I don't think I said it was not affecting pocketbooks... I just do not think it is solely responsible for the credit issues. What is, are the people you just defined. The ones that bought a $100,000.00 home, had it for a couple years, got it assessed at $300,000.00, had NO equity (no real equity anyway) in it, then borrowed against that over valuation as "equity". Now the home was probably worth say $110,000.00 realistically, so they kinda did see an increase in their asset. However, they took out, say $100,000.00 in equity, and now have a home worth, $145,000.00 (again still an increased value on the asset). So because the house is not valued at that over inflated rate, and is really valued at what it likely should be, but they took out more than they paid for the house to begin with in equity... See something wrong with this picture? This is the story across a great many mortgages... About 4 million in foreclosure in all as a result. We are not talking about intelligent people here, making intelligent decisions. We are talking about people that knew damn well what they could and could not afford. I'll be damned if I am going to continue to listen to , or be expected to pay for the mistakes of fuckups like this. The longer we let this go on, the worse it will get. Let it collapse and it will recover on its own, starting with a sharp drop in the price of energy. Gas where I live has come down 60 cents a gallon in a little over a week. That is really significant, considering the most it goes down is a penny or two only to rise again and again. There is a reason for that. OH, BTW, that $100,000.00 home above valued at $145,000.00 has NOT lost its value. Its actually increased in value. Just not to the tune of the over-valuation that some fucktard took out in equity.
Exactly, and that is the problem. The fucktards that bought homes with no money down had no vested interest in them. Nothing to lose. No wonder so many are walking away. When a bank asks for the traditional 20% down, (like they ALWAYS SHOULD), what they are doing is insuring that you too have something at risk here. Without any risk, a home buyer has nothing to lose.
You ever hear the story of 'the most hated blogger' Casey Serin. He was a 24 year old Russian immigrant that in 2005 purchased 8 homes with no money. By 2006 he was 2.2 million in debt and losing 600 a day on interest alone. The F^%@tard didn't even have a job. How did banks loan him 2.2 million to flip houses? Serin purchased his first residence, a condominium apartment, with the help of his parents. He ultimately sold the apartment, making a profit of $30,000 through no hard work of his own. Encouraged by this "money coming out of his butt", as Galina would later describe it, Serin plunged head-first into the real estate world. Beginning in October 2005 and continuing through the following year, Serin purchased eight houses across four U.S. states with the intention to fix'n'flip them for a sweet profit. In a matter of months, the money largely ran out. At one point in late 2006, Serin was approximately 2.2 million dollars in debt, with a net worth of around negative $600,000. By April 2007, all of the houses had been foreclosed upon or otherwise disposed of at a sharp loss, leaving Serin with a large pile of unsecured debt. http://www.caseypedia.com/wiki/Casey_Serin
The irony here as I muddled through the hoards of threads I was subscribed to prior to the ban. Everyone one of them pretty much died once I was gone. My guess is that my continual contribution and support of this forum is creating traffic issues. Ever notice how much faster things are and smoother things run when I am away? There's literally thousands of Casey's around the world.
Who in their right mind would take out a home equity loan in the first place??? Oh I know, it's the people that have way too much house, the expensive car, credit card debt out the wazoo, and the ever so small paycheck!
Ah, well some take them out to use that equity to make improvements on the home. That in and of itself is a good way to increase your investment dollars in the short and long term. But you are correct. Many pissed that money away and ran up more debt. But hey, that's Bush's fault right?
A lot of the people that took out home equity loans were intending to sell the houses at inflated prices and pay back the loan. Now there're singing the blues.