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Thread: Lenders keep doing it, your 401Ks will soon be gone

  1. #10
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    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    Quote Originally Posted by Ground&Pound View Post
    I live within my means.

    For example, I have credit cards, but choose not to use them.

    If I had an emergency and NEEDED to use them, I would. However, I wouldn't buy things (a house included) if I couldn't afford it.

    I someone wishes to foolishly use their credit and they get burned, I have no sympathy for them.
    That's all good and well, Ground and Pound. You are to be admired for living within your means. However, this issue is kind of like pregnancy. We can talk all day about how our daughters and sons should or shouldn't do this, but we are ignoring reality if we think they're not going to get together. And there are real consequences. Same way with home buying. It's fine and dandy to criticize homeowners who made bad choices, but the reality is they're being made, and they're being made in part because there are sharks roaming the streets. And there are very real consequences. Do you know the theory about what happens to a neighborhood when people don't keep it up--and especially, when there are abandoned house due to foreclosure and eviction?

    We should all be talking to our sons and daughters about the pregnancy, and about the use of credit. But it's a different picture when you're looking at the public sphere. There, we have to deal with the reality of bad loans and its effect on our communities. "Well, they should have known better" is not a satisfactory solution in my book.
    Last edited by matclone; 08-29-2007 at 03:05 PM. Reason: spelling errors

  2. #11
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    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    Quote Originally Posted by Ground&Pound View Post
    What does any of this have to do you losing 401ks?
    I assume Big is referring to the adverse effect the subprime loans are having on Wall St, i.e., our 401K investments.

  3. #12
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    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    Quote Originally Posted by BonnieJ2 View Post
    Why would you even WANT to buy a house if you are both unemployed? Who's to say that you will find a job that's convenient to your home? Maybe you'll find a great job 60 miles away, or in another area entirely.
    I assume the thinking goes something like this: (1) a new home would be very nice; and (2) I'll get (or s/he'll get) a job soon and it'll all work out.

  4. #13

    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    But you are limiting your job search unnecessarily if you live in a large metropolitan area. Why not get the job first and then look for house nearby.
    "All my life I have tried to pluck a thistle and plant a flower wherever the flower would grow in thought and mind." -- Abraham Lincoln

  5. #14

    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    Quote Originally Posted by matclone View Post
    That's all good and well, Ground and Pound. You are to be admired for living within your means. However, this issue is kind of like pregnancy. We can talk all day about how our daughters and sons should or shouldn't do this, but we are ignoring reality if we think they're not going to get together. And there are real consequences. Same way with home buying. It's fine and dandy to criticize homeowners who made bad choices, but the reality is they're being made, and they're being made in part because there are sharks roaming the streets. And there are very real consequences. Do you know the theory about what happens to a neighborhood when people don't keep it up--and especially, when there are abandoned house due to foreclosure and eviction?

    We should all be talking to our sons and daughters about the pregnancy, and about the use of credit. But it's a different picture when you're looking at the public sphere. There, we have to deal with the reality of bad loans and its effect on our communities. "Well, they should have known better" is not a satisfactory solution in my book.
    That is a very noble thought, matclone. But, it leaves out one of the main principles of human nature, which is motivation or incentive. If we take away all the potential negative outcomes, people will not shy away from poor decisions. They will continue to make poor decisions because their are no incentives to make good ones. One of the beauties of a free society is that consequences are not limited. Because of that, one is allowed to bear the full brunt of a bad choice, thus giving him incentive to make better decisions in the future.

    I would, however, be an advocate of educating people in the ways of loans. People can seek out advice and education from a number of places, like local libraries, schools, tax advisors, banks, friends, credit counselors, etc.

    Sure, there are people out there who may make pie-in-the-sky offers, but they are and should be free to offer whatever they wish. Their services may be of use to someone in some special situation. When looking at the public sphere, the public always benefits from the free exchange of information and the most options possible. As long as lenders are following all applicable laws, the responsibility falls on the consumer to make sure that he is doing whatever he sees fit. If a lender is violating the law, may God have mercy on his soul, because the courts will eat him alive.

    We can only go so far in protecting people from themselves. At some point, people will have to make their own decisions and deal with the consequences of their own actions. That is the only equitable way.

  6. #15
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    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    I agree with your reasoning, Bonnie. I was just trying to put myself in their shoes. Based on the limited information we have, it sounds like it wasn't a wise choice for them to buy a house at this time.

  7. #16

    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    Quote Originally Posted by matclone View Post
    I assume Big is referring to the adverse effect the subprime loans are having on Wall St, i.e., our 401K investments.
    Isn't the DOW over 13,000? It looks like the markets are fine. If you're in the right mix, your retirement accounts will be fine. Just be vigilant.

  8. #17

    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    I can't believe anyone is dumb enough to pay $2000 or even $3000 a month for a mortage. I'd like to know what kind of house you get with a payment like that where you guys live.

    My parents just bought a 2500 sq ft house for about $200,000 with a pool, 2 car garage, 5 acres, well-landscaped and aren't paying near that amount for a mortage. Plus, they live in a secluded neighborhood, with literally no crime in our whole town.
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  9. #18

    Default Re: Lenders keep doing it, your 401Ks will soon be gone

    A 2,500 sq ft house with less than 1/2 an acre in my area goes for anywhere from $900k to $1.2 mil. If you put $600k down, your monthly mortgage will be around $4,500 per month, depending on a variety of factors, including whether you finance your property taxes, how many points, etc...

    California real estate is crazy though. If you were lucky enough to have bought a house ten or fifteen years ago, you're golden.

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