Quote:
Originally Posted by TH0001
Our economy sucks because people who make 40k a year live in 400k houses and drive 50k cars... You cannot stop people from being dumb.
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Your right Todd. This is why the economy is struggling so hard. I remember from 2002 to 2006, people were putting offers on houses more than what the house was actually selling for just so they would get it.
Example: In 1999 a house sold for 199,000 and then in 2002 it was now sold for 249,000, then next year it was sold for 289,000, then in 2006 it was then sold for349,000.
Also, if a house sold for 349,000 quickly, then the house in the same neighborhood was trying to be sold for 359,000. It just kept on climbing the ladder.
All the r. estate agents built the hype on the property values going up and staying up, plus they were working hard with the loan officers to get the loan to get approved no matter what it would take. They made it looked like they were actually putting down money when in reality they were not.
Now after all this is going on, the banks are now sending out letters stating that the loan to value is no longer available. All people with equity lines are being suspended by the banks stating the loan to value has changed. This means you are unable to make any additional home equity credit line advances and all home equity credit line checks and credit card access transactions will be refused and returned unpaid.
I remember my bank telling me to pay off the equity loan fast and I can always borrow if needed.... I am very glad we didn't make that mistake of dumping everything we had into it now.
The reason for all of this is... the people buying these houses for stupid prices built on hype from r.estate agents and mortgage companies all came to a crash, and the people in the houses can't afford them cause they had no business getting approved in the first place.
The sad part is now I know a few r. estate agents that have been in the business for many years and are no longer doing it full time anymore due to the hype crash and are now working full time jobs for 10-12 an hour.
My brother was very successful at flipping houses for 12 years is now flipping pizzas for $12 an hour working 60 hour weeks. He never seen that coming.
