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Thread: Home price drops exceed Great Depression: Zillow

  1. #201
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by BmanMcfly View Post
    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.
    Just a slight tweek: the agent is not enticed by your buying more house than you can afford. The agent is glad for his buyer to find a house he loves and buy it. Regardless of price. Buyer's Agent (at least in the Chicago area) usually gets 2.5% commission....most of the time split with "the house." If you buy a $200,000 house today, I'll make $2,500. If you buy a $250,000 house today, I'll make $3,625. If you don't buy a house, I won't make anything. A real estate agent never pushes a client to spend more for a home than they tell the agent they can afford. Oh, there may be a few....but not professionals. That's a common misconception. And why Realtors are compared to used car salesmen. ;-)

    The loan officer who gets you your mortgage? That's a different story. He doesn't want you to get a 30-year-fixed loan. You're a "deadbeat" to him, if you do. Very little commission. He likes those ARMs that you have to refinance every three years. A loan officer makes as much or more than a real estate agent on any given transaction. And it is undisclosed to the Buyer. (The Realtor commission is right on the closing statement.)

    In Chicago, a real estate attorney makes about $550 on the closing of a home. Regardless of price. He doesn't give a tinker's dam what you pay for it.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by BmanMcfly View Post
    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.
    Yep...caught the sanity bug at the last minute. But note...WE went out property shopping. No one came to us. WE decided we might just want to see what we can get into. No one came knockig on my door sayin "hey...wanna buy that house?" (think the debil and Flip Wilson).

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by VanceMack View Post
    And anyone that got into those loans knew precisely what they were doing.
    Bank of america just settled for a couple billion bucks with the gse's over loans that originated at countrywide and subsequently turned bad and committed fraud to sell them to the government.

    there's several of these going on all over the place right now, very quietly. it doesn't seem like the people that bought the loans off the banks in the cdo's knew the loans were bad. and how could they, since the ratings agencies gave them all great ratings.
    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 Zyroh View Post
    Bank of america just settled for a couple billion bucks with the gse's over loans that originated at countrywide and subsequently turned bad and committed fraud to sell them to the government.

    there's several of these going on all over the place right now, very quietly. it doesn't seem like the people that bought the loans off the banks in the cdo's knew the loans were bad. and how could they, since the ratings agencies gave them all great ratings.
    No one said the banks didnt know the loans they were giving were risky. All I am maintaining is that EVERYONE played a role. To me...the biggest role was played by those taking out the loans in the first place. Buying a home isnt a one or two day process. Its a pretty deliberate act. It takes time, effort, and forethought. The only thought people were putting into this process was...how can I swing it.

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    Re: Home price drops exceed Great Depression: Zillow

    Without the demand for all those loans the bubble could not have happened.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    Without the demand for all those loans the bubble could not have happened.
    Nor would it have happened without the money to finance the loans.
    From the ashes.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Phoenix View Post
    Nor would it have happened without the money to finance the loans.
    And if all that money wasn't so cheap it wouldn't have happened either.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    And if all that money wasn't so cheap it wouldn't have happened either.
    And THAT is why we need Eddie Van Halen...

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by MaggieD View Post
    I actually agree with you. Bush sealed the deal. You'll get no argument from me. However, Bill Clinton championed the Community Reinvestment Act, and that was more than just the camel's nose under the tent. Low interest rates (like we're seeing now in spades) caused this bubble -- Clinton and Bush encouraged (arm-twisted) banks into loosening their lending standards so that people who couldn't buy lunch could buy homes. Clinton + Bush.
    Back in 93 buying a house was really the best investment you could make. Lowering the terms and rates so more could own one seemed the right thing to do at the time,
    was for 5 or 6 years until prices peaked (nowadays they call it a bubble). Since everyone profited during those years (mine tripled), you really can't call it a bad investment, even in hindsight.

    It wasn't low interest rates, Bush, Clinton, or even Greenspan, it was more like an illusion, an economy boom illusion, something like what happened in 1929 when you could buy stock for ten percent of the actual price.

    ricksfolly

    ricksfolly

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by ricksfolly View Post
    Back in 93 buying a house was really the best investment you could make. Lowering the terms and rates so more could own one seemed the right thing to do at the time,
    was for 5 or 6 years until prices peaked (nowadays they call it a bubble). Since everyone profited during those years (mine tripled), you really can't call it a bad investment, even in hindsight.

    It wasn't low interest rates, Bush, Clinton, or even Greenspan, it was more like an illusion, an economy boom illusion, something like what happened in 1929 when you could buy stock for ten percent of the actual price.

    ricksfolly

    ricksfolly
    It wouldn't have happened without record low interest rates.

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