Show us your credit crunch

August 26, 2008

Have you been hit by the U.S. housing crisis? Do you see evidence of the year-long credit crisis all around? Is a part of the story not being told?

We are inviting citizen photojournalists to send in their best photographs illustrating the battered housing market and on-going credit crunch. If you think your picture tells the story in an innovative way, please send it to pics@reuters.com.
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Mortgage crisis

Comments

The credit crunch is not only about bank CEO’s making ludicrously high salaries while their banks fold, nor is it about people over mortgaging themselves. It is about people expecting to continue to get pay raises, believing in their earning power, beleiving that America is the land of opportunity for all. It no longer is. It used to be a guy working at a gas station made enough to own a home and support his family.

We are homeless because of health problems and no job. I have a friend whose husband is losing his health and mind because his computer jobs got outsourced to cheaper foriegn labor. The only reason his kids have a roof over their heads is family charity. He has been trying to work for over 5 years. Trying to take any job out there, no matter how low paying. He is only 40 and has gone completely grey. I have a sister who is an engineer, unable to find a job because of foriegn replacements. Her husband, a brilliant engineer, works year to year, no pension, no security, their investments just got burned in the stock fallout.

I know a man who had made a decent living, saved for retirment, had a nice house, and then had a heart attack. He lost everything to pay his medical bills.

I know another man who had a truck accident. He has brain damage, lost an eye, ruined back, ruined leg. Not only did a hospital try and collect his drug and disease free 35 year old organs, by telling his wife he wouldn’t make it and putting him on 100% oxygen and medicine they knew he was allergic to, but for the last 2 years he has been turned down for disability.

Meanwhile rich people buy up the cheap houses and land, bragging about their deals, while ordinary people are becoming landless. The cost of housing is not going to go down, it is only that the rich are going to be richer and land holding lords now.

Once we claimed a chicken in every pot, now people lie in the street and rot. India has a high population, but it doesn’t make ordinary people richer. We were richer when we had fewer people.
Things will only go back to “normal” if we start creating civic jobs instead of going “private”. Jobs like road crew, recycling, civic maintainance.

Posted by Vivian | Report as abusive
 

Bush is a moron. The senate are morons. The house of representatives are morons. The entire government are morons, out of touch and not in any sort of reality completely insulated by the sureness of guaranteed income (taxes). Many of us are in dire straights, lost jobs, losing homes, destroyed neighborhoods and still they spend $10 billion/month on war. And now we get to choose between moron #1 and moron #2 for President of the United States of Amnesia. Wow! Oh yeah, are we got burned really bad by the middle east in the 1970′s and guess what! Why went out and bought bigger stupider cars. Oh yeah, we got burned really bad in 1933, 1987, the mid 1990s and other times as well I’m sure. And our government decides that removing all the financial rules is a good idea in the name of FREE MARKETS –> code words for FREE FOR ALL MARKETS. Oh, have I mentioned education or health care yet? How about Social Insecurity going broke. Or how about the 3rd world state of the national infrastructure. Or perhaps the millions upon millions of illegal aliens that have flooded the country for decades. Or perhaps the fact that they can’t guarantee the food supply network. Or how about moving all the manufacturing jobs (the back bone of the US Economy) overseas in the name of FREE TRADE –> Code words for ADVANTAGED CORPORATE POSITION. Or how about the destruction of the currency. Or the really god awful wages. Rampant inflation. or deteriorating cities. Crime. Drugs. Loss of privacy. Loss of rights and about a million other things…not one of which the morons have addressed let along solve. Housing bubble is a pretty small problem I think sitting on top of an iceberg of deterioration. Man being 3rd world doesn’t bother me that much. What bothers me is going from 1st place to 3rd world. Pretty damned embarrassing I think.

Posted by Dude | Report as abusive
 

Well, look on the bright side guys… I’m in debt 100k and I have no property or car. Only with a degree in engineering and 100k debt on my resume. Even if I go bankrupt I still won’t be able to clear this debt.

Posted by brokeengineer | Report as abusive
 

Let me get this straight, we are in a credit crisis because people have over extended themselves and defaulted on home loans they couldnt pay… now we are trying to unthaw the credit market so consumers can borrow even more.

To add insult to injury, the government bails out the people who are owed the money, instead of the people who owe the money, with money that is the public’s.

I have no sympathy whatsoever, Dave Ramsey should be required reading in public schools. Maybe the next round of tax paying americans will get the hint.

Posted by common sense | Report as abusive
 

My 88-year-old uncle died at the end of June. He came of age during the Great Depression after his father lost the famly farm. A veteran of WWII, he retrained and worked as machinist after a debilitating injury received working as an Army gunnery sergeant. He supported his parents after his father suffered debiiitating strokes and assisted his sister after her divorce. A lifelong bachelor, he lived frugally and honestly and save $88K to be divided among his heirs. Can any of you do what he did with a high school diploma and technical training at a career school?

Posted by Martha Anderson | Report as abusive
 

Here is the key to getting out of this mess. Maybe I am wrong with this but it seems simple. Someone figure out how to run vehicles on the air we breathe. Granted this will devestate other global economies but look at Dubai now. When the oil runs out Dubai will be ready. Anyway, no oil a whole lot more money is left in our pockets. The government needs another New Deal for the American citizen. Our interstates are in rough shape, our bridges need rebuilding, we need new schools, new public utilites, our health care system. Get rid of Unions. Look at the Toyota plant in Alabama that is non unionized. Much greater on the job work and they love what they do. Put people to work this way and the economy will rise. Create mass amount of jobs that pay well and pump money into this economy. I know it is a lot more complicated than this but get something going instead of sitting on our butts waiting for someone else to do it. Americans are inherently lazy. We expect to have everything for free. Quit being this way and this great country will once again be great.

Posted by Anthony | Report as abusive
 

stupid is as stupid does.
People bought in thinking they were gona make a killing in two years or so.
some did, some did not.
Blaming the government, Realtors, Banks, ect is a bunch of BS.
These folks are over 18 and can read.
tuff, suck it up baby, you rolled the dice-you lost.

Posted by rls | Report as abusive
 

The whole credit thing is so bad that I couldn’t get a student loan for school. Some friends of mine had the same problem. Then my credit card companies tried charging me late fees to make more money. My payments were never late.

Posted by meh | Report as abusive
 

Two and a half years ago, my husband and I looked around our five bedroom, three living area home, and decided we were crazy to keep it. Our children were grown; we had one college age daughter remaining at home. Our summer electric bills were unreasonable, our winter gas bills were too high.
So we sold it, and moved to a smaller home, far more inexpensive than the realtor’s charts and tables said we should be paying based on my husband’s income. Several of our casual acquaintances actually wondered if we were in financial difficulties.
Now, come the crash, we are much safer than many people. In fact, housing pricing in our modest neighborhood have actually risen. Our house is worth roughly 12% more than it was two and a half years ago, not including substantial improvements we have made to the interior.
A great deal of the fault for our country’s credit woes lies not just with the banks and lenders for talking the American people into taking on more debt than they could afford, but with the people themselves.
Yes, my husband and I were smart, but we were also blessed by God that we got smart when we did.

Posted by Cookieknits | Report as abusive
 

Solution #1 get off the cheap credit kick. When I started buying houses it was 1983 and interest rates for my first house was 15%. I always said if I can make money the bank should be able to make money and we both did. I have watched prices increase as much as 10 fold since that time and retreat back 40%. The simple answer was time and cheap money. If we could figure out how to raise interest rates then not everyone would be a guru making 100′s of thousands of $$ adding nothing to our world through buying and selling houses. So we all need to settle for a smaller house which uses less fuel to keep warm and houses less personal possessions. Other parts of the world can make due with less personal items and still live comfortable lives. The first credit cards in the U.S. came from Sears and Robuck in the early 1960′s. As you can see living on credit when managed properly can help build our world. Sears was a great company till the mid to late 90′s. Living on credit irresponsible does not help. Sears and the U.S. government can no longer lower interest rates any more and allow the financial systems to run smoothly. So lesson #1 is get us off the credit kick which may hurt like a scab being picked off your arm but when we all heal our world will be a better place.
So learn to save like my parents in the 1960′s, own a modest home with less debt, and work to get a great education.
It sounds simple and works for me!

Posted by Sailorguy | Report as abusive
 

Yes I see the crisis and am living it first hand. I was laid off last week due to the economy.

Posted by J Collett | Report as abusive
 

Absolutely! As an IT Project Manager I have been searching for a job/contract since July and finally decided to take a part time job at a craft store, which doesn’t pay enough to cover much more than my mortgage payment.

Posted by C. Blevins | Report as abusive
 

I inherited a house that’s not selling so is now in foreclosure, my car died and I can’t a loan for another one, the junk debt buyers got my name on their list and froze all my bank accounts and hmmm, what else…did I mention I needed the money to get the fuel before the weather turns cold? or to put food on the table for the kids? or that junk debt buyers are MAKING fist fulls of money by getting the discharged debt for pennies on the dollar and repackaging it for resale after seizing what they can? or that they don’t negotiate…and go beyond nasty…hmmm, was that old discharged debt from credit card companies that diligently fill your mailbox with solicitations and then pummel you with percentage rates just to get you in that position?

Posted by You Betya | Report as abusive
 

I have a problem with understanding people who took out home loans they knew they couldn’t afford, or take on credit debt. And I am supposed to bail you out for not being good stewards of your money? No WAY! I live in a modest home with no credit card debt, 3 kids. I live on less then what I make, no 42″ plasma tv, no new car, used clothing and a ton of cash in the bank. Pay cash people. Wake up America!!

Posted by James Vinewellen | Report as abusive
 

I think it is truly amazing that everyone who is in foreclosure is branded as living outside of their means. Take my case for instance, I was middle management for a mortgage lender and was laid off in the early part of 2007. I had to change professions at a much lower salary and now I am in foreclosure. I can’t sell my house because it is worth less than what I owe on it. Maybe those who are so critical should wake up and realize not everyone who is in foreclosure lived outside of their means. I just hope that our ciritics never have to endure what I have been enduring for the past 5-mths.

Posted by sdsoftbl | Report as abusive
 

I know what everyone is feeling. I was laid off in 2005 and had to take a job in a different city. I put my house up for sale and decided to buy a house in the new city so that my family could be with me. I was debt free at the time except for the house payments. Well, of course my old house didn’t sell and even though I worked two jobs in the IT industry I couldn’t keep up with the payments. We have been living off of credit cards since and now we have no choice but to go into foreclosure and start from scratch since I have cashed in all of my retirement savings.
Though I accept that it is my fault that I purchased another home without selling my first one, the phsychology of the time was so frenetic so many people who I thought were smart told me that it would be ok. I did learn a very hard lesson that has certainly been very humbling.
We are going to start over and only use Cash to pay for things, that is our goal now. It is funny but I used to make fun of my grandparents who lived through the great depression. They never used credit, and kept track of their money like hawks. I guess they were smarter than I thought.

Posted by Josh | Report as abusive
 

I still could afford buying my first home, except now no insurance company would insure 5% downpayment…well I could afford 10% downpayment until the crash of my 401K plan…now I dont have this money. How stupid is that? I thought banks would want to cash-in clean credit loans…they are just so picky now they are refusing stable incomes to take a decent, not over-your-head loan. In short, they are digging more their own whole. Now I have this money I can’t invest (invest in what? ) and I can’t use for buying a house. It’s a waste!

Posted by cristele | Report as abusive
 

Should we not blame Bill Clinton along with greedy bankers for creating this mess in the first place? Opening the floodgates for millions of Americans who should not have qualified for home loans. The effect of his liberal agenda is truly remarkable. How many Americans are now on some kind of government benefit.
The honest hard working American tax payer can no longer bare this burden. Look for more of the same from Barak Hussain Obama.

Posted by TJ | Report as abusive
 

we followed a simple policy –
“never take credit or give credit”
we followed this policy strictly and lived well within our means. We purchase any item either it is a home or car or mobile phone, we use cash. we never go for credit. By following this simple principle we are able to float free of credit.

Posted by krishna | Report as abusive
 

My credit score dropped 28 points in 3 years that included 18 months underemployed as a Temp. It was still well over 700 when the credit line on my house was frozen (as well as anyone else whose rating dropped more than 20 points since the line was written). Never a late or missed payment – just an arbitrary decision applied across the board by a banking institution with which I have had a 30 year relationship and 2 previous clean mortgages. Can you say running scared?

Posted by T. Cass | Report as abusive
 

Our residential lease included utilities. We were paid in full and in advance when the power and water company pulled the meters from the house and the sheriff came to the door on March 12th 2008. Turns out the homeowner hadn’t paid the mortgage OR the utilities since before we had moved in, and all three were thousands and thousands of dollars in arrears. I am the single mother of three children and owner of a construction related business in the epicenter of the construction/mortgage crisis: Cape Coral, Florida. I have had no work since March 2007 and reported unemployment is 10% in my zip code.

Posted by CapeKelly | Report as abusive
 

After 30 years at my company they decided to outsource the IT department to India. Paid off all a credit card and back bills with proceeds from the severance package. Not spending or charging one dime on anything but the basic necessities in the foreseeable future.

Posted by Keith | Report as abusive
 

The banks are running scared and pulling the rug out from under people.

Example: I recently paid off a credit card in full and the bank immediately lowered my credit limit. WHY?

THEN I get a letter from another bank stating that my credit score dropped due to higher “debt to income” ratio (caused by me paying off my card). Since my score is lower they are raising my APR to 29.99%

I have never missed a payment or went bad on a loan. The banks in my case are making me look like a high risk when I am paying my obligations.

Its a mixed up world man!

Posted by David | Report as abusive
 

I was laid off from my I.T. job in 2003.
I earned two college degrees while looking for a job in my own field for 5 years. Computer jobs all went to Asia. In June 2008, I went back to school to learn insurance and today I work selling auto and home owners for 1/4 of what I used to make in 2003. But it pays the mortgage. Try something new. If it doesn’t work, try something else. That is what I did.

 

The ‘credit crunch’ is not the cause of the economic crisis we are experiencing. It is a contributing factor. The Stock Market greed for fast cash and instant wealth through gambling coupled with mismanagement of companies by boards, officers and managers who, through their ‘professional’ management have launched us into the most serious economic crisis ever experienced in this country (this includes the great depression). It is time to realign our priorities which includes not living on credit and investing in people, not gambling in a market.

I have never previously experienced the traumas and set-backs that I have in the past few months. I do not and have not lived on credit. Evenso the economy has crunched my cash flow and resources tremendously.

I vote for a restructured economy that is not based on the wealthiest trading stocks for profit. I think we have to invest in our people and the quality of our service and products.

Shame on the execs for their contribution to this crisis. I should think their huge salaries and bonuses are now a thing of the past. They have cost we taxpayers far more than we should ever have had to pay.

 

I think some people are are going to learn that when you have no home, no savings and no credit you are not going to jump start the economy. You are wasting your time saving banks, insurance companies and various funds. They never supported the financial system before and they will not now.
Try the market at 7000 and unemployment 12 to 15 percent and 8 to 10 years to get back to where we were 1 year ago.This whole bailout is a joke and we have really serious problems…………………………………H.Steele

Posted by chuck | Report as abusive
 

My husband and I bought our very first town home last November w no $ money down. We are paying our mortgage, bills, etc. on time with our jobs that we still have. I just wish we would have waited a few months for all of these house deals. Our place was purchased for 190 and today, similar places around our block are going for 175. Next time, we’ll get a place that’s closer to my work, too. Not 40 miles away.

Posted by Lucky Girl 81 | Report as abusive
 

Credit seems to be in charge right now but according to Nielsen, cash will rule 2009 and retailers will offer discounts to cash over credit. The credit market is just too unstable right now. I tried to rent a car recently which I do often. All of a sudden Ace, Thrifty and Budget require credit checks for customers without credit cards. I just thought that was way too intrusive and costly to be worth it.

Posted by krissy | Report as abusive
 

Like dave above,
I canceled two cards then received a letter two months later stating they are lowering my credit line to $500 months after it had been canceled, both cards customer service reps said both cards were never canceled…Hmmm

Its like they’re trying to ruin your credit so you can default so they can tack on four times the fees and charges related to defaulting on a card, in which they get t reimbursed for half of the default amount…..never again credit card companies…never again.

Posted by Dee | Report as abusive
 

We have been in the Real Estate business for 30 years and would like to offer our idea, to help deal with the housing crisis.

Step #1: Give everyone who has a mortgage a 120 day moratorium on their mortgage payments. This would be retroactive for anyone who is currently late on their payment. This would act as a great stimulus to the economy, especially at Christmas time when people are motivated to spend money!

Step #2: Individuals apply for Gov payoff and refinance into a 30 yr, or more fixed rate of 3% – 4%. Applicant shows decrease or loss of income. Gov will payoff the loan, same as any home owner could do at anytime they were able, and the Gov will hold the deed to these homes so will have something if the home owner still goes into default. Late, or no payments could be added to the back of the loan. If a home owner is still unable afford the payment, work a Gov Subsidized loan with them and keep them in their home, same as the Gov does with Gov subsidized housing projects across the country, only difference is that the Gov will own these homes, not the developers who build Gov subsidized housing projects.

This process would benefit local mortgage lenders and anyone involved in the process and should help create additional jobs to handle the increased work load at the same time.

In short, the big bank bailouts are not working! it’s time for the Gov to step in and do the job for them!

Posted by Steve Hula | Report as abusive
 

Here’s one you might not have heard of… My husband & I built a new home. We had a construction loan, with a guaranteed flat rate conversion to a 30 years mortgage at the finish of construction.

The bank decided at the end of construction the home wasn’t worth the amount they had anticipated, so they tried to renegotiate the terms. They wanted us to pay almost 3Xs they agreed on interest rate and allow them to attach the mortgage to additional property we own.

When we tried to meet with them to discuss the situation, they would not talk, return calls or work with other lending institutions.

The accelerated the loan and hit our credit. We have NEVER had ANY credit problems prior to this. No slow or missed payments.

We would gladly pay accept a reasonable mortgage… at the agreed upon rate. BTW, it wasn’t sub-prime, mid sixes. Nothing has changed in our employment or financial history.

We’re now anticipating being homeless, never even living in this brand new home.

Merry Christmas.
Happy Holidays.

Posted by R. Friend | Report as abusive
 

Two things folks:

1. The government LOANED money to the banks, as well as getting some stock in the companies. The government could actually make money off the deals.
2. There are way way way too many people to “bail out”. Anyway, you don’t want a loan, you want free money.

Posted by Chris Boulder | Report as abusive
 

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