Lack of government control, my ass... It was the wrong type of government control that created this mess. Control of the kind that forced banks into risky loans with the promise of government backing.
SOME government control is good. But it has to be the right kind and in the right amount.
Neither of which is what was implemented in the banking fiasco and now we are getting even deeper in the wrong kind of control.
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Lack of government control, my ass... It was the wrong type of government control that created this mess. Control of the kind that forced banks into risky loans with the promise of government backing.
SOME government control is good. But it has to be the right kind and in the right amount.
Neither of which is what was implemented in the banking fiasco and now we are getting even deeper in the wrong kind of control.
Fanny Mae, Freddi Mac (and our Canadian version CMHC) are bad. They make people who otherwise can't afford a house to go into the market and artificially inflates it.
To pile it on top, you have interest only mortgage and teaser rates. That shit should be down right illegal. You pick a term, a rate and amortization period and stick with that shit. No complex formulas.
And this isn't Obama's fault. Every government since the 70s support these shit and nobody got the balls to stop it.
First, the good news: Foreclosure filings dropped nearly 10% between December and January.
That's a total of 315,716 notices compared to 349,519 in December, according to RealtyTrac, which issues a monthly report on foreclosure activity.
Now, the bad news: Filings rose 15% compared to a year ago, and the number of people who actually had their homes repossessed jumped 31% to 87,648.
That year-over-year increase in bank repossessions is what Rick Sharga, a spokesman for RealtyTrac, finds most troubling. "A lot of properties that had been stalled in foreclosure are now going all the way through to auction," he said.
The repossession numbers for January indicate to Sharga that the nation will probably set a new record for homes lost this year. All that needs to happen is for repossession numbers to stay flat the rest of the year.
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Are you underwater on your mortgage? Money Magazine can help. Send your name, age, hometown and photo to [Only Registered Users Can See LinksClick Here To Register] and you could be profiled in an upcoming story.
Despite signs that the real estate market might be lurching forward, prices are expected to fall further this year and next.
The average home price in the United States will fall by about 6% by September 2011, according to a joint report between Fiserv and Moody's Economy.com. And that's after plunging more than 27% in the past three years.
^ I'm already set on a fixed, 30-year, 4.5% mortgage rate... The only reason I would care about home prices falling is if I were to sell my home in the near future.
Heck, I might buy another home and rent the small one I live in now. So I'm loving this market right now.
^ I'm already set on a fixed, 30-year, 4.5% mortgage rate... The only reason I would care about home prices falling is if I were to sell my home in the near future.
Heck, I might buy another home and rent the small one I live in now. So I'm loving this market right now.
Start shopping and just do it.
I did the same thing when I got married years ago.
Unfortunately, during the divorce everything had to be sold off - right as the market was beginning to take off.
I bought my current place for about $100K more than it is currently worth. The market here swung back to far the other way that houses in this area are selling at 1992 prices.
I know because '92 was when I bought my first house that I used as a rental after I got married.
If I had stayed married I know I would have at least 6 rentals by now.
And I wouldn't be driving a Nissan.
But sometimes your mental health is worth far more than any amount of money.
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Lack of government control, my ass... It was the wrong type of government control that created this mess. Control of the kind that forced banks into risky loans with the promise of government backing.
Agreed, but with two caveats:
- The government didn't encourage banks to offer an unrealistically low interest rate and the give them the okay to jack the interest rate up... Adjustable rates should not have been allowed.
- Banks and banks alone are responsible for [Only Registered Users Can See LinksClick Here To Register]... I mean, it's a monumentally stupid idea: give people that have No Income, No Job or Assets a loan with next to no interest for the first year, and then 18-20% interest the next year. The only reason a bank would do that is to offset gains in other areas that are more likely to be taxed with capital gains.
- Banks and banks alone are responsible for [Only Registered Users Can See LinksClick Here To Register]... I mean, it's a monumentally stupid idea: give people that have No Income, No Job or Assets a loan with next to no interest for the first year, and then 18-20% interest the next year. The only reason a bank would do that is to offset gains in other areas that are more likely to be taxed with capital gains.
Just an aside from someone that works in the real estate business, when I got into the business four years ago I was amazed how easily people were buying homes: I saw people with credit scores in the 500's that worked at Taco Bell for only a couple of months buying homes with no down payment and no closing costs. I always thought it was harder to buy a home and, well, it shouldn't have been so easy.
Buying a home used to be something of a symbol of succcess because, through 20% down payments, bringing money for closing costs and having to deal with much higher interest rates, you actually had to earn it by working hard and showing some discipline to save for it. Today, we just want instant gratification at the sacrifice of our futures, and we're now paying for it.
Originally Posted by Red Lion[Only Registered Users Can See LinksClick Here To Register]
Just an aside from someone that works in the real estate business, when I got into the business four years ago I was amazed how easily people were buying homes: I saw people with credit scores in the 500's that worked at Taco Bell for only a couple of months buying homes with no down payment and no closing costs. I always thought it was harder to buy a home and, well, it shouldn't have been so easy.
Buying a home used to be something of a symbol of succcess because, through 20% down payments, bringing money for closing costs and having to deal with much higher interest rates, you actually had to earn it by working hard and showing some discipline to save for it. Today, we just want instant gratification at the sacrifice of our futures, and we're now paying for it.
I follow what you're saying, definitely, but 20% down, and interest rates approaching double digits is pretty heavy, especially with prices escalating (I'm assuming you're talking about the 80's lunacy ). Swinging way over the other way was just as bad though... I'd say 12-15% down and 6% interest would be a better solution because it would keep the people with low-likelihood of paying back out, and it would help people that are stable but still renting in a non-controlled area get into a place they can afford.
I bought my place @ 26, and just a thumbnail count on what a friend of mine (that just bought a new place) paid in rent vs my mortgage, I've saved about $45,000 in rent in the last 6 years and my property value has increased about 26% since I bought. If I needed 20% down, I might have been able to buy now.
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). Swinging way over the other way was just as bad though... I'd say 12-15% down and 6% interest would be a better solution because it would keep the people with low-likelihood of paying back out, and it would help people that are stable but still renting in a non-controlled area get into a place they can afford. 
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