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Thread: Home price drops exceed Great Depression: Zillow

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    And the banks that got bailed out? Remember the day capitalism died and the government saved the day?
    The government will always make sure the rich stay rich.
    While I disagree with the banking bailouts (should be obvious since I have stated numerous times the government should have let the market collapse in 2006) their intent was not to 'make the rich richer, their intent was a misguided notion that buoying up the banks would allow them to continue to loan people money so that they can start businesses and make purchases. It was a BAD idea...as bad as the notion that the way to get our economy running again is to have the fed spend us deeper and deeper into debt.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by BmanMcfly View Post
    That's right... the local banks and credit unions have too much to lose to take the kinds of gambles these 'too big to fails' (which is just another way of saying everyone else is 'too small to save') have taken.

    There's a reason why the founding fathers considered the types of crimes these banks are committing as crimes in the same realm as treason, because the end result is that the countries wealth is stolen, and so the people engaging in these activities would be considered as 'domestic enemies'... but in today's society that type of theft earns them the promise of trillions in taxpayer dollars to cover any losses, meanwhile any gains are kept mostly in the hands of the CEO's and other executives.
    Yes...I know. Those evil bankers went out and dragged people by the collar into their banks and MADE them fill out those loan applications.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by VanceMack View Post
    Gooooood lawd. You dont think EVERY American president that has ever been elected hasnt highlighted the American dream or given a similar speech? Or for that matter every congressman...or Governor?

    OWNING the homes...BUYING homes has never been the problem. The problem is and has been the inflated prices of said homes. That didnt come about because a president said gosh it would be great if everyone could own a home.
    No, but after that speech, he pushed banks into accepting loans that they otherwise wouldn't take on because of the level of risk on their parts.... that coupled with what the bigger banks DID with those mortgages afterward IS WHAT CAUSED the bubble, and well, bubbles will end up popping.

    Quote Originally Posted by VanceMack View Post
    Yes...I know. Those evil bankers went out and dragged people by the collar into their banks and MADE them fill out those loan applications.
    No, you're right... but the consumer was only one fraction of this total bubble. Some banks were even encouraging people to exagerate on the loan documents because then they could make a bigger loan and personally get a bigger commission.

    Flipping homes was the 'cool thing to do'... the less work you could get away with doing the better...

    BUT, in terms of economic damage, what happens AFTER the consumer gets the loan and starts living in the home... THAT was infinitely more detrimental. Almost like comparing a mild headache to full blown brain cancer.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by VanceMack View Post
    I dont think its dead...and in fact its still very reachable. We just arent used to doing it the way we had to back in the 70's and 80's.
    No, it's no longer a key component to "the American Dream" - it has been set, now, as it should always have been: just something that some people obtain in life.

    Labeling it into a "Dream" is where we went wrong with the idea to begin with.
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by BmanMcfly View Post
    No, but after that speech, he pushed banks into accepting loans that they otherwise wouldn't take on because of the level of risk on their parts.... that coupled with what the bigger banks DID with those mortgages afterward IS WHAT CAUSED the bubble, and well, bubbles will end up popping.



    No, you're right... but the consumer was only one fraction of this total bubble. Some banks were even encouraging people to exagerate on the loan documents because then they could make a bigger loan and personally get a bigger commission.

    Flipping homes was the 'cool thing to do'... the less work you could get away with doing the better...

    BUT, in terms of economic damage, what happens AFTER the consumer gets the loan and starts living in the home... THAT was infinitely more detrimental. Almost like comparing a mild headache to full blown brain cancer.
    I have several properties. I also was nigh unto a signature away from buying a personal home that I could no way afford. I still remember it like it was yesterday...my wife and I sitting with the mortgage consultant and doing the math...if we refi property X...roll the truck and boat payment into the new home loan, take the ARM, we can buy the 1.2 mill house...we can swing the 4k a month payments til 3 years from now when the ARM kicks in...all we have to do is make sure that A, we refi the property when the property value goes up and B, ensure our monthly income continues to keep pace with the ARM. We cut out cable, cell phone...only eat out maybe once every three months, cancel Christmas...baby...I think we can swing it...

    Then we both stopped and looked at each other and said the SAME thing...what are we DOING???

    NO ONE offered us the loan up front. No one enticed us. We were doing VERY well and we just got caught up in the swell. It WAS a VERY nice house...I must say! I also can say that I still live in my primary residence...pay all of $600.00 a month and am very glad we didnt do that to ourselves. BTW...we also built a 4 unit condo on the tail end of the bubble that we have a hard time keeping rented for what we owe on it. Thank goodness the other properties are well above water.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by VanceMack View Post
    Yes...I know. Those evil bankers went out and dragged people by the collar into their banks and MADE them fill out those loan applications.
    no, but they committed massive amounts of fraud. allstate did a survey of countrywide loans that were taken over by bank of america then sold off to investers, 9 out of 10 of the 'liar loans' (loans where you're not required to prove income) had misstated incomes. the ratings agencies, s&p and moodies principly, lied about the ratings on these things. goldman sachs and john paulson and their ilk misrepresented not only their positions on the cdo's they created, but also the makings of those cdo's. and none of these people are in jail. they may not have held a gun to anyone's head, but they sure had to do a lot of lying to make sure that they weren't caught with the losses and they weren't sent to jail.
    Democracy is two wolves and sheep voting on what's for dinner. Liberty is a well armed sheep willing to contest the vote.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Aunt Spiker View Post
    No, it's no longer a key component to "the American Dream" - it has been set, now, as it should always have been: just something that some people obtain in life.

    Labeling it into a "Dream" is where we went wrong with the idea to begin with.
    Maybe they should call it "the American mid life goal." I know a lot of folks who are opting for inner city condos with no property to maintain, close enough to places that they can take the bus or metro, and small enough kids can visit for a day or two but not stay indefinitely.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Zyroh View Post
    no, but they committed massive amounts of fraud. allstate did a survey of countrywide loans that were taken over by bank of america then sold off to investers, 9 out of 10 of the 'liar loans' (loans where you're not required to prove income) had misstated incomes. the ratings agencies, s&p and moodies principly, lied about the ratings on these things. goldman sachs and john paulson and their ilk misrepresented not only their positions on the cdo's they created, but also the makings of those cdo's. and none of these people are in jail. they may not have held a gun to anyone's head, but they sure had to do a lot of lying to make sure that they weren't caught with the losses and they weren't sent to jail.
    And anyone that got into those loans knew precisely what they were doing.

    Look...Im not saying the banks are without guilt (I HAVE stated that several times...right?). Im saying banks made stupid loans to stupid people that got into them. We all own our pice of the problem. Its not a Clinton thing, or a Bush thing or a Barney Frank thing or a...ok...you get the point...right?

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    The FED was pumping billions into the financial sector while lowering interest rates during and after the recession of '01.. There was plenty of money to meet the increased demand. However if the demand for new homes had remained constant the bubble would not have happened. The pushing for everyone to own their home, ready or not, stimulated demand to almost double that of before '01. That demand created the boom, the bubble and it's eventual collapse. Fannie, Freddie, bundled mortgages and derivitives would have never made the news without the bubble and it'a collapse.
    I don't see how you can get that lots of chesp money on the market creatd the bubble but deny that Fannie and Freddie had anything to do with it. When banks need more money where do they get it? (ideally saving but that is anonther discussion ) From the feds and after that, Selling derivitives. Who was buying the derivitives? Lots of people were, including Fannie and Freddie. The more Fannie and Freddie bought (Prime, sub prime, alt-a or otherwise) the more money the banks have to fuel the bubble and Bush's quest for universal home ownership.

    The reason you have been accused of half truths is because you have a fairly good grasp on part of the problem but completely deny other parts of it and where to lay blame.
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by VanceMack View Post
    I have several properties. I also was nigh unto a signature away from buying a personal home that I could no way afford. I still remember it like it was yesterday...my wife and I sitting with the mortgage consultant and doing the math...if we refi property X...roll the truck and boat payment into the new home loan, take the ARM, we can buy the 1.2 mill house...we can swing the 4k a month payments til 3 years from now when the ARM kicks in...all we have to do is make sure that A, we refi the property when the property value goes up and B, ensure our monthly income continues to keep pace with the ARM. We cut out cable, cell phone...only eat out maybe once every three months, cancel Christmas...baby...I think we can swing it...

    Then we both stopped and looked at each other and said the SAME thing...what are we DOING???

    NO ONE offered us the loan up front. No one enticed us. We were doing VERY well and we just got caught up in the swell. It WAS a VERY nice house...I must say! I also can say that I still live in my primary residence...pay all of $600.00 a month and am very glad we didnt do that to ourselves. BTW...we also built a 4 unit condo on the tail end of the bubble that we have a hard time keeping rented for what we owe on it. Thank goodness the other properties are well above water.
    At least you are doing relatively well...

    That said, the enticement is that you see the house you can't afford, you walk through the house and you think 'this could be mine'... and that you have a lender that is willing to give you the loan knowing that you are just scraping by to afford it.

    The enticement for the agent is the increased commissions, similarly for the banks, the lawyers, etc... but only the institutions get bailed out when the scheme falls apart.

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