Unfreakin' believable. I swear they need to test the Oxnard City Council chamber's water for psychotropics. Talk about drinking the Kool-Aid. This from our local fidshwrap The Star:The Oxnard City Council tonight will consider giving RiverPark developers $12 million for a parking structure and other improvements for an upscale shopping center.Nevermind the project is obviously deep in financial trouble. Nevermind the economy is on the brink of a recession. Nevermind the transportation infrastructure cannot handle the predicted increase in VPD. Whatinthehell is the Council thinking?
Here is their lame rationale:
As part of the deal, RiverPark will pay the city $9 million for a downtown business assistance program, but it's unclear how that money would be spent.
If that is a little unclear let me put it in plain language: Money laundering with a 25% handling fee.
82 comments:
Anyone been in and checked out Riverpark? Is it as desolate as it looks from the 101?
Anyone seen the auction notice from Whitesails development on Wooley/Victoria? Starting bids about half of peak listing prices they claim.
I drove through RiverPORK about 3 days ago. They are still slapping sticks together on the ultra-density Condopartments. THey are honestly doing a decent job with finish work on the public spaces. The grass is down on the pocket parks and landscaping is well maintained. The more expensive products seem to be in a steady but low level of ongoing pre-construction; streets, sidewalks, perimeter walls, etc. No foundations or sticks yet. The lack of foundations is an ominous sign. RiverPORK looks desolate from the freeway because of the phasing of construction. The "stuff" that goes in last along the freeway will be ummmmm "modified to match market conditions at the time." Make no mistake, those market conditions no matter what will reluctantly force the city to accept fewer commercial, more retail and mixed use and much higher densities. Oxnard is very predictable in this aspect.
Whitesails. Scam auction. Data collection and interest survey. Inflated original list prices, hidden reserves, etc.
Let me be the murst to say that the little piggies learn from the big piggies. On the bright side the dollar is on the move, er, down again.
Legion, my response from a previous post, CFC, like GM, is a $2 stock waiting to happen.
Rob, expect a whole lot more rationalization and fuzzy math to keep pork projects alive amidst the big downturn in government income. As I mentioned in a previous post, we'll all be hearing lots of "don't worry, this project will return more money to the city than what we spend on it", whether it's a new mixed-use development or stadium.
The unfortunate reality is that the bacon grease will continue to flow until the municipality hits a cash crisis and discontinues the funding, at which point the development grinds to a halt and the muni ends up getting little to no benefit from it at all.
CFC is being flushed down the drain.
8.64!
PV,
More on that idea later. A Dade County, FL mixed use development just BKd.
Aaron,
I could have told you this. I can predict CFC with absolute accuracy. All I do is look at ACA and minus 6 weeks. Weird? At first but then it all makes sense.
ACA and CFC graphed.
Thar she blows! 50 points (0.5%) until we start hearing that word that the markets dread. I'm wondering if the big banks will try and pull the market out of the toilet later today, or if they'll wait until the volume is even more thin later this week, or if their trading desks are simply running out of ammunition. I suspect they'll be watching to see if--and how fast--the Dow breaks the magical 12,850 mark.
And also very interesting that the readers of this blog are on opposite sides of CFC. You know a stock has become trash when trading in it is a zero-sum game.
ACA in the News
Ten minutes until the fed saves the markets!
ACA could very well be the proverbial mailbox in Kansas. You know, where Kalifornicators have been sending their earthquake insurance premiums for all these years. Next up is CFC who will do the same.
Looks like America's Largest Lender is finally in its death throes, though the midday action would seem to indicate that either there are still stupid retail investors or it's being walked up again just to give 'er another bitch slap...
What a lame fed release! Rough patch, slow growth, inflation low. That is all.
Bitch slap, head fake, bear trap, take your pick.
Now. Take a breath. We get a little silly sometimes. IF Countrywide gets taken over by BofA it will be a very bad thing. IF Countrywide goes bankrupt it is such a very bad thing that all bets are off. That means breaking covenants and emergency rules and such.
In an honest market Fannie, Freddie, Countryfried, DownDownDowney and others are worthless. No tears lost here. This isn't an honest market and any sucker who thinks otherwise deserves what they get. I want the pitchfork concessions.
You mean a market where the sky is falling and Barnes & Noble is up 10% on a narrower loss?
Rob,
Regarding The Point (NW corner of Oxnard Blvd. & 101) and The Landing (N of Oxnard behind the office tower): Permits are on track for issue in +/- 45 days. The projects will then go out for bid and construction will begin around mid Feb.
The tenants have not changed.
As to The Main Collection where the movie theater, Whole Foods, REI, etc. etc. are located - I don't know what is going on over there.
Rob,
The Point is NE corner, not NW.
FCB,
thanks for your self update. I would have been most unkind in my response had the original been left uncorrected. I am still sorry. It is not right to jump on people like I might have without your clarification.
I know the "tenants" have not changed but how many times have you seen this assignment of interest behind the top line? Think anything "Trump" these days. What I hear is a lot more disturbing.
Permits are on track? I will politely disagree. Applications are in-process within the City Planning Dept. but that isn't the same as on track. Recent changes are ummmm... how to say... possibly enough to trigger Planning Review. Is that soft enough? I can speak plainly if motivated.
Last rumor had was that both "Main" and "Landing" were "subject to" financing delayed.
On a political note, I wil be making a push to have the City not extend any conditional use permits (CUPs). That is a big deal. Without them the land use grants revert. A very big deal.
I think we can say with confidence the following NAR and FED facts have been proven to be Fallacies with the Q3 results from Freddie Mac:
NAR/FED Fallacies:
1) No housing bubble.
2) Housing prices never go down.
3) We have hit bottom.
4) Problems are contained to just Sub-Prime and will not spill over to prime and defiantly will not effect the rest of the economy.
Rob,
As you, I think the city giving any outright or in-kind grants to Shea is downright stupid.
I was not aware of any potential hang-ups with the permits within the planning dept., building dept., or the political process, so you are way ahead of me there!
FCB,
Let's be even clearer. Point is actually Waypointe. Paired houses aka townhomes at high density.
The Landing is another strip of townhomes aka condos at higher density over retail/commercial. Aka mixed used high density limited access residential.
Neither are even plumbed for infrastructure past the curb.
Rob,
That's not what I was refering to. I was refering to The Landing - the large plot on the NE corner of Oxnard Blvd. and the 101. That parcel runs along the CalTrans drainage canal and is strictly retail - three large box retailers and two multi-tenant buildings. All are one story, retail only - no multistory or residential
The other - The Point - is East of The Landing and North of Oxnard Blvd. between the office tower and the multi-family now under construction. That parcel is three stand alone restaurants and two multi-tenant shops buildings. Again all one story and no residential.
Maybe we're talking about different parcels.
Why don't they just stick the Big Box retailers in the old Comp USA, Home Depot, and Good Guys? Then put the restaurants in the Oxnard Outlet center. Who needs a degree in city planning, it's easy.
I can't figure out this wacky market. It's got every reason in the world to take a dump, but it always seems to recover in the last hour. There was no reason for that bounceback in the last hour today. It's like someone is trying to prop it up deliberately. For what gain? Or maybe it's just bottom fishing. It's like they love bad news.
Isn't everyone glad that Casey got a job for a MLM outfit?
He has a job again?
@ lou minatti,
RE:
Isn't everyone glad that Casey got a job for a MLM outfit?
+++++++++++++++++
How much did that cost him?
FMW
$2759 ?
There's very strong technical support at around Dow 12,850, as that's the level that the market bounced off after the Fed's "surprise" discount rate cut (I'm fairly certain there were a few who knew what was coming in advance, but I digress.) As such, it's not surprising that the market bounced near that level yesterday. The technical supports usually take a few tries to take out.
Not sure what will happen today or Friday, though, especially since volume is so thin, but I suspect that the investment banks will try and hold that line again. Once 12,850 is breached it's a bottomless pit, next technical support is . . . no idea, but once it breaks 12,850 things could get ugly. But when that happens, no idea, could be today, could be February.
Rob -
Voluntary bail out program in CA, interesting item for discussion:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/21/BUG5TGAIA.DTL&tsp=1
12,820 reached
The magic number the talking heads were saying was 12,784 last August's low. Getting real close. I sure as hell don't want to own stocks for the next 3 days of Asia trading and no US volume to speak of.
@Property Flopper
"To get help, borrowers must occupy their homes, have made their payments on time and prove they cannot afford the loan's new rate."
What about the dumbasses that can't afford their current rate? ie their mortgage is over 50% of their REAL income, can we just cut the bullshit and kick their asses to the curb?
Oh, and I just bought one of em new jeep wrangler unlimited 4 doors with he money I made on CFC(Yeah I paid cash). Thanks mozillo you piece of shit! Few more drops like today and yesterday and I'll be hitting 200K for the year.
It's pretty sad when the average american lists the following on how to become rich in america
(1) Get your feelings hurt by something someone said. Then sue them and/or write a book about your horrifying experience of humiliation and degradation.
(2) Do something extremely stupid that causes you injury or serious illness, but not death. Then sue whoever allowed you to do it or didn't come to your aid quickly enough.
(3) Be the spouse, child, parent, or sibling of someone who did something extremely stupid and didn't survive it. Then sue whoever allowed your loved one to do it or didn't come to their aid quickly enough.
(4) Be a victim of some kind of high-profile calamity (natural or manmade) and survive it. First, have the government compensate you handsomely for your pain and suffering. Then sue whomever was responsible for it, allowed it to happen, and/or did not provide relief quickly enough.
(5) Be the spouse, child, parent, or sibling of a victim of some kind of high-profile calamity (natural or manmade) who didn't survive it. First, have the government compensate you handsomely for the loss of your loved one. Then sue whomever was responsible for it, allowed it to happen, and/or did not provide relief quickly enough.
(6) Be a marginally talented singer and get discovered by some TV "talent search" show and get signed to a recording contract.
(7) Be a marginally talented baseball, football, or basketball player. Sign a Major League, NFL, or NBA contract and remain on a team's roster (you don't even have to play) for at least one year.
(8) Be lucky enough to be born to wealthy parents who will be willing to lavish all of their riches upon you for nothing more than the simple fact that you are their son or daughter.
(9) Become a victim of some great injustice (real or imaginary). Then demand justice in the form of financial compensation from the government and whomever propagated it (if they are not one in the same).
(10) Be the spouse, child, parent, or sibling of a deceased victim of some great injustice (real or imaginary). Then demand justice on behalf of your loved one in the form of financial compensation (for yourself) from the government and whomever propagated it (if they are not one in the same).
(11) Claim you have some kind of supernatural power and con enough people into believing you and handing you huge sums of money to fool them over and over again.
(12) Sell the public on some kind of fad diet, snake oil health product, step-by-step plan to overcome an addiction, or easy path to wealth.
(13) Become a TV preacher and/or pastor of a mega-church.
(14) Marry some rich old man or woman and then hang around long enough until he or she dies and leaves you all their money.
(15) Be the victim of some wealthy person's mistake, carelessness, or recklessness and then sue them for everything they have.
(16) Win the Mega Millions or Power Ball lottery.
Of course you ask the average kid how to get rich and they will say "Get adopted by Brangelina!"
Legion: What you've identified is the simple fact that the U.S. economy has degraded to the point that so much of the movement of money is completely unproductive. Since productive activity has either left the U.S. (through the offshoring of jobs) or is no longer sufficiently rewarded (through the effective reduction of working wages), people chase non-productive money transfers in order to make ends meet.
Whether it's lawsuits, or gifts, or begging, or inheritances, or gambling, or borrowing, or "financial engineering", or pyramid schemes, or taxation, or getting paid to show up at parties, or getting paid to sit on the bench, far too much of the U.S. economy consists of unilateral transfers of money where there is nothing productive provided in return. It's an entire nation of freeloaders.
Hmm, I just realized I wrote this on a day when I don't have anything to do at work . . . :O . . . I'll see if I can figure out something productive to do in the afternoon :).
@PV
I think more of it is the fact that most people just don't want to work for a living anymore. That's why you have suckers like Casey and all the other real estate investor wannabes wanting to make money via passive or lazy income.
Think of it, what happened recently is people were getting loans for 500K + which they shouldn't have had access to, and they were gambling and hoping that they could make more profit than the interest rate. This would be akin to getting a loan for 500K from a loan shark and hitting vegas and hoping that you made more money than in a week than the 30% interest rate. The buying a house crap was just that, crap. They shouldn't have gotten the money.
Freeloaders is right, everybody expects the governement to pay for everything, they want a house, free medical care, free food, money for cigarettes and booze...hell, in Katrina they used the 2500 dollar debit cards on strip joints and gucci bags.
Only in this day and age of freeloading can some douchebag that bought a house under false pretenses can now claim that she or he is a vicitm and shouldn't ahve to leave their house even if they can't pay for it.
Hate to say it FCB but as for your friend, if I was the lender, I'd be repossessing her shoe puppies before I even think about cutting her interest rate or cutting her some slack. Liek some college kid that runs up a credit card and declares bakruptcy but gets to keep the stuff. Wait a sec, Casey did that too, except he bought mostly stupid perishable or non tangible stuff...vacations, out of state trips, heh, real estate courses...lol
It's not the same thing. A college student may simply not have a sufficient income to pay off credit card debt. But that lady was meeting her obligations. It is only after the bank unfairly raised the rates that she became unable to do so. The bank should allow her to pay the same amount that she was paying before. Then, there would be no problem.
> It is only after the bank unfairly
> raised the rates that she became unable to
> do so
Perhaps I missed something in FCB's post, but where did it say anything about an unfair raise in rates?
The person borrowed money on an adjustable rate mortgage with an introductory "teaser" rate. These loans are designed to allow someone to get in to a property and pay less initially, but the rates, adjustments and terms are spelled out in the documentation.
Most people use this type of loan to get in and the re-finance before the rates climb. There is risk since you may not be able to refi.
There was no allegation that the rates were not disclosed or that the person did not understand them.
I often get offers from credit cards for zero interest for six months - should I expect the zero interest to remain for several years just because I can't afford to pay the 12% they charge after the six month intro period?
It's the same thing, only with larger dollar amounts.
"Those people" can't even afford the neg am payments, not really. As soon as any hope of a quick profit are gone they will quit making payments.
Regardless, the increase is huge. Why do the pigs at the bank insist on robbing people of their houses instead of just maintaining the low rates, if the people can't pay the higher rates?
Legion,
Like you I'm a businessman, trader, speculator, investor, and risk taker, so I'm in full agreement on what I would do in the lender's shoes. But my friends are on the other side of that equation, and I am trying to do something unfamiliar to me - give them advice on how to represent their own best interest on the wrong side of that trade.
It's a position I've never had to even think about, much less manage.
PV, you are correct about the rate increase being completely disclosed, forseeable, and expected.
Wow - where to start... Obviously you are not a fan of "the pigs" at the bank. Somehow, I doubt you actually know anyone in finance enough to know if they are "pigs", but that's a separate issue.
How about this - most of these "teaser" rate loans start out either covering interest only (not paying the house off at all) or even paying LESS than the interest. In that case, it's known as a negative amortization loan (neg am for short). The principal is actually growing each month.
In either case, this cannot go on forever. After some period of time (always specified in the loan docs), the payment jumps up to cover the full interest and a portion of the principal (eventually paying off the house). The large jump isn't so much the rate going up (though it often does), but also paying the full value of the loan.
Let's go back to the credit card example. Your bill shows the total amount due and the minimum payment. Often the minimum just covers the interest. The amount you owe never goes down. You'll pay forever.
With a house, the loan is for a specified length of time, at the end, the full amount is paid. Paying interest only never takes care of the principal, so at some point, interest only won't cut it.
Last addressed to Monica, if that wasn't clear...
Monica,
The lender was losing money every month that my friend was paying the low teaser rate because the rate that the lender paid for the money was less than what they initially charged my friend for it. It is only after the rate reset that the lender begins to make a profit, so maintaining the existing rate is a money losing proposition for them.
On the other hand, taking back the house is also a money losing proposition, so perhaps somewhere in between a deal can be reached.
Monica -
Would it have been more fair for the bank to tell them "No, you cannot have the house"?
That is the other option. When I first started out, I had an adjustable rate on a house. I was told by one banker that I could not afford the house (when I knew I could). I got the loan, lived in the house for a number of years and eventually moved on to a much nicer place. We all go through that.
The terms of the loan were laid out, if they did not think them fair, why would they have accepted the loan?
They were probably figuring they would refinance before the jump, buy are unable to. THIS IS NOT THE FAULT OF THE BANK. What is not fair is to expect the bank to absorb a loss because someone else gambled and lost.
This is not a case of predatory lending, this is someone who borrowed more than they could pay back and is now facing the bills.
Also - Life is not fair... HAD to put that one in there, I'm sure you've heard it before. :)
I'm going to need some clarification on who the pigs are--the people at the bank who are charging 7.5% interest, or the people who sold the house for twice what it cost five years ago?
And let me ask this--what companies will be willing to lend money out without any promise of it ever getting repaid--and without any promise of even earning a reasonable rate of interest on it?
Would you lend your own money out at 3.5%? Would you accept that return on your retirement account?
Adjustable rate mortgages should be banned. That way, those who can't afford to pay the mortgage won't buy a home, or will find something more affordable and then won't have to worry about higher payments.
Were there any factors we don't know about? For instance, in immigrant communities, many people live with relatives. Maybe the rent or financial contribution that was supposed to be provided in reality by other people was part of the person's calculations and then this arrangement did not work out.
Monica,
That's a good point, but her boyfriend has been and still is living with her and paying a share of the mortgage payment.
(Rant on how so many Hispanics were taken advantage of by their friend and family deleted. That's a critical issue, but it's not for me to address.)
Monica, if what you want is for working people to be able to afford a home, then what needs to happen is for all of the people who can't afford homes be forced out of them, and all the extra home inventory to go on sale and get marked down to reasonable prices. Then, and only then, will families be able to get into a home they can afford.
This isn't about people who could afford a home being forced out of it--this is about people who should never have had a home in the first place, like our beloved Casey Serin.
As for FCB's unfortunate friend, I echo the other advice here--she needs to save money and let the foreclosure process work its way out. Take advantage of the free rent for the next three to six months. Keep open contact with the second lien holder, and start making offers for a workout on that loan. She can realistically offer pennies on the dollar, and payment terms stretched out over years, as they should know perfectly well that otherwise they're getting nothing.
And be glad she has her health (must . . . resist), her children, and her job. In retrospect, that's more than what many people have.
> Adjustable rate mortgages should be banned
Not a bad sentiment.
My current home is on a fixed rate 5% loan - low enough that it's not worth paying it off. Prior to that though, I've always used ARMs - they gave me better rates and I did not plan to be in the home long enough for it to matter (spent several years buying "fixers", living in them 3-5 years and selling). Worked for me, your milage may vary... :)
Banning adjustable loans would be telling people they are not smart enough to figure out what "5.5%, adjustable 1% every six months, maximum rate 11.5%" means.
That type of statement is ALWAYS accompanied by an estimated payment schedule, INCLUDING the maximum payment.
Anyone who cannot understand what can happen with that information should not be allowed to own a house under ANY type of conditions.
There are people who should always be renters.
Instead of kicking people out of homes and reducing the prices next time they are sold, why not just reduce the prices for existing homeowners who did not finish paying the mortgage yet?
Monica,
I do not know if you can take a logical approach to the situation, your arguments are about 90% emotional and 10% logic but here is the logic should you choose to argue it.
Its basic math, if you buy a home for $500,000 eventually you will have to pay back the $500,000 plus interest, if you do not pay back the full amount and the interest you are effectively stealing the money.
Maybe the rent or financial contribution that was supposed to be provided in reality by other people was part of the person's calculations and then this arrangement did not work out.
Then they lose their home. Families get divorced all the time and guess what, the husband moves out, then a year later the wife has to sell the place because she can’t afford the home on a single income. The banks never have and never should have an expectation that they lower the payments because of divorce.
If you do not pay back the full amount and the interest of the loan then you are effectively stealing the money.
And Peripheral Visionary 100% correct.
But the house will not be sold for %500,000 plus interest. Since it will be sold for a lower price, why not just consider that from now on, that's the cost of the house, and treat the existing homeowner accordingly (reduce his/her mortgage)?
Also, in case of divorce, why not allow the wife to keep half the house and only sell the rest? It is true that many people would not live with strangers, but if she doesn't mind having a room in what is somebody else's house, or if the house can easily be shared (for instance, it contained 2 apartments, the wife can keep one of the floors, etc.), then why not?
market is taking a bath. Bought some ETFC this pre-market this am at 3.70. the recent drop in the price was not justified IMO. at least not that steep. should be good for a couple points.
damn the market is down under the magical 12,800.
> why not just reduce the prices for existing
> homeowners who did not finish paying the
> mortgage yet?
Cool. I owe about 20% of the value of my home, will the bank simply forget about that last little bit?
I'm all for it!!!
Now, I have a long history of making payments on the loan and have allowed the bank to make a nice profit off of lending me money. Shouldn't they forgive my loan before they forgive someone who borrowed money only recently and that they have been losing money on?
Casey came up a few posts back - should the banks have allowed him to keep the homes he bought? Why not?
People borrowed money, gambled and lost.
I see your point, that the bank will lose money by taking the house and selling it for less - BUT - they will lose even more if they let people keep the houses.
"A" bought the house and can't make the payments. The options are to let "A" keep the house or sell it to "B".
I know that "A" has a history of not making payments (got us here in the first place). I'd bet on "B" to be better qualified.
While we hear about those who can't afford their houses more often, they are in fact the minority. Most people pay their mortgages. We should not reward those who can't.
Off topic - RogerSmith: I'm betting on a myers-briggs, Monica tests as an off the chart "F" in the T/F category. Figure that and try to explain keeping that in mind. ESTP myself...
What if A cannot afford higher payments (although he was able to afford the teaser rates and was paying really well before the increase), but he can afford the lower payments that B will end up paying?
"A" should not have taken out a loan they couldn't pay.
Personally, if someone burns me in a deal, I am not going to want to do business with them again. If "A" can't make the payments, I would prefer to do business with "B" simply because I could not trust "A" not to stop paying and try to pay even less.
Also - some banks ARE working with people and offering lower rates. Many times though, the person cannot afford even the lower rates - they are just in over their heads.
Property Flopper,
I see your point, definatly a 'F' in the T\F dichotomie.
Monica,
To answer your question:
What if A cannot afford higher payments (although he was able to afford the teaser rates and was paying really well before the increase), but he can afford the lower payments that B will end up paying?
Person A needs to go and get a Credit card and use it to pay his rent.
If he tries to pay even less, then it's fair to kick him out, otherwise why not allow him to stay (it's cheaper and easier) and pay as much as B would have paid? I don't see it as screwing the bank. I see it as maintaining some degree of fairness in lending through unconventional means, when the consumer has no other means to obtain that result. Don't forget that laws are skewed in favour of the rich in the first place.
Also, the credit card won't solve the problem, as the mortgage will be expensive for a long time. It's not a one-shot deal. If paying again by credit card, then the minimum credit card payment will eventually become too high. That's not a solution. The solution is making the mortgage payment more affordable.
Let me be the first to welcome everybody to the market correction!
Monica: "Since it will be sold for a lower price, why not just consider that from now on, that's the cost of the house, and treat the existing homeowner accordingly (reduce his/her mortgage)?"
Congratulations! You have discovered what the rest of us refer to as "rent". With "rent", you only pay a monthly low price, and you're not affected by any loss in the price of the house, or any change in interest rates! It's a great deal.
But, you might say, under this so-called "rent", the owner--what we call the "renter"--doesn't get any equity! They get nothing for all those payments they make, and if the price of the house goes up, they get none of it! Well, that's actually how it works--if you own something, you get the gain if the price goes up, and you get the loss if the price goes down. If you don't own it, you get neither.
Now, if you really want to get sophisticated, you actually can set up a situation where you rent, but retain some of the benefits of owning, but without the risk--namely, with a lease option. I won't get too far into the nitty-gritty details, but suffice it to say, there are a lot of details. For most people, the choice between owning or renting is the choice to make--and for many people, renting is the correct choice.
(Disclosure: I rent. And my lack of holding property earned me a passive income™ of roughly 0% last year, as opposed to an estimated loss of at least 5% had I owned. Sweet™!)
These people lied to take control of property that had they not lied would have gone to qualified buyers for less money. Even if they can afford to stay in the ill gotten properties their lies have done damage to honest people all over the world who are forced to pay more for homes and pay higher rates in competition for a limited supply of capital.
It is the least that they can do to either pay the reset rates and pay extra insurance and higher rates as befits their true financial condition or to give up the property. That's letting them off easy.
But the rent is generally increased from time to time, and the owner may try to find tenants who are willing to pay more, if the market allows it. Not to speak of all kinds of things the owner is allowed to do, such as entering the property after giving notice for various reasons, but without quite giving the tenant the choice.
I just love this discussion. I never thought I'd live to see the day. It's a free for all. Everyone should become a scammer / criminal. There is no benefit to playing by the rules.
Not if the rules are skewed in favour of the rich and you are not one of them. But then, if they were paying the mortgage at teaser rates, the homeowners were playing by the rules. It's just when the bank pigs changed the rules (higher mortgage) that the homeowner could no longer play by the rules.
> The solution is making the mortgage
> payment more affordable.
Let's try this:
You personally loan someone $1000 out of your own pocket. They agree to pay you $5/week for 10 weeks, then they'll pay you $105 each week for 10 more weeks to pay off the loan.
You get your original $1,000 back and you get $100 ($5/week for 20 weeks) extra as interest.
Now say they pay for the first few weeks, they realize they spent the $1,000. Now they can't afford to pay you $105. They offer to keep paying you the $5/week and at the end of 20 weeks expect the loan to be paid off.
Would you accept this? You'd end up with $100 total instead of your $1,000, but... they can't afford the $105 they agreed to and you do want to keep the payment affordable.
You aren't one of those "pigs" that would expect to get the $1,000 that you loaned them back are you?
> It's just when the bank pigs changed
> the rules (higher mortgage)
The banks DID NOT change the rules. The rules were set down when the loan was made, the borrower would pay a low rate for a year or two, then it would jump to the higher rate.
The BORROWER is trying to change the rules now, saying that they do not want to pay the amount they agreed to back when the loan started.
Just because they were paying a low rate to start does not change the fact that they agreed to pay the higher rate later. This was all stated when the loan was taken out.
The "pigs" are just asking to be paid what the borrower agreed to pay (see my post above for an example).
I would simply not offer the teaser rates for the first few weeks. That way, either the borrower can afford to pay the real price, or he would not get the loan in the first place.
Also, the credit card won't solve the problem, as the mortgage will be expensive for a long time. It's not a one-shot deal. If paying again by credit card, then the minimum credit card payment will eventually become too high. That's not a solution. The solution is making the mortgage payment more affordable.
Monica,
The fact that you are incapable of grasping is that the home NEVER was affordable and NEVER will be affordable to “buyer A”. Your solution is to get the bank to cover portion of the loan “buyer A” can not afford also called a subsidy. My solution is to use a credit to cover a portion of the rent also called a subsidy. My credit card solution and your solution is the EXACT same solution. I’m just making Visa the fall guy instead of the bank. Perhaps the government will step in and make the subsidy, thus turning the tax payer into the fall guy.
Why do I get the felling Monica is baiting us?
> I would simply not offer the teaser rates
Nice way to avoid the question. Would you accept $100 back for the $1,000 you loaned (change it so it isn't a "teaser" rate, but they STILL aren't paying you back).
I suspect you'd quickly become one of the "pigs" if it was your own money that you'd lent out.
It's nice to say some random bank should take a loss, but few will offer to take the loss themselves.
FCB's friend "A" bought a house they could not afford. They can't even sell it now since the price has dropped. The "bank pigs" are now supposed to take the loss for them?
Question: I sold my last house at a nice profit. Should the bank be allowed to take that profit? No... and they shouldn't have to take the loss.
"A" gambled that prices would rise and that rates would not. They lost.
Monica, you seem to think it is okay to change binding financial agreements unilaterally. Not only is that not possible but even the idea that it may be possible is a hazardous prospect.
It is real simple. Do what the piece of paper we both signed says or we will do what the piece of paper we both signed says. Where's the unfair? And to be totally honest 95% of the problems stem from the borrower lying about something.
Monica, Are you arguing that the FBs should get to keep the house by paying less than market rate interest and less than a fully amortization schedule would dictate? That would effectively give the FBs a better deal than responsible people who have been paying on a 30 year fixed.
Edgar -
She keeps falling back to the idea that they should not have been offered a teaser rate.
She is ignoring the fact that they CHOSE a loan with a teaser rate - nobody put a gun to their head and made them take it.
Simple fact is, they could not afford the home they wanted on a fixed rate loan, so they took the ARM and got the home. Now it's time to pay and they can't.
If they did not want the teaser, they should have decided not to purchase the house. Now that they have purchased the house, they need to deal with it.
New post just to save our scroll wheels.
The bank should take the loss because they gave the loan to someone who cannot afford it. And the credit card is a third party, so they should not.
By why doesn't the government pass a law requiring all banks to get a certain percentage of their mortgage business from low-income consumers, or to provide an affordable loan to any consumer with a job and a salary above a certain low level? Sooner or later, banks would have to offer them loans but make sure it's for something they can afford. And that would help the market adjust, as there would have to be some kind of home or shack for said low-income consumers.
Rules for successful trolling 101:
1) Select a blatantly female name.
2) Make illogical, naive statements on how things SHOULD BE on this planet, for example, "We should have world peace, zero pollution, a free home for every family and free government medical care for every citizen and absolutely zero taxes for those who actually decide to work. Throw in lots of female type suffrage or victim examples.
3) Wait for "Knight in Shining Armor" to post realistic, logic based response.
4) Repeat steps 2-3 ad nauseum.
Now taking requests for your next lesson.
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