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So I guess the people buying more than they can afford did not play into it? People trying to flip w/o knowing what they were doing didn’t play into the problem(Caseys of the world)? Real Estate agents who either inserted themselves into the middle of the transaction (straw buyer) to skim money didn’t play into the problem? Real Estate agents pushing the mantra “gotta buy now or be priced out forever” didn’t play into it? What about the main-stream-media’s culpability?

Geesh, I get real tired when I keep hearing that the banks were the main problem. They weren’t. They did screw up, but it also cost them. Their screw-up was that they didn’t appropriately price risk and themselves bought into the ‘RE always goes up‘ so they figured that if someone defaulted, they could get back what they loaned through foreclosure. Everyone seemed to forget that things could go upside-down. I don’t want a nanny state where the government decides how much risk I get to take. If I screw up, I pay the price. Most of those ‘home-renters’ didn’t want to, and they complain loudly that they are being taken advantage of by the banks when they have to. Don’t forget all of the ‘Jenny’ Realtor, he-who-must-not-be-named, Casey Serins, June Reyno(s) that we have covered here. How much have these people paid for what in some cases amounted to felony fraud? To them it was sure money (sounds like gambling because it was). Always read the mortgage contract, and Financial calculators are cheap. A few years ago, I picked up a HP-10bII Financial Calculator at Wallmart.. cheap. Remember one key thing. A bank has to loan money to make money. If the product does not sell, the banks will have to sweeten the deal. If you have to, go to another bank. If no bank will loan you at the terms you want, maybe there is a reason. I just had to remind a friend of that fact when they were complaining about banks wanting to charge so much. The conversation sort of went along the likes of:
Me: So you consider yourself a good risk? What does your risk profile look like?
Them: You know I am good for it.
Me: How much money do you have in the bank?
Them: silence
Me: From what I remember, it is about 2.5 Months of salary, and outstanding credit card balance is about 1 month of that. That means you are 1.5 months away from bankruptcy on a job loss in a bad economy and without an engineering background.
Them: I can always borrow from my 401K.
Me: If you lose your job, you have to pay the borrowed money back or risk at least a 10% fine plus any outstanding taxes.
–the discussion pretty well ended there, but it should give you an idea of the mentality that still exists.

My sister and I also had to remind one of the family members that the loan officer is not being nice because he is a nice guy. They guy wanted to commission on the loan. It is a business deal and you have to remember it! Run the numbers.

PS: People didn’t pay much attention to Warren Buffet’s comments w/respect to BofA. He priced his warrants with a 6% return rate and $7.14/share strike price. Warren Buffet usually asks for a minimum 10% return like with Goldman Sachs. Warren is also not in the charity business when it comes to investments.

[ucodegen]

So I guess the people buying more than they can afford did not play into it? People trying to flip w/o knowing what they were doing didn’t play into the problem(Caseys of the world)? Real Estate agents who either inserted themselves into the middle of the transaction (straw buyer) to skim money didn’t play into the problem? Real Estate agents pushing the mantra “gotta buy now or be priced out forever” didn’t play into it? What about the main-stream-media’s culpability?

Geesh, I get real tired when I keep hearing that the banks were the main problem. They weren’t. They did screw up, but it also cost them. Their screw-up was that they didn’t appropriately price risk and themselves bought into the ‘RE always goes up‘ so they figured that if someone defaulted, they could get back what they loaned through foreclosure. Everyone seemed to forget that things could go upside-down. I don’t want a nanny state where the government decides how much risk I get to take. If I screw up, I pay the price. Most of those ‘home-renters’ didn’t want to, and they complain loudly that they are being taken advantage of by the banks when they have to. Don’t forget all of the ‘Jenny’ Realtor, he-who-must-not-be-named, Casey Serins, June Reyno(s) that we have covered here. How much have these people paid for what in some cases amounted to felony fraud? To them it was sure money (sounds like gambling because it was). Always read the mortgage contract, and Financial calculators are cheap. A few years ago, I picked up a HP-10bII Financial Calculator at Wallmart.. cheap. Remember one key thing. A bank has to loan money to make money. If the product does not sell, the banks will have to sweeten the deal. If you have to, go to another bank. If no bank will loan you at the terms you want, maybe there is a reason. I just had to remind a friend of that fact when they were complaining about banks wanting to charge so much. The conversation sort of went along the likes of:
Me: So you consider yourself a good risk? What does your risk profile look like?
Them: You know I am good for it.
Me: How much money do you have in the bank?
Them: silence
Me: From what I remember, it is about 2.5 Months of salary, and outstanding credit card balance is about 1 month of that. That means you are 1.5 months away from bankruptcy on a job loss in a bad economy and without an engineering background.
Them: I can always borrow from my 401K.
Me: If you lose your job, you have to pay the borrowed money back or risk at least a 10% fine plus any outstanding taxes.
–the discussion pretty well ended there, but it should give you an idea of the mentality that still exists.

My sister and I also had to remind one of the family members that the loan officer is not being nice because he is a nice guy. They guy wanted to commission on the loan. It is a business deal and you have to remember it! Run the numbers.

PS: People didn’t pay much attention to Warren Buffet’s comments w/respect to BofA. He priced his warrants with a 6% return rate and $7.14/share strike price. Warren Buffet usually asks for a minimum 10% return like with Goldman Sachs. Warren is also not in the charity business when it comes to investments.

[ucodegen]

So I guess the people buying more than they can afford did not play into it? People trying to flip w/o knowing what they were doing didn’t play into the problem(Caseys of the world)? Real Estate agents who either inserted themselves into the middle of the transaction (straw buyer) to skim money didn’t play into the problem? Real Estate agents pushing the mantra “gotta buy now or be priced out forever” didn’t play into it? What about the main-stream-media’s culpability?

Geesh, I get real tired when I keep hearing that the banks were the main problem. They weren’t. They did screw up, but it also cost them. Their screw-up was that they didn’t appropriately price risk and themselves bought into the ‘RE always goes up‘ so they figured that if someone defaulted, they could get back what they loaned through foreclosure. Everyone seemed to forget that things could go upside-down. I don’t want a nanny state where the government decides how much risk I get to take. If I screw up, I pay the price. Most of those ‘home-renters’ didn’t want to, and they complain loudly that they are being taken advantage of by the banks when they have to. Don’t forget all of the ‘Jenny’ Realtor, he-who-must-not-be-named, Casey Serins, June Reyno(s) that we have covered here. How much have these people paid for what in some cases amounted to felony fraud? To them it was sure money (sounds like gambling because it was). Always read the mortgage contract, and Financial calculators are cheap. A few years ago, I picked up a HP-10bII Financial Calculator at Wallmart.. cheap. Remember one key thing. A bank has to loan money to make money. If the product does not sell, the banks will have to sweeten the deal. If you have to, go to another bank. If no bank will loan you at the terms you want, maybe there is a reason. I just had to remind a friend of that fact when they were complaining about banks wanting to charge so much. The conversation sort of went along the likes of:
Me: So you consider yourself a good risk? What does your risk profile look like?
Them: You know I am good for it.
Me: How much money do you have in the bank?
Them: silence
Me: From what I remember, it is about 2.5 Months of salary, and outstanding credit card balance is about 1 month of that. That means you are 1.5 months away from bankruptcy on a job loss in a bad economy and without an engineering background.
Them: I can always borrow from my 401K.
Me: If you lose your job, you have to pay the borrowed money back or risk at least a 10% fine plus any outstanding taxes.
–the discussion pretty well ended there, but it should give you an idea of the mentality that still exists.

My sister and I also had to remind one of the family members that the loan officer is not being nice because he is a nice guy. They guy wanted to commission on the loan. It is a business deal and you have to remember it! Run the numbers.

PS: People didn’t pay much attention to Warren Buffet’s comments w/respect to BofA. He priced his warrants with a 6% return rate and $7.14/share strike price. Warren Buffet usually asks for a minimum 10% return like with Goldman Sachs. Warren is also not in the charity business when it comes to investments.

[ucodegen]

They got rid of the oleander in the front. (Something I think jp can relate too iirc). Cleaning up the yard was probably at least $1k, maybe more

Are you sure those were oleanders? The leaves don’t look right, too dark green as opposed to dark olive color. The leaves also don’t look like they are long-slender.

I don’t know about the front yard after.. The ‘rock garden’ approach may not sell that well out here. I know it turns me off a bit. I noticed that both sellers (pre and post flipper) are making it a point to state “Seller/has never lived in the home. Buyer to verify all before close of escrow and satisfy self.” or “the seller has never occupied the property”.. possibly to exempt themselves from disclosure?? I don’t know how that would work, but it wouldn’t make me feel very warm and fuzzy.

[ucodegen]

They got rid of the oleander in the front. (Something I think jp can relate too iirc). Cleaning up the yard was probably at least $1k, maybe more

Are you sure those were oleanders? The leaves don’t look right, too dark green as opposed to dark olive color. The leaves also don’t look like they are long-slender.

I don’t know about the front yard after.. The ‘rock garden’ approach may not sell that well out here. I know it turns me off a bit. I noticed that both sellers (pre and post flipper) are making it a point to state “Seller/has never lived in the home. Buyer to verify all before close of escrow and satisfy self.” or “the seller has never occupied the property”.. possibly to exempt themselves from disclosure?? I don’t know how that would work, but it wouldn’t make me feel very warm and fuzzy.

[ucodegen]

They got rid of the oleander in the front. (Something I think jp can relate too iirc). Cleaning up the yard was probably at least $1k, maybe more

Are you sure those were oleanders? The leaves don’t look right, too dark green as opposed to dark olive color. The leaves also don’t look like they are long-slender.

I don’t know about the front yard after.. The ‘rock garden’ approach may not sell that well out here. I know it turns me off a bit. I noticed that both sellers (pre and post flipper) are making it a point to state “Seller/has never lived in the home. Buyer to verify all before close of escrow and satisfy self.” or “the seller has never occupied the property”.. possibly to exempt themselves from disclosure?? I don’t know how that would work, but it wouldn’t make me feel very warm and fuzzy.

[ucodegen]

They got rid of the oleander in the front. (Something I think jp can relate too iirc). Cleaning up the yard was probably at least $1k, maybe more

Are you sure those were oleanders? The leaves don’t look right, too dark green as opposed to dark olive color. The leaves also don’t look like they are long-slender.

I don’t know about the front yard after.. The ‘rock garden’ approach may not sell that well out here. I know it turns me off a bit. I noticed that both sellers (pre and post flipper) are making it a point to state “Seller/has never lived in the home. Buyer to verify all before close of escrow and satisfy self.” or “the seller has never occupied the property”.. possibly to exempt themselves from disclosure?? I don’t know how that would work, but it wouldn’t make me feel very warm and fuzzy.

[ucodegen]

They got rid of the oleander in the front. (Something I think jp can relate too iirc). Cleaning up the yard was probably at least $1k, maybe more

Are you sure those were oleanders? The leaves don’t look right, too dark green as opposed to dark olive color. The leaves also don’t look like they are long-slender.

I don’t know about the front yard after.. The ‘rock garden’ approach may not sell that well out here. I know it turns me off a bit. I noticed that both sellers (pre and post flipper) are making it a point to state “Seller/has never lived in the home. Buyer to verify all before close of escrow and satisfy self.” or “the seller has never occupied the property”.. possibly to exempt themselves from disclosure?? I don’t know how that would work, but it wouldn’t make me feel very warm and fuzzy.

[ucodegen]

[quote Arraya]An interesting comparison in sub-cultures is the Scots-Irish. The Scots-Irish were predominately farmers in the appalachian and southern united US pre-WWII. After the war with industrialization and the consolidation of the farming industry they moved into factories(like blacks) and with the advent of outsourcing had their lively hood taken away again.

Now they predominately work at Wall Marts and meth labs, have no insurance, high crime rates, high rates of teen pregnancy, no high-school degree, etc… Which are now turning into kind of a tweaked-out hillbilly gangster culture with creepy strains of dominionism christianity throughout.[/quote]
Excuse me?? You have to be joking. You might want to have some numbers back that up.
http://en.wikipedia.org/wiki/Irish_American
Joe Biden, Kennedy, Andrew Jackson, Grant.. They may have started ‘back country’..

[ucodegen]

[quote Arraya]An interesting comparison in sub-cultures is the Scots-Irish. The Scots-Irish were predominately farmers in the appalachian and southern united US pre-WWII. After the war with industrialization and the consolidation of the farming industry they moved into factories(like blacks) and with the advent of outsourcing had their lively hood taken away again.

Now they predominately work at Wall Marts and meth labs, have no insurance, high crime rates, high rates of teen pregnancy, no high-school degree, etc… Which are now turning into kind of a tweaked-out hillbilly gangster culture with creepy strains of dominionism christianity throughout.[/quote]
Excuse me?? You have to be joking. You might want to have some numbers back that up.
http://en.wikipedia.org/wiki/Irish_American
Joe Biden, Kennedy, Andrew Jackson, Grant.. They may have started ‘back country’..

[ucodegen]

[quote Arraya]An interesting comparison in sub-cultures is the Scots-Irish. The Scots-Irish were predominately farmers in the appalachian and southern united US pre-WWII. After the war with industrialization and the consolidation of the farming industry they moved into factories(like blacks) and with the advent of outsourcing had their lively hood taken away again.

Now they predominately work at Wall Marts and meth labs, have no insurance, high crime rates, high rates of teen pregnancy, no high-school degree, etc… Which are now turning into kind of a tweaked-out hillbilly gangster culture with creepy strains of dominionism christianity throughout.[/quote]
Excuse me?? You have to be joking. You might want to have some numbers back that up.
http://en.wikipedia.org/wiki/Irish_American
Joe Biden, Kennedy, Andrew Jackson, Grant.. They may have started ‘back country’..

[ucodegen]

[quote Arraya]An interesting comparison in sub-cultures is the Scots-Irish. The Scots-Irish were predominately farmers in the appalachian and southern united US pre-WWII. After the war with industrialization and the consolidation of the farming industry they moved into factories(like blacks) and with the advent of outsourcing had their lively hood taken away again.

Now they predominately work at Wall Marts and meth labs, have no insurance, high crime rates, high rates of teen pregnancy, no high-school degree, etc… Which are now turning into kind of a tweaked-out hillbilly gangster culture with creepy strains of dominionism christianity throughout.[/quote]
Excuse me?? You have to be joking. You might want to have some numbers back that up.
http://en.wikipedia.org/wiki/Irish_American
Joe Biden, Kennedy, Andrew Jackson, Grant.. They may have started ‘back country’..

[ucodegen]

[quote Arraya]An interesting comparison in sub-cultures is the Scots-Irish. The Scots-Irish were predominately farmers in the appalachian and southern united US pre-WWII. After the war with industrialization and the consolidation of the farming industry they moved into factories(like blacks) and with the advent of outsourcing had their lively hood taken away again.

Now they predominately work at Wall Marts and meth labs, have no insurance, high crime rates, high rates of teen pregnancy, no high-school degree, etc… Which are now turning into kind of a tweaked-out hillbilly gangster culture with creepy strains of dominionism christianity throughout.[/quote]
Excuse me?? You have to be joking. You might want to have some numbers back that up.
http://en.wikipedia.org/wiki/Irish_American
Joe Biden, Kennedy, Andrew Jackson, Grant.. They may have started ‘back country’..

[ucodegen]

I have covered the problem with eliminating the mortgage interest deduction. It won’t work. Only the rich will be able to work around it, the middle class will get screwed. That is because interest costs are deductible on businesses, LLCs..etc. Wealthy people have good/expensive tax advisers that can show them how to wrap their house in an LLC.

On the other hand, the RE capital gains exemption only rewards those that can own real estate or already have real estate. The capital gains exemption can also be gamed, particularly if you are already in real estate as a broker (can reduce the commission cost to 1/2). There is no real purpose in this one and really should be eliminated. It also helped lead to the speculation that occurred in the RE market, leading to the current mess.

[quote FormerSanDiegan]What about the $70 Billion subsidies to big oil companies ?
Let’s cut that first.[/quote]Sounds like a good one to cut.

[ucodegen]

I have covered the problem with eliminating the mortgage interest deduction. It won’t work. Only the rich will be able to work around it, the middle class will get screwed. That is because interest costs are deductible on businesses, LLCs..etc. Wealthy people have good/expensive tax advisers that can show them how to wrap their house in an LLC.

On the other hand, the RE capital gains exemption only rewards those that can own real estate or already have real estate. The capital gains exemption can also be gamed, particularly if you are already in real estate as a broker (can reduce the commission cost to 1/2). There is no real purpose in this one and really should be eliminated. It also helped lead to the speculation that occurred in the RE market, leading to the current mess.

[quote FormerSanDiegan]What about the $70 Billion subsidies to big oil companies ?
Let’s cut that first.[/quote]Sounds like a good one to cut.

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