If you listened to the NAR and REIC, and bought a home you couldn't afford...
If you lied about your income, and took out a toxic loan with a teaser rate that will now reset...
If you rent the home out and it would only cover 40% - 50% of your monthly costs...
And if you bought that home solely betting on future price appreciation to carry the day...
The bottom line is...
You made your bet, you lost, and now you're f*cked.
And that's the bottom line.
35 comments:
OMG how do you think of this stuff? I want to know when your going on tour, or when is the TV show coming out? It can be like Stienfield but with RE agents.
Damn that's harsh, but it's true
well said...
My concern is that the fall out from these "gamblers" will affect all of us who did not make foolish RE moves. Although if you can buy when the market bottoms, you could get a real bargain. A game of winners and loosers is afoot.
The people who did all those things will never understand the simple, truthful logic that you've laid out.
So, on their behalf, I will commit to spend one hour today sitting in my landlord subsidized rental Phoenix house and be mad at you and sulk.
(It's the least I can do....:-)
bwahahahhahaahahahahhahaahhaha.
This is why keith is so good.
Keep up the good work.
Castrate David Lereah now!!!!!!!!!
Don't forget... to bring on the lawsuits to any and everyone involved in the lending, financing, mortgaging,....yada yada
the ultimate flipper theme song
http://www.timvp.com/flipper.html
Like I said a long time ago. We won't be at crash stage until you see these things in the press:
1) The cover of Time magazine showing a family with one toddler holding the father's hand and one swaddling babe in the mother's arms.
2) The cover title saying "Housing Crash"
3) Somewhere in the text of the article "This is America. How could this happen here???"
Right? Am I good or what?
The only regret I have is that his is taking so long to happen, it gains more and more distance from Alan Greenspan's disastrous decision to keep the interest rates low for too long. He'll be able to weasel out of the blame.
Report finds residential real estate underperforms other assets
http://biz.yahoo.com/cbsm/070214/6c85ce03eabe46e6ac8c04bcfbb670d0.html?.v=1&.pf=retirement
This is how it starts! The press is starting to report the home is not a great way to invest. I will be looking to buy a few months after the Time magazine cover about the crash and the displaced families and the loss of equity.
Chicago area is at DENIAL level.
Flippers are still very active here ,especially in high end condos.
Pit
Why a crash of house prices back to the trend or lower is a certainty:
1) I think everyone now can accept as axiomatic that if given the opportunity to borrow money, many, many people will borrow the maximum. Making huge loans available to idiots and speculators is what drove up the housing prices.
2) A large enough percentage of these loans are going bad that they are going to be stopped.
3) Without those loans to support buyers, the prices affordable will return to what they were before the bubble. These are just the simple mechanics of the situation. As predictable as a line of dominos falling.
4) Adding on the negative sentiment which will ensue, prices will probably drop lower as "mortgage" becomes a dirty, Enronny type word.
QED.
I get AZ, FL and Vegas. But why the heck is NYC still on such a roll? Is it just a bluff or do they really have such good a hand? I'm hoping it's just all those slippery wall street bonuses floundering away for somewhere to sock their cash. $750K for a 1 bedroom? Somethings fishy.
Compassion is a trait that may have more value than honesty
"It can be like Seinfield but with RE agents."
Nah ... more like The Simpsons! Or Beavis and Butthead!!
Seriously though, it's hard to feel sorry for people who bought into the toxic loans. You look at a guy like the one in Vacaville in the video and feel bad for him, then you realize he knew what he was getting himself into. And I really don't feel sorry for people in places like Scottsdale who "bought" purely out of ego and vanity and to make themselves feel important.
Even the people who bought pre-bubble and plan to actually LIVE in their homes have to deal with higher property taxes and the blight of foreclosures in their once-stable neighborhood.
video: money as debt.
http://tinyurl.com/26clcj
NYC is on a roll same reason London is on a roll
MASSIVE BONUSES being paid to the financial community. Bankers have cleaned up with all this funny money and massive credit bubble. They get paid, and first thing they do (at the urging of their wives) is buy the biggest house they can. Regardless of the fundamentals or P/E ratio.
But you know how the story ends. Massive layoffs coming one day in NYC and London as the credit boom turns to bust.
And bankers turning in the keys to house they can no longer afford.
I placed a sucker bet ona pre-bubble home in 03, bought with 100% financing, NO DOC loan, with a fixed 30. And I won. Home prices shot up soon after and my home appreciated more than twice what I paid. It's all LUCK. Not financial wisdom like some pre-bubble buyers claim to be.
Yes Anonymous...compassion is a great trait...so is honesty.
Dishonesty and Greed are not good traits.
Our world is a POS because of dishonesty and greed.
Time to shake the sand out of the beachtowel.
And that line is "RED".
striker,
Thank you for the 101 fiat banking link.
iw
This video is only 45 minutes long.
http://tinyurl.com/26clcj
YOU OWE IT TO YOURSELF TO WATCH THIS VIDEO!
It explains everything, with visual aids, so that anyone can understand it. The 45 minutes you spend watching this video will help you to understand the world better than most college graduates today, who are clueless about the true nature of money.
VERY well done video!
I hate to say it but NYC is a dumpy place and wouldn't be the place for one to buy a great pad if one were a newly minted millionaire.
A place for an expensive bling-bling bachelor setup would be a city like Toronto/Montreal for North America or Amsterdam/Prague in Europe. Those places have all the locales for people to party, live high but in a clean/safe surrounding. So for $500K, one gets a luxury suite instead of a Manhattan closet, and thus, now has money to hire a limo driver for nice clubs, expensive restaurants, and other entertainment venues. Realize, in order for one to remain a partying millionaire, one has to earn a residual income on the money not spent on $1.5 million dollar condos. Somehow, these new bankers miss that point which is why when the PE bubble ends, a huge chunk of Manhattan will be in a recession.
outbid my cash offers with borrowed money and set the values and local taxes, did realy well,guess selling oneself into slavery and paying irrational? prices is smart money management, and taxing oneself out of a needed product with anticipations of profits and higher taxes is sensible? maybe redefine slavery risks!
westchester chick guess nyc will wind up in phx and tax me out again, hate to loose all those grapefruits, at least i eat in a bad year, got tomatoes? fed ex price to ship to high! can not get them to grow well in 120 degree heat, nor potatoes, read london in the blitz with plantings for food at buckingham palace? odd
have not taught the kiddies to spice up the leaves of westchester, to feed the chickens in the lands of rockerfellers and roosevelts, got martha stewarts designer chickens yet, for the mauraders walking from the city! depressing depression at market tops???
couda been a contender
couda diddled 12 million tourists, for only 750,000 one bedroom, try to get a permit to do anything in westchester!,pay the taxes and wait till hell freezes over, amen
wasted to much time being rich in westchester!
For those who like to party...
http://www.montrealnitelifetours.com/faqs/answer/4
I think any NYC banker who's able to pony up that $1.2 million for a useless condo with bad plumbing, should consider simply buying a 3+ bdrm bachelor pad in Montreal (less than $500K Canadian [or $425 USD]) for a non-stop partying atmosphere considering that it's a 1hr flight from Manhattan so one doesn't even have to return Sunday night but can flight into the office on Monday morning after enjoying a real weekend out.
I never understood the appeal of Manhattan's so-called posh social scene of bankers, media clowns, pseudo-intellectuals (Andy Warhol look-a-likes), and wannabes.
Hi,
Help me understand what happens to the borrowers who default.
Is the homedebtor screwed or is the party holding the mortgage screwed?
The homedebtor can walk away right? Sure their credit is shot, and they may lose their down which in many cases is $0...but that is the limit of their losses. So help me understand how they are screwed?
"Sure their credit is shot, and they may lose their down which in many cases is $0...but that is the limit of their losses. So help me understand how they are screwed?"
Very simple, when the house is sold during a foreclosure auction, the amount of money recovered is typically less than the mortgage so the bank can then charge the homedebtor the difference.
In some states, like Cali, the banks are required to eat the loss and in doing so, they issue a 1099 for the difference to the defaulted homedebtor. What that does is that the IRS is immediately informed that the person has earned a passive income and has to pay taxes on it or face going to jail.
Since the IRS is compassionate to those who come clean and fess up, they can simply apply additional withholdings to one's paycheck along with a slew of penalties until that the taxable portion on that difference is paid off. For instance, if the price paid on the home was $600K, it gets foreclosed on and then someone gets it for $400K in an auction, that's $200K of passive income or a tax bill of $50K which is not dismissable in a bankrupcy filing unless of course the homedebtor uses his credit cards (let's assume BoA and Citicorp are stupid and don't cancel his lines of credits) to pay it down and then file for bankrupcy later. In either case, it sucks.
"In some states, like Cali, the banks are required to eat the loss and in doing so, they issue a 1099 for the difference to the defaulted homedebtor. "
Thanks for the reply. I did not know that the banks could do this.
Post a Comment