[asragov]

I am not a lawyer, and am not trying to give legal advice, but one of the main issues in business vs. personal liability is determining if, in fact, the business is separate from a person.

If there is no “corporate veil” (that is, no corporate minutes, no real employees, no corporate taxes, etc.) then such structures could be considered a sham. If the company owes taxes to the IRS, for payroll, etc., those could possibly have the first claim on the money, so the fate of the money depends on a lot of factors.

Regarding college financial aid, it would be assumed that your transfer of money to a business results in a higher value of the stock of that business. So, all you did was shift assets from your own cash to your shareholdings – your net worth did not change.

If you shift them to someone else’s name and then shift them back, it could (rightly) be considered a sham transaction by the IRS, the other person could owe back taxes, lots of risks, etc.

Try to look at having the money to pay for college as a blessing!

In terms of asset protection, you might find these links useful (no affiliation):

http://www.assetprotectionbook.com/asset_protection.php

http://www.garrettpub.com/garrettpub/garrettpubbooks.cfm

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[asragov]

23109VC-

Your question is probably related to the whole “median price” discussion. The median price can obscure movements in all areas of the market.

Remember Keynes’ saying, that “Markets can remain illogical for longer than you can remain solvent.”

[asragov]

Higher corporate profits do not mean higher wages.

A lot of people make this leap, but it is not so simple.

Just because corporate earnings are up, it does not mean that average workers’ earnings are up.

Offshore outsourcing, shuffling jobs to lower cost / tax states, and deceptive CPI data all mean that pressure on real wages is downwards. One simple example of thousands:

http://www.familiesusa.org/assets/pdfs/premiums-vs-paychecks/stagnant-earnings.pdf

I don’t know the numbers about “at risk” local employment in the real estate, construction, and mortgage finance-related industries, but I expect that it will have significantly more impact than possibly stable local employment at Qualcomm.

[asragov]

It is not that the subprime meltdown will hurt nice areas directly.

Lenders are tightening lending standards all across the board (I am working on a $3+ million loan, under 65% LTV, mediocre credit, and it is not easy). This causes “friction” in commerce, and makes it harder for everyone to obtain financing.

You should be aware also that a lot of people with wealth do not have good credit. I know one very wealthy professional family that does not believe in credit cards. They have a hard time borrowing money, so they just pay cash for things.

The classic book on the subject, which helps explain how credit is not wealth, is of course:

The slowdown in the economy, slowdown in credit, and slowdown in rise in asset prices will affect everyone.

You can read many, many articles on how this slowdown is not confined to the subprime sector, including Nouriel Roubini’s excellent website:

http://www.rgemonitor.com/blog/

[asragov]

With so much condo and single family inventory on the market that can be turned into rentals, I would certainly be cautious about multi-family properties.

As you say, these properties are based on the rents that they can generate, and there is probably a lot of downward potential in rents from this point.

[asragov]

Foreigners smell blood in the US housing market. Remember, these folks made their money in Russia, Latin America, Asia, etc. etc. because they are smart. They are much more used to detecting crises than Americans.

Wealthy Mexican immigration really started in earnest in 1982, with the Peso devaluation that year. There are more wealthy Mexican and South Africans et al. in San Diego than many people on this forum believe, apparently.

A few friends of mine (Eastern European) have been bargaining hard recently, and are still unable to find a buyer that they feel “gets” it. This is at the very high end of the market, so that sector will also likely be affecting by the housing slowdown

So far, the stubborn sellers have found buyers, but it is early on, and this in the high end.

[asragov]

Over at HousingDoom.com they had a recent article on the bust in Las Vegas real estate:

http://housingdoom.com/2007/02/08/las-vegas-single-family-housing-january/

Maybe you would also like to note rising inventories and falling prices in the Las Vegas area:

http://www.housingtracker.net/askingprices/Nevada/LasVegas-Paradise/

[asragov]

Maybe they are using your Social Security Number to check you out through ChexSystems (the database to see if you bounce checks).

While a deposit account isn’t an extension of credit, most banks certainly check you out via ChexSystems, even if they don’t tell you:

http://www.creditinfocenter.com/FeaturedArticles/ChexSystems.shtml

[asragov]

It seems unlikely that a bank would require you to pay off your mortgage if you are still making payments (I am not even sure that they can). A bank would buy itself a large headache in a market that is so depressed, and typically loses about 20% in the operating costs (realtors, holding costs, legal fees, etc.) workout process. If you walk away, certainly the amount of debt forgiven would be considered income, and they would send you a 1099 for that “income” ($10,000 in this example).

Also, the second mortgage / equity lines of credit are usually the ones that have a clause regarding curing a large fall in the price of the collateral (and I think you might have to just make up the difference, rather than pay it all off). I don’t think that first mortgages work that way.

[asragov]

Rates down is not a given anymore – there are more and more observers anticipating a Fed increase in 2007. There are two prevailing economic ideas supporting this, I think:

1. Sales are not increasing enough, so companies raise prices to get some income. These price increases cause the Fed to tighten

2. Rates rise as part of an effort to slow the dollar’s slide

These two are not necessarily exclusive.

It is interesting that six months ago or so, rates down was nearly universally anticipated. However, now the economic forecasting landscape seems to be decidedly mixed.

[asragov]

County of San Diego Treasurer (website doesn’t always work) will give you an idea. Most of the good ones are redeemed (sometimes right before the auction takes place).

In any case:

http://sdtreastax.com/pts_currentyear.html

[asragov]

One well known real estate school that offers the classes and exam passing material is http://www.lumbleau.com

The test now for a real estate salesperson vs. broker is fairly similar, but there are more education requirements to become a broker. The Lumbleau website has information about it.

I am not affiliated with them in any way, just aware of them.

[asragov]

In hearing all of these conversations, I wonder how many people realize that they are very likely to be issued a 1099 for the amount of the debt forgiven? The fact that we are talking about deficiency judgments and short sales is a sad sign indeed.

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