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kewp
ParticipantThis is key:
Predatory lending. In this case, complex mortgage terms and interest rate risks were not fully explained as required by federal law. The borrower is usually the victim.
Assuming thats the case, the culpability is legally on the lender. Of course, victim proneness is always an issue.
ParticipantI think this is a great idea!
How about an eBay like auction system that lets sellers bid on buyers? The buyers would have to pass a credit check and have some sort of contract to ensure their viability of course.
ParticipantI think its a great article, especially with the addendum.
I suppose one could make the case that of all the guilty parties, the borrowers are one the whole the least informed of the bunch.
Participant“The other thing, is this is by no means limited to sub-prime lenders. People won’t want to touch the housing market with a ten foot pole once the reality of the situation sets in.”
That’s my opinion as well. Real estate will be about as fashionable an investment as a dotcom in 2001.
ParticipantI wouldn’t worry too much about this, at best its only going to save those that are only marginally over-leveraged.
And its not going to keep the bubble going, the worst case scenario is a soft landing somewhere over whatever the ‘true’ bottom would be if these folks lost their homes.
ParticipantThats it, I’m only dating ugly asian chicks from now on.
ParticipantIt’s pretty easy to make over 100k in high tech if you have the commensurate degree and experience. There is a high barrier to entry and you can’t ‘fake’ competence in it, so employers still need to pay the big bucks to attract (and keep) the top talent. The risk of being ‘out sourced’ if overstated, in my opinion, as well.
Heck, I make close to that (if you include benefits) working in higher education *without* a degree; which is a notoriously stingy gig.
I agree with the previous posts; my experience is that in my age group (25-35), being over-leveraged is the exception, not the rule. I’ve fought about money with every girl I’ve dated in fact; they all *expected* a top-dollar lifestyle, regardless of our financial situation. Designer clothes, new cars, bling, fancy dinners a couple nights a week, etc. The sense of entitlement of my generation boggles my mind at times.
ParticipantWell, I happen to think the guy will ultimately be proven right.
It’s funny how folks here can easily see the problem with Joe FB, while missing that his problems are mirrored at the national level. Complete with our Bank of China credit card.
We’ve bounced from a tech bubble, to a housing bubble, to… what ultimately? We don’t have an infinite air (ie, money) supply.
Our economy naturally moves in cycles. We’ve averted at least two recessions through cynical currency manipulation by the fed. Strike three is long overdue.
ParticipantI don’t think there is enough money available to finance any meaningful sort of bail-out. Even with borrowing from China and running the printing presses full time.
Re: interest rates
I assume this will be a good thing for potential future homeowners. Assuming they are making money and have good credit, low interest rates plus a burst housing bubble is a winning combination.
The trillion dollar question, though, is how dependent our economy is on the RE bubble.
ParticipantSigh.
I hope the powers that be are wise enough to allow this mess to correct itself, rather than try and postpone it with the dollar printing press again.
Somehow, I doubt that.
ParticipantIf history is any example, bubble-assets after a crash end up cheaper than before the run-up. So I might be able to actually buy a starter home!
I’m also looking into renting a nice condo for dirt cheap a year from now, when the conversions revert back to rentals en masse’.
ParticipantI don’t think there is a ‘right’ answer to this. You will see lots of opinions, however.
My personal opinion is that Rich’s famous ‘income to median home price’ chart is right on the money.
http://piggington.com/images/primer/sdpricetoincome.gif
The red line is about what I would call the ‘fundamental’. You either buy on the bottom and get a short term gain, or at the top and weather a loss. Some might call the bottom the fundamental, however.
ParticipantOoops, guess a case of lies, damn lies and statistics.
ParticipantI guess this lends support that people across the income range have been ‘buying up’ over what they could afford.
Plus, I would assume the fraudsters would be buying up lots of million-dollar flips. After all, if you are not planning on paying off a mortgage, might as well get a huge one!
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