The housing news seems to be about nothing but bailouts these days. The latest round of bailout news has been hitting the wire for the last couple of days. The more I look at these bailout ideas the more I believe the bankers and politicians are living in a fantasy world. They seem to believe that people want to stay in homes worth 1/2 what they paid for them. They think people will take on 40 year mortgages with little hope of making any money when they do sell. These bailouts might be of some help in Texas or Kansas. Places where the bubble was not so large and people were actually buying homes to LIVE in. In those locations there is a reasonable chance that prices ay recover before the turn of the next century. In bubble locations like California, Florida, Nevada and Arizona the prices were so inflated that prices may not recover for many decades. In addition many of the buyers were only buying houses because there was a chance of making a large profit. With the profit possibility gone does anyone think these people care to stay in these homes? Would you take on a 40 year loan with a balloon payment at the end just to stay in a house? Financially most would be far better of to default, take the credit hit, rent and buy again in 5 to 7 years. Prices will probably be about where they are today in 5 years. So they can buy low as opposed to taking some crazy low interest 40 year loan on a home worth 1/2 of the loan amount.
I just get more angry every time I hear of another bailout. When do the rest of us get our bailout? Why are current home buyers getting stuck with 6%, 7% or higher loans while those that bought more than they could afford get 0% bailouts. It's not the people that are being foreclosed on that should be screaming. It's the rest of us that should be in the news protesting about these unfair bailouts. It's BS I tell ya!
4 comments:
I think the loan workout programs will help the slice of folks that are moderately underwater (e.g. if they owe $350K and their house is worth $300K).
I agree with you though, people that paid peak market prices and borrowed most of the cost are unlikely to participate.
No idea how big that first slice of folks is, but I'd guess it's not insubstantial.
I agree about the bailout(s). When did we start rewarding stupidity and irresponsibity...? I have sacificed beyond belief to save for a new home - I have put off buying a new car, vacations and have lived to cheap (undesirable) places to save more. Now I get rewarded by watching weak people, who want everything right now, get their mortagages modified or forgiven, for being dumb. How 'bout I go out and purchase a Ferrari, when I can no longer make the payments I would like taxpayer money to be used to forgive the payments on the Ferrari and then drive off into the sunset. Let the market place weed out the idiots and reward those who did it the way it's supposed to be done !!
okay so check this out. i work in the field of social services in texas. A young lady that had moved here from calif. was working at a minimum wage job and had a nice two bedroom apartment in a beautiful suburb of san antonio. In Calif. she had been put on a low income housing list as she had a child (that child was taken away by the state). Tired of the old 9-5 grind, she kept her 7th child and headed back to cali almost a year ago. just in time to be on the top of the low income housing list !! So now...she has a nice 2 bedroom apartment blocks from the beach in los osos, she gets $650 a month cash and food stamps....and all at the cost of you California taxpayers. Shes a very smart girl...in texas she would have received $150.00 in benefits. This is a TRUE story, i know this girl personally. Its a good thing that California is raising that sales tax ...gotta keep these people in their beachfront apartments!!
she kept her 7th child... she has a nice 2 bedroom apartment blocks from the beach in los osos, she gets $650 a month cash and food stamps...
They need to have that 'bi***' fixed. Seriously.
Post a Comment