What should you have done this year but didn’t because you were too scared, worried, unsure, busy or otherwise deterred from doing? (Bonus: Will you do it?) I should have listed my house for sale this summer. As I’ve blogged about before, I bought a house in 2007. I had a 100% financed (0% down), [...]
[24 Dec 2010]
They don’t care that these mortgages wouldn’t have been available in the first place if the banks hadn’t found a way to sell oregano as weed to pension funds and insurance companies. Matt Taibbi just made me snort laugh. I know someone who actually did cut his weed inventory with oregano to boost profits. The [...]
[13 Nov 2010]
But the Great Recession was different: It was triggered by a financial meltdown brought on by excessive lending, reckless risk taking, the implosion of an unregulated shadow banking system that assumed that short-term money would always be available — and ignorant and careless borrowing by people and institutions. The key paragraph from Who can magically [...]
[15 Oct 2010]
Contrary to the popular narrative, most foreclosures were not on sprawling “McMansions” but rather on modest properties that were typically valued significantly below area median values at origination. One of the key findings from Dreams Deferred: Impacts and Characteristics of the California Foreclosure Crisis, a report by the Center for Responsible Lending. You can also [...]
[21 Sep 2010]
Say you bought a house for $350,000 in July 2006 — those were the days of 100% financing, so you borrowed $350,000 on a 30-year fixed-rate mortgage at 6.8%. The house is now worth $280,000, but your mortgage balance is $334,000. The current rate for a 30-year fixed-rate loan, if you could get one, is [...]
[16 Sep 2010]
“If you need a job and you need to improve your life chances, you know, why not? I mean, it’s not that it’s free and it’s not that it doesn’t cost you, but it may be worth paying that price.” That’s Joe Gyourko, a real estate professor at the Wharton School at the University of [...]
[26 Aug 2010]
A short sale is going to be the only way for many people who bought at the peak and who are now underwater to move on with their lives if they have to relocate or downsize. From Jonathan J. Miller, president of the appraisal firm Miller Samuel and a market analyst in New York City [...]
[25 Jul 2010]
The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent. That’s from yesterday’s New York Times piece, Biggest Defaulters on Mortgages Are the Rich. Makes sense, actually. Rich people can avoid the fallout of foreclosure more easily [...]
[10 Jul 2010]
The financial calculus is pretty clear. But from a moral standpoint, the rationale should be just as obvious. The bank was not doing you a favor when it extended you a loan. It was trying to make money off of you. If that effort doesn’t work out for the bank, it’s not your fault. The [...]
[6 Jun 2010]
But it’s worth remembering that the advantages of homeownership are frequently exaggerated. The mortgage-interest tax deduction doesn’t eliminate the cost of borrowing money; it merely reduces it. The freedom to paint your house any color you wish comes with the responsibility of paying for a new roof when the time comes. The $15,000 or $30,000 [...]
[21 Apr 2010]