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Home price drops exceed Great Depression: Zillow

BmanMcfly said:
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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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.
 
BmanMcfly said:
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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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).
 
VanceMack said:
And anyone that got into those loans knew precisely what they were doing.
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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.
 
Zyroh said:
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.
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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.
 
Without the demand for all those loans the bubble could not have happened.
 
Phoenix said:
Nor would it have happened without the money to finance the loans.
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And if all that money wasn't so cheap it wouldn't have happened either.
 
MaggieD said:
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.
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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
 
ricksfolly said:
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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It wouldn't have happened without record low interest rates.
 
Dirty Harry said:
It wouldn't have happened without record low interest rates.
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Record low interest rates?
I pay on two loans for my home - a joint amount of 17% for the interest. 11% on one - 6% on the other.

We have a crappy loan with crappy clauses and blah blah - and I, at the time we bought the house, left all the decisions up to my husband (believing he knew what he was doing) and we're somehow managing to make our payments - haven't had any problems, yet.

But 'low rates' - no - just stupid people (myself included)
 
Aunt Spiker said:
Record low interest rates?
I pay on two loans for my home - a joint amount of 17% for the interest. 11% on one - 6% on the other.

We have a crappy loan with crappy clauses and blah blah - and I, at the time we bought the house, left all the decisions up to my husband (believing he knew what he was doing) and we're somehow managing to make our payments - haven't had any problems, yet.

But 'low rates' - no - just stupid people (myself included)
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30 year fixed rates went from 8.5 down to 5.5 after '01. This fueled the re-financing frenzy and then the building boom. Had rates remained at 8 percent or above new home construction would have remained stable. No bubble would have occured.
 
Aunt Spiker said:
Record low interest rates?
I pay on two loans for my home - a joint amount of 17% for the interest. 11% on one - 6% on the other.

We have a crappy loan with crappy clauses and blah blah - and I, at the time we bought the house, left all the decisions up to my husband (believing he knew what he was doing) and we're somehow managing to make our payments - haven't had any problems, yet.

But 'low rates' - no - just stupid people (myself included)
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DAMN!!You cant refinance at a lower rate?
 
donc said:
DAMN!!You cant refinance at a lower rate?
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Nope - not yet.

We've fallen into a few traps - first was our stupidity - lots of that, no denying.

Another factor is that when we bought the house our credit was **** - so we qualified for a *home* loan - but after we had the home we didn't qualify for an expected *improvement* loan.
Now - we've improved our credit sigificantly, resolved quite a bit of debt - we're on the up and up - BUT we entered into the other problems: the house isn't worth spit - never was worth anything, most certainly isn't worthy anything now.

We bought it 'as is' to fix it up - it was suppose to be a family-project (my husband and I) but things happened (he deployed, was injured, blah blah) - we still live here, house is partially 'done' and we've already pumped tens of thousands into the damn thing - I've spent hundreds of hours on it by myself :shrug: - Insert regret here.
So - because it's partially-done we don't qualify for a loan of any type to assist with improvement. Its' pocket-expense or nothing.

We've tried twice to improve - and though I've continually worked *on* the house we've yet to get it to a place where it's decent enough to qualify for a loan for further improvement.

And would that be smart? Going into more debt on top of debt to improve it so then we can refinance it at a lower rate? I decided we did enough damage already and stopped working on it after I finished our master-bath.

Right now we're making it - but I don't know how much longer that'll last. . . I know when our lesser-loan taps out. So instead of pumping more money into the home every year I'm pumping it into that part of the loan so we can pay it off and not suffer when it balloons in 5 years.

Other things that happened - we were annexed into the town nearby, which has risen our taxes - increased property 'value' per acreage but that doesn't make the "home" worthy more than what we bought it for. . . and so on - lots of stuff.

That's what happens when you make crappy quick decisions without knowing ALL the details and planning things out carefully for yourself.

Right now we're talking about selling off the land - it's not much, but it's some - and using that to get out from under the house altogether.
 
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Aunt Spiker said:
Nope - not yet.

We've fallen into a few traps - first was our stupidity - lots of that, no denying.

Another factor is that when we bought the house our credit was **** - so we qualified for a *home* loan - but after we had the home we didn't qualify for an expected *improvement* loan.
Now - we've improved our credit sigificantly, resolved quite a bit of debt - we're on the up and up - BUT we entered into the other problems: the house isn't worth spit - never was worth anything, most certainly isn't worthy anything now.

We bought it 'as is' to fix it up - it was suppose to be a family-project (my husband and I) but things happened (he deployed, was injured, blah blah) - we still live here, house is partially 'done' and we've already pumped tens of thousands into the damn thing - I've spent hundreds of hours on it by myself :shrug: - Insert regret here.
So - because it's partially-done we don't qualify for a loan of any type to assist with improvement. Its' pocket-expense or nothing.

We've tried twice to improve - and though I've continually worked *on* the house we've yet to get it to a place where it's decent enough to qualify for a loan for further improvement.

And would that be smart? Going into more debt on top of debt to improve it so then we can refinance it at a lower rate? I decided we did enough damage already and stopped working on it after I finished our master-bath.

Right now we're making it - but I don't know how much longer that'll last. . . I know when our lesser-loan taps out. So instead of pumping more money into the home every year I'm pumping it into that part of the loan so we can pay it off and not suffer when it balloons in 5 years.

Other things that happened - we were annexed into the town nearby, which has risen our taxes - increased property 'value' per acreage but that doesn't make the "home" worthy more than what we bought it for. . . and so on - lots of stuff.

That's what happens when you make crappy quick decisions without knowing ALL the details and planning things out carefully for yourself.

Right now we're talking about selling off the land - it's not much, but it's some - and using that to get out from under the house altogether.
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I believe that I would be setting in the office of the Head of the largest loan when he comes to work and let him have a go at lowing your interest rate. Imply that if you don’t get it, he (his CORP) will more than likely be the proud new owner of YOUR former abode. With the stack of REO,s on his desk’s, the last thing he wants to look at is a partially finished rehab; If you really want to dig into his side a bit ask how many” partially finished rehabs “he has in his portfolio now.

As for as the tax assessment, get on Zillow - Real Estate, Homes for Sale & Real Estate Values and check out the comps around your house,then go see your county/city assessor and get the tax rate adjusted to the what is now more than likely a 20% decrease in assessed valuation. :2wave:
 
Phoenix said:
If you want to get to the real nuts and bolts Every aspect of the meltdown can be traced back to the New Deal.
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Wrong. Cheap, easy money and artificially stimulated demand created the housing bubble of '01 to '06. The collapse of that bubble created the meltdown. It should not have happened but Greenspan and Bush decided to use the housing sector to pull us out of the recession of '01. The housing sector had been stable up until that point with home values following inflation rates.
There was no housing bubble before the recession of '01. Hell, Greenspan even claimed there was no bubble after '01. Shows what a fool he was.
 
Phoenix said:
If you want to get to the real nuts and bolts Every aspect of the meltdown can be traced back to the New Deal.
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Which has it's roots further back.

All in all - a faulted source of our issues is Nationalism - and the idea that "we're such a great country, we shouldn't have these social problems - here, let's fix everyone."
 
Dirty Harry said:
Wrong. Cheap, easy money and artificially stimulated demand created the housing bubble of '01 to '06. The collapse of that bubble created the meltdown. It should not have happened but Greenspan and Bush decided to use the housing sector to pull us out of the recession of '01. The housing sector had been stable up until that point with home values following inflation rates.
There was no housing bubble before the recession of '01. Hell, Greenspan even claimed there was no bubble after '01. Shows what a fool he was.
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At point in the history of the United States did we decide to start printing money based on a whim instead of backed by a commodity? 1934. Part of the New Deal. Not to mention FDIC and FHA.
 
Phoenix said:
At point in the history of the United States did we decide to start printing money based on a whim instead of backed by a commodity? 1934. Part of the New Deal. Not to mention FDIC and FHA.
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That had nothing to do with the cause of the housing bubble.
 
Dirty Harry said:
That had nothing to do with the cause of the housing bubble.
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Sure it did. What do you think lets the fed flood the economy with money? Fiat Currency that was instituted as part of the screw deal.
You even claim that the availablity of cheap money from the fed caused the crisis.
 
Phoenix said:
Sure it did. What do you think lets the fed flood the economy with money? Fiat Currency that was instituted as part of the screw deal.
You even claim that the availablity of cheap money from the fed caused the crisis.
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Greenspan cut interest rates and flooded the economy with money to pull us out of recession.. It was his decision. A very bad one and he should have known it would cause a bubble. Other people did. What happened 75 years wasn't the problem.
 
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Dirty Harry said:
Greenspan cut interest rates and flooded the economy with money to pull us out of recession.. It was his decision. A very bad one and he should have known it would cause a bubble. Other people did. What happened 75 years wasn't the problem.
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You don't see the fact that one man can make decisions that ultimately cripple the economy as a problem?
 
Phoenix said:
You don't see the fact that one man can make decisions that ultimately cripple the economy as a problem?
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Yes. Greenspan was a huge problem.
 
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