I have done a life insurance policy large enough to cover my mortgage plus to survive

In the deep reaches of my mind, I thought that selling insurance as a requirement to obtain a loan of any kind was a no no! Yes, the lender can offer it but NOT as a condition of the loan. In truth for me, I have 100% declined all insurance offers as they generally only protect the lender (if really that). You can find other ways to insure your loan and in a way that actually protects you ... if you need to. Example, a Life Insurance Policy large enough to cover your mortgage so your partner/family/others would have the funds to retire the debt. Note, the Life Insurance could help with other debts or Disability Insurance in case you are out of work short or long term etc.

FrugalFran wrote: Everybody involved has to be responsible and I would hope people would house shop smarter after the crisis of recent years. Banks are no longer lending more than people can afford and people need to figure out their budget and stay within it.

I don't believe that buyers were irresponsible, at least not for the most part. Mortgage contracts are written in the banks favor and are intentionally difficult to understand. Buying a house is an emotional, stressful, draining process so I can see how buyers might miss a few things. Plus, the world changed rapidly. When many home owners signed for their loan, gas wasn't $5 a gallon and coal mining was going strong. Unions had a place at the table and, workers retired from a company with a hearty pension. No one could predict those changes.

The future looks even worse because the robots are coming. People who signed mortgages five or so years ago had no idea that truckers would be out of a job in the near future due to autonomous driving. No amount of being responsible will save the day.

Tishbel wrote: I know when we took our mortgage out, the bank pushed insurance very hard. When we read the small print it wouldn't cover us because of the 'nature of employment' and a health issue in the family so we would have been paying in for years, only to be unable to get anything back. We declined it, but not everyone will take the time to check the terms, so I'd be surprised if some weren't caught.

So, what was the point of the insurance, Tishbel? Did it cover anything at all? It reminds me of that insurance commercial when a guy goes into his agent's office and says he needs to repair the central air and she tells him he's only covered in the event of a volcano eruption or a zombie apocalypse.

I know when we took our mortgage out, the bank pushed insurance very hard. When we read the small print it wouldn't cover us because of the 'nature of employment' and a health issue in the family so we would have been paying in for years, only to be unable to get anything back. We declined it, but not everyone will take the time to check the terms, so I'd be surprised if some weren't caught.

I agree. I do think banks will still be aggressive in certain situations and the lender should really understand how much they are taking out and how much they will have to pay each month.

Everybody involved has to be responsible and I would hope people would house shop smarter after the crisis of recent years. Banks are no longer lending more than people can afford and people need to figure out their budget and stay within it.

Glad you pulled me down from my podium and rant. Yes, buyers do need to be involved and take ownership/responsibility for their actions in the housing process including the mortgage. The idea of buying houses in a high market and going underwater is very real and the buyer has to take ownership too!

I can't disagree with you, but I do think in some situations you can blame the buyer. You should take responsibility in understanding what you are buying and how much you can afford.

Could go on a "rant" on this one but instead, agree with your idea of working with people and keeping them in an affordable home. BANK GREED!

We have over 900 homes in various stages of foreclosure just in my county alone. Real estate prices were so high for several years that many people bought homes they could not afford simply because rental properties were scarce. Frankly, I blame the banks. They approved people for mortgages they never should have, and then instead of working with people more willingly, they foreclose and then the home sits empty for several years and slowly gets ruined. After the home is completely useless, it then sells at auction for a fraction of what the original mortgage was. Why not just make the home affordable in the beginning for the original mortgage holders and not destroy neighborhoods with abandoned homes getting vandalized and not being cared for?

There's a house down the street from us that went into foreclosure and is now on the market. It's been for sale for quite a while so I'm guessing the bank is in no hurry. I didn't realize that the bank was covered by insurance. Learn something new every day.

That is sad to hear and you unfortunately hear banks put the house on the market for below what you could usually get. They are focused on speed not necessarily the highest price.

I have a neighbor that just had this happen to his house. It's sad too because he has done so much extra work on the house to make it beautiful. Now the bank has put it up for sale at a price that is much less than what he has put into it.

I agree many situations are difficult and could possibly been avoided. It is a 2 way street as if you borrow money, you are obligated to pay it back.