[patientrenter]

No, SD R. I’m mercifully out of range up here in OC. But why wouldn’t the limits be raised? It’s a democracy, and if a lot of voters want it enough, it will happen. Let’s see, the big gains are obvious and immediate and affect lots of voters, and the big losses come later and are diffuse and affect fewer voters. Hmm…. Hard to predict what Congress would want to do with that choice.

Patient renter in OC

[patientrenter]

No, SD R. I’m mercifully out of range up here in OC. But why wouldn’t the limits be raised? It’s a democracy, and if a lot of voters want it enough, it will happen. Let’s see, the big gains are obvious and immediate and affect lots of voters, and the big losses come later and are diffuse and affect fewer voters. Hmm…. Hard to predict what Congress would want to do with that choice.

Patient renter in OC

[patientrenter]

HLS, in the debates currently raging about how to bail out homeowners, the majority view is that underwater homeowners who don’t pay according to the terms of their loan should receive only mild penalties. Mad Jim Cramer has already given his mail-back-the-keys advice to all and sundry.

If I were lending my own money for someone else to buy a $800K California home, I’d notice all these debates, and I’d figure out that the buyer has a lot more incentives to walk, or demand a huge loan mod, than pay me what he promised if the home price dropped by 30% in the next 2-5 years. And that’s assuming I had an appraisal I could trust, something most mortgage investors don’t have.

For how much longer will the mortgage investors be dumber than little ol’ me? Surely not forever. The days of less than 20% down in S Cal have to be limited. The credit quality of the borrowers won’t have much impact.

Patient renter in OC

[patientrenter]

HLS, in the debates currently raging about how to bail out homeowners, the majority view is that underwater homeowners who don’t pay according to the terms of their loan should receive only mild penalties. Mad Jim Cramer has already given his mail-back-the-keys advice to all and sundry.

If I were lending my own money for someone else to buy a $800K California home, I’d notice all these debates, and I’d figure out that the buyer has a lot more incentives to walk, or demand a huge loan mod, than pay me what he promised if the home price dropped by 30% in the next 2-5 years. And that’s assuming I had an appraisal I could trust, something most mortgage investors don’t have.

For how much longer will the mortgage investors be dumber than little ol’ me? Surely not forever. The days of less than 20% down in S Cal have to be limited. The credit quality of the borrowers won’t have much impact.

Patient renter in OC

[patientrenter]

HLS, in the debates currently raging about how to bail out homeowners, the majority view is that underwater homeowners who don’t pay according to the terms of their loan should receive only mild penalties. Mad Jim Cramer has already given his mail-back-the-keys advice to all and sundry.

If I were lending my own money for someone else to buy a $800K California home, I’d notice all these debates, and I’d figure out that the buyer has a lot more incentives to walk, or demand a huge loan mod, than pay me what he promised if the home price dropped by 30% in the next 2-5 years. And that’s assuming I had an appraisal I could trust, something most mortgage investors don’t have.

For how much longer will the mortgage investors be dumber than little ol’ me? Surely not forever. The days of less than 20% down in S Cal have to be limited. The credit quality of the borrowers won’t have much impact.

Patient renter in OC

[patientrenter]

How can you underwrite for possible price drops of 20-40% in the next 5 years? If you think this is a real possibility, then it seems no loan should be made unless the buyer has at least 20-40% of a downpayment of their own money, net of a hard-headed realistic current appraised value. I don’t see how you can charge enough on a 95%, or even a 90%, loan to cover the risk. If there’s a 50% chance of losing 20% of the loan principal 4 years from now, for example, then you’d have to charge 250bp extra, and that’s with spotless credit.

Do any of the mortgage experts here think rates on new 90% LTV 30-year fixed jumbo mortgages to people with spotless credit is going to be at least 250bp over the risk-free conforming rate for the next 12 months or more, not just this month? Unless that happens, there’s inadequate compensation for the risk to the lenders, and either the taxpayers will have to subsidize them thru’ FNMA insurance etc, or else investors will eventually quit feeding this kind of dumb money to buyers when they finally realize the price drop will go beyond 5-10% in places like Southern California.

Patient renter in OC

[patientrenter]

How can you underwrite for possible price drops of 20-40% in the next 5 years? If you think this is a real possibility, then it seems no loan should be made unless the buyer has at least 20-40% of a downpayment of their own money, net of a hard-headed realistic current appraised value. I don’t see how you can charge enough on a 95%, or even a 90%, loan to cover the risk. If there’s a 50% chance of losing 20% of the loan principal 4 years from now, for example, then you’d have to charge 250bp extra, and that’s with spotless credit.

Do any of the mortgage experts here think rates on new 90% LTV 30-year fixed jumbo mortgages to people with spotless credit is going to be at least 250bp over the risk-free conforming rate for the next 12 months or more, not just this month? Unless that happens, there’s inadequate compensation for the risk to the lenders, and either the taxpayers will have to subsidize them thru’ FNMA insurance etc, or else investors will eventually quit feeding this kind of dumb money to buyers when they finally realize the price drop will go beyond 5-10% in places like Southern California.

Patient renter in OC

[patientrenter]

How can you underwrite for possible price drops of 20-40% in the next 5 years? If you think this is a real possibility, then it seems no loan should be made unless the buyer has at least 20-40% of a downpayment of their own money, net of a hard-headed realistic current appraised value. I don’t see how you can charge enough on a 95%, or even a 90%, loan to cover the risk. If there’s a 50% chance of losing 20% of the loan principal 4 years from now, for example, then you’d have to charge 250bp extra, and that’s with spotless credit.

Do any of the mortgage experts here think rates on new 90% LTV 30-year fixed jumbo mortgages to people with spotless credit is going to be at least 250bp over the risk-free conforming rate for the next 12 months or more, not just this month? Unless that happens, there’s inadequate compensation for the risk to the lenders, and either the taxpayers will have to subsidize them thru’ FNMA insurance etc, or else investors will eventually quit feeding this kind of dumb money to buyers when they finally realize the price drop will go beyond 5-10% in places like Southern California.

Patient renter in OC

[patientrenter]

Cyphire, I’d like to be guaranteed good health care. I’d also like to be guaranteed good food, good housing, good…. In fact, much of my life is spent trying to achieve these security goals, so my comments on this are far from flippant or unsympathetic.

I think it’s interesting that one of the largest well-off nations on the planet also has an unusual arrangement for the health care of its residents. When I was growing up in a society with a lot of these guarantees, I noticed the US seemed to have more economic drive and success than we did. Could it be that the effort I now expend to achieve this economic security is shared by many others here? Could it be that it’s one of the reasons why the US does as well as it does economically (and examining the record over very long time horizons)? I don’t know, but it’s worth some fairly deep reflection as part of any debate on our future health care system.

I see horrible waste in our health care system here, but my impression is that first began to be serious in the 1960’s. When primary responsibility for almost all payments for medical goods and services are handed over to a weak 3rd party, Medicare or a private insurer, logic would say costs would start to escalate. I suspect that the cumulative health cost inflation we’ve experienced since 1960 is the biggest contributor to poor health care today.

There is more than one solution to the cost inflation. One solution is to put an all-powerful “dictator” in charge of the health care system – a European-style government health agency. They can then impose cost controls through price orders and rationing. We do it for other things, like physical security. It seems to work OK in Europe. But I wonder if it’s also possible to cure most of the unaffordability problem by removing much of the 3rd party management.

If most patients and doctors had to come to an agreement on prices and services without a 3rd party, I suspect prevailing prices would be dramatically lower. If I only had to pay $25 for a doctor’s visit, then even when I’m pretty poor I’m likely to go when I really need it. And most communities would have doctors who would occasionally forgive the bills for their poorest and most deserving patients.

I agree we have the worst of both worlds now. But I just think that there may be more than one solution to this.

Patient renter in OC

[patientrenter]

Cyphire, I’d like to be guaranteed good health care. I’d also like to be guaranteed good food, good housing, good…. In fact, much of my life is spent trying to achieve these security goals, so my comments on this are far from flippant or unsympathetic.

I think it’s interesting that one of the largest well-off nations on the planet also has an unusual arrangement for the health care of its residents. When I was growing up in a society with a lot of these guarantees, I noticed the US seemed to have more economic drive and success than we did. Could it be that the effort I now expend to achieve this economic security is shared by many others here? Could it be that it’s one of the reasons why the US does as well as it does economically (and examining the record over very long time horizons)? I don’t know, but it’s worth some fairly deep reflection as part of any debate on our future health care system.

I see horrible waste in our health care system here, but my impression is that first began to be serious in the 1960’s. When primary responsibility for almost all payments for medical goods and services are handed over to a weak 3rd party, Medicare or a private insurer, logic would say costs would start to escalate. I suspect that the cumulative health cost inflation we’ve experienced since 1960 is the biggest contributor to poor health care today.

There is more than one solution to the cost inflation. One solution is to put an all-powerful “dictator” in charge of the health care system – a European-style government health agency. They can then impose cost controls through price orders and rationing. We do it for other things, like physical security. It seems to work OK in Europe. But I wonder if it’s also possible to cure most of the unaffordability problem by removing much of the 3rd party management.

If most patients and doctors had to come to an agreement on prices and services without a 3rd party, I suspect prevailing prices would be dramatically lower. If I only had to pay $25 for a doctor’s visit, then even when I’m pretty poor I’m likely to go when I really need it. And most communities would have doctors who would occasionally forgive the bills for their poorest and most deserving patients.

I agree we have the worst of both worlds now. But I just think that there may be more than one solution to this.

Patient renter in OC

[patientrenter]

Cyphire, I’d like to be guaranteed good health care. I’d also like to be guaranteed good food, good housing, good…. In fact, much of my life is spent trying to achieve these security goals, so my comments on this are far from flippant or unsympathetic.

I think it’s interesting that one of the largest well-off nations on the planet also has an unusual arrangement for the health care of its residents. When I was growing up in a society with a lot of these guarantees, I noticed the US seemed to have more economic drive and success than we did. Could it be that the effort I now expend to achieve this economic security is shared by many others here? Could it be that it’s one of the reasons why the US does as well as it does economically (and examining the record over very long time horizons)? I don’t know, but it’s worth some fairly deep reflection as part of any debate on our future health care system.

I see horrible waste in our health care system here, but my impression is that first began to be serious in the 1960’s. When primary responsibility for almost all payments for medical goods and services are handed over to a weak 3rd party, Medicare or a private insurer, logic would say costs would start to escalate. I suspect that the cumulative health cost inflation we’ve experienced since 1960 is the biggest contributor to poor health care today.

There is more than one solution to the cost inflation. One solution is to put an all-powerful “dictator” in charge of the health care system – a European-style government health agency. They can then impose cost controls through price orders and rationing. We do it for other things, like physical security. It seems to work OK in Europe. But I wonder if it’s also possible to cure most of the unaffordability problem by removing much of the 3rd party management.

If most patients and doctors had to come to an agreement on prices and services without a 3rd party, I suspect prevailing prices would be dramatically lower. If I only had to pay $25 for a doctor’s visit, then even when I’m pretty poor I’m likely to go when I really need it. And most communities would have doctors who would occasionally forgive the bills for their poorest and most deserving patients.

I agree we have the worst of both worlds now. But I just think that there may be more than one solution to this.

Patient renter in OC

[patientrenter]

Yen.

Patient renter in OC

[patientrenter]

Yen.

Patient renter in OC

[patientrenter]

Yen.

Patient renter in OC

[patientrenter]

vrudny and sdrealtor, I’ll share a different experience and point of view with you and other readers.

I’ve never asked for a raise. Maybe I’m dumb, but my pay has increased an average of over 15% annually since I started working 19 years ago. Yes, maybe I could have bumped it up faster now and again by taking advantage of my bosses’ episodes of desperation, but if I did that I may just have been taking it away from future years’ increases.

As I and my old bosses have dispersed through the industry, now I know I can work in many cities, companies, or lines of work because these people all trust me not to screw them, and they would hire me, or help me get hired, in a heartbeat. I move in a relatively small professional world.

Just thought I’d give an alternative experience and point of view, in case other readers thought there was only one way to get rewarded. Depends on how big your work community is, how often you move, your personality….

Patient renter in OC

[Author]

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