Segment | Economy

Foreclosure Alley

For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state — home to a major housing boom. But now the Inland Empire has become something of a poster child for the foreclosure crisis. In the newer developments, house after house sits vacant — either up for auction, for sale by a bank or going for what’s called a “short sale,” which is when the owner owes more than the house is worth.

SoCal Connected tracked down some surreal sights associated with the crisis - a company that specializes in removing whatever people leave behind in their foreclosed homes.  The process is called a “trashout” - a term the company came up with because it perfectly describes what happens.  Everything that’s left is dumped in a trailer and taken to the landfill.  
Then there’s the guy who started a business to spray-paint dead lawns.  That’s right.  He paints brown lawns green.  We also tag along with a couple of code enforcement officers who are spending more and more of their time having to drain slimy, abandoned pools.

Finally, we meet a typical couple who bought their first home, thinking it was a great investment and tax write-off.  Now the place is worth only half of what they paid for it and their neighborhood has almost as many vacant homes as occupied ones.

One of the code enforcement guys sums up the problem in a single sentence - “You know you’re in trouble when the lawns are brown and the pools are green!”

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I was deeply moved by the piece. It's sad to see 'The American Dream' fading away for the vanishing middle class by the greed and inaction from our financial sector. The man from Lake Elsinore had it right, the crisis is only to get worse as people with 5-year adjustable mortgages start getting their bills that they can no longer afford. 'Brown Grass & Green Pools with larvae' will be the going thing in the I.E. & California for sometime. Good report, KCET.

Joe, I don't think you get it. This mess was not only the greed of financial institutions, but also the greed of the prospective home buyer. Many who are in foreclosure knew that they couldn't afford the payments and no one twisted their arm and made them sign on the dotted line. Those people should take the blame for their own greed. Everyone wants to have a home of their own but some were willing to take excessive risk to buy what they couldn't afford. This has hurt those who stayed within their means by putting us into an economic crisis that we will all pay for in lost jobs, lost investments, etc.

I agree with you. Many people risk so much to have NOTHING!!!! But all the fat cats took the money and split.

Sorry but people need to quit blaming others and look into the mirror. Sub-prime loans are for people who have already proven that they are not trustworthy. This country is based on credit and entitlement. Only people I feel sorry for are those who are giving up their luxury items like cable tv, cell phones, and eating out in order to make good on their mortgage. This govt bailout is just another way to let American's know that they no longer need to be held accountable for anything!!!

Just a reminder to not buy things you can't afford....

Where I live the banks have always had adjustable mortgages so every three, four or five years I would have to renew. What I did, if during any one of the periods I found myself behind the eight ball with less cash coming in than the last time I renewed, was to take out the new renewal over a longer amortization period. That way I was always able to make my mortgage payments. If during any period I had more cash then I shortened the amortization period.

The foreclosure crisis is still happening but with a twist. The government that bailed out the banks are hurting first time home owners. I'm a first time home buyer that is finally able to buy a home at a reasonable price and thought the best route would be a foreclosure home, but there are none available. Why might you ask? Because the banks are buying back foreclosures at a higher price than they are worth.

This type of crap should be illegal, which is why I'm consulting with an attorney in Upland to see if there is anything that I can do about this.

I'm deeply saddened by the fact people are losing their homes but for those that never had an opportunity to buy are hurt as well. This country is all about the money not the way of life and our current crisis is proof of that.

Our mortgage has been modified, we are now able to stay in our home for 4 more years....then we can not afford the payments again, what will happen? Is the lenders help in modification of our loan a help, or just a temporary fix? Our goal is to pray the real estate comes back enough to sell and pay our first and second loans of approximately $566,000. My husband is retired, fortunately from the state of California after 38 years, and he has a pension, and will be able to collect Social Security in November. We are blessed, we are some of the lucky ones with an income. I have sold real estate since 1986 in the Santa Clarita Valley, a fairly well heeled area with excellent schools, etc.,, so prices were constantly going up. Now I am struggling like everyone else, I have been fortunate to sell a couple of properties this year, to help pay off credit cards, gas, food, and utilities. My business has come from referrals. My husband worries that in four years when we can no longer afford our modified home loan, what is going to happen? Are we going to go through the harrassing phone calls, people knocking on our door, attorneys and private individuals promising us assistance at a cost of course, lenders seem to play good and evil one person says they understand, the next one who calls yells and threatens. Our second trust deed of a little over $60,000, was the worst, I can't tell you how we where lied to, threatened, etc. Even when two weeks prior to our foreclosure date the first trust deed, agreed to modify our loan, the second would not, stating that now we should be able to make the interest only payment to them, it is a recourse loan and will follow us, to the ends of the earth, or so we have been told. We saw a bankrupcy attorney about claiming bankrupcy, but we have two cars that are paid for, and had paid off the credit cards. We are just house poor! So we were told we would have to buy one of our cars back from the bankrupsy court if we were lucky and were given that option. (We own a 1998 Ford Explorer and a 2004 Chevrolet.) Not luxury cars by any means, and we made the mistake of paying them off, which we assumed responsible people do.
Now to the important part, we were told by our lender on the first trust deed, that the reason we were able to modify our loan, was that we kept in contact with the lender, we did not back down, we did not bury our heads in the sand. No matter how bad and threatening things got, I contacted the lenders every week, yes, every week, I left messages on voice mails for any number and person I had ever spoke with at each of the two lenders, when I had an email I also sent an email. Other Realtors said I was beating a dead horse, I should transfer title to vehicles to friends or relatives, lies about everything under the sun, and play the system. This was not something I or my husband could do. We are honest people and have worked hard, we made a pact that no matter how bad everything got, we were not going to compromise our principles by commiting fraud.
What did our lender finally do? On our first trust deed: two percent interest only for first two years, then three percent interest only for years three and four. Year five it goes to 4.5 percent interest and principle, then year six on at 6.375 percent principle and interest. So you see they did not want another foreclosure property on their hands either. The lender is also hoping that we will sometime within four years be able to pay the loans off with a sale. They know we can no longer afford this home, so we either lose the house in a little over four years, or the lender will nedd to work with us again. And in the next four years we are able to stay in our home, with the combined payments of less than we could rent a much smaller property for in the Santa Clarita Valley. Oh yes, about the second trust deed, they were of no help, and said they are in a position of holding firm, of course they say we have commited fraud, taking a loan that we could not pay, although we have been paying on it for years.
I have since been able to advise anyone I hear of in foreclosure to not give up, keep in weekly contact with the lenders, leave open ended messages: as our situation has changed...we want to work something out that would be agreeable to all parties, etc. Do not give up, you may end up going to a foreclosure sale, but you will know that you did everything possible to try and keep your home. The lenders do not need nor want another foreclosure.
God bless you all and keep thinking positive.

Its very clear you purchased a house well beyond your financial means. People like you expecting a bailout like the 'adjustment' by your mortgage company make me sick.

At your age and circumstances(retired), you have no business having a 560 thousand mortgage. Wake up.

Why don't file bankruptcy?

Linda


I too have been in real estate and then the mortgage business for many years - call NACA - they're a non-profit organization and can and will negotiate your mortgage rate/payments down - can get you a 2% rate - really!

Check it out, pay it forward...

Blessings,
Xia

This was a shocker to my senses. I also live in this area where it was filmed. I'd been wondering how-where was all this money coming from with the new people in the area, new homes, women shopping like there was no tomorrow, new vehicles, it was shocking and bewildering how all these young couples-people were earning there living and spending these past years. Now I know.

Lisa Ling did a fabulouse job on this piece as usual, top notch job-it has shocked my senses all evening after watching it.

I hope you show "Foreclosure Alley" more through out the season-year! Great Job Everyone who worked on "Foreclosure Alley". Shocked My Senses to The Core and Beyond, Molly

He paid $399K and a house down the street is going for $180K.

He says he made a stupid decision. Yes, he did. But he is compounding it my an even more stupid decision--STAYING IN THE HOUSE. WALK AWAY, IDIOT!!!!

Well, I RESPECT a MAN who sticks with his deal, up or down.

A VERY sadning Video, I wonder where those people went to ?

Why don't people move together, and at least save 1 home, by renting out a room to other homeless people.

It should NEVER again be allowed 1-2 year loans, but next time will be different....NEXT time.

So, this is what happens to all that chinese crap that gets imported on borrowed money.
Will the USA DEFAULT...OR... the Chinese STOP lending.
This is a TOTAL waste of limited resoures,
and an indebted future.

Do peolpe REALLY love their children, to leave this SHIT-mess to them. ? ? ?

You wouldn't happen to be one of these greedy idiots who cashed out the equity in their homes in order to get all of the SeaDoos, RVs, and that brand new Lexus and so forth would you?

There was much greed going on from the sub-prime mortgage lenders but just as much greed from everyone refinancing their homes, cashing out their equity, and going on spending sprees!

You were enjoying the party when the real estate prices were going up and up. Did you think they were going to go up and up forever?

Of course the typical SOCAL response is to be morally bankrupt and just WALK AWAY when the party's over! I am so glad to be out of there!

I applaud the character of that family that is sticking it out and my heart goes out to him and everyone else who is caught in this crisis. You want to call him an idiot? Guess which one I would rather have for a neighbor!!!

Why can't most of the so called "trash" be given to charity? There were a lot of good clothes and other items I saw thrown in dumpsters. Seems like another great waste. Hopefully they are trying to sort some of it out.

All the "trash-out" people need to do is post the address of the house they're trashing to a site like craigslist or freecycle, and tons of people will come descending on the house to take stuff. Trust me on this one.

That was explained in the piece- the charity companies don't show up when they say they will - and they don't take everything - he's paying his crew by the hour - they have to leave the house in sellable condition with nothing on the curb - giving the stuff to charity means money out of his pocket...he's in business to make money. Now if you wanted to start a company that goes FIRST and charges nothing...to take the valuables then sell them - you could probably collect a lot of good stuff - to donate? - well, it will cost you money to get the stuff, and you have to store it someplace too...everything costs money...

Seriously, I know they explain why the company doesn't take the initiative to sell/give away the stuff, but I have to admit the WASTEFULNESS shown in this piece is what bothers me the most. Yea, I feel badly for some of the people who were uninformed and who might have been kinda led to believe they could make it in a house that they really couldn't afford...that stinks...but there's no excuse for the lack of environmental and social responsibilty. It doesn't take money to bring something to a shelter. ARGHHHHHH!!! >:(

It is difficult to feel sorry for all these people that is caught up with the foreclosure. I wouldn't even feel sorry for myself if I were in their shoe. My wife and I has been moving from rentals to rentals before we save up enough money to put a down payment for a house and we can put in at least 50% of the value. We did not go in immediately but waited for a bubble like this to do it. That happens in the 90's and we have a great house for a great price.
Our house increase in value after 2001, we did not refinance or take any equity from it because we did not need it. We see the prices going up ridiculously and told ourselves to braise for another bubble. Well this is it and we have save up enough to get another house.
This bubble is not going to go away for another six years and we are looking seriously into where the bottom is before we decide to get one.
My point is we have so much resources here to learn and be wise with our investment. We have so called the best education system here yet we look so stupid going into ridiculous loans with terms we know that is going to hurt us when the time comes. We have plenty from where I originated yet we get drunk with greed. We think we are someone but ending up longing to be somebody else and worship those rich and famous like God. We did think that money grows on trees before this bubble and we acted like there is no tomorrow buying all our WANTS and not thinking that much in the future.
We are going down today. History does repeats itself. The Romans had it good just like us but throw it all away being complacent.
We thought we have the freedom.. but look carefully and be wise to see what the government has done. Yes we think we have the freedom. Yes we think that all is fair in this country. The government today is not for the people, is not by the people or even of the people. Is the government afraid of it's people today? The French government is. Look at ours here. Think people who is in-charge of the country. You think you do? Where is our choices for president comes from.. the two big parties and people who are rich. Where are the rest?
It is sad to see that the country have to reach this desperate state to learn. It is sad to see generally the population taken for a ride by its own government. It is sad to see the so call best education system fail to greed. It is sad to see the world most powerful nation could even protect it own citizens from dying due to unavailable health care. What else could I say to create a revolution.

RIGHT ON JOSH! Anyone who did not read the last paragraph of Josh's comment really ougth to. After that, please watch "America: Freedom to Fascism" You will see for yourself what "EXACTLY" is happening in AMERICA .. and has been done (to us) on purpose. There are no accidents.


1) America: Freedom to Fascism – video
http://www.youtube.com/watch?v=3ueEfRXZCVA

2) The Fascist Blueprint – It can happen here
http://www.brasschecktv.com/page/177.html


Josh's comment that I am referring to:

We thought we have the freedom.. but look carefully and be wise to see what the government has done. Yes we think we have the freedom. Yes we think that all is fair in this country. The government today is not for the people, is not by the people or even of the people. Is the government afraid of it's people today? The French government is. Look at ours here. Think people who is in-charge of the country. You think you do? Where is our choices for president comes from.. the two big parties and people who are rich. Where are the rest?

It is sad to see that the country have to reach this desperate state to learn. It is sad to see generally the population taken for a ride by its own government. It is sad to see the so call best education system fail to greed. It is sad to see the world most powerful nation could even protect it own citizens from dying due to unavailable health care. What else could I say to create a revolution

I saved 50% of our income between 2003-08 while all these stupid people were buying homes they couldnt afford. The foreclosure I just bought 2 months ago I have enough to fully pay it off. I am waiting for this bail out to kick in so I can really get a place cheap. Use your brains people and don't be stupid again.
Signed,
Winner

Exactly right, I did the same thing. I'm a Generation Y'er who saved every penny and rented during the bubble years (because, duhh, I didn't want an oppressive mortgage). Now I'm supposed to feel bad for foolish people who knowingly lived outside their means?

there are always a few that may live beyond there means, but from the experiance of being one of the guys that cleans these up the leftovers, and i am also a home loss victem. i feel it is very wrong to assume we lived foolishly. arm loans , and people just not spending money was and is the problem.i am sure glad not everyone has mr garblers attitude. most of us worked day and night for years for our one big shot as a normal house with a small pool, my savings was gone is only a few months,!!

The broadcast was truly moving. Human beings are destined to repeat history time and time again. It is not fair to point the finger at just one party for the blame. The problem was a long time coming. Our government officials wanted increased revenue and cut red tape and turned a blind eye to warning signs. Loan officers encouraged applicants to get all they could get, not afford. Banks eased requirements. Reality companies directed potential clients to appraisers who “could deliver the numbers” and finally potential homeowners ignored common sense and overreached. In my case I was bombarded constantly to refinance my properties. I knew taking out huge loans was irresponsible. I took the conservative approach. I balance my assets between stock, bonds and property and lived within my means. I did not take out “the equality” my property had amassed. However, I am still getting hit pretty hard. I have lost 50% of my stock value in the last 12 months. This was to be the future for my children. It was to provide education and services for their disability and potentially a home for them to live in should they not be able to become gainfully employed.

We all knew that the market could not sustain the rapid growth. It was artificially created by loose lending practices of which our elected officials grossly failed to perform their sworn duty to safeguard the interests of the constituents. Both the Democratic and Republican politicians in Washington and Locally are to blame equally. When will special interests stop hurting America? Can’t our politicians do the right thing and put the people first not their political careers.

Are we going to experience the 1930’s again? I hope not. It is wrong for a family to leave behind its memories, dreams and hope. Your broadcast painted a stark picture of what might be for a great many more Americans if our politicians don’t start work together for the common good.

What is next? What about the bonds and special assessments to pay for the infrastructure i.e. the roads, water and sewage? The trigger to this meltdown was our dependence on foreign oil but it was our greed that made it possible.

We need to take responsibility for our future and earn an honest dollar. A fair wage, a flat tax both federally and locally in the State and we need to live within our means.

God Bless America!

This is shocking! I had no idea of the depth and scope of the foreclosure crisis in this area. Thanks for an informative presentation that illustrates the state of our economy. I do hope some enterprising individual or group will find a way to salvage the items left behind so that they could go to those in need instead of a landfill. Seeing those little dresses and family photographs trashed was heartbreaking!

Hey I need...no make that want a big screen TV. How can I contact these guys and pick up a big screen for pennies on the dollar. I can also use a new/semi-new computer for the kids.

Seriously that is a lot of good stuff going to waste. I guess that sums up the entire housing crisis people WASTING money on oversized houses, oversized vehicles, expenisive $1000 oversize purses and undersized overpriced dogs to put in said overpriced purse.

How could I contact these guys that just drow good things away my little brothers need a computer and a lot of those things they just trow away would be usedfull!!!!

to anyone watching this, i urge you to try and buy a foreclosed home. or go to an auction. it's almost impossible, made worse by the bank bailouts which are not forcing these homes into zero-reserve auctions.

Isn't is against the law to landfill electronics with all their hazardous waste? That's the part that made me cringe the most. If the hauling company is dumping the TVs and computers then that's just one more negative consequence of this we will all have to suffer.

1st.. Does anybody here not think the first part of this video was not set up to gain sympathy? PLeaseee.. do not insult us. Nobody is going to throw away computers and t.v's in reality. This was a preplanned little show to gain sympathy. DON;T FALL for IT!! Are all those workers making so much money that they are not willing to resell the stuff on ebay.

GIVE ME A BREAK.. STOP the lies..

Teach people how to walk away from the bad decision they made.

I am single, female and take care of my handicap mother under the same 1000 sq ft house. Yes.. It is a bit small but my mortgage is only $250 a month.

DO NOT ASK ME TO BAIL OUT THE FOOLS!!!!

No sympathy here ..

Instead of begging for another loan modification to live in a house 5 times the size of mine just walk away.

For the love of God... Find a 1000 sq ft. house and rent!!!! JUST LIKE YOUR FELLOW PRUDENT citizens.. DO not come begging to me for a bail out..

This is what the government is asking of us now.. To bail out our neighbors living in mcmansions.

TOTAL Insanity..

I came to USA 4 years ago and never able to understand how people can get so much loaned compromising their future income "just because they can" stupid things like "once you own a house you're on top of a bank" or "if you don't do it now you'll never be able of" or even better: " we just 'got an equity line and we're going to Europe/buying a Mercedes"
like money is of no value or will never have to be repaid... now I get it: It will never be paid!
Get the losses mr 125 percent loan to value...

I am shocked that anyone is shocked by this video. I've been hearing about this stuff for at least 6 months now. And why should we pity the former owners for not taking their personal possesions along? Did they really need to pay a moving company to pack up that handful of family photos? Maybe they could have just used their own two hands to do some work themselves. Prudent people don't just abandon stuff like that.

Joe G,
Are you smoking crack? Yes, there are many greedy conmen out there with fancy job titles in the financial industry.

But the middle class brought it on themselves. They fell for the con. Who would buy a home that cost twice as much as it was worth, hoping that some other sucker might misvalue it that much as well? And who would ever have the nerve to cry about it afterward? Oh, poor me, by the time I bought my Amway kit, everyone else stopped falling for it, woe is me.

A comment from the CalculatedRisk blog needs to be forwarded to the company that is doing these trash-outs -

Please call and ask them to try placing ads on CraigsList (http://inlandempire.craigslist.org/ or simply http://www.craigslist.org/) to help avoid some of this stuff going into landfill. This is such a waist!

If they posted the address the morning of, they'd probably get a line of people out there in short order to collect much if not most of the stuff from these homes!

Cn

freecycle.org would be another option for this company. It may be additional work for them, but that waist is simply disgusting!

Cn

Stop voting Republican. They represent ONLY the rich. The reason so many of you are in such a bad situation is due to Republican control of the government.

The only reason the middle class exists (which has only been about eighty years) is due to the Democrats.


But go ahead and vote on stupid emotional issues. Go ahead.

Since "the rich" are by definition a minority, how could any party succeed by representing them in a two-party system? I fear that you are oversimplifying just a tad. Anyway, this is false dichotomy, as there is a third choice: the Libertarian Party. The other parties steal from A to give to B, and then from B to give to A.

Libertarians don't steal.

Hey Mike,

The Democrats cater to the rich also. Why do you think the rich Hollywood elite loves them. Also, while I am sure there are plenty of Democrats who vote thinking they are helping people they are really creating a dependent class of people (the Poor and Union workers) who will vote for Democrats purely based on the handouts they receive. This is destroying the middle class and America. People need to become self sufficient instead of dependent on others for their care. Sure there will always be those who need our help, but many Democrats could care less about the needy and only care about getting their votes. It is not a black and white issue.

Mike Fairmont .... I don't know where you study Government at, but the majority in the house and senate is Democrat -- guess who's been signing off on most of the junk legislation that has been passed, and not doing their job on the stuff that sits there! I hate to tell you, but there is darn little that the Pres can do all by his lonesome self.

Sorry, Don M. In the piece it says that this started 8 years ago. The Republicans were in charge of Congress from 1995 to 2006. Bush was President for the past 8. Connect the dots...

But, we all (Democrats, Independents, Unregistered, and Republicans) will eat this fraud and house of cards for the rest of our lives.

Bon appetit!

Excellent piece... Horrible story...

NOW imagine how much worse it could be if just one of those trash outs took place in a home that was ILLEGALLY foreclosed on? What? Can't happen you say? An ILLEGAL foreclosure?

I've been fighting an illegal foreclosure initiated by a mortgage servicer named Fairbanks Capital Corp. (n/k/a Select Portfolio Servicing) for 7+ years now. I'm one of more than 281,100 Federal Trade Commission certified victims of Fairbanks per USA/Curry v. Fairbanks ( www.ftc.gov/fairbanks ). To the best of my knowledge, I'm the first homeowner in the country to obtain both permanent injunctions and contempt orders against a servicer without having to file for Chapter 13 protection. Court documents are posted on my website to confirm that the judge called this a "predatory scheme".

What happened to me, and is happening to literally hundreds of thousands, if not millions of homeowners is known as Mortgage Servicing Fraud. MSF is a securitization issue whereas predatory lending is an origination issue. Few homeowners understand that the servicing rights to a loan are sold as separate commodities from the note itself. In fact, the only time a borrower has to be notified of a change of ownership of their note is when the *servicing rights* are sold. The note itself can be sold 100 times but if the servicing rights remain with the same entity the homeowner may *never* know that the note itself was sold. More info is available simply by searching "Mortgage Servicing Fraud" .

Anyone who has a mortgage on their home needs to educate themselves with regard to Mortgage Servicing Fraud as quickly as possible because with the downward spiral of the housing market, servicers are becoming desperate and I suspect that Mortgage Servicing Fraud will only increase as time and markets and the economy drag on.

What happened to me can happen to literally anyone with a mortgage - especially one that has been securitized and led off to Wall St. for slaughter. Please feel free to visit my site for more information on my situation. Drop me a note if you have any questions. I'll be more than happy to answer if I can.

Mike Dillon
Manchester, NH
www.getdshirtz.com
Because after all - all you have to lose , is your home.

sadly this is just another reflection of the business 'bottom line. . .we don't have to give an f about your pain' mentality that is running western society.

People with student loan default issues are not suprised by any of this. . .bottom line mentality has ruined our lives and now. . .it is catching up with the rest of you all. . .trapping people in debt for any reason. . .even for a house. . I mean come one being over a 1/4 of a million to 1/2 million $$ in debt doesn't scare the crap outta people?

Easy credit has caused the price of housing and college education to increase much more than the cost of living. . .or wages.

So we have large ticket items which are beyond the average wage being sold to that group of people. . while at the same time jobs were disappearing . .okay good jobs were disappearing, plenty of Walmart jobs out there. . . yeah this writing has been on the wall for 26 yrs?

Ah deregulation. . .it just pissed on me.
thousand points of light KMA!

Poor Linda. Bought a half-million-dollar pad and now the meanies want their money. She's a real-estate professional (stamps foot) for goodness' sake! This kind of treatment just isn't right!

Rowe, I agree 100%, her story tells me she put "0" down payment, as she has the $60k second trust! She is bitching that the 2nd trust holder won't "Discount" for her like the First (primary) lender did. Well, I live in Maryland which makes sure R.E. agents are "Educated" in Mortgages. (I am a former Md. R.E. Agt.) Any Educated R.E. agent KNOWS that the holder of the 2nd trust is "Wiped Out" in a Foreclosure, as the 1st Trust is "Primary". And she is "Befuddled" about WHY the 2nd trust holder is so Hostile?? If she does not understand this principle she has NO Businiess being a licensed R.E. Agt. and anyone that would sendher "Referrals" is as Uneducated as she is! I have no sympathy for her at all! AS a former R.E. Agt. I bought my house with the Standard 30 yr. Fixed and I would have NEVER advised a Client to take an "Interest Only ARM". She should have known better than take this type of loan being a (so-called) Real Estate Agent!

really great piece. but man, what a bummer.

The excessively high price of the homes put people at an unnecessarily high risk of foreclosure and the economy could not support the high cost of real estate. The high prices of these homes (compared to the median salaries for that area) almost forced people to get an ARM loan just to afford these houses. Most people don't want to lose their PRIMARY residences, often enough an ARM loan was easier to get than a rental.

Now how did the prices get so high?

**Price manipulation by industry insiders**. Seriously. When the interest rates drop or the access to loans gets easier, the intent is to increase speculation. So that's how the lenders and the banks made their contribution. Then realtors (the "ethical" real estate "professionals") and others in the biz used these ARM loans to speculate, keeping demand and prices high. The lenders and real estate agents/realtors all benefitted from a higher valued property in higher fees, commissions, interest and penalties. Actually brokers got higher payouts for selling riskier loans. They faked this demand. They were acting like investment advisors. Boomers seeking their nest eggs and others thought the unregulated real estate market as an investment was "safe" so speculation added more icing to the cake. There's no guarenteed liquidity in real estate but foreclosure. The stupid lenders created a huge inventory of debt obligations intended for speculation purposes, which is still on their books (collapsing the Lending institutions and banks) and now they want the taxpayers to collect them.

Most people are not earning a dot com salary. Jobs are being lost, inflation is getting higher and gas prices are going WAY up. The correction was going to happen.

Sure some people took out equity loans on their appreciated property and foreclosed due to irresponsibility.

But the numbers are way too high. The borrowers were getting killed here with the economy and the gouging. Unless the bailout contains measures to correct these things, it's going to be an EPIC FAIL.


life on credit was nice !!

70 000$ car,

60 000$ truck,

25 000$ boat

350k $ house,

20 000$ credit card !!

the life was good with master card !!!!!

now it the bay back time ! it time to live like every one ...

What? They don't have any Goodwill donation spots in California? They'd rather toss perfectly-working items like a big screen TV into the dump rather than allow someone else to buy it (and the proceeds may help OTHER struggling families)?

It looks like the former homeowners aren't the only ones who are making horribly wrong decisions.

The Salvation Army and others will do complete house clearances, so I have no idea what the rush to 'trashout' is. Who's going to buy these McMansions, anyway ? Wouldn't they be more rentable with furniture, TVs and so on in them ?

Good riddance to bad rubbish. If these people can't or won't make the mortgage payments that they agreed to in the contract that they signed, then it's time to step aside and let steadier hands take the wheel.

Who really cares, there were no tricks if you got into a mortgage you cannot afford and bought too much house too bad suck it up and move on the people that did it right should not have to bail all of you morons out.

Excuse me....

but this woman seems waaaay to happy and upbeat reporting this....

they should've qued her to seem more "compassionate"

My thoughts exactly, Candice - this reporter's demeanour is totally inappropriate to the subject matter. She comes across as a rank amateur.

I should have probably said presenter rather than reporter.

wow. This is the first report I've seen that really shows the face of the disaster. Thanks for making it

We have a few foreclosures but nothing to that horrible extent is happening here, a settled old community in New England.

Pardon me if I have no sympathy: Get out of the damn cities and start populating the rest of the country. You have a water shortage, an energy shortage, and crazy property costs - move to the midwest where you can put down $100,000 for a three bedroom house and two acres of land.

U-Hauls are cheap. Get out of the population centers.

please noooooo do not give away our secret. We do not need these idiots who can't be fiscally responsible coming out here and ruining our lifestyle with their gimme mentality

Please don't let out the secret about the midwest. Here's a primer on what I did. At 25 bought a 2 family, lived there and fixed it up. Then bought another 2 family, moved into that and fixed it up. Then bought another 2 family and did the same. All 15 yr. fixed loans. Twelve years ago bought a beautiful single family home for $114,000 (20% down, 15 yr. fixed) I just sold that (1750 sq. ft. character home) in 6 weeks for $155,000 and am buying a 2600 sq. ft. home for $225,000. All 3 rentalS are now paid. I'll put $140,000 down on that with a 10 or 15yr fixed. At 44 am getting my dream home. I'll bet most of these people in this mess are twenty-somethings with no clue about finances. Please don't move here and screw up our neighborhoods.

Dave-Thanks for making a great point. I remember when real estate was a long term investment and we were taught to do exactly as you have described. It took time to build up to your "dream home" and when done right you reinvested the equity so that your mortgage amount and payments would stay roughly the same. It's a shame we lost sight of that wisdom when we fell into the I want it now and I want it all! I'm hopeful this is a lesson that will be remembered for as long as my grandparents who lived through the depression remembered that--their entire lives.

Left Lala land for Texas and love it!

my husband and i just bought a custom log home in colorado. for years we worked, sometimes 2 jobs and saved. we do not and never have driven new cars, we have 1 credit card, used for gas only, which we pay off each month. we've also gone to second hand clothing stores for everyday wear. we do not buy unless we can pay with cash. we also have enough invested to where we can pay off the house in case of an emergency. we are 2-5 yrs from retiring and are looking forward to that knowing we have been fiscally responsible our whole lives. i have no sympathy for those in forclosure...they know their finances, their income, their savings and their ability to save. we did everything right and are now being asked to bail those out who spent beyond their means. owning a home is a privlege, not an entitlement.

SOMEONE WHO GETS IT!!!!

Kudos to you Julie, I'm in the same boat. Now my IRA's have dropped 35% and my children's college fund 20%. I don't buy what I can't afford. People make bad choices then they want to blame someone else. Just like health insurance, most people choose not to afford it... (yes I know there are acceptions to the rule) but in general most think cell phones and cable TV come before health insurance. Sorry but those are just bad choices. Now my tax dollar is going to bail those people out. bleh!!!

Notice how that talking head has a huge smile on her face the whole time? Nice of her to care, huh?

It reaches all the way down to NE San Diego too. Love those local California municipalities too that don't give a hoot about carving up every last piece of hillside and valley to build a tract, it really disgusts me sometimes and they are as much to blame as "predatory lenders"...now they are choking on the problem all while their tax base gets cut in half...its the very definition of schadenfreude for me. Builders can do whatever they want in Calfornia and zoning is a word they don't know and even care to consider. Its really disgusting. Is there any reason why Lake Elsinore lots should be 5000 sq feet? Are they THAT valuable that people should be forced to live on postage stamp lots they cant even put a playset on? They should be 15,000 to 30,0000 square feet, but developers sell the local govt on a "tract of 1000 homes generating big bucks in tax revenues and everyone gets starry eyed because they are idiots. I bet they wish they hadn't approved all those homes. The only smart ones in all this were the builders, who suckered everyone and got away with it. What's even more sick is that California and the people who run local governments will never learn. They will keep building low quality tract and carving up every last inch of the place until there is no more land, then they will just start building skyscrapers. Anyone know what the ratio is of open space to built-out land in Orange County?

"Notice how that talking head has a huge smile on her face the whole time? Nice of her to care, huh? "

Can you say Botox? Her whole face was artificially frozen. Welcome to SoCal.

I have two friends who got kicked out of their homes. It's depressing to see two families getting kicked out of what they once called home. I remember hearing one of my friends tell me to move out to the inland empire because they were just giving away houses. Now I still have a roof over my head and my two friends barely held on by their fingernails. People got tricked into thinking they could afford these great homes and ended up getting screwed. Like the video says its going to happen again. History repeats itself.

Hint for financial success: do not buy a damned $300k+ house when you make "$3100 a month"

I think that was his mortgage payment, not his income.

I was about to say, wats wrong with ur face lady?

Just don't buy what you cant afford. Rather simple.

I saw a Kim Chee Jar and Shin Raman noodles that lead me to believe that they are korean so they probably returned to Korea.

Nah, they were probably white, like you, and were appropriating someone else's culture, like normal.

I'd love to have my own truck and haul all their stuff away, resell it myself and make some cash. If anyone wants to get in on that bussiness idea with me let me know and we can arrange something. seriously, thats literally millions of dollars of materials being thrown away.

I think it's a great idea. Drop me a return email and we can
combine forces perhaps.

To the man (PHIL) who wanted to start a business collecting and reselling the items "TRASHED" from the homes ... where do you live?

e-mail us at getfit66@gmail.com

We are in So. Cal


Orion and Tina


ORIGINAL Message from Phil:
phil | October 3, 2008 8:05 PM | Reply
I'd love to have my own truck and haul all their stuff away, resell it myself and make some cash. If anyone wants to get in on that bussiness idea with me let me know and we can arrange something. seriously, thats literally millions of dollars of materials being thrown away.

Here's what we aren't hearing about foreclosure:

Everyone's heard about the predatory and/or irresponsible lenders and the greedy and/or irresponsible home buyers.

What no one is talking about is how this could have been avoided most simply: do not adjust the mortgage rates. Obviously, all those people who purchased homes with adjustable rate mortgages made their payments for the first couple of years after purchasing their homes. The problem didn't come until the rates adjusted, resulting in people losing their homes, and cities and states losing out on tax revenue.

Everyone loses in this scenario, including people with fixed mortgages who are now seeing their housing values drop, and everyone now engages in the blame game. The simple solution of allowing people who have been paying their mortgages for two or more years to continue doing so would have been a win-win situation for all involved. Obviously, if people were paying their mortgages on time, they were being responsible.

I say this as someone who had an ARM. Before it adjusted, we did not miss a single house payment or property tax payment, we had excellent credit (after paying down debts for two years), and good salaries. When it came time to refinance, however, property values had dropped and we weren't able to do so. However, rather than wait until the last minute and leave everything, we moved out, found a good realtor, and put the house up for a short sale. It sold before it got to foreclosure.

Things happen for a reason. While it was nice to have a house (and it was a modest 1100 sq. foot home), it is even nicer to not have property taxes to pay, a lawn to mow, or to think about the new roof that would have been needed in a few years.

All's well that ends well.

I love all the finger pointing....

First to the almost-retired woman with the $566,000 mortgage. You're stupid. Don't look for sympathy. It was fun while it lasted, but the party's over and you have a huge hangover. I am in about the same life-stage as you. We're a single income household who raised/supported two kids through college - launching them into life without student loans and a $20,000 nest egg to begin their lives - and minimal support for their first 5 years after graduation. Everything we own is paid off (including the 05 BMW and the 09 MDX) and we just broke 7 figures in cash/cash equivalents - even after the market collapse. Our average annual income over the past 20 years was about $70,000/year (much higher now, but we also now put away $100K a year). How did we do it? Simple. Spend only what you have - never raid your home equity or savings. Pay yourself first (savings). Don't revolve credit (pay it off monthly). Live within (or below) your means. It's so simple, it's frightening. My wife doesn't have a closet full of Malono Blahnik shoes and Louis Vuitton bags, but that doesn't make her life any less fulfilling. She prefers running shoes anyway.

For those of you blaming the sitting President / Administration: It's not really entirely the fault of the current sitting administration. If you look to the root cause of the problem, it's Congress that started the fire in 1977. There's this little gem called "Community Reinvestment Act" - signed by Jimmy Carter with an amendment approved by Clinton, and defended by the Democrats, yet many other representatives saw it for what it was. On the surface, it looked good: affordable housing for low income people. The bad part was that poor people are usually poor for a reason - and it's not always income - it's judgment. So the Feds demanded that the banks finance these people who couldn't afford to pay attention, absorbed the loans via Fannie and Freddie, which required issuing liar loans so the banks could reach their quotas of "affordable mortgages" as dictated by Congress - all without adequate reserves to protect the banks from default. Any idiot (well, apparently almost any idiot) could predict what happened next. The other deadly nail in the coffin was the "mortgage brokers" who were paid, not on the performance of the loan, but for closings. They placed garbage, got their money and ran. Once mortgages were granted by banks that had loan committees that looked at the people - even held face to face interviews (as recently as the early 80's) - and made decisions on their creditworthiness. Now? Online loan applications and no income verification loans. The stupidity of it all... why not leave money in bags on the front porch instead?

The time proven ratio of 3x's annual income for housing and housing related expenses still stands true. If you're taking out home equity loans to make your house payment, it's a sign that you have a problem.

Flippers: I live in SoCal - Orange County. I watched my neighbors buying new cars on HELOC's, putting in pools, buying homes in the desert.... all on the artificial increase in their home value. Somewhere along the line, someone forgot what a home is. It's not an "investment" because it's not liquid. It's a place to live. People were buying $600,000 houses, spending $50,000 in upgrades, and flipping them for $800,000 in 30 days. Do you know what? There were lines forming to buy them. It was a fever where greed overcame common sense. I, for one, have no sympathy for a payment buyer. It's the total borrowed, not the payment, that is important. Interest rates cycle - if the 1% difference between a fixed mortgage and a ARM was the difference in affordability for you, it's clear you can't afford the house - let alone the Mercedes, Land Rover, and Porsche on the driveway. If you pay $100K less for the house, but with a higher interest rate, you can always refinance if you maintain your equity when rates adjust. Then you have a cheaper purchase price, lower loan, and ultimately a lower payment at some point in the future. If you don't have 20% down, you shouldn't buy a home anyway. It shows you don't have the self control to save. And before you start whining about "it's because you're rich", I did without luxury items until I could afford them. We're smart about what we do (we do have 5 cells, but share unlimited minutes and texting for $130 a month - all my family has one that I pay for - the same single service is $70 per phone per month from the same carrier for a savings of $250 a month) and we do without stupid things (like $50 a month pay per view sports packages on cable or HBO/Cinemax). I mow my own lawn, wash my own car, paint my own house, clean my own house, do my own home repairs..... not because I can't afford to pay for it, but because it's foolish to pay $40 a week to mow a 3,000 square foot lawn, $40 a month for fertilizer (I do it for about $20 a year). It takes 20 minutes a week.

The trashers: There isn't a market to absorb all the crap that they're cleaning out of these houses. Keep in mind that, if people are losing their homes, who's got the money in those communities to buy this crap? Having cash, I scour Craigslist for cool stuff. I just bought $4,500 (new purchase value without tax) of artisan chairs (if you don't know what that is, it's a hand made piece of furniture, signed by the cabinetmaker, and is of heirloom quality) for $1,000 from someone who lives in Malibu. She was clearing out the house as it appeared she lost it. I bought a table last night for $350 that some young woman bought for $850 in July. She needed the money to make the payments on her M3. This stuff is in brand new condition. However, I wouldn't buy the Packard-Bell computer shown in the clip - it probably couldn't run Windows 95 let alone XP - nor the projection big screen TV that is a power waster. To those who are worried about the environment: the dumps separate the crap in the dumpsters. They are required to by law (not that it means much). This is California aka granola land... land of the fruits and nuts... what's left are flakes.

To the moron who told the guy with the house he's paying $3,100 a month for "to walk away". Yes, legally in CA, you can walk away from a first mortgage used to purchase the house - but not the HELOC's, seconds, or refinances. YOU and YOUR TYPE is what's wrong with this country as you refuse to pay the consequences for your own stupidity and poor decisions. Do the rest of us responsible people a favor - go into the desert and die. I'm sick of paying for your stupidity. You, sir, are a weasel with no character whatsoever. Your mama must be proud.

Anyone with a brain knew that the Inland Empire would collapse. There is little employment out there (it is growing, but it's not self-sustainable as yet), unless you count the endless malls as the land of opportunity. The residents of that area are required to come through Weir Canyon to access LA's job market. It's a horrid commute (unless you pay $6 each way for peak tolls), it's hotter than hell out there (hence the pools and $500 a month electric bills)... anyone with a brain would not consider that a viable option unless your place of employment was local (and stable). The CA transportation system sucks. Each new community added more gridlock. I had the sense to buy close in - not in the fanciest of addresses, but I knew that as the population continued to increase, due to the unbridled illegal immigration we can thank our "leaders" for, that the further out you were from the employment base, the faster your property values would crater when the market inevitably adjusted. The knucklehead in this video has lost in excess of 50% of his purchase price. Me? I'm still ahead of the game. (I moved here in 2002 during the bidding wars). Why? No HELOC. No second. Location, location, location. Will I get out unscathed? Maybe. But I have a far better chance than some fool that bought his "dream home" 60 miles east of LA in a desert far away from any meaningful employment while filling up his SUV's tank with $5 a gallon gasoline for a 120 mile daily commute.

Finally: The $700B bailout of foreign governments that was approved by the House of Representatives: You just got screwed and didn't even get kissed. In case you haven't figured it out on your own, you just bailed out China and the Saudi's. Main Street got nothing more than the bill and some cheesy meaningless tax breaks you would have gotten anyway. What an elimination of the excise tax on toy wooden arrows has to do with this financial morass is beyond me... You should demand your representatives prosecute every person (CEO, senior executives, on down) that obscenely profited from this scheme at your expense. Let them know you're unhappy with the government intervention in the free markets - or you will vote them out of office. If you're too stupid to understand what just happened to you, I pity you. Capitalism is not at fault. In true capitalism, those who took the risks and were rewarded would now be pummeled with losses - painful (like the failure of Lehman), but justifiable. But the "feel good" crowd can't let that happen. They cite the "credit crunch" for slowing down what is truly false economic growth (demand fueled, not by wealth, but debt). Guess what? Just for fun, I applied for a $100,000 unsecured loan from a major bank (I'm not going to take it - it was a bet where I won $100 from some jerk that says no one can get money). I got approved because my FICO is over 800. What does that tell you? Those who are creditworthy can get all the money they want. Those who aren't creditworthy, cannot - and they shouldn't. Nobel laureate economists were against this misguided bailout (and don't get confused by the spin - it's a bailout of investment bankers and foreign governments. The market collapsing after it was signed shows you that the traders know it was a stupid move), yet your "representatives" made it happen. They handed the guy (Hank Paulson), who engineered some of the products that created this financial mess, $700B of your money. You may not realize it, but there is some $3T (that's trillion) of investment capital currently parked because it won't go into a rigged market. $3T of non-government money that would swoop in and buy damaged securities once a value could be determined - without dime one of taxpayer money. To show you how weird it is, investors are buying treasuries with a yield of less than .5%.... just so they don't get caught up in the impending financial implosion that will happen anyway.

Feel better now?

(Quote) For those of you blaming the sitting President / Administration: It's not really entirely the fault of the current sitting administration. If you look to the root cause of the problem, it's Congress that started the fire in 1977. There's this little gem called "Community Reinvestment Act" - signed by Jimmy Carter with an amendment approved by Clinton, and defended by the Democrats, yet many other representatives saw it for what it was. On the surface, it looked good: affordable housing for low income people. The bad part was that poor people are usually poor for a reason - and it's not always income - it's judgment. (END QUOTE)
I agree with you up until the above quote. You really make Bush look dumber then a rock. He was president for not four years but eight years and EVEN his father BUSH SR and RONALD REGAN were presidents in between Jimmy Carter and you mean to tell me BUSH didn't see this coming? I really wonder who is taking care of business for the average American? Right now America is the poor and rich, there is no middle class. Believe me there are many poor people who couldn't even afford a down payment for one of those homes. There were young people with new credit and went amuck trying to live like reality TV characters. JUST PLAIN STUPID. AND I AM GOING TO POINT A FIST, BUSH SHOULD HAVE SEEN THIS COMING AND CAME UP WITH A SOLUTION. OR AT LEAST A WORK IN PROGRESS!

The congress is responsible for overseeing banking. The congress ignored the problem and encouraged it. Congress ordered Fannie and freddie both Goverment Sponsored Entities to buy more low income loans. This caused both entities to accumalate bad debt. Every time a senator or congressmen brought this to the attenttion of congress the democrats refused to address it and blocked any action. You see it was their constituents that were buying homes. Barney Frank, Nancy Pelosi and Chris Dodd are all on record of denying the charges of accounting fraud by the GSE`s and of any impending problems. The cause is more than just the GSE`s or low income loans. People with good credit and good incomes bought homes they could not afford after the rates re-set. This is a classic example of the stupids by everyone involved.

THE TRUTH! IF YOU CAN HANDLE IT, or EVEN WANT TO KNOW IT!

To all those who think the CRA and Fannie and Freddie, is the main cause of this, well, you are just plain WRONG! There were many contributing factors, those being extremely miniscule, if at all relevant. But, in my opinion, the most relevant are greed and ignorance.

Look at the facts. Fannie and Freddie were making a minority of the loans in the past 8 years, they traditionally, had some of the more stringent underwriting standards, and their market share of originations actually dropped over the past several years, due to lenders being able to securitize their loans and sell them to hungry wall street and their subsequent, unknowing, investors.

These pools of securitized investments paid higher interest than other investment choices and were stamped as highly rated (A class) securities by rating agencies. So, Wall Street packaged these loan pools with beautifully wrapped gift wrapping, with the help of the rating agencies. This would be analagous to putting a beautiful diamond in a pretty gift box, then adding some crap over it, then putting the top on and a bow and wrapping, to make it look like a beautifully congruent package. Or, similar to putting a $100 bill on the top and bottom of a stack of $1 bills, so the stack looks full of hundreds (more valuable then they are). Pick your favorite analogy.

This created an unusually high demand and hunger for these type of investments and lead to a proliferation of mortgage bankers, lenders, etc., lowering of lending standards, highly risky option-arm loans, NINA loans(no-income/no-assets), SISA loans(stated-income/stated-assets), and other similar products. This also lead to the formulation of a large market of derivitave security instruments, such as CDO's (collaterall debt obligations), etc.

The main point being, this securitization of mortgage loans created a high demand for these higher interest bearing investments. But, to meet the rising demand, lenders created those highly risky loans (option-ARM's, etc.), allowing a Borrower to artificially afford the mortgage for a short time period, long enough to allow the Lender to sell them to Wall Street (getting them off their balance sheet and realize the profit), making a tidy profit and keep their balance open to keep doing it over and over, as fast as possible, to keep up with the demand from Wall Street.

So, that all created the demand for the mortgages, which lead to the lowering of lending standards. This was coupled with the dotcom bust of 2000, so capital was looking for other places to flow (where to put the money), and Greenspan was kind enough to add fuel to the fire with historically lowering interest rates, which helped contribute to lowering of mortgage rates - not directly though). This all added up to the makings of the perfect storm. But, this could not have happened without the end user...........the Borrower!

Real estate was already making a comeback from the decline of the early 90's, due to the S&L bust. In CA, we had already seen significant appreciation. So, market psychology contributed to people feeling they may be "priced-out" of the market, if they don't act quickly, to buy a house. And these relatively new lending standards/programs/loans, allowed them to justify being able to afford these mortgages, at least in the beginning. Of course, the unscrupulous mortgage broker or lender didn't help by encouraging people who couldn't afford it, to buy, or, in some cases, by lying directly, etc. And the Appraiser didn't help by folding to their client's pressure to "hit-the-number", or lose business. This was coupled with people who could legitimately afford to own real estate and qualified with fixed loans, which added to the demand.

So, it was all one big house of cards, just waiting for a slight wind to unsettle the foundation. Many people are to blame and others, unfortunately, got caught up in the storm of falling cards. But now, it is a problem for all of us, not because people are losing their homes, but because, the whole financial industry is on the brink of collapse.

Well, those are some of the facts, form your own opinions.

----- Nevermind


Dave's post
"The congress is responsible for overseeing banking. The congress ignored the problem and encouraged it. Congress ordered Fannie and freddie both Goverment Sponsored Entities to buy more low income loans. This caused both entities to accumalate bad debt. Every time a senator or congressmen brought this to the attenttion of congress the democrats refused to address it and blocked any action. You see it was their constituents that were buying homes. Barney Frank, Nancy Pelosi and Chris Dodd are all on record of denying the charges of accounting fraud by the GSE`s and of any impending problems. The cause is more than just the GSE`s or low income loans. People with good credit and good incomes bought homes they could not afford after the rates re-set. This is a classic example of the stupids by everyone involved."

two words......Thank you
okay can't resist......right on, correcto mundo, way to go, say it again.

When you crash and burn, please come back and reread your ultra-smug-look-at-me post. No one here gives a **** about your money chief.

The "Peaceful" 2nd American Revolution needs to get started NOW, before foreigners buy everything we own for pennies on the dollar. For much more:

www.newagecitizen.com

I'm sorry for the families that have to lose their homes, but I agree that greed and materialism plays a big part in this process. I am more SHOCKED by the 'trash out' of these homes, where all that good stuff is going into the landfill. This seems to be the same kind of greed and materialism that caused this problem. NO awareness of what it means to buy or to 'throw away'. What a blight on humanity this entire mess is. From start to finish. SHAME ON YOU ALL!

SAW A BEAUTIFUL PLACE FOR SALE LAST WEEK AT 35,000...IMAGINE BEAUTIFUL AT 35,000????????????????????????/ REGRET MY ILL HEALTH MAKING IT IMPOSIBLE TO GET BACK TO THOSE LANDS WHOSE PRICES AND TAXES FORCED ME OUT/ OLD HOME.............

These people LOST nothing except their delusions. If you put no money down, have no equity...what did you lose! Nothing! The people that have really suffered serious financial losses are those that are NOT forclosed on because they put 20% down! These people are the ones who really suffer.

If you put no money down, have no equity, and barely cover the interest...then you are a RENTER...you were just too dumb to realize it.

I'm sorry but if you spend more than you make then there's going to be a problem down the road.

Excuse me - Ashley! Two families got kicked out of their home? Where have you been??? You only get 'kicked out' if you don't pay your mortgage. I'm soooooooooooo tired of the folks on here who are feeling sorry for these families. Like many here, we have been fiscally responsible for our 20+ years as consumers. We have worked 2 or 3 jobs in the early years just to save the down payment for a home, then worked hard to pay off our home, debts, send kids to college, blah, blah, blah.

No one 'tricked' these people into believing they could 'afford' their homes. Let's face it - they were greedy for a life that was beyond their means. And don't tell me they didn't know it. You can't make 30k a year and believe that you can qualify for a 600k house. Come on!

Now the govt. is bailing out the very people (mortgage companies, credit card companies and all the rest of the Powers That Be) who created this mess. Sorry, I'm not giving them any sympathy.

As to getting rid of all that 'stuff' in their homes to charities; Salvation Army only takes clean, specific things, Goodwill has strong guidelines on what they will accept, and the condition. The owner of the 'trash company' said he does about 15 homes a day - there's no way any charity could pick up all that stuff. Now, I do like the idea of posting these 'trash outs' on the internet somewhere so people who really need the stuff can pick it up. The only downside is you would probably have people lined up and fighting over all this 'free' stuff.

Some people will never learn. Greed, stupidity and total disregard for their future put them where they are today. We were approved for a 350K loan. Just because we could didn't mean we should. We purchased a nice home in a quiet neighborhood for 120K. Nothing fancy but good enough for us.

I told my husband I wanted to have a home where both of us didn't have to work just to make the mortgage payment every month. My brother, who lives out in California, bought into the ARM bullcrap and just lost his house this year. He's the type that likes to impress others. I couldn't give a rats@ss what others think of me. :)

I'm sorry but they are all getting what they deserve. Playtime is over, now they need to wake up and live within their means.

The Russians are coming, they are going to steal your home and companies. Be very afraid for the knock on the door, it are the russians coming to take away your american dream.

Oh no, the terrorists are coming, they are coming to steal away your american dream, yes those nasty terrorists.

And the knock on the door came, it wasn`t the russians and
it wasn`t the terorists, it was the american dream knocking on your door, " Hello, I am your biggest nightmare."

Yep, we worshipped hermes/mercury, the god of trade, with his caduceus. And now that God demands sacrifices, and the humans sacrifics keep pooring in.

)O+-> (the devil was in the tail, the dream was nice, but you wake up way too late.)

anchhor.

(ankhor, ankhorion, ankhorus)

There is not about "those people." This is a tragedy.

One of the things you may not be seeing if you're gainfully employed is collapsing wages (let alone vanishing jobs).

Of couse, people bought into the idea of having a home to raise their family -- sure, some of them were ill-advised or over-ambitious or too optimistic about the future. And the financial and political processes are shown to be lacking also.

A little less blaming and more creativity could find a few ways to help a little bit. What if a local non-profit partnered directly with the banks to enter foreclosed homes first, before the trash-out crew?

Everyone is so eager to point the finger, and there certainly is no shortage of places to point. I tend to agree we need point the finger no further than these individual home buyers. They were living beyond their means. Unfortunately, Americans in general have been living beyond their means for a very long time. America has become a nation of consumers. When you consume more than you produce, sooner or later something is going bust.

In 2002 when the mortgage lender came back with approval on a loan 3 times more than I realistically knew I could pay, I looked at the broker like he had two heads. I didn't take the loan. I could have, and I could have been a star in this film today.

I see folks asking how people could walk off and leave all those valuables behind. The answer is _because they didn't pay for them_. I bet most of the items being thrown in the dumpster were "purchased" on credit. To heck with calling charities. Call the credit card companies and tell them to come get their stuff! Remember what your mother taught you as a kid? "If you have to work for it, it will mean something to you." Maybe mom was right.

Other than the guys loading the dumpster, what you don't see anywhere in this video is American sweat equity. Most of the materials used to build the houses were manufactured overseas. The majority of the textiles to furnish the houses were imported. Illegal aliens undoubtedly provided the labor to build the houses, as well as keep the yards and clean the pools. Think about that for a minute. Easy come, easy go. Not an ounce of American sweat equity involved anywhere.

I think in a lot of ways Americans have given a whole new meaning to the "keep up with the Joneses" syndrome. It's more like "life-style of the rich and famous" they've been trying to keep up with. Americans have a serious problem with instant gratification. "I want the bestest, the mostest, and I WANT IT NOW!". So, yeah, I think we can blame ourselves for this in some ways.

But not entirely. Somebody is responsible for marketing this keep-up-with-the-rich-and-famous syndrome that has afflicted so many people. In 2002 there was somebody trying to __sell__ me a mortgage I could not afford. The lenders are at fault too, for baiting people into things they could not afford. And this irresponsible marketing is certainly not limited to mortgages! We are incessantly bombarded day and night with marketing ploys for everything from a-to-z, trying to separate us from our dollars.

I also think this was a long term failure of government. Government exists to act as a buffer between unscruplous commercial interests and the innocent consumer. People forget the American Revolution was as much a revolt against abusive corporate interests as it was a revolt against a crown. I think government has gotten way too cozy with the merchant class over the past few decades, and we need to break that little party up.

You want more examples of how the government is failing to protect the American public to serve unscrupulous commercical interests? How about the FDA and all the toxic waste that has hit the American dinner table over the past few years? The DEA is charged with keeping drugs off American streets, but US Marines are guarding 97% of the world heroin supply from poppy fields in Afghanistan. The US Border Patrol guards US borders - huh? borders? what borders? Oh, the list could go on forever. Our government acts more as a functionary of commercial interests to facilitate the fleecing of our wealth more than anything else it seems.

The bad part is that it circles right back around to us, the individuals. We keep electing the same kinds of people who represent only commercial interests over and over again, and keep expecting different results. "A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury." And we just keep right on spending beyond our means.

And the bailout? Throwing money at this problem is not going to solve it. We Americans need to grow up and get over our need for instant gratification; just because the nice man is selling candy doesn't mean we have to buy it. We need to invest a little sweat equity. We need to elect public interest representatives, not commercial interest representatives. The collaboration between government and business to pick our collective pockets has got to stop.

This is totally crazy. On one hand I don't think most people believe they should get free housing but the BAILOUT is robbery!

How can a bank or institution have the gumption to kick a family out of their home and yet cry to congress and threaten the American People with Martial Law requesting that the same families to bailout the same institutions via taxes and inflation?

We are truly seeing the looting out of America! I doubt things will ever be the same.

I expect to see the riots start soon.

The waste in the beginning of this video is DISGUSTING!!!

Sorry, I'm not buying it. Anyone who makes $20 an hour and thinks they can afford a $400,000 house is nuts! And they KNOW it. Even if the bank was a crook and said you could, you know in your deepest insides that you can't, there fore YOU are responsible for your own actions. Then you go out and lease cars, buy big screen TV's, put in pools and what the heck do you expect??? I don't feel sorry for any of you.

The basic hard facts are, not everyone is created equal and not everyone deserves a house. The world is simply not fair, so get used to it. All you liberal yahoos, who think that everyone 'owes' you, are dead wrong.

Supposedly, I have heard that 1/3 of these forclosures are by illegal aliens on top of it. Why is our govt pandering to criminals? Want to still think they are hard working? Yeah at stealing ID's, jobs and services and then they split and run.

I want to thank all you idiots out there for doing this and helping to put our economy in the toilet. There is an old saying. Live within your means. I suggest you do it, like the rest of us.

This crisis was caused by the Federal Reserve banking system, the subsequent boom/bust cycles that occurred because of the artificial manipulation of the money supply, and government intervention by politicians. This has been an ongoing problem with the Fed (and indeed all central banks throughout history) since it was established in 1913.

In short, Austrian economics predicted a financial collapse would happen while Keynesian economics claimed that it would never be a significant problem.

Educate yourselves about the real causes of the problem, before it's too late.
http://mises.org/story/3045

http://mises.org/story/3138

What a bummer! Have people started a community in the dump yet?

wow! It's the signs of the times. More and more of this will continue to happen. I don't see no recovery from all this.
May the Grace of the Most High be upon us all.!

Sister

Why do people purchase items they can't afford? That house was full of frivolous extras that are not needed. I don't deny that the baking system may have taken advantage of home buyers, but there are many others out there who have followed the rules, lived within their means and are doing fine in this economy. This video just shows how wasteful and greedy Americans have become. It's very sad.

Hello to everyone
I have lived in my home for 8 years now and I am not lossing my home to ajustable mortgage rates cause I have a fixed rate of 5 1/2 %.
The problem with me is I will loss my home due to the Taxes on my home. For the last 5 years my taxes has doubled. It was 1,600. when I moved in and now in Jan 09 they will be 2,700.. I have disputed this but they always seem to be right and me wrong. Everyone around me has homes that are much larger and nicer then mine and their taxes are still 1,500. I will go again this Nov to dispute them. I am in Missouri so I do not know if this is why.
I am a mom with 4 kids and I worked all my life very hard to save to buy my home. I put 26,000 down on my home that I worked many hours to save. I am hitting 50 years now. My payments was 850.00 per month and as of Jan 09 they will be 1,500... this is what the mortgage company said. I paid 130K and my home was worth more until now with everything going down hill but the broker said I might get what I paid for it and come out 0 and this is without my 26,000. down payment. I can't start over at my age and save to buy another home, so I guess what they are saying to me is, we can go to the streets with nothing. "American Dream"?
I am American Indian and my goal was to live the American Dream and live life good, not on the Rez, work and do right. My husband just left us this past May 07 with his green card and all, back to the Arab country of Qatar/Jordan, I guess you can say he made to live his American Dream off of us cause I sent him to Washington University for Electrical Engineering.
Hey I am not crying over this... thats life, but I am crying that my Country "American" has turned their back on me and my children to cheat us with the Taxes and cause us to loss our home that I worked so very hard for.. Does anyone know what we can do of this that will matter to the Tax people of Missouri. Thank You for listening
Waya
wayastar@yahoo.com

compassion? Yes. fell sorry for them? Yes. But the fact remains that too many people are financially ignorant. Too many people want to live beyond their means. I want it all and I want it now generation. To many Americans do not save money. They do not invest for retirement. They go without health insuranse. Why? because they spend every dime they make on homes and toys. What we are witnessing today is the consequences of irresponsible behavior. I am not responsible for their lack of judgment, and I resent my government taking on billions of dollars of debt because of them. From a welfare state mentality comes the belief that we are not responsible for our actions and the government is responsible for preventing us from suffering the consequences of our actions and or decisions. I find it depressing that so many people in my country are so irresponsible and ignorant. And it scares me to think that these same people have the right to vote. Am I to believe that their judgment in selecting political representatives is better than their personal decisions? I think not. We are doomed.

On October 5, 2008, the CW Network premiered a new drama from the creators of The Sopranos. The new show, called Easy Money, is said to be about a family who owns and operates a “high-interest loan” business called Prestige Payday Loans. It’s always great to see shows being produced in an effort to bring underrepresented cultures or things into the limelight; as long as it constitutes a fair and balanced portrayal of the subject matter at hand. However, by taking one look at the trailers for the new drama, as well as a few of the episode a synopsis, my biggest fear is that the premise for the show is based solely on vicious media stereotypes. With this in mind, think of the last time that you viewed a news story either online or on television news talking about the payday loan industry. Chances are the story you saw or read wove tales of “real” persons’ woes fueled by their getting bogged down in an “endless cycle of debt.” Worst of all, according to such “articles,” it all started when they needed to borrow money to fix their car or pick up the tab on another unexpected bill. Such stories are further proof that, for the sake of winning the ratings wars, news networks will latch on to and report only the juiciest, most scandalous aspects of any big story and completely ignore everything else. It seems as if the CW network is following suit in an effort to recover viewers lost during the Writer’s Strike. One, for instance, opens with the tag line, “for this family of loan sharks, money is easy.” Surely, it’ll be interesting to see whether or not the CW or the show’s creators learned what the industry is really about. Chances are, probably not.


Post Courtesy of Personal Money Store
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After thirteen years of paying my mortgage, I think I can hold out about 3 more months.

We used to make a great living.  But now, I have not made any money in months and do not have a retirement fund.

What can I do?  Who can help me to keep my home?

Thanks for listening.

Willie, I am just a renter, but my advice to you would be to stop paying, and save that next 3 months payments, as you will need first & last to rent an apartment.

It would do my heart good to know that some of the "trash" that is being taken out of the foreclosed homes was at least going to a charity to help other people and not just the landfill.  Is this happening?

Thanks

Denise Meugniot

The journalist on the piece on foreclosures said she wanted here how it was effecting us.  We are on the other side of the coin. We are a family of 4 living in a studio apartment and couldn't see ourselves a year ago in our own house.  A condo was a possiblity but not desirable with 2 small children.  We now have hopes of getting a house finally in our price range in Los Angeles.

The problem at the moment though is that the deals are in the foreclosures and many of them need major repairs at least in LA.  Banks don't want to do any work on these properties and FHA won't finance a house that has safety violations or doesn't have retrofittings or conversions that are unpermitted.  FHA has a refurbishing loan but it takes 90 days to close and banks don't want to wait that long.  And with all that they say that getting a loan in short time will be very difficult to get.  We'd like
>very much to get into a house and we could get in with savings still in the account esp if we could get FHA.    If anything happened like my husband losing his job and not finding another for a couple of months or an accident that had us incur any amount of medical bills, getting a house that needs major repairs could take all the savings away putting us close to the same boat as people going through forecloseures now if we get a conventional loan putting 10% down.

We've done well living in a studio apt for going on 3 years to live within our means.  We managed most of it with a little help with medical from friends when our son was born a few months ago because our healthcare plan isn't adequate enough to cover all the expenses.  So in essence the housing crisis is hurting responsible consumers who don't bit off more than they can chew and would be able to manage 100% financing.

Frustrated housewife in LA


Dear Sir/Madame,

Nobody tells stories from people like me! I could never afford to buy any home in Los Angeles, not even one bedroom apartment. And I am an upper middle class man! I am a scientist, have Ph.D. for almost 20 years, working for the USC for 12 years. For last 10 years, I was dreaming to buy an apartment, but every time I would check the prices – they were always so out of my reach that I could not even dream. I was making more money every year, but the prices were shooting up much faster. I would talk to my friends, and we always were questioning – who are these lucky people that can buy home, what do they do, how it come that we cannot even dream to buy one bedroom apartment? We were depressed. And it was until now, when we suddenly discovered that people who were buying were not rich but just irresponsible.

Suddenly, things began to make a sense, and I began to dream to buy a home again. I am happy to see that things begin to make a sense again – things when professor at university will finally be able to afford at least a little apartment! Unless, our nice government will screw the things and will send the prices to the ridiculous levels again.

It makes me very upset and angry that nobody is talking about people like me. It makes me very upset and angry that our government would like to take my tax money to help those irresponsible people - to keep them in the homes and to keep me on the street! This is rewarding of irresponsible people and punishing responsible people like me! I am very, very angry!

Sincerely,

Gennady

Hello Socal,  I'm in Texas.
 
I don't have a pool or a spa, but I do have a repo in the neighborhood.
 
That's about as close as I can get to feeling your pain.
 
We will get through this, but let's all use some sanity in managing our finances, please.  No matter how attractive the property is, do not commit more than 25% of your future income to a mortgage payment or rent.  With declining property values, it's much more like "paying rent" than "buying equity" each month.  I lived 10 years in a dumpy crack house neighorhood because I could afford nothing nicer.

You may have to as well.
 
Jerome Barry
Texas

For those who foreclosed on their home and abandoned their home leaving countless personal belongings, can I recommend that it can get posted on http://www.freecycle.org/ and / or possibly the “Free” section of craigslist?

LISTEN!
There are 2 groups here, one that talks about how awful it is and the other that brags about how clever they've been. Thats great, but it really doesn't solve anythingt or help anyone. I'm sitting here in Europe and am completely shocked at 1) the carnage and 2) the complete lack of financial common-sense being demonstrated here - both buy the bankers AND the buyers.

To those unfortunate people who have got caught and are about to get caught, I would recommend a little book called The Richest man in Babylon, by George Clason. It's old, it's simple and it's cheap, but it WORKS - and it will give some basic understanding of 1) your money management skills and 2) the complete and utter stupidness of the quick-fix, keep-up-appearances, credit culture you've grown up in.

If one person gets hold of this book and actually reads it, then I'll be delighted.

Good luck to you and God bless.

My husband and I have been doing 'trashouts' in the NC area for almost 2 years now. We try to donate as much as we can. Sometimes the rate that we have to have these done, does not allow it...we have deadline. We also check with neighbors to see if they want any of it. The type of house that is shown in the video is not always the case. Most of the houses that we trashout, have been just that! TRASH! We have been in horrible conditions....rotting food in the fridge, feces, and crack pipes. It is no walk in the park for us. We have found some good things that we kept and sold. We keep all copper, aluminum and scrap metals to resale to help with our gas and food and motels along the way. It breaks our hearts at some of the things we have seen left behind. I have a ladies wedding dress still in the box. I am trying to find her to give it back, if she wants it.

Stop complaining. That house is too f@cking big. Don't complain! My god...

This foreclosure crisis has affected homeowners across the country and there seems to be no end. What homeowners need to do is become more active in selling their homes when they first notice they might be facing trouble. Waiting until the last minute with the glut of houses on the market is a reciped for disaster.

MY OPINION ...BASED ON THE FACTS, as I stated above.

My opinion is that
* Wall Street greed and deception contributed to the artifical demand for these mortgage products,

which lead to
* Lender greed creating relaxed loan standards

which fed some Borrower's
* greed, ignorance, and insecurities, spurring them to buy real estate, both their personal residences and investment property/ies

There was a 60 minutes piece in January 2008, that interviewed 2 couples who were in foreclosure. 1 of them were in the situation due to ignorance and not being prudent of their decisions (I actually felt bad for them), and the other said they knew exactly what they were doing, which essentially amounted to gambling, hoping they could refi their mortgage before the rate went up - after their home value would presumably go up. These guys were "rolling-the-dice" gambling, seemingly knowing full well, what they were doing, and unfortunately, they lost. I have no reason to feel sorry for them, and as a matter of fact, I think they are smart for letting their house go into foreclosure, because, they are right, it makes no sense to hold onto it. Here is a synopsyis and part of a transcript of the story and a link to a video.

Matt and Stephanie Valdez
They planned on refying their arm mortgage before the interest rate increased. They couldn't do it because the value of the house declined. Although, they can afford the higher payments, they don't see the point.

Stephanie says
"Why pay a $3,200 payment on a 1200sf home. It makes no sense."

Steve Kroft (from 60 minutes) says
".. that's what you agreed to do, when you bought the house?"

Stephanie replies
"Fine, if the value is going up, [but] the value is going down, it makes no sense."

http://60minutes.yahoo.com/segment/134/subprime_meltdown

http://www.cbsnews.com/video/watch/?id=4126094n

Personally, I think we need to support our financial institutions, since that affects the whole financial system and our society, but I don't think they should get a bailout. And I don't think individual homeowner should be bailed out either. Unfortunately, they need to learn their lesson and become better consumers for it.

On the positive side. This perfect storm has also created possibly the largest opportunity for profit in history, for those who know how to take advantage of it. Please don't misunderstand that, this has nothing to do with taking advantage of people or their misfortunes, but of the foreclosure opportunities out there.