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Archive for Wednesday, May 30, 2007

What do you know about foreclosures in Douglas County?

The Journal-World and 6News are seeking your help

May 30, 2007

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It's a tough time to be a homeowner on the brink.

Nationally, foreclosures in March were up 47 percent from a year ago. Kansas' 447 foreclosures in March ranked 35th among the 50 states and the District of Columbia; the monthly total was up 5.67 percent from February.

The trend is reflected locally: So far in 2007, officials say, there have been 52 foreclosures in Douglas County - compared to 88 in 2006.

The Journal-World and 6News are asking for your help telling this story.

We're looking for Douglas Countians who have experienced foreclosure - how it happened and what advice you would have for others in similar situations. We particularly want to hear from those who found themselves caught up in a subprime loan that became unmanageable.

If you would like to talk to us - or if you have other information that relates to this topic - contact special projects reporter Christine Metz at 832-6352 or cmetz@ljworld.com

Comments

KS 7 years, 6 months ago

There are more to come. Folks just don't want to live within their means. This is truly unfortunate. People always want something just because someone else has it. People that own the apartments/condos will make out like a bandit on this one. Folks will have to pay their rent or be out on the streets. I guess that is why there are soooooo many apartments being constructed everywhere, not just in Lawrence. Can't make the house payment, but my bet is that many (not all) have a fairly nice car in the driveway, cable tv, cell phones, internet access, ipods, etc, etc, etc. Now I think we should provide them "free" healthcare. Stirring up another pot.

feeble 7 years, 6 months ago

Can't make the house payment, but my bet is that many (not all) have a fairly nice car in the driveway, cable tv, cell phones, internet access, ipods, etc, etc, etc. Now I think we should provide them "free" healthcare.

An ipod, internet access, cable tv, these are luxuries.

Access to health care has a very real effect on things like infant mortality, life expectancy (via wellness check ups, early cancer screening, etc.) and quality of life.

Not having an ipod won't result in the death of a child, whereas the high cost of healthcare in this country will, and does, every single day.

Sigmund 7 years, 6 months ago

Foreclosures offer an excellent opportunity for those who are in a position to buy real estate seized by lenders. Generally lending institutions want to get rid of these quickly, even if that means selling at a discount. Doesn't mean your getting a bargain though, especially in a weak sellers market.

Wilbur_Nether 7 years, 6 months ago

Sigmund makes a good point. Individuals that can't make their mortgage payment often also cannot afford maintenance or repairs. These homes often require substantial investment to bring them up to snuff.

Steve Jacob 7 years, 6 months ago

Let's put some of the blame on the sub-prime lenders. Thay are not much different then the payday loan places. Offered high risk loans to people buying houses that where over their heads.

spammer89 7 years, 6 months ago

Alot of the forclosures are do to the adjustable rate mortage that sounded great and was lower than the fixed rate. Figured you would refi if and when the rate went up as long as your credit was not in the crapper. If you credit score had dropped or had not improved and then the rate the goes from 5% to 10% most people cannot afford that much of a jump. I agree with srj the sub prime lenders cause alot of the issues as well, put people into a house that is well beyond the what they can afford.

Kookamooka 7 years, 6 months ago

Interesting topic to explore. I take it the J-World is becoming interested because there is a very nice house on Stratford up for sale due to foreclosure. When it hits the wealthy, it's news. A foreclosed property in East Lawrence wouldn't be quite so interesting.

Nick Combs 7 years, 6 months ago

You'd be amazed how many people don't have basic money skills. As a society, we're living large on the margin. There are tons of examples out there of people who buy far more house than they can afford and end up housepoor.

I agree that folks don't want to live within their means.

justthefacts 7 years, 6 months ago

Why should individuals live within their means when, for decades, their government has not done so?

We are a nation that has come depend upon credit. Savings is a thing of the past. We have been "robbing Peter to pay Paul" for so long, we no longer realize that we are doing it. Our money is becoming so devalued that it now takes more money to make a penny then one is worth. And before you know it, China (or some other foreign country) will foreclose on us all. How many people are completely free of debt these days? I know very few. Our nation, state, county, city and families all live on credit, buying things we can't pay cash for. But don't expect any candidate to ever win an election by preaching the truth - we can't have what we cannot afford to pay for, out of pocket right now. The "gimme" "I need it" voices have drowned out the voices of reason.

So it makes sense that the whole system of cards is about to fall through. People have been living on borrowed money (and time) for almost as long as the system will allow. A crash of some kind is long over due.

Time to start saving up precious metals, storing water and guns, and learning to grow our own food.

formerlyKS 7 years, 6 months ago

Actually, it is true most peoples' financial hardship comes about because they refuse to live within their means.

Perhaps nowhere is this more true than in California, where "life coach," "personal trainer," "pet groomer," and other bull**** jobs make up probably 10-20% of occupations. Even more disconcerting is that many of these same people, using no-doc loans (Liar loans) claimed they made $100K+ to get into that $700K POS 1950's house. The house of cards is falling now...sellers of real estate and the overmortgaged are panicking, prices are slipping, and foreclosures are way up. Feel sympathy for them? Hardly. Most of them lied on applications to get into homes in the first place, hoping to cash in on the unsustainable rise in prices from 1998-2005. They will get slaughtered by their own greed...you wouldn't be hearing their sob stories if the market kept going up at 20-30% per year, and you'll most certainly be hearing about how it was "someone else's fault they're in this situation." But, it is because of this greed and the gross inflation in housing prices that they are unaffordable (currently) to many hard working Americans. Let the market correct...let the flippers flop.

Sigmund 7 years, 6 months ago

Yeah, I was shocked how much money I was "qualified" for, even with "conservative lending guidelines." Simply astonishing. When my Realtor asked my lender how much I prequalified for I asked them to cut it in half, then tell them. When I showed up at closing with 20% down everyone appeared amazed, as if nobody puts 20% down anymore. 2% seems the norm today. Leverage, when things go well its great! On the other hand if the City and Planning Kommission do their best to depress residential growth and property values, and raise proprty tax rates, then bankruptcy is often the only choice.

KS 7 years, 6 months ago

feebie - I agree with your assessment on healthcare, but people don't want to make that choice until it is too late. "Healthcare? Someone else should pay for it! Not me!" That is the cry. We all need access to good heatlhcare, but the problem is that it is "NOT FREE". There is no such thing as a free lunch and no such thing as free healthcare. Somebody has to pay for it. So who should that be? We already have a system in place in this country for healthcare access to those that can't afford it. It is called Medicaid. If one truly can't afford healthcare coverage, then one should be eligible for Medicaid. If one is above Medicaid eligibility, then maybe some things in one's life could be redirected to allow for that coverage, even if it is on a limited basis. People don't want to do that. They would rather spend their money on other things, such as the aforementioned luxuries. That is a normal desire, but then it comes back to who should pay for it? Should the rich pay for it because the middle class doesn't want to? If we have universal healthcare, should the taxpayer (which includes the middle class) pay for coverage for the Warren Buffett's, Bill Gates or Sen. Ted Kennedy's of the world? These are folks that can afford their own. Should they be excluded? That takes away the Universal concept. I just think that many folks in this country have their priorities out of sync.

Defender - if you have a lot of credit card debt (and making just the mininum payments) and a home equity line of credit with a second mortage against it, in my opinion you are living beyond your means. I believe there are more poeple in that position than you want to admit to and to not understand that is being unrealistic.

oldvet 7 years, 6 months ago

And then there are the two-income families that are living within their incomes and along comes a major lay-off... with kids, maybe loosing the health-car provider's job, now suddenly your savings start getting eaten up quickly... I remember when Sprint was laying off thousands... real estate suddenly became very difficult to move in JoCo, good jobs in KC were hard to get, if both people worked for Sprint and got laid off, suddenly there is NO income... not every foreclosure is the result of piles of debt and a flex-rate mortgate. Sometimes even good people have bad things happen to them.

RKLOG 7 years, 6 months ago

I will never tell. What I know about foreclosures in Douglas County will go to the grave with me.

subconscious 7 years, 6 months ago

Kookamooka - Good point - I heard, however, that the owners of that Stratford house got the house off foreclosure. I was looking at it and my agent talked to their Realtor. Too bad, it could have been a good deal... now I guess we'll have to pay the asking price.

notbushwacked 7 years, 6 months ago

The problem with the enormous amount of foreclosures, is not because people have lived beyond their means, because the rules of living within their means has changed. The Bush administration has been a disaster from day one. Look at what's happened since king George and his band if incompetent cronies began their path of destruction in 2000:

Gas prices have increased 105 percent, Health care premiums have increased over 70 percent, College tuition has increased as much as 60 percent, Average household income has declined each year during the Bush presidency while many corporations record record profits. Outsourcing and relocation of professional jobs to other countries has left many professionals out in the cold and in competition with low-skilled workers and illegal aliens for service jobs, thus increasing the labor pool for those jobs and driving wages down. Rather than address these critical issues, during the republican rubber stamp congress, we were addressing issues such as flag burning and banning horsemeat. The republicans are completely out of touch with middle class America and continue to twist the knife in the back of hard working Americans. Most foreclosures are not the fault of the homeowners not living within their means, because the rules have been redefined.

simplykristib 7 years, 6 months ago

I watched a family member go thru a foreclosure a few months ago. The family member never knew about it because the spouse never told that person. The spouse did not pay the bills even tho the money was in the bank! The family member has lost everything.

The choice between paying for health insurance premium and living expenses.. The living expenses win. I am being laid off at the end of June. The company I work for is moving the operations out of state. I am opting out of the COBRA coverage. At $300 plus a month, the COBRA is a little too steep for me. I do plan on working again but will wait to be covered when I start working again.

Sigmund 7 years, 6 months ago

Subprime lenders have been a problem, but not as much as you might imagine. There are a ton of folks who are in homes and making payments because of them.

Something you might keep in mind with foreclosures is that if the outstanding loan is less than or nearly equal to the market value of the home, almost nobody would be in foreclosure. Simply sell the house and use the proceeds to pay off the loan. With foreclosure it is almost always the case that the outstanding loan is far greater than the market value, sell the house at market and you still owe a ton of money. If you bought the house at market value (using subprime or not) and the market doesn't change much, then you will be ok if you have to sell (less commissions and fees).

Lots of foreclosures occur not because the borrower is a bad credit risk, but because the bank over valued the property and allowed the buyer to borrow far more than what the value of the property is worth.

Richard Heckler 7 years, 6 months ago

Some of the foreclosures may be the result of large medical expenses. Bankruptcies are so many times the result of extraordinary medical bills so healthcare for all would be good for the economy overall.

toefungus 7 years, 6 months ago

Many of those sub prime and even prime loans were extended by loan agents that are paid on the size of the loan and the interest rate margin. If a loan agent can place a high fee, high cost mortgage, they make much more money. Realtors make more money selling more expensive houses. How many loan agents and real estate agents have you meet that recommend less expensive homes and smaller mortgages. The entire housing industry prays on the public dream of home ownership and then fills there pockets to the brim. Many of those poor folks that are lossing or lost their home will be renting from loan agents and realtors. Why, because they had the money to invest in public housing units. When I shopped for a home years ago, my realtor was shocked that I wanted a home smaller than I could afford. She never called back. I had to get another one. Next time you get a home loan, ask the person you apply to how much commission money they are making off of you. At least the realtors are up front about it.

Sigmund 7 years, 6 months ago

Merrill, like the Doctor and the head of the KDHE?? What a laugher that one is! But still if you believe that I have some swamp, uh I mean 'wetlands', I'll sell you. You want taxpayer provided Health Care? Go to work for Walmart.

WorldWiseWoman 7 years, 6 months ago

There is no one root cause for these foreclosures but a multitude of causes; lenient lending practices; living above your means; spontaneous consumerism vs. delayed gratification; envy, jealousy, bad habits that consume spendible income (gambling, smoking), expensive hobbies (boating, cycling) and a host of other things that keep people from saving. Worse than home foreclosures is the fact that these same people will not have the money they'll need once they no longer are working at a job. These same folks will have campers, boats, etc., but will not purchase medical insurance for themselves. Save money for your purchases an never, never keep a monthly balance on your credit cards. It really is simple unless you have uncontrolled spending habits.

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