Home › Forums › Financial Markets/Economics › Free bank living – the HELOC replacement
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Huckleberry.
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June 1, 2010 at 9:02 PM #559211June 1, 2010 at 9:12 PM #558253
scaredyclassic
ParticipantWhy oh why is the govt not taxing forgiveness of indebtedness income? Does that provision expire soon?
June 1, 2010 at 9:12 PM #558352ParticipantWhy oh why is the govt not taxing forgiveness of indebtedness income? Does that provision expire soon?
June 1, 2010 at 9:12 PM #558847ParticipantWhy oh why is the govt not taxing forgiveness of indebtedness income? Does that provision expire soon?
June 1, 2010 at 9:12 PM #558948ParticipantWhy oh why is the govt not taxing forgiveness of indebtedness income? Does that provision expire soon?
June 1, 2010 at 9:12 PM #559231ParticipantWhy oh why is the govt not taxing forgiveness of indebtedness income? Does that provision expire soon?
June 1, 2010 at 9:21 PM #558258jpinpb
Participant[quote=briansd1]
We need to encourage people to consume to keep the wheels of commerce turning.[/quote]Yes. Sadly we are known as the nation of consumers. Must be some new economy not taught in schools. A nation that survives on tax-based consumerism. We used to be a country that manufactured, created, invented, etc. Now we just buy things.
In any case, as we’ve discussed, everyone not paying is indirectly helping the economy. And IMO that is a version of bailout for the homeowners. Probably the best stimulus the banks/government/tax payers can provide.
June 1, 2010 at 9:21 PM #558357Participant[quote=briansd1]
We need to encourage people to consume to keep the wheels of commerce turning.[/quote]Yes. Sadly we are known as the nation of consumers. Must be some new economy not taught in schools. A nation that survives on tax-based consumerism. We used to be a country that manufactured, created, invented, etc. Now we just buy things.
In any case, as we’ve discussed, everyone not paying is indirectly helping the economy. And IMO that is a version of bailout for the homeowners. Probably the best stimulus the banks/government/tax payers can provide.
June 1, 2010 at 9:21 PM #558852Participant[quote=briansd1]
We need to encourage people to consume to keep the wheels of commerce turning.[/quote]Yes. Sadly we are known as the nation of consumers. Must be some new economy not taught in schools. A nation that survives on tax-based consumerism. We used to be a country that manufactured, created, invented, etc. Now we just buy things.
In any case, as we’ve discussed, everyone not paying is indirectly helping the economy. And IMO that is a version of bailout for the homeowners. Probably the best stimulus the banks/government/tax payers can provide.
June 1, 2010 at 9:21 PM #558953Participant[quote=briansd1]
We need to encourage people to consume to keep the wheels of commerce turning.[/quote]Yes. Sadly we are known as the nation of consumers. Must be some new economy not taught in schools. A nation that survives on tax-based consumerism. We used to be a country that manufactured, created, invented, etc. Now we just buy things.
In any case, as we’ve discussed, everyone not paying is indirectly helping the economy. And IMO that is a version of bailout for the homeowners. Probably the best stimulus the banks/government/tax payers can provide.
June 1, 2010 at 9:21 PM #559236Participant[quote=briansd1]
We need to encourage people to consume to keep the wheels of commerce turning.[/quote]Yes. Sadly we are known as the nation of consumers. Must be some new economy not taught in schools. A nation that survives on tax-based consumerism. We used to be a country that manufactured, created, invented, etc. Now we just buy things.
In any case, as we’ve discussed, everyone not paying is indirectly helping the economy. And IMO that is a version of bailout for the homeowners. Probably the best stimulus the banks/government/tax payers can provide.
June 2, 2010 at 1:37 AM #558345CA renter
Participant[quote=jpinpb][quote=briansd1]
I think that being $50,000 underwater it the tipping point that make homeowners want to walk.[/quote]I think depending on property and location, I can see people holding on if they were 50k underwater. You know, if you were in a condo conversion and you were 50k under, then yes, I can see them walking. If you were in a SFH in a desired area, I can see people clinging if only 50k upside-down.
But at a certain point, the tendency is to stop paying. That is the trend. Sheeple lined up to buy w/no money down and then take HELOCs. They seem to be doing the same again. Whatever it takes, they have a “lifestyle” to maintain.
This behavior is basically being encouraged.[/quote]
Personally, I don’t think it has anything to do with being underwater, but rather the fact that many of these people were never really able to comfortably afford to pay the mortgages/debts they agreed to without the HELOC/cash-out refis that enabled them to pay off debt with more debt (resulting in the spiraling debt/credit bubble we’ve experienced).
As soon as prices stopped rising — even if they were just flat — the game was over. So many people were relying on their “home equity” to fund their lifestyles, there was no way to avoid an ugly ending to the credit bubble.
These people are being foreclosed on because they have *no other option.* People have been encouraged to take on so much debt (because it pleases our masters who earn interest and fees on all that debt!), there was no buffer left. They can’t access any more home equity-based credit, and they can’t sell for a profit/break-even, so they have no choice but to take the free ride and accept the foreclosure. They are being perfectly rational.
It would be nice to think that the govt/lenders will learn from this, but I highly doubt it. Based on all their rhetoric, they are still focused on propping up prices to unaffordable levels (and forcing us deeper in debt) rather than letting prices sink to levels where people can comfortably afford their homes…and have plenty of money left over to allocate to more important and productive endeavours.
Yes, the FB’s behavior has been encouraged all along.
June 2, 2010 at 1:37 AM #558447Participant[quote=jpinpb][quote=briansd1]
I think that being $50,000 underwater it the tipping point that make homeowners want to walk.[/quote]I think depending on property and location, I can see people holding on if they were 50k underwater. You know, if you were in a condo conversion and you were 50k under, then yes, I can see them walking. If you were in a SFH in a desired area, I can see people clinging if only 50k upside-down.
But at a certain point, the tendency is to stop paying. That is the trend. Sheeple lined up to buy w/no money down and then take HELOCs. They seem to be doing the same again. Whatever it takes, they have a “lifestyle” to maintain.
This behavior is basically being encouraged.[/quote]
Personally, I don’t think it has anything to do with being underwater, but rather the fact that many of these people were never really able to comfortably afford to pay the mortgages/debts they agreed to without the HELOC/cash-out refis that enabled them to pay off debt with more debt (resulting in the spiraling debt/credit bubble we’ve experienced).
As soon as prices stopped rising — even if they were just flat — the game was over. So many people were relying on their “home equity” to fund their lifestyles, there was no way to avoid an ugly ending to the credit bubble.
These people are being foreclosed on because they have *no other option.* People have been encouraged to take on so much debt (because it pleases our masters who earn interest and fees on all that debt!), there was no buffer left. They can’t access any more home equity-based credit, and they can’t sell for a profit/break-even, so they have no choice but to take the free ride and accept the foreclosure. They are being perfectly rational.
It would be nice to think that the govt/lenders will learn from this, but I highly doubt it. Based on all their rhetoric, they are still focused on propping up prices to unaffordable levels (and forcing us deeper in debt) rather than letting prices sink to levels where people can comfortably afford their homes…and have plenty of money left over to allocate to more important and productive endeavours.
Yes, the FB’s behavior has been encouraged all along.
June 2, 2010 at 1:37 AM #558941Participant[quote=jpinpb][quote=briansd1]
I think that being $50,000 underwater it the tipping point that make homeowners want to walk.[/quote]I think depending on property and location, I can see people holding on if they were 50k underwater. You know, if you were in a condo conversion and you were 50k under, then yes, I can see them walking. If you were in a SFH in a desired area, I can see people clinging if only 50k upside-down.
But at a certain point, the tendency is to stop paying. That is the trend. Sheeple lined up to buy w/no money down and then take HELOCs. They seem to be doing the same again. Whatever it takes, they have a “lifestyle” to maintain.
This behavior is basically being encouraged.[/quote]
Personally, I don’t think it has anything to do with being underwater, but rather the fact that many of these people were never really able to comfortably afford to pay the mortgages/debts they agreed to without the HELOC/cash-out refis that enabled them to pay off debt with more debt (resulting in the spiraling debt/credit bubble we’ve experienced).
As soon as prices stopped rising — even if they were just flat — the game was over. So many people were relying on their “home equity” to fund their lifestyles, there was no way to avoid an ugly ending to the credit bubble.
These people are being foreclosed on because they have *no other option.* People have been encouraged to take on so much debt (because it pleases our masters who earn interest and fees on all that debt!), there was no buffer left. They can’t access any more home equity-based credit, and they can’t sell for a profit/break-even, so they have no choice but to take the free ride and accept the foreclosure. They are being perfectly rational.
It would be nice to think that the govt/lenders will learn from this, but I highly doubt it. Based on all their rhetoric, they are still focused on propping up prices to unaffordable levels (and forcing us deeper in debt) rather than letting prices sink to levels where people can comfortably afford their homes…and have plenty of money left over to allocate to more important and productive endeavours.
Yes, the FB’s behavior has been encouraged all along.
June 2, 2010 at 1:37 AM #559042Participant[quote=jpinpb][quote=briansd1]
I think that being $50,000 underwater it the tipping point that make homeowners want to walk.[/quote]I think depending on property and location, I can see people holding on if they were 50k underwater. You know, if you were in a condo conversion and you were 50k under, then yes, I can see them walking. If you were in a SFH in a desired area, I can see people clinging if only 50k upside-down.
But at a certain point, the tendency is to stop paying. That is the trend. Sheeple lined up to buy w/no money down and then take HELOCs. They seem to be doing the same again. Whatever it takes, they have a “lifestyle” to maintain.
This behavior is basically being encouraged.[/quote]
Personally, I don’t think it has anything to do with being underwater, but rather the fact that many of these people were never really able to comfortably afford to pay the mortgages/debts they agreed to without the HELOC/cash-out refis that enabled them to pay off debt with more debt (resulting in the spiraling debt/credit bubble we’ve experienced).
As soon as prices stopped rising — even if they were just flat — the game was over. So many people were relying on their “home equity” to fund their lifestyles, there was no way to avoid an ugly ending to the credit bubble.
These people are being foreclosed on because they have *no other option.* People have been encouraged to take on so much debt (because it pleases our masters who earn interest and fees on all that debt!), there was no buffer left. They can’t access any more home equity-based credit, and they can’t sell for a profit/break-even, so they have no choice but to take the free ride and accept the foreclosure. They are being perfectly rational.
It would be nice to think that the govt/lenders will learn from this, but I highly doubt it. Based on all their rhetoric, they are still focused on propping up prices to unaffordable levels (and forcing us deeper in debt) rather than letting prices sink to levels where people can comfortably afford their homes…and have plenty of money left over to allocate to more important and productive endeavours.
Yes, the FB’s behavior has been encouraged all along.
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