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Living In The Bubble (America's Coming Mortgage Crisis)
The American Conservative ^
| Feb. 10, 2003
| Robertson Morrow
Posted on 02/18/2003 2:54:05 PM PST by Middle Man
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To: jocon307
Thanks for your reply. I was born in East Orange and raised in Jersey City and Union City. Moved out here in 1976, and have never been back east since then. But I enjoy hearing about what's happening in my native state. The illegals here are mostly Mexican. What ethnicity are they in your area?
21
posted on
02/18/2003 4:27:59 PM PST
by
Wolfstar
(Time is not on our side. Let's roll.)
To: Wolfstar
Back in '91 a fellow in a startup business was trying to convince my wife and I to move from our roots on the East Coast to Sacramento. After a week of house-hunting in California, we declined his generous offer because we saw how much living space we would be losing by moving to California. The housing we could realistically afford wouldn't even qualify as a rabbit hutch.
To: Lancey Howard
"...it would be foolish for a homeowner to let the opportunity pass." All of what you say rings true. If the majority of homeowners use this opportunity to lower their monthly outgo and invest or save the difference, great. I see too many people who use the increased cash flow just to buy more "goodies", wear out the debit card on a trip to the south of France or buy a Land Rover. I hope that's not the norm.
To: Middle Man
Part of the bigger problem is that there appears to be no end of capital available so people can go further into debt.I'd rephrase that to say: A huge part of the problem is that many people get an opportunity to lower the interest rates, and thus the payments, on their mortgages, but instead of doing that they max out the mortgage and spend the money on other things, many without even paying off their credit cards.
I have no sympathy here. People should know to put the brakes on high monthly payments that won't go away.
24
posted on
02/19/2003 6:51:49 AM PST
by
grania
("Won't get fooled again")
To: Middle Man
As a former mortgage lender, I see no real problem here. People have refinanced to take advantage of lower interest rates, thus lowering their payment and/or term of loan. Those who have pulled out equity have perhaps paid off non deductable credit card or other similar high interest loans, have perhaps used the proceeds for improvement or repairs, etc. which adds value to the property.
While to total mortgage balance may be up temporarily, it is coming down faster, the payments are lower, etc. so where is the problem?
To: Wolfstar
The "Greater Fool Theory" was INVENTED in Southern California. Not to worry. The supply of them out there is such that you ought to be able to buy the shack you describe and roll out of it in a few years with about a $million in clear profit.
To: LS
As southern Ohio goes, so goes the nation?
To: Middle Man
Not at all, and you well know that is not what I mean. But it DOES mean that the reverse is not true, either---that as "silicon valley" goes, so goes the nation, or as "Denver goes . . . " etc. But the Ohio Valley has traditionally been one of those heavy manufacturing areas that is something (a small part) of a "bellweather."
28
posted on
02/19/2003 7:35:14 AM PST
by
LS
To: nomorecameljocks
In a perfect world, if that's what people were doing, I would be in complete agreement. Americans have a negative savings rate compared to other industrial nations. Japan has a savings rate of around 17 percent. How many American households do you know set anywhere near that amount aside? I see the two late-model cars in the garage, eating out most nights, trips to Cancun and Cozumel.
People aren't staying put and building equity in their homes anymore, or putting money in the bank. Although we live in a well-established suburb of single-family dwellings, the turnover is phenomenal. Families are constantly moving after 2-3 years to "greener pastures", and always for economic reasons. This societal instability is reflected in the recent collapse of the NASDEQ. Just look at the performance of most of the major mutual funds.
To: LS
"...the Ohio Valley has traditionally been one of those heavy manufacturing areas..." I will grant that the incredibly shrinking manufacturing base in this country is indeed a bellwether. Wasn't Corning Glass synonymous with part of Ohio before it laid off 12,000 domestic factory workers?
Comment #31 Removed by Moderator
To: Middle Man
No, I think Corning was upstate New York. Corning badly missed-guessed on fiber-optics over satellites, among other things.
32
posted on
02/19/2003 9:07:49 AM PST
by
LS
To: Dick Bachert
Wouldn't that be lovely, LOL!
33
posted on
02/19/2003 11:04:29 AM PST
by
Wolfstar
(Time is not on our side. Let's roll.)
To: Middle Man
34
posted on
03/02/2003 5:23:58 PM PST
by
AdamSelene235
(Like all the jolly good fellows, I drink my whiskey clear.)
To: grania
A huge part of the problem is that many people get an opportunity to lower the interest rates, and thus the payments, on their mortgages, but instead of doing that they max out the mortgage and spend the money on other things, many without even paying off their credit cards. I just walked through a house for sale that was listed on 02/15/03. It was a must sell - the Seller needed to sell right away or the house was going into foreclosure.
I went through the house. The owners had moved to PA to start work at a new company. They had all the trappings in their home - hot tub, huge, huge TV system, new appliances, etc. Of course, they had not done periodic maintenance on their log cabin home and it showed, but the house was still in good condition.
I decided to not purchase the house. I later found out that the Sellers had a first and second mortgage out on the property. I confirmed that they were ready (or still are ready if the house is not yet sold) to "walk away from the house", Poof. Just like that. My agent says this is she is seeing more and more of this. People get overextended or whatever, and just load up the moving van and off they go.
35
posted on
03/02/2003 5:37:22 PM PST
by
Fury
To: NorCoGOP
I'm a Real Estate Broker in Portland, and for the first time one of my listings was foreclosed on. Poor clients were 'upside down' in their home. Wouldn't even have taken the listing, but they bought it through me, so I gave it a try. Market still good here, but many people have paper thin or no equity in their homes.
Nam Vet
36
posted on
03/02/2003 5:44:43 PM PST
by
Nam Vet
(Rooting for 'Big Al Sharpton', Savior of the Dims. (America's Mugabe?))
To: NorCoGOP
8.33% of the principal & interest amount of the monthly payment.......makes sense to pay off the morgage early, saving thousands of dollars.
37
posted on
03/02/2003 5:52:47 PM PST
by
mickie
To: ARCADIA; Steven W.
What free flow of commerce? We are talking about a distortion which uses a publically subsidized program to generate consumer spending. It is a perversion of a program designed to increase our stock of affordable housing. Dead on my friend....Nice to see somebody else "gets it". I was getting so lonely. See my #34
38
posted on
03/02/2003 7:38:40 PM PST
by
AdamSelene235
(Like all the jolly good fellows, I drink my whiskey clear.)
To: AdamSelene235
Bump
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