OT: Drop in value of homes

[gfretwell]

Before 1986 it was

[Tony Hwang]

Hi, I was taught to buy only what you need when you can afford. Living by the rule I ended up living comfortably without any debt. People buy what they want, not need regardless of their ability to pay for it. Your government is leading the example running into deep deep deficit.

[cshenk]

"aemeijers" wrote

Yeah, what a concept! We calculated my anticipated retirement if I did not advance (I was an E6 when we bought and now E8), my husbands retirement of a little under 1,000$ then (a bit over now). Payments were roughly 750$ mo (includes taxes and insurance) but opted for the 'pay every 2 weeks' schedule about 2 years into the loan which makes each slightly lower but pays an extra 4 payments a year for a 25 year payoff vice 30. We even throw a little extra cash at it now and again which comes right off the principle.

We owe about 45,000$ still 12 years later . In real money? Cost of a reasonably top market car bought new.

Mine's not fancy either, but it's nice enough and at the price, we can afford to keep it up right.

[cshenk]

"Nate Nagel" wrote

Luck to thy wings there Nate! In our case, last time we checked, they were not that interested because we don't owe that much left comparitively. We'd be refinancing about 45,000$.

Oh we did get dumb and had to use a small second mortgage for credit debit rollover, but thats almost all paid off and we have money in the bank which is more than that second total if we want to do that. It's at 8% and we get tax credit for it. Owe about 3,000$ there. When we do the taxes this year, will see if we are still getting a net savings with that one or if we need to clear it out as a net loss. So far, it's actually bumped our bracket just enough to result in a net savings. Wierd how that can work.

[hallerb]

90,000 ortages are in foreclosure at countrywide..... while CEO of that company spends lavishly of 750 buck a nite hotel rooms

[trader4]

Now I do agree that the compensation of the CEO at Countrywide was totally out of line and had no relation to his actual performance. However, here's the problem with populist notions about things like this. How, exactly would you propose to fix it? Far too often, people look at microscopic detail of a few bad apples and then want to change things that would have to impact not just the bad apples, but everyone. Yet, the same system and rules has produced GE, Intel , MSFT, etc.

So, how exactly would you propose to stop the CEO from spending $750 a night on hotel rooms? BTW, I have no problem with that. Staying in places like NYC or SF isn't cheap. I do have a problem with him getting compensated $100mil+ a year, including a severance package for an amount in that range which got activated when Countrywide was taken over.

I'd be very interested to hear exactly how you propose to fix this without impacting the whole entrepernurial free enterprise system that has made this country so successful.

[trader4]

as Vegas. =EF=BF=BDI

=BF=BDNo waiting. =EF=BF=BDNo

Boy, your cup sure is always half empty, ain't it? Credit card companies have been charging high rates for ever. I guess you don't think anyone ever defaults on those credit cards and they never get paid. If you think you can earn a profit and do it for less, go start one. The fact that there are plenty of smart people with a lot of money that aren't running up to do so suggests that the rates are probably about right.

And if this economy is so damn bad, what did you think about the late

70's?

You think any of that gas price might be due to the fact that the politicians won't allow drilling off the coast in most areas of the US? Or allow drilling in ANWR? Or that no new refineries have been built in the last 25 years?

[N8N]

Agh, I hate you so much right now. Not that you've been offensive in any way, but we're trying to refi about $400K... I just can't understand how people are buying all the McMansions around here when an old, modest three (tiny) bedroom house is going for almost half a mil...

nate

[cshenk]

"N8N" > Luck to thy wings there Nate! In our case, last time we checked, they

Sorry there! It's all about location. I live in a cheaper housing area (Norfolk) than you do obviously.

[Kurt Ullman]

Closer than that. I can remember all sorts of economist hang wringing over getting into inflationary employment levels as late as the mid-90s during the Tech boom.

Take any 20 year period (including post bubble) post WWII and you still find that the stock market goes up an average of around 8% per year. (ANY 20 year period. 1980 to 2000, 85 to 05, 50 to wo

[hallerb]

hang wringing

well i certinally hope all these relax everything is fine dont worry things are great are REALLY as wonderful as you believe......

my point about the feds pumping money into the economy is that this means they believe things arent good.............

and they need to do something about it.......

my concern is that the entire US economy is based on consumption and the housing and other indicators may be showing a collapse of their base.

time will tell, but over 10% in mortage default hasnt been seen since the depression of 1929..........

[hallerb]

on the cost of gasoline, we cant produce our way out of this. alterntives must be found. because we are shipping billions weekly to oil rich mid east terrorist breeding grounds. they love our money but hate us as a people

[trader4]

Another populist misconception. Oil is a worldwide commodity. If the US reduced it's dependence on oil from mideast countries, that oil would just be sold elsewhere to places like China and India. How much money do you think it takes to finance terrorism? It's not billions and doesn't require vast oil revenues. Iran is on the short list of the top terrorist financiers. How much oil does the US buy from them? Zilch!

And the notion that you could then just ignore what goes on anywhere and they won't bother you because you don't need their oil ignores the lessons of history. How much oil did Germany have?

[dpb]

Make that 20+ -- it has been so long I had actually forgotten it, but it was the Tax Reform Act of 1986 that repealed it.

The above ascribed motivation is, however, still incorrect --

FAQs: Taxes Deductions & Tax Liability

IMPORTANT MESSAGE: We have compiled the list of questions below based on inquiries that we receive. This information is generic in nature regarding tax policy questions and is NOT intended to serve as tax advice. We also cannot provide up-to-date information on any Administration or Congressional proposals that may affect the information shown herein. Any questions regarding specific tax situations or for help in filling out your tax return should be directed to your attorney, accountant or other tax professional, or to the Internal Revenue Service. The IRS will not comment, though, on the legislative merits of current tax law, or on pending Congressional action that may change the tax code. Finally, we make every effort to make certain that the information contained here is accurate, but due to the fluid nature of the legislative process, changes in tax laws may occur that are not reflected here at the time of publication. To the best of our knowledge, this information is accurate.

Question Why can't I deduct "personal" interest expenses when I purchase a car, or for the interest on my credit cards?

Answer The deduction for personal interest, including interest on charge card purchase of consumer items, was phased out by the Tax Reform Act of

1986. Congress believed that the deduction for personal interest encouraged people to consume and that such consumption was at the cost of savings. At the time, the American savings rate was declining and, unfortunately, the private savings rates continues to remain low. To eliminate the significant disincentive to savings, Congress repealed the itemized deduction for personal interest other than mortgage interest.

So, "greed" played little in the decision; it was an attempt to influence a more responsible consumer attitude by monetary/taxation policy.

--

[Oren]

Looking back now, it was a good policy. Credit card interest escalated to 20% or more under Jimmy Carter.

I remember long gas lines in the 70's, 5 lbs. sugar was nearing $6.00.

I hope Congress will do the right thing and not tax the Internet!

-- Oren

[Phisherman]

They can charge whatever they want. People agree to pay when they sign the credit-card agreement. People also have the choice to pay off the credit card balance in full at the end of the month. Greedy comes to mind when I think about oil companies, insurance companies and pharmaceuticals. It's about time people (and the US government) took financial responsibility and buy only when you have the cash to cover your purchase. I think my home dropped 50K, but I don't care since I'm not selling in the near future. Truly, it's a bad time to sell a house. I wish the government would stop trying to control the economy (rah rah for Ron Paul!).

[JC]

Now I do agree that the compensation of the CEO at Countrywide was totally out of line and had no relation to his actual performance. However, here's the problem with populist notions about things like this. How, exactly would you propose to fix it?

I wouldn't propose to fix it. It is not a problem. It is, if anything at all, a matter between the board of directors and the stockholders, nothing else. And if the stockholders don't like it, they know how to fix it. Apparently, they must like it. So why should anyone else be concerned, except out of pure jealousy?

[hallerb]

if you look at a chart of oil use growth over the last 20 years another 20 years the curve will rise exponentially exhausting all the worlds usable oil.

meanwhile we enrich the terrorists

[Phisherman]

I guess my house dropped 50K or more, but it doesn't matter because it's not for sale. In many locations it is a very bad time to sell--if you can put off moving for a couple years you'll likely be in a better position as a seller.

[dpb]

Yes. Bringing it up as if a 20+ yr old policy targeted to the low savings rates of consumers as if it had any bearing whatsoever on the current sub-prime mortgage situation was simply ludicrous. Unfortunately, it had been long enough ago I had actually forgotten it was ever policy to allow personal interest...

And, of course, high interest rates were not on c-c interest only--CDs were paying 12% or more.

--