if you bought a house in Puna in the last 5 years

[james weatherford]

"...should..."?

It can be easy to be smug and say, "you bought in, you take the risks." And, that is what ultimately happens. [btw: we sold equities in Sept 2007 just before the peak and bought real estate at 25 - 40 % discount in mid and late 2008. We took the risk.]

On the other side, it is a bit preachy to talk about what people "should" be able to do.

Someone must absorb the risk and that can mean a long time waiting. Who should absorb the risk? The community-at-large because a few lenders and borrowers are not prepared to? That is a hard line to sell.

James Weatherford, Ph.D.
15-1888 Hialoa
Hawaiian Paradise Park

[StillHope]

I agree with Kathy.
We don't know the circumstances.

If a person asks for help(advice),telling "It's your fault" is not helpful,to say the least of it.

[Jon]

The risk is shared by the buyer and the Bank... or it should be. In this day of no losers, the risk is shared by tax payers.

Myself and some buddy joke about how we should have bought million dollar homes last year... then work out a deal with the bank, Wait 2 to 5 years and sell it for 5 times what we owed on it.

Just wait, you will see those sales start in a year or so.



-----------------------------------------------------------
I do not believe that America is better than everybody else...
America "IS" everybody else.

[bystander]

Hah! that's what they said 2 to 5 years ago.

[Jon]

but back then you did not have the option of coning the bank into lowering your price...



-----------------------------------------------------------
I do not believe that America is better than everybody else...
America "IS" everybody else.

[lostboystoy]

ok their are 3 parties to blame for this lovely housing crisis. First and foremost are the individuals who bought outside their means. Second is the real estate agents that allow people to even look outside their means. And of course our friendly lenders. All three parties didn't really care about the big picture. As long as it looks good on paper. Who cares if the individual lost the house. But in fact knew they would make more money re selling the property and it's a great write off in loss for the lender. Which we as tax payers are flipping the bill.
To those that used their property as their own A.T.M's. Or more like their own credit card.
Shame on you,
If your a real estate agent or lender that subscibes to this practice you should be in jail.
Because of you. Hard working people with good credit that don't over extend themselves. It's almost impossible for them to buy.
When now is the time to get people into homes so we can start fixing this mess were in.

setting my soul free....

[Kelena]

I am sorry this is happening to you.

In 2005, only a handful were predicting the following:

* Housing prices would have not only a "hard landing", but the wings would fall off and the engines would be incinerated.
* That Lehman Brothers, a century old financial institution and a symbol of Wall Street, would vanish overnight.
* That Merrill Lynch would collapse, the remainders being snapped up by Bank of America, which would finance the purchase through a midnight raid on the treasury on the eve of an election where the legislation was cast as "do or die".
* That people would begin talking about the Great Depression as if it were in the futre, and not the past. And that it would be worse this timebecause we don't make anything in America, our corn is inedible, our families are scattered, and the family farms that sustained us in the Great Depression are fading into history.

Many of us who were not ready to come over earlier, have missed the slingshot and will have to work our way over.

And no, you aren't the only one affected. I have had a condo for sale in New Orleans since the very first day I set foot in Hawaii in 2006. The value of my home in Southern California is getting very close to what I paid for it and, I imagine, will fall through that floor before this is all over. Anyone with a home has been affected. Anyone with a job could be affected, along with anyone who doesn't have a job who wants one. Anyone with a 401k is in shock right now. I am very lucky to have a very stable job.

You must decide if you want to continue to live in this house and accept the burden. If you do want to stay, then a loan modification is your best bet. With regard to that, it is the Wild West right now and there is an element of arbitrariness to it. Always worth a try with your lender, though. There are also a lot of proposals in this area right now, so you need to keep up on that....or consult with someone who does.

If you don't want to stay, you need to understand the downsides to walking way (credit, possible deficiency judgments). I cannot advise you on that. In California, if the lender chooses to proceed by non-judicial foreclosure, that is to say, a trustee's sale on the courthouse steps, without filing a lawsuit, the lender waives the right to pursue you for the difference between the actual value of the house and the amount of the loan (the deficiency). You have a ding to your credit, but there is no credit to be had anyway right now. And rent is very cheap in HPP! The thing to avoid is the deficiency.

This is not my area of expertise (took a class in law school though and got an A, 23 years ago!), and I cannot advise you on Hawaii law, but a quick consultation with an attorney there may make the options clearer. Bring your loan documents with you. And don't despair. There is a lot of soul searching going on in America. We are wondering where we misplaced them. Hope is on the way.

[Devany]

Glen, I knew I liked the way you thought! Your post was absolutely RIGHT ON!

Aloha au i Hawai`i,
devany

Devany Vickery-Davidson
East Bay Potters
www.eastbaypotters.com
www.myhawaiianhome.blogspot.com
www.travelingfork.blogspot.com

[Dave M]

Oh cmon Kathy, I don't mean to sound non sympathetic but as Glen so eloquently put it "And no, you aren't the only one affected." I'm sorry but I'm just a little jaded or board, probably both, by this subject. It sux all over and I feel for people but the truth is that people tend live at the edge of "our/their" means and us Americans are extra good at it.

Unlike lostboys opinions, "the real estate agents that allow people to even look outside their means" Real Estate agents (The person that handles most peoples largest transaction of their life) don't control what price range people look in. If someone calls me and wants to see 500K ranches and I show them 700K and up they usually don't call me back. They call up ask us to show them places between 400-500K with 10+ etc etc.. We look, sometimes a week sometimes a year, they find something they like, make an offer in which case we ask for a pre-qualification letter, "from a bank" to accompany the offer. Does this sound vaguely familiar to any one?

I'm the first to admit that the lenders were out of control but why blame it on the Realtors? Granted we wanted to get people qualified, so we didn't waste everyone's time showing them something they couldn't afford. Doesn't sound that sinister to me. Unfortunately people tend to buy as much house as they can afford. Seldom do I see people say "we're overqualified for 400K but we only want to see properties in the 200s". As well there were the 0% "no docs" loans but again this was not the Realtors fault. I've never promised anyone a profit (I was a realtor through the eighties) to do so would be illegal by the (TREC) Texas Real Estate Commission regulations.

LOL.. I guess I ranted at lostboy in a reply post to Kathy [:0] Oh well such is life..

Radioguy, I will say this, if you can hang in there I think you should, but again, I don't know the details. I think the market will recover at different levels in different areas in the next two/three years (My opinion for what it's worth) The good thing about Real Estate is that it never gets reduced to being a "penny stock" that eventually goes off the NYSE board to be worth nothing. If you can hang you may even get back in the green on that house faster than you expect. The one thing you/we have going for us is that our society is pretty spoiled on credit so one could assume that we'll have money/credit/worthless paper flying around in no time.


And lastly, I don't have a clue who these hosts are on Saturday Night Live (I hate that [!] makes me feel old. Opps that's another thread.

[David M]

Just for perspective - You say your house is worth 50% what you paid in 2005 - what was it worth in 2002/2003? Near what it's worth now?

I weathered my own storm years ago. Bought a townhome in the greater DC area in early 90's during a time when prices were up. As noted, life changes and 3 years later we were moving to Ga. I was shocked to learn my house had lost value if I tried to sell it. I was able to do a lease purchase for what we paid for it. Basically, I'd break even month to month. Ended up extending the lease purchase and by the time it was completed, I was wishing the tenants would default just so I could put it on the open market, which was now beginning to soar. Actually, I was really glad to be done with it.

At least one financial advisor I know says your home should not be counted as an investment - yes, counter to the market hype. His point is, we have to live someplace. Unless your homeless, you're paying rent or a mortgage etc). You don't expect your rental value to increase.

As been stated even here on PW many times, need to take the long view. If not having to sell/move then just wait it out.

BTW, given such a drastic change are you going to challenge your county evaluation to make sure taxes reflect this new, lower value? If so, PLEASE keep us informed how that works - could help others.

In any case best of luck whatever your situation.

David

Ninole Resident