Mortgage "crisis" USA TODAY OPINION

[BroncoFan]

Called "Contractual Agreements". These are usually put into play due to the bulk/volume of those that carry the insurance.

Example: BCBS may have a 30% discount of all services as a contractual agreement with the hospital.

WPPA may have a 10% discount as the volume will not be as much.

Every charge remains the same and is not changed from person to person or insurance to insurance.

If you do not have insurance, you are paying full rate and you don't have the volume influence.

Personally, I would offer my best contractual agreement percentage to those that have no insurance. That way, I would stand a better chance of getting that self pay person as a client. I would also insist that payment be made at time of service, as I wouldn't be financing the insurance companies, therefore I should not finance the self pay.

[BroncoFan]

We shouldn't be so quick to judge anyone that may be forclosed on, or those going bankrupt.

Do you really know what is going on? In today's world, one can simply lose his job. Most people do not have enough money to live greater that 2 months.

What about medical bills? I have insurance, and with a spouse that had cancer, you are still stuck with a huge medical bill in the end.

Not all foreclosures are due to money mis-management.

[TexKan]

You are so right - Life does happen - even to the best of planners. The really young don't understand that and the really arrogant don't want to. they shouldn't get bailed out but they shouldn't lose a roof over thier head either. altho I would rather help out the person who made a dumb decision than the lending company that set them up with inflated prices and throat cutting interest.

[Detector]

I just don't get the logic?

If a person is a higher risk, then by all means keep their limit low, which is what they do. What I don't get is why would they expect a higher risk person to pay $10,000 for a car others pay $5,000 for? They lower their credit limit but raise the interest rate to make them end up paying far more than their limit.

Example: They won't sell you a $10,000 car because your credit is bad, but they will sell you a $5,000 car that with interest you will end up paying $12,000 for.

I honestly think it has far less to do with being a higher risk, and much more about taking advantage of a situation.

[TexKan]

Exactly!! That's how the folks got "hoodwinked" in the houseing disaster. They wouldn't sell them houses at a fixed rate - they put them in houses they "should" have been able to afford - then balooned the rate so thier notes doubled and tripled in few months. It's a shame and it was a sham................ I think the folks that got ripped are the home buyers. Lets burn them at the stake for wanting a little piece of the American dream. I forgot that it's getting to the point where you are only allowed to dream......... if your salary is high enough. It's a damn shame. I'm lucky - I'm older and my kids plan for thier future but it's so easy to take advantage of those that still dream and will never have the finances to do so. It's just so easy to lead them down a road where in the end they will have less than they already do - just cause they dared to dream. If they didn't qualify they should have left them alone so they could at least pay the rent. As it is now - they are the new homeless. The cylce continues and the bankers just got richer off the poor.

[Army_of_One]

Originally Posted by BroncoFan

We shouldn't be so quick to judge anyone that may be forclosed on, or those going bankrupt.

Do you really know what is going on? In today's world, one can simply lose his job. Most people do not have enough money to live greater that 2 months.

What about medical bills? I have insurance, and with a spouse that had cancer, you are still stuck with a huge medical bill in the end.

Not all foreclosures are due to money mis-management.

A lions share of the foreclosures are not due to job loss nor medical bills....maybe one or two here and there but the bottom line it's because of them being in a house they can't afford to make the payments plus interest with.

Here's the deal. If a car dealer can get me a 60K corvette at a high interest is it MY responsibility to not buy it or his responsibility to not sell it to me. Do you expect HIM to say...buy the Ford Taurus instead, it's what you can afford? People were living beyond their means...that's the bottom line and now they are paying the price.

[Army_of_One]

Originally Posted by Detector

I just don't get the logic?

If a person is a higher risk, then by all means keep their limit low, which is what they do. What I don't get is why would they expect a higher risk person to pay $10,000 for a car others pay $5,000 for? They lower their credit limit but raise the interest rate to make them end up paying far more than their limit.

Example: They won't sell you a $10,000 car because your credit is bad, but they will sell you a $5,000 car that with interest you will end up paying $12,000 for.

I honestly think it has far less to do with being a higher risk, and much more about taking advantage of a situation.

OR...you could save enough money to make a down payment on that 5000 car that you won't have to pay a high interest rate.

I believe they charge people more interest to protect their risk of loaning that person the money.

[Made in the USA]

Originally Posted by Army_of_One

A lions share of the foreclosures are not due to job loss nor medical bills....maybe one or two here and there but the bottom line it's because of them being in a house they can't afford to make the payments plus interest with.

Here's the deal. If a car dealer can get me a 60K corvette at a high interest is it MY responsibility to not buy it or his responsibility to not sell it to me. Do you expect HIM to say...buy the Ford Taurus instead, it's what you can afford? People were living beyond their means...that's the bottom line and now they are paying the price.

Originally Posted by Army_of_One

OR...you could save enough money to make a down payment on that 5000 car that you won't have to pay a high interest rate.

I believe they charge people more interest to protect their risk of loaning that person the money.

[Detector]

it's because of them being in a house they can't afford to make the payments plus interest with.

Almost right. It's because they were allowed to buy a house they couldn't afford. I know it's easy to say if someone is stupid enough to leave their keys in the car they deserve to have it stolen, but it still doesn't make stealing the car OK.

Here's the deal. If a car dealer can get me a 60K corvette at a high interest is it MY responsibility to not buy it or his responsibility to not sell it to me. Do you expect HIM to say...buy the Ford Taurus instead, it's what you can afford? People were living beyond their means...that's the bottom line and now they are paying the price.

No, we're all paying the price. Thats the point I'm trying to make. I'm just saying if people are going to point fingers at the cause of the "mortgage crisis" let's get it right. It's not just the buyer, but the seller as well.

It's not always "stupidity" that puts people in a position to be taken advantage of by lenders.

Let me give you an example from my own experience about 15 years ago. I'm not real proud of my obviously flawed logic, but sh!t happens.

I know that putting a little money aside to pay cash looks good on paper, but when you're living pay check to pay check as a single parent with 4 kids, that ain't going to happen.

So I'm driving this 17 year old station wagon which is needing repairs almost weekly when I see catastrophic failure in the near future. I head down to a local dealer to see what my options are. With my less than perfect credit and less than impressive income, I'm offered either a 15 year old Chevette for $2,000 or a 7 year old Explorer for $10,000. Here was where my flawed logic got the best of me. I'm thinking on one hand I can buy the Chevette, which will probably end up just like my station wagon in 3 moths, or I can buy the 7 year old explorer, with a higher payment. I'm thinking the money I save on repairs would make up for the higher payment. Plus, it will be better in the winter, and better able to shuttle around the family. See how I'm talking myself into the more expensive vehicle?

So for 3 years I'm lovin my choice in my new vehicle, even though I knew the interest rate was killing me. Being the money conscious person I was I had the salesman get me the lowest possible payment. Little did I know this low payment was just paying the super high interest rate. Well sh!t happens and I loose my job and can't make my truck payment. I call to find out how much I owe and find out I still owe as much as the truck price was to begin with. I'm like WTF? The truck goes back and then I receive this nice letter in the mail saying still owe $6,300 on the truck. They sold it at auction for $3,700 and now I've got to pay the difference.

Live and learn I guess.

[Highwayman]

Originally Posted by Detector

....Thats the point I'm trying to make. I'm just saying if people are going to point fingers at the cause of the "mortgage crisis" let's get it right. It's not just the buyer, but the seller as well.....

Keep in mind that the realtor and the mortgage broker both work on commission based on the selling price of the home. The paper shuffle they do is about the same on a $50K house as it is on a $500K house. They are both more than happy to sell you a more expensive home. The mortgage company tacks on 1% to the payment for mortgage insurance that covers their loss if you default.

I don’t see much incentive to sell folks affordable homes.