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Automotive News & Views How does gas at $4 and higher impact you?
2183 messages, Last post on Nov 21, 2009 at 5:13 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: larsb (Oct 20, 2008 9:35 am) “making a loan without regard to borrowers’ ability to repay the loan from income and assets other than the home’s value" Gas gets too high and there goes your ability to repay the loan. Sounds like a connection there to me.  Moving on....
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Replying to: steve_ (Oct 20, 2008 9:39 am) If that were the only factor, then yes, you would have a linear cause/effect relationship. But it wasn't the only factor. Moving on................ |
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Replying to: kernick (Oct 20, 2008 7:29 am) |
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Replying to: steve_ (Oct 20, 2008 9:39 am)
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Replying to: larsb (Oct 20, 2008 9:35 am) whenever you find an article that supports your view, that is supposed to be taken as absolute proof by others. sorry, that dosen't work for everyone else. my opinion is that $4+ gas prices 'is the straw that broke the camels back'. |
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Replying to: explorerx4 (Oct 20, 2008 4:09 pm) Add to that the fact that home prices where somewhat artificially high spelled a drop of home prices to a more reasonable levels. What hurt most people is adjustable mortgages. It was common practice to get 2-5 year ARM's and refinance before the rates started to adjust. The problem with this is that when home values go down it became hard to refinance the home, so their payments went up, and up and up. Those that had fixed mortgages (like me ) didn't incurred this issue. Those that had low loan to value loans also didn't have as much of a problem. Gas prices going up had little to do with this.
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Replying to: grbeck (Oct 20, 2008 11:23 am)  But, I'll concede it's not a root cause.... |
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Replying to: steve_ (Oct 20, 2008 8:52 am) " I thought I'd see more hits in a quickie search, but here's one for you: Gas prices fuel home defaults: Monroe foreclosures head for new record (Pocono Record) " We agree and we disagree, such is the nature of a forum. With similar credentials as snakeweasel,( I believe) I'll say that it was at least a significant contributory factor. They were mortgaged to the hilt.The ultimate most house they couldn't afford. Steve rightly raises that the point that high oil reflects accross the board. Not just at the pump. Food, electricity, groceries, service providers, anyone that needs to pass on a cost that affects their profit margin. If they were marginal, our favorite word no ? Then it might have accelerated their default. Would they have defaulted later without the oil spike. Probably yes, since the issue was more why pay for a mortgage on a home you thought you could flip or at least would keep appreciating when you had nothing to lose . Since I always insert my obligatory R & R lyric I'll postulate, What's love got to do with it ? On the bright side at least we're not speculating why $150-200-300 oil was rational. |
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Replying to: larsb (Oct 20, 2008 7:48 am) "You can think that, but so far there are no economists (who do that sort of thing for a living) who are saying that there was a direct connection between those two factors. At least no stories I have read or heard. Higher gas prices did not kill anyone with a correctly written mortgage. People who GOT INTO MORE THAN THEY COULD AFFORD might have had an issue. But I can promise you that very few people came down to the choice, "buy gas or pay the mortgage?" If they did, then they were just idiots who made bad financial choices. Not enough people were in that circumstance to contribute to the issue If you took a poll of people who have been foreclosed on and asked them, "Did you ever have to decide on either buying gas or paying the mortgage?" I would bet my last dollar that the number would be 5% of them or less. When I refinanced my house in 2006, they offered me $25,000 more than I thought the home was worth. I could have been one of the stupid ones and taken the extra money - it was there for the taking. But I did not give in to the temptation and drive my mortgage payment through the roof and grab the cash. High gas prices affected the economy IN GENERAL in the ways that you mentioned - but there is no DIRECT CONNECTION between people having to pay higher gas prices and that money going for gas instead of a paying their mortgage contributing to the mortgage meltdown. " Taking the other side of the debate shall I remind you that you thought a 100% increase in the price of oil over a little more than 12 months was rational. Rather like a tax increase in a period of weak economic activity it served as a coup de grace. I am glad you were foresighted enough to drive a fuel efficient vehicle but such wisdom was derived from driving more than average miles and the Indian energy analyst of Goldman Sachs who put forth after the 200 basis point rate cut demanded by Wall St. , sinking the dollar and spurring inflation that $200 oil was probable. As you will remember I contested that it would put us into a global recession and be self rectifying. As it is written, so shall it be done. We're not talking about people that are rational Lars, who save because they know crap doth happen and you shouldn't pay 100% of your paycheck . Curious as to why you took that previous stance, Just because you have a Prius ? |
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Replying to: larsb (Oct 20, 2008 8:36 am)
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