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Smart Shopper Owe more than it's worth... I'm upside down and I can't get up!
1160 messages, Last post on Oct 22, 2009 at 7:11 PM
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I'm with you about lenders being overly optimistic about how much debt you can handle. I'm guessing that I could go out tomorrow and buy a really nice car with a payment that would give me heart palpatations (maybe a nice S class benz?), and they would be happy to give me the loan just based on percentages. I could probably step up to a Maybach if my house was paid off! Actually, a few years ago (well, 11 now) when I bought my current house, I had to close before selling my prior house. Turns out that, even though I was nervous about taking on the higher (new) mortgage, the lender was perfectly happy to loan me enough to buy own both houses! So instead of a brdge loan of some kind, I just took out a mortgage on the new house. Of course, even though the bank said it was OK, I would have been a wreck being tied to that monthly nut on one house!
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Replying to: stickguy (Jan 03, 2008 6:19 pm)
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Replying to: lemko (Jan 04, 2008 9:18 am) Has anybody here had to personally change there life style drastically due to the "crisis"? Here where I live the news had a big thing how TN home sales are at there lowest point in 3 years. What the meat heads fail to mention is that 2005 and 2006 were record years in the state and that 2007 was the third best year ever. But to report that would not be sexy and have no wow factor. Don't look at the current market as a crisis, look at it as a opportunity. An opportunity to acquire some investment property. The only people it are a crisis for are the people who took out loans they could not afford, for the rest of us it just means that it is a buyers market and we may not want to sell for the next 6 months. Any one who thought the housing market would continue to climb at the rate it has been was fooling themselves anyhow. My owner told us this morning that the news is going to be talking about recessions and car sales falling in 08. he then pointed out that we Ford people have been in a recession since 01 anyhow so we are ready for it, and it will do nothing but benefit us because whenever this happens the manufacture panics and puts on crazy incentives. He went on to talk about how in this day in age the people hit hardest by the recessions are not the target demographic. "Imports are superior" . |
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Replying to: joel0622 (Jan 04, 2008 10:35 am) Great opportunity for folks who don't have to sell to pickup investment proporty or for folks renting to jump in and buy something. -mike |
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Replying to: joel0622 (Jan 04, 2008 10:35 am) I imagine your area in TN is similar to where I live, south central PA. We tend to be a year or two behind the trend. Our housing market has finally slowed. Houses in my neighborhood used to sell in 2 weeks at full price. Now there are 5 houses that have been on the market since the spring. Builders have canceled several planned developments in my area. I'm happy because 3 of these developments involved closing golf courses. I'm not sure if we are in a crisis yet, I know people have less money whether it's due to a bad mortgage, higher gas and energy prices or higher food prices. And they are predicting job loss this year. I'll be interested in seeing how Ford benefits from all of this.
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Replying to: dtownfb (Jan 04, 2008 8:24 pm) If it does decline then the manufacture will support us with the appropriate programs which 3 times in the past have equated to record months for us. We have already taught ourselves how to work smart and dig for sales. We have also cut all the fat from the dealership and run on a lean budget. I also understand the 7 year cycle our business seems to run on, the end of this year will be about the bottom and then the turn will come. "imports are superior"
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Replying to: joel0622 (Jan 05, 2008 8:27 am) I hope you are right about this bottoming out this year. Nobody wants or needs a recession. Luckily I am in recession proof business. |
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I don't think people understand how this loan business works. The traditional way was that the bank would loan you money and then collect the payments over the years to make the original amount plus interest back. So, banks had vested interest to make sure that they will get their money back. This all changed recently, when banks were allowed to package these loans into securitues and sell them on the securities exchange. So, the banks no longer had to make sure that you would be able to pay them back, they knew they could make money tomorrow by selling your loan as a securities paper. So, if you lend Pete money on Monday with the promise that he will pay you back on Friday, but he does not pay, you are not going to lend him anymore money next Monday. However, if you lend Pete $20 on Monday, and sell his loan to Joe on Tuesday for $25, then when Pete comes back to you next Monday for more money, you lend him some more money, because you don't care anymore. So, all these foreign nations that trade with us, have these huge sums of US currency that they were pumping into these securities papers. All over sudden, they were not seeing the reutrns they were expecting, the stopped buying the securities, and the dollar started to lose value. Since oil is traded in dollars, devalued dollar, made the oil look very expensive.... I hope it clears up the global picture... We are in for a long long recession and the dollar may be surpassed by the Peso one day. |
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| Dub Schwartz chimes in on being upside down on the Alternate Route today! | |
A reporter with a large national newspaper is interested in talking with consumers about their experience during this economic downturn and if they might have lost or had their car repossessed. If oyu are in this situation,, please contact Chintan Talati at ctalati edmunds.com no later than Friday, May 9.
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