In regards to the "last suckers in" who simply listened to their realtor, mortgage broker and President, and bought houses post-peak, with the no-down, no-doc, interest-only, negative-am loans, usually African American, Hispanic, low socio-economic status folks and young families:
Do they "deserve" the financial ruin they're about to face? How much of the blame should they shoulder? And should America bail them out in any way as they lose their houses to foreclosure and bankruptcy in the coming years?
September 15, 2006
HousingPanic Stupid Question of the Day
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28 comments:
Keith:
I'm one of those who really reads your post and makes my comment directly based on that. I hope others will do the same, in that way, there will be some consistency on the issue. Doing this would be really educational. I think if we all just stick to the issue being posted, we can really get different perspective from different people.
I would say NO. America should no bail them out. Remember the old mantra: Let the buyer beware? Bailing them out will not help them in the long run, because they might think that Uncle Sam will always be there for them. They need to learn their lesson. If they fall victim of a scam, the people responsible for that will answer to the law, if convicted. We are country of laws.
Race has nothing to do with it. They should mail the keys back to the bank and walk away like others. Taxpayers already subsidize housing via the home
mortgage deduction that, in effect, inflates the cost of housing and transfers funds from the treasury to the banks.
glad i didn't short the market the past week.....interesting chart
re stupid question - no bail out.....people have only themselves to blame
bail out = welfare
yeah, but long term the Dow has been shitti
Why do I have the feeling "Gene Quinney Associate Broker" is gonna get roasted?
Gene - I'd suggest you read the super-secret-double-handshake NAR presentation given a couple of weeks ago where they say housing is tanking and will tank for some time. This supplanted the "there is no bubble" talking points they previously had instructed their henchmen to deliver
Perhaps you were on vacation during the NAR position switcheroo?
Good luck on the job search
gene, I hope you keep posting. Like Osman before you, realtor comments are welcome here. Even if we'll lambast you for sure
fight the good fight, then have tea
I don't really care about realtors. I just hope for a housing crash so that the average working man can afford to buy a home for his family without taking out a toxic loan that will end up putting him in foreclosure. Is that too much to ask for?
gene guinney associate broker brings out an intelligent perspective in this debate. Your opinion maybe different than majority of the bloggers including Keith, but you've maintained a high level discussion. As like I said, if all of us can just stick to issue being posted, we can all learn from each other. It is a great educational and informative source that can even help others avoid becoming a victim of any laon scam out there.
Gene Quinney Associate Broker has indeed taken the "high road."
As for the topic.... No, if bailouts are needed, they should not be given.
We've all seen (and are constantly seeing) the effect of welfare and entitlements.
I don't really enjoy saying this, but if the people who bought at the peak lose their houses, the "deserve" what they get.
I don't mean "deserve" in some moralistic way. I mean it in more of a matter-of-fact, action and reaction, consequence rather than punishment sort of way.
Here's the thing: none of us can predict the future. In 2005, when I was looking for a house, I didn't buy. My wife I have a nice down payment, a good family income, and excellent credit. So why couldn't we buy a house? Several reasons 1) we live in San Francisco, 2) we insist on a fixed rate loan, and 3) we won't exceed a certain percentage of my income for housing payments. Those factors kept us from competing with the people who were willing to use interest-only loans - loans that I considered to be suicidal. The outbid me (more often I just didn't bother bidding) and got the house. Was I sure I was making the right decision? No, I can't see the future, I can only make judgements and decisions. The bets were made...
While the market certainly appears to be turning, mabye price appreciation will resume, interest rates will remain low, they'll refinance, and they'll have a nicer house than I will. Maybe so - and if that happens, I have no problem with it. Freedom and accountability - I made my bet, and I am ready and willing to accept the consequences. I'll still be able to buy a house, but it won't be as nice, and I'll pay more for it.
If it turns out I made the right bet, and they made the wrong one, then freedom and accountability will cut the other way. They will not be able to refinance, their loan will adjust, and they will be forced to sell into a down market. I'll pick up the property.
Roll the dice, pay the price. I will, and so will they. There's really no other way for this to end.
Last weekend, at an open house, a real estate agent actually told me I'm lucky I didn't buy last year. He said that I'll get more for my money now. Of course, he thinks we're near the bottom, whereas I suspect that this trend will continue for several more years, at least... but (and I know many HPers will go nutso when they see this post)... if I like the house, think it's reasonably priced, and can afford it within the parameters I've set for myself, I will buy.
If they are victims of scams then they should sue the scammers, thats the american way by golly. no bailout, thats for large corprations, banks, and anyone with the last name Bush.
Does it really matter? If they are poor, and cannot pay off their debts, what does it matter! They had nothing to lose in the first place. Can we really enslave them any more? Are we going to hold them responsible for those debts?
What does look like happening is debt deflation. The thing that normally follows credit expansion of the monetary system.
What does matter is that certain parts of the banking system may be bought down by the irresponsibility of the deregulate/liberalize mentality. The idea of saving for your investments has been thrown out the door.
You cannot bring future spending into the present (pure credit based financing), continuously. If everybody does it all at once, who in the future is going to be doing the spending?
As was famously stated: History doesn't repeat, but it often rhymes.
There's 3 things that are coming down in the next few moneths. And here they are:
1. Oil
2. Gold
3. Home prices
Jim K
dallas real estate
If the PTB go the bailout route then we will all know in this country that the ONLY way to survive here and be happy is by becoming a lowlife debtor who NEVER pays bills, could care less about debt, does not plan for the future, etc.
Here's the problem:
I think that is what our leaders and businesses may actually WANT for us.
Could it be that they think a profligate public is easier to control than one that is serious about their future?
In a "fair" world there would be no bailouts for these jerks that enabled the bubble to grow to obscene proportions.
Who knows why they did it? Stupidity? Lack of basic math skills? Greed? Fear? Whatever. All we know for sure is that these are NOT smart people.
The only thing worse than bailing out a smart person is bailing out a clueless idiot.
The people who are buying at the top with toxic loans are idiots.
BTW, a friend of mine just decided against buying today because it din't feel right financially- too much of a stretch.
Do I think they were stupid for even considering such a dumb move? YES.
Would I have felt bad for them when they lost the house and went downhill financially ?YES
Would I have been pissed if they got bailed at the last minute by American taxpayers for a stupid decision of their own making? Oh yeah.
Life is full of hazards.
PS:
My friends were actually considering spending more than 50% of their monthly income on the mortgage.
That is not even including property taxes, insurance and set-aside for repairs.
Now who is stupider in that case, themselves or the corrupt lender?
The corrupt lender is just doing his corrupt job.
THEY are the idiots here.
Thank God they "got smart" at the last possible moment.
My wife and I bought our house in 1994 based on 1 salary income. We're glad we did it that way, especially when I had to leave my construction job due to severe foot tendonitis. I'm now self-employed as a construction "paper-pusher." Meaning construction management without a steady flow of income, but at least we're able to make the house payment. I admit that our house is not a McMansion, but we are happy to call it home and we can sleep (soundly) at night.
we are already bailing them out Keith. Just look at your living costs as of late
Shakster:
Gene is not a financial planner. He is a broker and as such, he is not suppose to second guess his client's financial status and capacity. Now, where he will cross the line is when he aids in providing false information for his client (i.e. phony income, etc.), then morally and legally, he is wrong.
Airline industry needs a "bail-out"
We say -YES!
Farm indusry needs a "subsidy"
We say YES!
Oil industry needs "tax incentives"
We say YES!
Hummer owners want "tax credit"
We say YES!
Minorities need "help"
WRONG - we say NO!!!
Makes perfect sense to me, it's what America is all about- right?
The only assistance they should get is the satisfaction of seeing Bush and Greenspan put in jail for allowing/creating this debacle. Justice.
At least then all the people who will lose thier homes and savings and the scores of others who will have to wait years before housing becomes affordable again, can have some justice.
Never happen, but a nice thought.
Genes reply;
Actually you too could not be more wrong. I depend on honest hard working Americans in search of an experienced professional to help them with their home buying and selling needs. By the time my clients complete a transaction they are among the most informed and educated. I do not know anyone who makes money, we earn it, and I think everyone knows who the A holes are...
Saturday, September 16, 2006 3:48:38 AM "
Are you that "experienced professional" guiding them into the biggest investment of their lives? Welding and marine mecahnics give you those qualifications? Or are you like most Brokers who wouldn't know a good investment from a NAR talking point? You make your money selling houses, for two years now you have sold wayyyy over priced houses, simple as that.
Saturday, September 16, 2006 11:51:38 AM
Why should the taxpayers bail-out
any of them?
Airlines: They should raise ticket prices and/or reduce the number of flights.
Farmers: They already use cheap illegal labor and you know illegals use local resources mostly paid for thru property tax. Farmers usually have agricultural property tax exemptions. So much for personal responsibility.
Oil industry: We should be developing other sources of energy, not subsidizing oil.
Hummers: When did that happen? That's crazy~!
Many white people are also upside down on their mortgages. I hope that makes you feel better.
Saturday, September 16, 2006 11:51:38 AM
Why should the taxpayers bail-out
any of them?
Airlines: They should raise ticket prices and/or reduce the number of flights.
Farmers: They already use cheap illegal labor and you know illegals use local resources mostly paid for thru property tax. Farmers usually have agricultural property tax exemptions. So much for personal responsibility.
Oil industry: We should be developing other sources of energy, not subsidizing oil.
Hummers: When did that happen? That's crazy~!
Many white people are also upside down on their mortgages. I hope that makes you feel better.
Saturday, September 16, 2006 11:51:38 AM
Why should the taxpayers bail-out
any of them?
Airlines: They should raise ticket prices and/or reduce the number of flights.
Farmers: They already use cheap illegal labor and you know illegals use local resources mostly paid for thru property tax. Farmers usually have agricultural property tax exemptions. So much for personal responsibility.
Oil industry: We should be developing other sources of energy, not subsidizing oil.
Hummers: When did that happen? That's crazy~!
Many white people are also upside down on their mortgages. I hope that makes you feel better.
Gene, have you been sued yet?
Just wait.
I'm sure once or twice you gave a buyer the impression that their home value would only go up.
What are they gonna do when they find out the value went down?
And who will they blame?
Should be fun. But don't worry. Think positive, that'll take care of everything.
Sorry, didn't intend to post that three times.
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