[ringtonesmannq]

When did I ask for a bail out? I don't qualify for Bush's rate freeze.

The average correction is around 20% and even if it falls another 10% most prices rebound with in 5 years. I like my house and am in it for the long haul so 5 years doesn't bother me to much. That's not wishful thinking just past performance.

[JAMES PIETERSE]

Originally posted by Oerdin
When did I ask for a bail out? I don't qualify for Bush's rate freeze.

The average correction is around 20% and even if it falls another 10% most prices rebound with in 5 years. I like my house and am in it for the long haul so 5 years doesn't bother me to much. That's not wishful thinking just past performance. past performance isnt indicative of future results, and when a huge asset bubble like this one popped, things arent just business as usual 5 years later. are you getting your forecasts from NAR?

[oxixernibioge]

Originally posted by Oerdin
That's the thing. Expedicious action prevents a pop and instead allows a slow controlled deflation of the bubble. The sudden shock can really put a strain on lenders (remember the SNL crisis?) and possibly even start a downward spiral a la 1929 as housing prices crash and so force more people into upside down and banks are left with a bunch of houses worthless then the money owed. The bank sells those houses, the increase in supply drives house prices down further, this makes still more people underwater...

It's better to avoid such a spiral by controlling the deflation of this bubble then regulating the market to prevent another such bubble from occurring in the future. so are you saying that the bubble hasn't popped yet? that thing are on a gentle descent down?

[Pszinygv]

I would say it is pretty gentle. The "crisis" has been in effect for over a year now. Before that most people knew it was coming for a year before that. And even with all the talk about American's getting thrown out of their homes, so far only 8 out of every1000 homeowners (less than one percent) are foreclosing.

The simple fact is most homeowners are like Oerdin, and are not going to sell there house anytime soon anyways so this only affects their ability to refinance or borrow against their equity. If you have already tapped out the equity of your house then you are stupid and living beyond your means and this bust is for you

Some life lessons are harsh.

[SeLvesTr]

Originally posted by Patroklos
I would say it is pretty gentle. The "crisis" has been in effect for over a year now. Before that most people knew it was coming for a year before that. And even with all the talk about American's getting thrown out of their homes, so far only 8 out of every1000 homeowners (less than one percent) are foreclosing.

The simple fact is most homeowners are like Oerdin, and are not going to sell there house anytime soon anyways so this only affects their ability to refinance or borrow against their equity. If you have already tapped out the equity of your house then you are stupid and living beyond your means and this bust is for you

Some life lessons are harsh. if HELOC dries up so does a portion of consumer spending. why would banks offer HELOC if houses are depreciating rapidly? we have a recession coming because of this and a recession coupled with a bubble bursting won't be good. if the fed drops the rate even more the dollar will dip which means we will have inflation from international goods. so now we have inflation, recession and bubble bursting.

i just don't get how things will be back to normal in 5 years or really even the same levels they are now.

[ThisIsOK]

Originally posted by MRT144


if HELOC dries up so does a portion of consumer spending. why would banks offer HELOC if houses are depreciating rapidly? The real question is why morons take out HELOCs and ARMs in the first place.

[Zavdpacq]

Originally posted by Patroklos


I don't want them to be at the same levels they are now (house prices), as they are inflated. They will bouce back somewhat, but if people think their homes will ever be as valuable (or rather percieved as such) again they are on crack. The free ride is over, reality is back, and if we are smart we won't start deluding ourselves into thinking we can live like rockstars again.

I would love to examine the other finances of some of these foreclosure "victims," like how many plasma TVs per house. You know there is nothing wrong with buying a house more expensive than you need if you really want that, you just have to prioritize. But not us Americans, oh no. We have to have everything. part of the problem is the estimates that there will be a 20% haircut that will be rectified by a 4% increase for 5 years. a 20% haircut still makes housing too expensive. people can talk about fundamentals all they want and how their area is special but that doesn't speak to the fact that trying to get loan that would result in a debt to income ratio of 4 or higher just isn't going to happen in huge numbers any time soon.

[KeestRast]

Originally posted by Kontiki
Is the SNL crisis the years that Saturday Night Live sucked?
Savings aNd Loan crisis. In the late 80's all the news programs called it the SNL crisis.

http://en.wikipedia.org/wiki/Savings_and_Loan_crisis

Incidentally, deregulation was the primary reason for that financial melt down which should be kept in mind the next time some politician or business man claims deregulation is the best thing since sliced bread. Often times regulations are there because they're needed to prevent bad behavior. Ultimately the crisis brought about $150 Billion in bad loans of which the government ended up picking up $125 billion of it just to prevent yet more banks & thrifts from going bust.

[VUzgOhgv]

Originally posted by Oerdin


There are a lot of reasons people borrow money against their house. Some people are just enabling consumption while others get sick and have to pay medical bills, some get divorced and are buying their soon to be ex out, some borrow to start businesses, others to pay debts or college expenses. A 5% fixed HELOC is better then a 12% unsecured loan so if people really need it and don't have enough savings then that's where they go.

I'd never take out a HELOC because my goal is to pay off my house. ARMs are sometimes unavoidable or might even be a good idea if you think interest rates are going down. If you live in an expensive area or are a first time buyer (I was both) then mostly the banks only offer you an ARM. Most people with ARMS, especially the first time buyers, likely go into it thinking they'll refinance after the fixed period is over but then got surprised when the lending crunch hit. if you had to choose between getting an ARM and not buying...then most people shouldn't have taken the ARM. Enabling poor decision making by offering poorly structure loans is awful.

if a place was expensive and the only way to get into it was through a shitty loan and if there were more shitty loans gulping up supply, perhaps it would have been better not to offer shitty loans and avoid undue expense in the first place. but a realtor doesnt think that way I guess. they only want that 6%

[TpDoctorOneTp]

Originally posted by MRT144
if you had to choose between getting an ARM and not buying...then most people shouldn't have taken the ARM. Enabling poor decision making by offering poorly structure loans is awful.

if a place was expensive and the only way to get into it was through a shitty loan and if there were more shitty loans gulping up supply, perhaps it would have been better not to offer shitty loans and avoid undue expense in the first place. but a realtor doesnt think that way I guess. they only want that 6% The loan is ok. Around 7.75% right now and I'll likely see a nice rate deduction this month from the federal reserve. My days of a 4% fixed are over though so the rate freeze doesn't help me.

I'm surprised more of the people in trouble don't take to their mortgage company about a loan modification. They'll normally jump at restoring the fixed rate instead of foreclosing as foreclosure is one of the most expensive things a lender can do.

[duminyricky]

In the situation you describe, that person should have a) either insurance or an HSA and b) an emergency fund.

[pageup85]

Originally posted by DinoDoc
In the situation you describe, that person should have a) either insurance or an HSA and b) an emergency fund. Most people have an emergency fund to cover 2 months worth of expenses. One trip to the hospital for an injury can easily cost $50,000. Do you have that in your emergency fund?

It's laughable that you think it is so easy for the self employed to get insurance. They have to pay both the employer's and employee's share so for a family of four it can easily run $2000 a month. Why do you think so many people are pushing for national health care?

[erepsysoulptnw]

It's a competitiveness issue and it is the most cost efficient thing we can do. It costs France something like $3500 per person per year to provide gold plated health care to every person in France. Truly best of the world coverage. To compare the US total health care spending is around $6000 per year per person and we don't cover 1/3rd of the population. Many of the people who do have insurance actually have very poor coverage.

Economies of scale aren't just for businesses; governments can get them too. This is just a competitiveness issue which is killing many American companies like GM.

[Bill-Watson]

More like 9% of the work force.

http://research.stlouisfed.org/publi.../11/0011yg.pdf

Now include their spouses and dependents and you can easily find this is a problem with effects 25% of the population. Especially since the 9% figure doesn't include farmers.

Besides, national health insurance would also mean coverage for the 1/3 of Americans who don't have coverage. Also, I noticed you once again avoided the competitiveness issue for companies like GM or US Steel or even Boeing. Not a comment on that issue or that EVERY European country gets massively better health care for just a fraction of the cost Americans pay?

[MannoFr]

That "1/3rd don't have coverage" figure is erroneous by a long shot.

[derty]

Originally posted by DanS
That "1/3rd don't have coverage" figure is erroneous by a long shot. Ok, it is 16% without insurance and another 15%-20% who are under insured. Meaning they think they're insured but their insurance would run out before the bills did if there was serious illness.

http://www.cbpp.org/8-29-06health.htm

[heltduell]

Ok, it is 16% without insurance and another 15%-20% who are under insured. Meaning they think they're insured but their insurance would run out before the bills did if there was serious illness. And how much of that 16% is in an age group who probably won't use insurance (ie they choose not to have it)? And how many of those people who are uninsured are simply being irresponsible and spending that money on sqare footage they don't need instead (like the parents of that kid the Dems shamelessly exploited and forgot to vet)?

The simple fact is your individual sob stories are not the bulk of these cases. Nowhere near.