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The lack of good apartments on LI is pathetic and is a long time problem. LI is the only place that I lived that didn't have anything available to rent which meant lots of grown ups well into their 20' living with mom & dad, newlyweds in tiny illegal apartments and one family homes being turned into mother/daughters. If the powers that be on LI really want to attract or at least keep younger people there they'll have to push for nice, reasonable (not cheap) apartments.
I think any shortage like this is by design. Any rental development is subjected to rules that require housing be made available for the poor.
I think design is unlikely but the result is the same. I think the simple and likely answer is that those transplanted city folk, my parents and others like them, didn't want apartments, they wanted homes with a yard. The old American Dream. If they wanted apartments they'd have just stayed in Queens and Brooklyn, but they wanted a place in the country. Maybe today rules about allocating X number of apartments for the poor are keeping them from being built, which is sad because it could be causing so many perfectly good middle class earners being to be driven away.
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Many buyers aren't that far from being able to pay their mortgages, it is just that the resetting leaves the sum far too out of reach.
I see the opposite. People are choking on that first increase and are behind before the ARM fully resets. Let's face it most people took the ARM not because of high interest rates, which was common when I was shopping for homes on LI, but rather because they are financial disasters. These people should never have gotten in the car to look for a house to own, the realtor's should have shown them the door and the banks should have laughed them out of the bank. That's a whole lot of stupid to go around.
Last edited by ClarkStreetKid; 11-18-2007 at 07:44 PM..
I think design is unlikely but the result is the same. I think the simple and likely answer is that those transplanted city folk, my parents and others like them, didn't want apartments, they wanted homes with a yard. The old American Dream. If they wanted apartments they'd have just stayed in Queens and Brooklyn, but they wanted a place in the country. Maybe today rules about allocating X number of apartments for the poor are keeping them from being built, which is sad because it could be causing so many perfectly good middle class earners being to be driven away.
I see the opposite. People are choking on that first increase and are behind before the ARM fully resets. Let's face it most people took the ARM not because of high interest rates, which was common when I was shopping for homes on LI, but rather because they are financial disasters. These people should never have gotten in the car to look for a house to own, the realtor's should have shown them the door and the banks should have laughed them out of the bank. That's a whole lot of stupid to go around.
I heard on the news today that many of these folks will be allowed to keep their "teaser rates" for "at least a couple of years". How wonderful for them, how bad for those who purchased homes they actually could afford. I realize there are exceptions (loss of jobs, illnesses), but so many people kept expecting their homes to keep increasing in value, a very foolish assumption.
Perhaps their electric bills , heating bills and real estate bills should also be subsidized. Welcome to the world of no accountability
Now if they do freeze the rate for a few years what does the investor get for their trouble and what penalty does the guy with the mortgage get for the temporary reprieve? And it will be temporary and we'll be facing this mess again in a few years. I doubt that these sub-prime folks will suddenly win the lottery and be able to become prime.
This person wouldn't be saved based on what Paulson wants...
Mortgage payment going up -- Newsday.com (http://www.newsday.com/business/ny-bzcov1202c,0,4380321.story - broken link)
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Paulson has said rate freezes would not be offered to people who can afford the adjusted payment or those who, despite having made mortgage payments so far, have too little income and assets to do so in the future. Another issue was whether to exclude heavy borrowers who owe more than their homes are now worth.
Last edited by ClarkStreetKid; 12-03-2007 at 09:16 PM..
I heard on the news today that many of these folks will be allowed to keep their "teaser rates" for "at least a couple of years". How wonderful for them, how bad for those who purchased homes they actually could afford. I realize there are exceptions (loss of jobs, illnesses), but so many people kept expecting their homes to keep increasing in value, a very foolish assumption.
Perhaps their electric bills , heating bills and real estate bills should also be subsidized. Welcome to the world of no accountability
Everything feels upside down right now regarding the politics of this rate freeze. When did the Republican party become known for doing these type of big government handouts? I thought they were the party of small government, free market tax breaks. Regardless of who the party is though (and both are supporting this it appears), this is terrible and I would be curious to see how many class action suits come about from fixed rate borrowers who would have wanted the ARM option if they knew it would be extended and frozen....simply not fair. Let the housing market absorb the fallout and rebound.
Everything feels upside down right now regarding the politics of this rate freeze. When did the Republican party become known for doing these type of big government handouts? I thought they were the party of small government, free market tax breaks. Regardless of who the party is though (and both are supporting this it appears), this is terrible and I would be curious to see how many class action suits come about from fixed rate borrowers who would have wanted the ARM option if they knew it would be extended and frozen....simply not fair. Let the housing market absorb the fallout and rebound.
This plan will not work. In fact, it probably will make matters worse. If the ultimate investors (the holders of mortgage backed securities) see the government come in and lower their rates of return, they will abandon this already skittish market. That will lead to even less availability of credit. In turn, even less people will be able to buy homes. The people who have these mortgages will have no one who can buy the homes and end the mess.
This plan will not work. In fact, it probably will make matters worse. If the ultimate investors (the holders of mortgage backed securities) see the government come in and lower their rates of return, they will abandon this already skittish market. That will lead to even less availability of credit. In turn, even less people will be able to buy homes. The people who have these mortgages will have no one who can buy the homes and end the mess.
This doesn't make sense. It doesn't make sense because these securities already have mechanisms in them that cause them to be sold back to the packager once a certain default rate is met. This has driven several large banks into bankruptcy. So, you are telling me that the holders of these loans would much rather face the total collapse of their security as opposed to the changing of the return-value of the security?
Then, to argue that it would cause people to not buy the securities, drying up mortgage credit - that just doesn't make any sense. If there is more confidence in the market because of the stabilization of these loans, it would have the reverse effect. Though the returns would be smaller, the long-term outlook on these investments would improve.
But, you argue that risking a long-term (3 years) mortgage and real estate collapse is more important than stabilizing the markets in order to ensure the ability of these securities holders to risk their investment dollars.
Everything feels upside down right now regarding the politics of this rate freeze. When did the Republican party become known for doing these type of big government handouts? I thought they were the party of small government, free market tax breaks. Regardless of who the party is though (and both are supporting this it appears), this is terrible and I would be curious to see how many class action suits come about from fixed rate borrowers who would have wanted the ARM option if they knew it would be extended and frozen....simply not fair. Let the housing market absorb the fallout and rebound.
The assumption that the fallout would be contained within the housing market is naive. The entire economy hinges on housing, as it is just about the only revenue producing manufacturing left in this country. This would leak into every other market sector, and you know this.
Ideological purity sometimes needs to be compromised for the sake of doing what is in the interest of the vast majority.
Hey, we may become socialist before Hugo Chevez's Venezuela.
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Ugh...I can't believe it is the Republicans
