lost my house to the economy

[LennStar]

I watched a video on tiny houses (We the tiny house people) and there was a woman that "lost her house to the economy" and I though: No, you didnt. You probably lost it because you could not afford it, but that is not the economies fault but because you tried to buy more then you could (and someone else had no mercy on this).

Economy does not steal. The market does not steal. It does not give or demand either. Its always people doing it. Sometimes yourself. That is an important fact that is not told in school.

[eil]

Agreed 100%. The victim mentality is very much a predominant thing in western culture these days. Drives me insane. So many people just do not want to deal with all the hard work of making and analysing their own decisions and following through with the work required to make things happen. But when something bad happens to them, it's always somebody else's fault.

[Fonzico]

And I think the important corollary to your point, eil, is that it doesn't particularly matter whether it really IS or ISN'T yours or someone else's fault. It's your life, you have to deal with it. Take some personal responsibility for your problems. Most of the time, it doesn't matter how the situation came about, if it's your life, you are the only one who can and who ought to take responsibility for improving it.

I suspect that the reputation Americans have built for being litigious is based on a denial of the above. Why make due with your hand of cards when you can just sue someone else for dealing it?

[taekvideo]

mandatory south park reference
https://www.youtube.com/watch?v=6nqwHZ2fCLY

[brewer12345]

mandatory south park reference
https://www.youtube.com/watch?v=6nqwHZ2fCLY

Hahahha!  My favorite episode of all time.

From the same episode:  https://www.youtube.com/watch?v=wz-PtEJEaqY

As someone who was a bank regulator at that time, it is frighteningly close to the truth.

[soccerluvof4]

ahhhh that was a much needed laugh!! I will be sharing that one!

[FIreDrill]

Hahaha! That was some good stuff.

[BlueHouse]

I watched a video on tiny houses (We the tiny house people) and there was a woman that "lost her house to the economy" and I though: No, you didnt. You probably lost it because you could not afford it, but that is not the economies fault but because you tried to buy more then you could (and someone else had no mercy on this).

Economy does not steal. The market does not steal. It does not give or demand either. Its always people doing it. Sometimes yourself. That is an important fact that is not told in school.

*emphasis above is mine.
I wonder about the statement "because you tried to buy more than you could".  I bought a house two years ago that is much more money than I ever thought I'd spend.  All indicators tell me that I can afford it with no problem, and I have a thick emergency fund.  But if I lost my job, I would no longer be able to afford to keep it indefinitely without a rather high income.

So when people "buy more than they can afford", does that imply that everyone should have the full amount of the mortgage in a bank account somewhere?  Or do most people choose to accept some risk and assume they'll have a job to continue paying a mortgage?  Of course I know the answer to this question.  So why do so many people still assume that people bought more than they could afford at the time of the decision, when many times they bought something that they could very comfortably afford, but that due to a job loss or a medical emergency, they are no longer in the same financial situation and can no longer afford it.

[Fonzico]

I don't think that's quite it.

Many people take on the most mortgage they qualify for, which often precludes a reasonable savings rate (even by non-MMM standards) and a small increase in interest rates would put a large pinch on their finances. I don't think people are saying that if you couldn't afford your house if you went through a long period of unemployment, that you are buying more house than you can afford. If you've got some wiggle room, you can afford it. If you are just BARELY making your mortgage payments, odds are better than not that at some point, you're going to be in over your head.

[Jack]

I wonder about the statement "because you tried to buy more than you could".  I bought a house two years ago that is much more money than I ever thought I'd spend.  All indicators tell me that I can afford it with no problem, and I have a thick emergency fund.  But if I lost my job, I would no longer be able to afford to keep it indefinitely without a rather high income.

So when people "buy more than they can afford", does that imply that everyone should have the full amount of the mortgage in a bank account somewhere?  Or do most people choose to accept some risk and assume they'll have a job to continue paying a mortgage?

My wife and I both work. However, we bought our house at an amount low enough that we could still afford the mortgage and bare-bone living expenses on unemployment. One person's unemployment.

(Admittedly, we would have to defer/forebear our student loans, but still...)

[Ftao93]

When 'The great recession' hit, I worked as a contractor.   I literally owned nothing but a crappy car.  I still spent way too much, but as far as NEED, unless the price of a few brews went up I was totally unaffected while everyone else ran around screaming.

the building I worked in had only CNN broadcasting constantly (I shut my door to not listen to it).

They interviewed a family who 'lost everything' to the banks.  There were 4 people in the family.

This included:
A very large house
2 huge vehicles.
Personal watercraft for everyone
a trailer to tow them
a boat
a sportscar
Surely a billion other things.

I blurted "you never owned any of that, Idiot!  You just financed it to the Moon based on your salaries staying the same forever and saved nothing".

Most of my coworkers looked at me like I was an alien.

That was pre-frugality of any kind.

[rpr]

My wife and I both work. However, we bought our house at an amount low enough that we could still afford the mortgage and bare-bone living expenses on unemployment. One person's unemployment.

(Admittedly, we would have to defer/forebear our student loans, but still...)

Jack -- We have done the same. We both work and would be able to afford the house on just one income. But it would be tight and we would not be able to save much. Maybe have enough to max one IRA. Luckily we have no additional debt.

[Beaker]

My wife and I both work. However, we bought our house at an amount low enough that we could still afford the mortgage and bare-bone living expenses on unemployment. One person's unemployment.

(Admittedly, we would have to defer/forebear our student loans, but still...)

Jack -- We have done the same. We both work and would be able to afford the house on just one income. But it would be tight and we would not be able to save much. Maybe have enough to max one IRA. Luckily we have no additional debt.

We did pretty much the same. Ultimately there's always some combination of factors that would result in anyone losing their house. It's just that some people arrange it so that the combination is "prolonged unemployment for two people plus some other large, unlikely, unforeseen expenses" and others arrange is so that it's "a one week hiccup in cash flow" or even "not getting a raise." But it's hard to say where any given person/family falls on that spectrum without really looking into their finances.

[ender]

How the hell does someone lose a house?

I can understand losing keys or even kids but a house is f-ing huge. You can't leave it at a friends or in your car.

...

oh :)

[Annamal]

How the hell does someone lose a house?

I can understand losing keys or even kids but a house is f-ing huge. You can't leave it at a friends or in your car.

...

oh :)

One of the forums I used to be on had a guy who quite literally lost his rental house ( he signed up for it in a drunken haze and then completely forgot where it was and has never found it since).