housing crisis, really a crisis? - Page 2

PHBeerman · 07-03-08, 12:19 PM

Quote:

Originally Posted by Hilux

fixed.

And I won't have a house till the one payment I make on it is the payoff...

Until then you are paying for someone else's mortgage?

Brilliant.

tcb · 07-03-08, 12:21 PM

Quote:

Originally Posted by re_guderian

I agree with you, but... how many people actually have an "attorney" present at closing?

100% of the people financing a home.

LukeO · 07-03-08, 12:24 PM

The problem was artificial appreciation. Partially driven by both large and small investors trying to make a quick buck with the banks playing right along with these inflated artificial values. As well the White House used the housing industry as a quick economic fix after 911 which promoted this stupid behavior of banks giving loans to any and everyone. Basically burnt the candle at both ends.

The housing market is now correcting itself.

Fortunately our market (which has been affected too, by other markets) is more conservative. And I don't mean conservative in today's political sense since self proclaimed conservatives ain't conservative by any means. However local construction permits have been free for all (to increase the tax base without neccessary infrastructure as usual) for too long.

tcb · 07-03-08, 12:24 PM

Quote:

Originally Posted by re_guderian

'splain, please...

Closing attorney??

PHBeerman · 07-03-08, 12:25 PM

Quote:

Originally Posted by wob

psssst....

Assets
- Liabilities
=======
Net Worth <------ That's the number you should be focusing on.

Lets do the math for Hilux.

First Hilux we will inventory all of your assets (Let's see a junkyard in your yard is probably worth 200 bucks, and the black and white TV sitting on old milk crates would probably fetch 10 bucks at a garage sale) Then we will add up your liabilities (Clean up of said junk yard would probably cost 150 bucks)

And then we do the calculation and................

210 - 150 = 60

Congrats, you are a wealthy man.

wob · 07-03-08, 12:28 PM

Quote:

Originally Posted by PHBeerman

Lets do the math for Hilux.

First Hilux we will inventory all of your assets (Let's see a junkyard in your yard is probably worth 200 bucks, and the black and white TV sitting on old milk crates would probably fetch 10 bucks at a garage sale) Then we will add up your liabilities (Clean up of said junk yard would probably cost 150 bucks)

And then we do the calculation and................

210 - 150 = 60

Congrats, you are a wealthy man.

Wouldn't the potential expense associated with an asset account be a contra-asset?

In which case...

60
-0
==
60

My accounting is a bit rusty.

GeoRoss · 07-03-08, 12:29 PM

Quote:

Originally Posted by tcb

Closing attorney??

Not in AZ. Just you, the title agency and your realtor if you have one.

As to the question, it is a crisis to people in depressed markets who need to sell. My wife has a colleague that took a job in another state. He is having a bitch of a time selling his house that he bought several years before the peak. It is a crisis to him.

lucky 13 · 07-03-08, 12:31 PM

Quote:

Originally Posted by concretejungle

totally agree!

Putting on my business hat, there were many times (when i was selling homes) that clients would come to me and tell me they had been approved for $Xxx,xxx, and i would just know that was out of their league. So i would tell them to go back to the lender and tell the lender what they were comfortable paying a month and then derive a loan amount from that. Every time my client came back and was amazed at how much money the lender was trying to give them and that they would have never been able to afford that monthly payment.

Also, it amazes me that people act like they had no idea their rates were scheduled to change in a ARM. At EVERY closing, the attorney goes over the truth in lending document with the buyer and clearly explains what their monthly payment is, what their interest rate is and when/how much it will be changing and at what date. Then the attorney and myself advise the client to make their payments on time and when it gets close to that date, REFINANCE! The buyer has to sign that paper stating they understand that. People just amaze me that they take no responsibility for borrowing more than they could afford.

what about an ARM load do the buyers not understand?? as soon as i read about the main structure of these loans, i knew that was not for me.

one thing i have been noticing is the amount of empty homes everywhere. neighborhoods of newly built houses and only a few are lived in. and new houses are being built right down the road!!

tcb · 07-03-08, 12:33 PM

Quote:

Originally Posted by GeoRoss

Not in AZ. Just you, the title agency and your realtor if you have one.

Interesting....

Did not know that. I've bought 2 houses in MS and one in TN and an attorney was present for the closing at each of them. I always just thought it was universal.

Learn something new every day.

re_guderian · 07-03-08, 12:38 PM

Quote:

Originally Posted by tcb

Interesting....

Did not know that. I've bought 2 houses in MS and one in TN and an attorney was present for the closing at each of them. I always just thought it was universal.

Learn something new every day.

Must be state specific. I have bought and sold 3 houses and some land, and only used an attorney once. I recommend it, but had no idea some states require it. Who's attorney is it? One hired and paid for by the purchaser? or someone associated with the title company? JD with specialty in RE?

PHBeerman · 07-03-08, 12:39 PM

Quote:

Originally Posted by wob

Wouldn't the potential expense associated with an asset account be a contra-asset?

In which case...

60
-0
==
60

My accounting is a bit rusty.

I was booking it as a probable contingency that is also estimable. However, for most people this loss would not be material. It actually should be booked as an expense.

concretejungle · 07-03-08, 12:41 PM

Quote:

Originally Posted by re_guderian

'splain, please...

let me clarify, as i'm speaking of NC, don't know about other states. I would ASSume it's the same.

Every buyer has a closing attorney to do title searches, write up the deeds, close the property, prepare the HUD statement and go over all loan docs. They go over the docs with the buyers to explain what they are and where to sign. They then go to the courthouse and record the deed once the funds have been distributed.

As for the seller, they can choose any attorney to prepare the seller docs and then mail them to the closing attorney.

So, in NC, there is always an attorney involved representing the buyer.

wob · 07-03-08, 12:41 PM

Quote:

Originally Posted by PHBeerman

I was booking it as a probable contingency that is also estimable. However, for most people this loss would not be material. It actually should be booked as an expense.

Contingent liability.

Of all people, I should have known that.

smkymntn · 07-03-08, 12:42 PM

In florida it was title company- in NC attorney.

PHBeerman · 07-03-08, 12:42 PM

Quote:

Originally Posted by wob

Contingent liability.

Of all people, I should have known that.

Damn Finance guys.

concretejungle · 07-03-08, 12:43 PM

Quote:

Originally Posted by GeoRoss

As to the question, it is a crisis to people in depressed markets who need to sell. My wife has a colleague that took a job in another state. He is having a bitch of a time selling his house that he bought several years before the peak. It is a crisis to him.

Yes, i would agree with you on that one. That is a terrible position to be in right now.

That is totally different then trying to get out from under a stupid decision.

Fast Eddy · 07-03-08, 12:47 PM

[quote=[B]re_guderian[/b] ]I agree with you, but... how many people actually have an "attorney" present at closing?

Quote:

Originally Posted by concretejungle

EVERY buyer.

My most-recent closing (3 years ago) was done via fax and fedex. It was less paperwork than buying a car. No attorney fa sho.

tcb · 07-03-08, 12:52 PM

Quote:

Originally Posted by re_guderian

Must be state specific. I have bought and sold 3 houses and some land, and only used an attorney once. I recommend it, but had no idea some states require it. Who's attorney is it? One hired and paid for by the purchaser? or someone associated with the title company? JD with specialty in RE?

Quote:

Originally Posted by concretejungle

let me clarify, as i'm speaking of NC, don't know about other states. I would ASSume it's the same.

Every buyer has a closing attorney to do title searches, write up the deeds, close the property, prepare the HUD statement and go over all loan docs. They go over the docs with the buyers to explain what they are and where to sign. They then go to the courthouse and record the deed once the funds have been distributed.

As for the seller, they can choose any attorney to prepare the seller docs and then mail them to the closing attorney.

So, in NC, there is always an attorney involved representing the buyer.

Answered better than I could...

Cube Dweller · 07-03-08, 01:40 PM

Quote:

Originally Posted by tcb

Interesting....

Did not know that. I've bought 2 houses in MS and one in TN and an attorney was present for the closing at each of them. I always just thought it was universal.

Learn something new every day.

No atty in CA either. Think it's more of a midwest to east coast thing.

Cube Dweller · 07-03-08, 01:41 PM

Quote:

Originally Posted by concretejungle

let me clarify, as i'm speaking of NC, don't know about other states. I would ASSume it's the same.

Every buyer has a closing attorney to do title searches, write up the deeds, close the property, prepare the HUD statement and go over all loan docs. They go over the docs with the buyers to explain what they are and where to sign. They then go to the courthouse and record the deed once the funds have been distributed.

As for the seller, they can choose any attorney to prepare the seller docs and then mail them to the closing attorney.

So, in NC, there is always an attorney involved representing the buyer.

In CA, the preparation of documents is done by a title company. When you buy and sell, you work with the escrow/title agent to sign the docs.

concretejungle · 07-03-08, 01:52 PM

interesting. I could see how the transactions and signed documents could get a little sketchy then. I would rely heavily on a RE agent that knows what they are doing.

89GASHOG · 07-03-08, 03:06 PM

Of course it's a crisis! Folks losing their homes, due to financial incompetence or not, is a problem. Banks holding bad loans and properties they can't unload is a problem. The resultant weak dollar and troubled economy effects us all.

re_guderian · 07-03-08, 03:51 PM

Quote:

Originally Posted by concretejungle

interesting. I could see how the transactions and signed documents could get a little sketchy then. I would rely heavily on a RE agent that knows what they are doing.

I rely on reading them, and doing the math beforehand.

Look, they really aren't any more complex than say your average monthly phone bill, a typical IRS form, or a software end-user license agreement, right?

But seriously, if you need a lawyer to tell you what "ARM" stands for, and to recount what's stated in the repayment schedule, you likely are gonna get screwed, lawyer present or not...

And are these really "lawyer" lawyers? Like 3 year JD program "lawyers"? Sitting in the room with you for 45 minutes while you read and sign everything? Like bar-certified lawyers?

re_guderian · 07-03-08, 03:54 PM

Quote:

Originally Posted by 89GASHOG

Of course it's a crisis! Folks losing their homes, due to financial incompetence or not, is a problem. Banks holding bad loans and properties they can't unload is a problem. The resultant weak dollar and troubled economy effects us all.

funny how it's all roses when everyone's house value shot up by 100% in 3 years, but when the market corrects, as it had to, it's a crisis. In my area we had kids with high school diplomas and no stable "career" type income buying "starter" homes at $250K or more. That just can't last, there isn't/wasn't the income to support it, nor the demand for everyone to be a landlord and/or flipper. "Correction" is better than crisis. Same will happen with oil...

LukeO · 07-03-08, 04:47 PM

Quote:

Originally Posted by re_guderian

funny how it's all roses when everyone's house value shot up by 100% in 3 years, but when the market corrects, as it had to, it's a crisis. In my area we had kids with high school diplomas and no stable "career" type income buying "starter" homes at $250K or more. That just can't last, there isn't/wasn't the income to support it, nor the demand for everyone to be a landlord and/or flipper. "Correction" is better than crisis. Same will happen with oil...

I can't wait for the oil correction

07-03-08, 12:42 PM	#44
smkymntn Colonel Angus Join Date: Feb 2008 Location: up in the clouds TLCA# 18436 Posts: 644 Blog Entries: 4	In florida it was title company- in NC attorney. __________________ 1986 Toyota Landcruiser FJ60 "The Colonel" 2002 Toyota Tacoma Limited DC 4x4 "Hi-Ho" 1999 Toyota 4Runner SOLD "Marshmellow" Upstate Cruisers TLCA#18436

07-03-08, 01:52 PM	#51
concretejungle IH8MUD Tour Guide Join Date: Oct 2003 Location: North Cadillac TLCA# 14646 Posts: 5,981	interesting. I could see how the transactions and signed documents could get a little sketchy then. I would rely heavily on a RE agent that knows what they are doing. __________________ 95' FZJ80 OME med./J lift, ARB rack, ARB Bull Bar w/tmax 12,500, 315 Nitto, stainless brake lines, Center Diff Lock, Sliders, IPOR Skid, IPOR rear bumper, upgraded slee sticker, custom dents, more to come. . . Remember it's a gateway drug, so it will actually lead to "crystal meh".

07-03-08, 03:06 PM	#52
89GASHOG IH8MUD Addict Join Date: Oct 2003 Location: Latitude 58 Posts: 668	Of course it's a crisis! Folks losing their homes, due to financial incompetence or not, is a problem. Banks holding bad loans and properties they can't unload is a problem. The resultant weak dollar and troubled economy effects us all. __________________ Bret Juneau, Ak 1989 FJ62 3FE 122K 1992 Toy short cab 4x4 22RE 175K

07-03-08, 12:24 PM	#33
LukeO IH8MUD Regular Join Date: Aug 2004 Location: absolutely surrounded by V Posts: 332	The problem was artificial appreciation. Partially driven by both large and small investors trying to make a quick buck with the banks playing right along with these inflated artificial values. As well the White House used the housing industry as a quick economic fix after 911 which promoted this stupid behavior of banks giving loans to any and everyone. Basically burnt the candle at both ends. The housing market is now correcting itself. Fortunately our market (which has been affected too, by other markets) is more conservative. And I don't mean conservative in today's political sense since self proclaimed conservatives ain't conservative by any means. However local construction permits have been free for all (to increase the tax base without neccessary infrastructure as usual) for too long.