[patientrenter]

TheBreeze wrote: “The home “buyers” who made out best over the last 8 years were those who didn’t put anything down and got either an Interest-Only mortgage or a Pay Option mortgage. Because mortgages are non-recourse, not putting anything down and paying only the interest (or less) allows the “buyer” to take any appreciation upside while sticking any depreciation downside to the bank (by defaulting). Home buyers who got screwed the worst over the last 8 years were those who made down payments as that down payment has now evaporated with home price depreciation.”

You are correct. It was smart of the no-downpayment buyers to take advantage of cheap call options on home prices being offered by lenders. It was idiotic of the taxpayers and lenders to permit this to happen. Financial losses now are providing an effective incentive for private investors to require 20% or higher downpayments in the future. But govt schemes are still allowing homes to be bought with less than 20% of the buyer’s personal savings at risk. And Barney Frank and Chris Dodd are the prime movers behind this part of the screwed-up system. They won’t let go of this lunacy until Democrats like you call them on it.

[patientrenter]

TheBreeze wrote: “The home “buyers” who made out best over the last 8 years were those who didn’t put anything down and got either an Interest-Only mortgage or a Pay Option mortgage. Because mortgages are non-recourse, not putting anything down and paying only the interest (or less) allows the “buyer” to take any appreciation upside while sticking any depreciation downside to the bank (by defaulting). Home buyers who got screwed the worst over the last 8 years were those who made down payments as that down payment has now evaporated with home price depreciation.”

You are correct. It was smart of the no-downpayment buyers to take advantage of cheap call options on home prices being offered by lenders. It was idiotic of the taxpayers and lenders to permit this to happen. Financial losses now are providing an effective incentive for private investors to require 20% or higher downpayments in the future. But govt schemes are still allowing homes to be bought with less than 20% of the buyer’s personal savings at risk. And Barney Frank and Chris Dodd are the prime movers behind this part of the screwed-up system. They won’t let go of this lunacy until Democrats like you call them on it.

[patientrenter]

TheBreeze wrote: “The home “buyers” who made out best over the last 8 years were those who didn’t put anything down and got either an Interest-Only mortgage or a Pay Option mortgage. Because mortgages are non-recourse, not putting anything down and paying only the interest (or less) allows the “buyer” to take any appreciation upside while sticking any depreciation downside to the bank (by defaulting). Home buyers who got screwed the worst over the last 8 years were those who made down payments as that down payment has now evaporated with home price depreciation.”

You are correct. It was smart of the no-downpayment buyers to take advantage of cheap call options on home prices being offered by lenders. It was idiotic of the taxpayers and lenders to permit this to happen. Financial losses now are providing an effective incentive for private investors to require 20% or higher downpayments in the future. But govt schemes are still allowing homes to be bought with less than 20% of the buyer’s personal savings at risk. And Barney Frank and Chris Dodd are the prime movers behind this part of the screwed-up system. They won’t let go of this lunacy until Democrats like you call them on it.

[patientrenter]

TheBreeze wrote: “The home “buyers” who made out best over the last 8 years were those who didn’t put anything down and got either an Interest-Only mortgage or a Pay Option mortgage. Because mortgages are non-recourse, not putting anything down and paying only the interest (or less) allows the “buyer” to take any appreciation upside while sticking any depreciation downside to the bank (by defaulting). Home buyers who got screwed the worst over the last 8 years were those who made down payments as that down payment has now evaporated with home price depreciation.”

You are correct. It was smart of the no-downpayment buyers to take advantage of cheap call options on home prices being offered by lenders. It was idiotic of the taxpayers and lenders to permit this to happen. Financial losses now are providing an effective incentive for private investors to require 20% or higher downpayments in the future. But govt schemes are still allowing homes to be bought with less than 20% of the buyer’s personal savings at risk. And Barney Frank and Chris Dodd are the prime movers behind this part of the screwed-up system. They won’t let go of this lunacy until Democrats like you call them on it.

[patientrenter]

adelord wrote: “My general checklist:
1. Is it really necessary?
2. Can the market solve this problem within an acceptable period of time?
3. Can we (the taxpayers) afford it?”

Good idea, if it weren’t for the little game the pols are playing with you, that other commenters have pointed out above: Put spending initiatives that are unpopular through the legislature. That gets them up to a certain level of spending in total. Then put the popular spending initiatives on the ballot, using a pay-later bond.

Using this dual-barrel approach, total spending is way higher than if the voters were fully in control, or if the legislature were fully in control. Pols just wanna have… more spending.

My checklist is No if it involves more spending, and Maybe if it doesn’t.

[patientrenter]

adelord wrote: “My general checklist:
1. Is it really necessary?
2. Can the market solve this problem within an acceptable period of time?
3. Can we (the taxpayers) afford it?”

Good idea, if it weren’t for the little game the pols are playing with you, that other commenters have pointed out above: Put spending initiatives that are unpopular through the legislature. That gets them up to a certain level of spending in total. Then put the popular spending initiatives on the ballot, using a pay-later bond.

Using this dual-barrel approach, total spending is way higher than if the voters were fully in control, or if the legislature were fully in control. Pols just wanna have… more spending.

My checklist is No if it involves more spending, and Maybe if it doesn’t.

[patientrenter]

adelord wrote: “My general checklist:
1. Is it really necessary?
2. Can the market solve this problem within an acceptable period of time?
3. Can we (the taxpayers) afford it?”

Good idea, if it weren’t for the little game the pols are playing with you, that other commenters have pointed out above: Put spending initiatives that are unpopular through the legislature. That gets them up to a certain level of spending in total. Then put the popular spending initiatives on the ballot, using a pay-later bond.

Using this dual-barrel approach, total spending is way higher than if the voters were fully in control, or if the legislature were fully in control. Pols just wanna have… more spending.

My checklist is No if it involves more spending, and Maybe if it doesn’t.

[patientrenter]

adelord wrote: “My general checklist:
1. Is it really necessary?
2. Can the market solve this problem within an acceptable period of time?
3. Can we (the taxpayers) afford it?”

Good idea, if it weren’t for the little game the pols are playing with you, that other commenters have pointed out above: Put spending initiatives that are unpopular through the legislature. That gets them up to a certain level of spending in total. Then put the popular spending initiatives on the ballot, using a pay-later bond.

Using this dual-barrel approach, total spending is way higher than if the voters were fully in control, or if the legislature were fully in control. Pols just wanna have… more spending.

My checklist is No if it involves more spending, and Maybe if it doesn’t.

[patientrenter]

adelord wrote: “My general checklist:
1. Is it really necessary?
2. Can the market solve this problem within an acceptable period of time?
3. Can we (the taxpayers) afford it?”

Good idea, if it weren’t for the little game the pols are playing with you, that other commenters have pointed out above: Put spending initiatives that are unpopular through the legislature. That gets them up to a certain level of spending in total. Then put the popular spending initiatives on the ballot, using a pay-later bond.

Using this dual-barrel approach, total spending is way higher than if the voters were fully in control, or if the legislature were fully in control. Pols just wanna have… more spending.

My checklist is No if it involves more spending, and Maybe if it doesn’t.

[patientrenter]

I wish you luck on your research. I don’t have any data, but I echo RunningBear that my little knowledge says that Sydney has gone through a bubble too, and it’s about to deflate. Wait until you have real solid data.

[patientrenter]

I wish you luck on your research. I don’t have any data, but I echo RunningBear that my little knowledge says that Sydney has gone through a bubble too, and it’s about to deflate. Wait until you have real solid data.

[patientrenter]

I wish you luck on your research. I don’t have any data, but I echo RunningBear that my little knowledge says that Sydney has gone through a bubble too, and it’s about to deflate. Wait until you have real solid data.

[patientrenter]

I wish you luck on your research. I don’t have any data, but I echo RunningBear that my little knowledge says that Sydney has gone through a bubble too, and it’s about to deflate. Wait until you have real solid data.

[patientrenter]

I wish you luck on your research. I don’t have any data, but I echo RunningBear that my little knowledge says that Sydney has gone through a bubble too, and it’s about to deflate. Wait until you have real solid data.

[patientrenter]

[quote=scaredycat] student loans….. but today, people are graduating med school, law school with 200-250k plus in loans. it’s tough to make a go of it for some. it could turn out to be a bad bet. what if tuition kept going up as everything deflated? What if people got out of school routinely with a million in debt? at some point, wouldn’t it just be rational to say fine, I’ll get the degree, society tells me i need it to get ahead, i know i’ll never be able to pay off the loan,I’ll default, then you can garnish my salary. there’s only so much they can take, 25% or so. if your monthly payment is $5,000 a month and you take home $5,000 a month, it’s not possible you can pay your loan. yeah, you took the debt on willingly, but doesn’t society have some obligation to have tuition vaguely match up with the economic value of the degree? or at least be forbidden from putting out any propaganda that the degree is worth something and is not a liability? should there be a disclaimer or warning on your tuition statement, something like “WARNING: this debt you are incurring is toxic. it is unlikely you will ever be able to pay it back based on current salaries.” Maybe this is where it’s all gone to. the debts become crazy, speculative, bear no relation to reality…and that makes people say what the heck, why not…[/quote]

scaredycat, home prices went up much faster than incomes because of easier and easier lending that ended up being based on non-repayment from income. The easier money didn’t help, because it just led to higher prices. What you’re saying is that the same thing is happening with student loans. The obvious solution is to make student loans harder to get. If people had to have realistic limits on their student loans, then higher education costs would stop escalating, just as home prices stop escalating when easy money stops flowing. Price always follows demand. Unlimited money = unlimited inflation.

I agree that people should be educated about repayment of their student loan before they are allowed to take it. Maybe they should be shown a schedule that shows what a level 15-year repayment of their projected end-of-education loans would look like, and what income they would need in order to have that amount to less than 10% of their income. Then ask them to research careers that they can get with their planned education and the incomes to go with them. If they come back with a career plan that makes sense, make the loan. Otherwise, no loan.

[Author]

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