Mortgage idiocy - Page 2 - PeachParts Mercedes-Benz Forum

Hatterasguy · #16 09-09-2009, 05:15 PM

Typical morons, see that type all the time.

My favorite are the ones who suck the equity out with multiple refinancings.

I was trying to buy one this week, and could have, had the kids not sucked all the equity out to buy cloths and other BS.

Interest only loans and ARM's are great, for professional investors. Commercial is usualy set up that way. Problem is they started selling them to uneducated people.

Hatterasguy · #17 09-09-2009, 05:17 PM

Quote:

Originally Posted by al76slc

Multiply that story by 10,000 - in the same paper today ....

Buyers of Huge Manhattan Complex Face Default Risk

Three years ago, the sale of the 110 red brick apartment buildings at Stuyvesant Town and Peter Cooper Village in Manhattan amounted to the biggest American real estate deal of all time.

Now the buyers are running out of time and money. Jerry and Rob Speyer and their partner, BlackRock Realty, who together paid $5.4 billion for the quiet middle-class redoubt near the East River, have nearly exhausted an additional $890 million set aside for apartment renovations, landscaping and interest payments. Rents are down 25 percent from their peak.

Real estate analysts say that the partnership’s money will run out as soon as December and that the owners are at “high risk” of default on $4.4 billion in loans. Two real estate executives who have been briefed on the finances insist that the owners can hold out, but only until February.

On Thursday, the partnership will go before the Court of Appeals in Albany to try to overturn a lower court decision that could force them to pay hundreds of millions of dollars in rent rebates to thousands of tenants.

Regardless of the outcome at the Court of Appeals, Stuyvesant Town and Peter Cooper Village are in trouble. City officials have been monitoring the looming crisis, worried that the financial problems could eventually lead to default, deferred maintenance and disinvestment at a complex that has served as an oasis of affordability in Manhattan for middle-class New Yorkers. Some 6,875 of the 11,227 apartments at the two adjoining complexes are rent regulated.

Rest here...http://www.nytimes.com/2009/09/10/nyregion/10stuy.html?hp

Didn't anyone have any brains????????

Well thats a totaly different ball game. No one foresaw the market crashing as badly as it did, any business that loses 25% of its income is going to be hurting.

Besides owing billions is better than thousands, for starters they are not personaly liable. Their lenders will work something out, either get rid of those guys and bring in new blood to run it, or sell it to someone else.

pj67coll · #18 09-09-2009, 05:30 PM

I agree. I've never understood why anyone would touch anything but a 30 year fixed mortgage for a house. Professional investors? sure, but they are nothing more than gamblers and gamblers eventually get burned. Unfortunately all this has screwed it up for many others who tried to do it the right way. My wife and I wound up losing over a hundred thousand bucks in a year. That's over fifty percent of our houses value. We are basically screwed for the forseeable future. The only good thing is that as we can currently afford the payments we wont be on the streets in a few years thru our mortgate readjusting. Of course if I lose my job...

- Peter.

DieselAddict · #19 09-09-2009, 05:40 PM

Quote:

Originally Posted by pj67coll

I agree. I've never understood why anyone would touch anything but a 30 year fixed mortgage for a house. Professional investors? sure, but they are nothing more than gamblers and gamblers eventually get burned. Unfortunately all this has screwed it up for many others who tried to do it the right way. My wife and I wound up losing over a hundred thousand bucks in a year. That's over fifty percent of our houses value. We are basically screwed for the forseeable future. The only good thing is that as we can currently afford the payments we wont be on the streets in a few years thru our mortgate readjusting. Of course if I lose my job...

- Peter.

You may have tried to do it the right way, but it sounds like you didn't. Sounds like you bought near the peak of the bubble. We bought our house near the beginning of the bubble and much beyond that I would have waited it out and keep renting. I believe our house value is currently more or less where it was 5 years ago.

GTStinger · #20 09-09-2009, 05:52 PM

I got lucky with my timing and location. Bought in 2001. Since then, a highway interchange and a new hospital have been added within a couple miles. Resale value now is probably about 30% above the '01 sale price.

Now my neighbor across the street bought at the height of the bubble and is upside down on an adjustable no income verification "liar" loan.

pj67coll · #21 09-09-2009, 06:09 PM

Quote:

Originally Posted by DieselAddict

You may have tried to do it the right way, but it sounds like you didn't. Sounds like you bought near the peak of the bubble. We bought our house near the beginning of the bubble and much beyond that I would have waited it out and keep renting. I believe our house value is currently more or less where it was 5 years ago.

Unfortunately true. We bought after the peak but before the crash. Basically timing is everything and we were too early in our timing. Unfortunately pure market economics is not always everything when making some decisions. The house had already depreciated by almost 70 thousand when we bought it for 200. We figured it probably wouldn't go much lower. I'd say that within the last year and a half it's dropped by by over 100 more. The only good thing is that we were able to reduce our rate by a percent to five but that's small consolation when viewed against the overall balance sheet.

- Peter.

tankdriver · #22 09-09-2009, 07:06 PM

Quote:

Originally Posted by Hatterasguy

Problem is they started selling them to uneducated people.

Yup. Easier to sell to them. And people can usually find something better to do than educate themselves.

Hatterasguy · #23 09-09-2009, 07:14 PM

Professionals are gamblers? Thats laughable.

All the morons who decided to speculate on condos in FL, who have never bought a property in their life other than a personal residence are gamblers.

Hatterasguy · #24 09-09-2009, 07:16 PM

Quote:

Originally Posted by tankdriver

Yup. Easier to sell to them. And people can usually find something better to do than educate themselves.

Thats the problem.

Most people don't realize that most commercial paper is interest only, usualy 5 or 10 year balloons. Thats the way its been forever.

The problems started when you offered Joe six pack the same note and all they see are the low payments for the first 5 years. They don't fully comprehend what a refi means when property values tank.

Ara T. · #25 09-09-2009, 07:17 PM

Quote:

Originally Posted by 280EZRider

It's a shame the American public has become a nation of bufoons who "must have it" when they can't afford it. This is the root of the finnancial crissis, which has obviously spawned these interest-only loans. And this poor guy (“Everyone out here always preached to me, ‘Buy real estate. It’s the best investment you’ll ever have,’ ” said Mr. Moller, who grew up in Iowa) is doing nothing more than renting. He has no equity.

Seems like this isn't anything recent, probably has been around since easy credit (before the Great Depression).

DieselAddict · #26 09-09-2009, 08:24 PM

Quote:

Originally Posted by Hatterasguy

Professionals are gamblers? Thats laughable.

All the morons who decided to speculate on condos in FL, who have never bought a property in their life other than a personal residence are gamblers.

A lot of professionals are gamblers, especially those on Wall Street. Just about everyone thought property values would keep going up. That's the same exact mindset of a gambler who thinks he'll keep on winning.

pj67coll · #27 09-09-2009, 08:27 PM

Quote:

Originally Posted by DieselAddict

A lot of professionals are gamblers, especially those on Wall Street. Just about everyone thought property values would keep going up. That's the same exact mindset of a gambler who thinks he'll keep on winning.

Correct. As for how long this has been going on. Check out "The Ascent of Money" by Niall Ferguson. Either on Youtube or in the bookstores.

- Peter.

Hatterasguy · #28 09-09-2009, 09:25 PM

What if you don't buy counting on appreciation? What if you buy for cash flow and than force appreciation through capital improvements? Buy below market? Develope raw land? Their are more ways to make money in RE than I can ever imagin.

I know people who are making a lot of money even in this market by flipping SFH's, in AZ to boot.

But I do agree with you, buying a property at FMV and only counting on appreciation to make you a profit on it is rather foolish. Speculating at best.

E150GT · #29 09-09-2009, 09:54 PM

Quote:

Originally Posted by Hatterasguy

What if you don't buy counting on appreciation? What if you buy for cash flow and than force appreciation through capital improvements? Buy below market? Develope raw land? Their are more ways to make money in RE than I can ever imagin.

I know people who are making a lot of money even in this market by flipping SFH's, in AZ to boot.

But I do agree with you, buying a property at FMV and only counting on appreciation to make you a profit on it is rather foolish. Speculating at best.

I agree with this, but, its still a gamble. I dont think that any money making venture is without its risks and gambles though.