20% down mortages may return as the norm

[elitejp]

In china they need to pay 30% down on there house before they are allowed to get any kind of bank backing. But guess what the only time you hear of people losing their house is when the govt decides they need that space for building better houses or other such things, and of course they get market value for their house based on size and have the option to buy into the new housing. Americans owe way too much money because they believe they can borrow on everything and then have the govt help them when they dont have enough money. It may sound harsh but for the vast majority of the people out there you are where you are in life due to the choices youve made. Its time to take some personal responsibility.

 

[Thump553]

China's real estate market is the very epitomy of a bubble. And as you hinted on, their concept of eminent domain is draconian. It is exercised far more often than in the USA, and you must accept the buyer's/government price-there is no effective right of appeal. In the USA eminent domain is viewed with distaste, and getting a vastly increased price in court is quite common-or maybe even defeating the taking.

No thanks I won't accept Red China as a role model.

I would like to see the US tax code weaned off the home mortgage interest deduction, though. Many other countries instead allow deduction of principal payments, which encourages payoff of home loans.

 

[ShawnD1]

I would like to see the US tax code weaned off the home mortgage interest deduction, though. Many other countries instead allow deduction of principal payments, which encourages payoff of home loans.

That's actually a really good idea. Debt is very useful for growing the economy, but it's nice to encourage people to pay shit back

 

[Throckmorton]

China's real estate market is the very epitomy of a bubble. And as you hinted on, their concept of eminent domain is draconian. It is exercised far more often than in the USA, and you must accept the buyer's/government price-there is no effective right of appeal. In the USA eminent domain is viewed with distaste, and getting a vastly increased price in court is quite common-or maybe even defeating the taking.

No thanks I won't accept Red China as a role model.

I would like to see the US tax code weaned off the home mortgage interest deduction, though. Many other countries instead allow deduction of principal payments, which encourages payoff of home loans.

Mortgage principle payments should only be tax deductible if rent is

 

[alkemyst]

Mortgage principle payments should only be tax deductible if rent is

Once you think about that then you will realize how that wouldn't work.

 

[alkemyst]

allekmyst: To an extent you are confusing apples and oranges. This area of the law is based upon the UCC-Uniform Commercial Code. A mortgage note is an "Instrument" much like a check is a Instrument. Lets assume Joe Blow gets a mortgage from Megabank A-Joe Blow signs a mortgage note promising to pay $xx to Megabank A. Megabank A decides to sell the loan to Holder B-Megabank A must endorse the mortgage note over to Holder B so that Holder B becomes the owner of the note. What Megabank A is essentially doing is cosigning the the Note when it endorses it over-unless it endorses the note "without recourse." I have NEVER seen a mortgage note that was not commercially transferred "without recourse."

No...I am not confusing anything. I have a very good understanding on how this works as it was a large part of my job in an industry I was part of for decades.

It would be nice to believe your methods, but sadly all banks have had to 'buy' back loans that they didn't want to for sometimes really petty things. Fraud and the like is pretty much going to trump any 'no recourse' rubber stamp.

A common example of this is third party checks. Your brother endorses a check over to you, you endorse it and deposit it in your bank account. The check bounces. Your bank grabs the money back from you as you are liable to them as an endorser on the check.

Fraud by Megabank A in originating the loan is handled by exceptions under the UCC where if fraud is proven the exception would supercede the "without recourse" language, making Megabank A liable for the loan to Holder B. But fraud is dificult, expensive and time-consuming to prove (it has a much higher burden of proof). Look at the hundreds of thousands of fraudulent mortgages written in decade prior to the recession crash-how many of those were charged back? I doubt more than one tenth of a percent.

Laymen like to think of an endorsement to a note like a check and the note a lot like the 'cash'...however; it breaks down quickly.

Your example is a bad one. The reason the depositor gets faulted on bad checks (and ultimately they have a method to collect through the legal system) is because there is nothing stopping anyone from creating a 'bad check' to make some easy cash

As far as "I AM GOING TO SUE YOU FOR SELLING ME WITHOUT MY PERMISSION" that's irrelevant and unsupportable in the law, but if you really want to prevent your mortgage from being transferred just cross off the "or order" language in the mortgage note (where is says "pay to Megabank A or order"). This makes the note nonnegotiable. Of course, it also makes the Note totally unacceptable as a practical matter to Megabank A, so you won't get the loan.

This didn't warrant any response...I realize ways to try and prevent it and sadly some of these savvy customers try to do just that. They write in their own clauses and blackout others. In the end, they need to pound sand or sit and sign. It's a common whine we got and was indeed funny when someone mentioned getting Cochrane or calling Channel 5!

 

[Darwin333]

Mortgage principle payments should only be tax deductible if rent is

That would kick ass! I could sell my house to a friend/family member and rent it from them at their cost. They get a tax deduction on the note they pay, which they wouldn't have gotten otherwise, and I get a larger tax deduction on the rent (since I am not paying any interest).

The same amount of interest is paid to the bank but we would be getting two deductions for essentially the same money.

 

[Throckmorton]

That would kick ass! I could sell my house to a friend/family member and rent it from them at their cost. They get a tax deduction on the note they pay, which they wouldn't have gotten otherwise, and I get a larger tax deduction on the rent (since I am not paying any interest).

The same amount of interest is paid to the bank but we would be getting two deductions for essentially the same money.

Sounds good to me. Wouldn't your friend/family member pay tax on the income from renting to you?

 

[Darwin333]

Sounds good to me. Wouldn't your friend/family member pay tax on the income from renting to you?

There is no income if they are only covering costs.

 

[Throckmorton]

There is no income if they are only covering costs.

You mean to tell me someone can buy a house, deduct the mortgage interest, and then deduct the rent I pay because they use it to pay the mortgage? So mortgage basically is deductible if you're renting out to someone, but the renter doesn't get the deduction?

 

[alkemyst]

Sounds good to me. Wouldn't your friend/family member pay tax on the income from renting to you?

In your proposal, sure ... But since you are also writing off the payment (and rental expenses/maint.) itd be profitable.

 

[theeedude]

GOP is shutting FHA down tomorrow. I'd say you are going to be lucky to get 20% down mortgage next week