tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 (edited) Nothing works to change the behavior of the pudgy American public like a little dose of pain. Wanna solve the traffic problem? Shut down half the lanes on a freeway. Magically, you can suddenly drive 70 mph at rush hour. It's funny how, time and time again, everyone suddenly manages to get off their lazy asses and find another way to get around. Wanna solve his credit problem? Let people fall on their financial swords. It's the only way to drive the point home for the longer term. Our entire society runs on having someone in the distant future pick up the bill. Our political system is specifically engineered for this. As a candidate, if you try to tackle a tough issue, the other side calls you 'gloom and doom'. This, by the way, is the GOP's favorite tactic...on global warming, on the debt crisis, the health care crisis, the collapse of the dollar, Iraq, oil and natural gas depletion; you name it. Everything's fine, after all, this is America! Edited December 3, 2007 by tvashtarkatena Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 Thanks for your replies folks. Much more illuminating than Tvash's original conspiracy theory post.... but speaking of such, as you guys have convinced me that this is a pretty F stupid thing to do, what then is the motivation here? Why are they even considering it? Case for Rate-Freeze: http://www.rgemonitor.com/blog/roubini/229674 Quote Link to comment Share on other sites More sharing options...
archenemy Posted December 3, 2007 Author Share Posted December 3, 2007 Exactly. I've blathered on in other threads about having taken out an ARM for a rental property that I'd originally planned to sell before the low rate on it went up. I decided to keep the place so I refi'd with a traditional loan. And I am no econ genius, but I can do some basic math. The fact that so many people just decided to let crazy loans get out of hand is beyond me. Do people not budget? Is that just too uncool? Do these folks not rebalance their investment portfolios? Check on their 401Ks? Isn't that a regular part of middle class existance? Not very sexy, but just part of the deal. Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 I think most of them either cash-out refi'd or heloc'd all of their equity out of their homes, or the market value of their home has declined since they financed it with their adjustable rate loan, and they wouldn't qualify for a fixed rate loan unless they brought quite a bit of money to the closing table, or perhaps not at all due to the tightening of lending standards. I'm sure that most of the folks facing resets would love to refi into a fixed rate loan. I wonder what percentage of people in distress could service their loans even if they *were* able to refi into a fixed. I'd also like to see the percentage of occupied vs unoccupied properties that are in some stage of foreclosure, what percentage have either refi'd or heloc'd out their equity to pay for something other than medical care, income lost due to disability, etc. Quote Link to comment Share on other sites More sharing options...
matt_warfield Posted December 3, 2007 Share Posted December 3, 2007 I actuallly had a .25% rate offer for 1 month a while back and should have had it framed. I should have called them and asked if I could make it -.25% so I could make more money upfront while signing a ticking time bomb. Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 I also think homeownership is way overrated. It has always been presented as an integral part of the American dream and, as a result, has caused many people to overreach to try to grab that piece of that pie whether it makes sense or not. The combination of easy loans, financial illiteracy and being bound by that dream has screwed a lot of people. Not that they should be bailed out now... I think that the tax code also provides a considerable bit of encouragement/subsidization of this perspective. Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 I also think homeownership is way overrated. It has always been presented as an integral part of the American dream and, as a result, has caused many people to overreach to try to grab that piece of that pie whether it makes sense or not. The combination of easy loans, financial illiteracy and being bound by that dream has screwed a lot of people. Not that they should be bailed out now... I think that the tax code also provides a considerable bit of encouragement/subsidization of this perspective. Homeownership is the chief driver of our consumption economy. After upgrading just about everything on a 1911 house, boy, do I know what I'm talking about in that department. Quote Link to comment Share on other sites More sharing options...
archenemy Posted December 3, 2007 Author Share Posted December 3, 2007 Funny, my house was built that same year. Quote Link to comment Share on other sites More sharing options...
matt_warfield Posted December 3, 2007 Share Posted December 3, 2007 I also think homeownership is way overrated. It has always been presented as an integral part of the American dream and, as a result, has caused many people to overreach to try to grab that piece of that pie whether it makes sense or not. The combination of easy loans, financial illiteracy and being bound by that dream has screwed a lot of people. Not that they should be bailed out now... I think that the tax code also provides a considerable bit of encouragement/subsidization of this perspective. It's not home ownership that is at fault here. It is the interest only and negative amortization loans that are out there. There are plenty of very happy property owners in Seattle due to appreciation and tax benefits. Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 Funny, my house was built that same year. Sven and Hagar were busy that year. Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 People will still buy homes if the loans aren't subsidized and the gains aren't tax free. They'd just have to content themselves with smaller homes secured by smaller loans. The federal subsidy for home ownership can't be defended as either an economic or social policy. Quote Link to comment Share on other sites More sharing options...
Jim Posted December 3, 2007 Share Posted December 3, 2007 The rate freeze is yet another example of how the "free" market operates to benefit a select group. Rather than institute some reasonable control of the sub-prime resell market, the Feds turned a blind eye with the idea that "the market will prevail" and not want to interfere. Great. So now that the repackaging of subprimes was so fricking complicated that they could be rated AAA investments, folks bought in over their heads, and the finance industry is screaming for relief - well then NOW is the time for federal intrusion. What a joke. Keep an eye on this one - this is only the first round of defaults. This will be with us for a couple of years. Quote Link to comment Share on other sites More sharing options...
selkirk Posted December 3, 2007 Share Posted December 3, 2007 But if people don't suffer a bit, they don't learn. :lmao: :lmao: Since when does suffering make people learn? Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 On a related note, this 4800 sf plywood POS has been on sale for $1.2 million (twice the price of any other house on my street) for more than 4 months now. The price has been steadily dropping in $25K increments, but at that whopping sticker, no one even notices. Someone finally tagged it with "PLZ LUV ME!" Bad taste AND timing, fuckers! Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 Maybe they can find someone willing to rent it for ~12K/mo until they find a full-price buyer.... Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 The rate freeze is yet another example of how the "free" market operates to benefit a select group. Rather than institute some reasonable control of the sub-prime resell market, the Feds turned a blind eye with the idea that "the market will prevail" and not want to interfere. Great. So now that the repackaging of subprimes was so fricking complicated that they could be rated AAA investments, folks bought in over their heads, and the finance industry is screaming for relief - well then NOW is the time for federal intrusion. What a joke. Keep an eye on this one - this is only the first round of defaults. This will be with us for a couple of years. That select group in this case is likely to be the occupants and/or owners of dwellings financed with ponzi-credit. Stupid you for locking in at ~4% fixed. If only you had taken out a neg-am, I/O, payment-option ARM with a teaser rate you could have potentially scored a much better rate, underwritten by the German pension fund, CALPERS, or some other bag-holder. Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 Maybe they can find someone willing to rent it for ~12K/mo until they find a full-price buyer.... Let's see... ...illegal immigrants, 1st floor, meth lab, 2nd floor, grow op, top floor. I think I can make 12K/mo pencil out. Quote Link to comment Share on other sites More sharing options...
JayB Posted December 3, 2007 Share Posted December 3, 2007 Must have heard the NPR story about the grow-ops in the Puget Sound financed with no-doc loans. Match made in heaven. Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 Must have heard the NPR story about the grow-ops in the Puget Sound financed with no-doc loans. Match made in heaven. I should have had those yuppies whacked when I had the chance. Quote Link to comment Share on other sites More sharing options...
archenemy Posted December 3, 2007 Author Share Posted December 3, 2007 But if people don't suffer a bit, they don't learn. :lmao: :lmao: Since when does suffering make people learn? It has worked well for the Catholic church. Quote Link to comment Share on other sites More sharing options...
foraker Posted December 3, 2007 Share Posted December 3, 2007 On a related note, this 4800 sf plywood POS has been on sale for $1.2 million (twice the price of any other house on my street) for more than 4 months now. The price has been steadily dropping in $25K increments, but at that whopping sticker, no one even notices. Someone finally tagged it with "PLZ LUV ME!" Bad taste AND timing, fuckers! I see you got that can of spray paint you wanted for Christmas. Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 $3.99 at True Value. Quote Link to comment Share on other sites More sharing options...
mattp Posted December 3, 2007 Share Posted December 3, 2007 That looks pretty similar to the house built two doors down from us. I am amazed that people want that sort of thing! Then again, I never understood Cadillacs or Coach purses either. Quote Link to comment Share on other sites More sharing options...
ivan Posted December 3, 2007 Share Posted December 3, 2007 Maybe they can find someone willing to rent it for ~12K/mo until they find a full-price buyer.... Let's see... ...illegal immigrants, 1st floor, meth lab, 2nd floor, grow op, top floor. I think I can make 12K/mo pencil out. are the immigrants working on the top floors for their rent? might want to switch the meth and weed floors though, so when the lab bursts into flames it don't take the chronic w/ it and give all them poor fire-fighters a mighty-funny-feeling Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted December 3, 2007 Share Posted December 3, 2007 That looks pretty similar to the house built two doors down from us. I am amazed that people want that sort of thing! Apparently, they don't. Built by Quorum, of course. The quality you've come to expect from a spec home builder. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.