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Post by Chuck Storm on Mar 25, 2008 14:22:32 GMT -6
“‘My house is up for sale,’ said Kim Hanley, a custodian at Walt Disney World. ‘I just put it on the market. I can’t keep up; it’s gotten to be too much. The economy is terrible; gas prices are ridiculous. I’ve even done things like moved to a slower-speed Internet connection. I’ve cut down on air conditioning. But it’s not enough.’”
“Hanley, a single parent in her 40s with a teenage daughter, makes $11.82 an hour at Disney but said she has been on medical leave recently and is falling behind. ‘At my age, I expected to have a nice little nest egg, but I hardly have any savings,’ she said. ‘It’s hard to keep up.’” thehousingbubbleblog.com/index.htmlIf a single mother working as a custodian at Disney World can't own a home and build up a nice little nest egg on $11.82 an hour, what hope is there for any of us?
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Post by NOTTHOR on Mar 25, 2008 14:36:28 GMT -6
Fear not, oh autolykos, the Democrats are cooking up a plan right now to transfer wealth out of the pockets of fatcat 1994 Saturn owners like yourself to ensure people who earn $11.82 an hour are taken care of if they got in over their heads on a mortgage.
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Post by socal on Mar 25, 2008 14:38:17 GMT -6
We all know you're hopeless... but for the lady, I'm pretty impressed she had a house at all.
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Post by Chuck Storm on Mar 25, 2008 14:46:51 GMT -6
We all know you're hopeless... but for the lady, I'm pretty impressed she had a house at all. You're impressed she was able to scam some bank into giving a loan to somebody making $24K a year?
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Post by Chuck Storm on Mar 25, 2008 14:50:19 GMT -6
Fear not, oh autolykos, the Democrats are cooking up a plan right now to transfer wealth out of the pockets of fatcat 1994 Saturn owners like yourself to ensure people who earn $11.82 an hour are taken care of if they got in over their heads on a mortgage. That's 199 6 to you bud. Just 23 more lease payments and I'll have the option to buy that baby for a mere $12,000.
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Post by socal on Mar 25, 2008 14:56:08 GMT -6
We all know you're hopeless... but for the lady, I'm pretty impressed she had a house at all. You're impressed she was able to scam some bank into giving a loan to somebody making $24K a year? Depending on the loan amount, Yes.
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Post by GhostMod 5000 on Mar 25, 2008 15:12:26 GMT -6
I tried to build a house out of bubbles. Talk about a disaster! The damn thing collapsed on me!
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Post by bucketochicken on Mar 25, 2008 17:48:59 GMT -6
We have that same rubber ducky.
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Post by GhostMod 5000 on Mar 25, 2008 18:13:48 GMT -6
I collect them. Perhaps I shouldn't make that public...
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Post by Saggitariutt Jefferspin (ith) on Mar 25, 2008 18:36:49 GMT -6
Or that picture... : )
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Post by NotMyKid on Mar 26, 2008 7:52:51 GMT -6
Fear not, oh autolykos, the Democrats are cooking up a plan right now to transfer wealth out of the pockets of fatcat 1994 Saturn owners like yourself to ensure people who earn $11.82 an hour are taken care of if they got in over their heads on a mortgage. That's right, if she can hold on just a bit longer the 300 billion in housing bailouts that the Dems want to pass for people that made bad mortgage choices should help her.
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Post by lpcalihawk on Mar 26, 2008 8:05:19 GMT -6
We all know you're hopeless... but for the lady, I'm pretty impressed she had a house at all. You're impressed she was able to scam some bank into giving a loan to somebody making $24K a year? No, I'm impressed with the bank that fleeced her on a loan they knew she could never pay. Let's just look past those awesome free-market loan companies that prey on people who dream of owning a home.
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Post by NotMyKid on Mar 26, 2008 8:12:30 GMT -6
You're impressed she was able to scam some bank into giving a loan to somebody making $24K a year? No, I'm impressed with the bank that fleeced her on a loan they knew she could never pay. Let's just look past those awesome free-market loan companies that prey on people who dream of owning a home. All she had to do was read the fine print or ask questions of what would happen after the 5 or 10 year arm was up. But your right the company is 100% at fault because she either didn't listen or didn't read what she was signing. She is just as much to blame as the person or company that took her loan. LP, I am sure when you sign a contract that you trust the person 100% that they aren't trying to scam you so you don't read the fine print or make sure that you understand all the terms in that contract don't you?
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Post by lpcalihawk on Mar 26, 2008 8:19:39 GMT -6
No, I'm impressed with the bank that fleeced her on a loan they knew she could never pay. Let's just look past those awesome free-market loan companies that prey on people who dream of owning a home. All she had to do was read the fine print or ask questions of what would happen after the 5 or 10 year arm was up. But your right the company is 100% at fault because she either didn't listen or didn't read what she was signing. She is just as much to blame as the person or company that took her loan. LP, I am sure when you sign a contract that you trust the person 100% that they aren't trying to scam you so you don't read the fine print or make sure that you understand all the terms in that contract don't you? Hoffa, my point is that the housing issue has plenty of blame on both sides. To simply blame some single mom making $11 at Disneyland is ridiculous. The loan companies are just as much at fault for this whole clusterfuck. I don't spend over my means, so I don't get stuck in situations like this. I know better than to get a 110% home loan no matter what the bullshit loan salesman tells me. I've seen Boiler Room.
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Post by socal on Mar 26, 2008 8:22:17 GMT -6
All she had to do was read the fine print or ask questions of what would happen after the 5 or 10 year arm was up. But your right the company is 100% at fault because she either didn't listen or didn't read what she was signing. She is just as much to blame as the person or company that took her loan. LP, I am sure when you sign a contract that you trust the person 100% that they aren't trying to scam you so you don't read the fine print or make sure that you understand all the terms in that contract don't you? Ok... so a 40 year old Disneyworld custodian is now a legal/contractual savant? Nobody knows what was told to the lady - correct or not. But one can assume she didn't come to the gunfights with fully loaded weapons. For a more realistic portrayal of Housing Bubble stories (not necessarily horror, but definitely stupid & greedy), visit here: www.irvinehousingblog.com/
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Post by BlckKnghtHwk on Mar 26, 2008 8:24:49 GMT -6
Saying the banks and loan companies ar at fault is like saying Casino's are at fault for the gambling debts of their patrons because they 'enticed them' into the idea that they could fulfil their dream of winning lots of money. What next? Dems going to start a Gambling Addicts Relief Fund? Why are we paying for the mistakes and ignorance of individual who could have avoided their situation altogether had they been financially responsible. I understand there is a small percentage of people out there who are in a bad place not because of being irresponsible but becauseof a crappy circumstance but it is certainly the exception to the normal case.
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Post by lpcalihawk on Mar 26, 2008 8:41:55 GMT -6
Saying the banks and loan companies ar at fault is like saying Casino's are at fault for the gambling debts of their patrons because they 'enticed them' into the idea that they could fulfil their dream of winning lots of money. What next? Dems going to start a Gambling Addicts Relief Fund? Why are we paying for the mistakes and ignorance of individual who could have avoided their situation altogether had they been financially responsible. I understand there is a small percentage of people out there who are in a bad place not because of being irresponsible but becauseof a crappy circumstance but it is certainly the exception to the normal case. Would you say the same thing about the "mistakes and ignorance" of multi-million dollar corporations the U.S. taxpayers bail out? What gets me about conservatives is they throw the common man under the bus for making a poor investment decision (with or without high pressure sales tactics by the loan companies), yet they will make excuses as to why we have to bail out the airline industry, etc.
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Post by NOTTHOR on Mar 26, 2008 8:57:43 GMT -6
The bank as mortgage lender is NOT a fiduciary to a mortgage borrower. It's a lender. That said, banks tossed underwriting standards out the window thinking they could shift all the downside risk out to the secondary market. It was a good strategy until they started buying the shitty paper and then the secondary market died and they had to hold the new mortgages on their books.
I am a corporate lawyer. I read and write contracts for a living. Even I would not enter into a mortgage for the largest purchase of my life without having a professional on my side (real estate lawyer) look at my mortgage and confirm my reading of the terms. I find it really hard to believe that most Americans are too stupid to understand ARMs. I think it was completely willful ignorance of any downside. It's the herd mentality when a market goes up and is red hot -- people completely discount any downside potential and don't understand how a leveraged position can unwind very quickly in a down market (why BTR NEVER buys stocks on margin). I called the blow up a few years ago, though I thought higher rates were what was going to cause it, I didn't think the secondary market would melt down completely. Oh well, with the market running scared, I've been able to accumulate a nice basket of financial stocks and various bonds at a decent price that I will hold either for the rest of my life or until we hit another huge bull market and I sniff an impending meltdown.
The Bear Stearns "bailout" was categorically necessary. The equity holders got completely pinched, but the fact of the matter was that Bear was leveraged 30:1. Every other investment bank and money center bank was a counterparty to Bear Stearns to the tune of several billions of dollars on various swap positions. If Bear blows up, Lehman blows up. If Lehman blows up, Merrill blows up. If Merrill blows up, Morgan Stanley blows. If Morgan Stanley blows up, Citibank blows up. It's a domino. The fed stepping in as lender of last resort and preventing a bankruptcy while almost totally eradicating the equity was a brilliant move.
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Post by socal on Mar 26, 2008 9:02:17 GMT -6
Saying the banks and loan companies ar at fault is like saying Casino's are at fault for the gambling debts of their patrons because they 'enticed them' into the idea that they could fulfil their dream of winning lots of money. What next? Dems going to start a Gambling Addicts Relief Fund? Why are we paying for the mistakes and ignorance of individual who could have avoided their situation altogether had they been financially responsible. I understand there is a small percentage of people out there who are in a bad place not because of being irresponsible but becauseof a crappy circumstance but it is certainly the exception to the normal case. Would you say the same thing about the "mistakes and ignorance" of multi-million dollar corporations the U.S. taxpayers bail out? What gets me about conservatives is they throw the common man under the bus for making a poor investment decision (with or without high pressure sales tactics by the loan companies), yet they will make excuses as to why we have to bail out the airline industry, etc. Let's look at the advice of the all-knowing former guru of all things monetary (and non-casino-like): www.businessweek.com/magazine/content/04_15/b3878093_mz020.htmbusiness.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3579171.ece1+1 doesn't always equal 1.
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Post by Chuck Storm on Mar 26, 2008 9:09:08 GMT -6
Another housing horror story: Greg and Barbara Abbott have already cut the price twice on the two-bedroom condominium they are trying to sell on the Las Vegas strip. They're asking $669,900 now -- and an offer in the $650,000 range means they'll lose money.[Note: They bought the condo for $583K last April]
Abbott thinks hesitant buyers don't realize how reasonable the current price is. "They're not really being realistic about what the place is worth," he said.
These people are going to have lose money on the 100% mortgage they got for their $600,000 condo in Las Vegas (where the average home is $200,000)?!?! Why can't these unreasonable buyers realize that, just because the Las Vegas market has gone down 20%, that doesn't mean that they shouldn't be able to sell their place for 10% more than they bought it for?
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Post by Chuck Storm on Mar 26, 2008 9:16:44 GMT -6
Let's be clear here. People aren't getting pwn3d because they're in ARMs and there's been a huge unexpected surge in interest rates (such as during the tenure of noted liberal Jimmy Carter). People are getting pwn3d by ARMs because they're too stupid to understand them. "What? You mean the interest rate changes? I don't get it." I have a 7 year ARM on my house. It made sense for me (since I don't expect to be in my house more than 7 years). The ARM I got is going to save me thousands of dollars over a 30-year fixed. There are a lot of other situations where ARMs make sense. Getting an ARM that you can afford at the beginning but not when it resets when you don't have some reasonable expectation of increasing income is shortsighted and stupid.
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Post by lpcalihawk on Mar 26, 2008 9:25:52 GMT -6
Let's be clear here. People aren't getting pwn3d because they're in ARMs and there's been a huge unexpected surge in interest rates (such as during the tenure of noted liberal Jimmy Carter). People are getting pwn3d by ARMs because they're too stupid to understand them. "What? You mean the interest rate changes? I don't get it." I have a 7 year ARM on my house. It made sense for me (since I don't expect to be in my house more than 7 years). The ARM I got is going to save me thousands of dollars over a 30-year fixed. There are a lot of other situations where ARMs make sense. Getting an ARM that you can afford at the beginning but not when it resets when you don't have some reasonable expectation of increasing income is shortsighted and stupid. I completely agree with your statement about ARMs. I also had a 5-year ARM on my home, but I knew I would be selling it in less than 3 years. I saved money by going the ARM route. Unfortunately, not everyone knows real estate and loans like some of us on this board. So to call everyone without the same knowledge "stupid" is a bit 3rd grade, but understandable. BTR and his cronies will constantly make excuses as to why it is necessary for the fed to bail out the "richies" and their poor business decisions, but will continue to piss on the little man who has trouble making a mortgage payment. Unfortunately, they will never see their hypocrisy.
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Post by NOTTHOR on Mar 26, 2008 9:31:06 GMT -6
Cosign autolykos' theory. Greenspan got nervous as hell about a bubble in the 90's. Anyone remember the irrational exuberance speech? I don't think the Fed wanted to create the housing bubble, which was mostly a product of very low rates in the early 2000's, but with 9/11 and the recession, the Fed's hands were tied with respect to interest rates.
My brother bought a million dollar condo in Brooklyn with a 7 year ARM. The interest rate was over 2 points lower on the ARM than a 15 year fixed. He intends to have the place substantially paid off by the end of the ARM. ARMs are fine if you aren't using tehm to gamble.
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Post by Chuck Storm on Mar 26, 2008 9:42:12 GMT -6
Let's be clear here. People aren't getting pwn3d because they're in ARMs and there's been a huge unexpected surge in interest rates (such as during the tenure of noted liberal Jimmy Carter). People are getting pwn3d by ARMs because they're too stupid to understand them. "What? You mean the interest rate changes? I don't get it." I have a 7 year ARM on my house. It made sense for me (since I don't expect to be in my house more than 7 years). The ARM I got is going to save me thousands of dollars over a 30-year fixed. There are a lot of other situations where ARMs make sense. Getting an ARM that you can afford at the beginning but not when it resets when you don't have some reasonable expectation of increasing income is shortsighted and stupid. I completely agree with your statement about ARMs. I also had a 5-year ARM on my home, but I knew I would be selling it in less than 3 years. I saved money by going the ARM route. Unfortunately, not everyone knows real estate and loans like some of us on this board. So to call everyone without the same knowledge "stupid" is a bit 3rd grade, but understandable. BTR and his cronies will constantly make excuses as to why it is necessary for the fed to bail out the "richies" and their poor business decisions, but will continue to piss on the little man who has trouble making a mortgage payment. Unfortunately, they will never see their hypocrisy. If it walks like a duck and talks like duck... I don't know what else to call these people. These loan terms aren't difficult to understand and they don't require higher level math. It's not a problem of lack of disclosure. All loans are required to include the standard (extremely straight-forward and simple) disclosures that we all got when we bought our houses. So what else am I supposed to think about people who complain about the fact that their payment goes up after the teaser rate expires?
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Post by NOTTHOR on Mar 26, 2008 9:43:33 GMT -6
I completely agree with your statement about ARMs. I also had a 5-year ARM on my home, but I knew I would be selling it in less than 3 years. I saved money by going the ARM route. Unfortunately, not everyone knows real estate and loans like some of us on this board. So to call everyone without the same knowledge "stupid" is a bit 3rd grade, but understandable. BTR and his cronies will constantly make excuses as to why it is necessary for the fed to bail out the "richies" and their poor business decisions, but will continue to piss on the little man who has trouble making a mortgage payment. Unfortunately, they will never see their hypocrisy. Notice I use "bailout." Read up on what's going on. The Fed is acting like a lender of last resort because every large investment bank and money center bank is in a bind right now. Have you ever read book on money and banking or taken a class on the matter? Bank runs are triggered by short run psychological swings that can be significantly curtailed by the presence of a lender of last resort. We had no lender of last resort in 1929 and several banks failed as a result. The Fed merely opened up it's role as lender of last resort to I-banks last week. They are lending money. They are not giving away money. It is a credit facility to help the banks weather the short term mood swing of the market, it is not a gift from heaven. Hey, if the Fed wanted to open a 90-day credit facility for select homeowners who it deemed creditworthy and whose solvency is critical to American hegemony in the investment banking world, I would be fine with that, but it should not be a gift. However, query whether that is administratively possible. The fact that liberals get brainwashed into thinking of this as a Wall Street bailout shows the bias inflicted by the liberal media. Again, if Bear Stearns had gone under, Wall Street and most money center banks would have been insolvent upon Bear Stearns' BK filing. Additionally, the credit facility is designed to alleviate fear in the secondary market for residential mortgage backed securities. If that market does not function, there is NO money for originating banks to lend on all the ARMs coming due in the next few weeks and months. If there is no money to lend, what does that do to the cost of a mortgage (the interest rate thereon)? Is the "bailout" really aimed at Wall Street or or is it really aimed at Main Street?
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