To all of the responsible homeowners

[bobbyjoe]

You say that like it's absolutely a bad thing for everyone. In my situation (I own my home and I have no plans to move, ever if I have my way, and even if I do, I won't be selling this one), lower property values is a boon by reducing my property taxes and making some other things much more affordable (certain insurance policies, etc).

The big thing for me will be what the value is in 40 years when I retire.

The thing is, most Americans these days live in their primary residence on average 5-7 years before moving.

I'm sure many felt the way you did, that there's no way they would ever move. Things happen and plans change. Divorces, job relocations, etc.

For most Americans, their home represents a substantial percentage of their net worth. You want to see the value maximized because you never know when plans will change and you may want to sell or when you may need to tap into your home's equity (for example, a medical emergency in your family). You may one day want to start a business in which case a higher home value = a higher net worth = a stronger personal balance sheet to show prospective lenders.

[SnakeBoy]

You may one day want to start a business in which case a higher home value = a higher net worth = a stronger personal balance sheet to show prospective lenders.

I don't think you can use your home to secure a business loan since the bank isn't allowed to take your home if you can't pay back the business loan.

[boutons_]

"was about to get a better rate as a result of a government bailout"

really? that remains extremely hypothetical right now, as Paulson saves the skin of his buddies Elite Old Boys on the lender side first and foremost, with no definite plan to assist mortgage holders. The capitalists will get the benefit of off-loading $1T of debt paper to US taxpayers, while keeping the debt that is not at risk.

I read a funny simile where it's like Paulson wandering past all the high-quality goods in a luxury store, out the back door, and dumpster-diving to buy the garbage.

[MannyIsGod]

No its a hypothetical Boutons but wtf do you think the OP was referring to? The magic bad credit near foreclosure rate reduction refinance special?

[SpursFanFirst]

This thread shows how few people understand this crisis. And to be fair, I think the number of people who actually understand it is extremely small. I don't get all the details of the financial market but I think after reading a ton about it I've gotten the gist of what is going on.

If I owned a home and was responsible with everything, how could I not be upset if my neighbor who was not was the exact opposite was about to get a better rate as a result of a government bailout? That means my tax dollars were being used to provide an irresponsible buyer with a better deal than what I got. In addition, if I wasn't a home owner but was going to be in the market for one in the near future how could I not be upset that I was getting ed twice? First by my tax dollars basically paying for someone else's home and 2nd by lowering the amount of foreclosed properties on the market which in turn raised the price I was going to pay for my home?

It isn't as simple as saying intelligent people don't worry about their neighbor when their neighbor is reaping the benefits from the situation while the responsible buyer is not. Intelligent people actually DO focus on like this. Rich Dad, Poor Dad anyone?

T-H-A-N-K Y-O-U! This is exactly what I've been saying!

[Aggie Hoopsfan]

Muhammed Yunus writes very effectively about the concept of "social business" in Creating a World Without Poverty - utilizing the merits of capitalism (having businesses that are self-sustaining) but which are not "profit-maximizing" because they are instead focused on solving social problems, like poverty and hunger.

We don't need billions of dollars. No one does. No corporation does. But everyone has a right to basic human needs (food, a home, health care).

There will always be poverty in the world, because there will always be socialist programs that discourage the lazy from bettering themselves, and there will always be corruption, and there will always be countries that have limited if any resources available for an economy.

Everyone should have the opportunity to make what they want of their life. But I shouldn't be on the hook (or any other taxpayer) for you or anyone else being an idiot and buying too much house and signing on a loan they couldn't afford.

[Aggie Hoopsfan]

Manny is on fire on this thread. Good takes, bro. LMAO at boutons. We should just call this topic that boutons doesn't know about #291,203.

[Anti.Hero]

It all comes down to watching your own ass. Stay out of stupid debt, don't get caught up in possessions, and have a long-term plan.

I guarantee you, those who have done this are about to seriously clean up and be able to retire once we bounce back out of this.

Or if it all goes to , you will have a much better chance at survival.

[xrayzebra]

Good question, difficult situation. Your question betrays your typical right-wing, punitive, -'em-all-to- "values".

Would your rather have your neighbor renting somewhere, maybe homeless on the street, with their ex-house shuttered up, with the lender-owner under-maintaining it, and dragging down further your already-dropping property valuation, which is exactly what is happening in many neighborhoods, even gated McMansion neighborhoods?

My question to you boutons. If they cant afford to make their mortgage
payments and do get a lower rate of say one or two points. Where are
they going to get the money to maintain their property.

Home ownership is more than making payments each month. Other
things need attention. You know like painting, fixing screens, yard
maintenance, broken windows.

I really don't want someone in the neighborhood who doesn't maintain
their property. Do you?

[xrayzebra]

There wasn't a "tantrum" until people like you started attacking me (and putting words in my mouth) because I have a problem with having near perfect credit and not being able to get a better rate, while a neighbor with financial problems gets a better rate.

What was really galling when this type of situation happened back in the
80's was people were foreclosed on when the S&L thing came along and
RTC had the homes and almost gave them away to people who couldn't
afford them. Those that been paying on the house for years and one of
either the husband or wife lost their job and wham, bam, out on the
street with them. The poor got the house and trashed them in many
cases or I am guessing, resold them for a profit.

[spurster]

If I owned a home and was responsible with everything, how could I not be upset if my neighbor who was not was the exact opposite was about to get a better rate as a result of a government bailout? That means my tax dollars were being used to provide an irresponsible buyer with a better deal than what I got. In addition, if I wasn't a home owner but was going to be in the market for one in the near future how could I not be upset that I was getting ed twice? First by my tax dollars basically paying for someone else's home and 2nd by lowering the amount of foreclosed properties on the market which in turn raised the price I was going to pay for my home?

If you owned a home, you would want prices higher so your home was worth more. Your passion got a little ahead of your logic here.

[MannyIsGod]

If you owned a home, you would want prices higher so your home was worth more. Your passion got a little ahead of your logic here.

Read it again.

[Clandestino]

If you owned a home, you would want prices higher so your home was worth more. Your passion got a little ahead of your logic here.

it depends. if you were selling, you'd want the value to go up. if you planned to live in the neighborhood for a long time, you'd want it to stay stable so your property taxes wouldn't rise.

[spurster]

Ok, I admit to messing up.

[bobbyjoe]

I don't think you can use your home to secure a business loan since the bank isn't allowed to take your home if you can't pay back the business loan.

I'm not talking about using your house as collateral to obtain a business loan.

If you go to the bank and want to get a loan to start up a new business venture, one of the first things they will ask you for is a personal financial statement.

The more equity you have in your home, the higher your net worth, and thus the stronger balance sheet you can show to maximize your chances at obtaining credit.

Even though they can't take your home if things go bad, banks do take some comfort in the fact that if things start to go downhilll for your business, you have some home equity you could potentially tap into to invest into the business.