Posted on 06/24/2007 7:58:35 AM PDT by gpapa
It's easy to scold sub-prime lenders for the glut of home foreclosures. It's also wrong. Blame the buyers.
(Excerpt) Read more at boston.com ...
But one problem is that our government has ignored the Constitution and the idea of getting itself out of things...and has built in tax punishment for those who aren't homeowners (or parents, or ...). When people talk about tax credits, or deductions, etc., what they are really saying is: "The government is going to fine you and then reimburse you if you do what they want."
Then there is the myth of equality. There are those who assume that equal rights mean an equal share of the pie.
The pie share is a function of ability,initiative and desire to achieve. Those who lack intelligence, purposely decided not to be educated and daily shun advancement are denied an equal share.
To give them a loan to shore up their pie holding eventually results in problems.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Guess how far you'll get with ability, iniative, and desire without "access to capital."
Money is available to capable people. There must be a demonstration of commitment.
No it's probably more the fault of the real estate brokers and their agents.
It’s scary these days. My brother is a real estate broker here in Southern California, and although he has tons of homes listed, none of them are selling.
Witht he rise in prices, the sellers think they can still get top dollar, and the buyers want to undercut and get a great deal what with the defaults so the buyers aren’t taking the offers.
You’ll have someone with a million dollar price on a $700,000 home, and the buyer will make an offer of $500,000. Spooky.
No. Blame the fear mongers and investment brokers. They are the ones making gold out of dirt.
“Thanks to my early fiscal training, when my husband and I bought our South End condo in January 2004, we ignored the loan officer who wanted to sell us an interest-only loan for twice the amount we needed and instead got a smaller adjustable-rate mortgage.”
Early fiscal training? Err. “Gee so I pay 400 a month for two years, then I start paying 900 a month every month after that, and local property tax increases are mixed into the loan payment every payment as well...duuhhh..where do I sign?”
Old fashioned of me, but debt has been a bad idea since Biblical times, nothing has changed since then, if you borrow money, you are a servant to the lender of the money and they can take your home for collateral, people never learn.
I partially “blame” the lenders, with FDIC insurance, they basically can give credit to the worst candidates, then squeeze them for whatever money they can get, in the mean time the loan paper can be sold to a capital company, reaping even more money then when the sucker defaults....”Mommy” in the form of the FDIC, will make sure the bank doesn’t fail...
If there were no FDIC, then maybe such risky loans wouldn’t have been made in the first place?
Brokers and agents existed before the boom, and so did buyers, so it's probably something else.
There are plenty of homes on the market. Smart buyers will continue to wait.
I just moved to Sacramento, and I'm waiting. I still see $350k homes listing for $529...in fact, I'm RENTING one for $1800/month:)
“It’s scary these days. My brother is a real estate broker here in Southern California, and although he has tons of homes listed, none of them are selling.
Witht he rise in prices, the sellers think they can still get top dollar, and the buyers want to undercut and get a great deal what with the defaults so the buyers aren’t taking the offers.
You’ll have someone with a million dollar price on a $700,000 home, and the buyer will make an offer of $500,000. Spooky.”
Sounds like a free market to me at least, one side is going to have to give in, or face a loss, or a buyer may miss a great opportunity because they wanted a home to cheaply.
I also think a hidden benefit to all of this is rental costs will obviously be falling, a glut of homes with no tenents means that rent prices will be a droppin’.
I am a real estate agent and I think you are right about this. In 05 we had agents pushing clients to pay top dollar so that they would get the contract through. Mostly minority clients and agents. But do not forget about the loan officers that pushed getting that 0 down loan through. I can run foreclosures and 90% of them is this very thing. (DC area)
Personally, I believe it’s “greed” driven. First on the part of the agents and brokers who are not serving their clients by “assisting” them to obtain a house they cannot afford. Secondly, by the buyers who are living “way” beyond their means, but feel that they are entitled to such lifestyle.
Really this is very simple- some people are just too stupid to make sound financial decisions.
The terms for any formal loan must be presented in writing; many people skip reading the paperwork, cannot understand the terms or hope for the best and sign anyway. Whose fault is that? (rhetorical question)
I think your slightly behind the times. There maybe a few banks that keep mortgages on the books, but most of this stuff is repackaged and sold to big institutional investors such as pension funds.
How do you conclude that the fault lies with real estate brokers and agents?
I blame feds and their public schools they force americans to attend and we the people for putting up with their destruction of everything good about America.
Banks are all about the short term when it comes to profit. The turnover in both management, ownership and even to the very existence of any lending institution... is brief. Get in, make the loan, sell the loan to someone else, get the short term cash difference minus costs and GET OUT FAST. That’s the game they are playing.
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