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Nick's avatar

False.

I also had a ~50% drop in my home valuation at that time. Could've easily been more had I bought 3 months later than I did (the peak).

Jillian is not responsible for her house valuation halving in a year. Go troll/shill somewhere else bub.

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Ph8drus's avatar

How does one go from being able to afford a payment on a home when it is worth $500,000 (for example) to not being able to make the exact same payment on the same home now worth $300,000? The payment is based on the loan, not the value. The only real "cost" is being unable to sell at will.

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Blissex's avatar

I guess that you know well the answers:

* Many if not most of them though they would have to make the payment on the $500,000 mortgage only for a short period, and then flip the house for a big cash profit.

* Some lost their jobs in the recession and they had never expected to have at the same time the downside of a crash in house price and a loss of their salary, because they thought that cannot happen, must not happen, to middle class people, only to lower class "losers".

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Ph8drus's avatar

Loss of a job is entirely different. Neither poster referenced a job loss. I personally had friends and family despairing the loss of equity, as if financial ruin. They would say things like, "I'm upside-down on my house and don't know what I am going to do!" There were millions of people who thought they were badly harmed at the time, but they really weren't - everything, for them, remained the same other than the value of an asset. We see similar now due to the pandemic. For example, governments at all levels have stopped all evictions for all reasons. Many evictions are unrelated to Covid. Nobody mentions the DIFFERENCE in evictions numbers. There is an average baseline. Our government should focus on those who can demonstrate harm, not blanket solutions "helping" millions who don't really need it. Everyone I know received the Covid payments, while nobody I know was financially impacted by the pandemic (aside from now working from home more and not going out and about as much). Many people claim harm where there is none, diluting the population actually harmed. Same with the '08 financial crisis - many were actually harmed and some were merely inconvenienced, yet all demanded the government "do something." Legislators don't even write legislation, let alone read it. Lobbyist's lawyers write it for them, and guess who gets the biggest benefit? Certainly not those who really needed it.

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Blissex's avatar

┬лJillian is not responsible for her house valuation halving in a year┬╗

But was she responsible for exposing herself to that risk or not?

Was she forced to buy or did you and her have the option of renting? I know a number of people who starting in 2005 decided that the risk was too big and sold to people like you and Jill and switched to renting to minimize the risk.

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Carol Jones's avatar

How do you become risk adverse to corruption and fraud? how do you forecast for that? What a ridiculous suggestion. You know it was fraudulent criminal behaviour right?

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Blissex's avatar

┬лHow do you become risk adverse to corruption and fraud? how do you forecast for that?┬╗

That seems to me the fancyful claim that speculators who borrow at 10-20 times leverage because of the potential big profits of a volatile asset have the absolute human right to expect that there will no significant downside.

┬лYou know it was fraudulent criminal behaviour right?┬╗

Then sue the culprits and get damages. But the Wall Street criminals didn't defraud their borrowers (except in some cases during repossessions), they defrauded their shareholders.

Anyhow, in reality another category, those people who have to work for a living have no right to expect it will never have a significant downside, and that it will last them until they retire, and must always be ready to cope with losing their job, which is a 100% cut in their income, for whatever reason they lost it.

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HBI's avatar

Actually, I have to hop on here. I stayed out of the housing market from 1999 to 2009. Partially, it was the result of luck/a bad divorce but every time I was tempted to get in and buy, I looked at the house prices and said "there has to be a correction soon, this can not continue" and avoided it a few more years. Damn glad I did. I also kept my money out of stocks by not having any money. :-)

My point is that everyone with half a brain could see things were not right in the mid-first decade of this century. Overheated building, prices multiplying - that's not a boom, it's an asset bubble. We'd seen this before with the dotcom stocks.

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Kelly Green's avatar

Are you implying that a first time, non-english speaking, homeowner with terrible credit who had a predatory real estate agent and mortgage broker lie on their application, despite the homeowner having provided truthful information to them, and tell them to sign it has less than half a brain, or that they don't deserve our pity?

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HBI's avatar

What would you think of me if I went to Vietnam or Russia as a uni-lingual English speaker and started signing real estate documents that I didn't understand like a 17 year old at a Marine recruiting station? I'd be pretty dumb right? So what is the difference?

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Koshmarov's avatar

...

the Marine recruiting station *isn't* predatory?

HBI, I think I understand that you're arguing for personal responsibility, but I also think that some of the people you're locking horns with are trying to say that they don't want to live in a society where everybody has to view everybody else as a potential shakedown or rip-off artist all the time. Perpetual paranoia is exhausting.

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HBI's avatar

I agree with you that it's exhausting, but if you operate in any other way, the scumbags take advantage of you anyway and you just have to take it. Maybe I have a warped sensibility, since my stepfather was one of those predatory scumbags. Got to watch him in action for 30 years and I can't trust anyone after that.

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Kelly Green's avatar

Dude, there's a bell curve. Great that you're on the upper end but pity those on the lower end and help build systems to stop their exploitation by predatory scumbags.

I'm not saying I don't want to view people as predatory scumbags. I'm saying that I don't want to view people less intelligent than me as half human idiots who deserve what they get. 25% of the country is in the lower quartile of intelligence by definition. So you can't design a system that makes them read and understand a document comprehensible only by the 50th percentile and up or it's their fault.

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HBI's avatar

How do you design a world where the stupid get the same shake in life those who are not so limited do? The answer is you can't without spreading the misery.

No one is actually altruistic in any real sense. Dig into any story about how people are doing things for other people and you'll find their profit motive. Some are less odious than others - sometimes people want their names in lights or they're trying to bed someone and being a nice guy for a few months is their chosen method. Other times it's odious, like the kind of charity my stepfather would engage in. Anything that would make him money - he was a politician and a business owner.

Yes, I have a shit view of humanity but it's proven out by the things I see. So whatever method you might choose to "level the playing field" for the stupid will just be hijacked by the predators to make them more money by taking advantage of the stupid, again.

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Blissex's avatar

┬лhomeowner with terrible credit who had a predatory real estate agent and mortgage broker┬╗

In any case the "predatory" in this context is disingenuous to the point of ridiculousness: for there to be predatory lending there has to be a state of *need* from the borrower: they need the loan to pay the rent to avoid their family being evicted, or pay the hospital bill to save the life of their child, for example, so the lender can fuck them over taking advantage of that need.

But in the case of real estate speculation the borrowers almost never have a state of *need*, they have instead a state of *greed* for the "yuuuge upside" of speculating on real estate that "never falls in price". To the borrower perhaps speculating on the upside of real estate with a big loan feels like a need, but it is not, so however slimy the estate agent and mortgage broker are not predatory.

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Blissex's avatar

┬лAre you implying that a first time, non-english speaking, homeowner with terrible credit who had a predatory real estate agent and mortgage broker lie on their application, despite the homeowner having provided truthful information to them, and tell them to sign it┬╗

* That тАЬhaving provided truthful information to themтАЭ is a largely imaginary premise, as so many were the "liar's loans" where the predatory borrowers from the native english speaking middle classes thought there was only an upside and leveraged themselves up as much as they could with "liar loans" to maximize the expected upside.

* Had prices boomed instead of crashing, would have they complained so pitifully that they had been the victims of predators who pushed them to take the risk of a big fat upside despite them not understanding the size of that risk? Would they have then given up that big fat upside to the government, just as when it turned out to be a downside they wanted to shift it onto the government?

* Did the people who told them "sign it" have a fiduciary duty to them? Do people who are in possession of their mental faculties sign a purchase agreement for a loan just because the *seller* told them "sign it", or rather because they were cynically betting that there would be such a big upside for them (at someone else's expense) so it was worth taking the risk?

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Trollificus's avatar

Dang. Such cynicism. Now I'm expecting bad news regarding a certain widow of a Nigerian prince with whom I've been corresponding...

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Galleta's avatar

They deserve protection. There should have been prison sentences for the so called professionals involved.

Speak to Barry about that next time you are sipping drinks with him on someone elseтАЩs yacht

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Kelly Green's avatar

They defrauded their *clients*. Who were, generally, banks and funds with deep pockets buying CDOs with false risk ratings.

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Blissex's avatar

That was a relatively small deal, the rating agencies did not accumulate hidden losses. The much bigger deal was the fabulously "compensated" executives and traders of those banks and funds who made it very clear to the rating agencies they would only buy ratings estimating a very low risk, sot they could under-reserve for risk and thus book quite imaginary profits out of which they paid themselves very real and very big commissions and bonuses.

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Carol Jones's avatar

exactly ЁЯТЧ

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Carol Jones's avatar

I couldn't have said it better! ЁЯТЧ

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