June 26, 2008

Bitter Renters who refused to gamble and buy overpriced homes with toxic loans, or Bubble Sitters who sold when things got nuts, tell your stories


Some newbies (and Chris Dodd) need to learn some lessons from folks here who made good decisions in their lives, and refused to gamble or buy overpriced homes at the peak...

Too bad couples like the ones in the video in the post below didn't understand. That if you can't afford it, don't buy it. Or don't buy investments that make no economic sense. And above all don't do business with Countrywide.

Check out this classic 2006 Bubble Sitting report (at the peak) from ABC News, with the REIC shill reporter who said renting or bubble sitting back then was a bad idea, because you "feed your dog in your home", and Charlie Gibson saying he was in favor of 'owning' (i.e. paying money to a bank) because of "psychic comfort". Here's the reporter's crib notes if you can't see the video.

43 comments:

Anonymous said...

I sold my house in San Francisco last year and did real well. It's so nice living without a mortgage and money in the bank. It doesn't hurt to run with a bubble for awhile, the key is getting out before the music stops...

rom said...

Look at all the idiots who live by her advice -- emotions first! No wonder we're going broke.

Figures Lie and Liars Figure... said...

In the 'Above All' channel, NEVER, EVER take what the MSM dispenses as the last word or even slightly accurate or truthful.

Figures Lie and Liars Figure...

Anonymous said...

And yet, you're going to reward Dodd by voting for his boy Obama. Hey, maybe Dodd will be your VP too, as he's still a top contender for that position.

That's the new America we live in. Dodd, Reid, Pelosi, the Dems, screw all those bitter renters and bubble sitters, but what do you do? You vote for their boy Obama.

The new one from the Democratic Congress is that they're pressuring law enforcement to deport only illegals that commit serious crimes. Illegals that are caught but don't have a record yet should be freed. These are the same illegals who depress American wages (especially for African Americans). The same illegals who use the expensive infrastructure, social services and healthcare, just to turn around and send 80% of their under the table-cash earnings back to their countries, instead of helping our economy or paying for what they use and abuse.

And what do you do? You vote for Obama and his Dems who want to keep on pumping millions of illegals in the country until the Colorado river dries for good.

There must be something wrong with you, people.

Anonymous said...

bought condo in LA in late 01, sold in oct 05. when i bought it thought i would keep this property forever and rent it out if i ever wanted to move. figured out it was an obvious bubble and decided to sell when morgage payments for new buyers were over 2x rent in the same building. (hoa was going up 10-20% a year too). almost all of the new buyers in the building for the year up until i sold were flippers (the kind that fix up) or realtors (who just sit on a property and resell without fixing anything)

was thinking about renting in the same building too, but decided to rent and move closer to the beach.
close to 250k in profit (tax free thanks to Bush tax breaks) since has grown to nearly 300k in mostly CDs and money market.

renting a nicer place now for a little less then what my mortgage payment was back in 01, money problems solved. thank you bubbles bennie.

Anonymous said...

Hey sheeple, jump in the rigged market:

(Bloomberg) -- Wall Street analysts who only weeks ago were telling investors to buy bank stocks because the worst of the credit crisis was over are now flip-flopping.

Goldman Sachs Group Inc. reversed a call on financial stocks, saying on June 23 that its May 5 recommendation was ``clearly wrong.'' Merrill Lynch & Co. on June 17 cut its rating on Lehman Brothers Holdings Inc. to ``neutral,'' just a week after telling clients to buy. Barron's, the financial newspaper, said this week that its February advice to buy American International Group Inc. was a ``mistake.''

what we have sowed said...

A subdued Angelo Mozilo got choked up at the last shareholder meeting for Countrywide Financial (CFC). Nearly 70% of Countrywide shareholders approved the firm's sale to Bank of America (BusinessWeek.com, 1/11/08) at the June 25 meeting. The deal—now valued at $2.8 billion—is expected to close July 1.

Mozilo, a butcher's son who co-founded Countrywide nearly 40 years ago, called the event "clearly an end of an era" and promised Bank of America (BAC) shareholders they would "reap the benefits of what we have sowed."

IS SHE SWAN'S MOTHER? said...

OLD BARBARA CORCORAN MUST HAVE GOT DUMPED BY ABC AFTER THE BUBBLE BIT HER IN THE ASS... SHE'S ROUTINELY A SHILL FOR NBC AND THE TODAY SHOW NOW...

ZANTAC CAN'T EVEN STOP YOU FROM THROWING UP A LITTLE IN YOUR MOUTH WHEN SHE COMES ON...

http://activerain.com/bcorcoran

"As founder of The Corcoran Group, Barbara used her ingenuity, quick wits, and solid instincts to turn a $1,000 loan into a multi-billion dollar business. Barbara sold the company for over $70 million in 2001."

DUMB BITCH SOLD HER RE BUSINESS BEFORE THE BIGGEST HOUSING BOOM IN HISTORY AND NOW SHE'S AN EXPERT ON WHEN TO BUY AND SELL HOUSES...

DOPES!!!

Anonymous said...

Great advice from Barbara Corcoran:

Paying a mortgage is a way of forced savings; it's less tempting than saving at a bank where you might be tempted to dip into the savings.

HAHAHAHAHA

What about HELOC and other types of second mortgages. Housing equity is one great scam: you either have to take an equity loan or sell your house to benefit from the equity!

say no to liar loans said...

Is bank of america really going to take on all their legal issues.We could have the whole country sueing countrywide.BOFA is makeing a bigtime mistake.

I wish I was a fly on the wall inside bofa headquarters.

michael said...

wife and i are closing on our one bedrom condo on july 14.

bought 2001 170K
sale price 2008 375k

at peak the 1 bedrom condos were selling for 425k.

other 1 bedrooms can be rented in the building now for $ 1,600 month.

commute to work for both wife and i from condo sold: 45 mins to an hour each way.

commute from 3 bedroom townhouse we are going to rent for $ 2,500 a month: 5 to 10 mins each way.

the 3 bedroom townhouse we are renting for $ 2,500 a month were being sold for 650k at peak.

we got out by the skin of our teeth.

we live in northern va btw. my personal feeling is that the collapse will hit the d.c. market as bad or even worse than miami, phoenix, or vegas.

it will just take d.c. a little longer to capitulate.

Reality said...

We need some real life stories of people who went through a foreclosure or short-sale, and now renting a place for much much less than what they were paying in mortgage.

SENATE FOA COMMITTEE said...

DOW DOWN 140!!!

OIL UP TO $138!!! (AGAIN)

GM SELLING AT $11.00!!!

ENJOY YOUR BAILOUT, ALL YOU MCMANSION FUKTARDS!!!

HOPE YOU LAST LONG ENOUGH TO GET IT!!!

DOPES!!!

Bob said...

All of you HP'ers are the ones who are bitter. The bailout is coming whether you like it or not. The White House is now saying "modify this bill and we won't veto it". This is only the beginning. More bailout bills are on the way. You folks love to gloat how smart you are and how dumb others are. Well the tables are now reversed. Any idiot in America who was prudent with their money and saved it will see it washed away by inflation and by the government using your tax dollars to help out people like me! The last laugh is had by me.

Mammoth said...

O.K., here’s one story:
We bought our house in 1997 with the assumption we’d live in it forever. After a few years we decided it would be nice to have some land, so we bought another house on 2½ acres in 2001.

Made the prudent decision to rent out the old house rather than sell it. We priced the rent low in order to get lots of applicants to choose from, and the tenants who we chose stayed in the house until July last year.

Being HP’ers, we knew that it was time to sell. Again we priced the house low in order to attract lots of prospective buyers. Got an offer within a week, and closed 3 weeks after putting it on the market.

As far as numbers go, the rent income came within $50 of the monthly mortgage payment. The selling price was $163,000 over what we purchased the house for, so it worked out well for us. But we don’t claim to be financial gurus – it was pure luck that we came out so far ahead on appreciation.

Took the money and paid off our residence, and it feels great to own free and clear. (Yes, we still have to pay taxes, insurance, house upkeep…)

But then in January we purchased the 2½ adjacent acres for $78K below the seller’s asking price, so once again we’re stuck with a mortgage.

There’s a 4-stall barn on the property and we rent it out to some horse-lovers for $500/mo., which covers most of the payment.

-Mammoth

Anonymous said...

Love the fact that their real estate "reporter" is also one of the largest REALTWHORES(tm) in NYC.

After 5 years of hearing how stupid I was to rent (after selling in '03, but not for much of a profit), the idiots have finally shut up in the past few months.

Have you sold the movie rights to this fascinating story? said...

Have you sold the movie rights to this fascinating story?

Mammoth said...
O.K., here’s one story:
We bought our house have some land, so we bought another house on 2½ acres in 2001.

Madepriced the rent low in order to in the house until July last year.the 2½ adjacent acres for $78K , a for $500/mo., which covers most of the payment.

-Mammoth

Gee, FASCINATING. Maybe you'll be on the cover of Forbes next month?

Mark in San Diego said...

I would gloat about selling near the peak, but the continuing financial tsunami will likely wipe out everyone including me. . .I am hedged in Euros and Swiss Francs, and US Treasuries (losing value by the moment), but I still have the majority of my holdings in USD bonds/stocks, etc. . .The Dodd bill will do NOTHING to help - subprime is almost over, and the new words are NegAm, HELOCS, Commercial loans, Credit Card loans, auto loans, and finally fixed 30 year mortgages. . .why pay on a 300K fixed mortgage when your house is work 200K or less. . .this meltdown has a long long way to go. . .I think we are at the "canned goods and gun" stage.

Anonymous said...

Summer 2005 : Bought in Metro Atlanta, GA for $194,000

Fall 2007 : Sold for $195,000

We couldn't be more thankful to have gotten out when we did. Recently in the same neighborhood, a home sold for $130,000 (it was an investor trying to get out, but that's still a massive price drop). Most homes for sale still sit idle. The neighborhood is an hour commute from downtown ATL, and rising fuel costs alone make the neighborhood less compelling. Add to the mix the MASSIVE amount of sitting, new inventory in the area and the daily-devaluing dollar, and you have quite a mess on your hands.

Anonymous said...

We've been renters through the bubble because the fundamentals didn't make sense. We weren't ready to buy anyway because we were relocating shortly. We've rented a half million dolllar home on five acres, and now a pad with full 180 degree view of the water on the beach, both for not much more than an 2 bed apartment.
We watched as friends our age bought houses. Two couples owe almost half a million on depreciating houses, one couple made 100k by forced sale with a partner and now rents, and another couple was relocated and continues to eat money every month on a house they cannot sell. Another couple owns and lives in a stick box shit hole in a house that has lost more value than we paid in a year of renting. Another couple is still in the same tiny condo which has not only depreciated, but they have to foot the bill of the people that don't pay dues.
I will continue to sit comfortably on my down payment, renting and letting the landlord pay the costs, while I rent for a lot less than his expenses, and a lot less than the cost of being indebted to a bank.
Just why should I buy again? Am I suppose to fun the boomers retirement, prop up the economy, loose a down payment in a month?

donald said...

you dumb bitter renters. You think that prices are going to crash, when in reality the bailout will keep them inflated and at the end of the day, you will have egg on your face.

Skaven said...

You don't have to be a renter to look smart here. I bought my house in 1999 for a fair-market price. I have paid it off over the past 8 years, and didn't take a single home equity loan or HELOC along the way.

Inflation sucks, during those 8 years I watched my neighbors pump inflation into the economy by borrowing money they could never pay back to redo their kitchen cabinets 2 or 5 times, etc, etc

Now they're all either deep in debt or trying to get out of their new-found debt traps, while I'm just making property tax payments on my house.

It's good to be me now, but it sure was tough to swallow during the past 7 years while they were driving around in home-equity paid Mercedes and Rolex watches.

Now it all comes crashing down. Screw gold, hello DEFLATION!

Carioca Canuck said...

I just moved into my new rental apartment last week.

http://www.rentrouleau.com/home.html

Wifey and I pay $1,550 a month for a 1,024 square foot 2 bedroom, with 2 ensuite bathrooms, walk in closets, fireplace, underground parking, a kitchen island with track lighting, insuite washer and dryer and more closet space than we I need, plus a huge balcony. It is next to the river, it's lined with mature trees, 2 blocks from our subway and about a 20 minute walk to downtown past all the cool boutiques and trendy restaurant and bars. The building is 3 years old.....and comps in the area are $500K +/-...which translates into about $4,000-4,500 a month to buy once it is all said and done.

I am soooo bitter.

Reality said...

bob,

The housing price is not coming back. You are stuck paying far higher mortgage than the rent on a comparable house would be, for years to come, with your minute principal payment eaten alive by slow depreciation. Higher inflation just means higher 10yr bond price, which means lower housing price.

This bailout plan doesn't save homeowners. It gives the frozen sheeple just enough excuse to stay where they are and keep making outsized payments to banks.

Frank@Scottsdale-Sucks.com said...

All of you HP'ers are the ones who are bitter. The bailout is coming whether you like it or not. The White House is now saying "modify this bill and we won't veto it". This is only the beginning. More bailout bills are on the way. You folks love to gloat how smart you are and how dumb others are. Well the tables are now reversed. Any idiot in America who was prudent with their money and saved it will see it washed away by inflation and by the government using your tax dollars to help out people like me! The last laugh is had by me.

Bob, you are the sucker, and here's why (and so are most people - my apologies to those who are offended by this):

There are actually 3 choices, not 2:

1. "Buy" a house and pay down your mortgage (not a bad idea pre-bubble)

2. Rent a house and put the difference into savings, stock market, or paper investments

3. Rent a house and put the difference into building a business

While most people are arguing over whether #1 or #2 was better, I chose #3 and came out WAY ahead. Here's why:

Around 2002-2003 I was getting pre-approved mortgage offers in the mail left and right but instead of putting my savings into a down payment, I realized I could invest it in a business and multiply it by thousands instead of the meek "investment" appeal of a house.

Fast-forward to today: I've been free of a job for over 5 years, I live completely free, my work is outsourced to companies who do it, rather than employees, so I don't have to babysit an office, I buy whatever I want without looking at the price, I live where I consider to be the most beautiful place in the US, I drive my dream car, and so on.

I now have multiple businesses, all of which keep accelerating despite the economy (and in some cases, because of it), my opportunities to make more money keep coming at me left and right, faster and faster, because that's the exponential effect.

I am living proof that Kiyosaki was right when he said your own "B-quadrant" business is the ultimate investment, and all other investments are for suckers by comparison.

So Bob, I don't give a sh*t about bailouts. I don't give a sh*t about home prices. I don't give a sh*t about gas prices. I am set for life, and if you analyze it, it all came down to that one single decision to not "buy" a house and to use the money to start a business instead.

What do you have? A mortgage and a job? No offense or disrespect intended here, but please, don't make yourself out to be smarter than everyone else, because you took a sucker bet. The last laugh is at you.

It's 10:30 am here in Newport Beach and I'm enjoying the coffee a friend in Costa Rica just sent me. After breakfast I'll go for a walk on the beach, then I'll head over to my office (where I go about 3 times a week, 4-5 hours per) and catch up on emails and working on my next book.

Have fun with your boss and your mortgage, Bob.

Lost Cause said...

I sold my house, thereby cutting my expenses in half.

Now I am in the process of dumping my car.

Anonymous said...

I bought a modest home in 1993, sold it at the top of the market in 2005, bubble-sat for a year and a half, realized my landlord was a royally f***ed buyer, bought a new home knowing full well I would not be able to sell it for what I bought it for, that the market would be dropping, dropping.

I'd rather "rent from a bank" than from an FB.

Milton K. said...

I bought a new home in Riverview, FL for $107K in January, 2001. It was a good starter home, 1250 sq. ft., 3 bedroom, 2 bath, 2 car garage in a 1000 home subdivision. Sold it right before the prices starting dropping for $204K to a military family. Huge thanks to my parents for convincing me to hold on to it, otherwise I would've sold it earlier and barely made a profit. Glad my ex-wife did a quick claim deed and signed the house over to me!

Anonymous said...

When you pay a small amount in rent, you can buy a SH*TLOAD of GOLD, SILVER, OIL and, yes, FERTILIZER!

Reality said...

oops, typo. Meant to say, higher inflation just means higher 10yr bond INTEREST (not price), therefore higher mortgage interest, and lower house price.

Plug in 15% interest rate to a mortgage caculator, and see how low the house price has to be for someone like yourself to afford it.

Hom many Ameros is that? said...

Reality said...
bob,
This bailout plan doesn't save homeowners. It gives the frozen sheeple just enough excuse to stay where they are and keep making outsized payments to banks.
June 26, 2008 6:13 PM.

Correct. Thank you. Priceless.

New World Order Strikes Again!

Anonymous said...

In 1997 I bought a house for $100K.

I sold it in 2005 for $500K.

Quit my job, hitchiked to a warm place where I can sleep outside, don't drive, don't have any bills. I figure I spend $5000 a year. I am set for life.

All you have to do is stay one step ahead of the cops. People don't understand what living free really means. Any bill, any obligation, is a shackle.

Most of you pay taxes...thanks for the library with the A/C and the free Internet connection! It's my main hangout and saves me a few grand a year.

Anonymous said...

Reality YOU OUR SOOOOOOOO RIGHT. We sold our home in 2005 at the top of the market .And have been renting as prices have dropped we been living rent free when you look at how far prices have dropped.Not only do we have no mortgage but we also paided no intrest on a loan for the mortgage. IMHO when rates go up that will be the wave to wash out this mess .

Anonymous said...

The 3 biggest lies ever created to screw the sheeple:

1. Buying a home is the best investment.

2. You should blindly fund your 401(k) to the max.

3. Don't you worry honey, I'll put just the shaft in.

John Quimby said...

I tried to buy a duplex for years on the east coast but it was always cheaper to rent. Finally I moved to Tulsa where there was never a bubble ,just steady 2-4% appreciation and bought a foreclosed home off Wells Fargo for less than 50% of the previous sales price and about 40% of what related homes are selling for. Lucky for me Wells Fargo is trying so hard to move houses they are discounting areas of the country where the value is still high. Monthly payment on a 15 year note $424 - Monthly rental income $1200. Thank you housing bubble.

Debt free is true freedom said...

I moved back to Los Angeles in in 2001 after living in Arizona for college and generally bumming around. Almost took a job with a mortgage company. Decided I did not like office work and started working for a buddy who was an electrical contractor.

Looked at house prices and felt like a loser because my options were either rent and live where I want to live or buy and live in BFE. I decided to rent.

Started wondering why a man with a good trade could not buy a house in the neighborhoods like I grew up in, a modest neighborhood in suburban LA, where 30 or so years ago a tradesman like my dad could afford a house AND a stay at home wife to raise his kids.

Then I found HousingPANIC. It started making sense or rather I started to realize that none of it made sense.

Now it is all falling apart and I am renting a house in the neighborhood I want to live in for less than half of what it would cost if I had bought a similar house three years ago when I moved in.

Maybe not as free as Frank but speaking as another escapee from the Grand Canyon State with no mortgage, no car payment and no credit cards; life is so much sweeter when you are not a debtslave.

HB Slackin Trailer Dweller said...

Ok here's my story I'm not sure if Frank from Scottsdale approves..Anyways I bought my first home in Oceanside, CA 1999 at age 31 Im now 40. It was a 1411 sq ft 4/2 detached mid 80's stucco box complete with HOA rules home for 168K. I earned 4500/mo as a web designer at the time. I put a hot tub in the backyard a typical bachelor party house. So I had usually 2 roomies during the time I lived there paying me 500-600/mo. My mortgage was 1500/mo total with taxes and ins. So I started reading HOUSING PANIC from the beginning must of been 2004 and started preaching the bubble to everyone....no one listened to me and combined with my anti bush talk they thought I was nut and told me to lay off the bong.I told them housing will really hurt the economy and encouraged people to cash out and rent. So by April 2005 I put my home on the market after my last roomate got married and bought a 1900 sq ft new construction home ON A WAITING LIST for 320K by order of his new wife aka golddigger.By then I listed my home for 495K. girlfriend and I staged home and held open houses. I paid a 350 fee to list on MLS, I made my own flyers. Only thing that sucked was I had to smoke my pot in the backyard:( So by that time more inventory was coming on the market and taking longer to sell. I was really paranoid that the home lookers would sdtart reading housingpanic. So after some bogus lookiloos a 25 yo newlywed couple with a new baby were in awe over my black granite and stainless steel appliances and hot tub. They begged me to accept there offer which was 10K over to incluse there closing costs which I wouldnt pay.
So I sold it took all the equity minus the 20K heloc I used for upgrades and found a new "bachelor pad" to rent. I did that for awhile then got tired of the roomies and in 2007 BOUGHT A MOBILE HOME RIGHT AT THE BEACH IN OC for 75K 1400 sq ft reduced from 130K. A really nice one. So since the 75K check was no problem and I have instant equity in it. I do have to pay space rent of 1450/mo but the interest on the housing bubble loot pays it, and I rent out a room for 900/mo since its beachfront real easy to keep rented. Other then that I bought a brand new Prius in 2007 (I saw the gas hike coming)Anyways I work from home as a web designer/artist i work when I want and surf alot. Im in the best shape of my life do to al;l the free time I have to play. Im just sitting on the money and I focus on my freelance business which makes me plenty of income to live comfortably.

Thanks a million HP If I wouldnt have sold Id be stuck in foreclosureville with a couple chumps and in a cubicle!

Mike Hunt said...

How about a new term, "Bitter Owner"?

I refused to buy in overpriced NJ from 2003 - 2006 when I was there... reason, I was single and it didn't make sense to deal with the huge overconsumption of a house.

So I rented and saved and bought a condo overseas in cash in 2005... it was all my savings with the exception of my stock retirement portfolio. Bought the place for about $175K USD... put another $10K into it to upgrade the condo- it was a brand new unit so this covered appliances and misc stuff. Since then the dollar has dropped 30% and the place has appreciated 20%. But the big benefit is it's so low cost to live here. There are no property taxes in Thailand, monthly condo fees are about $110, electricity, internet, cable and water is about $200. The place has a gym, pool, free parking with security underground and is kept very clean by the team of staff working here. So my housing expenses are about $310 per month, leaving money aside for fun, food and travelling. I've lost my job a few months ago but am in great shape from a cash reserve perspective. Now I'm getting back into shape and looking for another opportunity.

Low housing with cheap overseas living is the way to go. My sister lives in California and tells me about the excessive taxes, etc. I like the area but it's so damn unaffordable.

-Mike

Anonymous said...

Bought a townhouse 2004 in NJ, and sold in 2005. Made 20% gain.

We sold not only because of the bubble, but we didnt like NJ, and wanted to live in an Urban environment (Manhattan).

We were chided by our friends/family because we were not only 1) "Throwing" away our money on rent but also 2) Selling too early and getting taxed heavily. "Why dont you just wait it out a couple years, so you dont have to pay the tax" they would say.

Now, we are happy renters. We live in NYC, and we locked in a nice gain, and we were able to get some conservative gains in the mix of CD's, TIPS, MUNIS i invested the money in.

As for the townhouse now? Simliar ones are selling at a 10-15% discount of our ORIGINAL PURCHACE PRICE!

And to our friends and family, i offer my retorts

1) Throwing away our money? Call it what you want, but we are getting a roof over our heads in return. We're not taking the cash, and burning it. What about your housing maintenance? Taxes? Gas? BTW, you leased your mercedes and audis, aren't you "throwing" your money away as well?
2) Selling too early? Nope, we sold at the right time, and we are much happier.

Anonymous said...

I sold my house in L.A. in August 2006, which was just short of the top of the boom. House had appreciated 30 percent, and I pocketed the difference, after owning the home just 2 1/2 years. I miss my house, but I'll buy another on an uptick, after the bottom comes in 2010.

I know three real estate agents -- in fact, they are the ONLY real estate agents I know! -- and each lost their home to foreclosure. Of course, before all that happened, they had been trying to get me to buy again after I sold my house and moved to San Diego in 2006, but the market here was already beginning to tank and, wisely, I became a renter. They had poo-pood my predictions of panic in the housing market.

Anonymous said...

"...paided no intrest..."

LOL! Typical HP-spew. Could there be another reason all your friends laugh at you other than the fact that you rent?

Anonymous said...

Anon June 27, 2008 6:34 PM:

10-15% off the original purchase price in 3 years and you have been paying rent ever since? So you've paid, what, 30 grand and are congratulating yourself on not losing 20, 30 grand? Plus you could have paid off a few grand on the principal, taking your potential loss down a couple/few points?

Wizardry at work, here...

Reailty said...

Anon 10:17 PM,

"10-15% off the original purchase price in 3 years and you have been paying rent ever since? So you've paid, what, 30 grand and are congratulating yourself on not losing 20, 30 grand? Plus you could have paid off a few grand on the principal, taking your potential loss down a couple/few points?"

You are forgetting interest payment and taxes. In a typical market on either coast, a $600k house in 2004 rented/rents for about $2000/mo. Compared to that, the homedebtor would face $3000/mo in interest payment alone, anoter $1000/mo at least for taxes, insurance and maintenance. So that's $4000/mo renting the house from the town and renting the money from the bank . . . compared to $2000/mo renting from the landlord, that's $72,000 additional cost over three years, on top of the $20-30k capital loss.


That's why paying more than rent in interest expense + taxes would only make sense in a rapidly appreciating market, in other words a heavily leveraged gamble that the house would keep appreciating.