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Post by Dr. Doofenshmirtz (Heywood) on Mar 26, 2008 9:47:20 GMT -6
The bad thing about this crisis is that it also affects everyone else. Banks lose a ton of money on default loans of any kind, which will cause them to raise their rates for loans and credit cards while lowering their rates on savings and (for the lucky ones) checking accounts.
The blame needs to be shared between the lenders and the consumers. The lenders could do a better job of explaining the terms of the loan and the consumers could do a better job of reading the terms and asking questions if they don't understand something.
I will not argue that an adjustable rate loan of any type is a bad thing but the consumers need to be very careful in how they get their money.
For the record, my wife and I bought our first house in 2005 on a 30 year fixed mortgage. We don't plan on living there that long but I didn't want my rate to change.
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Post by lpcalihawk on Mar 26, 2008 10:30:17 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? Look BTR, I am not claiming to have the banking and financial knowledge as a corporate lawyer. My knowledge of real estate and banking comes from a practical place where I owned my first home when I was 15 (it was a rental investment). I understand the points you made in the last post. I do understand the difference between a "bailout" as the feds did with the airline industry and other corporations that couldn't get their shit together. My problem is with the "fiscal conservatives" who scream and shout when the goverment tries to aid the common man who makes a bad investment, but sit idly by as their rich cronies have their corporations bailed out by the U.S. taxpayer without the screaming and shouting. I am not calling Bear Stearns a bailout, I didn't even bring up Bear Sterns, you did. I am pointing out the hypocrisy of those on the right when it comes to "bailouts".
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Post by NOTTHOR on Mar 26, 2008 11:33:11 GMT -6
What specific bailouts piss you off so much? I don't think the bailouts are aimed at protecting the rich, as the equity holders end up totally effed in the a, and the equity holders are the rich capitalist pigs that you probably hate so much.
Aren't bailouts designed to keep a critical industry or business solvent so that the workers don't get tossed out on the street or to prevent the economy from having a crisis due to the sudden of withdrawal of a necessary product or service? I think the idea of the rich fatcat being the beneficiary is a myth carefully crafted by the leftist media.
Bailouts are generally in the form of loans or loan guarantees in response to the credit market freezing up on an entity. If there is a practicable way of providing a short term facility to mortgage borrowers, the Fed should make it available. Truth be told, they already have by allowing RMBS's to be pledged as security at the credit window. What more bailout does the left want? Do they want the government to now pay the principal and interest so someone who got in over their head can live in a house they couldn't afford in the first place? That's not a bailout, that's a transfer payment whose benefits inure only to a select few idiots who overextended themselves. There really is more to it than the simplistic idea of what you see as hipocrisy.
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Post by lpcalihawk on Mar 26, 2008 12:56:09 GMT -6
What specific bailouts piss you off so much? I don't think the bailouts are aimed at protecting the rich, as the equity holders end up totally effed in the a, and the equity holders are the rich capitalist pigs that you probably hate so much. Aren't bailouts designed to keep a critical industry or business solvent so that the workers don't get tossed out on the street or to prevent the economy from having a crisis due to the sudden of withdrawal of a necessary product or service? I think the idea of the rich fatcat being the beneficiary is a myth carefully crafted by the leftist media. Bailouts are generally in the form of loans or loan guarantees in response to the credit market freezing up on an entity. If there is a practicable way of providing a short term facility to mortgage borrowers, the Fed should make it available. Truth be told, they already have by allowing RMBS's to be pledged as security at the credit window. What more bailout does the left want? Do they want the government to now pay the principal and interest so someone who got in over their head can live in a house they couldn't afford in the first place? That's not a bailout, that's a transfer payment whose benefits inure only to a select few idiots who overextended themselves. There really is more to it than the simplistic idea of what you see as hipocrisy. Chrysler. Individual airlines. If you are a true free market, laissez faire capitalist let the market take care of itself. If these companies go belly up, there will be another one ready to step in and take its place, correct? That is the rhetoric we hear from the free market lovers. I understand that my points have been simplistic and these situations are complex, which only behooves my point that it is ridiculous to slam some single mom who works at Disneyland that is having trouble making her mortgage. I see the double standard that conservative thinking points to individual responsibility when it comes to individuals making poor investment decisions and blames the person, yet doesn't prescribe corporate fiscal responsibility to corporations that are mismanaged and run themselves into the ground; thus, needing "special loans"/bailouts to stay afloat.
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Post by Chuck Storm on Mar 26, 2008 13:42:42 GMT -6
What specific bailouts piss you off so much? I don't think the bailouts are aimed at protecting the rich, as the equity holders end up totally effed in the a, and the equity holders are the rich capitalist pigs that you probably hate so much. Aren't bailouts designed to keep a critical industry or business solvent so that the workers don't get tossed out on the street or to prevent the economy from having a crisis due to the sudden of withdrawal of a necessary product or service? I think the idea of the rich fatcat being the beneficiary is a myth carefully crafted by the leftist media. Bailouts are generally in the form of loans or loan guarantees in response to the credit market freezing up on an entity. If there is a practicable way of providing a short term facility to mortgage borrowers, the Fed should make it available. Truth be told, they already have by allowing RMBS's to be pledged as security at the credit window. What more bailout does the left want? Do they want the government to now pay the principal and interest so someone who got in over their head can live in a house they couldn't afford in the first place? That's not a bailout, that's a transfer payment whose benefits inure only to a select few idiots who overextended themselves. There really is more to it than the simplistic idea of what you see as hipocrisy. Chrysler. Individual airlines. If you are a true free market, laissez faire capitalist let the market take care of itself. If these companies go belly up, there will be another one ready to step in and take its place, correct? That is the rhetoric we hear from the free market lovers. I understand that my points have been simplistic and these situations are complex, which only behooves my point that it is ridiculous to slam some single mom who works at Disneyland that is having trouble making her mortgage. I see the double standard that conservative thinking points to individual responsibility when it comes to individuals making poor investment decisions and blames the person, yet doesn't prescribe corporate fiscal responsibility to corporations that are mismanaged and run themselves into the ground; thus, needing "special loans"/bailouts to stay afloat. Wait, so why are you arguing against the Chrysler bailout? You're right that someone would have been ready to eat up Chrysler's market share. A large percentage of Chrysler's market share would have gone to Toyota, Honda, Volkswagon and other foreign automakers. Many of the jobs done by Americans (union line jobs, engineering, design, etc.) would have moved overseas along with jobs at suppliers who used to work with Chrysler. Plus, the American people would have been stuck holding the bag for unfunded OPEB obligations. Nobody argues for the bailout of corporations to save the stockholders or bondholders. Conservatives don't really care about them. That doesn't mean we're going to throw hundreds of thousands of Americans under the bus just because they work for a corporation and saving their jobs would be a "bailout".
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Post by lpcalihawk on Mar 26, 2008 13:57:19 GMT -6
Chrysler. Individual airlines. If you are a true free market, laissez faire capitalist let the market take care of itself. If these companies go belly up, there will be another one ready to step in and take its place, correct? That is the rhetoric we hear from the free market lovers. I understand that my points have been simplistic and these situations are complex, which only behooves my point that it is ridiculous to slam some single mom who works at Disneyland that is having trouble making her mortgage. I see the double standard that conservative thinking points to individual responsibility when it comes to individuals making poor investment decisions and blames the person, yet doesn't prescribe corporate fiscal responsibility to corporations that are mismanaged and run themselves into the ground; thus, needing "special loans"/bailouts to stay afloat. Wait, so why are you arguing against the Chrysler bailout? You're right that someone would have been ready to eat up Chrysler's market share. A large percentage of Chrysler's market share would have gone to Toyota, Honda, Volkswagon and other foreign automakers. Many of the jobs done by Americans (union line jobs, engineering, design, etc.) would have moved overseas along with jobs at suppliers who used to work with Chrysler. Plus, the American people would have been stuck holding the bag for unfunded OPEB obligations. Nobody argues for the bailout of corporations to save the stockholders or bondholders. Conservatives don't really care about them. That doesn't mean we're going to throw hundreds of thousands of Americans under the bus just because they work for a corporation and saving their jobs would be a "bailout". Conservatives don't care about corporate shareholders or bondholders? I'll call bullshit there. Taxpayers should not bail out private companies. Per free market principles, those laid off employees had a choice to work for Chrysler. Is it there fault Chrysler was mismanaged? No, but that is the breaks in a free market society. Go find another job, right? By the way, foreign automakers use U.S. workers, so to assume all the jobs go overseas if Toyota takes over Chrysler's market share I think is mistaken.
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Post by NOTTHOR on Mar 26, 2008 14:13:53 GMT -6
If I was a fat cat investor who bought UAL stock in 2000, how much would that stock be worth today? Don't get me wrong, I'd love to have seen a company like Chrysler or all of the airlines in bankruptcy. The union slugs whose bloated wages drove those companies to bankruptcy would get their day of reckoning asa bankruptcy judge ruined their collective bargaining agreements faster than I ruin a new pair of tighty whities. Fiscal reckoning for the capitalist comes when they realize that the stock they paid $150 for a few months ago is now worth $2 a share, or less. A 100% loss of capital is a pretty strong lesson about risk taking.
The "rich" guys in these businesses aren't the ones getting bailed out. The bailouts are for the rank and file workers, the libs don't want Jimbob to get shit on because he decided to go to work for Chrysler. And most airlines probably would have stopped flying entirely in the early 2000's if the government didn't inject capital. Would you personally have lent United money while they were in bankruptcy? I wouldn't have, but I think the country is a better place for having a (semi) functional airline industry.
And therein lies the difference. A company like Bear Stearns can become unwound in 48 hours when someone starts a rumor that Goldman will not trade with them. If I had heard that Bear Stearns was filing for BK any day in the past week or so, my ass would have been in line at Citibank within minutes pulling out at least $5k so that I was liquid during the FDIC clearing period while the shit got sorted out in a bankruptcy court. The risk to society of a failure of a company that gets a bailout significantly outweighs the cost of society of performing the "bailout." If some dumbass buys too much house and can't pay for it, the cost to society of that person ending up in bankruptcy is very limited.
Individual responsibility is relevant in both situations. What is different is the impact on society.
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Post by Chuck Storm on Mar 26, 2008 14:16:27 GMT -6
Taxpayers should not bail out private companies. Per free market principles, those laid off employees had a choice to work for Chrysler. Is it there fault Chrysler was mismanaged? No, but that is the breaks in a free market society. Go find another job, right? By the way, foreign automakers use U.S. workers, so to assume all the jobs go overseas if Toyota takes over Chrysler's market share I think is mistaken. I never said all the jobs go overseas. In fact, I explicitly said "many of the jobs." Why are you throwing out this false choice of completely free markets and government bailouts of everyone? Why does saving jobs mean we have to engage in a massive government redistribution program from people who didn't buy more house than they could afford to those who did? The mind boggles.
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Post by NOTTHOR on Mar 26, 2008 14:17:49 GMT -6
Wait, so why are you arguing against the Chrysler bailout? You're right that someone would have been ready to eat up Chrysler's market share. A large percentage of Chrysler's market share would have gone to Toyota, Honda, Volkswagon and other foreign automakers. Many of the jobs done by Americans (union line jobs, engineering, design, etc.) would have moved overseas along with jobs at suppliers who used to work with Chrysler. Plus, the American people would have been stuck holding the bag for unfunded OPEB obligations. Nobody argues for the bailout of corporations to save the stockholders or bondholders. Conservatives don't really care about them. That doesn't mean we're going to throw hundreds of thousands of Americans under the bus just because they work for a corporation and saving their jobs would be a "bailout". Conservatives don't care about corporate shareholders or bondholders? I'll call bullshit there. Taxpayers should not bail out private companies. Per free market principles, those laid off employees had a choice to work for Chrysler. Is it there fault Chrysler was mismanaged? No, but that is the breaks in a free market society. Go find another job, right? By the way, foreign automakers use U.S. workers, so to assume all the jobs go overseas if Toyota takes over Chrysler's market share I think is mistaken. See chart of Bear Stearns stock. The government doesn't give a shit about shareholders. Those guys are lucky they got anything. If your theory held any weight, W's crony Kenny boy would have gotten Enron a sweet bailout deal. How'd their stock and bondholders end up? And autolykos is correct with his assertion re foreign auto workers. The late 1970's, when the Chrysler bailout occurred, was a period marked by tight capital controls under a liberal regime. Foreign direct investment by the likes of Toyota and Honda in the US was nil.
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Post by lpcalihawk on Mar 26, 2008 14:56:48 GMT -6
If I was a fat cat investor who bought UAL stock in 2000, how much would that stock be worth today? Don't get me wrong, I'd love to have seen a company like Chrysler or all of the airlines in bankruptcy. The union slugs whose bloated wages drove those companies to bankruptcy would get their day of reckoning asa bankruptcy judge ruined their collective bargaining agreements faster than I ruin a new pair of tighty whities. Fiscal reckoning for the capitalist comes when they realize that the stock they paid $150 for a few months ago is now worth $2 a share, or less. A 100% loss of capital is a pretty strong lesson about risk taking. The "rich" guys in these businesses aren't the ones getting bailed out. The bailouts are for the rank and file workers, the libs don't want Jimbob to get shit on because he decided to go to work for Chrysler. And most airlines probably would have stopped flying entirely in the early 2000's if the government didn't inject capital. Would you personally have lent United money while they were in bankruptcy? I wouldn't have, but I think the country is a better place for having a (semi) functional airline industry. And therein lies the difference. A company like Bear Stearns can become unwound in 48 hours when someone starts a rumor that Goldman will not trade with them. If I had heard that Bear Stearns was filing for BK any day in the past week or so, my ass would have been in line at Citibank within minutes pulling out at least $5k so that I was liquid during the FDIC clearing period while the shit got sorted out in a bankruptcy court. The risk to society of a failure of a company that gets a bailout significantly outweighs the cost of society of performing the "bailout." If some dumbass buys too much house and can't pay for it, the cost to society of that person ending up in bankruptcy is very limited. Individual responsibility is relevant in both situations. What is different is the impact on society. Society is like the puppy that lost its way....... What I read in your posts is that you are for government intervention in private business when it benefits society?
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Post by lpcalihawk on Mar 26, 2008 14:59:04 GMT -6
Taxpayers should not bail out private companies. Per free market principles, those laid off employees had a choice to work for Chrysler. Is it there fault Chrysler was mismanaged? No, but that is the breaks in a free market society. Go find another job, right? By the way, foreign automakers use U.S. workers, so to assume all the jobs go overseas if Toyota takes over Chrysler's market share I think is mistaken. I never said all the jobs go overseas. In fact, I explicitly said "many of the jobs." Why are you throwing out this false choice of completely free markets and government bailouts of everyone? Why does saving jobs mean we have to engage in a massive government redistribution program from people who didn't buy more house than they could afford to those who did? The mind boggles. My apologies for misquoting you. I am not claiming we need to bailout every individual who made a poor decision on a mortgage and their personal finances. I am claiming we don't need to bailout every private company that shits their pants.
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Post by NOTTHOR on Mar 26, 2008 15:14:30 GMT -6
Society is like the puppy that lost its way....... What I read in your posts is that you are for government intervention in private business when it benefits society? Of course. It's just the level of intervention that I think is necessary is clearly less than the level of intervention mouthbreather liberals think is necessary. Various huge safety nets to prevent catastrophic market failures are absolutely necessary as history has shown us. However, it is worth noting that now the liberals have made the safety nets so big that they have significantly usurped certain favorable private activities, like saving for retirement. The huge balls and willingness to lose everything is what makes the US companies the strongest in the world. There is a reason there are thousands of BSD Americans living in downtown Tokyo and why Goldman Sachs owns about half of Japan. Name a Japanese investment bank with the prestige of Goldman, Merrill or the House of Morgan. You can't. If these dudes fuck up every once in a while and some of them get burned, sucks to be them, but in terms of balancing future tax revenues against the miniscule cost of opening a credit facility, I'd say the Fed did the taxpayer a solid a few days ago. The coffers of the government are a helluva better off if assets are operating and people are employed than when assets sit idle and people are unemployed.
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Post by lpcalihawk on Mar 26, 2008 15:49:14 GMT -6
Society is like the puppy that lost its way....... What I read in your posts is that you are for government intervention in private business when it benefits society? Of course. It's just the level of intervention that I think is necessary is clearly less than the level of intervention mouthbreather liberals think is necessary. Various huge safety nets to prevent catastrophic market failures are absolutely necessary as history has shown us. However, it is worth noting that now the liberals have made the safety nets so big that they have significantly usurped certain favorable private activities, like saving for retirement. The huge balls and willingness to lose everything is what makes the US companies the strongest in the world. There is a reason there are thousands of BSD Americans living in downtown Tokyo and why Goldman Sachs owns about half of Japan. Name a Japanese investment bank with the prestige of Goldman, Merrill or the House of Morgan. You can't. If these dudes f**k up every once in a while and some of them get burned, sucks to be them, but in terms of balancing future tax revenues against the miniscule cost of opening a credit facility, I'd say the Fed did the taxpayer a solid a few days ago. The coffers of the government are a helluva better off if assets are operating and people are employed than when assets sit idle and people are unemployed. Government intervention on private business in terms of environmental protections benefits society. Following your logic, I assume you agree with government regulation in that sense.
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Post by Chuck Storm on Mar 26, 2008 15:58:21 GMT -6
I am claiming we don't need to bailout every private company that shits their pants. um... we don't. Far, far, far from it.
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Post by Chuck Storm on Mar 26, 2008 16:03:20 GMT -6
Government intervention on private business in terms of environmental protections benefits society. Following your logic, I assume you agree with government regulation in that sense. Can't speak for BTR, but I don't know any rational person that's against all environmental protections. Allowing people to just dump mercury into the environment is exactly the kind of market failure BTR mentioned. What most people take offense with is mouth-breathing knuckle-draggers who don't know when the cost of environmental regulation exceeds the benefits. Since the costs are localized and the benefits are widespread, it's easy for the people who don't bear the costs to continue pushing for increased regulation (see e.g. the increased CAFE standards that Barack H. Obama and his cronies are pushing for)
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Post by NOTTHOR on Mar 26, 2008 16:11:51 GMT -6
Do you think I'm DweebBuster or something? I have no problem with environmental regulation because environmental runoff and waste are things that cause externalities that cannot be remediated in any practicable way other than through regulation. Bargaining with every driver of a car that uses leaded gasoline is impracticable, as is seeking an injunction against every one of them. Clean air standards on cars making catalytic converter necessary = fine. Impossibly high mandate about what fuel efficiency must be = not fine.
The absolutist free market crowd dismisses real world notions of transaction costs, informational imperfections and the once in a lifetime shitstorm out of the box. That is the weakness in their ideology. The liberals live on dogma and soundbites and think that any market failure can be cured with regulation, when in many cases, regulation or stupid government actions causes or contributes to the market failure in the first instance. That is the weakness in their ideology.
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Post by NOTTHOR on Mar 26, 2008 16:14:26 GMT -6
What most people take offense with is mouth-breathing knuckle-draggers who don't know when the cost of environmental regulation exceeds the benefits. bince the costs are localized and the benefits are widespread, it's easy for the people who don't bear the costs to continue pushing for increased regulation (see e.g. the increased CAFE standards that Barack H. Obama and his cronies are pushing for) You read my mind there brother. The Husseinian CAFE standards are a joke and will require everyone to get either a minicar or a hybrid. Then, in 10 years, the next big shitstorm will be what to do with all the shitty old batteries and we'll get some other clusterfuck out of DC.
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Post by socal on Mar 26, 2008 18:21:46 GMT -6
The absolutist free market crowd dismisses real world notions of transaction costs, informational imperfections and the once in a lifetime shitstorm out of the box. That is the weakness in their ideology. The liberals live on dogma and soundbites and think that any market failure can be cured with regulation, when in many cases, regulation or stupid government actions causes or contributes to the market failure in the first instance. That is the weakness in their ideology. You are an oxymoron.
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Post by NOTTHOR on Mar 26, 2008 19:59:41 GMT -6
So now the leftists see anyone who can find middle ground between a pure free market and the pure socialism they seek to inflict on the country as an oxymoron? Interesting. Meanwhile, their white flag waving counterparts in New York who clearly don't understand what is going on have staged protests at Bear and JPM. My guess is that if credit had been tight, this same group would be pissing and moaning about discriminatory lending or some other liberal nonsense. news.yahoo.com/s/nm/20080326/bs_nm/bearstearns_protest_dc
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Post by lpcalihawk on Mar 27, 2008 7:16:01 GMT -6
So now the leftists see anyone who can find middle ground between a pure free market and the pure socialism they seek to inflict on the country as an oxymoron? Interesting. Meanwhile, their white flag waving counterparts in New York who clearly don't understand what is going on have staged protests at Bear and JPM. My guess is that if credit had been tight, this same group would be pissing and moaning about discriminatory lending or some other liberal nonsense. news.yahoo.com/s/nm/20080326/bs_nm/bearstearns_protest_dcBTR - I would completely agree that our economy works its best when the appropriate balance between free market-ism and socialism is struck. The extreme in either direction is not appropriate in my opinion.
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Post by socal on Mar 27, 2008 8:44:58 GMT -6
Another interesting story from the Irvine housing blog: www.irvinehousingblog.com/2008/03/27/big-time/Summary: So how did it come to this? Why is this a potential short-sale preforeclosure opportunity? It started out normally. In 1998, the property was purchased for $733,000 with 20% down. There was no activity until 2005 when the owner took out a HELOC for $147,191. A couple of months later, the house was refinanced with a 1% Option ARM for $1,190,000. This was followed by two more HELOCs for $250,000 each. There are two scenarios by which this could be a short-sale / preforeclosure: 1. The two HELOCs are maxed out, and the total property debt would be $1,690,000 which leaves this seller underwater, or 2. The Option ARM exploded, and the payments are far greater than the seller’s income. The seller has a different mailing address than the property listed, so it is possible they moved to a different home and could not sell this one and just stopped making payments. No matter how they got there, this house has a stated asking price more than $900,000 greater than its purchase price, and it is a foreclosure opportunity. Only in Irvine…
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Post by NOTTHOR on Mar 27, 2008 8:54:25 GMT -6
socal - what's the law in Cali with respect to recourse/non-recourse mortgages? Are these shitbags who used their house as an ATM at least going to have pay tax on the income they received from their home?
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Post by Chuck Storm on Mar 27, 2008 9:03:06 GMT -6
Another interesting story from the Irvine housing blog: www.irvinehousingblog.com/2008/03/27/big-time/Summary: So how did it come to this? Why is this a potential short-sale preforeclosure opportunity? It started out normally. In 1998, the property was purchased for $733,000 with 20% down. There was no activity until 2005 when the owner took out a HELOC for $147,191. A couple of months later, the house was refinanced with a 1% Option ARM for $1,190,000. This was followed by two more HELOCs for $250,000 each. There are two scenarios by which this could be a short-sale / preforeclosure: 1. The two HELOCs are maxed out, and the total property debt would be $1,690,000 which leaves this seller underwater, or 2. The Option ARM exploded, and the payments are far greater than the seller’s income. The seller has a different mailing address than the property listed, so it is possible they moved to a different home and could not sell this one and just stopped making payments. No matter how they got there, this house has a stated asking price more than $900,000 greater than its purchase price, and it is a foreclosure opportunity. Only in Irvine…That person's house has only appreciated $900,000 in 10 years. Their problems are all the fault of the greedy bankers that kept lending them money. They need a big government bailout.
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Post by Chuck Storm on Mar 27, 2008 9:26:02 GMT -6
Ooh, here's another good one... Today’s sellers owe more than $1,214,500 on a house they purchased in 1981 for $265,000.
Can you believe that? After 27 years of ownership, they should have almost completely paid off a 30-year fixed rate mortgage and be looking forward to having a $1,000,000 for their retirement. Instead, they have nothing, nada, zero. They have refinanced themselves into oblivion; either that, or they are have exercised their mortgage “put” option.
Today’s sellers first step to the Dark Side came in 2002 when they refinanced for $450,000. Apparently, the lure of free money was too much for them so they refinanced again in 2006 for $1,175,000. Finally, their journey to the Dark Side was complete in 2007 when they took out an Option ARM for $1,000,000 and a stand-alone second for $214,500.
Even if these sellers get their sales price (this is borderline WTF,) they get $1,221,060 after a 6% commission. Anyone want to guess what the outstanding loan balances total up to? It sure looks like they will sell for a $1,000,000 gain, and they will not get a penny at the closing table. Amazing.
These people need a bailout. Why is the government bailing out Wall Street and not Main Street? I'd be happy to see my tax dollars go to people who've wasted all the equity in their house and live in a house that's worth several times what mine cost.
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Post by socal on Mar 27, 2008 9:52:56 GMT -6
That person's house has only appreciated $900,000 in 10 years. Their problems are all the fault of the greedy bankers that kept lending them money. They need a big government bailout. Which side do you think needs the bailout? The money foolish homeowners... Or the money foolish lenders?
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