Posted by Anonymous on 10/16/05 8:39am
Msg #70799

Observations from signings

The trend I'm seeing from the signings I'm doing is people eating up the equity in their homes to fund the "good life" or other frivolous things. I had one the other night where the borrowers were irritated about having to pay the required mortgage insurance on a $503K refi. They had lived in the house for almost ten years and after refinancing several times, had less equity in it than when they first bought it. The mortgage insurance requirement in this case was for anything less than a 20 percent stake in equity.

Are others seeing the same thing?

Reply by Tennessee on 10/16/05 9:05am
Msg #70801

"Frivolous" & "the good life"?

sheesh! Collectively speaking, who has time to draw conclusions on the viability of a homeowner's decision? Furthermore, without those two equations we would all be closer to looking for a new job.

Reply by Anonymous on 10/16/05 9:38am
Msg #70805

Re: "Frivolous" & "the good life"?

You would put your home in possible jeopardy just to fund a luxury car or boat, or to get everyone lavish holiday gifts? These are all comments I've overheard during signings from folks that are spending the equity on their homes.

Reply by Tennessee on 10/16/05 9:50am
Msg #70806

Personally no but......

it's something that society has made "ok" with the "ease" of borrowing, i.e. a Signing Agent and 1-800 numbers AND let's not leave out the internet. I'll tell you this much, I'd much rather eavesdrop on the plan to buy that fabulous boat then hear the stories where illness is forcing the borrowers hand. While I'm at the table they have my undivided attention, that's what they're paying for. I DON'T want to know why they need me, I only want to perform my job to the best of my ability and go to the next one. Sometimes they just need a shoulder, I am convenient BUT their situation and their numbers fall out of my head as soon as the door closes behind me. Yes, I pray for those in terminal despair while I am giving thanks that it's "them and not me". I don't live within their walls and I adopted the "live and let live" thought patterns long ago. Sorry if my response sounded hard, it's early.

Reply by Anonymous on 10/16/05 10:03am
Msg #70807

On the other hand...

...I've also overheard comments on how the refi's are going to improve the lives of several borrowers, including better schooling for better jobs, getting out from under crushing debt, etc. For those folks, I'm glad to be a participant in their all-American dream.

I just observe and listen a lot, then get to thinking when I hear the media saying we've become a nation of spenders rather than savers.

Some final observations: the folks I've observed funding their "good life" lifestyles tend to be the ones within the moderately well-off to the lower well-to-do ranks. The folk's improving their debt status or schooling are from the lower financial ranks. Also, the lower stratus folks are a lot more observant about what's actually going on with the loan (rates, fees, etc.).

Reply by Brijoe_WA on 10/16/05 12:13pm
Msg #70815

Re: I wanted to slap this lady

This all reminds me of a closing I have last month. The lady was a single mom of 3 girls, had an average job which she made just ok money. The house was nothing special at all, outdated, older neighborhood. She was taking a 2nd out on her house for 40k to buy a brand new HUMMER. What the hell is she thinking???? I was speachless. Some people....

Reply by LawrenceOK on 10/16/05 12:38pm
Msg #70820

Re: I wanted to slap this lady

She'll find out when the 3 T's comes along that that was a real stupid investment. I know, I raised 3 girls and have a 13yr old niece that just hit the 3 T's.

Reply by Paul_IL on 10/16/05 5:49pm
Msg #70833

Everyone complains about mortgage insurance as it is just flushing money down the toilet! It is not deductible and only benefits the lender as if they are already not making enough money off the loan..

I seriously doubt that you are in a good position to give informed opinions on anyone's financial status..

The equity in a home is there to be used paid back and reused again..it is the cheapest money available and the interest is usually deductible which makes it that much more attractive.