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Ah, my wife thinks there was a law in Michigan requiring a 30-day grace period. Maybe California needs a similar law.
There are some things, like my ISP account, that require me to use a credit card. Maybe they would take a check if I insisted, but it is pretty convenient to just charge things to that number. The float is a bonus.
Please let me know if there is a credit card with no fees at all. No annual, no interest (because payment required in full every month). I know AmEx was kind of like this, but many places don't take it, and there was an annual fee.
I wonder if I could run my own Visa or MC operation like this. There might be a lot of people who would like it, and the merchants have to pay 1% or so of the purchase price, so it could still be profitable.
Yes, not bad. Still, I'd like the old 30 days I used to get. Weird that it used to be standard, and now I haven't seen any card in 5 years or more that offers 30 days. Know of any?
Would also be nice to get some guarantee that they'll actually send out the bill within a week of the closing date. I guess that's just not a parameter that anyone reports - whether they send out the bill on time. Wonder where I can get that info.
Hey, WordPress is asking me to "moderate" comments. I don't want to do that. I just want them to appear, instantly, no matter who comments.
Anyone with WordPress knowledge know how to do that? Thanks.
One point I still don't see is how exactly the money flows from Chinese and Japanese trade surpluses back to US mortgages. Are the Chinese depositing their money in US banks that lend to US house buyers? I don't think so, but maybe I'm wrong.
So does it say somewhere in the fine print that the second mortgage or home equity loan is collateralized by *all* the assets of the borrower, and not just the house?
I've also heard that the new bankruptcy laws mean that the banks can come after you when you eventually have money again, maybe even years later. Not sure if that's true.
Thanks for the excellent comments.
Re: mortgages, here's how I see the Chinese affecting US purchase prices -
They have a low currency, so we buy their stuff, so they get lots of dollars which they invest in US Treasuries, and the Fed can keep rates low and still borrow money, and houses go up because people can borrow more at low rates.
Why they buy US Treasuries at low interest and also suffer the low dollar is still a bit mysterious to me. Seems like a lousy investment. They should be buying up oil fields or other raw materials.
Re: bankruptcy, the questions now become how many people have second mortgages (putting their non-house assets in peril) and whether a refi is really a second mortgage or not. I'm guessing that a refi is collateralized by the house only, but I don't know that for sure.
I'm here. Just went camping for a few days and now I have 98 emails to answer.
I won't buy until prices are reasonable compared to renting.
Yes, I admit that Oaktown Girl got it right when she said: "My guess is that Patrick used that much-remarked-on title to grab people's attention (it's certainly done that), and to provide counterbalance to the media's mindless real estate rah-rahing (much more prevalent a year, even six months ago)."
But now that there's not so much need to counterbalance the cheerleading press, the title is probably just about true.
At least I didn't waste 300K on interest!
I don't know, but ironically, I just asked a similar question to a person in an interview for a job, just to see how he would reason about it. Basically, take the number of people in the US, about 300 million, and figure they each have $50 or so. Banks and businesses have some, but then you also have to subtract for all the very young and other people who don't carry money.
I'd be interested if anyone knows for sure.
I hear ultra-discount food stores are doing well, and will probably do even better as there are ever more poor people. Supervalue (SVU) owns the ultra-discount chain Save-A-Lot which are mostly in bad urban neighborhoods.
Not sure it's a great investment, but that's the kind of business that might do well by serving the poor.
I should really read this more. A group of smart people is smarter when they're all listening to each other.
I'm happy you all (well, nearly all) post thoughful comments.
They both take money, but the Democrats take it from the rich, and then spend it on education and medical care for everyone.
The Republicans take money from the poor, and spend it on yachts and private planes for themselves.
We do have excellent medical care for the rich in America - and long waits and crappy conditions for the poor.
Ah wait, there is actually part of the US medical system that is fair. It's called Medicare. And it's socialized medicine. And it works. I know, since my parents both have cancer and could not otherwise afford treatment.
Of course Republicans are trying to cut that and every other benefit to the poor, but that is what Republicans are all about, so I don't know why I bother to mention it.
If you empower the rich too much, we all become slaves while the rich drive in special car pool lanes and buy imported goods at private billionaire-only stores. Sound similar to your argument? It is.
At some level of disgusting inequality, it is morally wrong NOT to redistribute money. America is approaching that level.
I don't want to make everything equal and poor, I just want to give everyone a fair chance to get rich.
To do that, the minimum is good public schools and good public health care, both of which are being gutted by Republicans.
The Republicans consist of two parts:
1. the rich
2. the poor who have been fooled into voting for tax cuts for the rich
I assume you're in the second part.
Massachusettes Native, you may want to look past the Republican anger that you have adopted. A Republican is someone whose feelings are manipulated so skillfully that they end up voting for the exact same people who are causing him pain. And he thinks that this is derived from this own thought and judgement. It is really sad.
Thanks for the historylearningsite.co.uk link. It is interesting to see that Republicanism goes up with income, which makes sense for the rich. The amazing thing is those poor Republicans who were critical in electing someone who is against their own interests.
I'm sorry you're suffering from so much Republican anger. It must be very painful.
Why do angry Republicans have such poor spelling?
I'm pretty sure it's related, but not sure how.
The richer people are, the more they vote Republican. Check out the table our Republican friend above pointed out:
The myth of "rich Democrats" is just one more way you, my friend, are fooled into voting to transfer money from your children's education to your CEO's private plane refueling costs. I'm sorry you will stay poor, and never figure out the game.
I think a general lack of attention to detail is the explanation for why poor Republicans can't spell.
Resentment is the core feeling of Republicanism. You hit it exactly.
You may be a nice person, but my point is that it's that very resentment that keeps you voting Republican, not the issues.
If you're rich, then lowering your taxes at the expense of everyone else makes a lot of sense. If you're not, then it makes no sense to vote for a party that talks about moral issues, but acts only when capital gains tax cuts are at stake.
What, no bubble? Gosh, I'm really sorry to have been so negative. It seemed obvious to me, but a million Realtors(TM) can't be wrong.
I'll post a link to this right away.
I'm always amazed when I look at this blog. To be honest, I could not say things better than the regular posters here.
I wish I could be as witty and well informed, but I'll limit myself to administration and posting news links on the crash page, since I barely even have the time for that. Someday my kids will be grown and I'll be retired and have the time to do all this right, but by then it will be long since over.
By the way you all, I'm going to be at Mijita in the Ferry Building in San Francisco on Sunday at 5:00pm. Anyone else who wants to show up and talk housing is welcome.
Hey, I stopped by that house near 375 Hawthorne where the veterans live and chatted with 3 of them sitting on the porch.
It's a halfway house for mentally ill veterans, not necessarily alcoholics.
Just wanted to clear that up.
Why buy in a good school district when it's 3x cheaper to rent?
Also, if you have a house already but want to go to school in the next town over, those with the money can just rent a tiny place and leave it empty. Voila, residency. Cheaper than private school.
One of the Giovanotto family, a big landlord in Palo Alto, told me that "a lot" of their rentals are really just to give the renter a Palo Alto address and access to the schools. So they pay $1000 a month for a tiny apartment and never move in.
The really funny part is that even the PA school district is not that great. It's good for California, but that's not saying much. I was looking at school stats on realestate.yahoo.com last year and found that pretty much all of the midwest ties the PA SD in terms of test scores, college admission rates, etc.
The midwest has vast numbers of great schools, but then, you have to live in the midwest to attend them.
A reader just asked me if owners get any property tax break when the value of their house falls. I think no.
Anyone know for sure?
Sorry to digress, but here is a fun tidbit a reader just sent to me:
"It's interesing. There is this type of unit that I want in this place called Panther Valley (it's a townhouse). The prices have fallen from $460,000 to $389,000. There are 6 units on the market from $389,000 to $459,000. The $389,000 has new paint, carpet, appliances, etc. In this area inventory is up over 400%.
My sources tell me there have been ZERO offers placed. 4 of the six have been on for more than 5 months.
I am still going to wait.
Also, I have looked at townhouses closer to New York City. Prices have been falling more than $100,000 on $800K townhouses and no offers at all."
FNM and FRE and GNMA are just the tickers of the stocks that issue the mortgage-backed bonds, right? I was hoping to get symbols for the actual bonds, their maturities, and the discount, if any, from the stated interest rate.
Sorry for the slowness of the site this morning. I talked to the ISP, Hurricane Electric, and the rebooted the server. Hope that fixes it...
Sorry guys, I have to delete most of the initial post. It's probably a copyright violation to post a whole article from another source. Quoting it for discussion is OK, but not a whole copy.
"Mortgage lender reviews" spam now deleted.
Please mail me at email@example.com if spam shows up again. Thanks.
Funny, there was no traffic change from the mention of patrick.net in the Chronicle. See http://patrick.net/housing/crash.html#hitlog
Either there were not so many readers of that article, or they didn't click through to the underlying web sites.
Thanks Boston Transplant, good idea to put up a link to the parody as the thread image.
Time check - are posts now showing correct (Pacific) time?
Randy says "Mortgage rates are linked to long-term rates, not overnight rates which the Fed directly controls."
I think that's true for long-term mortgages, but short term ARMs are directly affected by Fed moves, and an ever-larger fraction of mortgages are those ARMs. So housing could take a big hit in the short term from Fed moves upward.
The http://www.ownitmortgage.com/ URL is dead now.
No warning to the public. They were still selling loans up to the last moment. Wonder what happens to the loans in progress.
This seems to be related somehow, since Goldman is talking about using Standard & Poor's Case-Shiller Home Price Indices, which is what they use in Chicago, right?
I didn't change any blog settings. Sorry about comments that get killed. You can always mail them to me personally (firstname.lastname@example.org) and I'll figure out what the problem is.