Who's Going to Buy My House, the Sequel.
My my my,
How things have changed since last we visited this subject! But first, what is the same. My kids are fine, just noticeably larger as my 12 yr old son is sharing my 46 yr old shoes. Of course, I can never remember where they are anymore. And apparently I cannot remember to restock the fridge either. My mind must be going.
In my original post on this subject, I spoke of my amazement at the price of housing. I spoke of how it was unaffordable and my concern that there would be no one to buy my house when I am done with it.
And in response TMFBent mentioned something about sub-prime loans! He pointed out that as long as there were ARM's available at teaser rates, my house would sell! Well what now Mr Jayson? Seems things are royally screwed up now! Well point the finger, load the cannon, and light the fuse! Lets have us a witch hunt! Blame must happen!
But who? Them, us, the other guy? Her? Who, who, who?
Well, how about the idiots who did not understand their loans? We could blame them. And the schools who graduated the blamed idiots? We could blame them. Maybe the home buyers were on drugs? Then we could blame the failed war on drugs. Maybe the buyers were on prescription drugs? Everything looks rosy to them. Then we could blame the Doctors or the Pharmaceuticals. Sue Merck! Or the well-trained real estate people that told us real estate always goes up (I heard that one personally). Maybe these buyers did not have lawyers to warn them. Blame the lawyers! Maybe the loan paperwork is to complicated for a HS graduate. Maybe it is to complicated for a College graduate. Blame the paperwork!
Maybe it is all Hype? Some one suggested that the other day. Relax they told me. It is not that bad, relax. Yes thats it, relax. In NY State foreclosures are up only 18%. It only sounds like alot. relax.
Maybe there is an answer.
Maybe to graduate each year of grade school you should have to fill out a tax return. A real tax return. Just insert credits for income. And maybe to graduate each year of High School you should have to fill out a real tax return. For a real person. With a shoebox full of receipts, and dividend income and stock losses, and if you miss three deductions you fail. I bet our teachers don't do their own. And if we cannot graduate maybe we will have to simplify the form.
And contracts. How about limiting the contracts to two pages. One side only. My mortgage could be this easy:
You are borrowing 200,000. from the bank. You are paying the bank back 400,000. The bank expects 360 equal payments of 1111.11. One payment each month for the next 360 months. Miss one and you will be put in the street. Sign here.
That leaves the better part of two pages for more complicated loans.
So, to those of you looking to trade up. Relax! The value of the house you own will adjust. The value of the house you buy will adjust. In the meantime work hard, save money, and pay cash.
To those of you about to enter the housing market. Things might be looking up for you! But be careful, your wife is nesting and the pressure to settle down is mounting. If I was you I would like to think I would wait and see if houses get a little less pricey. But I cracked. I hope your wife lets you wait a little. In the meantime, work hard, save money, and pay cash.
To those of you caught up in this mess. Stop reading this shit and get a second job. Kiss Starbux goodbye and plant a grarden. Abercrombie is nice but fleece from Target will keep you warm and dry. Bankruptcy may not be an option for you. I remember the laws changed four years ago. It is almost as if somebody knew something was coming.
To the Government By the People and For the People, thanks for not letting things get out of control, maybe additional less goverment and regulation is the solution. So far it has worked for the lenders. I believe the usual compliment after competency like this is "Nice job".
Oh, and what about my house you ask? I'm a lucky one. I can pay for my house. And someday someone will buy it. But I may not get $650,000 like my neighbor across the street did. But then I never believed it was worth that much anyway.
But I better not get sick. Nobodys finances survive that anymore. But that is a blog for another day when we all get back to reality based planning.
So, is this sub-prime lending collapse the end of the world? no. Is the worst yet to come? maybe. Is life going to get a little tougher? probably. Well guess what. relax. then work hard. make plans. deal with it. It is all anybody has ever done anyway.
Step one relaxing, tomorrow step two, I've got nothing else to offer you.
Oh, I've also got this:
Everything works out in the end. If it has not worked out yet, it just isn't the end.
Sorry, I know it is not much.