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HLS.
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January 29, 2009 at 8:46 AM #338538January 29, 2009 at 9:08 AM #338016
(former)FormerSanDiegan
ParticipantSorry I diverged a bit from the original point, patientrenter. I started to address housing subsidies in general (e.g. mortgage interest deduction) rather than specifically the Freddie/Fannie guidelines as they pertain to buying a personal residence when one already owns a rental.
The fannie/freddie “subsidy” that is being complained about as supporting rich a-holes pertains to the ability for someone to qualify under Fannie/Freddie Guidelines for a principal residence when owning other property. Consider two examples:
1. Potential Homebuyer 1 –
Owns a Franchise, which after expenses produces about $300 in monthly investment income. Based on what his franchise would sell and the loans he has against it, he has about 75% LTV in the business. This poor homebuyer gets a subsidy from Fannie/Freddie to buy his house because he can count his investment income.2. Potential Homebuyer 2 –
Owns a formerly foreclosed single family rental property in Temecula that produces monthly income of about $300. His LTV is 75%. This rich a-hole does not gets a subsidy from Fannie/Freddie to buy his personal residence because he cannot count his investment income since it is income property and his LTV is more than 70%.Is this fair ? Why should we subsidize some of the rich a-holes and not others based on their allocation of investments ?
I don’t think the Fannie/Freddie rule is based on a well-thought out analysis on where they want to provide subsidies. It is strictly based on perceived risk.
As for removing all housing subsidies ? What do people think of removing the deductibility of mortgage interest for a primary residence ?
January 29, 2009 at 9:08 AM #338345ParticipantSorry I diverged a bit from the original point, patientrenter. I started to address housing subsidies in general (e.g. mortgage interest deduction) rather than specifically the Freddie/Fannie guidelines as they pertain to buying a personal residence when one already owns a rental.
The fannie/freddie “subsidy” that is being complained about as supporting rich a-holes pertains to the ability for someone to qualify under Fannie/Freddie Guidelines for a principal residence when owning other property. Consider two examples:
1. Potential Homebuyer 1 –
Owns a Franchise, which after expenses produces about $300 in monthly investment income. Based on what his franchise would sell and the loans he has against it, he has about 75% LTV in the business. This poor homebuyer gets a subsidy from Fannie/Freddie to buy his house because he can count his investment income.2. Potential Homebuyer 2 –
Owns a formerly foreclosed single family rental property in Temecula that produces monthly income of about $300. His LTV is 75%. This rich a-hole does not gets a subsidy from Fannie/Freddie to buy his personal residence because he cannot count his investment income since it is income property and his LTV is more than 70%.Is this fair ? Why should we subsidize some of the rich a-holes and not others based on their allocation of investments ?
I don’t think the Fannie/Freddie rule is based on a well-thought out analysis on where they want to provide subsidies. It is strictly based on perceived risk.
As for removing all housing subsidies ? What do people think of removing the deductibility of mortgage interest for a primary residence ?
January 29, 2009 at 9:08 AM #338439ParticipantSorry I diverged a bit from the original point, patientrenter. I started to address housing subsidies in general (e.g. mortgage interest deduction) rather than specifically the Freddie/Fannie guidelines as they pertain to buying a personal residence when one already owns a rental.
The fannie/freddie “subsidy” that is being complained about as supporting rich a-holes pertains to the ability for someone to qualify under Fannie/Freddie Guidelines for a principal residence when owning other property. Consider two examples:
1. Potential Homebuyer 1 –
Owns a Franchise, which after expenses produces about $300 in monthly investment income. Based on what his franchise would sell and the loans he has against it, he has about 75% LTV in the business. This poor homebuyer gets a subsidy from Fannie/Freddie to buy his house because he can count his investment income.2. Potential Homebuyer 2 –
Owns a formerly foreclosed single family rental property in Temecula that produces monthly income of about $300. His LTV is 75%. This rich a-hole does not gets a subsidy from Fannie/Freddie to buy his personal residence because he cannot count his investment income since it is income property and his LTV is more than 70%.Is this fair ? Why should we subsidize some of the rich a-holes and not others based on their allocation of investments ?
I don’t think the Fannie/Freddie rule is based on a well-thought out analysis on where they want to provide subsidies. It is strictly based on perceived risk.
As for removing all housing subsidies ? What do people think of removing the deductibility of mortgage interest for a primary residence ?
January 29, 2009 at 9:08 AM #338466ParticipantSorry I diverged a bit from the original point, patientrenter. I started to address housing subsidies in general (e.g. mortgage interest deduction) rather than specifically the Freddie/Fannie guidelines as they pertain to buying a personal residence when one already owns a rental.
The fannie/freddie “subsidy” that is being complained about as supporting rich a-holes pertains to the ability for someone to qualify under Fannie/Freddie Guidelines for a principal residence when owning other property. Consider two examples:
1. Potential Homebuyer 1 –
Owns a Franchise, which after expenses produces about $300 in monthly investment income. Based on what his franchise would sell and the loans he has against it, he has about 75% LTV in the business. This poor homebuyer gets a subsidy from Fannie/Freddie to buy his house because he can count his investment income.2. Potential Homebuyer 2 –
Owns a formerly foreclosed single family rental property in Temecula that produces monthly income of about $300. His LTV is 75%. This rich a-hole does not gets a subsidy from Fannie/Freddie to buy his personal residence because he cannot count his investment income since it is income property and his LTV is more than 70%.Is this fair ? Why should we subsidize some of the rich a-holes and not others based on their allocation of investments ?
I don’t think the Fannie/Freddie rule is based on a well-thought out analysis on where they want to provide subsidies. It is strictly based on perceived risk.
As for removing all housing subsidies ? What do people think of removing the deductibility of mortgage interest for a primary residence ?
January 29, 2009 at 9:08 AM #338558ParticipantSorry I diverged a bit from the original point, patientrenter. I started to address housing subsidies in general (e.g. mortgage interest deduction) rather than specifically the Freddie/Fannie guidelines as they pertain to buying a personal residence when one already owns a rental.
The fannie/freddie “subsidy” that is being complained about as supporting rich a-holes pertains to the ability for someone to qualify under Fannie/Freddie Guidelines for a principal residence when owning other property. Consider two examples:
1. Potential Homebuyer 1 –
Owns a Franchise, which after expenses produces about $300 in monthly investment income. Based on what his franchise would sell and the loans he has against it, he has about 75% LTV in the business. This poor homebuyer gets a subsidy from Fannie/Freddie to buy his house because he can count his investment income.2. Potential Homebuyer 2 –
Owns a formerly foreclosed single family rental property in Temecula that produces monthly income of about $300. His LTV is 75%. This rich a-hole does not gets a subsidy from Fannie/Freddie to buy his personal residence because he cannot count his investment income since it is income property and his LTV is more than 70%.Is this fair ? Why should we subsidize some of the rich a-holes and not others based on their allocation of investments ?
I don’t think the Fannie/Freddie rule is based on a well-thought out analysis on where they want to provide subsidies. It is strictly based on perceived risk.
As for removing all housing subsidies ? What do people think of removing the deductibility of mortgage interest for a primary residence ?
January 30, 2009 at 7:23 AM #338618HLS
Participant[quote=4plexowner]”trapped equity”
what happened to the idea that we pay down a mortgage and someday own our real estate free and clear?[/quote]That has gone the way of the dodo bird….
Along with moms staying home with the kids, having dinner as a family, being a “company employee” for your entire career, kids respecting their elders, and waiting at least until high school to have sex.
That was at a time when you could go outside to play until the street lights came on and when you got hurt doing something stupid you didn’t sue the person whose property you were playing on.It was a time when houses in Southern California could be bought for 2X an annual income and TV’s were black and white. You had to get up and change the channel, and you had to actually answer the phone and say hello to find out who was calling… among other things.
The new culture is to have both parents work, not to make money to save, but to fund an excessive lifestyle saddled with debt and live beyond your means.
Let someone else bring up your kids, have an entitlement attitude, run up debt without any clue of how it will get paid off, the govt teaches people to be victims, and to spend not save…
Lease a car instead of buying one.
and constantly hearing $19.95 PLUS SHIPPING & HANDLING.You MUST learn how to say “it’s not my fault”
The new mantra is “debit or credit ?” and “push 1 for English”
Want a reminder of how life was not so long ago ? Watch an episode of Ozzie & Harriet or Leave it to Beaver, if you can find one and if you don’t know what I am talking about, I can only say that I’m sorry.
Today you have the “luxury” of believing in a 401K as a false sense of security and knowing that you can get a reverse mortgage so your “house can start paying you” at time in life when you are afraid of getting scammed by an investment advisor with a sure thing..
The empire has crumbled.
January 30, 2009 at 7:23 AM #338947Participant[quote=4plexowner]”trapped equity”
what happened to the idea that we pay down a mortgage and someday own our real estate free and clear?[/quote]That has gone the way of the dodo bird….
Along with moms staying home with the kids, having dinner as a family, being a “company employee” for your entire career, kids respecting their elders, and waiting at least until high school to have sex.
That was at a time when you could go outside to play until the street lights came on and when you got hurt doing something stupid you didn’t sue the person whose property you were playing on.It was a time when houses in Southern California could be bought for 2X an annual income and TV’s were black and white. You had to get up and change the channel, and you had to actually answer the phone and say hello to find out who was calling… among other things.
The new culture is to have both parents work, not to make money to save, but to fund an excessive lifestyle saddled with debt and live beyond your means.
Let someone else bring up your kids, have an entitlement attitude, run up debt without any clue of how it will get paid off, the govt teaches people to be victims, and to spend not save…
Lease a car instead of buying one.
and constantly hearing $19.95 PLUS SHIPPING & HANDLING.You MUST learn how to say “it’s not my fault”
The new mantra is “debit or credit ?” and “push 1 for English”
Want a reminder of how life was not so long ago ? Watch an episode of Ozzie & Harriet or Leave it to Beaver, if you can find one and if you don’t know what I am talking about, I can only say that I’m sorry.
Today you have the “luxury” of believing in a 401K as a false sense of security and knowing that you can get a reverse mortgage so your “house can start paying you” at time in life when you are afraid of getting scammed by an investment advisor with a sure thing..
The empire has crumbled.
January 30, 2009 at 7:23 AM #339041Participant[quote=4plexowner]”trapped equity”
what happened to the idea that we pay down a mortgage and someday own our real estate free and clear?[/quote]That has gone the way of the dodo bird….
Along with moms staying home with the kids, having dinner as a family, being a “company employee” for your entire career, kids respecting their elders, and waiting at least until high school to have sex.
That was at a time when you could go outside to play until the street lights came on and when you got hurt doing something stupid you didn’t sue the person whose property you were playing on.It was a time when houses in Southern California could be bought for 2X an annual income and TV’s were black and white. You had to get up and change the channel, and you had to actually answer the phone and say hello to find out who was calling… among other things.
The new culture is to have both parents work, not to make money to save, but to fund an excessive lifestyle saddled with debt and live beyond your means.
Let someone else bring up your kids, have an entitlement attitude, run up debt without any clue of how it will get paid off, the govt teaches people to be victims, and to spend not save…
Lease a car instead of buying one.
and constantly hearing $19.95 PLUS SHIPPING & HANDLING.You MUST learn how to say “it’s not my fault”
The new mantra is “debit or credit ?” and “push 1 for English”
Want a reminder of how life was not so long ago ? Watch an episode of Ozzie & Harriet or Leave it to Beaver, if you can find one and if you don’t know what I am talking about, I can only say that I’m sorry.
Today you have the “luxury” of believing in a 401K as a false sense of security and knowing that you can get a reverse mortgage so your “house can start paying you” at time in life when you are afraid of getting scammed by an investment advisor with a sure thing..
The empire has crumbled.
January 30, 2009 at 7:23 AM #339070Participant[quote=4plexowner]”trapped equity”
what happened to the idea that we pay down a mortgage and someday own our real estate free and clear?[/quote]That has gone the way of the dodo bird….
Along with moms staying home with the kids, having dinner as a family, being a “company employee” for your entire career, kids respecting their elders, and waiting at least until high school to have sex.
That was at a time when you could go outside to play until the street lights came on and when you got hurt doing something stupid you didn’t sue the person whose property you were playing on.It was a time when houses in Southern California could be bought for 2X an annual income and TV’s were black and white. You had to get up and change the channel, and you had to actually answer the phone and say hello to find out who was calling… among other things.
The new culture is to have both parents work, not to make money to save, but to fund an excessive lifestyle saddled with debt and live beyond your means.
Let someone else bring up your kids, have an entitlement attitude, run up debt without any clue of how it will get paid off, the govt teaches people to be victims, and to spend not save…
Lease a car instead of buying one.
and constantly hearing $19.95 PLUS SHIPPING & HANDLING.You MUST learn how to say “it’s not my fault”
The new mantra is “debit or credit ?” and “push 1 for English”
Want a reminder of how life was not so long ago ? Watch an episode of Ozzie & Harriet or Leave it to Beaver, if you can find one and if you don’t know what I am talking about, I can only say that I’m sorry.
Today you have the “luxury” of believing in a 401K as a false sense of security and knowing that you can get a reverse mortgage so your “house can start paying you” at time in life when you are afraid of getting scammed by an investment advisor with a sure thing..
The empire has crumbled.
January 30, 2009 at 7:23 AM #339163Participant[quote=4plexowner]”trapped equity”
what happened to the idea that we pay down a mortgage and someday own our real estate free and clear?[/quote]That has gone the way of the dodo bird….
Along with moms staying home with the kids, having dinner as a family, being a “company employee” for your entire career, kids respecting their elders, and waiting at least until high school to have sex.
That was at a time when you could go outside to play until the street lights came on and when you got hurt doing something stupid you didn’t sue the person whose property you were playing on.It was a time when houses in Southern California could be bought for 2X an annual income and TV’s were black and white. You had to get up and change the channel, and you had to actually answer the phone and say hello to find out who was calling… among other things.
The new culture is to have both parents work, not to make money to save, but to fund an excessive lifestyle saddled with debt and live beyond your means.
Let someone else bring up your kids, have an entitlement attitude, run up debt without any clue of how it will get paid off, the govt teaches people to be victims, and to spend not save…
Lease a car instead of buying one.
and constantly hearing $19.95 PLUS SHIPPING & HANDLING.You MUST learn how to say “it’s not my fault”
The new mantra is “debit or credit ?” and “push 1 for English”
Want a reminder of how life was not so long ago ? Watch an episode of Ozzie & Harriet or Leave it to Beaver, if you can find one and if you don’t know what I am talking about, I can only say that I’m sorry.
Today you have the “luxury” of believing in a 401K as a false sense of security and knowing that you can get a reverse mortgage so your “house can start paying you” at time in life when you are afraid of getting scammed by an investment advisor with a sure thing..
The empire has crumbled.
January 30, 2009 at 7:35 AM #338628rnen
ParticipantWhat kind of crazy talk is this?????? Take responsibility for my decisions? Teach my own kids rather than have the schools do it? Save money? Live with in my means? Employ legal citizens over illegals?
Huh?
You are so right HLS. This has become a nation of whining little children that want someone to look after them and be responsible for their lives.
It is so easy to let that happen, after all we have Obama and Pelosi to look after us.
January 30, 2009 at 7:35 AM #338957ParticipantWhat kind of crazy talk is this?????? Take responsibility for my decisions? Teach my own kids rather than have the schools do it? Save money? Live with in my means? Employ legal citizens over illegals?
Huh?
You are so right HLS. This has become a nation of whining little children that want someone to look after them and be responsible for their lives.
It is so easy to let that happen, after all we have Obama and Pelosi to look after us.
January 30, 2009 at 7:35 AM #339052ParticipantWhat kind of crazy talk is this?????? Take responsibility for my decisions? Teach my own kids rather than have the schools do it? Save money? Live with in my means? Employ legal citizens over illegals?
Huh?
You are so right HLS. This has become a nation of whining little children that want someone to look after them and be responsible for their lives.
It is so easy to let that happen, after all we have Obama and Pelosi to look after us.
January 30, 2009 at 7:35 AM #339080ParticipantWhat kind of crazy talk is this?????? Take responsibility for my decisions? Teach my own kids rather than have the schools do it? Save money? Live with in my means? Employ legal citizens over illegals?
Huh?
You are so right HLS. This has become a nation of whining little children that want someone to look after them and be responsible for their lives.
It is so easy to let that happen, after all we have Obama and Pelosi to look after us.
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