You need to make $60k a year to afford a $300,000 house comfortably assuming you have no other consumer debt ans 20% down. Where I live $60k is less than the average individual income. That is also the case for the top fourteen states. When you consider that most people end up as some sort of couple then if you are double income family and average then even in the lowest income state you have a $75,000+ family income.

That is ridiculous. Even if you mortgage the entire amount you are paying $1500/month for a mortgage. In your example you have the guy paying $1000/month in rent and saving $2000/month for his big cash purchase so basically spending $3000/month in housing but all of a sudden he can't afford $1500/month + property taxes and maintenance.

This I would agree with but you are on the other extreme which is just as bad.

lol @ an adult having a roomie. How comical.

Hey guys, will it matter that I have not filed taxes as a professional poker player? By the time I try to get a mortgage I will have 3 years of tax documents and enough money to make a good down payment, etc, but I have been in grad school and also teaching online classes etc, so I didn't file as a professional. Will that help/hurt me at all?

I lend on real estate in Colorado and the highlighted portion above is incorrect. The lender keeps all proceeds from the sale of foreclosed property above and beyond the loan balance. This is what created the predatory lending that was in part to blame for the mess were in today.

For example, I buy a $200,000 house and finance $100,000. Some time later I default with a $90,000 balance and the house is still worth $200,000. The lender forecloses and the house brings $150,000 at the trustee sale. The lender pockets the $60,000 above and beyond the payoff as profit to the bottom line.

Predatory lenders will qualify buyers they know cannot repay the debt over the long-term if there is sufficient down payment for the scenario in the example to take place.

As a former automotive lender, I was shocked to learn the "leftover" equity in the asset did not go to the borrower/owner. Go figure.

Been playing poker for years and I'm going to have folks as co-signers to get mortgage. Otherwise it's really impossible even if you put down huge down payment.
They want to see pay stubs not poker checks.

my mortgage company approved me with no income besides poker. They did not require a co-signor. They did not require a large down payment. They also did not care that I never filed as a professional (I was in college when I got my mortgage). Anyone having trouble with any of these things, pm me, I probably will be able to help

This is incorrect.

Usually, the lenders end up screwing the original owner out of a lot of equity in cases like this, but they are only allowed to recover their amount owed.

In reality, extreme cases like this (where the owner had 100k equity before being foreclosed on) rarely happen though as in a pinch the original owner can easily sell the house slightly below market value and keep all that equity to himself well before foreclosure when in a pinch (even in today's market).

Note that I said market value, not moran-inflated 2003-08 value.

You have bad credit or a horrible mortgage lender.

This is my understanding as well, although I've had an amazingly hard time getting a straight answer on this.

I think what happens is that the lender takes it to foreclosure with a reserve bid of the amount the lender is owed (which is almost by definition more than the asset is worth, but not quite).

If nobody beats the reserve bid, the lender takes title and now owns the property free and clear. From this point he gets to pocket whatever he sells it for.

But the key point, if I am correct, is that the lender can't profit from the trustee sale beyond the amount he is owed (which inevitably includes some penalties and fees for late payment and non-payment).

Would love to know if I'm wrong, I certainly might be. Perhaps it varies from state to state, or real estate is different from chattel (cars)?

Comical.

So many different stories...I guess it just matters where you live/look/etc...we will see how it goes!

Not incorrect at all. While I do not work at a bank that engages in predatory lending, our bank has foreclosed on homes with big equity and taken the proceeds to the bottom line as profit.

It is not uncommon for homeowners with big equity and who are severely past due to attempt to hold on until it is too late and they end up in foreclosure.

From HUDs website:

Predatory Lending

Over the last several years, our nation has made enormous progress in expanding access to capital for previously under served borrowers. Despite this progress, however, too many families are suffering today because of a growing incidence of abusive practices in a segment of the mortgage lending market. Predatory mortgage lending practices strip borrowers of home equity and threaten families with foreclosure, destabilizing the very communities that are beginning to enjoy the fruits of our nation’s economic success.

I'll try to find the specific statute when I have more time.

I don't have great credit 720ish but def not bad.
Maybe it's harder out here in California...and if someone knows of a lender out here I'm all ears.
Otherwise I'm probably going w Wells Fargo.

720 isn't good unless the scale in the States is different than in Canada.

cash out refi's based on over inflated bubble valuations.

Your comment about waiting too long may be true, but if there is REAL equity(as opposed to paper) a buyer can be found before foreclosure completes.

Cwilli are you sure the bank is capturing the equity at the actual foreclosure sale, rather than when they sell it through their REO guy subsequent to taking it back at the auction?

Same result but different process.

720 is the top tier on FICO... 850 is max, but 720+ is the top tier, so that is excellent credit.

No, I'm not sure of the actual process. I just know that the result is that the homeowner/borrower loses their equity.

I don't know where you're located, but based of what you are saying here I could get you a 30 fix at 4.5 and close it in two weeks based off what you are saying. Anyone worth a penny should be able to do the same. You're the easy guy that just needs to make sure he doesn't get robbed by the broker.