Foreclosure!

[Bigted]

Ah Bloomzie, this goes way back to FDR's presidence. Thats when the Rockafellers, Morgans, etc........ took our gold, started the federal reserve (thats not really federal), and gave us legal tender(paper) in return. They control us. not Texas(W), W and family just figured out how to get rich with them.

Come on boys, this isn't the case here. There's a lot of blame to go around here, but, it's really two things: people gambled when they bought houses they couldn't afford and hoped they could refi or sell when the time came, and mortgage companies talked people into buying houses they couldn't afford.

It's no different then those pyramid schemes that used to go around. The early players always make money, the late players always lose. It is sad to see the trauma that so many families have to go through when losing their house. However, they generally have very little money in the house, and hopefully their taste has been whetted for home ownership and they will try again a little more conservatively.

 

[lori042499]

I was reading in the USA Today about this. A couple with $90,000 combined income got a $567,000 mortgage! WTF? The first two years were interest-only, and the family was told that they could always re-fi after two years. Never mind interest rates two yeas ago were slightly above historic lows already. The problem now is that the market has dropped, so their house is worth less than the outstanding balance on the mortgage, and they can't re-fi. Plus, with both parents already working, and additional third or fourth jobs are going to be incremental increases in income only.

The banks need some new regulations. There are a number of GAAPs for lenders, and these were all discarded in the past few years. When Kathy and I bought our current house four years ago, the banks in our area put the screws to us.

This has happen to two of my friends...They never in a million years thought that they would not be able to refi..Now they are working like animals to pay for their mortgage...This is how banks take advantage of the unknowing...I am one of those unknowing people that didn't have a clue about interest rates and anything financial, I found out the hard way and ruined my credit very young..I think there should be a required class in HS for this because more and more kids are spending their retirement money before they even get jobs through college...

 

[Mikey the Flower Guy]

This has happen to two of my friends...They never in a million years thought that they would not be able to refi..Now they are working like animals to pay for their mortgage...This is how banks take advantage of the unknowing...I am one of those unknowing people that didn't have a clue about interest rates and anything financial, I found out the hard way and ruined my credit very young..I think there should be a required class in HS for this because more and more kids are spending their retirement money before they even get jobs through college...

I think THIS is one of the smartest posts I've seen in a long while, and very much agree!!

 

[lori042499]

All of this cannot be good for our business, which rely on people having expendible income...If this many people are house poor, they certainly are not buying flowers. They are probably having a hard time just paying electric, gas, cars, food and clothing....When the economy is in upheaval like this our business is always one of the firsts that take the hit....


A real estate lady that I know was telling me that in my area, eastern MA, there were several illegal aliens that were selling houses without a licence getting other illegals mortgages for broken down houses and they would get the cash for the repairs on the house and take off back to their country...

 

[Bigted]

I think there should be a required class in HS for this because more and more kids are spending their retirement money before they even get jobs through college...

That's a great idea. To take it even further, everyone should have to take a class before buying their first house.

 

[lori042499]

That's a great idea. To take it even further, everyone should have to take a class before buying their first house.

Or getting a CC, buying a car, financing anything....

 

[Kristine]

Sorry guys,

I am one of those folks who think it's the Parents JOB to teach kids about money and the value of a dollar - not our school system. The schools can teach math skills, but you should learn from home about how to budget, save, spend WISELY.

Don't just blame the banks, I also know of some real estate agents who sold a bag of goods. Check out the advertisements these days. Its not how much it costs but what the MONTHLY PAYMENT is going to be. I don't think many look at the whole picture.

 

[lori042499]

Sorry guys,

I am one of those folks who think it's the Parents JOB to teach kids about money and the value of a dollar - not our school system. The schools can teach math skills, but you should learn from home about how to budget, save, spend WISELY.

Don't just blame the banks, I also know of some real estate agents who sold a bag of goods. Check out the advertisements these days. Its not how much it costs but what the MONTHLY PAYMENT is going to be. I don't think many look at the whole picture.

No, this is definately true...I know I never did, about 10 years ago we were paying 21% on a car, yes folks you heard it right..Didn't even know..

We were trying to get a car loan and the dealership was having a hard time finding financing..we were all set to let the car go, because we could barely afford it anyway. When we got to the dealership to pick up the down payment check, low and behold they found us financing at the same monthly paymet we were talking about all along...My husband got so excited he signed. We went home with a new truck..5 years later we realized not only the high interest rate but that the time was extended from what we originally were talking about...that sucked...now I make sure I listen and read everything...

 

[carol]

Sorry guys,

I am one of those folks who think it's the Parents JOB to teach kids about money and the value of a dollar - not our school system. The schools can teach math skills, but you should learn from home about how to budget, save, spend WISELY.

Don't just blame the banks, I also know of some real estate agents who sold a bag of goods. Check out the advertisements these days. Its not how much it costs but what the MONTHLY PAYMENT is going to be. I don't think many look at the whole picture.

This doesn't work if the parents don't know how to budget (and there are alot of them around)..so we just keep repeating the pattern. I know a teacher that starts all her kids off with a checkbook.. good grades or finished homework go in as deposits of $xx.xx bad behavior or no homework etc. they have to write a check.. and there is talk about what happens when you get close to ZERO.

If they are going to teach sex education in the schools then they sure can teach fiancial or check book education.

And the banks are part of the problem,, they know when they loan money what the interest & payments are and all the details..they just got greedy.. remember in the early 1990's when we taxpayers had to bail out most of the banks in this country because they got greedy and when the s*** hit the fan they were all going under..so we bailed them out..and did not send anyone to jail..just gave them lots more money and let them start again!

 

[Kristine]

And the banks are part of the problem,, they know when they loan money what the interest & payments are and all the details..they just got greedy.. remember in the early 1990's when we taxpayers had to bail out most of the banks in this country because they got greedy and when the s*** hit the fan they were all going under..so we bailed them out..and did not send anyone to jail..just gave them lots more money and let them start again!

I agree with this but I think consumers are greedy too. Everyone wants all the stuff, big big house, toys, flat/big screen tv and on and on. But no one wants to pay up front. Just pile on the payments until we are one financial incident away from disaster.....

As for bailing out the banks, we've been bailing out big businesses forever - Chrysler, Every airline several times over and on and on.

 

[Bigted]

I say bail out no one. No company, no borrower nobody. In this country, sometimes people fail. It's very sad, but that's how the system works. It's self-correcting. For the next 6-10 years, the no money down mortgages won't be a problem.

It's the same in business. Go into one when you are undercapitalized, or unskilled and you will probably fail.

That's just how it works.

 

[Mikey the Flower Guy]

I agree with this but I think consumers are greedy too. Everyone wants all the stuff, big big house, toys, flat/big screen tv and on and on. But no one wants to pay up front. Just pile on the payments until we are one financial incident away from disaster.....

As for bailing out the banks, we've been bailing out big businesses forever - Chrysler, Every airline several times over and on and on.

Therefore Inka, based on your earlier post, parents are NOT the source of stable financial education for our youngsters, and that is MY opinion ONLY!! I've watched MANY offspring self destruct, just because THEY were trying to "emulate" their parents!!

 

[TexasFlowerGuy]

Interesting....but.....

Is there anything that we can do?

Can we increase marketing to realtors / sellers. Support interest rate cuts....support new and more reasonable financing solutions...

I guess my thoughts are that this whole thing can hurt our businesses; how can we make it better?

all the best....

 

[Tuberose]

With the internet as prevalent as it is, there's no reason why people can't find the information they need to make a sound decision. They immaturely decide they want it NOW and just jump on it without first looking into the particulars and educating them selves. Some people just have to learn things the hard way.

 

[Connie]

Sorry guys,

I am one of those folks who think it's the Parents JOB to teach kids about money and the value of a dollar - not our school system. The schools can teach math skills, but you should learn from home about how to budget, save, spend WISELY.

Ideally, this is true. It IS the job of the parents to teach their children many of the things which have been relegated to the schools. Teachers have, however, picked up the slack, and budgeting skills are taught in many areas of learning. Some students simply do not learn the lesson, or they think that the lesson does not apply to them.

This doesn't work if the parents don't know how to budget (and there are alot of them around)..so we just keep repeating the pattern. I know a teacher that starts all her kids off with a checkbook.. good grades or finished homework go in as deposits of $xx.xx bad behavior or no homework etc. they have to write a check.. and there is talk about what happens when you get close to ZERO.

If they are going to teach sex education in the schools then they sure can teach fiancial or check book education.
QUOTE]

EVERY elementary school classroom that I have visited within the past 5-6 years has had some version of this checkbook senario. My daughter uses it in her 3 grade class. She sets up a store with items that she has purchased from her own meager income for the students to purchase with their "money/checks."

BTW, it was not the decision of the teachers to teach sex education, it was voters and/or the State Department of Education. Even in this area of learning, many students do not learn the lessons, or they think that they do not apply to them.

I could go on and on, but ...... :wallhead:

 

[Kristine]

Therefore Inka, based on your earlier post, parents are NOT the source of stable financial education for our youngsters, and that is MY opinion ONLY!! I've watched MANY offspring self destruct, just because THEY were trying to "emulate" their parents!!

Your right! My sister has three sons. They were all taught the same manor of citizenship. One son is a responsible productive member of society, one son aways had to learn the hard way and the third son, we wonder if he will ever get his act together. Same parents, same lesson, different personalities.

Some people will never learn, some learn the hard way and some figure it out very early.

Me, I taught my kids young. We budgeted (still do) and when we shopped we bought only that on the list, no extras. My kids would always ask for some sugar cereal or some other kid thing, and I would reply "sorry, its not on the list". To this DAY, I will remember the grocery trip when my son started to ask for something and he said "NEVER MIND - IT'S NOT ON THE LIST" And when they learned to write I would find stuff like Captain Crunch or whatever the latest got-to-have thing written in 2nd grade script on the LIST!

 

[sfox]

Inka

Inka, you're one of a dying breed. Modern times are about "getting it now."

Doing a budget, that's a quaint idea today? If you probably asked 100 couples if they did a budget before they bought their house, I imagine that 90 out of the 100 would say no. Today with credit cards and ATM's there is no waiting for anything.

And unfortunately too many times people get into the follow the crowd mode. Back in the 90's, everyone bought tech stocks because everyone else was. Even when many of those tech companies had never ever made money people still bought the stock because tech was good. I think the reason there are so many foreclosures is because so many people felt that if they didn't get a house, they might never be able to afford one later. Think back, it looked like the spiral in prices was never going to end.

And when people get into that panic mode, they don't think about budgets, future costs, or any other what ifs.

 

[enraeh]

gotta agree

Modern times are about "getting it now."

Doing a budget, that's a quaint idea today? If you probably asked 100 couples if they did a budget before they bought their house, I imagine that 90 out of the 100 would say no. Today with credit cards and ATM's there is no waiting for anything.

And unfortunately too many times people get into the follow the crowd mode. Back in the 90's, everyone bought tech stocks because everyone else was. Even when many of those tech companies had never ever made money people still bought the stock because tech was good. I think the reason there are so many foreclosures is because so many people felt that if they didn't get a house, they might never be able to afford one later. Think back, it looked like the spiral in prices was never going to end.

And when people get into that panic mode, they don't think about budgets, future costs, or any other what ifs.

I'm not one for more government, but...
There needs to be accountability in this real estate mess. Sure, I know "buyer beware" and "look before you leap" and "due diligence" and all that. But consumers were fed a line of BS. Their fears of never affording a home and missing the “dream” were used against them. Many were in effect forced to enter the spec house market just to have a place to live.
Perhaps a HUD or FannieMay takeover of some of these "pound of flesh" lenders and serious jail time for some loan brokers would be in order.

 

[rhjuska]

I do not think this housing issue will bother our industry much, I am in south Florida and authough I purposly cut back incoming wire orders for the summer, local sales seem OK. Fall and Christmas sales will answer the question, I think florists will be ok at least regarding the economy on housing issues. There are bigger boogy men in the closet and we must learn to cope. Especially relating to the internet changing where our business comes from and how much we will continue to pay to get our share of the business. A soul searching and source searching of how much we pay for product and a very close eye on our Cogs is critical right now.

 

[RJD]

I am one of those folks who think it's the Parents JOB to teach kids about money and the value of a dollar

Boo-yah! Right on Inka. My pop reminds me the mortgage interest on the house where I grew up was nearly 30% apr (bought at the end of the Carter admin)! It's amazing we had a house at those rates. They did a re-fi several years later for the discount rate of about 15% apr.

Cranberry Township and Adams Township are the southern end of our county. Despite being the most rapidly growing area in the entire state of PA, and with one of the highest median incomes, there are no furniture stores in the area. There are 4 of 5 up here in Butler, where things are a lot calmer.