# Sorry to beat the dead horse



## graceandmartin (Feb 25, 2008)

While I completely sympathize with people who unfortunately got themselves in situations that were too much for them to handle (or bit off more than they could chew), I feel that sometimes lessons need to be learned the hard way. I currently work in the Real Estate profession as a Broker/ Realtor and trust me- I have seen (and to this day still!!) or have clients whom I know have no right to be purchasing a house right now in this current market, in this current financial downswing. And trust me, a $4000/5000 mortgage is not that uncommon here in Los Angeles, for an average sized family home. However, as much as you can advice your clients (and I do- if I feel a home is completely out of a price range for a client, I'll tell them) sometimes people will do whatever they want and often will keep beating down every door till they are given what they want. 

However, yes, I am biased here, but I can't find fault with brokers or lenders here when it all comes down to one thing- the consumer and CAVEAT EMPTOR- Buyer Beware!! Yes 2 years ago lenders were literally giving ANY Joe-Schmoe off the street as much money as they wanted for a home. They didn't need to provide money down, reserves, FICO's- nothing. It was practically completely on good faith! But no one knows your financial situation better than yourself. Why purchase something that you know you may not be able to afford? Yes, they got these homes on these balloon interest rates that eventually inflated to 12%, but they were made aware of that at the time of signing! Did they honestly think that their financial situation would change or improve that drastically in just a matter of a few years? No, when it comes down to it, one poster said it best- you live within your means. You live within what you currently have, not what you are hoping or counting on what you may have down the line. 

And again, back to the Caveat Emptor- its just like buying a dog. (Unfortunately myself, I have to eat my own words here. I thought that I did my research on my breeder, only to find out some not so good things later... but, that of course is a different subject and I stray!) Why is it that here we all preach about do your research, find out what you can on where you're getting your baby- visit the home, see its parents, etc. Shouldn't something like an IMPORTANT purchase like a home be the same thing?! You can not purchase on a whim or out of emotion. Just like it isn't the smartest thing to just buy a pet on a whim either because they looked so cute and needy (although again, I have to admit, I myself have almost fallen prey to that too!! :smpullhair: ) You need to really sit down and address the situation and as many variables and possibilities that you can come up with to make sure that what you are doing is going to be the best decision not only for yourself, but your family as well, at that particular time. Research the various lending products, speak to more than one advisor, get multiple opinions from various professionals. By carefully calculating your moves prior to, and during such a heavy process like this, you can most likely save yourself and your family a lot of heartache. The real victims here aren't the buyers who are about to foreclose or default on their homes. Its the rest of the family that will unfortunately be uprooted from their home or have their credit affected by those who sought their help.

*sigh* :smheat: Sorry if I exploded there. I'll jump down from my soap box now.


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## I found nemo (Feb 23, 2006)

It seems to me people have to do credit checks so how can banks be giving all this money to people who don't make enough to pay it?? Thats what I don't understand. 
I have never bit off more than I could chew, Nick and I have extremely good credit and I wouldn't have it any other way. I drive a nice car and so does Nick, our children are in private schools, but we can afford it.
I don't go and buy things I can't afford and my kids work for they want (which I feel is so important)

I don't wish bad on anyone even people I can't stand, I believe what you do in life will always come back to you..
I think people in general are good people who just made bad decisions but the banks aren't innocent either. People need to be responsible for their actions and sometimes the lesson is disastrous  
We (Nick and I) both, have worked hard for what we have, nobody gave us a thing and it took years to get where we are and I wouldn't have it any other way :biggrin:


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## Lennabella (Mar 29, 2007)

I agree - I took a break from studying for my real estate licence right now to go on SM :brownbag: and found your post ..

Unfortunately, I know at least 3 families that bought into the interest only mortgages and they are clinging to all they have right now but they are losing grip ..


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## Gail (Oct 14, 2007)

When I bought my house, you had to have 20% down or jump through hoops to get a loan. My Realtor kept telling me I could afford a house costing $20,000 more than the one I eventually bought(this was 20 years ago and I live in the Midwest). I knew I would need a new car, new clothes, go on a vacation, etc. and didn't want to be "house poor". So I bought a house that fit my needs and within my budget. Not only do I have a house that's paid in full, I'm able to retire at 55 because I have no debt. 

Living within or below your means is not easy but, it can be done. I would never trade my debt free lifestyle for a bigger house, a luxury car or other "things".


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## puppymom (Jun 13, 2005)

I honestly believe that alot of the problem has to do with the way credit is viewed by our society. I don't necessarily blame it on the credit companies but we live in an era where immediate gratfication is more important than fiscal responsibility. 

Credit applications go out regularly to college FRESHMAN (how the companies think they will pay it off is beyond me). They continue to be showered with credit applications throughout their college years. By the time they graduate from college they are in debt for tuition and indebt for those sping flings to Miami and Barbados. 

They become numb to what the debt numbers actully mean. Then starts the purchase of cars and homes and other luxery items. 

With the exception of my mortgagee I live a debt free live, I do have a credit card for convenience but the balance is paid in full every month. If I want something I save the money for it and buy it when I can pay for it. I believe a course in Finance given by someone like Suzy Orman should be required in high school. 

So go ahead, beat away, this is one dead horse that seems to need continual flogging.


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## camfan (Oct 30, 2006)

It's called inexperience. Whether it be due to immaturity, stupidity, stubbornness or just plain ignornace. I've done my share of stupid things over the years due to plain old inexperience. I will say about myself, though, that if somebody came out and said "you are foolish to do this" instead of letting me flounder my way around, then I MIGHT have listened. But I guess that's how we all grow up (although some people never quite get there). I understand that institutions cannot use the word "stupid" to their clients. And you cannot tell them NO--if they can find a way, they'll find it. Again it comes down to those things I mentioned.

My family and I could be living in a much bigger house if I chose to go back to work when my kids were born, but we chose otherwise. We chose a VERY small house--so even if something did happen to my husband's income, we still wouldn't be stuck. We pay less for our mortgage than we would for an apartment, basically. Sometimes I complain about the size of my house but then I remember that I chose for it to be this way--and it's a heck of a lot better than dealing with a financial strain that takes it toll in MANY ways, including your family and marriage. I'd rather be cramped.


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## mimi2 (Mar 29, 2005)

> It seems to me people have to do credit checks so how can banks be giving all this money to people who don't make enough to pay it?? Thats what I don't understand.
> I have never bit off more than I could chew, Nick and I have extremely good credit and I wouldn't have it any other way. I drive a nice car and so does Nick, our children are in private schools, but we can afford it.
> I don't go and buy things I can't afford and my kids work for they want (which I feel is so important)
> 
> ...



This article should help explain your first question Mortgage CEO Pay While this is just a piece of the puzzle, it's a big one. Wall Street greed is another huge piece of the puzzle. I worked in the title industry and there was a lot of shady things going on that mostly had to do with the mortgage brokers. Mortgage Brokers aren't looking out for you, they're looking to fill their fat pockets. If you want a loan, my suggestion is to go to the bank directly.


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## jazak (Feb 12, 2008)

One of the greatest things I ever did was not get a credit card!!!! I am 26 years old and I have never had a credit card. I don't want one, occasionally I will get a whim and hubby and I will apply for one, it comes in the mail a week later and I always cut it up and throw it away!! I know that I am not disciplined enough with money to handle that kind of responsability. If I can't afford it I probably don't NEED it. Hubby has been driving the same car for 7 years, and the only reason I got a new car 4.5 years ago is because I couldn't fit 3 carseats in a Mitsubishi Eclipse!!! My house is small, but it is nice enough for now. I am currently going to school and when I am out of school we will sell and buy something bigger. Until then I make the best of what I have. 

When we first looked into buying a house 3 years ago, our realtor told us that we were loking at too low of a price range, and that we should not under buy. He said to basically strap our selves now, b/c our income would only rise and then we would feel like we should have something more. I am soooooo glad that we didn't listen!!! I know some jaws are probably going to drop at this, but I paid 57 k for my 3 br 1.5 bathroon on 3/4 of an acre. I have a good interest rate, and pay less for my house then I do for my car. We did have to put alot of work into the house, but that has made the experience more rewarding. (albet more frustrating sometimes) We learned alot when we bought this house, and I am glad they were lessons that we learned on a 57 k mortgage, and not a 250k mortgage, which is what we were looking at. First of all, if we had not "under bought" there is no way in the world I could have had the opportunity to stay home with my kids, and now go to school full time. Which ultimately will pay off way more then a nicer/bigger house that I can't/don't want to afford!!!


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## mom2bijou (Oct 19, 2006)

There's always going to be people who do the things right way b/c they have researched and then there will people who get taken advantage of b/c they didn't know any better. It's a shame b/c the ones who get taken advantage of (for example get loans that aren't suited for them) are the ones who lose everything they have. Most people learn from their mistakes...and hopefully the next time they will be more cautious...but I agree..it's a hard lesson to learn...and one that could takes years and years to fix.


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## Max & Rocky (May 20, 2004)

I just about entirely agree with you. The one thing I wanted to add though is that here in AZ, there was criminal behavior by at 
least a few in the real estate industry.

Ten years plus ago, I was dating a lady who had a rather low income and she was looking at buying a house. The "friend"
who was "advising" her on this had a lender set up as well as falsified information on her income to support this. I kept
telling her to run away from this... she never followed through actually trying to buy the house... but she did "go into business"
with this person and lost what relatively few things she had.

While this was going on, in an effort to get her to see how bad of an idea it was to submit false loan info, I set up and meeting with
a local police department and a detective there. We took all the info in... the "meeting" lasted maybe all of 10 minutes. The police had
zero interest in looking into this situation... I'm trying to do the right thing and I end up feeling I am making a mountain out of nothing.


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## Max & Rocky (May 20, 2004)

> One of the greatest things I ever did was not get a credit card!!!! I am 26 years old and I have never had a credit card. I don't want one, occasionally I will get a whim and hubby and I will apply for one, it comes in the mail a week later and I always cut it up and throw it away!![/B]


Just a bit of advice, those accounts you applied for but never used are still open and activity of any sort like this does impact your credit rating and not in a good way...


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## jazak (Feb 12, 2008)

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Actually, I always check to make sure that they are not active. Hubby and I always tell our selves that we need a credit card for emergencies, and then when we are waiting on the card to come in, I find something that I just HAVE to have. That is why I know we are not capable of handleing that kind of respnsability yet. (I find that a savings account for emergencies is much more effecient, plus it EARNS interest instead of CHARGING interest.) But thanks for making me aware, I will definately be more ontop of it. We have only done it like twice in the last 7 years. Also b/c of the fact that hubby and I do not have any revolving credit other then our house and our car, which our car is through our local bank, we basically have no credit. Not good, not bad, just none. We are not worried too much about it, b/c if we had credit, we would just end up in debt. I don't mind being broke, I HATE oweing money. When we are ready to sell and buy a new house, we will have a substancial down payment to help keep our interest rate low.


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## I found nemo (Feb 23, 2006)

I was just going to say having no credit isn't good either.
Banks need to base something on and they look at payment history .
Also I found out the hard way  everytime someone inquires about your credit, ur score it actually goes down :w00t: I didn't know that.
We were looking into re-financing cause the rates are so low (Im at a good rate now 5.7 dont ask me why I looked into it) and dumb dumb me went to several banks and they all checked my credit score and one broker told me not to do that and told me why. I think that is totally stupid , but it's the way it goes.
Also your score varies with the 3 top credit scoring companies with one mine is 775, the other 765 and the other 800 :blink: have no idea why?


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## jazak (Feb 12, 2008)

> I was just going to say having no credit isn't good either.
> Banks need to base something on and they look at payment history .
> Also I found out the hard way  everytime someone inquires about your credit, ur score it actually goes down :w00t: I didn't know that.
> We were looking into re-financing cause the rates are so low (Im at a good rate now 5.7 dont ask me why I looked into it) and dumb dumb me went to several banks and they all checked my credit score and one broker told me not to do that and told me why. I think that is totally stupid , but it's the way it goes.
> Also your score varies with the 3 top credit scoring companies with one mine is 775, the other 765 and the other 800 :blink: have no idea why?[/B]


I know, sometimes no credit is worse then bad credit!!! but since I have no intention of doing anything on credit it is not a big concern. My house and my cars are on there, and I do periodically take out a signature loan from my bank (usually a small amount on a 3 or 6 month note). I just don't want to get caught playing catch up.


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## I found nemo (Feb 23, 2006)

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I agree with you and your smart. If you know yourself and know it's not the right time for you and credit cards then u must be smart..LOL
I only have my American Express and it's the one you have to pay in full every month so I know my limit and what I can spend . Having a few credit cards isn't bad I just prefer the one's you have to pay in full every month :biggrin:


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## LJSquishy (Feb 27, 2008)

I couldn't agree more with the first post. Personally, I don't think people should be able to bail out on their debt, etc.

People (like my husband) work hard for what we have and don't get to bail out of our debt. It's only the screw ups (sorry if this offends any one) that get a break.

And, something completely off topic, people on welfare (even though welfare shouldn't exist) should NOT be allowed to have MORE children than what they already have...I see too many people in the line at the grocery store using their food stamps, etc, with kids in the basket and MORE ON THE WAY!


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## geslabon (Mar 3, 2008)

I'm not sure what is the meaning of "Sorry to beat the dead horse" but it sounds like you are talking about me or my situation.. (if not I apologize) Just to defend my side.. I know that it sounds more like my situation are very similar to what's going on right now in terms of these people losing their house because they can not afford it. The difference on my side is we CAN afford our mortgage and one more and please do not get me wrong, I do not want to sound like I'm bragging but the reason we were in Foreclosure is that my husband did not pay our mortgage for 3 months.. and gamble the money.. and on my side I was buying things like a brand new luxury car etc.. in cash and thinking that the money always flows and I don't save up. In other words, we dig our own whole. We have been in this house for almost 3 years now in June. I think we would have been out along time ago if we couldn't afford it. I don't really want to say this because I know that someone will say that I'm blaming this to my husband but from bad credit to almost losing our house is honestly due to gambling ob course my fault for letting this happen and not saving. I did not see the storm coming at all. It was really stupid of me esp. as a mother.

Now, what I have learn is that no matter how much you make.. it really does not matter because what matter is how much you save. 

No wonder my father always told me to always act as if there will be a war coming and did not really listen to him but with this bad experience... I know now what exactly he means by it. 

My comment here.. is that not everyone is as smart or as knowledgeable and human do make bad decisions and most of the time it's plain stupid... and they learn it the hard way... but I personally would not judge them if you are not in their shoe. Sometimes situation are really different than what it seems and this is just my opinion.. I'm no body and just someone who made bad moves and learning from it. For ex.. I use to watch Jerry Springer and I cannot believe what I see in this show... I use to say oh my she's stupid but since I had an experience with a friend of mine in real life and know more about the her situation. I stop making those comment and instead I say poor girl.. instead of stupid. Oh, well I hope I'm clear on what I'm saying maybe not again but Peace be with you.. and I hope that you feel better now that you have expressed your thoughts.. Take care!





> While I completely sympathize with people who unfortunately got themselves in situations that were too much for them to handle (or bit off more than they could chew), I feel that sometimes lessons need to be learned the hard way. I currently work in the Real Estate profession as a Broker/ Realtor and trust me- I have seen (and to this day still!!) or have clients whom I know have no right to be purchasing a house right now in this current market, in this current financial downswing. And trust me, a $4000/5000 mortgage is not that uncommon here in Los Angeles, for an average sized family home. However, as much as you can advice your clients (and I do- if I feel a home is completely out of a price range for a client, I'll tell them) sometimes people will do whatever they want and often will keep beating down every door till they are given what they want.
> 
> However, yes, I am biased here, but I can't find fault with brokers or lenders here when it all comes down to one thing- the consumer and CAVEAT EMPTOR- Buyer Beware!! Yes 2 years ago lenders were literally giving ANY Joe-Schmoe off the street as much money as they wanted for a home. They didn't need to provide money down, reserves, FICO's- nothing. It was practically completely on good faith! But no one knows your financial situation better than yourself. Why purchase something that you know you may not be able to afford? Yes, they got these homes on these balloon interest rates that eventually inflated to 12%, but they were made aware of that at the time of signing! Did they honestly think that their financial situation would change or improve that drastically in just a matter of a few years? No, when it comes down to it, one poster said it best- you live within your means. You live within what you currently have, not what you are hoping or counting on what you may have down the line.
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## puppymom (Jun 13, 2005)

I believe that the whole point of a new thread was to discuss the issue of debt, mortgagee and foreclosure without making it "about you". All one has to do is listen to the news to know that is a problem of endemic proportions.


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## geslabon (Mar 3, 2008)

:brownbag: ow.. that's why I said I apologize. I think I'm being so defensive right now.


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## graceandmartin (Feb 25, 2008)

> I just about entirely agree with you. The one thing I wanted to add though is that here in AZ, there was criminal behavior by at
> least a few in the real estate industry.
> 
> Oh, I couldn't agree more. Unfortuately yes, there are some really bad seeds of the bunch that I have seen. And trust me, I'm the first one to feel that they should be prosecuted to what extent possible- when they have violated rules and regulations that are set. I work real hard everyday, to not only feed my family, but to also gain client's trust in me that I am only looking out for their best interest. And believe me, that is not an easy thing to do, to really build a rapport with someone who is pretty much entrusting their hard earned money to you! And yes, like I said before, if I feel that a client may possibly be overspending, I'll advise them the best way I can. I'm human too. While I know I need a paycheck, I also know that I can't have someone mad at me or resenting me down the line all because I just needed to make a commission check!! That in itself is not only bad business practice, but horribly bad karma.


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## geslabon (Mar 3, 2008)

I thought the dead horse was me.. :brownbag: 



> :brownbag: ow.. that's why I said I apologize. I think I'm being so defensive right now.[/B]


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## I found nemo (Feb 23, 2006)

> I thought the dead horse was me.. :brownbag:
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 :smrofl: :smrofl: :smrofl: :smrofl: Sorry, but that was funny about the dead horse being u :brownbag:


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## geslabon (Mar 3, 2008)

lol.. I thought that the dead horse was me and she's still beating me up... Wow... English is harder than I thought.
:smrofl: 



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## domino_angel (Apr 17, 2008)

As a former realtor myself, I completely understand and agree with you. The thing that really ticks me off about the situation that started this thread is that the homeowner CAN afford to pay the mortgage, they just don't FEEL LIKE DOING IT!! They don't want to face reality! The reality is they would be much better off doing what they can to stay in the house until the market recovers, and then downsize. 

My fiance and I could have easily purchased our dream house, but we didn't. We bought well under our credit availability, and we are very happy we did. We have plenty of extra cash for improvements, and any emergencies that WILL come up. People just don't think that those emergencies will happen, they don't plan for it, and then they end up paying out the nose when it does. 

Our culture right now is all about "me me me" and "I want it now". That really needs to change.


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## geslabon (Mar 3, 2008)

I'm proud of you... and I truly think that your amazing. 
I really wish that I have that good self-control but unfortunately, I'm just learning it now the hard way.



> As a former realtor myself, I completely understand and agree with you. The thing that really ticks me off about the situation that started this thread is that the homeowner CAN afford to pay the mortgage, they just don't FEEL LIKE DOING IT!! They don't want to face reality! The reality is they would be much better off doing what they can to stay in the house until the market recovers, and then downsize.
> 
> My fiance and I could have easily purchased our dream house, but we didn't. We bought well under our credit availability, and we are very happy we did. We have plenty of extra cash for improvements, and any emergencies that WILL come up. People just don't think that those emergencies will happen, they don't plan for it, and then they end up paying out the nose when it does.
> 
> Our culture right now is all about "me me me" and "I want it now". That really needs to change.[/B]


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## geslabon (Mar 3, 2008)

BTW, you just gave me the best IDEA! "The reality is they would be much better off doing what they can to stay in the house until the market recovers, and then downsize". I will sell my house when the market get's better and get the H**L out of this high munfortunately, I'm just learning it now the hard way.



> As a former realtor myself, I completely understand and agree with you. The thing that really ticks me off about the situation that started this thread is that the homeowner CAN afford to pay the mortgage, they just don't FEEL LIKE DOING IT!! They don't want to face reality! The reality is they would be much better off doing what they can to stay in the house until the market recovers, and then downsize.
> 
> My fiance and I could have easily purchased our dream house, but we didn't. We bought well under our credit availability, and we are very happy we did. We have plenty of extra cash for improvements, and any emergencies that WILL come up. People just don't think that those emergencies will happen, they don't plan for it, and then they end up paying out the nose when it does.
> 
> Our culture right now is all about "me me me" and "I want it now". That really needs to change.[/B]


[/B][/QUOTE]


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## graceandmartin (Feb 25, 2008)

> BTW, you just gave me the best IDEA! "The reality is they would be much better off doing what they can to stay in the house until the market recovers, and then downsize". I will sell my house when the market get's better and get the H**L out of this high munfortunately, I'm just learning it now the hard way.
> 
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[/B][/QUOTE]


I hate to break it to you, but its not as easy as you made it just sound. Typically a market can take anywhere from 7-10 years to correct itself. So don't count on thinking that you'll just keep making the payments and then next year resell and then downsize. And keep in mind that when you do resell, it may be a high forecasted possibility that you will end up LOSING even more money due to current market value versus what you originally paid. And remember, downsizing isn't something that should be looked as a future plan, its something that should be looked at as a present plan. All my best and good luck to you and your family.


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## puppymom (Jun 13, 2005)

> BTW, you just gave me the best IDEA! "The reality is they would be much better off doing what they can to stay in the house until the market recovers, and then downsize". I will sell my house when the market get's better and get the H**L out of this high mortgage.. at least less way less than $7000/Month. My morgage is $5,000+ and Chapter 13 is $1,000+ total is on $7K/Month. :smilie_tischkante:
> I can't wait to get out. Any idea when the value of the house is going to get back up???[/B]


I just want to point out that you were upset that this thread might be about you and yet you keep bringing it BACK to you....... :smpullhair:


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## graceandmartin (Feb 25, 2008)

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*sigh*  I think that at this point that is pretty much all we can do... is sigh.


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## domino_angel (Apr 17, 2008)

When we are talking about waiting for the market to recover, that entirely depends on your market. It could be months, it could be years. You have to talk to a local realtor about that.


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## Gail (Oct 14, 2007)

"I did not see the storm coming at all."

You weren't looking. Otherwise you would have noticed there was no check sent to the mortgage company, no money in savings, bills not paid, etc. If you stay married to a gambler, expect more to heartache to follow.


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