In-A-Gadda-Levitre Posted October 1, 2008 Share Posted October 1, 2008 So let me educate you. Home prices skyrocketed within about 50 miles of the coast making it impossible for many high income folks to buy a home and when they tried they got stuck with a high interest loan in a low interest market on a house that wasn't worth it, but they were told this was their nest egg. So when the housing market really crashed and their loans went up because there were things like a 3 year no-interest loan. Are you as sympathetic to that narrative? It's true too. High income people also rely on their house and their portfolio as their nest egg, even more so than the poor - they are less likely to have pensions. Or are the missteps of the poor inherently more acceptable than the missteps of the rich? I agree with a lot of what your saying, and in that example, probably true. But there are people that were told by their bank how much they could borrow and/or how much down payment they needed, and rather than say, no, I can't afford that, and with a real estate market that was appreciating rapidly, they signed the paperwork. While there's a lot of hindsight 20/20 over whether they should've known the right thing to do at the time, all that is somewhat subjective. The reality is there are likely people who lived way beyond their means, made stupid decisions and deserve to pay, as well as those that got caught without necessarily trying to fool anyone. What are ways to help the truly needy and let those more self sufficient, as well as the greedy ones, fend for themselves? that would be a good discussion to have... Link to comment Share on other sites More sharing options...
bills_fan Posted October 1, 2008 Share Posted October 1, 2008 I agree with a lot of what your saying, and in that example, probably true. But there are people that were told by their bank how much they could borrow and/or how much down payment they needed, and rather than say, no, I can't afford that, and with a real estate market that was appreciating rapidly, they signed the paperwork. While there's a lot of hindsight 20/20 over whether they should've known the right thing to do at the time, all that is somewhat subjective. The reality is there are likely people who lived way beyond their means, made stupid decisions and deserve to pay, as well as those that got caught without necessarily trying to fool anyone. What are ways to help the truly needy and let those more self sufficient, as well as the greedy ones, fend for themselves? that would be a good discussion to have... Anyone who purchased a home, with at least an 80% mortgage, since 2003 will soon be toast. Whether they went for a fancy 0% down ARM deal or went traditional 20% down, 30 year fixed. If those people want to sell their house, they will not be able to recoup their purchase price. For example, if you bought a $300,000 house in 2006, with 20% down, your mortgage is likely just under $240,000. If you had/wanted to sell now, you are unable without losing most of your down payment. And soon, sellers will have to show up at closing ready to write a check to cover the outstanding mortgage balance, their down payment now gone. Add to that a 6% broker commission and no one will sell. Until my example family can at least get close to the $300,000 they paid, this will not be over. You have to figure that people need to recoup at least most of their down payment to sell, simply because they will probably use that on another house. The market will be locked up for a while, even after banks are more willing to lend. Take my conservative example, multiply by a factor of 5 for the people living way beyond their means/low income with goofy ARMs people. Link to comment Share on other sites More sharing options...
Max Fischer Posted October 1, 2008 Share Posted October 1, 2008 What exactly is the message for those who live simply, within their means, and avoid debt? That they should sacrifice further to ensure that everybody but them can continue to live in a house bigger than their means warrants? Is this the whole Biden 'patriotism' thing? So, we will have a test to see who fits that VERY small minority of Americans? These would people would include those who don't have a mortgage, car payment, college loan, any credit card debt or has a job that is dependent on the economic health of the nation. All others, start bailing. And yeah, sacrifice is a patriotic thing. Something Bush and others never understood about the War Against Terrorism. When you are punished for being financially responsible, maybe it is time to simply abandon the ship. How are the tax-heavy states like NY doing, by the way? Show me a state in the nation that is doing well right now. Whether it's your definition of "tax-heavy" or not. Link to comment Share on other sites More sharing options...
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