patrick.net

I would say that those who've realized we're headed for the Mother Of All Great Depressions, and they can be miserable about it, or make the best of it like Jack London, Euell Gibbons, Harry Partch, and other luminaries who embraced the hobo life and used their experiences to inspire their art. George Orwell too, he washed dishes in the 1930s, when he was lucky. Henry Miller is another - I personally feel his books were banned not for the liberal use of "fuck" and "shit" but because they pointed out how bogus the American Nightmare is.

You have a point about the elderly losing out though - imagine their embarassment showing up at the Pearly Gates with only one bag of cash in hand instead of two! It will take millennia to live down!

Everyone, when they see that it’s better to have more free time to enjoy life than more square footage.

Even if you want square footage, the price will be lower.

Odd that you left "Savers" off of that Winners List. Is saving so passe that such people are typically forgotten?

I'd be reluctant to call someone that paid a grand to an ex-mortgage broker to "justwalkaway" a winner? There may be safety in numbers but their credit is going to be difficult to contend w/ for some time to come.

Besides, I question the math some of us have put forward. Since they're targeting the teaser crowd, their payments weren't all that big to begin with? So you were paying $1,200 a month to live in a 3,000 s/f home? Multiply by the 6 months you *won't be paying... and you still have, a couple of grand?

DinOr

Here is a walk away winner:

http://patrick.net/housing/contrib/bag.html

www.youwalkaway.com

Keep in mind it's not "just walk away" like a native, educated, speaker of English would say, imagine it said in a nasal Asian voice, demandingly, at a flea market: "Youwalkaway"!

@Headset,

Funny! I looked at the link and I've had garages that were bigger! As the poster shares, "multiply that by all the people that used their home as an ATM" and I get your point. They just took the money up front. Oh and here's the funny part, that owner is probably flat @ss broke!

We just need to qualify the difference between HELOC Bandits (winners) and Late-to-the ATM Party ("loosers")

Native speakers of English spell it "losers".

I'm ragging on this because first it's annoying to look at. Secondly, if the US does a total Yugoslavia type breakup, knowing correct English may save your life.

You can thank me later.

Have we ever had low interest rates (really low!) AND a RE crash at same time? Supposedly rates and house price are inversely related....not this time huh....something different and bad must happen...

maybe we cant afford 800 foreign military bases anymore....
god help us if bush 3rd (mcCain) gets elected.

I second Headset: add "Savers" to the list of winners, benefitting from the increased purchasing power of their cash as prices continue to drop.

Unfortunately, we also have a Fed and Congress that is hell-bent on destroying the $USD's PP by every means available to them. Even while housing is falling, prices for just about everything else is going up YoY. Question is, is the Fed pushing on a string, or can they minimize nominal RE price drops by inflating everything else*?

(*Excluding worker wages of course --we wouldn't want those to increase.)

Hello Kitty,

As much as we might like to see it, closing down every base, everywhere and sending everyone home... isn't going to help shore up housing in the short term. As committed as the Admin. is to that end (they'd be doing exactly that if they thought it would help) :)

Is it too late to be a HELOC/Mortgage Bandit? Even with the new rules, maybe someone with good credit could still finance a home for more than he could net after a sale.

For example, I own my house outright and have perfect credit. I also have substantial cash in banks and credit union CDs. Thus, I will not need credit to buy a house or car for the foreseeable future.

So, if I can't sell, could I "cash out" my house and walk away? I will not need to borrow again, so credit rating is not an issue. I no longer need a Top Secret clearence. And with so many other well-off welshers around, I expect a 'Big Forgive" anyway to forclosure "victims."

Gee, I'd hate to feel left out.

HelloKitty - I believe that's what Japan has had, low interest rates AND a housing slump.

I'd say if you're a saver, better keep a low profile and consider getting out of the US.

"Is it too late"

Unfortunately for you my friend... I'm afraid so. Our local PDX blog just posted an "internal" memo from Mort. Implode directly from CountryWide. 2 days late on your HELOC? Disconnect. Over 50% LTV? Disconnect. According to their memo competitors are engaging in the same type of directives. Disconnect!

Just too bad they didn't implement these changes in '05?

god help us if bush 3rd (mcCain) gets elected.

Remember, ABC! ABC! ABC!

ABC?

I say... Dis-co...nnect!

According to their memo competitors are engaging in the same type of directives. Disconnect!

Excellent! That alone is all it will take for house prices to fall.

Higher conforming limits and rate freezes will just allow a few people to hang on until Freddie buys the loan. But when a job transfer or other event forces a sale, the hang-on will have to walk away. Not enough cash to close a sale.

I don't know if you guys watched the debates or not, but everyone except Ron Paul sounds like an idiot politician to me.

And yet, one of them is going to be the nominee.

If it is McCain vs Hillary (as is looking likely) the country loses in a big way.

We all love Ron Paul! :(

It is going to be McCain vs Clinton. ABC!

I've seen this just in trading in electronic surplus*...... someone will hang onto something convinced it's worth a fortune...... then they get in some tight situation and sell it at a huge loss.....

Enough people are losing their houses, jobs, shirts, that the values of various pieces of test equipment are plummeting.

*Needless to say, a dying field. The only area in electronic surplus to go into anymore is taking stuff apart for the precious metals.

Yeah, it's going to be McCain vs Clinton and yes, the country is going to lose in a big way.

@Headset,

AND.... further good Sir! (what's the point of buying a home if it doesn't come w/ it's own ATM Machine?)

I've been tinkering w/ this for a time (and I don't want to de-rail the thread) but how do people feel about.... :( ..... at least allowing people the option to either deduct their HELOC int. or (ducks) credit card/car payment interest?

Every year (as we go to file) we are given a number of different options. Married Filing Joint? Married Filing Sep? Standard Deduction? Itemized Deduction? Why not this? REIC can't say we're "cutting the legs out from under The American Dream (TM)" we're just giving the taxpayer the option!

Standing by for fuh-lame.

Anyway, apropos this topic, I don't think any honest person will emerge a winner in this scenario.

There will be degrees of losing, the prudent saver will lose through inflation and dollar devaluation but his loss will be less than that of someone who bought a house they couldn't afford. Especially if they plan to hang on to it and keep making monthly payments.

But, the only people who win are those that the system is rigged towards - bankers a d wall street guys who took terrible risks, made money off it for some time and now have passed on the bill to Joe Taxpayer.

Some politicans will also win since they will be able to pretend to be the knight in white armor saving this country from the evils of free market capitalism.

Hello Kitty,

I would agree that interest rates and housing prices are *usually* inversely related. The maxim there is that homes are sold on monthy affordability.
However.
People are now cognizant of something called risk. Even though you can afford an $800k loan with $200k down with a 5.% 30 year fixed, at the end of the day it is just no fun to have a home that will 1) lose $300k over the next 5 years, and/or 2) never sell (pool of buyers is too smal), and/or 3) make you house-poor and miss out on something called life.

There really has to be a regression to housing fundamentals abd finally, everone is getting that.

Good job us for teaching our fellow citizens an important economic lesson.

Headset,

the banks are getting very tight. Originally you could borrow money on a DTI of 60%, then only 50%, now only 40%. The historical norm is 36%, and when I was borrowing money in early 90s for my house, I had to hit 30% DTI (NOT 36%).

I won't be surprised that we will see 20% DTI sometime in the future.

Shouldn't Ron Paul pull out at this point? He has no chance at all.

OO,

I can't post the Implode link (membership?) but they were referring to LTV on 2nds. If your HELOC was approved for 100K (they're cutting you off @ 50K!) I'm sure I didn't make that clear in my earlier post.

And you're right, DTI will revert back toward sane levels.

Shouldn’t Ron Paul pull out at this point? He has no chance at all.

Mathematically, he has a chance...

I like to see Ron Paul stay in there. What's the worse that can happen, we end up with Clinton or McCain? We're headed toward that anyway. If Ron Paul stays in there and keeps fighting, maybe he'll win.

Losers will be savers who don't take any risk to protect their savings - US government will guarantee that the PP of your USD CDs or Treasury go down YOY, ranging from a few percent to perhaps 20-30% should there be a turmoil in the currency market.

FBs are actually not big losers because they had nothing and sacrificed nothing to begin with. At least they get to live on a leveraged lifestyle for a few years.

Big winners will be the Wall Street, as always.

If Ron Paul stays in there and keeps fighting, maybe he’ll win.

No, fighting won't help. But if he stays in, we can at least hope for divine intervention.

Losers will be savers who don’t take any risk to protect their savings

Savers are freedom-hating, un-American traitors anyway.

Maybe I should have said "campaigning" instead of "fighting". Just keep giving speeches, keep expounding on his platform, keep getting the message out.

Ron Paul should stay in there just so the truth can keep coming out in debates and MSM interviews etc.

The more honest, thinking people hear Dr.Paul speak, the better it is for everyone.

A lot of us donated to his campaign and we did/do hope that he wins but it is worth it just to keep him up there on the stage.

His campaign has had an effect - even mainstream journalists, who are usually very dismissive, have grudgingly agreed that his views are important to listen to even if we don't agree. More and more people who were struggling to identify their political beliefs are coming out as "Ron Paul Republicans".

I would say stay in the race as long as the money is there.

BTW, what happens to the campaign donations when the candidate withdraws? Where does the money go?

Where does the money go?

Sushi?

His campaign has had an effect - even mainstream journalists, who are usually very dismissive, have grudgingly agreed that his views are important to listen to even if we don’t agree.

Why won't people agree to his views? They love paying tax?

Im voting for Ron Paul so I can badmouth who ever wins and say 'i voted for ron paul!' maybe by 2012 enough people will wish they had voted for paul too that the message will get across. Especially if we have a race war over gasoline like ex-sunnyvale predicts. I shall scream 'dont kill me I voted for ron pauulllll' as they pull me from my car and intersection of Florence and Normandy avenue in los angeles (la riots started here in 92...also those are now popluar names in black community....)

>Why won’t people agree to his views? They love paying tax?

Indirectly, yeah. Everyone has this mythical view of taxes being good and being used to help the poor and the sick and the orphans. They also have this idea of a mythical Rich who would pay for everything. It has become a religious thing for many and even if they realized where the taxes come from (middle class) and where they go (rich special interests) I doubt if the opinion will change. They'll keep saying, if only my guy got elected, he'll fix it.

Also, people don't like to think for themselves too much. They trust the so-called experts. So, someone labelled as fringe by the MSM will automatically become the fringe.

Thirdly, he talks about freedom, which also means responsibility. People being responsible for their decisions? That is just insane.

Indirectly, yeah. Everyone has this mythical view of taxes being good and being used to help the poor and the sick and the orphans.

Ha!

The best way to help the poor is to leave them alone. Some of them will rise and actually do something useful.

Why are people trying to suppress their selfishness even though it is part of their nature? Is it fashionable to be compassionate?

Why are people trying to suppress their selfishness even though it is part of their nature? Is it fashionable to be compassionate?

Maybe it's part of the evolutionary process. The super-organism that has more elements of selflessness may win. Or may lose. Not every path taken by evolution leads to a "better" form - however you may want to define "better".

I heard a segment on NPR the other day about how they were using a classroom in a bank in Chicago to give free classes on all aspects of buying a house (mortgages, insurance, taxes, inspection, etc) - all totally in Spanish!

Spin put out by the NAR friendly segment is that house purchases by minorities is going to save the housing market.

Some of the comments from the speakers at the free classes are classic!

Sandra Cabrera, counselor for Acorn housing:

“We trying to reach more people to come to the seminar so they can purchase a house right now, now is a good time, I mean an right now is good time to a house, cause I mean, the values are so, so low, I mean, like, below the market, like two or three years ago”

Raul Sorado, Attorney:

“Ya know to them is doesn’t matter, ya know, if the economy is good or bad, if they have the means they are buying because, of course, their ultimate goal is the American dream, obviously, to have their own home, and put their family in a house where their children can grow up, ya know, that is front and center for them.”

For any ponzi scheme to work, you got to keep adding new suckas at the bottom.

“Their ultimate goal is the American dream…” Yeah, whatever you say, Mr. Attorney. Nice job of recruiting a new group of debt slaves, all to keep the machine running.

The Middle Class Lifestyle is a myth…