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U.S. housing boom a bust for many (heh credit wrecks to come)
MSNBC & Washington Post ^ | May 29, 2005 | Michael Powell

Posted on 05/30/2005 6:19:28 AM PDT by Flavius

Edited on 05/30/2005 6:35:29 AM PDT by Sidebar Moderator. [history]

PHILADELPHIA - To walk Thayer Street in northeast Philadelphia is to count, door by door, the economic devastation afflicting a working-class neighborhood. On a single block, 18 of the 42 brick rowhouses have gone into foreclosure in the past three years.

There's Marciela Perez, who fell ill with cancer, lacked health insurance and stopped making mortgage payments. Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver who took on too much debt, lost his job and fell behind on his mortgage.

"Mortgage companies convinced us to refinance, and each time our bill went up," O'Mara said as he surveyed his narrow street from his shaded front porch. "You fall behind and they swoop down on you."

Excerpt msnbc.msn.com


TOPICS: News/Current Events; US: Pennsylvania
KEYWORDS: default; housing; mortgage; philadelphia; re; realestate
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To: armydoc
Actually, I did read your post. There is nothing in the other poster's reply to yours that indicated that his plan was to follow your idea, just that he/she was looking at a large number and considering interest only.

I have used interest only to leverage one income property to buy another. The rent on the first covers the nut plus enough to write down the debt by 75% before the traditional set-up kicks in. That will be in 8 years and I will be locked in at 6.25% for twenty years based on the remaining principal which will be 25% of the original debt. Now, that makes sense.

61 posted on 05/30/2005 9:13:58 AM PDT by wtc911 ("I would like at least to know his name.")
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To: Wonder Warthog

Problem with that is that 1) most folks ain't that disciplined; 2) many folks are dirt stupid (gotta have that BIG PLASMA SCREEN TV); credit card companies hate people who pay off their usurus loans so they find hidden fees to tack on.

Get rid of all your credit cards say I. Have a portable job so you never have to worry about income. And stay off the financial services grid.


62 posted on 05/30/2005 10:57:15 AM PDT by Archangelsk (Handbasket, hell. Get used to the concept.)
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To: wtc911

Au contraire. I live in a rapidly appreciating area, and I won't be in the house more than five years. Makes perfect sense.


63 posted on 05/30/2005 11:53:51 AM PDT by RightOnline
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To: RightOnline
I live in a rapidly appreciating area, and I won't be in the house more than five years. Makes perfect sense.

-----------------------------------------

I hope your plan works but remember, man proposes, God disposes. I you are biting off more than you could chew under a standard fixed rate mtge then you are out where the ice is thin until you sell.

64 posted on 05/30/2005 12:28:55 PM PDT by wtc911 ("I would like at least to know his name.")
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To: Flavius
"We've had a national agenda that's putting people into homeownership who are not ready for it," said A. William Schenck III, Pennsylvania's secretary of banking and a former bank president.

Yep, just like trying to get every kid into college. A disaster waiting to happen.

65 posted on 05/30/2005 12:45:17 PM PDT by varon (Allegiance to the constitution, always. Allegiance to a political party, never.)
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To: Flavius
State and federal regulators place much of the blame for the foreclosure problem at the feet of mortgage brokers and bankers, who have crafted ever-riskier ways for Americans with poor credit to buy homes.

And if they hadn't offered up ways for "the peur" to get mortgages, these same bureaucrats would be screaming classism, racism, and any other kind of -ism they could think of...

66 posted on 05/30/2005 12:55:39 PM PDT by Libertarian444
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To: AmericanChef
Does being barrel-chested or rawboned and crew-cut have any possible significance to the story? Please stop the romance novel reporting!

..and the story was written by a man.

67 posted on 05/30/2005 12:57:42 PM PDT by Libertarian444
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To: suzyq5558

If you didn't refinance the whole debt, it may be smaller. If you finance it all, it's bigger because they usually throw in the mortgage paperwork and profit costs into the new principal.


68 posted on 05/30/2005 1:59:44 PM PDT by expatpat
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To: Glenn

My sarcasm tag did not show, sorry.


69 posted on 05/30/2005 5:35:13 PM PDT by junta ("Racism" a word invented so as to allow morons access to the political debate.)
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To: Flavius

I get calls from finance companies trying to offer me credit. I tell them I owe nothing to anyone. I am debt free. I have no mortgage, I pay the credit card bill fully each month and I paid cash for my car. I think it is possible to live within ones means. I think it is possible to save for what one wants. Why is this such a foreign concept?


70 posted on 05/30/2005 5:44:43 PM PDT by muir_redwoods (Free Sirhan Sirhan, after all, the bastard who killed Mary Jo Kopeckne is walking around free)
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To: Flavius

"Yes but banking system depends on them, if everyone lived within their means.

The GDP would disappear"

They must hate me since i've never borrowed a cent except for 1 1st mortgage which I paid off 8 years before it was due and it was at 6%.

Still own the home and bought my condo for cash and haven't had a mortgage payment in 20 years.


71 posted on 05/30/2005 5:50:05 PM PDT by dalereed
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To: armydoc

From the LA Times this weekend re: your "consistently climbing" "sure thing" DC market.

"The chief economist for the Mortgage Bankers Assn. is worried enough about the torrid housing market to get out of it.

"I'm going to rent for a while," said Douglas Duncan, who expects "significant reversals" in regions that have enjoyed strong home price appreciation, including Washington, D.C., Florida and California. He plans to sell his suburban Washington home, which has tripled in value since he bought it a dozen years ago, and move into an apartment.
. . .
It's a human temptation to stay in the game until the last moment. But Duncan, the economist for the mortgage bankers, doesn't seem to feel it. Workmen are prepping his home now for a sale, he said.

Acting on his gut has served him well before. In 1988, as the economist was moving to Washington, he went to look at a house that was for sale. Three couples were already there. They started a bidding war in the living room.

"This is irrational behavior," Duncan remembers thinking. He decided to rent. Shortly afterward, the market crashed.

In 1993, he decided it was a good time to own. The price he paid for his house was about a third less than the previous owner, who had lost it in a foreclosure sale."


72 posted on 05/30/2005 6:49:15 PM PDT by agrarianlady
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To: Jerry K.

Quote: That's a lot like refinancing a house - you just re-set the payout back into the bank's favor. During the first half of the life of your mortgage, the house payment is predominantly interest, while the last half is mostly principal. Refinance and you just begin paying more interest again.


Bingo!!!! It's amazing the number of people who do not understand this concept.


73 posted on 05/31/2005 8:03:36 AM PDT by superiorslots (Free Traitors are communist China's modern day "Useful Idiots")
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To: Libertarian444

-..and the story was written by a man.-

A Girlie Man!


74 posted on 06/01/2005 5:38:26 AM PDT by AmericanChef
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