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Platinum Super Contributor
buyinghouse
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Housing market recovery. Economists blame Obama for not helping!

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sheriff
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Re: Housing market recovery. Economists blame Obama for not helping!

I am against helping out people who bought houses they could not afford, planning to resell them for a profit a year later.  They never should have been homeowners so why forgive their debt?

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Acre
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Re: Housing market recovery. Economists blame Obama for not helping!


sheriff wrote:

I am against helping out people who bought houses they could not afford, planning to resell them for a profit a year later.  They never should have been homeowners so why forgive their debt?


No kidding. Debt "forgivness" just means the rest of us are saddled with it - either through higher taxes, higher interest rates due to more government borrowing, or higher loan rates due to banks being forced to "forgive" the deadbeats.

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buyinghouse
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Re: Housing market recovery. Economists blame Obama for not helping!


Acre wrote:

sheriff wrote:

I am against helping out people who bought houses they could not afford, planning to resell them for a profit a year later.  They never should have been homeowners so why forgive their debt?


No kidding. Debt "forgivness" just means the rest of us are saddled with it - either through higher taxes, higher interest rates due to more government borrowing, or higher loan rates due to banks being forced to "forgive" the deadbeats.


  How about investors? They are taking advantage of the system too?

  Shall we forbid them from buying homes in foreclosure/short sale/REO's?

 

 The system is rigged. No doubt about it.

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TerriM
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Registered: ‎05-02-2011

Re: Housing market recovery. Economists blame Obama for not helping!

We also saw a large falloff in consumption due to the loss of $8 trillion in housing wealth. The housing wealth effect is one of the oldest and most widely accepted concepts in economics. It is generally estimated people spend between 5 and 7 cents each year per dollar of housing wealth. This means that the collapse of the bubble would be expected to cost the economy between $400 billion and $560 billion in annual demand. 

 


Unless I'm completely misunderstanding this paragraph, it seems that the real problem here is that the idea that you borrow against your house to fund other things is pervasive in our culture.   

 

And the other unfortunate idea is that if you're underwater on your house, you can get off scott free by short saleing.   And I don't mean that as a point-the-finger.  This is the kind of thing my husband, even now, is taking  for granted as a possibility.  I feel like we've both graduated, married, have kids and are well-employed, and we're still living off of our parents and taking actions that might ensure our continued reliance on them.  What happened to "Honey, if I die, you and the kids are provided for" and "Let's pay off this house as soon as possible."  DEBT DEBT DEBT.  Drink it up!  Get more of it.  It's tax deductible.  Someone else will save us.

 

I think over and over again to an article on the Amish culture I once read.  How they almost never miss a payment because of the embarassment it would cause their family.  How you can almost always rely on them if they take out a loan.   What happened to the rest of the US?

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lexa
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Re: Housing market recovery. Economists blame Obama for not helping!

[ Edited ]

Acre wrote:

No kidding. Debt "forgivness" just means the rest of us are saddled with it - either through higher taxes, higher interest rates due to more government borrowing, or higher loan rates due to banks being forced to "forgive" the deadbeats.


I don't know who "us" are in your representation, but elephant in the room for us with debt forgiveness is higher home prices.

 

i know i know, it is politically correct to deem higher gas, food and other consumer prices to be bad for economy, except housing prices to be good...well, I am just not of that type as many know.

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tjh
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Re: Housing market recovery. Economists blame Obama for not helping!


TerriM wrote:

 

I think over and over again to an article on the Amish culture I once read.  How they almost never miss a payment because of the embarassment it would cause their family.  How you can almost always rely on them if they take out a loan.   What happened to the rest of the US?


BINGO!

 

Personal responsibility.  It's been going out the window for years.  Now it's spread to mortgages.  Just borrow with immunity.  If you don't want to pay, someone else will take the hit.  No need to be embarrased about it.  It's just business.

 

The number of strategic defaults and/or fraudulent short sales I encountered while looking this summer was large.  What was disheartening was how open and non-chalant both the owners and the listing agents were about not needing to move and being able to continue making the payments but choosing not to because the loan balance was more than the house was worth and probably going to be worth for some time.

 

The worst cases were, where they had already purchased another place and moved out of the first, to circumvent the hit their credit rating would be taking when they stopped making payments on the original place.  AND THEN, as was the case in our intended Brentwood residence, began stripping the high end fixtures to put into their new place.

 

People see nothing wrong with this kind of behavior.  "It's just business" they would say.  But, these were the same kind of people who scream bloody murder when gasoline prices rise and express bitter condemnation of the "greedy" oil companies.

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buyinghouse
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Re: Housing market recovery. Economists blame Obama for not helping!

  Meanwhile, I wonder about Solyndra..................

 

http://news.yahoo.com/middle-east-beginning-embrace-solar-energy-063409749--finance.html

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lexa
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Re: Housing market recovery. Economists blame Obama for not helping!


tjh wrote:

People see nothing wrong with this kind of behavior.  "It's just business" they would say.  But, these were the same kind of people who scream bloody murder when gasoline prices rise and express bitter condemnation of the "greedy" oil companies.


 

not sure those are the same people, but sure it is easier to ignore those screams than make people keep the payments if they don't want to and know they have no criminal liability for not making those payments.