O.T. Next financial bubble to burst.

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Canadian property bubble, followed by general collapse due to dependency on exports to the USA. After that Australia. Saw it on Russia Today so it must be right. Kieser report. He's been pretty accurate so far. ?
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harry wrote:

House and condo prices have declined during the past 6 months to a year, or have showed zero growth during that time frame.
The differences betweed US and Canadian residential real-estate markets are:
1) No ARM's, no no-money-down mortgages here in Canada. 2) Anything less than 25% down requires mortgage insurance. 3) Very little speculation done by the average home owner (ie - very few second homes being purchased out of pure speculation) 4) We don't have the equivalent to Nevada, Florida, or other locations where second homes used as vacation homes can be built 5) We can't deduct mortgage payments from income tax, which limits speculative home buying and bubble-forming price increases. 6) Our banks did not re-package mortgages into fancy derivative- based products, and because of that our banks did not and do not cut corners when qualifying potential mortgage borowers.
You can't look at the headlines about Vancouver or Toronto's high house prices and extraplolate them to the rest of Canada.

We've had the loss of the Auto Pact, followed by 3 consecutive years of the Canadian dollar being over-valued by 15% because it's been pegged at 95 - 99% of a US dollar. Still lots of oil, natural gas and electricity being shipped to the US from Canada, but our economy is slowing becoming less export-driven and more domestically driven.

Don't count on it. Look for more pain from a handful of Euro-zone countries way before Canada or Australia.
Mexico will continue to deteriorate, their self-destruction fed by US-made guns flooding south across their border.
Conditions in the US will also get worse - "security" budgets will continue to spiral out of control as the US wages it's "War on Terror" (tm) against it's own citizens. The "War on Terror" is a lot like fighting cancer with chemo-therapy: It doesn't seem to matter how many good people you harm (financially, psycologically, morally) in order to detect, apprehend or (rarely) kill a handful of bad people. The end result will be to create a culture of control. What you see now is just the beginning.
It's really sad to sit here in Canada and watch you Americans consume yourselves over this terrorism pretense as you allow your gov't to destroy the very ideas of personal freedom and liberty your country was founded on. We watch your local TV news, your national 6:30 pm network news (which reported last night that your restaurants and grocery stores are now on the lookout for food poisoning performed by home-grown terrorists). If I believed in a god, I would be thanking him that I'm a Canadian living in Canada.
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There are more differences:
7) Canadian homebuyers cannot refinance an existing mortgage at a new, lower rate, without paying a penalty to do so. That penalty is formulated to make it financially unfeasible to break the original contract.
8) Canadian homebuyers cannot escape their legal obligation to fulfill the terms of the contract (i.e.: pay it off) by simply handing in the keys and walking away from the home.
9) Unlike the US, Canada does not use legislative and policy measures to force banks to tease people into real-estate debt.
The US housing bubble was created by the shiploads of artificial credit conjured up by the Fed. Canada also creates artificial credit, but not to the same extent, and without accompanying legislative idiocies like the Community Reinvestment Act.
--
Tegger

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harry used improper usenet form when he unnecessarily full-quoted:

You sell your house. What's what happens.
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harry wrote:

That hasn't happened in Canada. House prices here have not declined. At worst, they've remained static over the past 2 or 3 years in most markets. In other markets, they have still increased.
Have a look at this document:
http://tinyurl.com/2uoxzef
Look at the table of numbers on the last page (page 10).
You'll see how the year/over/year percentage change in house prices have changed since 2000 for various western countries.
The UK has had some major Yo/Y figures (8 to 15%) during 2000 to 2004, followed by a crash of -4 to -10% during the years 2008 to the present. Far larger increase and decrease than even the US has seen, but the US has been in negative territory since 2006.
Japan has been in negative territory for this entire decade.
Ireland is seeing MAJOR negative Yo/Y numbers in 2008, 2009 and 2010 (-10 and -20%).
Spain has been negative since 2008. Australia has been posting erratic numbers this decade, almost all positive, but very high numbers lately (10+ percent this year).
France has been posting negative numbers since 2008, and Germany for this entire decade (what's going on there?).
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Because Canada never goosed the market with the same stupid incentives the US did. If there is a correction, it will likely be quite small. You must also remember that Canada has very few large urban areas, so there are not many places you can move where there are a significant number of jobs. It's not like the US, where you can just move a few hours away and have much lower taxes but the same employment opportunities.
Even the US meltdown was concentrated primarily in areas where it was possible for underwater homebuyers to walk away without penalty, like California and Arizona.
--
Tegger

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In most of the US, you walk away from it and incur no penalty other than forfeiting what little equity you might have. That's a consequence of law.

In Canada, you are legally obligated to pay the dollar-amount owing, whether you walk away or not.

Not in the US. In the US, government entities Fannie Mae, Freddie Mac and FHA eat the difference, not the banks or the ostensible homeowner. That too is a consequence of law. The law was specifically and particularly designed to insulate banks from risk of borrower default, so that banks would be more willing to lend to deadbeats.

Congress and the executive branch feverishly and maniacally continue to push the public into real-estate debt, as though 2008 never happened. Unreal.
One day, perhaps centuries hence, history will look upon the modern debt- fetish the way we now regard Mayan human-sacrifices.
--
Tegger

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wrote:

People are starting to find out that is not true. Back in the olden days when a bank could recover all of what it was owed in the foreclosure sale they let people walk away but now that the loan are more than the house is worth they are coming after the owner for the difference. The only out is bankruptcy.
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On 12/22/2010 11:40 PM, snipped-for-privacy@aol.com wrote:

I believe they're sending 1099 forms to the IRS for the amount not recovered in the foreclosure. You have no money to pay the mortgage and you give the house back to the bank, the bank sells the house at a loss and you get a 1099 for the amount of the loss. The IRS comes after you for the amount on the 1099 as income. Anyway, you get screwed unless you take precautions with other paperwork maneuvers.
http://illinoislawnews.net/?p67
TDD
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On Wed 22 Dec 2010 11:11:25p, The Daring Dufas told us...

But that should not be the case if the house was included in a bankruptcy?
--

~~ If there's a nit to pick, some nitwit will pick it. ~~

~~ A mind is a terrible thing to lose. ~~
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On 12/23/2010 1:10 AM, Wayne Boatwright wrote:

I haven't researched it fully but I think there is some legal maneuvering to protect you from the IRS since you lost your home rather than some investment property. "Boys, we won't get any blood out of this turnip. Let's get after the next one."
TDD
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On Thu, 23 Dec 2010 00:11:25 -0600, The Daring Dufas

No, home loans that are discharged are not taxable income. Other discharged loans *are*.

There is something wrong here. Forgiveness on mortgage loans is not taxable.
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You're right, but it was a fairly recent change in the law -- in the last couple of years. -- Doug
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And, IIRC, it will sunset around 2017 or so.
--
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
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That's a lie. Under any foreclosure (and handing the keys in to the bank is a foreclosure) the borrower is *still* responsible for the entire loan, unless discharged in a bankruptcy (which is difficult to do).

The US is no different.

Not true. The bank gets it money, but the borrower is still on the hook for the money.

Nonsense.
Clueless.
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Yes it is. The US is completely different. America invented artificial credit in December 1913, and America continues to invent more of it, causing reciprocal infections in other parts of the world.

Nope. Buyers lose their equity, and their credit rating tanks, but they're still off the hook for the remainder. That's how the banks ended up with so many "foreclosed" properties on their books.

Sorry, but it's completely true. It's happening now. Look it up.
Specifically, look up what the FHA is now doing under orders from Congress, and look up how Congress removed the caps on how much low- quality debt Fan and Fred are allowed to buy.
--
Tegger

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wrote:

The bank still has the right to pursue the former owner for costs and any outstanding balance from the foreclosure sale. (I know someone facing that as we speak) Read the terms of your mortgage it may even be spelled out there that you agree to pay. That is likely if this is a post 2000 loan.
In any case you can get sued for just about anything in the US. Bankruptcy will generally get you off the hook if you can take it.
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On Thu, 23 Dec 2010 21:19:55 -0500, snipped-for-privacy@aol.com wrote:

If you can *get* it. Even bankruptcy is means tested. It's rare that the borrower will get off completely.
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cluelessness.
You're simply *wrong*. You really haven't a clue. Just because you turn in your keys doesn't let you off the hook for the remainder of the contract, unless the lender *allows* it. Often they will (short sale) so they don't lose even more, but they're under no obligation to unilaterally release you from your obligations.

You're wrong here, too. Credit is much tighter. Yes, silly things are still being done, but it's not as you suggest.

To cover the banks, yes. They are also going after banks that made (and packaged) bad loans under iffy or fraudulent circumstances. You simply don't know what you're talking about.
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On Thu, 23 Dec 2010 20:43:15 -0600, " snipped-for-privacy@att.bizzzzzzzzzzzz"

You're both wrong. Depends on the state. Look up "deficiency judgement."
--Vic
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