Nearly 900 Californians a week are losing their homes because they can’t afford to pay the mortgage â┚¬â€ up from about 100 a week a year ago â┚¬â€ providing fresh evidence that the housing market’s troubles are nowhere near over.
Home prices could well drop because of this, with some saying it could also trigger a recession.
It’s not just California either, The Housing Bubble Blog has a daily litany of the troubled real estate markets nationwide. Adding to all this is the outright fraud, which Bubble Markets Inventory Tracking cheerfully expounds upon, naming names, and detailing the transactions.
Ain’t capitalism wonderful, with greed and exploitation ruling the day. And yes, many of those who signed up for one of those negative amortization ARMs with an artificially low rate expecting real estate prices would rise forever so the house would just be their little unending piggy bank were just as greedy as the exploitative mortgage brokers and predatory bankers.
Dunno, guess I was insufficiently greedy to exploit all of that. My condo in L.A. doubled in value in three years, and when Sue and I got married, the house kept going up in value. It never even occurred to us to pull out money from it because, well, you do have to pay it back. Oh that…
There’s this bizarre notion that home equity is somehow free money. Pay off your credit cards debts! Yeah, and pile on the mortgage payments, and hope the value goes up so you can do it again. It’s like a hamster going faster and faster on a treadmill, one day it will collapse from exhaustion.
On the one hand, the housing boom was what pulled the economy out of the recession (if we are in fact out of the recession)– though Bush would like to give credit to his tax cuts. Without the housing boom, what’s our economy running on?
On the other hand, I lost my condo to the housing bubble of 1990, an ARM I couldn’t afford (but was talked into by the realtor), and negative equity. I bought it for $130K, owed $120K, and it was worth $87K. Ouch. But fifteen years later, with housing prices up by multiples of 5 and 6, I sure wished I still had it! Do housing prices always go up? No. But the general trend is generally in that direction.
On the third hand, it is indeed sad that our culture (and our government) now seem to promote taking on as much debt as you can possibly get. I tried that route. I didn’t sleep very well. Now, my wife & I are working to pay off our mortgage as fast as we can and become debt-free. How un-American! No wonder the country’s in a recession!
All the money paid by debtors goes somewhere. It’s a major transfer of wealth from the poor and middle class to the wealthy.
Did you know that it is forbidden to charge interest on a debt in Judaism, Christianity, and Islam? Exodus 22:25 specifically forbids charging interest on loans made to the poor, while Deuteronomy 23:19 allows charging interest only to “foreigners,” by which one presumes they mean those outside the religion. Islam, I am told, is stricter.
Now a days, the greedy bankers are exploiting the people by laving high interest rates, where they can not repay it and hence resulting in loosing their property at loss.