There Goes Four Years of my Life

Mortgage Reductions

We’ve all heard the adage “it’s not what you make but rather what you keep” which serves as a reminder to take taxes into consideration. My philosophy goes a step further to say “it’s not what you make or even what you keep but rather what you save”.

In other words, I focus on what I have to show after consuming some of my finite period of time to provide for myself.

While others were watching American Idol from the satellite feed in their toy haulers, I was busy hitting the books and cultivating a decent career.

The combination of hard work, deferred gratification, and careful financial planning has provided me with a net annual savings rate of nearly forty thousand dollars.

I’ve always bought homes that were well within my means to allow for unforeseen setbacks and to avoid being over allocated in real estate. I bought my last home three years ago when I was in my mid forties and I put over sixty percent down to free up cash flow so I could aggressively save for my two daughters educations.

I realize that bad things happen to good people and circumstances like high unemployment and astronomical medical bills have produced many instances of responsible people being at risk of losing their homes.

I honestly do get this but when you analyze the case studies, you find that most people that are in trouble had no business buying their homes in the first place.

Regardless, excusing an average of $150,000 in principle is synonymous with wiping out four years of my productive life.

These actions have left me feeling like I’ve awoken in some sort of surreal sci-fi movie where the fundamental tenants of justice and fairness have been contorted into something completely unrecognizable.

The old days were much more to my liking where you could man up, take on the world, and make something of yourself. Now, success just makes you a walking ATM machine to be used and used and used until there’s nothing left.

Why do all the screw-ups in this country get everything handed to them while those of us that work our asses off get nothing?

Because we, as a culture, have spent the last 80 years making that the case.

We are regularly reminded that the only debt in this country that appears to be impossible to lose through bankruptcy is student loans for college.

So you can make any bad decisions you like and have them wiped away in bankruptcy, but try to better yourself through an education and you'll be saddled with the burden of paying it off until it grinds you under.

This is also a case where the banks made very stupid loans. They are essentially recognizing the loss because foreclosure would be more expensive and they wouldn't be able to get back the principle if they resold the properties.

This all goes back to the near zero cost to borrow that the Fed promulgated.

Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."
I didn't go to college (suppose I'm not as good as many here then) but I've been working since I was 16. I learned real lessons through personal experience. I've turned those lessons into a career that has allowed me to support my growing family and keep them happy and healthy. I've gone through hard times, one of which almost ended my life, but I've pulled through. We have owned 3 houses, our current abode is upside-down. I put 30 or so percent down and did not over extend my self (heck, I went through 2 years of unemployment and was able to hold on to it, so it was not beyond my means) yet it's still worth 1/2 what I now owe. I didn't screw up. I found myself at the mercy of a funky market, both job and real estate. Crap happens. I'm doing what I have to do now to keep my kids happy and well fed, and I'm happy.
We could have weathered the storm better had my wife been working, but I like to say “it’s not what you make, what you keep or even what you save, but it's the fact that your kids know who the heck you are”. My wife raised our kids, not a Kindercare employee.
Do I sound bitter? Yup, suppose so. I just hear all these people lumping everyone into the same basket (yeah, you made quick mention to the contrary between boasts) and it irks me.
I'm gonna stop now. Sorry for the distraction.

To be eligible for the principal reductions, however, homeowners will have to meet certain criteria, including: having a loan owned or serviced by Bank of America; owing more on the mortgage than their property is worth; and being at least 60 days behind on payments as of the end of January.

Bolded because that's the insulting part. So you're saying my house which I put a large cash deposit on, and met the monthly payments on despite being a financial burden, because it is the right thing to do when you are loaned money, is not eligible to be modified, but if I bought something that I couldn't afford in the first place I can get an average of 150k reduced?

DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."

I didn't take that away from it at all.

Meh, by some miracle, we were able to get a "streamlined re-fi" through Chase--20 year fixed at 4.25%, where we had 21.5 years left on a 5.25% loan. It drops the monthly by $50 but saves us $62k over the life of the loan.

I'll take it.

In reply to The0retical:

I'm in the same boat. When I tried to just modify my mortgage a few years ago(interest rate reduction only) I kept getting denied. Why? Because I had the audacity to make my mortgage payment each month. Stupid me.

I couldn't agree more. I was approved for a mortgage 2.5 times more than I could afford when I bought my house. Where did they think the extra money would come from? I bought within my means instead and can always make my mortgage payment. I don't have a lot of extra money so taking $150,000 off of my mortgage would be awesome! They would owe me a few bucks! I could finally make a Challenge! But because I was not an irresponsible shiny a-hole, I don't get any handouts.

MG Bryan wrote:

DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."

I didn't take that away from it at all.

I didn't either.

A $150k reduction would put $55k in my pocket!

fromeast2west wrote: This is also a case where the banks made very stupid loans. They are essentially recognizing the loss because foreclosure would be more expensive and they wouldn't be able to get back the principle if they resold the properties.

Exactly. The banks are trying to make the best of a mess, and in doing so are making it easier for some people to keep their homes. It's lucky for them, but that's all it really is. Luck. Sometimes things work out that way. It's not going to reward everyone for bad behavior and there's still a lot of carnage. But BoA is being fiscally smart about this.

Does this mean that RX lost "four years of his life"? No. He's in exactly the same situation he was yesterday. So am I. I'm going to continue to aggressively pay down my house and be conservative in my finances. Don't judge your own situation by that of others.

A $150K reduction would put 150K in my pocket!! Where's MINES!!!! Hell I'm 13 months behind on payments. I would accept a Property tax vacation for say forever as an reward for my responsibility. I promise to use it to stimulate the economy.

I don't know... reading between the lines in that article, I got the impression that the folks who get a $150K reduction will still be so upside down with regards to the value it won't matter much. If anything, all it will do is allow for an easier short-sale since then they might be able to sell the house for closer to the mortgage balance.

bastomatic wrote: So you can make any bad decisions you like and have them wiped away in bankruptcy, but try to better yourself through an education and you'll be saddled with the burden of paying it off until it grinds you under.

If you don't have the sense to figure out how to get a college education without burying yourself in debt...

You are not college material.

Keith wrote: Don't judge your own situation by that of others.

Or, don't judge others' situation by that of yours.
Maybe I was manstrating when I read that, but it just rubbed me the wrong way.

ronholm wrote:

bastomatic wrote: So you can make any bad decisions you like and have them wiped away in bankruptcy, but try to better yourself through an education and you'll be saddled with the burden of paying it off until it grinds you under.

If you don't have the sense to figure out how to get a college education without burying yourself in debt... You are not college material.

Worried about student loan debt? Just borrow money from your parents to start a business instead. Duh!

MG Bryan wrote:

DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."

I didn't take that away from it at all.

However he meant it, thats what he was saying, that he kept his nose down, and others screwed up. I agree with what hes saying, but its still saying that hes better...

Joey

joey48442 wrote:

MG Bryan wrote:

DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."

I didn't take that away from it at all.

However he meant it, thats what he was saying, that he kept his nose down, and others screwed up. I agree with what hes saying, but its still saying that hes better... Joey

Well, yeah he's saying that, but not because of the inherent "betterness" of a college education or anything. He's ticked off that he's been a good boy and done what he's supposed to do, while others who have not are being relieved of (at least a portion) of the consequences of their bad decisions.

So yes, he is saying his way is better, but not because it's HIS way - just because he's upheld his end of the bargain.

5 years of college, down the drain!

Duke wrote:

joey48442 wrote:

MG Bryan wrote:

DrBoost wrote: Sorry, I gotta say your post smacks of "I'm better than you. I make (and save) more than you, my house is worth more, I'm just plain better...."

I didn't take that away from it at all.

However he meant it, thats what he was saying, that he kept his nose down, and others screwed up. I agree with what hes saying, but its still saying that hes better... Joey

Well, *yeah* he's saying that, but not because of the inherent "betterness" of a college education or anything. He's ticked off that he's been a good boy and done what he's supposed to do, while others who have not are being relieved of (at least a portion) of the consequences of their bad decisions. So yes, he is saying his way is better, but not because it's HIS way - just because he's upheld his end of the bargain.

He doesn't have to say it.

His way IS better. I don't think there's any real argument against that.

I've said it before, I'll say it again: Being responsible is not good for you, it's good for society. Being an irresponsible asshat is good for you but bad for society. Hard work alone will only get you so far.

The only value to yourself in honesty and responsibility is stability and security.

What you should have to show after a finite period of time of providing for yourself is happiness. Money's just a number in a bank until you spend it. You don't get to put your initials next to your balance on a high score screen when you die.

ronholm wrote: If you don't have the sense to figure out how to get a college education without burying yourself in debt... You are not college material.

The economics of higher education make it so that there are many careers that the debt burden far exceeds the recommendation against the career track's projected salary.

A graduating veterinarian for example can expect to make on average $60k, some more, some much less. Average student debt from Vet school alone is more than $120k. Explain to me your solution.

The mortgage industry is fighting tooth and nail AGAINST any form of principal forgiveness, and I could type for the rest of the afternoon to explain why but in short it devalues the MSR and destabilizes the industry and market.

BOA has agreed to do this as a form of punishment for making bad loans and for abusive foreclosure practices.

Remember Countrywide? Until a few years ago, they were the biggest originators of sub-prime, zero-down, interest-only, pay-option ARM, no income/asset verification, liar loans. Their motto was - if you can fog a mirror, you're approved!

What happened to Countrywide? Under the direction of then CEO Ken Lewis, BOA bought it in 2008, just as the mortgage meltdown hit. Arguably one of the dumbest business deals ever.

This settlement is, in effect, the fine that BOA is paying for abusive lending practices, mostly (but not all) perpetrated by Countrywide. When they acquired Countrywide they also assumed the liability for the defects in origination of these loans.