March 29, 2008

HomeDEBTORSHIP is not HomeOWNERSHIP


It is seriously driving me crazy how much I see and hear the word "homeowner" in the media, as if America was full of 'em.

It's not.

Very few people actually OWN their homes. It's the nation's dirty little secret. And with HELOCs, even people who used to truly own their homes are now indeed owned.

So HP salutes the true OWNERS. Yes, they still have to pay their property taxes or lose their homes. Yes, they still need to mind community or association regulations. So even OWNERS are not truly free.

But they're as close as they can come to that ideal.

Here's a funny piece from the past that reinforces my message: homeDEBTORSHIP is not homeOWNERSHIP. Enjoy.

Minneapolis, Minn. — Showing no ill effects from a weak economy, housing numbers released by the National Association of Realtors today showed that a record 75 million Americans are now participating in the mass self-delusion that they, and not their banks, actually own their homes.

"Home ownership is the fulfillment of the American (banking industry's) dream, and we are proud to announce that more Americans than ever have been able to (help lending institutions) achieve that dream," said NAR President Richard Schicter.

After putting 20 percent down on a $235,000 house yesterday morning, Minneapolis pediatric nurse Stephanie Doogan officially became the 75 millionth American to take part in the widely accepted fantasy.

"Ever since I was a little girl, I've wanted to (deceive myself into believing I could) be a homeowner," said Doogan, 35. "Well, look at me now! Me, little Stephanie Doogan, I actually have a place I can call 100 percent (minus 80 percent) my own!"

34 comments:

Anonymous said...

You never truly own your home as long as you must pay the local county mafia "property taxes" every year just to keep it.

You own your shoes, your TV, your refrigerator. The government doesnt require that you pay them a tribute every year in order to keep them.

They only require that in most localitys of your real estate.

Anonymous said...

Yippee! I'm a slave again!

Anonymous said...

Maybe someday people will figure out the newspeak in this Owellian world.

DOPES said...

HEY, I'M QUITE PROUD THAT ORANGE MAN OWNS MY (HIS) HOUSE AND NOT ME...

PAYMENTS I'M SUPPOSED TO MAKE, HIS PROBLEM...

PROPERTY TAXES, HIS PROBLEM...

LAWN CARE, HIS PROBLEM...

AND IF SOMETHING BREAKS, I'LL JUST MOVE NEXT DOOR INTO A WAMU HOUSE...

AND IF WE DON'T LIKE THAT ONE, WE'LL TAKE THE WELLS FARGO MODEL DOWN THE STREET...

I JUST HOPE THE FURNACE HOLDS OUT TILL MY BUSH REBATE CHECK GETS HERE. DON'T WANT PROBLEMS WITH MY ADDRESS...

DOPES!!!

Anonymous said...

So true Keith...The biggest part of the housing scam is the 30 year note. It is the widely accepted and most popular method to purchase a home but the interest is staggering if you ever really paid it off. I will tell my kids that if they cannot afford the payments on a home with a 15 year note...they need to keep looking until they find one with payments small enough that they can. Financing more than 15 years is a total ripoff and a way to keep the middle class paying the man.

eric in vegas said...

Whenever I discuss this with others I always tell them to stop making their mortgage payments then they'll find out who really owns the home.

DOPES said...

YOU'RE A HOMEOWNER RIGHT UP TILL THE POINT WHERE THE FORECLOSURE AD SAYS "BANK OWNED HOME! (CASA)"

DOPES!!!

Anonymous said...

Yep. I'm going to drive to work on Monday in my cardebtorship, use my edudebtorship to make money in my job, and the return in the evening to my homedebtorship.

Either call it like it is across the board or stfu.

Anonymous said...

Back in the 1960's people put 20% or more as a down payment, and paid off the home on the original loan.

There is a reason for this mindset, and we will find out soon enough what it is.

Anonymous said...

Whats wrong with this woman buying a home with 20% down? I bet it is a neighborhood none of you posters would consider living in. Whats wrong with paying off your mortgage in 30 years. Plenty of people have done that, it is the plan so you can have cheap housing when you are old. Why do you make fun of this woman, because you want this to crash so you can afford a 15 yr mortgage and have money left over to jet to an island for vacation.

True colors coming out here.

Anonymous said...

"True colors coming out here."

Hey Anon,

I noticed a couple of your "kharma" focused posts. You sound like someone who just noticed the enormous credit bubble that has brought this country within sight of a possible depression era. I'm guessing that you or someone close to you bought in and has now lost equity and/or is in forclosure... or is on the path to that.

Many of us have been following this bubble in it's infancy, through it's childhood and adolescence. We saw all this happening even as everyone around us was wrapped up in the greed-frenzy. We have earned the right to have a bit of attitude on this topic.

That attitude seems to keep catching your attention. We know very well that the upcoming recession/depression may hurt us innocent "bitter renters" personally too. It is not our wishing for this thing to blow up that is making it happen - it was inevitable - two sides of the same coin: ponzi-scheme-bubble-economy turns to recession/depression.

"Bitter renters" deserve to blow off some steam.

You are criticizing the wrong group for your troubles.

Anonymous said...

Anonymous Anonymous said...

Whats wrong with this woman buying a home with 20% down? I bet it is a neighborhood none of you posters would consider living in. Whats wrong with paying off your mortgage in 30 years. Plenty of people have done that, it is the plan so you can have cheap housing when you are old. Why do you make fun of this woman, because you want this to crash so you can afford a 15 yr mortgage and have money left over to jet to an island for vacation.

True colors coming out here.

March 29, 2008 3:41 PM<<<

what do you mean? who in their right mind would want to live next to this ghetto queen? not me buddy. I have done my fair share of it and I can tell you, you would not like it. she might not be the problem. it is the kinds of people that she allows to come around, that are the problem. the roots of this woman go all the way back to the projects. even though somehow she got to be a nurse(affirmative action), they can never completely leave what they used to be(and probably still are)...

Anonymous said...

Whats wrong with paying off your mortgage in 30 years?


Based on a 30 year note for 250,000 100% LTV @ 6.5%

Mortgage Summary:

Monthly Payment
$1,944.75 (No steak $$$ Left)


Total of 360 Payments:
$700,111.22 (That castle had better appreciate)

Total Interest Paid
$318,861.22 (Do you have this laying around?)

The only color here is common sense.

Any more questions?

Another order of fried chicken, please... said...

Looks like that Oprah in your picture ate too many Ribs. She will need extra large furniture...

AZwatch said...

anon said:
So true Keith...The biggest part of the housing scam is the 30 year note. It is the widely accepted and most popular method to purchase a home but the interest is staggering if you ever really paid it off. I will tell my kids that if they cannot afford the payments on a home with a 15 year note...they need to keep looking until they find one with payments small enough that they can. Financing more than 15 years is a total ripoff and a way to keep the middle class paying the man.
---------------------------------
BUBUT..BUT...my realtor "professional" said get the longest term mortgage possible so I can leverage into a bigger house and as an extra bonus I get a big tax deduction!
YIPEEE..I'm a homeowner with tax advantages all because of my smart selfless real estate broker who cares about me.

BABABAWAWAWAWA!!!

nfn.nln said...

"Why do you make fun of this woman, because you want this to crash so you can afford a 15 yr mortgage and have money left over to jet to an island for vacation."

Tough choice:
a) 15yr mortgage and vacations
b) 30yr mortgage and interest payments

What was I thinking. I'd be a fool not to take b. Thank you for showing me the light.

The better question is why do you want home prices to be inflated; so banks can lock us into unnecessary slavery? Are you an RE agent or mortgage broker???

"True colors coming out here." When did DOPES start posting anon?

You're an enabler. Instead of fighting against obvious injustice you actually try to reinforce it. You're like a battered wife trying to defend her husbands actions.

Enabling Battered Spouse: "But, he means well. He's really a good person at heart. He didn't mean to hurt me, I had it coming really, if you look at it."

Enabling Useful Idiot: "But, the bankers mean well. They're really decent people at heart. They don't mean to harm us, they're just trying to get us into a nice home, and if they didn't have 30yr mortgages some of us couldn't afford homes."

You're so stupid you actually pull the rest of society down with your crap by enabling and defending those who oppress us. Un-@&%#ing believable.

You may be anonymous here but someone out there knows you and the crap you spew because you probably do it in person too. If people ever take to the streets with pitch forks and baseball bats I'm sure someone has you in mind.

Anonymous said...

first of all, it's the greed of the banks that keep people paying on a house for 30 years that is ridiculous. It should not take take thirty years to pay off a house it is just a way to make sure people have debt for their entire working lives.

Secondly that is the purpose of inflation to make sure you never have enough extra disposable income in your pocket to pay off that debt early, keep claiming that the reason the price goes up is because more people want it so it cost more to produce because so many people are looking for it. Example people who stand in lines around a building for days to buy the latest Iphone price up greedmasters laughing. Include slick advertising in that. These people know how to make people feel inferior if they don't have the latest gadgets, newest computers, biggest TV, fanciest cars, showy houses, name brand clothes. Remember that song by the Temptations the Jones, bill collectors, tranquilizers, and getting deeper in debt. Make more people glad it's not the 1970's with pictures of cars lining up around the corner to buy a gallon of gas and be told that "The USA is running out of oil" a way to drive up gas prices. We haven't run out in 35 years.

Thirdly bankers know that no one can really save enough money to buy a house verses a used car and they have exploited that by offering more products that get people into debt that people can not get themselves out of as long as food and gas prices rise higher than incomes can tolerate. The people who are good at paying mortgages are the ones who are being screwed by these new products because they are the ones who really keep this economy afloat. Banks don't bless them they screw them even more making them like people who buy 500,000 dollar houses and pick strawberries all day getting paid by the load instead of the hour.

Fourthly I will never allow HP to make me feel guilty for buying a house the conventional way 20 percent down monthly payments and a 30 year debt because I was a renter and I hated landlords and the idea of how much control they have over my living ie: no pictures on walls, no dogs, no changing the color of walls, no guest, no broke down cars the economy doesn't leave me with enough money to fix, no new windows to replace the drafty ones or they will be happy if I pay for the replacements, people love to pass judgement and talk about other people so much that they demonize everyone while ignoring all their short comings that's your landlord and many HPers. Pass. Been through it, plenty, it is worth the money to only deal with the mortgage company who comes around once a month in the mail not the landlord who drives past the house once a week to make sure you are doing what the contract says or he will evict you and move in a relative hard on their luck. But then my mortgage is what people are paying for a 2 bedroom apartment so I can talk. I don't miss renting for a second and pray I never have to go back to it.

The cost of buying anything in the country is a crime and the bankers are so gleeful that it is because you can't even buy a stove without credit and that is the true problem no one can afford to buy anything without credit that is why people were pulling money out of their houses to be able to buy sofa's and chairs keeping people just being consumed by debt. It's the shareholders and investors and greedmasters who caused this mess and until people revolt (like me I don't drive unless I have to) it will never stop. People weren't born to work and make people incredibly wealthy who then turn down their noses at the people who put them there. I quit buying needless stuff because I realized I was making some Chisese rich while I stayed poor. I try not to call help centers because my phone call goes to INDIA why should I give them a job. I don't go to McDonalds because the workers are all Mexican's and I don't understand them their accents and I know they are illegal. Why should I legitimize them by buying the product and keeping them employed. I don't want the job but one day I may need it. When I find there are more spanish speaking people working in a particular place they loose my business because there are good americans that can do that same job too and probably applied and were turned down. Also Mexican's only want to hire Mexican's because they only want people who speak the language and don't feel that they can work with American english speaking people.

If you inquire all this joined to together makes a big mess that's what we have in our lives.

Anonymous said...

true colors you are a douchebag.

How much money are pediatric nurses making these days? That's what I thought. Simply put, unless she has some other source of income, this woman has absolutely no business buying a $235,000 house.

Only a few years ago $235,000 was considered a lot of money. Oh yeah, IT STILL IS!

And until recently, homes were typically paid off in 15 years, not 30!

Anonymous said...

This woman from Cleveland OH,is not a new homeowner at all. She just jingle mailed a New Century ARM reset and found a new Apt in Dayton.

RayNLA

6% of Zero said...

Anonymous said...
Whats wrong with this woman buying a home with 20% down? I bet it is a neighborhood none of you posters would consider living in. Whats wrong with paying off your mortgage in 30 years. Plenty of people have done that, it is the plan so you can have cheap housing when you are old. Why do you make fun of this woman, because you want this to crash so you can afford a 15 yr mortgage and have money left over to jet to an island for vacation.

True colors coming out here.

You really are an idiot. The blog is not making fun of the woman in the picture. The blog is saying that someone who owes hundreds of thousands of dollars against an assest does not own that asset until they pay off the note. With chronic refis and equity cashouts a person will never own the asset in question.

Think about what you say in yourr own post about us evil HPers wanting a housing crash (ie house prices resetting to a price based on reality and economic fundamentals) and 15 year mortgages being a realistic option. We're such bad bad people. Wouldn't the woman in the picture also benefit from that if she had not bought the NAR lies. She will still benefit when she walks away and she will help us all by helping the accerate the housing crash.

One question though-Have you sold any houses lately or is your part-time job at Starbucks takingg up too much of your time.

suzanne researched it... said...

Precision in vocabulary is critical in helping us communicate clearly. Keith,this is an extremely important delineation in language that needs to be repeated. We must overcome what we have been raised to believe, homedebtorship equals homeownership. We will slowly come to realize this as a nation and along the way we will see some extremely pissed off people learning this difference the hard way.

-SRI

Anonymous said...

Me, little Stephanie Doogan, I actually have a place I can call 100 percent (minus 80 percent) my own!"


yaaaaa she aint so little....

Anonymous said...

New development in San Diego,

Million dollar homes,

Taking 35% right off the top...

Now thats more like it!

Anonymous said...

.


"I own my home outright"!!


Yeah, Great, just miss your property tax payments and watch what happens!

.

Anonymous said...

.


Billionaire CEO from Oracle, Ellison,

just had his 200 million dollar 23 acre custom home re-appraised downward by to lessen the prop taxes by some $3 million a 60% tax break!

Landscaping cost alone are 4 mil a yr.

Poor Son of a Bitch!

Cry me a river!




.

Peter T said...

Keith, I agree with you completely, and I think that this fetish "homeownership" helped to bring real ownership down, see today's decreasing equity in homes. Ownership is good for giving security and responsible attitudes, and for preventing socialism. Maybe congress should support with its tax laws only ownership that has, at least, 20% equity. Below that, its now owner, only an aspiring one.

Anonymous said...

Total of 360 Payments:
$700,111.22 (That castle had better appreciate)

Total Interest Paid
$318,861.22 (Do you have this laying around?)

The only color here is common sense.

Any more questions?


You're right. Much smarter to rent for 30 years. Rent goes up every year, while your mortgage stays flat. Rent keeps up with inflation (at least), while your mortgage gets cheaper every year. Much better to pay $1,000/mo renting for 30 years to own jack shit than to work toward home ownership.

At a 4% increase per year, your rent will triple over the course of 30 years while the mortgage will remain the same. But hey, you get to live in a dump so I'm sure it's worth it!

Thanks for setting me straight.

Kevin Gunn said...

Wait a sec...

I'm not sure I'd want to get into the market yet as a first time homebuyer, but some people feel that the market is about to bottom. I think we have a bit further to go, BUT I admit I am the one that could be wrong.

This woman apparently saved up until she could put down 20%: that's $47,000. If home prices do have farther to fall she'll take a hit, but over the long haul (if she is in it for the long haul and doesn't try to "trade up" in 3-5 years) she'll likely come out ahead of those that choose to continue to rent.

Not every real estate purchase is stupid, although MANY still are. A renter is, for all intents and purposes, a debtor with an "interest-only loan". Every month they pay and pay, but they never build any equity.

Now -- don't get me wrong. Many real estate purchases are made by people expecting it to be a panacea. It's not.

If you can't put 20% down, it's not for you.

If you aren't staying put for a long time, it's not for you.

If your market is still grossly inflated, it's not for you.

However, there IS a place and a time and a way to buy real estate wisely.

In this case, I suspect she still paid a bit much, but if she stays put for the long haul after making a good down payment she'll come out ahead and won't be trying to pay rent out of her retirement income.

Folks -- while most Americans have made bad home purchases it doesn't mean that every purchase is without merit. Done with care and planning, real estate purchases can provide financial benefits.

Big down payments. Fixed terms. Fixed rates. Modest houses. You CAN find a house worth buying, and over that next year that will only be more true.

You can also make a stupid purchase, but you CAN make one that leaves you coming out ahead. You just have to work for it.

Peter T said...

On first glance, I didn't see that the buyer in this case had made a 20% downpayment - this case is therefore not a good example for the ridiculous promoted notion of homedebtorship, because this buyer is actually at the beginning of having real equity in her house. She did it right (except buying into a falling market), and behavior like hers should be promoted by the government through the tax laws, to increase security and responsibility among its citizens. If every buyer would have made a 20% downpayment like her, we wouldn't have had the bubble and not the housing bust today.

Anonymous said...

"...It is seriously driving me crazy how much I see and hear the word "homeowner" in the media, as if America was full of 'em...."

I feel the same way about the word loan. If I borrow $5 from you, then you don't have it to use because I have it. You are out the 5 until you get it back. That is a loan.

When the bank extends you credit of any amount, neither the bank nor any depositor is out any money. It is created simply by crediting your account. Think of it as check kiting by permission of the bank and the permission comes in return for agreeing to return the original amount plus interest over time. This is not a loan.

It's not a loan and the borrower has borrowed nothing so he is not a borrower.

Most people hate to hear this but I'll say it, if we were on the gold standard, and all debts were settled in gold and silver coin, we'd never have gotten into this mess. There. I said it.

Anonymous said...

So this woman's monthly payment of principal and interest, at 6% for 30 years, 20% down, at $235,000 is $1127.15. After thirty years, she has paid a total of $405,774. And, she also owns her home (finally!) free and clear.

To rent the same place (I live in Minneapolis and am a landlord), she would pay $1200 per month. If rent NEVER WENT UP, which is highly unlikely, she would pay a total of $432,000 over those thirty years. And she has absolutely no asset to show for it.

Most of you will accuse me of being a Realtor or something, but I seriously cannot figure out why she is making such a bad decision by buying this house. Do you truly believe that home prices will fall to zero???

Anonymous said...

“Anonymous Anonymous said...

So this woman's monthly payment of principal and interest, at 6% for 30 years, 20% down, at $235,000 is $1127.15. After thirty years, she has paid a total of $405,774. And, she also owns her home (finally!) free and clear.”

“You're right. Much smarter to rent for 30 years. Rent goes up every year, while your mortgage stays flat. Rent keeps up with inflation (at least), while your mortgage gets cheaper every year. Much better to pay $1,000/mo renting for 30 years to own jack shit than to work toward home ownership.

At a 4% increase per year, your rent will triple over the course of 30 years while the mortgage will remain the same. But hey, you get to live in a dump so I'm sure it's worth it!

Thanks for setting me straight.”

Wow you guys must be accountants! Comparing the price to rent versus a mortgage is always a brilliant way to justify homebedtorship. You dopes forgot to include taxes, maintenance, utilities, lawn mowers, closing costs, selling costs, all of which are affected by inflation. This could easily add up to 50% of the mortgage.

Anonymous said...

"yaaaaa she aint so little...."

She is what is now known as "fit built" or "plus size" or "thick lady".

We used to just call it "sloppy fat" or "corn fed" or "lard ass" but that is just so last millineum.

Anonymous said...

"Comparing the price to rent versus a mortgage is always a brilliant way to justify homebedtorship. You dopes forgot to include taxes, maintenance, utilities, lawn mowers, closing costs, selling costs, all of which are affected by inflation. This could easily add up to 50% of the mortgage."

I factored all that in, and with a mortgage I will come out:
A million behind at 50;
Break-even at 60;
A million ahead at 70;
Over 2 million ahead at 80;

I didn't go past 80; life expectancy is in the 70's.

Place your bets...my dad died at 53, he came out behind. My grandpa is 93, he's up by millions.