Please help me understand 'sub-prime crisis'

[Nos4r2]

Re: Please help me understand 'sub-prime crisis'

How about the bank & credit card companies charge a reasonable rate for their loans instead of loanshark rates?......
They have brought some of the ruin upon themselves & hopefully our GUBMINT won't bail them out......
They want to charge exhoribitant rates then pule when they don't get their money back....
I have no remorse for those that speculated on flipping property for profit, but I do for the average Joe who got his job outsourced or got forced out of business because he couldn't compete with companies that hire illegals.....
& that goes double for all of the FREE FOREIGN AID money that we give to just about every country on Earth, how about cutting off their free ride?......
I think we would be OK without all of these albatrosses around our necks.......
& Furthermore.......​

Far better for people to get less stupid and stop borrowing the money in the 1st place...

How much of a house could I buy in the USA for $300,000 cash at the moment? I'm wondering if it's worth me selling my house here and buying 1 or 2 in the USA while repos are abundant and renting them out to pay for living here.

 

[Scaaty]

Re: Please help me understand 'sub-prime crisis'

I blame the whole thing on women's lib.. They completely devalued the stay at home Mom. Raising your children is the most important thing anybody can do (male or female), yet the women of this country were led to believe that it made them less for doing it. So they got careers, put the kids in daycare, and family incomes doubled. The economy responded by increasing the prices on everything. And what a fine crop of kids it produced, too. Stay tuned to the fallout achris...sadly this is just the beginning...

Yep...I saw the beginning of the "Baby Farms"...and the gov just loves how it created a whole new business to tax, PLUS the salary's of the working woman doubled the tax base too.

On the sub prime, I know MANY people here at our little waterfront dog patch. Homeowners. Took the HELOC, bought a better place on the water, rent out the old place to pay for it. Lasted a year or so. Now they can't rent for what they want/need ...good 20 houses empty here, with for sale or rent on the front lawn. Prices have gone from over $350,000 (shacks in my book)..to down to $200,000...still not selling, and renters will not pay $1500 a month for a place that has everything..(we are private)..but they cannot use our Marina, Launch, or any facilities. Same stuff in town is $700, and also the gas daily to get out here..20 miles outside the State Capital..rural tip of a Peninsula.
In town, I see a newly built 50 house subdivision. Figure 2 years ago. Massive 2 story's..5 foot from yer neighbor. 10 foot back yards. Drove through last week. 75% still empty. Still asking $300,000
Another 100 acre's of treed prime were leveled not far away. Backs up to HWY 101 (west Coast..Olympia WA)..car noise constant. Leveled a year ago...so far not a single anything was built...and according to people in the know...it will be 5 years before it might be feasible to start building.
We have a 9 month supply of houses. And western Washington R/E is still kinda doing fine...so they say.
Debt? Last I heard..US people are 290 BILLION in debt!
Credit Cards? Ya can't pay the monthly..don't buy it. Cut them up.
I have $15,000 on the HELOC. Retired. Schwab..1% under prime. Cost about $80 a month. House worth plenty. And HELOC has put 7 motorcycles, and 4 boats on my "patch". 4 years, SS kicks in, pay it off easy..(10 year draw, interest only fine,..took out 2003..2013 have a 20 year payback ..covered my butt. One Harley, one boat..paid off anyway.
The people that did a bad "deal"...I have not shed a tear, but my heart does cry for them..educate yerself, or get buried by the "sharks"..that just mulipulate "money"...
My take is it will be few years before this works itself out..unless the gov gets involved, then add 4-5 more.

 

[OldMercsRule]

Re: Please help me understand 'sub-prime crisis'

BIG CORPORATE GREED........
Unfortunately it is the "little guy" who will get bent over in the end.......
Mr. Potter never panics.......
George Bailey knows that......​

Now Bro HO, "big Corporate greed" me arse. We as an entire country of people borrow toooooooooooo much, (as others have stated), n' save tooooooooooooo little, n' we export this abroad, (Hollywierd et al), as many in the non Japanise world do it now tooooooooooo.

Ya jus' luv ta try ta get me in trouble don't ya? JR

 

[SgtMaj]

Re: Please help me understand 'sub-prime crisis'

I think mscher got pretty close with that one.

The only thing is that the lenders have to also share the blame. For one thing, they were lending money to people they KNEW couldn't afford the adjusted rates (which is an illegal predatory lending practice by the way). Secondly, they then jacked those ARM's up way above the standard interest rates.

My wife and I bought our house on one of those ARM's because our credit scores wern't good enough to get a decent fixed rate, and after two years when it adjusted, it went up by 3 whole % above the standard rates, despite the fact that our combined credit scored increased by nearly 500 points in those two years. Fortuneately for us, we had planned for the adjustment (we did after all know what we were getting into), and although we could afford the new rate, we went ahead and refinanced to a low fixed rate. So now we're paying less than we were originally and it's fixed for the rest of the loan period. Even better, the new loan cost us NOTHING. Not even an appraisal fee.

PS - Another problem facing people that we didn't face is that their houses are now appraising for less than their loans, so they are unable to refinance them without paying the difference. That's one of the reasons so many people are being forced to "walk away" from their homes, and that's not really anybody's fault.

As far as lenders "pulling" money from the rest of the world, that's not really the case, they just don't have as much money to lend out anymore. The good news is, this is a GREAT time to get a great deal on a new house.

 

[Haut Medoc]

Re: Please help me understand 'sub-prime crisis'

No way Murky.....
It is greed.....
There is no reason to jack up the rates to realize that type of profit.....
Same goes for the speculating & manipulation with regard to BIG OIL.....
It is obvious that they have gone beyond the threshold of what the market will bear......
I won't say anymore 'cuz I don't want the thread locked, but there is (sadly) a need for some sort of corntrol with regard to the interest rates......
The money manipulating BS has gone too far....
Oh, & this plays right into the Mr. Potters of the world....
Me own, "straw man".......​

 

[Scaaty]

Re: Please help me understand 'sub-prime crisis'

Same goes for the speculating & manipulation with regard to BIG OIL.....​

Yep..CNBC almost erupts into cheers, when a barrel hits a $100....its the oppisite of going into a tunnel, with a train coming at ya. This time its a "stall out"..middle of the tunnel, and the Expess shooting up behind, at ya at 100mph...pilot sound asleep..​

 

[achris]

Re: Please help me understand 'sub-prime crisis'

This is great. I'm learning soooo much... Just a couple of questions... Who are Mrs Jones and Mr Potter?

In Australia most of our housing loans are variable rate, ie, they move with the market, has been that way for about 30 years... Fixed interest loans are available, but the rate s so much higher than the variable it's just not worth it.

Again, thanks for the info, and anything new.... I'm all ears....

Chris.............

 

[OldMercsRule]

Re: Please help me understand 'sub-prime crisis'

This is great. I'm learning soooo much... Just a couple of questions... Who are Mrs Jones

"Mrs. Jones" is me "straw women". I don't use multiple names like Ray did, (and many do on other sites). So when I wanna emphasize a particular point or raise a perplexin' question Mrs. Jones steps up n' does the deal fer me.

and Mr Potter?

Bro HO invented Mr Potter as his "straw man" ta be snarky ta counter the shapely Mrs. Jones, (BTW: Mr. Jones is 6'6" a hard 285, 100 yard dash in 11.2), so me Bro best be haven Mr. Potter mindin' his Ps n' Qs or Mr. Jones may look up Mr. potter fer a chat).

In Australia most of our housing loans are variable rate, ie, they move with the market, has been that way for about 30 years... Fixed interest loans are available, but the rate s so much higher than the variable it's just not worth it.

Again, thanks for the info, and anything new.... I'm all ears....

Chris.............

...

 

[Haut Medoc]

Re: Please help me understand 'sub-prime crisis'

I'll let Murky explain Mrs. Jones......
But Mr. Potter is the "robber baron" in the classic American movie, "It's a Wonderful Life".....
Basically, Mr. Potter seeks to control the entire town through manipulating money & does his best to capitalize on the misfortunes brought on by the stock market crash of '29 & the resultant Great Depression......
His quest for total control is thwarted on a small scale by George Bailey & the Bailey savings & loan.....
I won't say more so as not to spoil the movie....
If you have never seen this movie, you should.....
It is a classic!......​

 

[Haut Medoc]

Re: Please help me understand 'sub-prime crisis'

Chris is there some sort of government control to keep the mortgage companies from jacking up the rates to whatever they want to in OZ?...
You know, once they have ya by the short hairs?........​

 

[OldMercsRule]

Re: Please help me understand 'sub-prime crisis'

Chris is there some sort of government control to keep the mortgage companies from jacking up the rates to whatever they want to in OZ?...
You know, once they have ya by the short hairs?........​

My Lord Bro you sure embrace Socialism. If ya set rates at artifically low levels ya jus' ration credit. OZ is a commodities based Country like Canada is as well. OZ can have large changes in inflation and or interest rates. Commodity based Countries are in a relative plus to cornsumer Countries in inflationary, (weak currency) times, (FYI).

Chris was askin' a serious question. You are somethin' (pssst; Chris: Bro is likely jus' pullin' me chain with his carp ta stir the ol' pot).

This crisis could have some real serious cornsequences fer the whole world. If the US goes into recession as the NYT was ponderin' then the rest of the world may get a hit too.

There looks like there is an asset bubble in housin' world wide. N' if ya get a big down in bidness, (world wide), not good fer anybody long houses potentially anywhere, (fer the first time since the 1930s).

Me overpriced $.02 JR

 

[SpinnerBait_Nut]

Re: Please help me understand 'sub-prime crisis'

Getting real close to the line here fellows, tread lightly please.

 

[achris]

Re: Please help me understand 'sub-prime crisis'

Chris is there some sort of government control to keep the mortgage companies from jacking up the rates to whatever they want to in OZ?...
You know, once they have ya........​

No government control. The control is called competition. It's really easy to tell your current lender that they can take their money and put it .... not allow to say that here (sorry, SBN, won't happen again boss). There are usually a dozen others lined up to lend you money. And you can haggle the rates too!


Chris.......

 

[Haut Medoc]

Re: Please help me understand 'sub-prime crisis'

Getting real close to the line here fellows, tread lightly please.

I think the forum has a right to know how mortgages & interest work in other countries, with all due respect Spinner...
I'm curious how one can migrate to a better rate & how does it remain competetive.....
It is not a cakewalk to refinance in the US....
Hoops must be jumped through toget where you want to be.....
I'D LIKE TO HEAR HOW IT WORKS IN OZ....
& I will wager that the forum would like Chris's testimony....

 

[SgtMaj]

Re: Please help me understand 'sub-prime crisis'

If ya set rates at artifically low levels ya jus' ration credit.

While I have no problem with raising interest rates, I do have a problem with raising interest rates way beyond what interest rates are set at for people who have better credit and have never been late on a payment since the inception of the loan, simply for the sake of soaking them for everything they can. That basically defines predatory lending practices, and is why many of them have been investigated for such practices (and could also explain why we got a settlement check from our original lender even though we never sued them).

PS - I'm really confused as to what line we are getting near?

 

[achris]

Re: Please help me understand 'sub-prime crisis'

I'm curious how one can migrate to a better rate & how does it remain competitive.....
It is not a cakewalk to refinance in the US....
Hoops must be jumped through to get where you want to be.....
I'D LIKE TO HEAR HOW IT WORKS IN OZ....

Changing lenders is easy here. As long as you show you can afford the repayments and you ain't trying to borrow more than 90% (some will even go to 95%) of the property value, you're a shoe-in. They deem that you can afford the repayments if they aren't more than 30% of your income (I can't remember if that's gross or net). What they don't take into account on that is future shifts in the rate. So that's how some (many) people can get caught. I think we'll see quite a few people going to the wall here quite soon. Rates have been low and steady for about 9 years and people have become complacent about saving or paying more off the loan. Rates are on the rise, as are yours and for the same reasons, and for people on the borderline it will be enough to push them over.

Back to topic. To change lender you call you choice of new lender, and tell them what you want. The new lenders often will pay any transfer or pay-out fees for you. Some will wavier the set up fees and some will even have the appraisal done free of charge. And they will all come to your house at a time of your convenience to discuss it. Any hoops that have to be jumped through they will do the jumping for you. Heck, you can even do it over the internet!

To give you an example of what they're like, I had just changed banks and there were a few hiccups with an automatic credit card repayment option (banks hate me, I pay the full amount on the card when it's due. They make $0 interest from me). While I was away working they messed up the payment and then charged interest on the account and a couple of 'late payment' fees. When I got home I walked into the bank, slapped 10 monkeys on the table and said "That's yours (meaning to be deposited in my account), but you'll have to earn it." The girl said "Ok, what do we have to do?" I told her to reverse all the fees and credit the interest back to my account. It was all done before I walked out! And I haven't had so much a blip since (3 years).

All the banks, credit unions and mortgage lenders here would off their grandmothers to get you to borrow from them!

Chris.........

 

[JB]

Re: Please help me understand 'sub-prime crisis'

"The line" is where civil discussion ends and bashing begins. This thread has become a "bash lenders" thread and is closed.