Bonfire of the homebuilders

[soblessed53]

By rushing into lending, homebuilders helped fuel the housing crisis

But when it appeared that the Mottos might not qualify financially for the loan, things took a troubling turn. Beazer, according to the couple, inflated the pair's earnings in loan-application documents by incorrectly stating they were collecting rental income from the house they were leaving. "I don't want to misrepresent myself," Elizabeth said in e-mail correspondence with Beazer's outside mortgage service, dated July 14, 2006. But in the end, the couple signed the documents, and soon after they closed on the Clarksburg house.

http://www.msnbc.msn.com/id/20145724/

 

[Lynden1000]

Many companies have acted reprehensibly, but I'm having a hard time mustering sympathy for people who signed their lives away to purchase homes they knew they could not afford.

I know so many people who bought homes priced at 4 or 5 or 6 times their income, because, hey, that old rule of thumb about a house being 2 times your income is just outdated and no long applicable.

They're rethinking that perspective now, while crying all the way to the bank.

The fools in this article made 145K a year. They needed to look at houses in the 350K range, not 580K.

 

[Steezie]

Capitalism at it's finest, greed, theft, fraud, and lives ruined

Housing prices out here have gone ridiculously high. 500K or more for houses that were bought for MAYBE 20K back in the day

 

[billwald]

"Sucker born every minute," P. T. Barnum.

 

[Sandlapper277]

Many companies have acted reprehensibly, but I'm having a hard time mustering sympathy for people who signed their lives away to purchase homes they knew they could not afford.

I know so many people who bought homes priced at 4 or 5 or 6 times their income, because, hey, that old rule of thumb about a house being 2 times your income is just outdated and no long applicable.

They're rethinking that perspective now, while crying all the way to the bank.

The fools in this article made 145K a year. They needed to look at houses in the 350K range, not 580K.

Not to mention they signed a fraudlent application. I wonder if that's criminal in Maryland?

I also looked at a map. I wonder what a 3-bedroom 20 miles outside the Washington Beltway will be worth when housing prices come back to Earth? Baltimore-Washington will never be cheap, but a three-bedroom 35 miles from town for over half a million? That's insane!

Also, from my map and some math, they had a $420,000+ mortgage on a house 13 miles closer to Washington. To think of moving to a 3-bedroom with four kids, I wonder how small that house must be?

How about putting a contingency on the offer to buy the new house?

I can't find any way to make this couple's actions look anything other than "stupid". And when the bubble bursts and they've got a million in debt on half a million in homes, it'll take them years to dig out.

 

[Ave Maria]

Sorry to hear that the couple is suffering so.