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balor123
Joined: 08 Mar 2008
Posts: 1204
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 Posted: Mon Mar 30, 2009 7:05 pm GMT Post subject: |
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| john p wrote: |
This statement goes against my constitution because nobody put a gun to my head and told me to buy. I took my risk and I am happy to deal with my decision. It is just a bit unfair when someone who bought prior to the bubble can refinance and enjoy the low rate even though they weren't damaged in any way by the bubble; I guess that's my point. ... I guess my position is I'm not asking for a bailout and we should not to give a bailout to anyone.
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I wish others saw it your way. Just lots of people complaining that they aren't getting a bailout. The real problem is those who are getting it, not those who aren't. Caught by circumstances is part of the package. Whether or not you thought this would happen, as you say you bear the risk, not other/future taxpayers.
| john p wrote: |
So summing it up, if you bought before the bubble, you get a bailout in refinancing, if you bought during the bubble and you can't afford your place, you get a bailout, and if you never bought a house during the bubble you get a bailout.
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If you never bought a house during the bubble, then you only get a bailout if you buy a house now. Otherwise, they are hit the worst since they don't get the benefit of refinancing and have to pay the taxes to subsidize mortgages for those who already own and are refinancing. The FTHB bonus is insignificant around here, especially when compared to refinancing. The price of a stabilized housing market is born by new homebuyers. What would housing prices be if there were no bailouts? You can claim FTHB are getting a bailout only if they would be paying less than those prices.
Interestingly, we seem to perceive three stakeholders in the housing market: sellers, buyers, and "the market". People don't recognize that tipping the scale in favor of sellers also tips away from buyers. "Stabilizing the housing market" really means "forcing new homebuyers to pay more".
| john p wrote: |
My remedy to this would have been to offer a 40 year note to these folks so it wouldn't hurt those that didn't do ARMS.
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That will certainly kick the can down the road. It's questionable whether homeowners will even finish paying off 30-year notes. Keep pushing the timeframe out and homeowners basically become renters.
| john p wrote: |
Further, the softer side of me thinks that it is good for first time buyers to get an incentive because they are absorbing some risk and we want them to take that risk to help this market bottom more gradually. Believe me, I want this market to get back to sustainable levels, but I want it to come down like an elevator ride and not like a falling watermelon that goes splat when it hits.
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I'd be ok with that if the government subsidized the full bubble (so on a $600k house the government paid $300k of it) but $8k is a joke in Boston.
| john p wrote: |
Not many saw this coming to this degree, I mean people saw the stress but not many people had the balance sheets of these banks and saw the real weight of these assets.
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In this country unknown is an externality. I hear from people in Boston that "houses always seem expensive at first but then you're income catches up". Sure it has for a long time but there's a possibility that it won't.
| john p wrote: |
Before you chastise anyone that bought keep this one thing in mind: The United States Government guaranteed many of these subprime loans, so if they were morons, you're saying that the general public chose leaders that were entirely wrong with the assessment of the subprime loss potential. That guy who e-mailed Barney Frank ought to forward that communication beause as Frank put it, he said that he can now have some measure to determine who was right, and Frank was wrong. Further, if you can get past that our elected leaders guaranteed these poor loans, how can you blame investors for investing in something that the US Government guaranteed?
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Not blaming investors, just asking them to play by the rules. Just because you can't predict who will win a basketball game doesn't mean that we should declare both teams the winner.
| john p wrote: |
Essentially if you fault anyone who bought in the recent few years, you're basically saying that they underestimated the wrecklessness and stupidity of politicians and Ivy League Bankers.
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You're assuming that you have to make an estimation. If you diversify your portfolio, then you can make mistakes here and there without significant impact to your wealth. You have trouble when your house is 90% of your assets and then you have to get it right.
I still really like that house. Can it be moved to that lot in Newton?  No amount of remodeling will make that house nice, aside from bulldozing it, as is the case with many houses around here. They still have low ceilings, 1 bathroom, thin walls, funny layouts, etc. |
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