Strikes

[PhDhawk]

Yep fucked up. You need to save up $40k for a down payment on a house while you pay $1,8000/month rent. So that your monthly mortgage payment can be $1,300/month.

[Mjl]

Yep fucked up. You need to save up $40k for a down payment on a house while you pay $1,8000/month rent. So that your monthly mortgage payment can be $1,300/month.

What's the alternative? I mean, we saw what happened when lenders stopped requiring that.

[PhDhawk]

Yep fucked up. You need to save up $40k for a down payment on a house while you pay $1,8000/month rent. So that your monthly mortgage payment can be $1,300/month.

What's the alternative? I mean, we saw what happened when lenders stopped requiring that.

I don't think the housing crash was caused by offering loans to two income families interested in buying starter homes.

There are lots of things besides down payment that can determine suitable loan terms.

I'm not talking about mcmansions for the unemployed, or crazy ARMs for people hoping to sell a house for profit in 9 months.

The answer is probably somewhere in the plot of "it's a wonderful life".

[Mjl]

Ok... But I don't know how you regulate that. Unless you're saying that it's not a matter of regulation but rather a matter of lenders making poor decisions, but I would think the free market would take care of that.

Or you're saying it's just a shitty fact of life, in which case I'm in complete agreement.

[ousdahl]

You’d think that paying a $1400 rent for years would be proof in itself that you could pay a $950 mortgage, but let’s not pretend the system is set up to be fair

[jfish26]

Yep fucked up. You need to save up $40k for a down payment on a house while you pay $1,8000/month rent. So that your monthly mortgage payment can be $1,300/month.

What's the alternative? I mean, we saw what happened when lenders stopped requiring that.

I don't think the housing crash was caused by offering loans to two income families interested in buying starter homes.

There are lots of things besides down payment that can determine suitable loan terms.

I'm not talking about mcmansions for the unemployed, or crazy ARMs for people hoping to sell a house for profit in 9 months.

The answer is probably somewhere in the plot of "it's a wonderful life".

If you haven't, The Big Short is a terrific read.

At bottom, the cause of the crisis/collapse/crash was that (i) risk was sliced and diced and broken down and reconstituted to such a degree that there was absolutely no connection between loan underwriting/origination and risk of default, and (ii) an entire economy-within-an-economy was built to create and sell and trade financial instruments that were at best opaque and at worst created without understanding for the risk contained within.

If you find my explanation clumsy or obtuse, you should really just read The Big Short.

[ousdahl]

“an entire economy-within-an-economy was built to create and sell and trade financial instruments that were at best opaque and at worst created without understanding for the risk contained within...”

wait, is this the GameStop thread?

[PhDhawk]

What's the alternative? I mean, we saw what happened when lenders stopped requiring that.

I don't think the housing crash was caused by offering loans to two income families interested in buying starter homes.

There are lots of things besides down payment that can determine suitable loan terms.

I'm not talking about mcmansions for the unemployed, or crazy ARMs for people hoping to sell a house for profit in 9 months.

The answer is probably somewhere in the plot of "it's a wonderful life".

If you haven't, The Big Short is a terrific read.

At bottom, the cause of the crisis/collapse/crash was that (i) risk was sliced and diced and broken down and reconstituted to such a degree that there was absolutely no connection between loan underwriting/origination and risk of default, and (ii) an entire economy-within-an-economy was built to create and sell and trade financial instruments that were at best opaque and at worst created without understanding for the risk contained within.

If you find my explanation clumsy or obtuse, you should really just read The Big Short.

Right the issue was writing loans as fast as possible to get commissions not that most families could put down 8% instead of 20.

And, going back to the old Bailey building and loan brings back the connection between the lender and the home owner.

[MICHHAWK]

Buy the house you can afford. Not the house the lender says you can afford. Problem solved.

[Cascadia]

Buy the house you can afford. Not the house the lender says you can afford. Problem solved.

The adults are talking here, please stfu.

[ousdahl]

“But lender, I can afford it!”

Yeah, that’ll work.

[jfish26]

Interesting data to parse through.

[PhDhawk]

Buy the house you can afford. Not the house the lender says you can afford. Problem solved.

That solves the problem from 2007 when they were handing out predatory loans like candy.

Does nothing to address the tweet that started the conversation.

[PhDhawk]

Interesting data to parse through.

Look at the difference in credit scores though.

Also, those are nominal. A dollar then is worth about $1.40 now.

[jfish26]

Interesting data to parse through.

Look at the difference in credit scores though.

Also, those are nominal. A dollar then is worth about $1.40 now.

Yes - a median credit score of 786 suggests (i) that there really isn't the same sort of default bubble as in 2007, and (ii) a profoundly K-shaped recovery (which causes major issues in other areas).

[ousdahl]

Sort of changing gears, but...

sometimes it’s hard to tell whether things like hunger and waste are failures of capitalism, or features...

[Walrus]

Buy the house you can afford. Not the house the lender says you can afford. Problem solved.

Exactly. Lots of people are buying homes like they do cars. Thousands are going to lose their homes over the next few years when they realize owning a home is not the same as a monthly payment.

[Walrus]

The only way home prices will come down is if you get the government and federal reserve out of the free market. Homes are going to crash regardless, but the government forbearance just delays the inevitable.

[twocoach]

Buy the house you can afford. Not the house the lender says you can afford. Problem solved.

If Americans had the self control necessary to do that, we wouldn't have 90% of the problems we have in this country with debt, obesity, etc...

[MICHHAWK]

I feel sorry for no one. they dug their hole. Buying the house they know they can’t afford. Driving around in their 60K Ford F-150. Then when they go splat they want mom and dad or Uncle Sam to bail them out.