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re: Don't buy things you can't afford.
Posted on 6/27/14 at 9:42 am to Duke
Posted on 6/27/14 at 9:42 am to Duke
the gov pretty much telling the banks go ahead and loan to sub prime candidates and we will bail you out is what caused the bubble. The banks had no incentive to be responsible because they would be bailed out. the gov and irresponsible poors that have no shame are usually to blame when things go wrong.
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Posted on 6/27/14 at 9:45 am to heartbreakTiger
Right. Privatized gains and public losses are terrible and give the financial system the incentive to take WAY too much risk because if it loses the government covers it.
Poor incentives lead to poor results. I just have a problem with the poors being the only losers.
Poor incentives lead to poor results. I just have a problem with the poors being the only losers.
Posted on 6/27/14 at 9:46 am to InVolNerable
quote:
A mortgage is one of the, if not THE, most important ventures in a person's life; they shouldn't rely on other people to let them know how it works or how much they should borrow. They can do a little research and go in there knowing exactly what he needs and how much they can afford.
I agree, and I think having a foreclosure or short sale or some other type of knock on their credit is proper punishment for them for their mistake. I'm willing to bet the vast majority learned their(yay me, got it right this time) lesson.
quote:
Why? They didn't force people to get these mortgages.
No they didn't force them, but in many instances they did mislead and pressure them into the mortgages knowing full well their risk was covered on both ends. They deceived the borrower, and they should pay a price. Many did not, and in fact are still doing it today.
Posted on 6/27/14 at 9:49 am to heartbreakTiger
quote:
the gov and irresponsible poors
It was the McMansion defaults that did the damage not the mini's
How many mini loans can you make to equal 1 jumbo or super jumbo?
poors may borrow 50K for housing stock but rich folks may borrow 5 Million or more for a single property
500K / 50K = 1 jumbo loan = 10 poor loans
5 M / 50 K = 1 super jumbo = 100 poor loans
Just before the 2008 collapse you saw an explosion of McMansion construction not an explosion of low income housing. Hence blaming the "poors" is both misguided and a displacement of blame.
Posted on 6/27/14 at 1:48 pm to Cheese Grits
quote:
PS, while we keep calling it a recession we need to call it what it really is - a depression - and demand price drops relative to reality. Prices continue to rise while real wages do not. That is the real bubble in all of this.
And we've completely limited our power to save anything because interest rates are stupidly low. I don't even have a savings account. I get higher yields with blue chip dividends than I do a fricking bank. Our financial situation is backwards and I blame the federal reserve.
Posted on 6/27/14 at 1:53 pm to Cheese Grits
quote:
It was the McMansion defaults that did the damage not the mini's
Partially. A lot of the "juice" on those derivatives was a bunch of brand new 90k trailer homes.
We systematically stripped away equity from ourselves at a lot of levels. It was a perfect storm and it's quite sad. A lot of my generation will be playing the rent game for a long time. I've invested in a few REITs when I noticed this trend.
Posted on 6/27/14 at 1:55 pm to The Spleen
quote:
No they didn't force them, but in many instances they did mislead and pressure them into the mortgages knowing full well their risk was covered on both ends. They deceived the borrower, and they should pay a price. Many did not, and in fact are still doing it today.
I agree.
Posted on 6/27/14 at 1:57 pm to TeLeFaWx
i just wanted to pop in here and stop you from posting 4 times in a row.
Posted on 6/27/14 at 2:07 pm to Cheese Grits
quote:
Just before the 2008 collapse you saw an explosion of McMansion construction not an explosion of low income housing.
This definitely happened in my area. Builders were building 4-5k square feet custom homes in the hopes that they would sell because they had been selling as fast as they could build them for some time. We moved in our house in 2007, and since then all except for a couple of houses have been foreclosure sales or short sales. The house across the street has been sitting empty and for sale for 7 years because of this.
Now, even though the inventory has been depleted, the banks are still valuing the homes at less than what it costs to build them, so everyone's stuck in a holding pattern. Unless the buyer brings a significant amount of cash to the table, they can't get a house because the sellers aren't willing or able to take a loss on the property. And if they do take a loss it brings down the values of other homes in the neighborhoods.
A couple of examples.
The home behind us originally sold for $685k, but it was foreclosed on and the current owners purchased it for $365k.
A builder down the street had $800k in the home and turned the keys over to the bank. Current owners got the property for $425k.
Posted on 6/27/14 at 2:09 pm to UMTigerRebel
quote:
The home behind us originally sold for $685k, but it was foreclosed on and the current owners purchased it for $365k.
A builder down the street had $800k in the home and turned the keys over to the bank. Current owners got the property for $425k.
subtlebragaboutyourneighborhoodhomepricesisnotsosubtle.
Posted on 6/27/14 at 2:11 pm to 3nOut
I knew it would come across like that, but it was not my intention. 
Mine is one of the smallest in the neighborhood.
Mine is one of the smallest in the neighborhood.
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