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- twalsh36, on 05/08/2009, -4/+40And the cycle continues...
- inactive, on 05/09/2009, -2/+23The Fed is issuing money as fast as it can to "stimulate the economy". However, consumer demand is down and the means of production are no longer available. Therefore all of this funny money will enter at the top of the food chain and will fuel another bubble. This money will attempt to re-inflate the real estate bubble, but will only manage to inflate the dollar and kill the real estate market.
- KirbyMeister, on 05/09/2009, -1/+22That's the point. Keynesian economics considers price drops to be bad. For a Keynesian, the economy is best served when prices are constantly rising, everyone is mortgaged to the hilt, and everyone continues to spend, because spending (and not production) somehow drives the economy.
- marytormey, on 05/08/2009, -5/+25Don't people understand, that this makes houses more expensive for everyone!
- enantiodromia, on 05/09/2009, -3/+20This is not about "Subprime" borrowers; Subprime refers to loaning money to people with _poor_ credit scores.
This is about helping people who have good to great credit, who have good stable income, take advantage of the lower property prices in their area.
If you have worked hard to build up your FICO score, and have worked hard to advance your career & salary over the last few decades, but don't happen to have a 20% down payment just sitting there in liquid assets, this is a good thing.
If you want the real estate market to pick up again, then you should be happy people with good income and good credit are one step closer to buying.
Buried for sensationalist headline. - T8erT0T, on 05/09/2009, -4/+19............................................________
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...................................,For Christ's sake... look, how many ***** times---- screw it. - heechee1010, on 05/08/2009, -3/+14Another housing boom but there will be nothing to soften the next bust. All nations are mortgaged to the hilt and that will mean a savage depression to follow
- BillE3, on 05/08/2009, -2/+9Like a broken appliance until the power fails.
- thegrantman, on 05/09/2009, -0/+7Add in more foreclosures from the new unqualified buyers (who will borrow with inpunity because the government will offer bailouts ) and we'll have what Schiff described as the earthquake...not our current tremor.
- brisketplease, on 05/08/2009, -4/+11rick roll
- unii, on 05/09/2009, -0/+6People are selfish greedy bastards.. They don't care about others....
Someone gives them credit out the a** and they know they can't afford.. They don't care...
Do they care that they are outbidding reasonable people w/ cash?
Nope.. haha, they say.. I got the house.. I got the govt. bailout... I got the loan..
Look at me in my big house.. The thought never crosses their mind when they overpay for a house.. All they care about is themselves. - itsthemechanic, on 05/09/2009, -7/+13Here we go again with the Digg.com economic professors...
- Maddoktor2, on 05/09/2009, -1/+7Which has precisely dick to do with nationalized health care, student loans, and real estate grants.
- P-Frank, on 05/09/2009, -4/+9This has been framed in a pretty ridiculous way by the post. Countries like Australia have been running new home-buyers grants for quite awhile to great success. Other countries, like New Zealand, are slowly following. Australia has all sorts of neat things like 0% interest student loans, nationalised healthcare, cheap dental and glasses. Though some Americans may think this is a bit too "Swedish" for their liking, I believe the results are proof enough for me.
- RooX, on 05/09/2009, -1/+5Canada is doing similar things as well, seems to be working for many here.
- BeatPunchbeef, on 05/09/2009, -0/+4you dont live in Cali do you?
- Maddoktor2, on 05/09/2009, -0/+4And then the wiring overheats...
- Mpwns, on 05/09/2009, -1/+4as a guy in real estate, i can tell you its way to ***** soon for this ride again. this will only make matters worse in the next 3-5 years.
- gcnaddict, on 05/09/2009, -0/+3If anything has government backing, it's seen as being okay, which means the private sector will pick it up like wildfire.
- gcnaddict, on 05/09/2009, -1/+4It's a cycle of fear and greed. When stuff goes wrong, fear makes people sane. When stuff gets better again, greed makes people think it's safe to be stupid.
I hate this system. *sigh* - Dewhead, on 05/09/2009, -0/+3The only way you will know if the bottom has been reached is when prices start to go up. There is no way to know. I'm realtor and I usually tell my clients to plan to be in the home at least 7 years and to put at least 10% down. If you put down less and you sell sooner, then you will lose whatever equity that you have in the home to pay realtor fees and other closing costs. In addition, during the first 5 years of the mortgage the majority of the payment goes towards interest on the loan. After about 5 years, then you will begin to pay on the principal.
There might not be a better time in our lifetime to buy a home since prices AND rates are low, but that doesn't mean that it will make sense for everyone.
However, money is very cheap right now and rents can be very high so it be less per month to buy then it is to rent. Another idea is to get a smaller starter home with a low interest rate and keep it as a rental instead of selling in 3-5 years. In five years, rents will be even higher and you can charge alot more than your mortgage payment and get someone else to pay down your mortgage.
Buying real estate is more like "investing". If you want to make money then it is a long term process. In a "normal" market, real estate will appreciate about 4-5% which is about the normal rate of inflation. - Dewhead, on 05/09/2009, -0/+3blockbusting and redlining haven't been an issue since the 70's,
I sold homes during the subprime nightmare and I can tell you that I told every client really bad idea to do a 103% FHA loan. The Federal Housing Authority was pushing lenders to lend money. The credit scores and debt ratios were "adjusted" down so that more people could qualify. The lenders felt reassured that the loans were going to be bought by the secondary market (freddie & fannie). It is a complete farce that the lenders were predatory. The lenders were given a green light and nice little push from our government to "make homeownership affordable" for everyone. Sound familiar? It's the same thing you are hearing now with the cram down that the government is "encouraging" the banks to do.
Its also BS about the issue being adjustable rates. Rates are lower now than they were when the bubble started so loans are not adjusting up dramatically. - filovirus, on 05/09/2009, -1/+4Dateline should start a new show called, To Catch a Predatory Lender.
- Goph09, on 05/09/2009, -1/+4I would like to remind you that it was the democrats back in 1994ish that first forced banks to issue subprime lending. Now it's the democrats doing it once again, not learning from the recent past.
REAL SMART - moxley, on 05/09/2009, -1/+4Can we just take over this corrupt mess by any means necessary already and install honest, non-careerist government?
- Evazan21, on 05/09/2009, -6/+8Australia also has a firewall blocking whatever websites their government deems unfit and doesn't allow citizens to protect themselves with personal firearms. That is not a model I want to follow.
- trythison4sighs, on 05/09/2009, -0/+2There was a movie in the late 80's early 90's with the Cory's called "Prayer of the Rollerboys". The premise of the movie was the United States was both privately and publicly mortgaged/in debt to the hilt. So much so, that other countries came in and bought up EVERYTHING including the Government... sound familiar?
- cards, on 05/09/2009, -0/+2I'm the exact person this lending could help, but I still disagree with it. The problem isn't *only* about whether the person has good credit and can make the payments. It's also about how much they have invested in the property. As home prices have been dropping, more and more people are upside down with their mortgages. When that happens, people have a decision to make; whether or not they're smarter to walk away. The choice to walk away gets much easier when you have nothing invested in the property. This is bad. More foreclosures, more bank-owned properties, and we all know the rest.
- herojon, on 05/09/2009, -0/+2How is the government forcing things upon us greed?
- decker12, on 05/09/2009, -0/+2And yet I still can't afford a house in the SF Bay Area... $650,000 for a 1400 square foot 2 bedroom? I'll rent for a couple more years, thanks.
- yerdaddy, on 05/09/2009, -1/+3In USA, interest is a religion.
- twistedrapier, on 05/09/2009, -2/+4You seem grossly misinformed. Australia does not yet have a national internet filtering system and it is completely possible to obtain firearms here. The internet filtering system is in "testing" at this point, and given the vocal opposition of the public, will be unlikely to get much further. As for firearms, it is simply a case that it requires mores background checking and operation training to obtain one.
- shig, on 05/09/2009, -0/+2Did you know this girl has a credit score of 300? Then why did you offer her this loan?
- z0rk, on 05/09/2009, -2/+4It also prevents the housing market from hitting bottom, and until that happens things will just keep getting worse.
- FujoGusto, on 05/09/2009, -0/+2Agreed. Too many people confuse having a mortgage with actual home ownership. The vast majority of Americans don't own *****. The banks own their homes and cars and the credit card companies own their televisions and furniture. The average U.S. citizen is lucky if he can afford his own groceries and gas on a month to month basis. It's no wonder one of the most common things a dead relative passes on to his or her family is debt.
We run an economy based on imaginary wealth, it's pure insanity. - splorpdotorg, on 05/09/2009, -0/+2But, Canada has winter.
- inactive, on 05/09/2009, -0/+2Loz
- ninjakitty07, on 05/09/2009, -0/+2My husband and I are also looking for our first house. The general advice we've heard is that it takes an average of five years to break even on the costs of buying a home, and that's assuming that the value of the house does not decrease. It depends on your local housing market and individual circumstances, but I would definitely seek some professional input before choosing to buy a house for just a few years.
- Scottamus, on 05/09/2009, -0/+2Or Iceland! No, Wait...
- Annihilia, on 05/09/2009, -0/+1Why not be responsible and rent if you can't afford a house? Why expose your entire family to risk of perpetual indebtedness in the event that you lose your job (which is entirely possible today)?
- Kangalanatolian, on 05/09/2009, -1/+2It is still the same socialist mindset that got us here in the first place. These prices are volatile. There is a good chance that the downpayment will be eaten up in depreciation. There is just too much housing in the US. We need to stop building for a while, and junk the federal reserve cartel. That would allow REAL capitol to eventually flow into housing. The excess houses are out there. Sign a lease option and make it home.
- enantiodromia, on 05/09/2009, -0/+1so what if i already have kids, make six-figures a year, and have my savings invested in other things?
you just said "don't make it an investment", but that's exactly what it would be if i had to move $50,000 from my real investments just to get the house loan.
this article also meantions NOTHING about Subprime loans, except in the title for some reason. - heystoopid, on 05/09/2009, -1/+2O'really ?
And the proof is where in this soggy pudding of so much missing key information and a preselected but very skewed point of view mixed with lots of posterior hot air ? In a sense just a lot of words jumbled together to scare those too lazy to research this shallow deception of misinformation .
Even simple basic research will demolish this line of bull crap and horse hockey with total ease !
Enough said , be a cynic read between the lines investigate the authors and the alleged loans on offer , look beyond the fictional hype ! - Bloodwine, on 05/09/2009, -0/+1Just when I thought my neighborhood was safe from the unwashed masses.
- Ebacherville, on 05/11/2009, -0/+1government and the FED started the first housing bubble with there "cheap" debt ect.. its also the consumers fault for taking the variable rates and getting into something they could in no way afford.
The government and there big bank (the fed) started it, came up with a "solution" and now are starting to create the problem again. - zomgflamer, on 05/10/2009, -0/+1Im hearing sub prime market is around $600 Trillion globally.
- pbd1637, on 05/10/2009, -0/+1If you only want a 3 to 5 year investment, housing is not it. Dewhead and ninjakitty are correct. A house should first and foremost be a place to live; a place for you and your family to grow.
Second, it is a long term investment. Thinking about that, you should also consider the neighborhood, the school district, the city and county. You want to make sure the value of the house goes up.
Having a second lien on your investment is not a good idea.
FTA - States are employing schemes whereby they offer prospective buyers low or no-interest loans for the amount of the tax credit, due upon of receipt of their money from Uncle Sam. If the borrower doesn’t make good, the loan becomes a junior lien on the property, with an interest rate that is far from usurious - usually just a bit over the prime lending rate. - pseudononymist, on 05/09/2009, -0/+1my point is that people should only buy houses they can afford and not put the money in with the intention of selling the property later at a profit. If one day the mortgage is greater than the value of the house, people shouldn't suddenly be trying to sell it on the fear the value will continue to slide, as a home is much more than money. I'd try to get my property reassessed, though, as soon as possible, so I could pay lower property taxes.
- pbd1637, on 05/10/2009, -0/+1ninjakitty - The problem here is that first time home buyers (out of ignorance) purchase homes beyond their means using schemes and sub-prime loans with adjustable rate mortgages. The mortgage brokers and real estate agents make commissions, so they go for the biggest most expensive house possible. This leads to defaults and foreclosures. The same way we got into this mess in the first place.
This just sounds like the states are taking the place of fannie and freddie. - MrColdheart, on 05/09/2009, -0/+1There is absolutely nothing wrong with sub-prime lending as long as they don't try to hide the fact that it's sub-prime.
When are you guys going to realize the amount of propaganda out there that's trying to stop you from coming to the conclusion that it was a giant scam?
Lets say your working the counter at some food chain and you start selling medium cups for the price of large... -
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