Mortgage company suddenly closes doors

Seattle Times ^ | Saturday, August 16, 2003 | Bradley Meacham and Peter Lewis

[arete]

A promise to pay an agreed upon value, which is also measured in terms of money

Actually when it comes right down to it, money is a "call" on the governments ability to take a cut of its citizens work/earnings through taxation. In that sense, we all are literally working for the government.

Richard W.

[Lijahsbubbe]

They are taking out second mortgages (home equity loans) to pay off debt on a bunch of crap that they bought with credit.

If people charge as much as I read they do, I agree there's gonna be some interesting finangling ahead. Seems maybe people are playing the shell game and running out of shells!

[Lijahsbubbe]

Except, I am envisioning a bizarro world scenari where our currency is so devalued that the $50,000 they are in debt and the $300,000 they owe on their homes will be the equivalent of buying a new couch or washing machine. And in tha scenario, it will be folks like you (presumably) and me who tried to do things right, stayed debt free and have some cash stashed away--who will be really hurt.

Oh, you have those bad thoughts too huh?

[Mannaggia l'America]

There seems to have been a number of instances lately where dealers have refused to sell vehicles for cash -- personal watercraft, motorcycles, etc. Don't know for sure about new autos, but cash does seem to be a disincentive to the dealer unlike the "deal-maker" it once was.

That's because the dealer is getting a kickback on the loan.

A few years ago when I was in the market for a minivan for my wife, we decided on one and I negotiated a price (they kept coming back to me with payment amounts and I insisted on negotiating on bottom line price).

After we agreed on a price, I informed them that I would be paying cash. They tried all different ways to get me to finance. In fact, when I came back the next day to get the car, I was literally writing out check and they were still trying to convince me to finance it.

[HighRoadToChina]

bump

[meatloaf]

That's an ugly looking house (the one on the left). Are you sure that didn't use to be a restaurant? Or maybe a fire station?

[Rebelbase]

"You'd have to wonder what they were buying with the excess money "

Frivolus crap. An $8000 vacation, thousands in home decor, eating out at high $$ restaurants. Irresponsible living that will catch up to them sooner than later.

[hopespringseternal]

If you put 20% down as opposed to 2%, you save a whole lot of money over the life of the loan and you are liable to get a better interest rate, no PMI (why isn't that MPI?), and the chances are you can pay the loan if things get rough. Makes perfect mathematical sense to me.

But all things being equal, you may be better off keeping the 20% and getting a cheaper house. Especially if that 20% represents most of your savings.

Everyone's situation is different. For some people paying cash for a house is smart, for others it may be monumentally stupid.

[Chad Fairbanks]

A guy I work with had a meeting to sign papers last wed. after getting his mortage refinanced through this company with an amazing rate (a little under 5) - he was really happy on Wed.

When Friday rolled around, and he was told of this he was NOT a happy camper...

[MatthewViti]

You know those Ditech.com commercials? Guess who owns Ditech? GMAC!

[FITZ]

All money is nothing but a mere promise to pay. All assests are valued in monetary value.

But some value is less relative. If a loan is backed by real estate, if the borrorer doesn't pay, the real estate is still there. Something like a car isn't backed by anything. Car loans are a bad idea anyhow because the minute a $25,000 car is driven off the lot it's lost $5,000 or more in value and repos aren't worth much. It's one thing if they give loans to only the credit worthy whose promise to pay means something but they're giving credit to college students who have never worked, and all sorts of people who easily might never pay.

[FITZ]

Home prices are the most obvious.

I think buying a home in a subdivision would be especially risky because the future value of that home is going to depend a lot on what happens with your neighbors. If too many of them bit off more than they could chew and start foreclosing, those home values are very likely to drop. I don't know what will happen in this area because in spite of high immigration and a very high birth rate, the population is dropping and you see a lot of houses ---especially in the central areas of town sitting empty. Property taxes are four times what they should be and jobs are leaving and so is the middle class.

[ErnBatavia]

That's an ugly looking house (the one on the left). Are you sure that didn't use to be a restaurant? Or maybe a fire station?

It used to be a nice normal looking little white house with some nice pepper trees in front; the speculators got a painter to do the psychedelic thing to it.

Out here, I can't imagine wanting a house that dark, if for no other reason than it'll absorb more heat. Same reason that around 75 percent of our cars are white, so you can at least touch the door handle to get in on a summer day.

[Concentrate]

Well said. Some promises are more valid than others, which is why interest rates on credit cards and cars tend to be higher than rates on real estate.

The dollar is based on faith in the Government of the United States; perceived ability to pay is what determines value of a loan. Dollars, therefore, are merely IOU's from the federal government.

[razorback-bert]

That style is called Santa Fake chic out here in West Texas, we have one here called the Pep-O-Bismol house, pale pink, with lime and pale yellow trim.

[hedgetrimmer]

I am so jealous of your beautiful paving. In California, our roads are literally just a series of potholes interspersed with weeds and trash.

[ErnBatavia]

In California, our roads are literally just a series of potholes interspersed with weeds and trash.

We're in California also (Palm Springs area); we just had our local streets reslurried a couple of years ago - just give 'em time, though, and they'll be like the rest of the state's roads!

Funny, when I was a chirren in the 50's and early 60's, California's highway system was the envy of the rest of the country - no mas!

[fortaydoos]

150K to 300K in 15 years is a bit under 5% compounded growth a year.

[hedgetrimmer]

I have had tires popped by potholes in Santa Cruz county CA. A few years ago the county spent the entire road budget putting a vinyl looking plastic down on a couple of hundred yards of median that was supposed to sustainably keep out the weeds. Of course if you look at it now, the weeds have completely taken over the stuff and it looks like garbage. They could have bought some very nice carpeting and spent less per square yard, but the real goal was to use up the money so there wouldn't be any left to actually maintain the road.

[fortaydoos]

You doom and gloomers keep betting against America and, not to be mean, but that is why you are so envious of the folks in the big houses and the big cars. You might be right one of these days, but in the meantime my money is on America and George Bush.