More on housing affordability
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Christian Graus wrote:
But, I would agree it's banks, and not government, that needs regulating, to save stupid people from themselves.
Absolutely... people should have to demonstrate that they have saved their deposit, and can afford repayments, in order to borrow money... just like the good old days!!
I don't have ADHD, I have ADOS... Attention Deficit oooh SHINY!! If you like cars, check out the Booger Mobile blog | If you feel generous - make a donation to Camp Quality!!
I didn't have a deposit, and my loan is guarenteed. :) Ah, VA Loans. While the rest of the benefits might suck, getting a house has been remarkably effective. With the market fairly stable here we are looking to be okay and maybe upgrade to a nicer place in 2 or 3 years. We need the space with kidlet #2 due soon.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.
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When I was going to buy my house and was getting qualified the bank to me I could get 250K. They're out of their minds. I had a budget and a monthly payment I wanted and that was it. This is where I think consumers start to get into trouble. If the bank, who should know best after all, says you can get a loan for X and afford it they're idiots. I all but told them so and left to go to another bank.
Christian Graus wrote:
I think a price crash will be a good thing overall, housing is probably getting too expensive, even in Australia's most affordable state. But, the real question is, how is it the fault of anyone bar the banks and people who borrow outside their means that a bubble was fed and will eventually burst ?
After your initial thread about this that was my conclusion. Even 11 acres in the country side isn't worth $600,000. I can get a lot more in Missouri for that than just 11 acres. It's not really any one person's fault that we have bubbles as near as I can tell. As long as we treat everything as a commodity to be exploited we're going to have bubbles. This includes people via wages and our health care through insurance premiums.
That's called seagull management (or sometimes pigeon management)... Fly in, flap your arms and squawk a lot, crap all over everything and fly out again... by _Damian S_
wolfbinary wrote:
When I was going to buy my house and was getting qualified the bank to me I could get 250K. They're out of their minds. I had a budget and a monthly payment I wanted and that was it. This is where I think consumers start to get into trouble. If the bank, who should know best after all, says you can get a loan for X and afford it they're idiots. I all but told them so and left to go to another bank.
But they do know, they can get most of their money back from you, and then in capitalist wonder land take what you bought with it from you when you default, and then re-sell it on loan to someone else who can later default on it, and they can collect the insurance on all of those failed investments. It's like free money. Though to be honest I'm not aware of both defaulting and reselling as well as insurance being used at the same time, I haven't looked, I'm sure someone's had the 'bright' idea.
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I could be pulling this out of my ass, but isn't the general guideline for housing costs keep it under 1/3rd of your income? You know, no where near 100% of it?
Distind wrote:
I could be pulling this out of my ass, but isn't the general guideline for housing costs keep it under 1/3rd of your income?
I've heard that from financial advisers. But on the flip side you'll have realtors telling you to buy the absolute biggest house possible: "You'll be there for years so you'll grow into the payment."
Latest toys built for fun: 3D gravity simulation using xbap
full size Google image search. -
Distind wrote:
I could be pulling this out of my ass, but isn't the general guideline for housing costs keep it under 1/3rd of your income?
I've heard that from financial advisers. But on the flip side you'll have realtors telling you to buy the absolute biggest house possible: "You'll be there for years so you'll grow into the payment."
Latest toys built for fun: 3D gravity simulation using xbap
full size Google image search.Funny part is we probably could have gotten a house worth twice what we have. If you go to a place with a homeowners association that charges, look at a place for 50% more than what you would get without the association. It almost ends up being the same payments.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.
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wolfbinary wrote:
When I was going to buy my house and was getting qualified the bank to me I could get 250K. They're out of their minds. I had a budget and a monthly payment I wanted and that was it. This is where I think consumers start to get into trouble. If the bank, who should know best after all, says you can get a loan for X and afford it they're idiots. I all but told them so and left to go to another bank.
But they do know, they can get most of their money back from you, and then in capitalist wonder land take what you bought with it from you when you default, and then re-sell it on loan to someone else who can later default on it, and they can collect the insurance on all of those failed investments. It's like free money. Though to be honest I'm not aware of both defaulting and reselling as well as insurance being used at the same time, I haven't looked, I'm sure someone's had the 'bright' idea.
Distind wrote:
But they do know, they can get most of their money back from you, and then in capitalist wonder land take what you bought with it from you when you default, and then re-sell it on loan to someone else who can later default on it, and they can collect the insurance on all of those failed investments. It's like free money.
Yup, and that's where the market is open to predatory practice. If the banking practices on a macro scale lead to a bubble and subsequent crash, you could make the arguement that they're gaming the system. And when the government pays the banks off at 100 cents on the dollar to cover any bad debt they might have, while refusing to help individuals caught out by the drop in market values, you have a whole economy that's being raped for the benefit of the banks.
L u n a t i c F r i n g e
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Distind wrote:
I could be pulling this out of my ass, but isn't the general guideline for housing costs keep it under 1/3rd of your income?
I've heard that from financial advisers. But on the flip side you'll have realtors telling you to buy the absolute biggest house possible: "You'll be there for years so you'll grow into the payment."
Latest toys built for fun: 3D gravity simulation using xbap
full size Google image search.pelnor wrote:
"You'll be there for years so you'll grow into the payment."
Let's see, take my parent's pay grade changes over the last ten years, figure into that the odds of divorce over time, and yea... that's what I expected, there's a crater where my bullshit meter was sitting. That and personally I'd rather grow out of a house than grow into it. I can deal with not having quite enough space, I can't deal with having my space and all of the money I've put into it taken from me because I made a stupid commitment.
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Distind wrote:
But they do know, they can get most of their money back from you, and then in capitalist wonder land take what you bought with it from you when you default, and then re-sell it on loan to someone else who can later default on it, and they can collect the insurance on all of those failed investments. It's like free money.
Yup, and that's where the market is open to predatory practice. If the banking practices on a macro scale lead to a bubble and subsequent crash, you could make the arguement that they're gaming the system. And when the government pays the banks off at 100 cents on the dollar to cover any bad debt they might have, while refusing to help individuals caught out by the drop in market values, you have a whole economy that's being raped for the benefit of the banks.
L u n a t i c F r i n g e
I still think having the fed bailing out people with the loans would have been a better option. Banks get the remaining principle on the loan to get rid of the bad loans, the loans are reworked at the Fed's interest rate with a payment schedule those who are responsible for the mortgage can pay, and put a clause in there that these loans may not be sold, transfered or refinanced. Banks don't fail, people keep their homes, and eventually the government makes a minor profit of saving the economy, and the people can't fuck up this without having completely lost their income. But for some reason I never heard that idea floated among the political set.
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I still think having the fed bailing out people with the loans would have been a better option. Banks get the remaining principle on the loan to get rid of the bad loans, the loans are reworked at the Fed's interest rate with a payment schedule those who are responsible for the mortgage can pay, and put a clause in there that these loans may not be sold, transfered or refinanced. Banks don't fail, people keep their homes, and eventually the government makes a minor profit of saving the economy, and the people can't fuck up this without having completely lost their income. But for some reason I never heard that idea floated among the political set.
I completely agree. The country's economy has been trashed by 30 years of 'trickle-down' philosophy; individual's real purchasing power has been in decline for decades, while wealth has become more and more concentrated in the hands of a few. Those few benefit from the bank bailouts, while the masses are screwed. Wouldn't it have been a game-changer if a 'trickle-up' approach had been used instead... :rolleyes:
L u n a t i c F r i n g e
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Pretty much. One minor issue has been holding me back for about the last year and a half and keeping me from riding, which would otherwise cure all my ills. :-D I need to get a couple of disks in my neck replaced, and the insurance coverage we've had for the last 7 years or so totally sucks (a big factor in our current predicament). The only option offered is fusion of the vertebrae. Don't know if you know anything about it, but it is not exactly a state of the art fix; irreversible and, at it's heart, really pretty primitive. There is a much better option, been in use in Europe for over a decade, probably there too (artificial disk/disk replacement), but the FDA only approved it for use here I think 2 years ago now, and only a few insurers cover it. However... one of the changes coming down in the next few weeks involves new insurance coverage on a really good plan for federal employees, from one of those few providers. And if it's covered (not sure yet), I definitely made the right choice by waiting for the right fix. :)
L u n a t i c F r i n g e
LunaticFringe wrote:
There is a much better option, been in use in Europe for over a decade, probably there too (artificial disk/disk replacement), but the FDA only approved it for use here I think 2 years ago now, and only a few insurers cover it.
My dad had that for two discs in his lower back a few years ago, of course that was through the nasty socialist NHS in Britain. Full recovery within 4 months, had a shunt in for a month or so. He had held out, as there is some risk of permanent damage, until he couldn't take it anymore. Said it made him feel 10 years younger.
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I didn't have a deposit, and my loan is guarenteed. :) Ah, VA Loans. While the rest of the benefits might suck, getting a house has been remarkably effective. With the market fairly stable here we are looking to be okay and maybe upgrade to a nicer place in 2 or 3 years. We need the space with kidlet #2 due soon.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.
Kidlet #2? Pah! Slacker! I have kidlet # 3 due in early August, the new house being built is expected complete end of June. We really didn't think this through :D
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pelnor wrote:
"You'll be there for years so you'll grow into the payment."
Let's see, take my parent's pay grade changes over the last ten years, figure into that the odds of divorce over time, and yea... that's what I expected, there's a crater where my bullshit meter was sitting. That and personally I'd rather grow out of a house than grow into it. I can deal with not having quite enough space, I can't deal with having my space and all of the money I've put into it taken from me because I made a stupid commitment.
Distind wrote:
That and personally I'd rather grow out of a house than grow into it.
My sentiment exactly, by the time my kids are ready for Uni I don't want a payment that's eating 1/3 of my income. In fact I'd rather have a house almost paid off. Fortunately my wife is a cheapskate too (one reason I married her) so our new house will still be a lot less than that.
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I completely agree. The country's economy has been trashed by 30 years of 'trickle-down' philosophy; individual's real purchasing power has been in decline for decades, while wealth has become more and more concentrated in the hands of a few. Those few benefit from the bank bailouts, while the masses are screwed. Wouldn't it have been a game-changer if a 'trickle-up' approach had been used instead... :rolleyes:
L u n a t i c F r i n g e
LunaticFringe wrote:
'trickle-down' philosophy
I see you used the word philosophy instead of economics since it isn't an economic theory as some would have you believe.
That's called seagull management (or sometimes pigeon management)... Fly in, flap your arms and squawk a lot, crap all over everything and fly out again... by _Damian S_
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I still think having the fed bailing out people with the loans would have been a better option. Banks get the remaining principle on the loan to get rid of the bad loans, the loans are reworked at the Fed's interest rate with a payment schedule those who are responsible for the mortgage can pay, and put a clause in there that these loans may not be sold, transfered or refinanced. Banks don't fail, people keep their homes, and eventually the government makes a minor profit of saving the economy, and the people can't fuck up this without having completely lost their income. But for some reason I never heard that idea floated among the political set.
There was always a big problem with propping up the home buyers. Simply put they couldn't afford the mortgage they were servicing which led to no good subsidized exit. If they were bailed out on a temporary basis, i.e. monthly subsidy on payment, ultimately you've delayed the problem that they can't afford to service the mortgage (or frequently even maintain the property) until the subsidy is withdrawn. If you make it permanent then you've created a class of individuals permanently dependent on handouts to support a house they can't afford. Neither popular nor good policy, how would you define a cut off, for instance? If the mortgage is refinanced in part or fully paid then you create a class of individuals who have received a wonderful gift on behalf of the taxpayer. The problem is that membership of this class becomes an aspirational attainment, simply put you've shifted the moral hazard not eliminated it. Ultimately the collapse of the credit markets, let alone the collapse of the banking system, was always going to do more harm to more people then propping it up. Now's the time to make sure that those who profited by socialized risk do not get to do it again.
062142174041062102
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LunaticFringe wrote:
There is a much better option, been in use in Europe for over a decade, probably there too (artificial disk/disk replacement), but the FDA only approved it for use here I think 2 years ago now, and only a few insurers cover it.
My dad had that for two discs in his lower back a few years ago, of course that was through the nasty socialist NHS in Britain. Full recovery within 4 months, had a shunt in for a month or so. He had held out, as there is some risk of permanent damage, until he couldn't take it anymore. Said it made him feel 10 years younger.
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MidwestLimey wrote:
My dad had that for two discs in his lower back a few years ago, of course that was through the nasty socialist NHS in Britain. Full recovery within 4 months, had a shunt in for a month or so. He had held out, as there is some risk of permanent damage, until he couldn't take it anymore. Said it made him feel 10 years younger.
It's funny how you never hear about that much in the health care discussions.
That's called seagull management (or sometimes pigeon management)... Fly in, flap your arms and squawk a lot, crap all over everything and fly out again... by _Damian S_
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Kidlet #2? Pah! Slacker! I have kidlet # 3 due in early August, the new house being built is expected complete end of June. We really didn't think this through :D
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We only want 2. I would have been happy with the one, he's a wonderful experiment kid. I've been teaching him how to rack people with use nerf weapons and other fun stuff. And it wasn't for lack of trying, trust me. We tried the hell out of it for #2 for a year. Not that I am complaining.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.
-
There was always a big problem with propping up the home buyers. Simply put they couldn't afford the mortgage they were servicing which led to no good subsidized exit. If they were bailed out on a temporary basis, i.e. monthly subsidy on payment, ultimately you've delayed the problem that they can't afford to service the mortgage (or frequently even maintain the property) until the subsidy is withdrawn. If you make it permanent then you've created a class of individuals permanently dependent on handouts to support a house they can't afford. Neither popular nor good policy, how would you define a cut off, for instance? If the mortgage is refinanced in part or fully paid then you create a class of individuals who have received a wonderful gift on behalf of the taxpayer. The problem is that membership of this class becomes an aspirational attainment, simply put you've shifted the moral hazard not eliminated it. Ultimately the collapse of the credit markets, let alone the collapse of the banking system, was always going to do more harm to more people then propping it up. Now's the time to make sure that those who profited by socialized risk do not get to do it again.
062142174041062102
MidwestLimey wrote:
Now's the time to make sure that those who profited by socialized risk do not get to do it again.
I really doubt that's going to happen. Wall Street doesn't get it and Congress has no balls to pass something that will really kick their ass. They're back at it again in full swing making stuff up(what they call innovation) and no one seems to be making the kind of stink that is necessary to break them. I watched their testimony and they were just smug sitting there basically saying "We did nothing wrong according to the law." For people like that morality and ethics don't transfer to their work lives.
That's called seagull management (or sometimes pigeon management)... Fly in, flap your arms and squawk a lot, crap all over everything and fly out again... by _Damian S_
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There was always a big problem with propping up the home buyers. Simply put they couldn't afford the mortgage they were servicing which led to no good subsidized exit. If they were bailed out on a temporary basis, i.e. monthly subsidy on payment, ultimately you've delayed the problem that they can't afford to service the mortgage (or frequently even maintain the property) until the subsidy is withdrawn. If you make it permanent then you've created a class of individuals permanently dependent on handouts to support a house they can't afford. Neither popular nor good policy, how would you define a cut off, for instance? If the mortgage is refinanced in part or fully paid then you create a class of individuals who have received a wonderful gift on behalf of the taxpayer. The problem is that membership of this class becomes an aspirational attainment, simply put you've shifted the moral hazard not eliminated it. Ultimately the collapse of the credit markets, let alone the collapse of the banking system, was always going to do more harm to more people then propping it up. Now's the time to make sure that those who profited by socialized risk do not get to do it again.
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MidwestLimey wrote:
If the mortgage is refinanced in part or fully paid then you create a class of individuals who have received a wonderful gift on behalf of the taxpayer. The problem is that membership of this class becomes an aspirational attainment, simply put you've shifted the moral hazard not eliminated it.
Why is it that people of lesser means are automatically assumed to be of lesser moral stature? You might make the argument that a big reason for the mess the country is in, is that the 'trickle-down' philosophy automatically assumes a degree of social responsiblity / philanthropy on the part of the wealthy. That part of the equation seems to have been exposed as a fraud; why would the flip side of the coin be any more credible?
L u n a t i c F r i n g e
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We only want 2. I would have been happy with the one, he's a wonderful experiment kid. I've been teaching him how to rack people with use nerf weapons and other fun stuff. And it wasn't for lack of trying, trust me. We tried the hell out of it for #2 for a year. Not that I am complaining.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.
ragnaroknrol wrote:
And it wasn't for lack of trying, trust me. We tried the hell out of it for #2 for a year. Not that I am complaining.
Yeah, quit yer bitchin', #3 wasn't exactly planned. My wife's just glad we didn't meet as teenagers ;)
062142174041062102
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There was always a big problem with propping up the home buyers. Simply put they couldn't afford the mortgage they were servicing which led to no good subsidized exit. If they were bailed out on a temporary basis, i.e. monthly subsidy on payment, ultimately you've delayed the problem that they can't afford to service the mortgage (or frequently even maintain the property) until the subsidy is withdrawn. If you make it permanent then you've created a class of individuals permanently dependent on handouts to support a house they can't afford. Neither popular nor good policy, how would you define a cut off, for instance? If the mortgage is refinanced in part or fully paid then you create a class of individuals who have received a wonderful gift on behalf of the taxpayer. The problem is that membership of this class becomes an aspirational attainment, simply put you've shifted the moral hazard not eliminated it. Ultimately the collapse of the credit markets, let alone the collapse of the banking system, was always going to do more harm to more people then propping it up. Now's the time to make sure that those who profited by socialized risk do not get to do it again.
062142174041062102
MidwestLimey wrote:
If they were bailed out on a temporary basis, i.e. monthly subsidy on payment, ultimately you've delayed the problem that they can't afford to service the mortgage (or frequently even maintain the property) until the subsidy is withdrawn. If you make it permanent then you've created a class of individuals permanently dependent on handouts to support a house they can't afford.
Compared to a bailout of the banks who only got to hand out more bonuses and paychecks to people that had been reaping huge benefits on this before it soured. The banks survived, but I wonder if they should have. Quite a few banks were more conservative and didn't risk everything like the ones being bailed out. They got screwed, and they should have been the ones rewarded. They basically gave every bank 10K per person. If they had given each person that money, you could have gotten a typical family 30-40K off their mortgage. In some cases, no, not much of a help. In quite a few cases, boom, back into the black, you could reduce payments while getting other debt under control or even get ahead. Some people would have been able to pay off hteir debt and that would have been more money directly going into the economy. I would have just done this. If it didn't save you, sorry, you should have been a little more wise, the bank at least will be able to survive. If you are now able to make everything, even if only for a little while, at least it will allow you to get into a better position temporarily, it might be enough to let you get a better job. If it paid off your debt or made it so you can now breathe easy, grats. Now go spend money wiping out debt and help the economy recover.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.
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ragnaroknrol wrote:
And it wasn't for lack of trying, trust me. We tried the hell out of it for #2 for a year. Not that I am complaining.
Yeah, quit yer bitchin', #3 wasn't exactly planned. My wife's just glad we didn't meet as teenagers ;)
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HAHAHAHAHA See, after #2 I'm going to get fixed. I figure, it's still a gun even if it shoots blanks, and I don't want the sort of thing that happened to some friends. Went for #2 and had triplets.
If I have accidentally said something witty, smart, or correct, it is purely by mistake and I apologize for it.