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FIFTY YEAR home loan?!?

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Angry McPisseron View Drop Down
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    Posted: 20 Sep 2008 at 2:26pm

 
You mean they now have a FIFTY YEAR home loan?!?
I always thought that home loans topped out at 25 - maybe 30 years. ConfusedAngryConfused
Figure that the average home won't even last 50 years without requiring significant repairs, necessitating taking out a second morgage for repair money long before the 50- year loan comes to term. Cry

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kartek View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 01 Oct 2008 at 7:05pm
  All part of the New Economy, backed by those good paying $8.50/hr jobs that last 89 to 175 days.  Isn't it wonderful?    Now for enterprising idividuals they can take out a 50 year mortgage move in 3 friends and perhaps own part of something before retirement at age 72.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Jimbo Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 2:01am
So true, so true.
 
I remember when 6 & 7 year car loans were unheard of.
 
A car loan was 4 years. Period.
 
As far as how long houses last... it depends on what they're built out of & how well of course. My house is just over 50 years old & structurally sound. It's constructed of concrete block.
 
There are old wood frame houses around that are in the neighborhood of 100 y/o & older.
 
But they really built em back then. Some of these modern wood frame houses would be lucky to last 30 years.
 
Great news guys.... With the Air Hawk, flat balls are no longer a problem!!!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 2:45am
Oh! Gonna Date myself here I was in the workforce almost 8 years before the 48 month car loans were the rage,  36 month was pretty standard....  Then I remember gasoline at around 20 cents a gallon.... 
50 Year mortgage is a game, they don't ever expect you to pay it off nor to gain equity in the home either.. it a straight pass of $$$ from your pocket to theirs.
 
I think it is time for our legislator to stand up and really address some of the crap that is going on.  Don't you?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bobwilson1977 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 4:10pm
The Government won't ever address the real problem. The issue is affordability. There's a lot of talk that is accompanying this bailout that includes ways to help homeowners who are at risk of getting foreclosed upon. I have a problem with that because most of those who bought and are about to foreclose knew the risks and assumed appreciation would save them.

 They are not victims. I live out in California and make excellent money. I also rent. But I know a TON of people who bought homes anyway despite the fact that they didn't make enough to do so. There were an equal amount of people like me who didn't buy because we knew the bubble would pop and ultimately take prices down to levels that real wages would afford.

 But instead, every attempt is being made to prevent that from happening. They are trying to engineer a plan to start housing appreciation again. The reasoning, which is probably true, is that housing is basically the only thing the US economy makes money at. Banks make money off of debt. People these days are so used to thinking of houses merely as investments that unless they are appreciating, buyers stay away in droves. The US government needs to condition people to get back to thinking of homes as a place to live and not a place to flip.

 What the government refuses to admit is that housing prices are too high, even now. The prices must come down, and by a huge percentage. But if they said that, they wouldn't get voted back into office. But that is the problem. Home prices must be allowed to price itself per natural market forces and not via bailouts for the irresponsible.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Jimbo Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 8:38pm
I dunno.
 
I see the logic behind what they say they're trying to do which is to prevent bank loans from becoming to difficult to obtain which would in turn cut into sales of big ticket items like houses, cars, appliances, furniture, etc. which would then result in layoffs from these industries which would in turn affect restaurants, department stores, grocery stores resulting in even more layoffs & the next thing you know we'd have a really really serious problem on our hands on the scale of our entire economy collapsing.
 
Even if the govt. did allow market forces to bring housing prices down, by the time prices  dropped to affordable levels, there might not be enough people with jobs to afford them. And if there were, once a new round of home buying was spurred, the prices would just go back up to where they were before.
 
Tricky situation indeed.
 
 
 
Great news guys.... With the Air Hawk, flat balls are no longer a problem!!!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bobwilson1977 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 9:13pm
Well,
Another way to look at it is that while recessions are bad and cause people to lose jobs and inflation to go through the roof, they also create opportunities. If homes became more affordable, the  more people could afford to buy. The more people buy homes, the more industries they support along the way. As it is in California, home prices are far too high for the average person. In states like Florida, they're having a hard time keeping people from moving out and to cheaper states.

  The hard truth is that the US is in for a day of reckoning. The entire US economy has been fueled with debt, which was heavily borrowed from foreign companies. The economy has been based on selling houses since after the interest rates were dropped after 2001. Its time to pay the piper, let those prices fall, and return to a level that the average person can afford.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 11:12pm
Bob, if I truly believed that it was all market driven, I would agree.  But since I believe it was fueled by predatory practices and greed on wall street. I respectfully disagree. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bobwilson1977 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Oct 2008 at 11:23pm
"Predatory Lending" had very little to do with it. The fact is that the vast majority of those who bought knew exactly what they were getting themselves into. Trust me- I had many friends who bought using such loans. They knew full well the implications, which was that their house would have to appreciate enough within a certain amount of time if they were to be able to refinance and afford the payments. The lie was that "Housing only goes up", which anyone who takes even a peek at history can see in untrue.

 The fact is that the majority of those in foreclosure took a risk willingly. They knew full well the potential outcome, but bought anyway because we as a society are conditioned to believe that success is metered in material possessions: cars, houses, etc etc. You don't have to own a house to raise a family, get married, or anything else. But yet most people feel that they HAVE TO buy a house, and whether they can actually afford it, oh well.

 Nobody forced anyone to buy anything. Nobody had a gun placed to their head and told to "Sign!". Its no different than going to a car dealership, singing on the dotted line, and driving away. Its no different with either case. If George buys a Bentley and can't afford the payments, it gets repod. The same with houses. It is the responsibility of the consumer to make that decision. "Predatory Lending" suggests that people were forced to do something. They were not.

 Like I said, the prices are too high. I feel no pity for anyone who is losing a home they couldn't afford. Boo-hoo. I'm surrounded by houses I can't afford too. But I didn't buy any of them, and yet since I decided to wait and rent, I now have to pay for these people's mistakes? Screw that. Let the pieces fall and come to rest where they will.

 A lot has been said about how greedy banks and lending institutions were. Yes- I agree. But so was everyone else buying homes, flipping, investing, speculating, and assuming the homes were mere investments. Greed was everywhere and everyone involved deserves equal blame in my opinion. Its time for Americans to grow up and learn responsibility.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 12:04am
Predatory pratices means a group or stratification was singled out to exploit, and it a fact of bussiness in the U.S.   Please Please with all the responsibility the borrower had, what about the Responsibility of the lenders my friend to their bussiness, and stock holders.  The all entered a high risk venture and all are expecting someone else to bail them out.  The lenders suckered the buyers and the investors alike!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Tiz Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 12:45am
Originally posted by bobwilson1977 bobwilson1977 wrote:

Well,
Another way to look at it is that while recessions are bad and cause people to lose jobs and inflation to go through the roof, they also create opportunities. If homes became more affordable, the  more people could afford to buy. The more people buy homes, the more industries they support along the way. As it is in California, home prices are far too high for the average person. In states like Florida, they're having a hard time keeping people from moving out and to cheaper states. 

 
 
I've railed about this for years. It's sad when the trades people that build these homes, can't afford to buy one. Except maybe with a 50yr. loan. I really don't know how our children & grandchildren will be able to afford a house. House prices have way out paced wages in this country.
I used to ride by subdivisions that had a sign up, "homes starting in the low $150,000s"
Now it's "starting in the low $300,000s"
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bobwilson1977 Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 3:46pm
If you think seeing signs for the 300,000's is bad... out here where I live, a STARTER home- an old un-updated one at that is around $550,00-$600,000. That means that in order to get just a plain-jane 30 year fixed, you had better be making around 200,000 a year or have a $200,000 down payment. California has the worst housing situation.

 What irritates the hell out of me is that this new and improved bailout bill has new "sweeteners" in it that are in many ways aimed at putting current homeowners with risky loans into more affordable loans. Again- these people who about 99% of the time knew what they were getting into are totally getting bailed out with my tax dollars. That's a slap in the face to renters and responsible homeowners alike. Much has been said that we HAVE to restore housing. We HAVE to make sure that the prices stop falling. But like I said- the homes around where I live are still way, way too high. By stopping the fall in prices, we're more likely to arrive right back where we are right now, which is that the average person in most major metro areas- aka: NYC, LA, SF, Miami, and so on cannot afford homes at current prices.

 Current prices were only created via the usage of these creative lending products. Thus if we're to return to an era of more traditional lending based on actual incomes and so on, then either wages are going to have to go way up ( which they aren't since companies are laying people off) or prices will have to adjust to what current incomes will buy.

 Lastly, this morning Wells Fargo bought Wachovia. Wells Fargo didn't sell a lot of toxic mortgages. They're actually in good shape. Wachovia did. The same is with Bank Of America and their purchase of Merrill Lynch and Countrywide. In other words, the banking industry is just like any other. Companies compete, and sometimes get acquired when they are weak. Therefor the market absorbs the rot and eventually stabilizes. The point is that we do not need a bailout.

 The simple answer as I initially mentioned is that we need affordability. Return that and people will buy, banks will lend, and confidence will be restored.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 4:08pm
Bob, I don't disagree, that the market is artificially high, The push to make people believe that could become independant by playing with realestate (flipping) and to do that was to tie their equity in their primary residence for the capital to do so plays a big part here.  The causations of the problem run very deep, with wall street and corporate america at the heart.  Marketing is a predatory sport my friend, and it isn't the working folks who fuel it.  If we never control the causations we never solve the problem.  Bailing out the corporations  I don't believe is the answer, they shouldn't profit in any manner from their foolishness, but to blame exclusively the population is an oversimpification of the problem.  It wasn't  created in the rank and file of working folks, but the brunt of the problem is being forced upon them. 
Perhaps we need less federalism, who knows?  But historically when the government becomes the largest employer,  impolsion is soon to follow.  I cannot fathom how they expect to drive an economy with services and no products, every scenerio I have run ends in failure.  The difference is only in how long and not if.
 
We see nothing here at this time in history that has happened before, and until once again we find a champion to stop the buying and selling of votes in washington their answer will always be the same taxes.  Soon those making $8 to $10 and hour (quickly becoming the median wage) will be strapped with tax burden exceeding half of that, it isn't far if it isn't already beyond now.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Jimbo Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 4:09pm
Originally posted by kartek kartek wrote:

Predatory pratices means a group or stratification was singled out to exploit, and it a fact of bussiness in the U.S.   Please Please with all the responsibility the borrower had, what about the Responsibility of the lenders my friend to their bussiness, and stock holders.  The all entered a high risk venture and all are expecting someone else to bail them out.  The lenders suckered the buyers and the investors alike!
 
Exactly.
 
Predatory lending had everything to do with it & you'd be hard pressed to find a serious commentator on the subject saying otherwise. When an industry targets people to exploit & take advantage of their longing & naivete by dangling a desperately yearned for dream in front of their faces & telling them in all earnesty that they can attain it with relative ease knowing full well they're lying, that is defined as preying upon people.
 
Just like any other industry that glamorizes it's product via commercials, the banking industry made the dream of home ownership appear attainable to people who they knew couldn't afford it knowing that because of the way the laws were written, they could just package up the debt & sell it to someone else who would do the same on & on down the line.
 
There are emails that were exchanged between top banking industry officials describing the whole thing as a house of cards & one of them actually saying to another "Let's hope we're all rich & retired before this whole house of cards comes falling down."
 
They knew exactly what they were doing.
 
Great news guys.... With the Air Hawk, flat balls are no longer a problem!!!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bobwilson1977 Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 4:59pm
I have to respectfully disagree. Respectively because you both bring up good points. But if we're going to make a claim that the cause of the mess was predatory lending, then that suggests that the bulk of home buyers are ignorant and irresponsible. If that's the case, then perhaps we should blame the education system for failing to give people basic math skills. All mortgages come with terms sheets. The terms describe the nature of the mortgage, like when rates reset and what this means for the payment. Everyone who got a mortgage had an obligation to read and understand the documents. Buying a house is the biggest financial decision of your life. If you don't read the terms, then you have nobody to blame but yourself.

 Did people on Wall Street act irresponsibly? Yes. But at the same time, homeowners are just as much to blame for eagerly going along with it. This is no different than the dot-com where everyone from hair stylists to soccer moms bought stock and ultimately lost money on a big Ponzi scheme. A lot of lessons were learned then. The housing bubble was a fallout of the dot-com and careless interest rate slashing. Yet those who partook in it are getting bailed out.

 This leaves one fundamental ethical question. I'll use myself as an example. I make good money and save 50% of my income. I've been saving for years. We rent a house at 1/3rd the cost to currently buy. I am married too. We drive older paid off cars. We eat out only occasionally. We have retirement funds. We have savings. Yet I know many like us who bought houses. Some are having to sell. My best friend lost two houses to foreclosure. So the only difference is that we saved and rent because we know our financial limits. So how come me and my Wife aren't victims? We were priced out of the market. Yet we rent. So because we acted rationally, we have to pay for the mistakes of others? What about my bailout? Why not lower my rent?

 I agree that as much as I hate it, the bailout must pass. But that we arrived to this conclusion is indicative of a system that is corrupt, and that goes all the way down the line.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 5:21pm
Thank you Jimbo, simple to the point and points to the heart of the problem.
 
Pointing fingers isn't going to solve it, the bail out certainly won't, if it helps at all it will be short term.  It truly doesn't matter who is to blame or how much of the blame belongs where.  What matters is how are we going to fix it, how to consturct a remedy that allows a degree of fairness to all.   How it is going to be finaced so it doesn't bankrupt the entire county, or sadly if it is truly fixable at all.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bobwilson1977 Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 5:49pm
I agree, a fix is required. But first, let me back step. I am not in any way blaming specific groups. I blame everyone equally. It was a national mindset that debt is perfectly OK. That mindset of living beyond available finances is what landed us into trouble. To "Fix" the problem,we have to stop relying on credit. The avg US citizen has a negative savings rate. That has to stop.

 As far as the bailout, well logic tells me that getting 700 billion out of thin air will lead to rampant inflation. The treasury doesn't actually have 700 billion. Thus that means we're simply doing more of the same on a grand scale: Borrow from other countries and crank up the printing presses. That's what you call a " Fiat currency".
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kartek Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2008 at 8:34pm
I agree Bob, but bear in mind, Our grand old man in washington, supported that lousy life style or mindset.  UP to and including comments that the Chineese were a nation of savers and not consumers and that should be corrected!    Most folks did exactly what was expected of them, there is a lot of effort into social programming in this country.  I just fear, that chasing the blame we miss the true players, profiters, and criminal yet again.  The Blame game is smoke and mirrors.  There exist a fundamental, ethical crisis in the US that has infiltrated the majority of our population.  It has cultivated and fertilized well, and for the benefit of just a few.  Becareful, your an intelligent man, look for true causations, follow the money all the way home...
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