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| New Jersey In The Media; Recaps, Reviews, Media Gossip @ NJ | |
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| Tweet Topic Started: Dec 24 2011, 11:03 PM (60,623 Views) | |
| Mariah | Jun 21 2012, 03:50 PM Post #106 |
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Up until the crash this stuff was pretty common. Move in, renovate, up the value from that with both work and time alone was increasing values, refinance on that, sell. Then the bottom fell out. House values plummeted and people owed 3-4 times current market value. I have a friend who got caught in that. She built her own gorgeous log home, stayed in a 5th wheel on site for the entire construction, designed most of it, supervised on site and with 11 acres land and labor/materials built the entire thing for about $150,000. Went to the bank to refinance, to pay back the $100,000 a friend loaned her (he was to get a small cut of the profits when it sold, she got more because she stayed on site to keep the costs down and quality up.) ANYWAY, appraisers came out and considering the pricey area and the quality, told her it was worth 2 3/4 million and gave her a mortgage which she foolishly took. She had fallen in love with the house. If she had sold then she would have made a lot of money, instead she kept it, and used the mortgage loan for a new truck, 4 horse trailer, all kinds of stuff. Market crashes, other stuff happens and a couple of years later she can barely sell the house for $450,000. So, even with basically small time honest people this happened. She tried to get me to buy the property next to hers and do the same thing. Thank heavens I said "no." Edited by Mariah, Jun 21 2012, 05:11 PM.
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| cccharley | Jun 21 2012, 04:06 PM Post #107 |
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Yeah and all the flippers destroyed the market for the rest of us. I hate them. I'm actually thrilled the Joes are having issues since they didn't just build for their family but just to make money. I know that's the capitalistic way but it created a nightmare for many. Too big, too big a mortgage and the thought that housing will just keep going higher.
Edited by cccharley, Jun 21 2012, 04:19 PM.
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| Mariah | Jun 21 2012, 04:17 PM Post #108 |
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I think it was more the junk mortgages the bankers and hedge fund people profited on, and then were bailed out on, they knew they were playing with non-existent money and then using THAT so-called "money" to leverage other stuff. Had my friend actually flipped her house rather than loved it and kept it, she would have been OK, actually would have made a ton of money for the year she put into making that house perfect, because she was offered $3M for it after it was done buy a buyer. She was still dumb, but not a scammer like the Joe and Joe. (I know you weren't talking about my friend.) |
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| cccharley | Jun 21 2012, 04:23 PM Post #109 |
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Yeah I know. It's hard for me to decide who was more at fault. For certain things the bankers of course but flippers just as bad to me. Now the only ones I have slight sympathy for are the ones who bought the dream house and signed mortgages they could never afford. I still can't get by the stupidity of it and they don't deserve to stay in a mcmansion just because the banker signed off on the loan and they didn't read the papers right. See I'm a renter so I got nothing. Nothing but higher rent because we knew we couldn't afford to buy. In reality we should have bought and taken a new special mortgage but that's so skeevy.. |
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| ISH | Jun 21 2012, 04:34 PM Post #110 |
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I feel for your friend. But I don't want to say the Joe's started out to scam. I think they went in it believing the bubble would never burst, that they could ride the wave forever. They'd get rich and everyone would be happy. I think both Joes' are skilled at construction. The apartment that JoeGiu was teasing Tre about moving into was beautiful. Even their home, while it's not my taste is well built. I think sadly the bubble started to break and JoeGu didn't react fast enough or was probably reassured by his mortgage brokers that this will blow over. From there, I think things went downhill too fast for him to regroup and he did what so many others did, rob Peter to pay Paul. I'm not excusing him, but I don't think he's scum either. Nor do I think he set out to hurt anyone. As far as JoeGo, let's see how things pan out for him. He may be closer now to disaster than before. I wanna see Melissa hustle to help him out of debt. We'll see then if Teresa was on target with her assessment of Melissa. |
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| cccharley | Jun 21 2012, 04:44 PM Post #111 |
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Lots of people took second loans out on their houses. That was really bad. She is lucky she didn't get next door. Did she really think it was worth that much - I mean 2.75 mill to a few hundred thousand is a huge differential. Anyway, she still has her house right? If so then she is ahead of the game. Also that's the problem. Put in 2-300K and expect a multi million dollar pay off is ridiculous. So glad that's over with until the next bubble. You know there is still a bubble here in Manhattan. It fell but not nearly as much as the rest of the country. Bummer. That's why rents are so high. People are sitting on their properties and there is very little inventory.
Edited by cccharley, Jun 21 2012, 04:51 PM.
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| Velvet | Jun 21 2012, 04:55 PM Post #112 |
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I feel bad for the working stiffs who were priced out of the market but managed to get a modest $200K home that's now worth $40K. I don't feel bad for the assholes who leveraged 110% of a mortgage in excess of a million dollars or more - if they could afford that much house they should have been required to put down a heftier down payment. And no one should have been able to cash out $2.5 million on a house that could potentially be worth only half a million. I always said that the dollar amount of my mortgage on $300K would be the same as if I bought a house for $1 million. that's how you don't get in trouble. |
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| cccharley | Jun 21 2012, 05:01 PM Post #113 |
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Totally agree with everything you said Velvet. We should probably have a Real Estate thread since this could be a never ending topic. Anyone interested? |
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| Mariah | Jun 21 2012, 05:08 PM Post #114 |
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Luckily she didn't take the mortgage out for the full amount they offered. She took a $750K mortgage, paid off some debts, bought a few things. At the time, having already had offers worth well over that amount, it seemed a prudent deal. Actually, even then she would have been OK, since she decided to keep the house. Other life stuff intervened, fell in love, job changes etc. Vanity Fair has had a series of articles about this that are very good and very understandable. It's not the small time house flippers who go into a run down house and fix it up for sale who are to blame for this. Or the people who take vacant land and built from the ground up, including wells, septics, getting power in (for the mountain places like hers.) At all. It's the bankers and hedge fund people who talked people into to balloon payment mortgages knowing full well they would default, and then used those as supposedly SOLID money as collateral for even more sketchy and larger loans. Edited by Mariah, Jun 21 2012, 05:12 PM.
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| Velvet | Jun 21 2012, 06:17 PM Post #115 |
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Andy just posted this pic on, as he calls it, "mah facebook" wall. https://apps.facebook.com/whosayforfans/AndyCohen/photos/190187?wsref=fb&code=mfM3AVV |
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| oleander | Jun 21 2012, 06:33 PM Post #116 |
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Yeah, Carolyn looks so tiny in that pic. I'm not a fan of Andy - can't really stand him. |
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| Velvet | Jun 21 2012, 07:04 PM Post #117 |
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O - did you see my comment on FB? Lol. |
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| Cosmocrush | Jun 21 2012, 07:11 PM Post #118 |
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Ah ha!!! Finally a believable answer to how this stupid man had the lifestyle he does. Thanks for posting this Freely. |
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| Finestra | Jun 21 2012, 07:16 PM Post #119 |
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I just clicked back to the facebook picture and the comments are gone, and it says you can be the first to comment. What did you write Velvet. |
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| discomom | Jun 21 2012, 07:20 PM Post #120 |
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And her hair looks awful! It makes her tiny little nose look so much bigger. I'm a year older than Caroline. In view of our discussion on her hair making her look worse, I went out today and cut "mah hair" ... in Andy-speak. |
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