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2011 Jul 16, 6:53am
But flowers are pretty and they smell nice.
never got to play that game but I found a spoiler site / walkthrough and found the writing in that game to be amazingly deep and entertaining. Would make an excellent SF movie.
I suspect that most baby boomers will not start renting. Rather, they will take one of the three courses:
1. Sell the big house, buy a small one or a condo. After all, the kids are all gone.
2. Take a reverse mortgage and use it for retirement. Live in the house until you run out of equity or die. Then let the bank take the house.
3. Sell the house and move into an assisted living facility.
4. Sell the house and move in with one of the kids. I think this will happen more than people expect.
Except in California, because of Prop 13, where they will die in the house because the property tax is so ridiculously low and then let their children inherit a substantial majority if not all of the lower tax base. Yay, market distortions!
I purchased my investment property in 2006 for $2.5 million dollars. Recently, I’ve had a tremendously high vacancy rate due to the poor economy and it began taking a toll on all my reserves just to maintain the property. I tried to negotiate with my lender (CHASE) for a modification. I went round and round with the bank, submitting documents and so on and in the end, CHASE denied me for a modification. I couldn’t understand why they wouldn’t modify my loan when it was clear that the economy ham-stringed my ability to service the debt. The only thing that CHASE could tell me was that the investor was the one who declined the modification. I asked who the investor was and they would not tell me. It was then that I began to look closer at my original loan and I saw on the Deed of Trust that MERS was listed as the Beneficiary. With all the information about MERS in the news I decided to talk to an attorney. My attorney had an auditing company called Lighthouse Consulting Group review my documents for both a forensic analysis of my original loan documents as well as a Mortgage Securitization Audit. It turned out that my loan was securitized in a trust called “Structured Asset Mortgage Investments II Trust 2005- 8. It was in this trust; there is a pooling and serving agreement, which governs the rules of the REMIC Trust. In my loans pooling and servicing agreement, it said specifically that any loan modified would require a buy-back from the servicer. Now, it was about this time that I began to default on my loan and was looking at ultimately losing my investment property. I was already 6 months in default at this point. The individual I talked to that is an attorney and real estate broker immediately ordered a forensic audit for predatory lending. Commercial properties do not have TILA and RESPA violations. The attorney also ordered a securitization audit to verify if the lender that filed the NOD was actually in proper standing. Both audits reveled several issues about my loan. First, the forensic audit proved that my lender had wrongfully calculated my payment it was overstated by $350 per month. Secondly, the loan itself was an adjustable loan based off the Libor Index, which was dropping, but the loan always adjusted up. This was a major development in a very positive way for me. Then, I had the securitization audit show that my loan was never securitized properly and the note and deed were not even with the same party. My attorney drafted a complaint, outlining everything I have mentioned. As soon as the lender was served, they contacted my attorney and settled without going to court. The settlement I got was a principal balance reduction of $400,000; my interest rate was reduced to 4.5% fixed for 30 years.
Patrick
2011 Jul 18, 8:25am
Wow, that's such a great story I created a new thread out of it, here:
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http://online.wsj.com/article/SB10001424052702304259304576375323652341888.html
"Between 1980 and 2010, the value of a median-price, single-family house in California rose by an average of 3.6% per year—to $296,820 from $99,550, according to data from the California Association of Realtors, Freddie Mac and the U.S. Census. Even if that house was sold at the most recent market peak in 2007, the average annual price growth was just 6.61%.
So a dollar used to purchase a median-price, single-family California home in 1980 would have grown to $5.63 in 2007, and to $2.98 in 2010. The same dollar invested in the Dow Jones Industrial Index would have been worth $14.41 in 2007, and $11.49 in 2010.
Here's another way of looking at the situation. If a disciplined investor who might have considered purchasing that median-price house in 1980 had opted instead to invest the 20% down payment of $19,910 and the normal homeownership expenses (above the cost of renting) over the years in the Dow Jones Industrial Index, the value of his portfolio in 2010 would have been $1,800,016. The stocks would have been worth more than the house by $1,503,196. If the analysis is based on 2007, the stock portfolio would have been worth $2,186,120, exceeding the house value by $1,625,850."
Great article. However, the author should have added that the 3.6% average annual return hardly beats inflation...i.e. there's hardly any return at all. Those are facts, not opinions, folks. Home price tracking carried out in areas of Europe - over hundreds of years - have shown the same thing: that the intrinsic value of housing does not change over time; it essentially tracks the rate of inflation. Btw, Warren Buffett has publicly stated the same thing.
#housing