patrick.net

Mr.Fantastic says

Lenders in theory actually have something to lose by lending out to unworthy candidates. So they have at least a nominal self interest in not being crazy, bubble economics notwithstanding.

As for Real Estate Agents, it’s basically a two tier ponzi scheme with very little “professionalism”. The entire point of the job is to trick people and be dishonest.

Exactly.

Taxing your Labor. Taxing hard work. OMG. One thing the U.S.A. has proved to me is. They are a bunch of violent thugs. That can bully and trick people into just about any kind of con. Divide them up against each other so they can't get at them.

ASK YOURSELF. If even writting comments, isn't a plea for common sense. An end to division of the things that are common sense? Like not taxing labor.

skipper says

Realtors began this whole charade by lobbying Congress to allow subprime mortgages. Realtors reaped a windfall because that then included millions more in commissions from buyers that would never have qualified. The commission was folded into the mortgage payment. It was a gigantic scheme…it is called fraud. Where are the culprits………in Congress. Time to revolt.

Actually, the big money goons did it because they needed more mortgages for the securities. There are no lobbying groups as powerful as the banksters, even the NAR. :)

CL says

There are no lobbying groups as powerful as the banksters, even the NAR.

Pretty sure NAr has them trumped.

jvolstad writes:
>His response was that fewer people would be able to buy a house

No. More people will have less money to spend on houses. In a normal market this means that prices will come down on affected properties so buyers win.

Banks will loose because mortgages will be smaller.

Real-estate agents will loose since their fixed percent commissions are coming out of a smaller pie and they won't be able to up-sell to gullible buyers with the suggestion "if you spend more you'll get a bigger tax deduction"

Mr.Fantastic says

The NAR did a pretty good tug job on you though, didn’t they? You liked it so much, you forgot all sense of fiscal responsibility.

Sure did, but since I'm rich ain't no thang. Plus I can always pass it on to the people living in their mom's basement!

Liked it more when houses were for cash. I could say they were not. But they were costing well 1k to 12k depending on when in time. The people that could no afford of course they sold on financing them. Values a tricky thing. The value an appraiser put on a house. Well thats more or less for mortgages. So forget that.

A tax assesor's value I pay absoulutly no attention to much less them. I could care less about the tax ass. Some can't see their way to doing that. Sad but true.

The value of any individual thing. That decision is made by you and what your willing to give for it. The seller has idea's of course. Because he has something he feels is of value.

Fixed price goods. More or less dictated in a way what it is worth. Fixed price = Price fixing. Which is of a monoploy. That glides like a child-like thought. However its very true when you take a look at all of the entities that make fixed pricing, work.

The only choice you have there is not to buy or buy. If it cost's 1c to make and has a 1500% markup. They really might be thinking someone is stupid if they buy it. If they allow themselves that thought. If you knew the markup in new construction. You would faint. I very clearly do being in this home investing business for over 18 years.

As long as they don't change the mortgage interest deduction rules after I buy a house... That would be totally unfair to recent buyers. They are going to take a HUGE hit on their home value when buyers dry up... AND i know a lot of middle class buyers that subtract the mortgage interest deduction from their monthly payment when calculating how much home they can afford.

That would cause a lot of people to foreclose and more to go underwater... I don't see this happening. But in theory it makes sense...Should have been phased out years ago though.. But then homes would probably be 30% cheaper now.

You guys sound like self serving douche bags if you ask me.
The problem was "Price manipulation", "Speculation", "Greed", "Corruption on the City level and the Appraisers offices, resulting in essentially Un secured loans"

America forgot how to behave for a decade and the "American dream" deal is off?
Not only that, I think everyone would feel better if we saw a no less than about a 1200 man Perp walk, all dressed in Orange jump suits.

Los Angeles Renter says

That would cause a lot of people to foreclose and more to go underwater… I don’t see this happening. But in theory it makes sense…Should have been phased out years ago though.. But then homes would probably be 30% cheaper now.

The NAr says 15%:

“Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to our research. "

http://www.realtor.org/press_room/news_releases/2010/12/deduction_vital

Given the usual self-interested overstatements in the NAr's "research", I'm thinking difference would be under 10%.

See. Any appraiser can tell you the trouble started. When they appraised homes for loans. Lender don't make all that much on small loans. The larger the loan the larger the vig.

As for tax deductions. I dunno. It's interesting you have to report the income you make for your deduction. Simple statement. However not reporting saves you even more I feel. HAHAHA. W.C. Fields said there is a sucker born every minute. He should know. If your paying those boy. You got a long way to go and a short way to get there.

I'll elaborate a little. See they don't especially like large loans either. They sit down and figure losses. You think they like taking them they don't. The present situation we are in are because of the MBS's after that little con was uncovered. All the tires blew out on the peverbial, station wagon. It just wasn't worth the losses to them.

The leverage starts with mortgage deduction.
Analogy used above with a Ferrari is 100% accurate for houses too. People who borrowed irresponsibly must not get away with a free house. Some one thought that they can borrow more than they can afford whose fault is it? Now the tax payers are paying the price for everyone's greed. There are millions of people in this country who were responsible during the bubble. They did not sign for liar loans thinking that they can milk the system like others. Those are the people we need to respect and this country moves forward because of them and their savings. Relators are worried if the price goes down their percentage of commission will be less. With home selling is not too complicated and not a rocket science these days relators will have to find other ways to make a living.

The mortgage deduction is middle class welfare. It needs to end.

Patrick's analysis would definitely make housing affordable again as prices would have to fall in order for anyone to be able to afford them.

Mallu is right about some people being responsible during the housing bubble and the need for these folks to be respected but that ain’t gonna happen. It never has and it never will. The backs of honest “play by the rules” homebuyers will be broken and made poor by the crooks and liars that pushed housing “dope.” I fell for that trap in 2007 when I bought my dream house for $630K. I put 36% down, about $227K thinking this would be a prudent financial move for the long term. Boy was that ever a lousy mistake. My house is now worth about $400K with all my equity evaporated like the morning dew. Responsible house purchasers are considered f..king fools by the housing market “smart money” and we will continue to be disrespected and will ultimately pay the price in real dollars for Wall Street crooks and NAR charlatans that inflated the housing market to ridiculous levels. This attitude amongst the “play by the rules” buyers will have severe and lasting aftershocks for the housing market, I guarantee that! Fool me once, shame on you, fool me twice… that’s not going to happen! The upshot is that I will never again buy another house and will encourage others not to make this same mistake.

Ptie- mann Interesting. I like to look at who "owns" some of these small towns. Television has made it something of folklore. They own the tax base of small cities. While the indigenous are not very sophisticated as far as finance. However they more of "government". It's interesting how finance went way - big banks. How the tax base went in another direction. Yet they both meet at a certain point (Debt payments by the United States).

Most of the purchases would be made by having their own personal tax base. There is really no financing there just pure cash. That they can spend on what they want. Sounds like they are having a ball buying real estate.

Following the indigenous in anything like finance. Because they are so inept at it. Is not smart thing to do. As we have found out. In real estate. It we might be close to the same opinion. The indigenous are not all that smart in real estate. One looks at the big picture and says they are smart. However "finance" has led to the parceling out of their land. With which they are very ok with. Because it leads to what they do like, having a tax base.

One would call it smart. Them, having the tax base. However I would probably laugh at some of their purchases. Or at the fact they are even buying now.

One looks at a Jimmy Carter. You would think he runs all over the world doing "goodies" to people. However he may own as many as 5 tax bases. Many people are not aware. That he owns a very large portion of land in northern Florida. I never did like the "we are running out of oil" senario he created. Along with the 55 mph game.

Oil isn't the subject. It's the provocation. The gift that keeps giving and giving. A very interesting scam that was born in his years on the stage. He reaped his rewards.

ptiemann says

I read once that until the mid-80ies (a decade before I moved to the USA) pretty much any interest paid was tax-deductible (car loans, credit card interest etc).

This is true. I'm not sure what the cut off date was but at one time interest like that was deductable.

Los Angeles Renter says

As long as they don’t change the mortgage interest deduction rules after I buy a house…

I don't see them not granfathering it in. Or at least doing that and then limiting the deduction over a period of years.

Some may say hey is this Real Estate. The things that effect the buying of land. The owning of property. All are. Not everyone lives in a large metro center. You certainly would not toy with a dangerous lion of course. No one wants that. Exericsing prudence in real estate can benifit one. Knowing the profitble thing to do can benifit one even more.

There's plenty of history supporting low down payment programs if properly underwritten. This combined with 20% down for QRMs is just an overcorrection that's sexy for headlines but will be brutal in states like California, Florida, and Arizona. There's so much bad legislation going on right now that helps no one. But no worries, they eventually figure it out and change it after a few years when they realize it does nothing (example = HAMP).

zzyzzx says

ptiemann says

I read once that until the mid-80ies (a decade before I moved to the USA) pretty much any interest paid was tax-deductible (car loans, credit card interest etc).

This is true. I’m not sure what the cut off date was but at one time interest like that was deductable.

Tax reform at of 1986. http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

"Moreover, interest on consumer loans such as credit card debt were no longer deductible"