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Old 02-15-2008, 08:10 AM
 
Location: NJ
2,210 posts, read 7,013,052 times
Reputation: 2193

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Quote:
Originally Posted by DMenscha View Post
No matter where one sits on the political fence, I think we all have to face the reality of government intervention on some level. I'm not a big fan of government regulation, but I think it's easy to see that had the mortgage markets been more closely regulated, the current situation would be less ugly than it is.
Thing is, the bubble came about due to lack of regulation - introducing (much needed in my mind) regulation won't stop the bubble from deflating, it will hasten it.

The bubble isn't deflating because of foreclosures. It is deflating because credit has tightened and First Time Buyers can't get financing (plus prices in some areas are so high they can't put enough money down). One of the suggestions I read in the past is that the last rush to buy actually USED UP some of the future demand - people bought homes in a panic not to be priced out that they may not have bought for a few more years, either to save money first or to be more secure in their jobs.

Frankly, for my consideration, foreclosure help or no, it makes no difference. Some people being helped to stay in a home that they can't afford and is underwater isn't going to make the next buyer overpay. Plenty of people don't want to stay in underwater homes. Why have a $500k mortgage on a home worth $100k less on a $50k income - might as well just walk away, making the remaining homeowners pay the price in blight.

At the end of the day, the market won't balance until there is demand. Bailout or no bailout, the bailout is for banks, not people.

The only way the government can pick up the market is with inflation. Which will work. But be very painful too, and it will destroy the savings of the elderly and the prudent. Making the careful, conscientious consumer pay for other peoples greed and somebodies house sale. Shameful.
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Old 02-15-2008, 10:24 AM
 
Location: Barrington
63,919 posts, read 46,533,215 times
Reputation: 20674
Quote:
Originally Posted by CouponJack View Post
Not true. We had a housing bubble somewhat similar to this in the late 80's/early 90's that corrected itself.

That's what markets do.

I follow the rules....where's my break?
There are significant differences between previous bubbles and this one. Past bubbles were localized. Most areas of the U.S. did not lose value. Most buyers started with skin in the game. Most homeowners had real equity. And arms were limbs.

This time, there are almost no areas of the U.S. that are not loosing value. So many home-owners have no skin in the game. Hundreds of millions have taken out chunks of equity to embrace lifestyles they could not afford. And oh my stars, it's all about the ARMs.

Like you, I played by the rules. I do not have a mortgage and live within my means and "do without". It really frosts me to think that those who have not embraced the concept of " doing without" could have a better outcome.

Having said this, it's the "doing without" thing that is the greatest risk to the economy. If consumers stop buying today based upon the hope of paying tomorrow, the house of cards implodes.
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Old 02-15-2008, 11:11 AM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,249,630 times
Reputation: 6469
The problem with the way government functions, is that they believe they can write a regulation that covers all situations. My first career was as a firefighter for the CA forestry, our Manual of Instruction was 2 binders thick. These days it takes a 4 foot shelf to hold the same document. Obviously, making the document bigger hasn't made it any better, but I'll bet you won't find a bureaucrat that would admit that.

When you paint with such a broad brush you get paint on a lot of people that didn't need painting. In the mortgage "relief" effort, there's going to be some winners and some losers and some of those that took advantage of the situation will get "rewarded". Some that had the situation take advantage of them will get "rewarded" as well.

We "reward" people that don't manage their money well by offering bankruptcy as a way to start over. I'd like to see that used more, it's painful, but not the end of the world.

Banks typically will allow workouts on a variety of loans, it being better to get back a major portion of the debt, than having to write it off and collect nothing. Rather than "freeze" loans, I think banks ought to be given some latitude for their accounting of non-performing loans by the comptroller of currency. This would let lenders decide individually whether borrowers were abusers of the system or victims of it and take action appropriate to the situation. I'm sure some clever accountant would be able to figure out a way to take advantage of that proposal too, but it's way better than any proposal I've seen on the table so far.

The only thing that's sure is, no matter what gets done, it's going to be FUBARed from the get go.
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Old 02-15-2008, 11:18 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,100,357 times
Reputation: 2661
Quote:
Originally Posted by Buckhead_Broker View Post
Amen,

The stimulus package is nothing more than election year pandering. Prior bailout efforts have failed. What the liberal media is not telling people is that approximately 70% of people who have been foreclosed upon lied about their income to get mortgages for homes they had no reason buying.

Leave the markets to correct themselves - yes, it will get ugly before it gets better. But we've all seen how kids turn out when Mommy & Daddy always bail them out of trouble so they don't have to face the consequences of their actions.
Source of your statistic? Whenever you use a number like that you should present its source. Otherwise the instant conclusion is more braying by one of Rush's faithful...
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Old 02-15-2008, 02:05 PM
 
Location: Atlanta
739 posts, read 826,245 times
Reputation: 279
Quote:
Originally Posted by olecapt View Post
Source of your statistic? Whenever you use a number like that you should present its source. Otherwise the instant conclusion is more braying by one of Rush's faithful...

Careful Captain! I am not a fan of Rush's. Comments like that can get you labeled too! My source is Clark Howard, a syndicated host of a consumer advocacy radio show and the Mortgage Asset Research Institute.
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Old 02-15-2008, 05:33 PM
 
Location: NJ
2,210 posts, read 7,013,052 times
Reputation: 2193
Quote:
Originally Posted by middle-aged mom View Post
Having said this, it's the "doing without" thing that is the greatest risk to the economy. If consumers stop buying today based upon the hope of paying tomorrow, the house of cards implodes.
Quite true, and yet inescapable. Newsweek had an article not long ago which suggested that increased savings would have an even stronger effect on the economy than a crashing housing market.

And yet with the country literally drowning in debt, at the whiff of a recession, decreased spending HAS to happen.

Quite a house of cards, and one I do believe is imploding. Without any other option in order to get back to a healthy economy. Our economy is built on consumerism, it's sick. We don't make much of anything any more and produce little that anyone else wants. Even our services are moving offshore. Things were held up a little longer by people selling each other houses, but that delusional economy is fading too. I don't see how there is much left..

Pretty scary actually.
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Old 02-15-2008, 11:33 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,100,357 times
Reputation: 2661
Quote:
Originally Posted by Buckhead_Broker View Post
Careful Captain! I am not a fan of Rush's. Comments like that can get you labeled too! My source is Clark Howard, a syndicated host of a consumer advocacy radio show and the Mortgage Asset Research Institute.

Clark Howards twisting of numbers to his ends is well known. He is not a source of such statistics. He is certainly not authoritative.

But at least if you cite Mr. Howard we then all know the number is likely not what it is represented to be.

I would of course welcome a discussion of Mr. Howard's source...
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Old 02-16-2008, 06:50 AM
 
Location: Atlanta
739 posts, read 826,245 times
Reputation: 279
Clark got it directly from the Mortgage Asset Research Institute. Do you ever get tired of assuming everyone else is wrong? And as long as you are saying Clark is notorious for twisting numbers, let's see how YOU can back it up. Give us three verifiable examples of how he has "twisted numbers" to his own end. If you can't then you are just blowing steam!
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Old 02-16-2008, 11:14 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,100,357 times
Reputation: 2661
Quote:
Originally Posted by Buckhead_Broker View Post
Clark got it directly from the Mortgage Asset Research Institute. Do you ever get tired of assuming everyone else is wrong? And as long as you are saying Clark is notorious for twisting numbers, let's see how YOU can back it up. Give us three verifiable examples of how he has "twisted numbers" to his own end. If you can't then you are just blowing steam!
Clark says...
"
Clark gets a lot of questions from people who want to buy a home. The first question he asks them is how long they plan to live there. And, he will say, if they don’t plan to live there five years or more, they should rethink buying a home. When you buy a home, you pay about 10 percent in transaction costs. The same is true when you sell a home. And you need to stay there at least five years to break even on those costs.
"

Do your buyers have 10% transaction costs? Can you ever break even in MI?

Clark says...

"Real estate agents are terrified these days. The Internet – and the discount Web sites that have succeeded on it – has decimated the industry. And, now it’s a civil war; agents against agents. Traditional agents want to keep commissions fixed. Some have even tried to get legislatures to pass price-fixing laws. Other agents realize that the marketplace is going to win out so they’re offering full service a lower commissions. There are also several great sites offering a menu of services based on how much help you want. A new example Clark just learned about is the site redfin.com. "

Uhh you terrified? Redfin is our new model?

Clark says...

"
About one-quarter of people do a FSBO - or For Sale By Owner -
"

Ohh..You think 25% of the deals are FSBOs?

Neither does Clark...from a year earlier...

"The number of people selling a home by FSBO (for sale by owner) is in decline. It’s down to about 12 percent, while 70 percent of sales happen with traditional brokers."

Clark says...

"Did you know that you can sell your home at a reduced commission these days? Real estate trade associations don’t want you to know this and they’ve gotten six states to pass laws that make it a crime to negotiate over commissions. Real estate agents are divided over the topic, but many think it should be up to the free market."

You really think that there are laws that make it a crime to negotiate our commission...

Clark says...

"Most people who bought in 2005, 2006 or earlier this year financed 100 percent and are in weirdo exotic loans. That's the true picture of what's going on -- though it makes better headlines to say the sky is falling. "

Really? Most people?

Clark Says...

"In a lot of cities, about one-third of home sales are taking place on the Web. That is a very scary prospect for agents, who used to be in complete control of real estate listings and information. So, what are real estate agents afraid of? In the Northeast, they are terrified of Foxton’s, a European real estate agency that pays its agents salaries instead of strictly commission. Foxton’s agents get about 3 percent, compared to the typical 6 or 7 percent that regular agents get. "

Yeah that Foxton...really big...

Face it. the guy makes his living as a career financial do gooder who is highly opposed to the conventional RE Industry. He is also very careless with numbers.

Now where do you want me to send the crow?
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Old 02-16-2008, 04:12 PM
 
354 posts, read 1,215,810 times
Reputation: 90
Just let everybody convert into a 30 Yr fixed mortgage at current rates. If they can't afford or qualify then they should not be owning a house. That will get the monkey off our back for 30 yrs.
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