Saturday, April 02, 2005

A Lifetime Of Debt

The California Housing Finance Agency has thrown a "life raft" to residents looking to get in on the housing boom; a lifetime of debt. "A fixed-rate, 35-year loan -- an alternative to the mortgage industry's conventional 30-year loan -- offering buyers interest-only payments the first five years."

It is a sign of how entranced the public is with the housing bubble; in place of affordable housing, the government fills the gap with lengthy, low payment subsidies that will likely never be paid off. "The program also will apply to $647,000 existing homes in Santa Clara County, $643,000 homes in San Francisco and $620,000 houses in Santa Barbara County."

At least one group is enthusiastic. "It's aggressive and exactly what's needed at this point in California," said Michael Faust, legislative chairman for the California Association of Mortgage Brokers." The Modesto Bee


At 8:08 AM, Anonymous Anonymous said...

during the Japanese bubble, they had 100 year mortgages that were inter-generational.

we aren't there- yet. ahah

At 9:15 AM, Anonymous Anonymous said...

These dumbass politicians and their "housing assistance" and their easy credit are part of the problem, not part of the solution.

At 9:57 AM, Anonymous great caesar's ghost said...

I didn't think it was possible, but Michael Faust has supplanted Ron Shuffield ("South Florida is working off of a totally new economic model than any of us have ever experienced in the past") in the clueless housing bubble quote sweepstakes.

See that fire over there--douse it with this here gasoline.

At 10:14 AM, Anonymous Anonymous said...

I disagree somewhat, compared to ARMs, interest-only, and all that ballooning garbage, at least these are fixed.

At 10:46 AM, Blogger Ben Jones said...

(their easy credit are part of the problem, not part of the solution)

Right, but they have played their hand to the hilt. I guess they can't attack their own creation. Its sad.

(the clueless housing bubble quote sweepstakes)
Thats a great idea, we should keep a record of the things people are saying now, for historys' sake.

(at least these are fixed)
I understand the sentiment, but the money makers should have let the air out of the market long, long ago. I am afraid that regular folk will get sucked in by the loan, not helped out. The bubble has created a cruel situation for aspiring owners. Thanks for the comment..Ben

At 12:56 PM, Anonymous Anonymous said...

When we went to close on a refinancing few years ago the title lady said a 78 year old couple had just bought a house with a 30 year mortgage. I was refinancing on a loan because my prior loan was interest only. I never was notified it was interest only until I did the Math when I received my statemnts. I specifically said I didn't want interest only. Now I know why the payments were so low. I have an MBA and was astonished I was hoodwinked by this. Luckily I refinanced a year later with a great rate. Sometimes you just don't have the time to go over the terms of the loan, and when you are moving in on the day of the closing it is hard to have a clear mind with two kids and a dog and getting the kids in schools when the schools are full, blah blah blah. They'll tell you anything to get you to sign. I'll be renting for the next few years. It is just too scary.

At 3:11 PM, Blogger deb said...

Actually, the best quote on this really inovative new program was printed in LA Daily News this morning.

Theresa Parker, the agency's executive director, was quoted as saying, "What we're trying to do is create a loan product that would help people that don't really have sufficient income to qualify for these expensive houses."

Maybe, if the lenders weren't so busy "helping" people find inovative ways to saddle themselves with outrageous amounts of debt, the prices wouldn't have been pushed quite so far into the stratosphere!!!

At 4:27 PM, Blogger Ben Jones said...

deb nailed it.

"Maybe, if the lenders weren't so busy "helping" people find inovative ways to saddle themselves with outrageous amounts of debt, the prices wouldn't have been pushed quite so far into the stratosphere!!!"

At 8:06 PM, Anonymous Anonymous said...

So happy to learn that my California tax dollars are being spent to further inflate the housing bubble. As for me, I sold my house last year for a 70% tax-free profit (Thanks, Mr. Bush) and moved my family into a luxury rental where I'll stay with my family until the foreclosure era arrives. Here is the other side of the housing bubble: in my Santa Clara complex and those around it, vacancies are 15% or more, immediate occupancy is available, and rents are actually DOWN on 2BR units from $2100 to $1600 over the past five years due to lack of demand. Rich and poor alike are all being brainwashed that renting is for idiots, and now my tax dollars are subsidizing that nonsense as well.


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