A Ledgie wants to know: Economy Edition

[HejiraNYC]

Originally Posted by strandinthewind

The article below represents the second wave, which I submit will be far worse than the first wave, which was the failing of roughly 9 or so percent of the sub prime mortgages out there and the ripple effect. It just amazes me that banks still look to force a foreclosure when they will get less money a la the Phoenix example set forth below. Fraud aside (which does not appear to be the case there) - that deal seems like a win win for everyone.

In the end, as noted in the article, many people have used their homes as an ATM and are balking now that they have to pay it back. Taking out all the equity in your home to go to Europe or even educate your children (there are cheaper schools and your kids can get loans or possibly scholarships, work/study programs, or grants ) is not the soundest financial planning. The soundest financial planning is to ignore the yearning to Jones on your neighbors and pay off your house instead of borrowing against it to live beyond your cash based means. In the end, I do not feel sorry for anyone who took out all of the equity in their home and spent it on BS and now bitch about paying it back and/or that the house is not worth what they owe. That was the clear risk they took when making the loan. To say one did not know it now is utter BS IMO.

In the end, many people have lost their homes though no fault of their own. I am not talking about them. But, all this "poor Johnny home owner who is mortgaged to the hilt for convenience and now is losing their house so let's get the taxpayers to bail them out" is just BS to me. I say let them declare bankruptcy and be done with it if the assinine banks won't work with them. The banckruptcy likely will allow them to discharge the extra debt and keep their house.

Maybe I'm just turning into an old curmudgeon, but way back in the day, it seemed like you could pretty much assess the wealth of a person based upon the clothes they wore or the car they drove or the kind of stores they shopped in. And if you didn't have the newest and best of everything, it was okay, because you were just like everyone else- living simply, humbly and within their means. But today it seems like everybody is driving the newest, nicest luxury cars, buying $200 jeans and $5000 handbags, flat screen TV's, etc. And it isn't like the country has suddenly become so productive and wealthy. It's just that there is so much more credit available and people have been brainwashed into thinking that it is okay to run up your credit cards/home equity line of credit, and be indebted up to your eyeballs because stuff=happiness and debt=wealth. And somehow the perception of wealth has become more important than wealth itself; why settle for shopping at KMart when a thin little piece of magnetized plastic can enable you to shop at Bergdorfs?

It really is maddening to hear about people griping because they looted their housing equity to support lifestyles that were way beyond their means, and now they owe more than the value of the house. Boo-freakin'-hoo! You should have thought about that before buying that Hummer H2 that you can no longer afford to fuel up. I only wish that there was a way for these kinds of people to be responsible for their debt obligations forever; however, unfortunately it is just too easy to walk away. It makes me feel like an idiot for being fiscally responsible and living within my means.

[strandinthewind]

Originally Posted by HejiraNYC

. . . It makes me feel like an idiot for being fiscally responsible and living within my means.

Well you are and you aren't. It really just depends on your conscious. You likely could have spent two or three times more than your actual level of spending over the last few years, gotten into horrible debt you knew you could never repay and then filed for banktruptcy and wiped out that debt or paid back pennies on the dollar, while still having had the experience of the high life and keeps the vast majority of the assets acquired therein. If you could live with yourself, then who really cares. And - no one really would know what you did because it is not like they post filings in the front page of the NY Times

Bankruptcy is a good thing when used by people who are in a bind and cannot get out. I am not talking about them and I think they are good people in a jam, which is that the system was meant to address. But, it will now be used for the situation I just described, which emboldens IMO the American and somewhat world position of no responsibility for my actions mentality.

And, even with a bankruptcy, you can get a market rate mortgage that is Federally backed - and, if your income is high enough, you have a cosigner, and/or a year or so has passed in which you have demonstrated the ability to pay a credit card - a market rate conventional loan likely is available to you.

[David]

Originally Posted by HejiraNYC

But today it seems like everybody is driving the newest, nicest luxury cars, buying $200 jeans and $5000 handbags, flat screen TV's, etc. And it isn't like the country has suddenly become so productive and wealthy. It's just that there is so much more credit available and people have been brainwashed into thinking that it is okay to run up your credit cards/home equity line of credit, and be indebted up to your eyeballs because stuff=happiness and debt=wealth.

Yes, indeedy. For the past fifteen years or so, everybody -- & I mean everybody -- has gotten those little notices from all the credit card companies that say: "Congratulations! We've just raised your credit limit!"

Hehheh....not so many of those being mailed out at the moment.

[skcin]

Originally Posted by HejiraNYC

But today it seems like everybody is driving the newest, nicest luxury cars, buying $200 jeans and $5000 handbags, flat screen TV's, etc. And it isn't like the country has suddenly become so productive and wealthy. It's just that there is so much more credit available and people have been brainwashed into thinking that it is okay to run up your credit cards/home equity line of credit, and be indebted up to your eyeballs because stuff=happiness and debt=wealth.

Exactly. I blame the gays. And Project Runway.

[strandinthewind]

Originally Posted by skcin

Exactly. I blame the gays. And Project Runway.

La même chose Ã* mon opinion

[skcin]

Originally Posted by strandinthewind

La même chose Ã* mon opinion

Come on, if it weren't for Tim Gunn making me feel that I'll look like **** unless I have a fabulous signature piece, I wouldn't need to go out & spend spend spend!

You know I'm kidding. That's not how I roll.

[strandinthewind]

Originally Posted by skcin

Come on, if it weren't for Tim Gunn making me feel that I'll look like **** unless I have a fabulous signature piece, I wouldn't need to go out & spend spend spend!

You know I'm kidding. That's not how I roll.

My dearest one - you would good decked out in anything from anywhere

I am the first to LOVE the fab. brands like Prada and if I find them at like 90% off, I will buy them. I usually shop at Gap (HUGE sales - like $5.00 pants) - Marshalls, etc. I still go in Neiman's and drool and then wait for the year end sale.

[David]

Originally Posted by strandinthewind

I am the first to LOVE the fab. brands like Prada

I buy Wranglers & Levis, & my footwear is New Balance All Terrain & New Balance C-Cap. I sleep & nap in my boxers, & my T-shirts are custom-made from an online vendor that puts pictures of Stevie Nicks, W.C. Fields & Jacques Barzun on the front & back.

I buy DVDs from DeepDiscountDVD & DVD Planet, & I like old-fashioned hot-air balloons.

[strandinthewind]

Originally Posted by David

I buy Wranglers & Levis, & my footwear is New Balance All Terrain & New Balance C-Cap. I sleep & nap in my boxers, & my T-shirts are custom-made from an online vendor that puts pictures of Stevie Nicks, W.C. Fields & Jacques Barzun on the front & back.

I think La Nicks' image homage is better suited for crotchless pantaloons or, in a pinch, apricot colored bloomers.

Originally Posted by David

. . . I like old-fashioned hot-air balloons.

Me too!