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Old 04-03-2013, 03:53 PM   #21
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We're seeing double-digit growth here. I just have to remind myself that it's all basically funny-money. I'm just happy to own a home that isn't totally underwater.
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Old 04-03-2013, 04:01 PM   #22
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I was always extremely suspicious of the booming housing market throughout the naughts. I mean, it wasn't like the bricks were somehow suddenly transmorgafying into gold or something while they sat there, miraculously creating wealth/value out of thin air. Sadly, my suspicions seemed vindicated circa 2007-08. I don't think bricks are any more likely to transmorgify into gold now than then, so hopefully those speculative urges will not again rise. Lesson: buy houses primarily for housing, invest in productive enterprises for generating real wealth.
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Old 04-03-2013, 07:30 PM   #23
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Originally Posted by Carskibum View Post
"Everyone should be able to own a home." Bill Clinton

Probably one of the dumbest and most destructive things ever said in US history.
And yet, very few people were missing house payments under Clinton's program.

I bought my first house under Clinton's housing program in 1994.
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Old 04-03-2013, 08:14 PM   #24
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And yet, very few people were missing house payments under Clinton's program.

I bought my first house under Clinton's housing program in 1994.
Coincidence. Just because people were doing ok back then doesn't mean the idea was sound. A lot of people in NJ that live in those developments are 100K underwater with their houses. While most are still paying their bills, paying 400K for something now worth 300K sucks anyway you slice it. My inlaws are in that boat. The values will also never go back up because they keep building these developments, flooding the market with these townhomes. I'll just sit tight and wait a bit. Just secured a house for rent, $2300 on 1.2 acres with a 4 car garage utilities included. Luckily its from my super, who trusts me, so he gave me a great deal, as he knows I always upgrade my rentals.
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Old 04-03-2013, 08:27 PM   #25
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I think the main problem occurred when 1) more people bought homes under the new guidelines; 2) demand therefore increased and so home prices went up; 3) people saw all this "new value" in their homes and so they pulled out equity lines of credit and spent all that money; 4) home prices corrected and values dropped; 5) people couldn't keep up with their new mortgages. There were still plenty of people who didn't touch the bubble equity in their homes who were fine during the recession.
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Old 04-03-2013, 08:59 PM   #26
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I think the main problem occurred when 1) more people bought homes under the new guidelines; 2) demand therefore increased and so home prices went up; 3) people saw all this "new value" in their homes and so they pulled out equity lines of credit and spent all that money; 4) home prices corrected and values dropped; 5) people couldn't keep up with their new mortgages. There were still plenty of people who didn't touch the bubble equity in their homes who were fine during the recession.
From a lot of people I know, that was a major issue. The price of their house kept on climbing and climbing. Most used the equity to get a loan on another house, an apartment in Sunny Isles Florida, etc. Then the sh!tstorm. That is the problem I have with people blaming wall street. No one was complaining when everyone's 401k was doubling or their property grew another 100K that year. The people were as greedy as those bankers they try so hard to blame.
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Old 04-03-2013, 09:33 PM   #27
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The idea is perfectly sound - until some irresponsible POS decides to take it too far.

Quote:
Bush Profiteering from Housing Defaults
by James Bovard
by James Bovard


President Bush is determined to end the prejudice against people who want to buy a home but don't have any money. Since he became president the U.S. Department of Housing and Urban Development has spent more than $120 billion. HUD public-housing projects continue to devastate poor neighborhoods. HUD largesse to local governments continues to finance the confiscation and demolition of private homes, and HUD programs continue to spur fraud and corruption around the nation.

Bush has done almost nothing to reduce HUD's damage to America. Instead, he is devoting himself to expanding home giveaways. He proclaimed on June 16, 2003,

Homeownership is more than just a symbol of the American dream; it is an important part of our way of life. Core American values of individuality, thrift, responsibility, and self-reliance are embodied in homeownership.
In Bush's eyes, self-reliance is so wonderful that the government should subsidize it.

Bush could be exposing taxpayers to tens of billions of dollars of losses, luring thousands of low- and moderate-income people to the heartbreak of losing their first house, and risking wrecking entire neighborhoods. Bush's housing initiatives - especially his "American Dream Down Payment Act" to give free down payments to selected home buyers - were key planks in his reelection campaign. He is also pushing Congress to enact a law to permit the feds to give zero-down-payment mortgages.

The Bush "Dream Act" and the zero-down-payment plan are modeled after "down-payment assistance programs" that have proliferated in recent years. These programs, often engineered by nonprofit groups, routinely involve a home builder giving a "gift" to the nonprofit, which provides a home buyer with money for the down payment. The price of the house is sometimes increased by the same amount as the builder's "gift." Almost all the mortgages created with down-payment assistance end up being underwritten or guaranteed by either the Federal Housing Administration (FHA) or Ginnie Mae (the Government National Mortgage Association).

Free down payments carry catastrophic risks. The default rate on mortgages from the largest down-payment-assistance organization, Nehemiah Corp., is 25 times higher than the nationwide mortgage-delinquency rate, according to the HUD inspector general. The default rate on Nehemiah mortgages quadrupled between 1999 and 2002, reaching almost 20 percent. The I.G. warned that permitting the Federal Housing Administration to insure mortgages made with gifts from down-payment organizations is "endangering the FHA insurance pool." HUD currently has no idea how many of the loans that the FHA is underwriting are closed with down-payment gifts.

Bush began pushing his American Dream Down Payment plan in 2002. The administration's rhetoric echoed the 1968 Housing Act, which nullified state and local restrictions on where blacks and other groups could live. A June 17, 2002, White House Fact Sheet declared that Bush's agenda

will help tear down the barriers to homeownership that stand in the way of our nation's African-American, Hispanic, and other minority families by providing down-payment assistance. The single biggest barrier to home-ownership is accumulating funds for a down payment.
The Bush administration sounded as if requiring down payments is the new version of Jim Crow laws.

Enacting the "American Dream"

The Bush administration finally got its "Dream Act" pushed through Congress in the fall of 2003. The House leadership chose freshman congresswoman Katherine Harris (the Republican hero of the Florida 2000 recount) for the honor of sponsoring the bill. Harris declared,

As our nation continues to confront daunting threats both at home and abroad, we cannot neglect the most basic security of all, and that is a safe, clean, adequate place to live.
One congressional staffer raised the question of whether "HUD will soon send out maids to ensure our right to a clean house."

When Bush signed the act on December 16, 2003, he declared,

One of the biggest hurdles to homeownership is getting money ... so today I'm honored to be here to sign a law that will help many low-income buyers to overcome that hurdle, and to achieve an important part of the American Dream.
He plaintively added,

The rate of homeownership amongst minorities is below 50 percent. And that's not right, and this country needs to do something about it.
Bush did not specify the precise percentage of blacks and Hispanics that would be "right." The new law authorized federal handouts of $5,000 each for 40,000 home buyers whose incomes are less than 80 percent of a local area's median.

The Bush administration and Republicans portray down-payment giveaways as if they were primarily targeted to minorities:

After Bush visited a black neighborhood in Atlanta in 2002 to hype his housing-aid proposal, his first HUD secretary, Mel Martinez, explained, "We sell it that way, as a program for minorities, because we want minority buyers for these homes, but it's available to anyone" who qualifies under income guidelines.
When the House passed the American Dream Down Payment Act on October 1, 2003, House Speaker Dennis Hastert hailed the bill: "We will help lift up our African-American and Hispanic communities."
HUD secretary Alfonso Jackson declared in February 2004 that the Bush administration efforts "will help more Americans, particularly minorities, achieve that dream" of homeownership.
If the down-payment program actually specifically targeted minorities, it would violate numerous federal laws and the U.S. Constitution.
The "right" of homeownership


Bush talks as if people should be able to buy a house the same way they buy a couch at some dubious no-money-down furniture store. In a January 23, 2004, speech to the U.S. Conference of Mayors, he declared,

I'm asking Congress for $200 million to help people with their down payment.... Many citizens have the desire to own a home, but they don't have the dough to make the down payment. And therefore, they balk at making the decision.
But to portray this as a "balk" makes as little sense as criticizing the average wage earner for not purchasing a yacht.

Once Bush proclaims a national goal, he entitles himself to claim credit for the efforts of all Americans. At an October 15, 2003, talk at Ruiz Foods (the nation's largest producer of frozen Mexican food) in Dinuba, California, Bush reminded listeners of his devotion to boosting homeownership: "And so I let out a goal. I said over the next decade, we want there to be 5.5 million new minority homeowners." Then Bush informed his listeners of what he'd helped to achieve: "Last year, we did a pretty good job. There's now 809,000 new minority homeowners in America."

Bush took credit for every black and Hispanic person who bought a home during his administration - even though the vast majority received no help from him. Bush exalts in the recent rise in the number of Americans who own homes as one of his greatest accomplishments:

It turns out that one of the fantastic statistics and one of the realities of our society today is more people own homes than ever before.
The percentage of Americans who own homes rose from 66.2 percent in 2001 to 68.6 percent in late 2003. But the foreclosure rate is rising much faster than the homeownership rate. The foreclosure rate for home mortgages has tripled since the early 1980s. The rate has especially "gone up a lot ... in struggling neighborhoods in big cities," according to Federal Reserve Board governor Edward Gramlich.

Zero-down-payment loans

A month after signing the "Dream Act," Bush urged Congress to permit the FHA to begin making zero-down-payment loans to low-income Americans. The administration forecast that such mortgages could be given to 150,000 home buyers in the first year. Secretary Jackson declared,

Offering FHA mortgages with no down payment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities.
Federal Housing Commissioner John Weicher said in January 2004 that "the White House doesn't think those who can afford the monthly payment but have been unable to save for a down payment should be deprived from owning a home," National Mortgage News reported. While zero-down-payment mortgages have long been considered profoundly unsafe (especially for borrowers with dubious credit history), Weicher confidently asserted, "We do not anticipate any costs to taxpayers."

The Bush administration aims to make more dubious mortgages, even though the percentage of FHA single-family home loans that have defaulted rose 54 percent between 1999 and 2002, reaching 4.25 percent. Roughly 12 percent of all FHA mortgages are past due.

Avoiding making unsound mortgages seems to be the last item on HUD's list of priorities. Weicher declared in January 2004, "We have been addressing our default rate, and we are now able to help half the families who go into default avoid foreclosure." This merely suppresses the evidence of a failed policy and sticks taxpayers with a larger bill once the roof finally falls in.

A neighborhood wrecking ball

The FHA continues wreaking devastation in some neighborhoods and cities across the country. A 2002 study by the National Training and Information Center, a Chicago nonprofit organization, found that between 1996 and 2000 21 percent of FHA loans in low-income areas in Baltimore defaulted and 25 percent of FHA loans in low-income areas in Queens, New York, defaulted. Eight of the 22 cities studied had default rates above 12 percent. The FHA paid out more than $5 billion in settlements on defaulted mortgages in 2001. More than 45,000 FHA homes were abandoned and vacant.

Homeownership carries far more financial rude surprises (such as the cost of major repairs) than does renting. If people get into a house they cannot financially handle and go bankrupt, they are much worse off than if they had never received down-payment assistance. Giving people a handout that leads them to financial ruin - as the Small Business Administration perennially does for people unfit to be small business owners - is wrecking-ball benevolence. The virtues of homeownership do not arise from living in a single-family dwelling and holding a piece of paper from a bank. Rep. Ron Paul (R-Tex.) commented,

In the original version of the American dream, individuals earned the money to purchase a house through their own efforts, oftentimes sacrificing other goods to save for their first down payment.... That old American dream has been replaced by a new dream of having the federal government force your fellow citizens to hand you the money for a down payment.
Bush's freebie hype could make the millions of low- and moderate-income Americans who are saving and scrimping for a down payment feel like fools. Bush talks as if the federal government is obliged to relieve all Americans from the nuisance of ever having to accumulate any personal savings.

Down-payment handouts and zero-down-payments are a great political strategy for Bush. He gets the applause and the political credit now, and the defaults from the program may not surge until much later. He transfers the risk of homeownership from buyers to taxpayers and then pretends he has multiplied virtue in America. He preens as a great benefactor at the same time he undermines those virtues that he is claiming to multiply.

In the early 1930s, shanty-towns of destitute unemployed people were known as Hoovervilles. In the coming years, if neighborhood after neighborhood is wrecked by waves of defaults and foreclosures caused by the reckless new mortgage policies, the areas should be known as "Bush blights."

June 11, 2005
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Old 04-03-2013, 11:26 PM   #28
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Lol blaming bush again
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Old 04-03-2013, 11:31 PM   #29
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That $200 million annual free downpayment program had nothing to do with the real estate meltdown that happened 3 years after the program was instituted, did it?

It was Jimmy Carter's fault! (30 years after he left office!)
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Old 04-04-2013, 12:12 AM   #30
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That $200 million annual free downpayment program had nothing to do with the real estate meltdown that happened 3 years after the program was instituted, did it?

It was Jimmy Carter's fault! (30 years after he left office!)
Does that negate all the bad decisions made by others? As if two wrongs is ok?
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Old 04-04-2013, 12:17 AM   #31
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Originally Posted by Lair View Post
That $200 million annual free downpayment program had nothing to do with the real estate meltdown that happened 3 years after the program was instituted, did it?

It was Jimmy Carter's fault! (30 years after he left office!)
I do agree with you, though, Bush was a religious libtard.
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Old 04-04-2013, 09:28 AM   #32
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Does that negate all the bad decisions made by others? As if two wrongs is ok?

My mother bought a house under Carter's program. She paid a ridiculous interest rate and worked two jobs to make it happen. She never missed a house payment. I can't recall seeing anyone in our family or circle of friends lose a house during that period of time.

Same deal when I bought a house under Clinton's program. I didnt know a single person who lost a house during Clinton's presidency.

Record foreclosures and bankruptcies followed Bushco's program. Just a massive coincidence, right?
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Old 04-15-2013, 02:12 AM   #33
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And yet, very few people were missing house payments under Clinton's program.

I bought my first house under Clinton's housing program in 1994.
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Originally Posted by Lair View Post
My mother bought a house under Carter's program. She paid a ridiculous interest rate and worked two jobs to make it happen. She never missed a house payment. I can't recall seeing anyone in our family or circle of friends lose a house during that period of time.

Same deal when I bought a house under Clinton's program. I didnt know a single person who lost a house during Clinton's presidency.

Record foreclosures and bankruptcies followed Bushco's program. Just a massive coincidence, right?
Really? Not according to foreclosure stats from the 1990s.


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Old 04-15-2013, 10:30 AM   #34
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Awesome.

Now post a graph that depcits the record number of foreclosures after BushCo's program was instituted.
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Old 04-15-2013, 11:34 AM   #35
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Really? Not according to foreclosure stats from the 1990s.



Perspective is reality.
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Old 04-15-2013, 12:08 PM   #36
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I think the main problem occurred when 1) more people bought homes under the new guidelines; 2) demand therefore increased and so home prices went up; 3) people saw all this "new value" in their homes and so they pulled out equity lines of credit and spent all that money; 4) home prices corrected and values dropped; 5) people couldn't keep up with their new mortgages. There were still plenty of people who didn't touch the bubble equity in their homes who were fine during the recession.
Don't forget 6) people wrinkled their noses at fixed rate mortgages and instead opted for ARMs or interest-only mortgages (or stupidest of all, neg-ams) to minimize their near-term monthly payment for the sake of buying more house than they could afford, totally ignoring that winning that bet required interest rates to remain low AND the home's value to perpetually and steadily increase.
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Old 04-15-2013, 12:12 PM   #37
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And yet, very few people were missing house payments under Clinton's program.

How is that double wide in MS doing for you ?

I bought my first house under Clinton's housing program in 1994.
Many reasons why few people missed payments is because they bought adjustable rate mortgages that took 3-5 years to mature....and start deteriorating.
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Old 04-15-2013, 01:15 PM   #38
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Don't forget 6) people wrinkled their noses at fixed rate mortgages and instead opted for ARMs or interest-only mortgages (or stupidest of all, neg-ams) to minimize their near-term monthly payment for the sake of buying more house than they could afford, totally ignoring that winning that bet required interest rates to remain low AND the home's value to perpetually and steadily increase.
Yes, also true. I knew many people who did this.
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Old 04-15-2013, 06:48 PM   #39
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Many reasons why few people missed payments is because they bought adjustable rate mortgages that took 3-5 years to mature....and start deteriorating.
Keep trying. You've almost convinced me that it's Clinton's fault.

I've never lived in a trailer.

The house I bought in 1993 for $92K sold last year for $236K - after the meltdown.
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Old 04-15-2013, 07:52 PM   #40
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Keep trying. You've almost convinced me that it's Clinton's fault.

I've never lived in a trailer.

The house I bought in 1993 for $92K sold last year for $236K - after the meltdown.
Adjust for inflation...
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