fuzzy math

my brother sent me this link, knowing my love for Detroit and my desire to be a homeowner. thing is, i dont think i can handle commuting from Detroit, MI to Fairfax, VA. my drive from DC is long enough, thanks.

anyway, the gist is that banks are basically giving away homes that they have foreclosed on so that they dont have to maintain them and pay property taxes. so banks gave loans on these things that the owners cant afford so the bank takes the house. the typical idea is that the bank sells the house to cover the cost of the loan, but here, the banks just want them off their books.

it seems like a better idea for the bank, the homeowner, the neighborhood, the city, pretty much everyone, if the bank and homeowner negotiate new loan terms to allow them to make a more affordable payment. i realize that perhaps the owner has lost their job in some cases and cannot make any payment. but if the situation is such that the owner took a pay cut, or one or the other spouse has lost income, a lower payment is still a payment and not a liability to the neighborhood and city.

it also seems that these houses are a great opportunity. the people who recently lived in the homes still need a place to live. at the prices they are offering, you could get into one of these and fix it up for under $30k, meaning you would have a mortgage payment less than $500 on a short term loan. many cars cost more than that. point being, you can make income the moment you rent a two or three bedroom place out for $600 or $800 a month.

you may notice that none of this has to do with the government. it makes sense for the banks, saving them money, and allows a new homeowner to keep their home. or, it gives someone a home and an entrepreneur a modest additional income. evicting people and giving away their homes is dime smart and dollar stupid if they can afford to pay something to stay there. its fuzzy math at best.

i agree with McCain

ive been thinking it for a while now. i havent really said much on it. but, seriously, why are we paying to bail people out of their loans. i feel for you if you got laid off, or your time or pay cut back, but if your just an idiot that signed up for a loan that you now cant afford, why should we as taxpayers bail your stupid ass out.

when you buy a home you should know what youre getting into. you should not buy at the top end of what you can afford. allow a margin of error. you dont know what might come up a month or a year down the line. and if you were stupid enough to sign an ARM and now your payments jump and you cant afford it, i have no sympathy for your dumb ass. you deserve to lose your home. if youre an investor or land lord who cant afford it, then just sell it already. oops, the housing bubble collapsed and youre losing an income property. at least you have your own home. to ask the government and thereby the taxpayers to cover your loss is ridiculous. man up and accept your misjudgment.

so im not all out liberal. im a fiscal conservative. and if youre an idiot who cant manage your money and assets, perhaps you desrve to take a hit, and maybe you and the rest of the world will learn from this and not be so eager to spend spend spend.

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