Stack your chips and buy a house in '08-'09 as the market bottoms bigtime, saying.
Truth. Same goes in the stock market. Rich people wait for it to bottom out and then they buy big. The people who get scare and sell or the people that didn't have the money in the first place lose.
A good friend of mine who is a real estate agent in Arizona was telling me how crazy it's been the past 8 months. I wish I had some spare cash to invest right now.
typically, inflation-adjusted home values are actually net negative over most periods of time. it's a good investment of course for families who actually plan to live in those homes but buying properties on spec - even with conservative financing - isn't the can't-miss proposition it may seem to be ...
Stack your chips and buy a house in '08-'09 as the market bottoms bigtime, saying.
Truth. Same goes in the stock market. Rich people wait for it to bottom out and then they buy big. The people who get scare and sell or the people that didn't have the money in the first place lose.
A good friend of mine who is a real estate agent in Arizona was telling me how crazy it's been the past 8 months. I wish I had some spare cash to invest right now.
typically, inflation-adjusted home values are actually net negative over most periods of time. it's a good investment of course for families who actually plan to live in those homes but buying properties on spec - even with conservative financing - isn't the can't-miss proposition it may seem to be ...
i dont think the banks can get off that easy. its predatory lending based on an unfiar bargaining position that the banks have over mostly minority or poorly educated individuals. I'm all for people being held accountable for their decisions, but the lending practices of some of these institutions is fraud, certainly in the spirit of the law - if not the letter.
I find it amazing that some folks are saying it's one or the other. People bought homes because they thought it was too good of a deal to pass up and the mortage companies disguised their shit like it was too good of a deal to pass up. All of our hands are bloody.
Why would anyone expect a Mortgage Company to be any more fair and forthright than say a car dealer.
If you go to the local Chevy dealer to buy a compact car and the salesman talks you into signing up for a Corvette that you ultimately can't afford, how is this the salesman's fault??
He's a salesman and he has HIS best interest in mind, not yours.
I don't disagree that these lenders were like this car salesman, but unless they broke a law, I can't place the blame on anyone but the fool who signed the mortgage.
And unless these buyers are literally illiterate, is it too far fetched to expect them to go to the FREE public library and spend an hour reading about the decision they are about to make that will be one of the biggest in their lives??
I find it amazing that some folks are saying it's one or the other. People bought homes because they thought it was too good of a deal to pass up and the mortage companies disguised their shit like it was too good of a deal to pass up. All of our hands are bloody.
Why would anyone expect a Mortgage Company to be any more fair and forthright than say a car dealer.
If you go to the local Chevy dealer to buy a compact car and the salesman talks you into signing up for a Corvette that you ultimately can't afford, how is this the salesman's fault??
He's a salesman and he has HIS best interest in mind, not yours.
I don't disagree that these lenders were like this car salesman, but unless they broke a law, I can't place the blame on anyone but the fool who signed the mortgage.
And unless these buyers are literally illiterate, is it too far fetched to expect them to go to the FREE public library and spend an hour reading about the decision they are about to make that will be one of the biggest in their lives??
There's a cool documentary about selling used cars called Slasher, about a guy who comes to a Memphis dealer to get rid of the inventory. He was a pretty convincing salesman, and in the movie he convinces a lot of folks to buy cars they can't afford. Yet a lot of the deals never closed, because the old guy in the office with the calculator couldn't get the numbers to work, that it'd be stupid for the dealership to lend the money to folks who were going to default on the payments. That's the problem here -- not enough dudes with calculators. Let's let them off the hook for deceiving them on the "teaser" interest rates. But you can't let them off the hook for thinking they were going to keep paying when they had no more money.
I don't disagree that these lenders were like this car salesman, but unless they broke a law
Well fraud is certainly a crime.
So's running a card hustle on Broadway.
If a car dealer sold several million people cars with the knowledge that they would fall apart in a year, and a bad warranty with a bunch of hidden loopholes, you can be well sure that a class action would arise out of it.
I don't disagree that these lenders were like this car salesman, but unless they broke a law
Well fraud is certainly a crime.
So's running a card hustle on Broadway.
If a car dealer sold several million people cars with the knowledge that they would fall apart in a year, and a bad warranty with a bunch of hidden loopholes, you can be well sure that a class action would arise out of it.
I don't disagree...maybe I just don't understand what laws were broken and where the "fraud" lies.
I don't disagree that these lenders were like this car salesman, but unless they broke a law
Well fraud is certainly a crime.
So's running a card hustle on Broadway.
If a car dealer sold several million people cars with the knowledge that they would fall apart in a year, and a bad warranty with a bunch of hidden loopholes, you can be well sure that a class action would arise out of it.
That's different than the upsell. Granted it's a flawed system, but the borrowers must bear some of the blame for their ignorance. Guess that's what's happening now.
I don't disagree that these lenders were like this car salesman, but unless they broke a law
Well fraud is certainly a crime.
So's running a card hustle on Broadway.
If a car dealer sold several million people cars with the knowledge that they would fall apart in a year, and a bad warranty with a bunch of hidden loopholes, you can be well sure that a class action would arise out of it.
I don't disagree...maybe I just don't understand what laws were broken and where the "fraud" lies.
It pains me to do it. But wikipedia says.....
Unconscionability (also known as Unconscientious Dealings) is a term used in contract law to describe a defense against the enforcement of a contract based on the presence of terms unfair to one party. Typically, such a contract is held to be unenforceable because the consideration offered is lacking or is so obviously inadequate that to enforce the contract would be unfair to the party seeking to escape the contract.
In and of itself, inadequate consideration is likely not enough to make a contract unenforceable. However, a court of law will consider evidence that one party to the contract took advantage of its superior bargaining power to insert provisions that make the agreement overwhelmingly favor the interests of that party. Usually for a court to find a contract unconscionable the party claiming unconscionability will have to prove both that there was a problem with the substance of the contract and the process through which that contract was formed. The substantive problem will usually be the consideration, but could also be the terms, interest payments, or other obligations the court finds unfair. Procedural issues that a court could consider include a party's lack of choice, superior bargaining position or knowledge, and other circumstances surrounding the bargaining process.
Upon finding unconscionability a court has a great deal of flexibility on how it remedies the situation. It may refuse to enforce the contract, refuse to enforce the offending clause, or take other measures it deems necessary to have a fair outcome. Damages are usually not awarded.
Usually for a court to find a contract unconscionable the party claiming unconscionability will have to prove both that there was a problem with the substance of the contract and the process through which that contract was formed. The substantive problem will usually be the consideration, but could also be the terms, interest payments, or other obligations the court finds unfair.
Fair enough....are you suggesting that the majority of the 446,000 home foreclosures in the U.S. during 2007 are a result of the above??
I find it amazing that some folks are saying it's one or the other. People bought homes because they thought it was too good of a deal to pass up and the mortage companies disguised their shit like it was too good of a deal to pass up. All of our hands are bloody.
Why would anyone expect a Mortgage Company to be any more fair and forthright than say a car dealer.
If you go to the local Chevy dealer to buy a compact car and the salesman talks you into signing up for a Corvette that you ultimately can't afford, how is this the salesman's fault??
He's a salesman and he has HIS best interest in mind, not yours.
I don't disagree that these lenders were like this car salesman, but unless they broke a law, I can't place the blame on anyone but the fool who signed the mortgage.
And unless these buyers are literally illiterate, is it too far fetched to expect them to go to the FREE public library and spend an hour reading about the decision they are about to make that will be one of the biggest in their lives??
This is not a very good comparison (mortgage broker to car dealer.) You might as well compare a mortgage broker to a hot dog stand vendor. Because we bought a house about a year ago I have been following the housing market with fascination and dread. Here is my understanding of some of the changes that caused the current crisis. The housing mortgage business used to be pretty much self regulating because the collateral when the loans are made is the house itself. The lending companies do not want to be in the real estate business, but when loans are defaulted and houses are reposessed this is what they are stuck with. Recently, mortgage debt has been packaged and traded on the stock market. So loan companies could sell their loans to someone else and remove themselves from being responsible for the fallout in a foreclosure. When the loan companies were no longer responsible for dealing with the consequences of bad loans, they began offering loans to people who had no business borrowing. At this point, someone (our government) should have stepped in and began regulating the industry for the benefit of both the individuals involved in these loans and our economy as a whole. But anyone who follows politics should have noticed that government regulation to protect the long term good of our country has not been the priority of our federal government over the past eight years. As regards individual responsibility in taking out loans, there are many opportunities to be swindled in the raft of paperwork that is involved in buying a house. We took a class in first time home buying, but were still left confused by some aspects of the process, and just sort of muddled through with common sense and help and advice from friends. Although there are some people who took out stupid loans because they were willfully ignorant and wanted to buy too much, I'm sure there are others who were steered astray by lenders who were interested in a quick profit and chose to improperly explain the adjustable rate mortgages.
Although there are some people who took out stupid loans because they were willfully ignorant and wanted to buy too much, I'm sure there are others who were steered astray by lenders who were interested in a quick profit and chose to improperly explain the adjustable rate mortgages.
This is the crux of the matter. There's culpability on both sides of the signing table. I just can't shed many tears for the real estate/mortgage/loan industry whose business is all fucked up right now. If they thought their hit-it-and-quit-it were never going to backlash, then that's their fault. It just sucks that a bunch of hopeful (if ill-informed) homeowners got the dick because of it.
I wonder what percentage of mortgages are actaully held by the company that signed them up? Aren't they often sold off? If so, that sounds like part of the problem to me.
The car salesman is the closest analogy I could come up with as it's probably the second largest purchase an individual makes in their lives and the loans can also be sold and manipulated as being overloaded at the back end.
There are probably more car repos that house foreclosures.
The car salesman is the closest ananlogy I could come up with as it's probably the second largest purchase an individual makes in their lives and the loans can also be sold and manipulated as being overloaded at the back end.
There are probably more car repos that house foreclosures.
I guess in this sense a car salesman is a better comparison than a hot dog vendor (although a bad hot dog can cause problems at the back end too) Still, car loans and home loans are on a whole different level of magnitude.
The car salesman is the closest ananlogy I could come up with as it's probably the second largest purchase an individual makes in their lives and the loans can also be sold and manipulated as being overloaded at the back end.
There are probably more car repos that house foreclosures.
I guess in this sense a car salesman is a better comparison than a hot dog vendor (although a bad hot dog can cause problems at the back end too) Still, car loans and home loans are on a whole different level of magnitude.
Although there are some people who took out stupid loans because they were willfully ignorant and wanted to buy too much, I'm sure there are others who were steered astray by lenders who were interested in a quick profit and chose to improperly explain the adjustable rate mortgages.
Mortgage brokerage is a shady industry, straight up. Brokers' incentives are misaligned with those of the buyer and lender, and there's potential for information asymmetry on both sides of the transaction. It's a recipe for irresponsible behavior.
If I remember right, broker-originated loans in 2006 were twice as likely to be subprime as lender-originated loans. Coincidentally, brokers collected an average 27% higher commission on subprime than on prime loans.
Although there are some people who took out stupid loans because they were willfully ignorant and wanted to buy too much, I'm sure there are others who were steered astray by lenders who were interested in a quick profit and chose to improperly explain the adjustable rate mortgages.
Mortgage brokerage is a shady industry, straight up. Brokers' incentives are misaligned with those of the buyer and lender, and there's potential for information asymmetry on both sides of the transaction. It's a recipe for irresponsible behavior.
If I remember right, broker-originated loans in 2006 were twice as likely to be subprime as lender-originated loans. Coincidentally, brokers collected an average 27% higher commission on subprime than on prime loans.
Funny some should mention lawyers. Even that doesn't cover ur ass. People who have bought something pre construction might know what I'm talking about.
i simply want to put into perspective the similarities between these bad loans and the infamous bad loans in LatinAmerica that led to the ISI financial crisis of the 80's
guess who came out a winner in that story...
the soaring eagle of american economy and its global management
Stack your chips and buy a house in '08-'09 as the market bottoms bigtime, saying.
Truth. Same goes in the stock market. Rich people wait for it to bottom out and then they buy big. The people who get scare and sell or the people that didn't have the money in the first place lose.
A good friend of mine who is a real estate agent in Arizona was telling me how crazy it's been the past 8 months. I wish I had some spare cash to invest right now.
typically, inflation-adjusted home values are actually net negative over most periods of time. it's a good investment of course for families who actually plan to live in those homes but buying properties on spec - even with conservative financing - isn't the can't-miss proposition it may seem to be ...
Theoretically though, aren't all properties inflation-adjusted at some point in time? Not trying to be argumentative, I'm just interested in hearing more about your point.
Comments
its in the 120s. kramer says don't buy until it hits 100.
typically, inflation-adjusted home values are actually net negative over most periods of time. it's a good investment of course for families who actually plan to live in those homes but buying properties on spec - even with conservative financing - isn't the can't-miss proposition it may seem to be ...
good words.
Why would anyone expect a Mortgage Company to be any more fair and forthright than say a car dealer.
If you go to the local Chevy dealer to buy a compact car and the salesman talks you into signing up for a Corvette that you ultimately can't afford, how is this the salesman's fault??
He's a salesman and he has HIS best interest in mind, not yours.
I don't disagree that these lenders were like this car salesman, but unless they broke a law, I can't place the blame on anyone but the fool who signed the mortgage.
And unless these buyers are literally illiterate, is it too far fetched to expect them to go to the FREE public library and spend an hour reading about the decision they are about to make that will be one of the biggest in their lives??
There's a cool documentary about selling used cars called Slasher, about a guy who comes to a Memphis dealer to get rid of the inventory. He was a pretty convincing salesman, and in the movie he convinces a lot of folks to buy cars they can't afford. Yet a lot of the deals never closed, because the old guy in the office with the calculator couldn't get the numbers to work, that it'd be stupid for the dealership to lend the money to folks who were going to default on the payments. That's the problem here -- not enough dudes with calculators. Let's let them off the hook for deceiving them on the "teaser" interest rates. But you can't let them off the hook for thinking they were going to keep paying when they had no more money.
Well fraud is certainly a crime.
So's running a card hustle on Broadway.
If a car dealer sold several million people cars with the knowledge that they would fall apart in a year, and a bad warranty with a bunch of hidden loopholes, you can be well sure that a class action would arise out of it.
I don't disagree...maybe I just don't understand what laws were broken and where the "fraud" lies.
That's different than the upsell. Granted it's a flawed system, but the borrowers must bear some of the blame for their ignorance. Guess that's what's happening now.
It pains me to do it. But wikipedia says.....
Fair enough....are you suggesting that the majority of the 446,000 home foreclosures in the U.S. during 2007 are a result of the above??
This is not a very good comparison (mortgage broker to car dealer.) You might as well compare a mortgage broker to a hot dog stand vendor.
Because we bought a house about a year ago I have been following the housing market with fascination and dread. Here is my understanding of some of the changes that caused the current crisis.
The housing mortgage business used to be pretty much self regulating because the collateral when the loans are made is the house itself. The lending companies do not want to be in the real estate business, but when loans are defaulted and houses are reposessed this is what they are stuck with. Recently, mortgage debt has been packaged and traded on the stock market. So loan companies could sell their loans to someone else and remove themselves from being responsible for the fallout in a foreclosure. When the loan companies were no longer responsible for dealing with the consequences of bad loans, they began offering loans to people who had no business borrowing.
At this point, someone (our government) should have stepped in and began regulating the industry for the benefit of both the individuals involved in these loans and our economy as a whole. But anyone who follows politics should have noticed that government regulation to protect the long term good of our country has not been the priority of our federal government over the past eight years.
As regards individual responsibility in taking out loans, there are many opportunities to be swindled in the raft of paperwork that is involved in buying a house. We took a class in first time home buying, but were still left confused by some aspects of the process, and just sort of muddled through with common sense and help and advice from friends.
Although there are some people who took out stupid loans because they were willfully ignorant and wanted to buy too much, I'm sure there are others who were steered astray by lenders who were interested in a quick profit and chose to improperly explain the adjustable rate mortgages.
This is the crux of the matter. There's culpability on both sides of the signing table. I just can't shed many tears for the real estate/mortgage/loan industry whose business is all fucked up right now. If they thought their hit-it-and-quit-it were never going to backlash, then that's their fault. It just sucks that a bunch of hopeful (if ill-informed) homeowners got the dick because of it.
There are probably more car repos that house foreclosures.
I guess in this sense a car salesman is a better comparison than a hot dog vendor (although a bad hot dog can cause problems at the back end too) Still, car loans and home loans are on a whole different level of magnitude.
Mortgage brokerage is a shady industry, straight up. Brokers' incentives are misaligned with those of the buyer and lender, and there's potential for information asymmetry on both sides of the transaction. It's a recipe for irresponsible behavior.
If I remember right, broker-originated loans in 2006 were twice as likely to be subprime as lender-originated loans. Coincidentally, brokers collected an average 27% higher commission on subprime than on prime loans.
Dude, keep it! No Money DOWN!
Good call -- I am using the money as a downpayment on a new TV for my new home!
guess who came out a winner in that story...
Theoretically though, aren't all properties inflation-adjusted at some point in time? Not trying to be argumentative, I'm just interested in hearing more about your point.
Please, explain.