I really liked an idea posted a while back Lander’s blog. They suggested giving a free credit walk to that first time homebuyers that got in over their heads during this bubble. My husband and I are both college educated professionals, and with our first home purchase we really put a lot of trust into our agent and mortgage broker. At the time I tried to do internet searches on “average closing costs” and the like, but it rarely turned up good information. They certainly don’t teach this type of stuff in school, so I can see how many average folks ended up in trouble, watching prices skyrocket and fearing they would be priced out of the market. In addition, many of the first time buyers are young or new to the country and have never been through a housing bust, so they don’t have the same perspective of those who have been around a little longer
Now for all the flippers and speculators out there who jumped into the market hoping to make a killing (and the members of the real estate industrial complex that enabled and fueled their behavior)…..they deserve what they get. I am not trying to be mean or spiteful here. . We would never deny them the riches they would have made, so why should we feel sorry for their losses. Let’s call it what it is…they were taking a risk, gambling with money they didn’t have, and they lost this time.
There is no such thing as free money. Although from 2002-2005, I can see how some were fooled into thinking there was.
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Heck, it isn't only newbies who don't understand the process. Until I started reading the housing blogs, I didn't understand it, and I've owned 2 homes.
Prior to now, the process was: find home you like, ask Realtor and/or Mortgage broker if you can afford it, sign name rapidly on several hundred pieces of paper. I did not know what my credit score was. I did not know how to figure out what I could afford.
Thanks to a young impoverished adulthood in the 70's and early 80's, I understood ARMs and knew that I only wanted a fixed-rate mortgage, and also that I wanted to be able to refinance without paying a penalty. But that's it.
I can't complain much about the financing on my condo because I made money on the sale and paid off my consumer debt, but I've recently become aware that I was probably put into a subprime loan, despite having a good job and a good credit score.
One of the reasons I read housing blogs like a maniac now is because it is important to me to stay informed and to know what I'm doing before I buy again.
There but for the Grace of God and a very frugal upbringing, go I.
Prior to the blogs, my only question was, "How in the name of Gawd are these people able to buy these homes? And cars?? And vacations??? And this overstuffed neo-Old Europe style furniture????"
We got burned pretty bad the first time....I certainly hope we learned from that experience! (much of it stemmed from thinking our RE agent had our best interest at heart).
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