Gas Prices.... Completely Outrageous!!! How Much Are They Where You Are???

[irishgrl]

Originally Posted by strandinthewind

Actually, it's more like the staggering amount of credit card debt in this country Again, a $50 to $100 increase in a morgage likely will not cause a foreclosure unless other serious problems are there.

Now - are banks loaning money to non-qualified people? Of course they are. But, many of those people are minorities or people who qualify for some program that mandates they be given the money. I am unsure however what percentage that entails. The mtg. lending rules are, however, pretty strict regarding qualification, though they can be played with by a smart buyer.



In that job loss case, it would make no difference what kind of mortgage you had and, quite frankly, the ARM would be better for you if your income dropped because the monthly payment under that ARM likely would not reach the usually much higher fixed rate payment for 7 or so years

you're missing the point in the "job case" what Im saying is, people think their future is going to resemble today only better somehow, and in many cases, that just isnt true!! I know that in the Bay Area, particularly in the Silicon Valley, people are becoming unemployed at an amazing rate! and they USED to hold fantastic jobs and could afford dream homes! but no more

[strandinthewind]

Originally Posted by irishgrl

by the way: your inference that people will save (bank) that extra money that they benefitted from with the ARM is GOOFY! people will always find a way to spend "found" money! oh yeah, Ive always wanted a big screen tv, or I've always wanted to travel, or say, wouldnt it be cool to have a nice backyard patio/bbq set? Nope, sorry, people just dont really look ahead and/or save for a rainy day any more...I mean why should they? they think they can still file bankruptcy what fools...

That has nothing to do with their qualification for a mortgage. You implied it was all the evil mtg companies fault. I responded to that. In the instant example, I know lots of people who chose the lower mtg rate and pay extra on that as a way to avoid paying more interest and as a safe haven in case something goes wrong and they could not make the higher fixed rate payment. On edit - but even if they blow the money, it would still take seven or so years for the ARM payment to reach the fixed rate payment.

As for bankruptcy, they can still file it. If they make more than $35,000 or so a year, they ordinarily cannot 100% discharge their unsecured debt in a 7 and will be put into a five year 13 plan, in which they will pay pennies on the dollar in their unsecured debt. Under either scenario, they ordinarily can keep their house (and their car for that matter) if they can show they can pay for it. If they give their house back in a 7 or a 13, FHA will allow them to buy another in about a year if they have income and have been the remaining debt (car, rent, etc. ) on time. So, bankruptcy is a viable option to this day. The govt. just made the 100% discharge in Ch. 7 less available to those making more money.

[strandinthewind]

Originally Posted by irishgrl

you're missing the point in the "job case" what Im saying is, people think their future is going to resemble today only better somehow, and in many cases, that just isnt true!! I know that in the Bay Area, particularly in the Silicon Valley, people are becoming unemployed at an amazing rate! and they USED to hold fantastic jobs and could afford dream homes! but no more

Thus, my point that it would not matter what mtg they took - they likely would lose their house under both, though the they may be able to hold on to it in the pmt was several hundred dollars less a month in an ARM. But, if they have no way to pay either mtg - they would lose their house. So, how is the ARM a bad choice here

[irishgrl]

Originally Posted by strandinthewind

That has nothing to do with their qualification for a mortgage. You implied it was all the evil mtg companies fault. I responded to that. In the instant example, I know lots of people who chose the lower mtg rate and pay extra on that as a way to avoid paying more interest and as a safe haven in case something goes wrong and they could not make the higher fixed rate payment. On edit - but even if they blow the money, it would still take seven or so years for the ARM payment to reach the fixed rate payment.

As for bankruptcy, they can still file it. If they make more than $35,000 or so a year, they ordinarily cannot 100% discharge their unsecured debt in a 7 and will be put into a five year 13 plan, in which they will pay pennies on the dollar in their unsecured debt. Under either scenario, they ordinarily can keep their house (and their car for that matter) if they can show they can pay for it. If they give their house back in a 7 or a 13, FHA will allow them to buy another in about a year if they have income and have been the remaining debt (car, rent, etc. ) on time. So, bankruptcy is a viable option to this day. The govt. just made the 100% discharge in Ch. 7 less available to those making more money.

oh BOY are you wrong about THAT one (the ch 11 or 13 "pennies on the dollar" spiel)

my best bud did a ch 13, paid 80% of his debt, the trustee made about 50k off of him, and at the end, his credit score is the same as if he had discharged the whole thing. People dont realize that for the most part, they wont qualify for a ch7, and yet, even if they pay their debt, creditors look at you like you DID file ch7. Plus, anyone can come in any time until your debt is discharged and put a lien on your assets. It totally sucks now how the system is set up. I highly recommend people find any other way out of a financial mess than bankruptcy. The chances of people qualifying for a ch7 are pretty slim unless you make squat in the job dept.

[irishgrl]

Originally Posted by strandinthewind

Thus, my point that it would not matter what mtg they took - they likely would lose their house under both, though the they may be able to hold on to it in the pmt was several hundred dollars less a month in an ARM. But, if they have no way to pay either mtg - they would lose their house. So, how is the ARM a bad choice here

my point is, at least in the SF Bay Area, and surrounding comunities, people can only afford homes (because of inflated home prices) WITH 2 incomes and WITH creative financing. The days of a fixed 30yr mortgage (around here) are about gone.

and sadly, when people NEED a home, and they find one they love, they convince themselves that its possible. They find out later (3-5 yrs later) that they were wrong (because in the meantime, Jenny needed braces and Jeff wants to go to a good school, etc)

[sara1998]

Originally Posted by irishgrl

I can vouch for that....when I was living in the Bay Area (while I was going to Law School) I was astounded at what apartment rents were going for! I had section 8 (subsidized housing) so I was only paying $650/mo for a dirtbag 2bdrm apt. the nicer ones were going for $1000/mo easy. and thats RENT!!!

and that was even out in the outskirts of the bay, too! not even in SF...

my little 2bdrm 2bath manufactured home could sell for almost $200k!!! and I am in the mountains, not anywhere special

but the commute to Chico kills me. We've been paying over $3/gal for awhile now. California has the highest gas prices (and the highest overall home values/sticker prices) in the nation. Unfortunately without two incomes, or a profession that pays really well, a lot of people go under if they were stupid enuff to go for that crappy creative financing (I just think adjustable mortgage rates with balloon payments or anything that follows prime is a bad BAD thing.)

Sara, please see the link I posted about the comparison between housing costs in several states...its an eye opener. Your home could fetch a million or more depending on where you live....

ETA: here's the link:
http://money.cnn.com/2006/09/26/real...ment/index.htm

Funny, my home falls into that exact profile. I think that's amazing. I remember going to San Francisco a couple years back, and being astounded by the amount of rent I saw in a apartment window. A 1500 square foot efficiency went for $1500/month!!! That's $600 more then my mortgage a month!!!

[irishgrl]

Originally Posted by sara1998

Funny, my home falls into that exact profile. I think that's amazing. I remember going to San Francisco a couple years back, and being astounded by the amount of rent I saw in a apartment window. A 1500 square foot efficiency went for $1500/month!!! That's $600 more then my mortgage a month!!!

consider yourself lucky my dear

[sara1998]

Originally Posted by irishgrl

consider yourself lucky my dear

More then you know....

[Sarah]

healthcare. lol. lolol.

i work 2 jobs. 12 hours a day, 6 days a week, some weeks 7. i have no insurance of any sort other than car insurance. what a ****ing joke. and i mean, i have problems. and then people wonder why i'm all bad and buy **** on the street. assholes.

i'm not bitter. in fact, it's easier this way. i just get paid. it's just like.. i'm glad i don't have a kid.. i feel really bad for people scraping to take care of a family the way that i have to scrape to take care of my own idiotic self.

[irishgrl]

Originally Posted by Sarah

healthcare. lol. lolol.

i work 2 jobs. 12 hours a day, 6 days a week, some weeks 7. i have no insurance of any sort other than car insurance. what a ****ing joke. and i mean, i have problems. and then people wonder why i'm all bad and buy **** on the street. assholes.

i'm not bitter. in fact, it's easier this way. i just get paid. it's just like.. i'm glad i don't have a kid.. i feel really bad for people scraping to take care of a family the way that i have to scrape to take care of my own idiotic self.

gosh....what can anyone say? Im sorry you have problems...

[strandinthewind]

Originally Posted by irishgrl

oh BOY are you wrong about THAT one (the ch 11 or 13 "pennies on the dollar" spiel)

my best bud did a ch 13, paid 80% of his debt, the trustee made about 50k off of him, and at the end, his credit score is the same as if he had discharged the whole thing. People dont realize that for the most part, they wont qualify for a ch7, and yet, even if they pay their debt, creditors look at you like you DID file ch7. Plus, anyone can come in any time until your debt is discharged and put a lien on your assets. It totally sucks now how the system is set up. I highly recommend people find any other way out of a financial mess than bankruptcy. The chances of people qualifying for a ch7 are pretty slim unless you make squat in the job dept.

Ummm -- I did it for a living

If he was able to pay 80% of his debt as well as $50,000 to the trustee ($833 a month is not really accurate unless his debt was huge and he still amde a ton of money - - he had no business in a Ch. 13 plan. He likely should never have filed. But, there could be facts untold, etc.

Also, FHA does not look at credit scores for the most part when lending money. Go here for some info. - to wit:

A last option, and perhaps the best one, is an FHA loan. FHA’s approach to bankruptcy allows a borrower to purchase or refinance a home after one year of perfect payments into the plan as long as you have perfect credit outside the plan and have the trustee’s permission. Also, if a borrower has an existing FHA loan, they can streamline-refinance it as long as they have been no more than 60 days late in the last year. In addition, this method actually keeps the bankruptcy in force, preserving the plan’s payment schedule and protection.

http://abiworld.net/crackingthecode/index.php?p=34 Obtaining the Trustee's permission is not that difficult as long as you have the income to support the payment. I know many people who have done this and when they emerge from the Ch. 13 plan, conventional mortgage companies are willing to deal with them, though the FHA loan was at the market rate of someone with good credit. FHA loans are slightly more because the borower has to pay an insurance fee per month of roughly $50, which allows the FHA to loan to people not based solely on the credit score.


See also --

How long after filing bankruptcy will I be able to get a loan to buy a house? Will the interest be "sky high"? What are some of the other credit effects of filing bankruptcy?

The short answer to your question is that you may be able to finance the purchase a home two years after you have gotten your discharge in bankruptcy, but you may qualify as early as one year after filing Chapter 13, or one year after discharge in Chapter 7.

Since a large proportion of home loans depend on FHA or VA loan guarantees, your ability to qualify for those guarantees may determine when you are able to obtain a home loan.

FHA will insure mortgages to individuals who have filed Chapter 7 liquidation bankruptcy two years after the discharge if "the borrower has re-established good credit (or has chosen not to incur new credit obligations), and has demonstrated an ability to manage financial affairs."

To obtain a loan within one year after the discharge, the borrower must show that "the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited an ability to manage financial affairs and the borrower's current situation is such that the events leading to the bankruptcy are not likely to recur."

FHA regulations also specify that a borrower still in a Chapter 13 debt adjustment who has satisfactorily completed one year of plan payments and gets court approval of the transaction. [U.S. Department of Housing & Urban Development, Office of Housing, Handbook No.: 4155.1 REV-4 CHG-1, September 28, 1995. Chapter 2-3, E]

VA has similar regulations. The VA handbook for lenders includes provisions that "If the bankruptcy was discharged more than 2 years ago, it may be disregarded."

If the discharge was between 1 and 2 years, the guarantee may still be granted if the applicant or spouse has obtained consumer items on credit subsequent to the bankruptcy and has satisfactorily made the payments over a continued period and the bankruptcy was caused by circumstances beyond the control of the applicant or spouse such as unemployment, prolonged strikes, medical bills not covered by insurance, etc.

VA regulations allow granting of the loan guarantee to a person in a Chapter 13 when the plan payments are finished satisfactorily, or after 12 months payments and the Trustee or the Bankruptcy Judge approves of the new credit. [Veterans Benefits Administration VA Pamphlet 26-7, Change 34, November 13, 1997]

If you obtain home loan financing with a loan guarantee, the loan rate should be based on the guarantee status of the loan. As a result, I would not expect that the rate would be affected by the bankruptcy.

Other effects of bankruptcy on credit are difficult to assess. Credit is extended by individual lenders, and is not generally regulated by law. Lenders do not generally make their criteria public. We do know that there are two factors which are important to creditors in extending credit.

Ability to make payments. Any lender will want to be sure that you have the ability to pay back a loan before extending you credit. The discharge in a bankruptcy should improve your ability to make payments. You will no longer owe the debt that you did when you filed, and you will no longer be subject to judgments, garnishment and other collection activities which would impair your ability to pay back the new loan. In addition, the restriction against you filing a Chapter 7 for 6 years from the filing of your previous case may give the creditor some assurance of their ability to collect new debt.
Credit history. Lenders look at the way you have paid your bills in the past as an indication of how you will pay your bills in the future. A bankruptcy is an adverse rating in this respect, but creditors can also see how your credit was before the circumstances which caused the bankruptcy. If you had a good credit history and paid your bills on time before the bankruptcy, you may find that it is easier to re-establish credit than if you were perpetually behind on your payments and had judgments against you.

http://doney.net/faq_credit.htm

Finally, your statement:

Plus, anyone can come in any time until your debt is discharged and put a lien on your assets.

is wholly incorrect unless the creditor moves for relief from the automatic stay in place immediately after the bankruptcy is filed - also student loans (for the most part) and other things like income tax non payment are exempt for the most part - though they can usually be included for 100% payment in a Ch. 13 plan. But, usually, only mortgage companies can get a motion for relief granted and then only when the homeowner intends to surrender the property in lieu of paying the secured debt.

Here is some general info on the differences between Chpaters 7 and 13.

http://www.totalbankruptcy.com

here is another

http://www.expertlaw.com/library/ban...ankruptcy.html

to wit:

Chapter 13 Bankruptcy - "Wage Earner Bankruptcy"

By Aaron Larson

Law Offices of Aaron Larson
April, 2005

Contents
Introduction
Is Chapter 13 The Right Choice?
The Automatic Stay
The Chapter 13 Bankruptcy Process
Dismissal of the Petition
Summary

Notice: Due to the complexity of bankruptcy law, and the difficulty of determining which form of bankruptcy will apply to any given situation, most people will benefit from consulting with a qualified bankruptcy lawyer before filing for bankruptcy.

Introduction

In simple terms, a Chapter 13 bankruptcy involves the reorganization of a debtor's financial affairs. The goal is to create a payment plan for the benefit of the creditors, while protecting the debtor from foreclosure, garnishment, levy, or similar consequences.

In order to qualify for Chapter 13 bankruptcy, the debtor must have an income that exceeds the debtor's reasonable living expenses, as it is necessary that the debtor have sufficient means to provide repayment to creditors of past debts. In some cases repayment may be for the full amount of the debt, while in others the debtor may pay off only a small percentage of certain debts - perhaps as little as ten percent. Debtors must also meet with a credit counselor at some point during the six months prior to applying for bankruptcy, and must attend money management classes at their own expense before a final order will be issued by the bankruptcy court.

This form of bankruptcy is commonly referred to as a "wage earner plan".

A Chapter 13 bankruptcy will appear on your credit report for up to ten years.

Is Chapter 13 The Right Choice?

Most debtors will benefit from consulting with a qualified financial professional before considering a Chapter 13 filing, and create a list of obligations which will be subject to repayment under a Chapter 13 plan, and map out a possible budget. Some debtors will realize at that time that they cannot realistically live under that type of budget. Others may discover that they will be better served by trying to resolve their debts with their individual creditors outside of the bankruptcy process, as opposed to going through a formal bankruptcy.

The Chapter 13 bankruptcy tends to be favored by debtors who have fallen behind on secured loan payments, such as mortgages and car loans, as it enables the debtor to keep possession of the property while catching up on payments through a court-approved repayment plan. It may also be preferred by a debtor who has valuable non-exempt property that would be liquidated in the course of a Chapter 7 bankruptcy.

Some debtors will choose not to file for Chapter 13 bankruptcy, as they do not wish to live under the scrutiny of the bankruptcy court which will result from a successful petition. Many debtors lack the discipline to abide by a Chapter 13 repayment plan. Only about 35% of debtors successfully complete their plans. If you do not think that you can live under the plan's budget, you may wish to reconsider a Chapter 13 filing.

Under recent reforms in bankruptcy law, effective in October, 2005, many debtors are disqualified from filing for Chapter 7 bankruptcy protection, and thus will have to file for Chapter 13 protection. If the debtor earns in excess of the state median income, and is able to repay 25% of his or her "nonpriority unsecured debt", the debtor will be ineligible for Chapter 7 protection and must proceed under Chapter 13.

The Automatic Stay

Once a debtor files for bankruptcy, the debtor's estate is protected by the "automatic stay", which bars creditors from trying to collect debts without the permission of the bankruptcy court. This provides immediate protection against foreclosure, repossession of your car, eviction from your apartment, garnishment of your wages or bank accounts, cut off your electricity, or other measures creditors may take to try to recover monies owed.

The Chapter 13 Bankruptcy Process

After filing for Chapter 13 protection, a debtor will propose a repayment plan for any debts and obligations. The proposal will be reviewed by a bankruptcy court. If the plan is approved, the court will appoint a trustee to collect the debtor's payments, to distribute them to creditors, and to supervise the debtor's compliance with the court-approved repayment plan. The debtor will be required to pay the trustee's fee.

During the repayment period, the bankruptcy trustee will have control over the debtor's personal finances, and the debtor must submit any credit-related matters to the trustee for review and approval.

The repayment period typically lasts from three to five years. During this time, the bankruptcy court will not permit the debtor to spend money on anything it deems "nonessential", and the debtor will have to live under a strict, court-imposed budget.

Dismissal of the Petition

Some persons who file for Chapter 13 bankruptcy protection simply wish to buy some time in order to prevent a foreclosure, or repossession of a vehicle. If the debtor is able to regain firm financial footing before the bankruptcy is resolved, the debtor may opt to petition for discharge of the bankruptcy petition and then to pay off the arrearages in full. In the alternative, a debtor may use the time to sell certain property, such as a house, prior to foreclosure or repossession, as foreclosure sales often do not result in the recovery of full market value.

Summary

In a "Chapter 13" Bankruptcy:

You will propose a repayment plan for your debts;

If approved by the court, a trustee will be appointed to collect your payments, distribute them to your creditors, and to supervise your compliance with the repayment plan.

You will have to pay the trustee's fee, which can be substantial.

Debtors whose debts exceed certain limits are barred from seeking Chapter 13 bankruptcy. (At the time of this writing, in order to file a "Chapter 13" bankruptcy, you must owe less than $269,250 in noncontingent, liquidated, unsecured debts, and less than $807,750 in noncontingent, liquidated, secured debts. You will most likely be unable to file a "Chapter 13" bankruptcy if you have filed and dismissed a "Chapter 13" petition in the last 180 days, and should discuss any prior filing with your attorney. You should also take care to propose a reasonable budget, as most debtors find themselves unable to comply with the strict enforcement of their "Chapter 13" plans, and end up dropping out of bankruptcy before their plan is completed.

This type of bankruptcy can be particularly useful when a debtor believes that his financial crisis is temporary, and that his income will continue to grow in the future. Corporations and partnerships cannot file a "Chapter 13" bankruptcy.

[strandinthewind]

Originally Posted by irishgrl

my point is, at least in the SF Bay Area, and surrounding comunities, people can only afford homes (because of inflated home prices) WITH 2 incomes and WITH creative financing. The days of a fixed 30yr mortgage (around here) are about gone.

and sadly, when people NEED a home, and they find one they love, they convince themselves that its possible. They find out later (3-5 yrs later) that they were wrong (because in the meantime, Jenny needed braces and Jeff wants to go to a good school, etc)

I do not think I was talking about that -- you were talking about the evil finance companies. If someone bites off more than they can chew - who the fool

[irishgrl]

Originally Posted by strandinthewind

I do not think I was talking about that -- you were talking about the evil finance companies. If someone bites off more than they can chew - who the fool

yes, granted, but that is the crazy housing market in the Bay Area...people are nutz.

as for your bankruptcy info, Im aware of most of that info, but FHA WAS looking at his credit score and a year after his bankruptcy was discharged there were unexplained bits and pieces that the trustee didnt clean up. And the lending companies and credit companies are treating him as if he had discharged his debt completely, instead of paying 80%. He believes he was given bad legal advice and was not represented in Court (the attorney wouldnt tell him his court dates and then didnt show himself, and my friend got taken to the cleaners as a result.) I overstated the amount the Trustee got, it was 30k not 50k. still a huge sum of $$$

[strandinthewind]

Originally Posted by irishgrl

. . . a year after his bankruptcy was discharged there were unexplained bits and pieces that the trustee didnt clean up. And the lending companies and credit companies are treating him as if he had discharged his debt completely, instead of paying 80%. He believes he was given bad legal advice and was not represented in Court (the attorney wouldnt tell him his court dates and then didnt show himself, and my friend got taken to the cleaners as a result.) I overstated the amount the Trustee got, it was 30k not 50k. still a huge sum of $$$

Well, he did discharge more than 20% of the debt because he likely saved tens of thousands in interest as interest cannot be charged or accrue in a 13 plan save for some exceptions like student loans, income tax, etc. So, creditors will never look at him as if he did anything other than bankrutpcy under either chapter, though 13 generally is considered slightly better.

As a general rule and with few excpetions, any and all creditors listed as such when he filed will be included in the discharge order. If these creditors are not accordingly reporting the debt on his credit report, they are in violation of the court's order. Mailing a copy of the listing of the creditors as well as the dischrage order as proof of the dispute to the credit reporting company should remedy this. If the creditor refuses, then they could be consrued as being in violation of the court's order, which usually means sanctions. Having said that, any unrelated negative items on his credit report will be up to him to remedy, and that is not that easy of a process, though it has gotten better.

And, yes, given those facts, it sounds like your friend got bad legal advice becuase the amount he paid in five years likely could have paid his debt off in full and left him with some money.

[Sarah]

Originally Posted by irishgrl

gosh....what can anyone say? Im sorry you have problems...

no no. i'm not looking for anyone to say anything. i just have to laugh every time someone mentions health care.

both of my parents work for the government. you'd at least think there'd be some sort of family plan. i suppose that's why Americans are encouraged not to think.

sit down, shut up, and watch this tv! here's american idol. here's 56 channels of it!