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It's not surprising, but it's jarring to see the numbers: Personal bankruptcies filed by New Yorkers during the first 7 months of the year has increased 31% over last year's first 7 months. According to Crain's New York, it's "fueled in large by the number of homeowners who could not keep up with monthly payments on subprime loans," which is different from the usual reasons of "catastrophic events such as accidents, illnesses or divorce." An example of those facing bankruptcy include a 28-year-old math teacher who says he was "scammed" into investing in $1.5 million in real estate without putting money down, "I make $50,000 as a schoolteacher. There's no way I should have been approved for loans that big."
NYC Bankruptcies Up 31%
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It's the same media that NEVER mentioned Muslims' hatred of Israel as a possible motive for 9/11.
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Wow. that teacher is an idiot. just now he realizes that he shouldn't have "qualified" for that sort of loan? I feel bad for his students. and he teaches MATH for crying out loud!
It is so hard to beleive that so many people are lacking the most minute amounts common sense that would tell you that no money down on 1.5 mil in loans is a BAD FREAKING idea.
A school teacher buying a 1 mil dollar home is a bad idea--period--unless he's got an inheritance or a winning lottery ticket in his hand.
There is a THIS AMERICAN LIFE episode on NPR called GIANT POOL OF MONEY that explains that whole housing situation with the loans and why everything is so janked up right now. You can listen to it here.
http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1242
Very disappointing to see an educator who should have known better. Buying a 1 million dollar home and not putting one cent down!? How could anyone not see the stupidity in that!!!????
this is why public schools suck. you've got idiots teaching future jail inmates.
Just like Barbie says..."Math is hard!"
Scammed? You're a fucking math teacher, how about you look at the numbers?
"Scammed" my ass. That douchebag deserves everything he gets.
I'm going to explain to the next cop that pulls me over for speeding, that it isn't my fault... I was scammed into buying such a fast car. :rolleyes:
Any doubt this dummy is voting for "Change?"
The percentage --31% --is used to sell the story.
The numbers show there are 14,407, up from 11,026 last year.
That's an increase of 3,381. Obviously not a good thing that bankruptcies are trending up, but the actual increase is not nearly as scary as the percentage makes it seem.
NYC has a population of about 8.3 million, so you could also look at it as the bankruptcy rate increasing from .133% to .174%, an increase of .041%, which comes out to around one additional bankruptcy for every 2,500 people.
The 8.3M figure includes kids, but even if you halved the number, it's 1 additional bankruptcy for every 1,250 people. That's not a good thing, of course, but not nearly as awful as a 31% increase might lead some to believe.
My guess is that these people knew the math, but
the real problem was the thinking that even though it doesn't add up, if you get approved, it must work somehow, because if it doesn't work you wouldn't get approved.
So, the problem is not the lack of education, but rather the lack of maturity. These people felt comfortable with any dumb decision just as long as somebody else maked them for it.
Even now, this teacher is still blaming the person who approved the loan, and not himself.
Fucking incredible.
I did not know our public school system was in such a bad state that we have resorted to hiring the mentally challenged.
"I'm a math teacher. I make $50K a year and I bought $1.5 million in real estate and I ain't got no money to pay for it."
This jackass is trying to put the blame on someone else? He should have to stay after school and write the above on the chalkboard 1.5 million times.
The teacher blaming the approval process is just par for the course; most of the way the government is responding to the housing crisis is by viewing these idiots as "victims" incapable of understanding that they would need to make monthly mortgage payments or who supposedly believed that their teaser rate of 1% would never go up.
People like this teacher knew exactly what they were doing. Using someone else's money to gamble that housing would keep going up.
Regardless of whether he was approved for the loan, his entire $50,000 income was insufficient to even pay interest on a 1.5M mortgage with a rate as low as 3.5%. He was clearly hoping to flip the place for a profit and lost. Now he's playing the victim card? Fuck him.
Agree with #12 on the teacher's plan to flip the property.
Somehow I doubt he had any intention of going more than a year or so paying off a loan that large, he was probably eating crumbs under the sofa and putting everything on credit expecting that he was going to make serious money when he found a buyer for the property. So greed + faith in an eternally increasing market = totally overextending yourself. Dumb, but no different than anyone who actually buys those investment strategy packets they advertise at 2:00 in the morning. He's not a victim but someone sold him the rope to hang himself with.
I do want to know what idiot gave someone with a $50k salary a $1.5 million loan. Something tells me this was not the only loan floated to someone who could obviously never be expected to take care of the payments for more than a year before defaulting if they failed to sell the property for enough money to cover the rest of the loan and any associated fees. How many loans like this did that bank make?
"I make $50,000 as a schoolteacher. There's no way I should have been approved for loans that big."
ugh...what a disgusting math teacher - a lot of these foreclosures are from people like him who were INVESTING in RE...flipping houses, serving evictions, acting out thier wanna be Trump fantasies...and you know good for them, but not everyone who invests makes money, theres no guarentee implied, theres risk, they played the game, they lost - yet there some how trying to pass the blame on to other people. I've got no sympathy 4 them, at all.
wow, there are a lot of real estate & financial experts here.
i'm going to have to disagree with you guys. i don't think the other housing victims (yes, victims) knew enough about finance to realize they were being screwed over.
ixvnyc says: the real problem was the thinking that even though it doesn't add up, if you get approved, it must work somehow, because if it doesn't work, you wouldn't get approved.
i don't think it's a problem to expect people to , i don't know, do their jobs. if someone is a mortgage or loan specialist or a doctor or a dentist, you expect them to know what they're doing, that's why you go to those people, if not, you would do it yourself.
i'm sure you are all experts on open-heart surgery too.
There are really so many people you CAN blame for this mortgage scam BS. There's the Bush administration for taking away all the laws that prevented mortgage issuers from selling all responsibility for the loans they made. There's the banks who failed to do their job (i.e. make sure people they make loans to can pay them back) because they knew they could just sell the debt and forget about the consequences. There's the scummy mortgage brokers who went after people to "refinance" property they owned outright, and lied on other people's applications to get their ultra-sub-prime commissions. There's douchebags like this "math teacher" who thought the salary upon which they can barely afford to live was enough for them to play the NY RE market. I don't think you need expertise to know who's responsible for all this - a lot of very greedy people who let their own idiocy run away with them.
It's just a real pity they took our economy with them. The rest of us don't deserve what we're dealing with now.
I still don't know how he can be making $50k/yr. as a schoolteacher.
"I make $50,000 as a schoolteacher. There's no way I should have been approved for loans that big."
NOW he does the math. How quickly these asswipes change their tune once their attempt at fraud goes sour. Not surprising.
What IS surprising is that some bank allowed this turd to leverage himself into a 1.5 million dollar debt on a 50K salary, which basically will constitute a total LOSS for the bank.
Grab a bag of popcorn, relax and sit back because the US economy is about to come tumbling down like the WTC towers.
Allah Akbar!!!!
"if someone is a mortgage or loan specialist or a doctor or a dentist, you expect them to know what they're doing, that's why you go to those people, if not, you would do it yourself."
Apples and oranges. Depending on the state, any schlub can be a "loan specialist". All they do it try to sell you their product. While doctors and dentists can do the same, it takes years and years of study to become a doctor or dentist and while not infallible, their opinions have much more weight.
And really, loans just aren't all that complex. While there were some unscrupulous lenders out there, based on my experience with getting a loan earlier this year, I think most people brought it on themselves.
That math teacher was the scammer here, and he got caught. He's like the poster child for "Moral Hazard".
The person who made the loan was probably on commission and probably didn't care about anyone's ability to pay since the paper would be quickly sold to a CDO bundler trading with the large banks. These guys make the paper and then get rid of it as fast as they can. Last person who touches it takes the hit. If banks and mortgage lenders were required to hold on to that paper for the first five or ten years of the loan's life, you bet your ass they'd comb through some douchebag teacher's $50,000 per year world...and flatly tell the gentleman "no".
What I don't understand, is how baby seals can produce coats that are just so darn soft
eyekantspel, agree with you. So was the pulled quote about the teacher. It is almost too perfect a quote, to be honest.
I'm just waiting for someone to sue a mortgage company for these types of irresponsible business practices. The mortgage company is not only to blame but where was the closing attorney on this one. And don't forget the real estate agent who threw her commissions into the loan for good measures. Although I know that there is some sort of addendum to sign at closing that states that the loan may not be a good idea and at the same time exonerates the attorney and the mortgage company, but that shouldn't allow these people to destroy this guy life for financial gain.