property boom the ECB interest rate was 2% while now it is 3.75% and rising.

As you said, many of the people deserve what they get. I mean borrowing 110% to buy an asset. Hey... I said ass

[Pretorian]

Hmm.. Everyone went ranting with rage that if he/she cant live in a 700K house, than a couple of strawberry pickers shouldnt either.
I knew a latino-waiter who bought a 500K house, his wife doesnt work. he renovated it recently for 50-60K.
I knew 2 sisters from Honduras, one of which doesnt speak any English, and is working as a busser for $8 an hour, another was a hostess at the moment, and I am sure they are illegals, they bought a townhouse for 400K a few years ago.
How they do it? Easy. They rent out every corner, make small rooms out of big ones, throw a few mattresses in the backyard, ets. Finally they spend on mortgage less than if they were renting.
remember, Hispanos are not USAers, they dont need a hundred pounds of plastic per month, 29 1/2 bills, insurance of the insurance, ets.

[MD]

heres how the scam works:
The agent collects $52,000 in commissions from this $750,000 sale.
The reason they help pay for a few months is to legitimize the transaction.
Say they kick back $3k per month of "help" for six months then bail out.
They will then still hold $36,000 from their dirty deed
If they don't "help" for a few months to legitimize the transaction, I think there is much gretaer risk that the courts would void the transaction and force them to return their commissions.(or send them to jail)

[Concerned]

$this->bbcode_second_pass_quote('Gideon', 'B')eing hard working is one thing.
But unless they are retarded, they deserved what they got.
You stoop over 8+ hours a day in the sun picking strawberries and you think you can afford to live in a 700k house?
A fool and his strawberries are soon parted.

[some_guy282]

Don't worry, money is free when you can print as much of it as you need. Right? Right...?

[dukey]

$this->bbcode_second_pass_quote('', 'D')on't worry, money is free when you can print as much of it as you need. Right? Right...?

[TommyJefferson]

$this->bbcode_second_pass_quote('', 'W')ant to pick up the check for every homeowner who got saddled with a risky mortgage?

[Pretorian]

$this->bbcode_second_pass_quote('Concerned', '')$this->bbcode_second_pass_quote('Gideon', 'B')eing hard working is one thing.
But unless they are retarded, they deserved what they got.
You stoop over 8+ hours a day in the sun picking strawberries and you think you can afford to live in a 700k house?
A fool and his strawberries are soon parted.