If you own a home....

Why is it that you start out talking about personal responsibility and common sense then end up blaming the brokers? It's not the broker's responsibility to tell people what to do with their money. The broker is responsible for telling the borrower the specific characteristics of the loan they are getting and from that information it is up to the borrower to determine if they can afford it. When dealing with ARMs there is no way to predict what rates are going to look like 5 years from now so how can a broker even guess if someone is going to be able to afford payments that far out when nobody knows what they will be?

 

To sum up: if you're thinking about taking out a high-risk loan, do it in an election year.

 

If you bought a home in recent years in the bubble states (Nev, Az, Fla, Ca), you are really screwed. How screwed? In California, prices may still come down 40% more. From here!
http://online.wSportsJournalists.com/article/SB120276871472760255.html

This isn't voodoo economics behind the math. It's very simple. Comparing housing prices to personal income. During the last few years, members of Idiot Nation looked at the monthly payment, and not the price.

Teasers, Option Arms, etc etc fooled people into looking at their monthly payment for that month instead of looking at the actual price of the home.

 

Given that I paid for my house in cash, have no mortgage, want no mortgage, and never want to deal with those fuckers ever again, I'm really unsympathetic. It amazes me when I turn on home shows and see some yayhoos who look like they flip burgers for a living signing on the dotted line for a $600,000 house.

 

A lot of venom in here for these people who made poor financial decisions.
Some of it's probably warranted, but there are so many educated, intelligent people who are clueless about finances.
I just shake my head at all the folks in my (middle-class) neighborhood with Lexuses and Mercedes in their driveways, cause I know they're probably in way over their heads.
My brother's house is worth twice as much as mine with flat-screen TVs in the bathrooms and beautiful cars in the garage. And he has meager savings and high debt to show for it.

Hopefully people learn their lessons with just one major screw-up. But it's an easy trap to fall into.

And that Dave Ramsey book is a good one, by the way. So is David Bach's "Authomatic Millionaire."

 

Cash for a home? Fucking awesome. I wish I could. I'm shooting for a 25 per cent down payment.

 

people who rob banks also make poor decisions. i don't have a lot of sympathy for them when they're caught, either.

 

Paulson has a rare moment of lucidity:

Q for Paulson: Is the worst over?

Paulson: The worst is just beginning.

Although he follows that up with “we have a diverse economy”.

LOLOLOLOL - our service economy is diverse. We can sell hot dogs to each other, or sell frapaccinos to each other.

It would have been nice if someone in the room had an intelligent follow-up question when Paulson says that we are screwed. And he only talked about the subprime resets, not the Alt A and Option Arm resets in the next few years.

 

I have a house in California. While I believe prices will fall, 40 percent is crazy. It's still California, one of the best places in the WORLD to live, especially Southern California. The demand for houses here will always be high because of the weather, the beaches, the mountains, Disneyland, Hollywood, I could go on.
Suffice it to say, I am not worried that prices will go down that much in California. And besides, I'm not planning on selling my house any time soon, not until my kids are out of high school, and that won't happen for another 16 years.

 

just curious, where do you live, rpmmutant?

Palos Verdes, Manhattan Beach, etc? Probably not 40%. Although it wouldn't shock me.

The IE? Absolutely.

 

Well, that's certainly not an overused comeback at all.
Seriously, I have limited sympathy too because I work so hard to make the right decisions. (Read: I'm a cheapskate).
Just saying, schools don't teach finance 101. so it's not entirely people's faults if they're clueless.

 

i have to question your logic, my friend.

in general, the people who are fleeing socal are the folks with good jobs and homes. those same people are being replaced with immigrants.

yes, socal is growing, a bit, but many of the people entering your fine area of the country don't have jobs, or work in the service or agricultural industry, and don't have the means to buy homes without the creative lending we've recently witnessed.

socal, specifically los angeles, no longer is a destination of choice by folks with educations or money.

as for LA being one of the best places in the world to live, i won't type a word. instead, i will sit here and silently laugh at the premise.