March 30, 2008

More on homeowners versus homedebtors...


Agreeing to pay a lender interest for the next 30 years, or 10,950 days, in order to live in a home that is not yours does not make you a homeowner. It makes you a homedebtor.

Homeowners are not losing their homes. They weren't their homes in the first place.

Homeowners are not in troube.

Homeowners don't need to be bailed out.

Homeowners don't have toxic loans.

Homeowners were not victimized by predatory lenders.

Putting little or nothing down and signing up for a loan does not make you a homeowner. It did not give you special status versus renters. It did not elevate you to a new class or socioeconomic status. It did not mean you have arrived.

HOMEDEBTORSHIP IS NOT HOMEOWNERSHIP.

18 comments:

Anonymous said...

Renters rule

Anonymous said...

Comrade Keith, your stance does not help the state. You don't want the terrorists to win, do you?

Anonymous said...

10,950 days really puts into perspective just how excruciatingly long that prison...I mean "debt sentence" is.

No weekends off and I'll bet the conjugal visits will be getting rare.

Anonymous said...

To all the flippers out there, who peruse this blog, who want a bailout from my taxpayer money, I have just one thing to say to you ...


FU%K YOU, YOU PIECE OF SHIT!!!!!

AND GO TO HELL, THATS YOUR NEW PIECE OF REAL ESTATE!!!!!!!!!!!!!

Anonymous said...

I'll just play Devil's advocate here. If you have a fixed mortgage payment for 30 years, but renting steadily increases with inflation, bad government/monetary policy (which is a certain just like death and taxes), etc. At some point, the rental payment can become more than the fixed 30 year payment. Not to mention the 5% historical long-term appreciation you get with being being a home debtor.

Wells said...

I would argue that instead of just saying "homeowner" people should prefix that word with the percentage of equity that a person has. For instance someone who put down 20% on a house is now a "20% homeowner", Someone with a home and no mortgage is a "100% homeowner" Someone in a negative amortizing mortgage might be a "-15% homeowner"

Afterthought said...

But the alternative is self-conscious virtue, Keith!

We can't have that silly!!!!

We're Americans!!!!!!

Thinking is not required OR DESIRED here!!!!!

Anonymous said...

I owe money for a school loan. Does that mean I don't actually own my education and it can be taken back by the lender?

If you buy a house, even with 100% financed, it is still your house to do anything you want with (legal restrictions of course) because the bank loaned you the money and you paid that money for the house. If you fail to make payments to the lender, then the lender will end up canceling your loan and calling for repayment. If you cannot repay, you've already agreed to put the house up for collateral. Calling a homeowner a homedebtor simply says more about you than the person you're making a sad attempt to mock.

That being said, too many homeowners don't actually seem to understand what that means and the responsibilities they're signing up for and consequences if they cannot live up to those responsibilities for whatever reason.

Gabor said...

I'll just play Devil's advocate here. If you have a fixed mortgage payment for 30 years, but renting steadily increases with inflation, bad government/monetary policy (which is a certain just like death and taxes), etc. At some point, the rental payment can become more than the fixed 30 year payment. Not to mention the 5% historical long-term appreciation you get with being being a home debtor.
-------------------------------
There is no 5% appreciation. Appreciation is negative, it has to be. Homes get older and crappier, not better over time. Compare a house purchased 50 years ago to the price of gold 50 years ago. They seem to rise at the same rate. How could a home get more valuable (on average) just by sitting there? It is not the home that gets more valuable, but currency that gets devalued. Yes it's true that after 30 years my rent will be much more than your mortgage, but you will have replaced the roof twice, your property tax keeps going up, your cost of repairs and maintenance keeps going up. Everything goes up except your mortgage. The renter has no worries and can move anytime he wants to. I guess I would say that if you have a family and want to live there for at least 10 years then buy it, otherwise rent.

eric in vegas said...

"I owe money for a school loan. Does that mean I don't actually own my education and it can be taken back by the lender?"

Terrible analogy. The lender can't go inside your brain and remove everything you learned in school, but they can kick you out of the house if you stop paying the mortgage.

YoungExec2B said...

How to not stay a home"debtor" for your whole life:

1) Save up some money before hand. Like 20-30% down or more.

2) Do not sign a mortgage for more than 25 years. 40 year mortgages, wtf?

3) When the bank tells you you can afford payments of X, what you can really afford is payments of X - 40%. Only purchase a house that has mortgage payments of 40% less than you can afford.

4) Take that 40% you're not paying on your mortgage and save it. This becomes your renovation/repair/extra payment fund.

I have applied these principles and have paid off 9 years worth of a 25-year mortgage in a shade under 3 years. I've also waterproofed my basement, installed an underground sprinkler system and a high-end water filter, and landscaped my front yard.

Owning a house doesn't have to be a path to financial ruin - that right is reserved to people who buy houses they can't afford.

There's no shame in renting. As Keith is showing, in many (or most) places, it makes more sense to rent than to buy. It's simple, don't buy things you can't afford. Flushing money down the toilet to achieve a certain social status is just plain dumb.

Anonymous said...

ot yours does not make you a homeowner. It makes you a homedebtor.

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Keith,

if you are going to nit pick terminology they should be called home co-owners, at least those who have equity (via any number of means).

Anonymous said...

Tell that to Obama and his cultists. They are criticizing McCain for not wanting to bail out every flipper, speculator and bank that participated in the ponzi scheme. Free healthcare for druggies, free college so bums can stay in school for 8 years on the taxpayer dime. Anyone who believes he will pull US troops out of Iraq in his first year is a moron.

Anonymous said...

Lots of problems with your rosy view:

1.If you have a fixed mortgage payment for 30 years, but renting steadily increases with inflation, bad government/monetary policy (which is a certain just like death and taxes), etc.

Because of bad gov/monetary policy, you need to be mobile and not anchored to a cancer mortgage that won't allow you to pursue other job opportunities in other states, cities, or even abroad. Not to mention that bad gov increases property taxes (ask Floridians).

2. Natural disasters, that skyrocket housing costs, have been hammering homedebtors. From floods in the Mideast to wild fires in the West, and many hurricanes and tornadoes in between. Do you want to take your chances with a 30 year iron ball attached to your ankle?

3. Not to mention the 5% historical long-term appreciation you get with being being a home debtor.

Returns have been less than 1% per year. Not sure where you got that 5% from.

Get a Refund, doofus... said...

"Anonymous said...
I owe money for a school loan. Does that mean I don't actually own my education and it can be taken back by the lender?"

At the very least you should demand a refund on that 'education' you have dumbell. Or better yet, come th San Francisco and work for Mayor 'any twosome'Newsome.

With that caliber of intelectual frepower you will fit right in nicely...

Lover of Sheeple said...

Keith,

I don't get it. First you praise Osama's speech - it was good but he was clearly all for the homeowner- then you put this thread up. Can you put some some commentary together that ties these 2 different ideas together?

Sean said...

I owe money for a school loan. Does that mean I don't actually own my education and it can be taken back by the lender?

If you have a school loan (and I'm right there with you), then surely you had to do an exit session upon graduation that spelled out the repayment terms. Unlike most other types of loans, which can be dismissed through bankruptcy, student loans can not. There are only five ways you can get out of paying that loan back, and one of them is death. Why? Because unlike physical possessions, the bank can't send goons to repossess your brain.

Don't get me started on the clusterfsck that is the student loan scam in America. It pisses me off almost as much as the housing scam. Both were designed to sell the American people into debt slavery.

Anonymous said...

This topic is an exaggeration. Debt, such as a 30 year mortgage, can be useful if well managed. Buying an overpriced house now would not be good management, but in other cases it can be.