wrote:
On Fri, 09 Jan 2009 19:53:08 -0500, BAR wrote:


20% cash down. If you don't have 20% down get a second job. If you have
to wait 15 or 20 years to buy a hose then that is what you have to do.
You do not have a right to buy a house regardless what Barney Frank or
Chris Dodd have to say.

Damn conservatives, always wanting government to regulate everything. ;-)

Government, no government regulation needed just good risk analysis. If
you buy a $200K house are you going to walk away from $40K? Or if you
buy a $500K house are you going to walk away from $100K?

From my seat, it wasn't the CRA or the sub-prime loans that did this
economy in. It was the stupid actions of the banks and investment houses
in their dealings with sub-prime loans. Lehman Brothers was leveraged
somewhere @ 33 to 1. That's just downright dumb.

What gave rise to the sub-prime loan market? Who started underwriting
97% and 100% loans? If I obtained a 100% loan what do I have to lose if
I walk away from it and leave the bank holding the bag?

Remember "redlining"? It was a racist, and illegal, policy of grouping
entire neighborhoods as "out-of-bounds" for loans. That was what the CRA
was intended to alleviate. What a concept, banks doing their jobs
loaning money without regards to race, religion, or gender.

Racist and illegal? It was based upon risk analysis. Why would I want to
lend money to people who were most likely not going to pay it back. And,
if I did have to foreclose just before getting the sheriff to evict them
they would trash the place. Where is my motivation to lend money in
those areas?

What a concept banks lending money to those who they believed would
actually pay the money back.

On Fri, 09 Jan 2009 22:18:18 -0500, BAR wrote:


Racist and illegal? It was based upon risk analysis. Why would I want to
lend money to people who were most likely not going to pay it back. And,
if I did have to foreclose just before getting the sheriff to evict them
they would trash the place. Where is my motivation to lend money in
those areas?

Yup, racist and illegal. When I find the link I'll post it, but those
"redlined" areas have reasonably low default rates. Where most of the
problems have arisen, is the more affluent borrower who over extended
thinking of their home as an investment, not as a home.

wrote:
On Fri, 09 Jan 2009 22:18:18 -0500, BAR wrote:


Racist and illegal? It was based upon risk analysis. Why would I want to
lend money to people who were most likely not going to pay it back. And,
if I did have to foreclose just before getting the sheriff to evict them
they would trash the place. Where is my motivation to lend money in
those areas?

Yup, racist and illegal. When I find the link I'll post it, but those
"redlined" areas have reasonably low default rates. Where most of the
problems have arisen, is the more affluent borrower who over extended
thinking of their home as an investment, not as a home.

Seek and seek well.

Let me ask you another question. What is the cost of making a $40K loan?
What is the cost of making a $200K loan? What is the profit on a $40K
loan? What is the profit on a $200K loan? Which loan would you rather
put your efforts into?

wrote in message
t...
On Fri, 09 Jan 2009 22:18:18 -0500, BAR wrote:


Racist and illegal? It was based upon risk analysis. Why would I want to
lend money to people who were most likely not going to pay it back. And,
if I did have to foreclose just before getting the sheriff to evict them
they would trash the place. Where is my motivation to lend money in
those areas?

Yup, racist and illegal. When I find the link I'll post it, but those
"redlined" areas have reasonably low default rates. Where most of the
problems have arisen, is the more affluent borrower who over extended
thinking of their home as an investment, not as a home.


those redlined areas had low default rates and the lender did due diligence
and loaned on what the house was really worth, and if the borrower could
afford the payments.

As to NOYB the guy in Florida, he may lose the house if he can not
refinance, but he bought the house early enough before a lot if the price
inflation and he got to write off 35% of his payment. Probably cheaper than
renting a house. The taxpayers subsidized his renting the house. May owe
taxes on the unpaid part of the loan if foreclosed. Do not know the rules
on that. Credit cards, they write down the balance owed, and you get a 1099
for the amount written down. Ordinary income.

On Sat, 10 Jan 2009 12:04:41 -0800, "Calif Bill"
wrote:


As to NOYB the guy in Florida, he may lose the house if he can not
refinance, but he bought the house early enough before a lot if the price
inflation and he got to write off 35% of his payment. Probably cheaper than
renting a house. The taxpayers subsidized his renting the house. May owe
taxes on the unpaid part of the loan if foreclosed. Do not know the rules
on that. Credit cards, they write down the balance owed, and you get a 1099
for the amount written down. Ordinary income.

As I recall NOYB is a dentist with a good income.
He should be doing just fine.
As to refi's, I'm not sure how people got into trouble with the
various home loans. Must have not read the terms or lost their jobs.
I did a 3 yr ARM refi about 6 years ago at 3.75%. I had planned on
paying it off before it adjusted from 3.75%, but didn't quite make it
before I retired, and still have about 30 g's on it.
Thing is it never went past 6.75% and is now 5.75%.
So far I haven't wanted to take the tax hits in cashing in IRA's to
pay it off.
It's not easy figuring out how to best do that, as we have little
taxable income. And I'm lazy about thinking since I retired.
But I think I have to figure out how to knock down the principal
pretty soon, as I'll be paying that interest forever - and maybe even
at a higher interest rate.
Once they adjusted this one it went on a 30 year amort schedule and
though the payment is low, it's nearly all goes to interest.
I hate paying interest, and on the surface it looks like I would pay
more in taxes by cashing in CD's.
But if you look at an amort schedule and see TOTAL payments over some
years, it might make sense to just take the one time tax hit. Depends
too on when and if I move south.
Just have to make sure I can still afford the "boat(s) of my dreams."
I'm thinking of getting a little help on handling my money.
Anybody know about a guy named Bernie Madoff?
He's been highly recommended by those "in the know."

--Vic

On Sat, 10 Jan 2009 14:52:31 -0600, Vic Smith
wrote:

On Sat, 10 Jan 2009 12:04:41 -0800, "Calif Bill"
wrote:


As to NOYB the guy in Florida, he may lose the house if he can not
refinance, but he bought the house early enough before a lot if the price
inflation and he got to write off 35% of his payment. Probably cheaper than
renting a house. The taxpayers subsidized his renting the house. May owe
taxes on the unpaid part of the loan if foreclosed. Do not know the rules
on that. Credit cards, they write down the balance owed, and you get a 1099
for the amount written down. Ordinary income.

As I recall NOYB is a dentist with a good income.
He should be doing just fine.
As to refi's, I'm not sure how people got into trouble with the
various home loans. Must have not read the terms or lost their jobs.
I did a 3 yr ARM refi about 6 years ago at 3.75%. I had planned on
paying it off before it adjusted from 3.75%, but didn't quite make it
before I retired, and still have about 30 g's on it.
Thing is it never went past 6.75% and is now 5.75%.
So far I haven't wanted to take the tax hits in cashing in IRA's to
pay it off.
It's not easy figuring out how to best do that, as we have little
taxable income. And I'm lazy about thinking since I retired.
But I think I have to figure out how to knock down the principal
pretty soon, as I'll be paying that interest forever - and maybe even
at a higher interest rate.
Once they adjusted this one it went on a 30 year amort schedule and
though the payment is low, it's nearly all goes to interest.
I hate paying interest, and on the surface it looks like I would pay
more in taxes by cashing in CD's.
But if you look at an amort schedule and see TOTAL payments over some
years, it might make sense to just take the one time tax hit. Depends
too on when and if I move south.
Just have to make sure I can still afford the "boat(s) of my dreams."
I'm thinking of getting a little help on handling my money.
Anybody know about a guy named Bernie Madoff?
He's been highly recommended by those "in the know."

--Vic

Dentists suffer big time during recessions. A lot of their work is
'voluntary', like veneers, some caps, some alignment, etc.

I too hope NOYB is in good shape. But, I can call my dentist in the
afternoon and get a next morning appointment. Six months ago I'd have
waited a week, unless it was an emergency.

On Sat, 10 Jan 2009 17:05:25 -0500, John H
wrote:



Dentists suffer big time during recessions. A lot of their work is
'voluntary', like veneers, some caps, some alignment, etc.

I too hope NOYB is in good shape. But, I can call my dentist in the
afternoon and get a next morning appointment. Six months ago I'd have
waited a week, unless it was an emergency.

Yeah, didn't give that much thought. One of my daughters is still a
part-time dental assistant while in college, and the orthodontist she
works for has cut back on his spending.
I think the younger guys who haven't been through recessions/layoffs
are at risk if they don't have their heads screwed on straight.
Used to live paycheck to paycheck myself before I got married.
Hey, that was fun!

--Vic