bostonbubble.com

[admin]

The other day, I received the letter below in the mail from Bank of America. It is an advertisement for refinancing into a new mortgage. They list multiple refinancing options with each option being a progressively worse idea. The first fixed rate option seems fine on the surface, it's the rest of the options that are very bad ideas, especially now. At first glance, I thought that the letter was primarily promoting an interest-only option as that option is given prominent attention (though that prominence is kind of a warning).

- admin

[john p]

Go to today's Wall Street Journal and read on page A4, "Bank Launches Big Plan to Cut Mortgage Debt"

from that article:

[admin]

[john p]

Who do you think ate the $200k that was written off?

What is interesting about this whole loan modification thing is that this lady just refuses to pay, her adjustable never even reset higher so there was no hardship. It was a total self created hardship and it wasn't like she aligned her means with a modest goal, she wanted a Million dollar home. Now parts of California, Florida, Arizona, Nevada have had property values cut in HALF. I don't know how she was allowed to get this, and I don't understand how this loan remodification policy is fair because I couldn't get refinancing in Massachusetts due to Loan to Value even though a house 400 square feet smaller houses three houses down the street on a not as nice lot sold for $7,000 less than what I needed my house to appraise at. No deal for me even though the bubble had a direct impact on me, but the guy who bought 15 years ago could refinance as well as this lady in California.

This ability to refinance for those who bought before the bubble has a direct impact on first time homebuyers and I don't think they get this point. The point is that if people can refinance they might not be that motivated seller. The government is not letting the natural course of events happen and this correction will make things more affordable. I think it is good that they are trying to land this plane safely, but the medicine isn't going to the right people and the banks are taking advantage.

The real insult was that this lady most likely wouldn't have had to pay the bank fees that the banks wanted to impose on me.

[Kaidran]

I guess they ran the numbers as figured they could get more out of forgiving part of the loans on deadbeats than letting the market drop to a better price.

The one thing I am certain of is that they put a lot of math into working through the angles until they came to this decision. I guess it just indicates how low they are afraid the market could drop.

[admin]

[GD]

Uncle Sam knows exactly what he's doing. The govt wants to prop up property prices for the short term benefit of cronies with strong lobbyists at the expense of taxpayers.

And people wonder why I'm bitter - My apartment had bad mold problems (landlord came and bleached some out, but had to knock down one wall and completely rebuild it because the mold was so bad). We choose to stay in a smaller, older space while saving up for our expensive metrowest house. Paid 28% in taxes last year, and are seeing it frittered away to help those who chose to lead an unaffordable and nicer lifestyle than us. I want to deduct my rent too, why can't I? "Renters don't pay property tax" - nonsense. Most landlords will have included the property tax when deciding on rent price.

I'm going to pick my next investments based on what the majority or elite does. Then maybe Uncle Sam won't let me fail too.

[admin]

[GD]

$3K tax deduction in MA, state income tax only.

Versus the likely $15K interest deduction + property tax deduction when we eventually buy.

I absolutely think the way to do things is to go with the flow now. The govt won't let things go too bad if it hurts the majority (with voting power to vote them out).

[admin]