ConsiderAgain_IHB
New member
<p>I have had a personal epiphany, as opposed to the less common group kind of epiphany also known as collective experience. In the past I have emphatically blamed the individual borrowers for the Great Housing Bubble (kudos IR for the name). I was wrong.</p>
<p>At 42 years old, college educated, professionally employed for over a decade, owner of three homes (sequentially owned by the way), I have always viewed credit as a necessary evil.</p>
<p>I am greedy. Not greedy to the point of cheating someone or losing sleep over what the Jones’ have or scheduling which day to do grocery shopping to maximize store sales. But I am good at math and I understand interest, and here is where I am greedy. I detest paying for the use of someone else’s money. I have to do it or I would never have gotten into my first house, or bought all the cars I periodically owned over the years.</p>
<p>I went through a stage of just having to have a new M3, a S2000, another M3, several Accords. I always produced at least a 50% down payment and at no time considered leasing any of these new cars even though I knew I would likely trade again before long, because I have such an aversion to paying interest and “losing” that money.</p>
<p>The other side of credit of course is leverage. I do not purport to have the same level of financial knowledge as <em>Irvine Renter</em> demonstrates, but I have a working understanding which allows me to do a cost/benefit analysis on owning a home vs. renting. I know exactly how much owning costs me.</p>
<p>I play the stock market from time to time and understand the interest requirements of margin and short selling (Thank you CW & C!). In periods of euphoric glee at momentarily out-guessing the market, I have been tempted to tap a credit card or home equity to “invest” in this or that, but thank goodness prudence prevailed and I never did.</p>
<p>Not being a prying type of individual, I assumed other people in my general socioeconomic class where philosophically similar to me. Here is where I evidently was wrong. I incorrectly assumed everyone was interested in minimizing the interest they pay. I subscribed to the theory that people would do what was in their best interest, and were capable of making responsible judgments on major financial decisions. I understand there are a certain percentage of those that gamble, but I attributed that to fringe groups.</p>
<p>What has happened in California housing is truly incredible, as all are aware. This is not the result of a fringe group going nuts. Only a mainstream action could have driven home prices so high, so quickly. I have seen the tv commercials for the buy 20 homes with no money down and hey, “look at all these checks I got within two months”. I did not imagine normal people would partake of this Ponzi scheme.</p>
<p>The no-money down mortgage, and no doc loans were great in my opinion. I would never do a no-money down mortgage, but the freedom and ease of it is nice especially if you are juggling two houses buying a new one while selling the old. Our current home, 2006, was financed with no documentation at all. Nothing to show, no w-2s, no bank statements, zip; here’s a big bag of money, just sign here, here and here. You should have seen all the documentation we had to produce to buy our first house in 1998, gezzz, they wanted to see everything.</p>
<p>I hate big government and policies that take personal freedom from me. But the Great Housing Bubble proves people are not responsible for their own actions. Because of this epiphany, my expectations now fall to the lending institutions to enact and enforce policies that force responsibility on the masses. And I find that very sad.</p>
<p>At 42 years old, college educated, professionally employed for over a decade, owner of three homes (sequentially owned by the way), I have always viewed credit as a necessary evil.</p>
<p>I am greedy. Not greedy to the point of cheating someone or losing sleep over what the Jones’ have or scheduling which day to do grocery shopping to maximize store sales. But I am good at math and I understand interest, and here is where I am greedy. I detest paying for the use of someone else’s money. I have to do it or I would never have gotten into my first house, or bought all the cars I periodically owned over the years.</p>
<p>I went through a stage of just having to have a new M3, a S2000, another M3, several Accords. I always produced at least a 50% down payment and at no time considered leasing any of these new cars even though I knew I would likely trade again before long, because I have such an aversion to paying interest and “losing” that money.</p>
<p>The other side of credit of course is leverage. I do not purport to have the same level of financial knowledge as <em>Irvine Renter</em> demonstrates, but I have a working understanding which allows me to do a cost/benefit analysis on owning a home vs. renting. I know exactly how much owning costs me.</p>
<p>I play the stock market from time to time and understand the interest requirements of margin and short selling (Thank you CW & C!). In periods of euphoric glee at momentarily out-guessing the market, I have been tempted to tap a credit card or home equity to “invest” in this or that, but thank goodness prudence prevailed and I never did.</p>
<p>Not being a prying type of individual, I assumed other people in my general socioeconomic class where philosophically similar to me. Here is where I evidently was wrong. I incorrectly assumed everyone was interested in minimizing the interest they pay. I subscribed to the theory that people would do what was in their best interest, and were capable of making responsible judgments on major financial decisions. I understand there are a certain percentage of those that gamble, but I attributed that to fringe groups.</p>
<p>What has happened in California housing is truly incredible, as all are aware. This is not the result of a fringe group going nuts. Only a mainstream action could have driven home prices so high, so quickly. I have seen the tv commercials for the buy 20 homes with no money down and hey, “look at all these checks I got within two months”. I did not imagine normal people would partake of this Ponzi scheme.</p>
<p>The no-money down mortgage, and no doc loans were great in my opinion. I would never do a no-money down mortgage, but the freedom and ease of it is nice especially if you are juggling two houses buying a new one while selling the old. Our current home, 2006, was financed with no documentation at all. Nothing to show, no w-2s, no bank statements, zip; here’s a big bag of money, just sign here, here and here. You should have seen all the documentation we had to produce to buy our first house in 1998, gezzz, they wanted to see everything.</p>
<p>I hate big government and policies that take personal freedom from me. But the Great Housing Bubble proves people are not responsible for their own actions. Because of this epiphany, my expectations now fall to the lending institutions to enact and enforce policies that force responsibility on the masses. And I find that very sad.</p>
