Forgive my youthful ignorance

[Carbonics]

I was watching NBC nightly news a minute ago and they had a story on the housing market bust... apparently something about in Ohio they are issuing bonds to save people from losing their homes (I smell S&L scandal 2.0 brewing) and the reporter interviewed one lady, she stated that the lady feared she would "lose the home she has owned since 1965" because her mortgage payments jumped to $1500 a month... got me thinking, now I'm no rocket scientist or real estate agent but it seems to me that mortgage should have been paid off around 12 years ago, correct me if I'm wrong.

the reporter continued the story, walking down a street - a street she said alone had 4 homes in foreclosure, and that neighbors on the street worried about their property values.

again, forgive me for my youthful ignorance, but why in the **** would you be concerned with your property values? why don't people run around saying "oh man GM had another recall, I'm concerned about my silverado's market value" ? my guess is that you can't get equity lines of credit on cars.

what other reason besides wanting to milk your home's equity teat would someone have for worrying about their properties value?

I personally couldn't care less, bought it, live in it, keeping it why would I care what someone else thinks my home is worth?

 

[Pablo]

Some people think of their home as a pile of cash. Weird I know.

The news likes to hype this stuff to blame someone. And I suppose it's some rich guy's fault that a lady in Ohio took out a new $400,000 mortgage on her $300,000 home.

 

[bretfraz]

There have always been places in the US where home prices were depressed, never benefiting from the huge run-up in prices in other parts of the country. Was Brian Williams reporting live from those places? Of course not. Not newsworthy.

In 2002 I bought my home for $184K. Today it appraises for about $210K, less than 15% increase in 5 years, or about 3% per year. Not much of a return, I know, but not horrible. What are the chances NBC Nightly News will broadcast live from my street, telling the nation of the relative stagnant housing prices in my part of Metro Atlanta? Prolly less than zero. I don't have anyone to blame.

 

[Shannow]

Some people down under are worried about their values for a different reason.

With interest rates, and a ridiculously overblown housing market, people have no retirement savings...so they take out a reverse mortgage to wind down their ownership to nothing, just before they fall off the perch.

It's crazy, pay heaps of interest all your life so you can live (near the jobs), then wind it down to survive retirement.

 

[GROUCHO MARX]

Bretfraz, take out about $220k in loans on your equity and NBC News will be right there.

I'm afraid this type of financial activity is not new, just under reported in more active news periods.

 

[Al]

Quote:

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The news likes to hype this stuff to blame someone. And I suppose it's some rich guy's fault that a lady in Ohio took out a new $400,000 mortgage on her $300,000 home.

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Pretty much covers it. The fact that the lady took out a home equity loan was intentionally not brought up. "Don't mention the details..just present a theme-whether it fits or not."

 

[Kestas]

I'm worried that the government will step up to the plate and rescue these people who can't save or manage their money, do it with (my) tax dollars, and the rest of us who have learned to live within our means will get the shaft.

I agree with you, Carbonics. Living in a house for 42 years, and still paying a mortgage... there's a lot more to the story than the "sob story" we're hearing from the reporter. And I have a feeling it's really a non-story.

In fact we should all rejoice in the fall of housing prices. Isn't it better than seeing them rise? The only people that should be losing are the realtors and mortgage companies, who all leach from our society with their inflated fees.

 

[drm7]

They probably didn't go in the garage and see the Lexus or into the family room and see the big screen TV/theater setup. Or even follow her on the expensive Alaska cruise last year. All paid for with her equity line.

I understand the financial gurus that use home equity/leverage to build wealth but why would anyone get an ARM? Especially when rates were so low you could lock 30yr under 6%??? The gurus are more savvy and have learned the "tricks" of the trade. Not something the uninitiated should try. Never by depreciating "assets" with home equity.