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Old 05-04-2018, 02:40 PM
 
Location: The analog world
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Quote:
Originally Posted by MrRational View Post
Just for reference... how much under $100,000 did you pay for that house?
Was it below $80,000?
Yes, it was a bit less than $100k as I recall. We bought our next home for ~$110k on $85k in household income with a traditional 30-year loan; our third home for $200k on $120k income with a 15-year loan; our fourth home for $295k on $160k income with a 15-year loan; and our fifth home for $315k for cash.
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Old 05-04-2018, 03:14 PM
 
Location: The Triad (NC)
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Quote:
Originally Posted by randomparent View Post
Yes, it was a bit less than $100k as I recall.
That's what makes the difference in all these.
You had some skin in the game and you could afford to play.
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Old 05-04-2018, 03:17 PM
 
Location: The analog world
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Quote:
Originally Posted by MrRational View Post
That's what makes the difference in all these.
You had some skin in the game and you could afford to play.
It was an FHA loan. We put down maybe $3k. That's not a lot of skin, but we did make our payments consistently and on time for the seven years that we owned that home.
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Old 05-07-2018, 06:25 PM
 
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Quote:
Originally Posted by Larry Caldwell View Post
You guys are talking past each other. Yes, there were some really weird housing loans going on before the crash. Interest only no down loans with a balloon payment after 5 years. Remember those? You were supposed to use the appreciation in real estate values as a down payment when you converted to a conventional mortgage. HELOCs handed out like Halloween candy, with people mining their fictitious equity for everything from putting the kids through college to jet skis for the whole family. It was insane. The banks were turning millions of people into real estate speculators by lending them the money to speculate, then selling those loans as secured AA instruments. There is no doubt at all that the banks caused the banking crisis.

OTOH, if a homeowner practiced reasonable financial discipline, they sailed through without much problem. They may have been upside down on their loan, on paper, for three years, but values recovered quickly. By about 5 years ago they were back in the black, and they could use the Fed's free money to refi at a negligible interest rate on a fixed rate mortgage.

The only people I feel sorry for are those who took a heavy income cut during the recession and were unable to either make their mortgage payments or sell their homes. At least this time housing prices recovered quickly. In 1986 I bought a house for 60% of the previous sale price in 1979, but I was still stuck paying 10% interest.
What about first time home buyers who were the right age for it and bought reasonably sized homes for overinflated values from 03-07ish? They certainly got screwed imo as next to nobody was sounding the alarm at real estate being over valued and the mantra was that it always would go up
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Old 05-08-2018, 06:12 AM
 
Location: Boston
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I didn't get screwed. I've bought homes I could afford and realized housing like the stock market is cyclical.
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Old 05-08-2018, 06:12 AM
 
Location: Tennessee
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Quote:
Originally Posted by GiantRutgersfan View Post
What about first time home buyers who were the right age for it and bought reasonably sized homes for overinflated values from 03-07ish? They certainly got screwed imo as next to nobody was sounding the alarm at real estate being over valued and the mantra was that it always would go up
Depending on where they were, many of those people have only recently gotten back to near or above previous valuations.

There is a lot of speculation that many of the major metros are in a bubble right now. We won't know until when/after it passes.
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Old 05-10-2018, 08:50 PM
 
Location: Gettysburg, PA
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Quote:
Originally Posted by GolfingCat View Post
What's wrong with giving low income folks a shot at home ownership?
Quote:
Originally Posted by Electrician4you View Post
Absolutely nothing. But when you have to change the system to make it happen......
Exactly. This should be plain as day to everyone, but perhaps not: no job is 100% secure. You go off loaning 100K+ or thereabouts to someone who lives paycheck to paycheck (no savings or assets to speak of) and they lose their job---how are they going to pay the mortgage bill? Quick obvious answer is they won't. And therefore they'll foreclose.

Nothing's wrong with giving low-income folks an opportunity to own a home, only they have to make that opportunity a reality by saving hard to get to the point where they can borrow. Living paycheck to paycheck with no savings, you're just asking for trouble to take out a loan to buy a home.
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Old 05-10-2018, 09:36 PM
 
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I was heavily involved in RE investment during the run up and bubble pop and I will never forget these two things.

1) they where literally handing out blank checks to anyone that wanted one. Stated income, i.e. liar loans, fraud was rampant.
2) every person I talked to in industry knew it was a bubble based on giving money to people who had no business having it. We all knew it was going to come crashing down eventually. Just one big game of hot potato, but everyone was making so much money, no one cared.

People talk like no one knew what was happening, but that isn't true at all. We all knew.

I even know a guy who fled the country he was so scared all the execs in his company where going to go to jail. No lie. This guy took his money (many millions) and his family and ran.

What is happening today in real estate isn't even close to being anything like the situation of the last bubble.
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Old 05-15-2018, 04:43 PM
 
Location: The analog world
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I used to read a blog by someone called SoCalMtgGuy. His posts scared the hell out of me in the early 2000s.
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Old 05-15-2018, 05:39 PM
 
6,058 posts, read 2,492,570 times
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Quote:
Originally Posted by oldtrader View Post
What people are missing, is that Barney Frank got laws passed to make lenders loan money to poor people as he called them, no matter what.

The last figure, was 22% of loans had to be made to people that could not qualify to buy a home by conventional mortgages. If you did not meet that quota, you could no longer make mortgages available. They came up with all kinds of crazy loans, to meet those quotas. The lenders tried to get the feds to let them tighten up on loans and no longer make crazy loans so the poor people could buy homes. When George Bush became president, he tried to get congress to stop these crazy loans but Barney Frank gave a passionate speech, and that ended any changes.

People in the mortgage business, and Real Estate Salespeople, knew we were headed for the cliff, but laws said that those bad loans had to be made or shut up your business.

When they made those new type loans, they had to make them to everybody, and people that could not qualify for the old standards were buying homes they could not afford.

The loans were often made for 5 years, payments lower than the interest rate, and had to be re-financed after 5 years. Problem was, the poor people and those that were in by the skin of their teeth could not afford the new loans they were to start paying, and the real estate market tanked and people all over the country lost their homes to foreclosure. Prices dropped and people had negative equities, and the big crash just got worse and worse as people walked away when the homes were worth way less than the mortgages.

The real estate bust happened, because of the Federal Government through Congress making laws that required lending to people that should not have been able to buy homes, and this brought on the real estate fiasco we went through.

Today they are not making those crazy loans, so the real estate market is many times safer than it was back in those days.
Yep, instead of just mandating a significantly higher minimum wage and ending at-will employment. So much dancing around the real issues here.
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