You are oversimplfying the situation. First of all many people lost their jobs and no longer had the means to pay their morgtgage.
Secondly, One can't blame someone who purchased a house for $300,000 and now that house is worth $100,000, I'd walk away also.
The ones you CAN blame are people who took out large second mortgages and revolving home equity loans to buy boats, cars, big screen TVs, etc, and then walked away.
__________________ There are more humans in the world than rats.
Buying a house is a gamble; there's no guarantee that the value will rise. So defaulting on loan because it didn't pan out the way you planned/hoped is a breach of contract just the same as your "second mortage"point.
You won’t read about it in the mainstream press, but there has never been a better time to leave the United States in the country’s 233-year history.
You can hardly mention this without offending people these days. If you do, you risk being called “unpatriotic.”
This, of course, is nonsense. The idea of America is that people should have the right to shape their own lives...seek out opportunities...and go wherever they want.
I still believe in that America. That’s why I always encourage people to keep seeking out new places where you can live freer or better. I suspect it’s why you’re reading these Postcards—because you, too, are searching for that original America all over the world.
As International Living's financial editor, it’s my job to spot ways you can protect and grow your savings so that they can be passed onto the next generation. Two threats concern me the most: inflation and higher taxes.
America now spends far more than it earns in tax revenue. To close this gap, Washington does two things: it borrows dollars and it prints them.
The scale of this effort is staggering.
The amount of U.S. government debt forced into the hands of the public has risen by $3.62 trillion in just over two years. That’s an increase of 61%.
Meanwhile, over the last four years, Ben Bernanke has managed to create out of thin air 60% of the entire monetary base of the country. (This is a term economists use to describe the amount of money available to the economy.)
This is bad news for the dollar. That’s because the more dollars the Federal Reserve creates, the less each dollar is worth. The dollar has already lost 95% of its buying power since the Fed was created in 1913. Given the unprecedented increase in dollar creation over the last four years I expect each one of today’s dollars to hold onto just half their current buying power by 2020.
Twined with this inflation threat is 100% certainty of higher taxes in the future. If you earn $62,068 or more you already pay four out of every five dollars collected by the IRS. At the other end of the scale, today roughly 50% of adult Americans don't pay any taxes...whatsoever. This shrinking tax base will force Washington to collect more of the tax take from those already shouldering most of the tax burden. Anything else would be political suicide.
The dramatic increase in federal spending, the record number of fresh dollars entering the system, and the shrinking tax base all mean that time is running out for savers and earners who still have their homes, their salaries, their savings, and their investments denominated in U.S. dollars.
My advice is simple: get out while you still can. Seek to diversify your savings into other currencies and overseas assets. And most important of all, don’t stop searching for new lands of opportunity and new Americas beyond your borders.
__________________ Deja Moo: The feeling that you've heard this bull before.
does your monthly mortgage go up if the value of your house goes down? if not then whys there a problem? i thought you bought a house to live in it, not buy it and then sell it.
edit- no not at you rob. we posted at the same time
If interest rates go up then your mortgage payments go up and the overall value of your mortgage goes up...If this happens at the same time as the value of your house going down then you go into negative equity. You can then get into the situation where you can't pay your mortgage because the repayments are too high but the value of your house isn't enough to cover the remaining balance of the mortgage.
Exactly, this is why smart(er) people get into a loan with a fixed interest rate, cost more upfront, but there's no risk of taking it in the ass should the FED raise the rates and suddenly your $1,850.00 monthly payment is $3,285.00 and the bank is "sorry to hear that, **** you, pay me."
You'd have to be a total idiot in the UK to get a variable rate mortgage at the moment because the interest rate can't go any lower without going to zero...The rate is currently 0.25% and it gets changed in increments of 0.25%....In other words...The only way is up.
What's stupid is that people are still getting mortgages at the absolute limit of their ability to pay.
Interest rates in the late 70's to early 80's in the UK were 17%
An example would work as follows in the UK.
If you were to take out a 100k mortgage at 0.25% (would never actually be this though obviously because the banks charge more than the base rate)then the monthly repayment 288.67
If this was to go up to 17% then the monthly repayment would be 1429.53
Gender: Unspecified Location: With Cinderella and the 9 Dwarves
...that's seriously not what this is about...
Why the hell do you guy keep talking about people not paying their mortgages. Yes, that's bad, it's breaking a contract, everyone knew that's bad for...hmm the last 500+ years.
You know what else is bad, the government giving your money to banks for absolutely no reason, an issue that we can see here, and that this thread is about.
I havent watched the video, I will when I get home, but seriously, my parents had a house built for 300 grand, and it is now easily worth half a mil, even in this economy.
some blame clearly goes to the people who were buying above their ability to pay. obviously my parents aren't exemplary of everyone, however, they are great evidence that people, if they spend their money rationally, can be resilient to economic down turns.
lol, I'm sure they would hate to hear me say this, but their ability to care for themselves and such has had a huge impact on why I am an anarchist. my dad, seriously, this man never needed the state to bail him out, even if he did lose his job in the recession
Gender: Unspecified Location: With Cinderella and the 9 Dwarves
So the **** what?
Hell if they want to give them a safety FOR WHAT THEY ACTUALLY INVESTED, fair enough, still shitty, but okay....but they just give them tax money for nothing. They are giving them a completely risk free investment and on top of that they even say "Hey, in case that what would have been the risk had we not covered it for you happens, we'll not just give you the money you lost...**** no, we'll double it".
Granted I'm sure there were unscrupulous lenders willing to give people money knowing that things couldn't be sustained and that these people would end up potentially defaulting but people should've properly assessed the risks of what they were doing before going ahead. A mortgage and house is most cases the largest purchase a person will make in their lives. If they're going to go ahead on the basis of the absolute maximum of what they can afford at the time and hoping that either interest rates don't go up and that their income either goes up or at the very least doesn't go down thne whatever befalls them is their own fault.
KMC Community Forums
Jan 14th, 2011 08:49 PM
