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Old 03-08-2009, 08:13 AM
 
Location: Irvine, CA to Keller, TX
4,831 posts, read 6,190,543 times
Reputation: 844

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Quote:
Originally Posted by greatscott View Post
Notice how most of the states with the highest rates of refi and 2nds are red states?
California the biggest contributor to the subprime debacle, Blue State. Washington, Blue state, Florida Purple state. Maybe you meant, look at how many Blue states contributed to the mess?
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Old 03-09-2009, 09:55 AM
 
Location: Orange County, California
1,017 posts, read 2,705,157 times
Reputation: 469
Quote:
Originally Posted by Soccersupporter View Post
I think the CA homeowners who experienced record property value inflation who then pulled out every penny is a big part of it.

So you blame the smart people for the problems of the greedy, dumb people. I watched my house value go from $126,000.00 to $800,000.00 and when it hit the high it was adiós for TX, bought a beautiful home, put money in the bank and rested. BTW, I stayed in my home in Irvine, CA for 26 years. My house was my home until it was time to cash out. Now I have 4 years of expenses in the bank and a home paid for. Thank you CA.
Actually, no I don't. Not sure I follow your logic. I said in another post that there was plenty of blame to go around.

By "pulling every penny out of your home" I meant people who used equity to purchase renovations, consumer spending, etc, not people who bought low and sold high to relocate to cheaper state. I was talking about the people who now have two mortgages, or refied and now owe more than their homes are worth due to inflated values.

And as for your 425K profit over 26 years, congrats!!! That's great. (The 674K you earned is lessened by inflation, 126K in 1979 is worth roughly 373K today http://www.measuringworth.com/ppowerus/result.php). That's one way to do it. Keep in mind that with an annual salary of $60K/yr, a 6% investment in a 401K over the same amount of time with a 7% ROI and a 3% employer match will yield more than that (http://www.bankrate.com/brm/calc/401k.asp).

Your relocation is the only reason why you were able to "cash out" as much as you did. Moving to a place with 60% lower cost of living will allow you to use your equity to buy your retirement. However, this doesn't apply to those who don't want to move out of state. If people want to stay in their communities, they shouldn't look at their primary residence as an investment.

Last edited by cabolissa; 03-09-2009 at 10:10 AM..
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Old 03-09-2009, 06:09 PM
 
Location: Irvine, CA to Keller, TX
4,831 posts, read 6,190,543 times
Reputation: 844
Quote:
Originally Posted by cabolissa View Post
Actually, no I don't. Not sure I follow your logic. I said in another post that there was plenty of blame to go around.

By "pulling every penny out of your home" I meant people who used equity to purchase renovations, consumer spending, etc, not people who bought low and sold high to relocate to cheaper state. I was talking about the people who now have two mortgages, or refied and now owe more than their homes are worth due to inflated values.

And as for your 425K profit over 26 years, congrats!!! That's great. (The 674K you earned is lessened by inflation, 126K in 1979 is worth roughly 373K today Measuring Worth - Purchasing Power of US Dollar). That's one way to do it. Keep in mind that with an annual salary of $60K/yr, a 6% investment in a 401K over the same amount of time with a 7% ROI and a 3% employer match will yield more than that (Retirement savings calculator -- How much money can I save in my 401(k) plan?).

Your relocation is the only reason why you were able to "cash out" as much as you did. Moving to a place with 60% lower cost of living will allow you to use your equity to buy your retirement. However, this doesn't apply to those who don't want to move out of state. If people want to stay in their communities, they shouldn't look at their primary residence as an investment.
I never looked at my house as an investment but rather a home to raise my four kids. As it was it did send 2 through college and provide a nice financial nest egg with all the great memories. No complaints from me.
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Old 03-10-2009, 10:22 AM
 
624 posts, read 1,076,733 times
Reputation: 616
Is it true that many of the people who lied about their income lived for free until the house was foreclosed? I have read that people lived rent free for months and did not put any money down. Heck months of free rent with no money down would bankrupt a lot of banks. "Oh the tangeled webs we weave when we seek to deceive..."
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Old 03-10-2009, 11:42 AM
 
11,715 posts, read 35,952,231 times
Reputation: 7512
Here's a funny video on the "geniuses" that created this mess:


http://www.youtube.com/watch?v=mzJmTCYmo9g
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Old 03-10-2009, 06:06 PM
 
Location: The OC to NOVA
239 posts, read 634,049 times
Reputation: 109
You can blame any one you want, but what it comes down to is the people who bought the loans and could not pay the inflated interest did it to themselves. They signed the loan papers, hopefully after reading the loan papers, and agreed to the terms.

Rates went up, people sold when they could. Other people then bought under similar terms. I know many people who did this.

I was a loan officer, I used to try to talk my customers OUT of variable loans. The people wanted them. I explained up and down and back and forth what would happen, they still wanted what they wanted.

The whole of CA started to demise when Arnold got into office. You could blame him. But then who backed Arnold...Enron? Where was Enron based...TX? There...we can blame TX.
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