Bank of America stole this guy's home, oh wait

[IronWing]

Congress ruled this was discrimination in the 90s. If the bank had denied the loan, he could have sued them for it. Accountability and responsibility are a thing of the past.

This is simply not true. No law or regulation has ever forced a bank to loan money to unqualified borrowers. Banks did it out of pure greed. Like the stupid borrowers, the bankers also bought into the "housing always goes up" myth and happily made loans to folks who couldn't afford them. The banks would make money on closing costs, take in a few payments, let the borrowers fail, and sell the houses at a profit. Worked great until housing prices stopped going up. The myth that the government forced banks to make bad loans is BS spread by the banks fans of banking de-regulation trying to cover their own asses.

 

[waggy]

I didn't say you couldn't do it. I said that it's not easy enough for any idiot to do like it was during the bubble. Now it takes a little more know-how and guts to take the risk.

yeah. a buddy of mine still flips. He buys a house that needs work (so its cheap) he lives in it and works on it. they come out very nice. he then turns around and sales it for a huge profit. Witch he uses most on the next house

He would laugh at people who were buying 2-4 $500k houses when they only made $100k a year. sure they were making a lot but many of them lost all they made with the collapse. some were smart and got out before it did.

heh the house next door to me was a flip. the 5 years i have lived here it has been empty 4 of them.

 

[Gothgar]

spray painting the house was OTT

 

[IceBergSLiM]

you make a slight mistake they are assets. but they are not worth much some are negitive in worth (meaning the the car you pay 20k for is now worth 10k. its still a 10k asset but he lost 10k so far on it).

I agree that financing a depreciating asset is silly. but who has 25k in cash to buy a new car? this is why i buy used cars 90% of the time. i don't like loseing so much damn money on them.

people that only pay cash for cars they can afford and bank their "would be" car payment.

 

[Bateluer]

This is simply not true. No law or regulation has ever forced a bank to loan money to unqualified borrowers.

My bad, it was Community Reinvestment Act of 1977. Not the 90s. Few other acts surrounded it too.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Effectiveness

The CRA followed similar laws passed to reduce discrimination in the credit and housing markets including the Fair Housing Act of 1968, the Equal Credit Opportunity Act of 1974 and the Home Mortgage Disclosure Act of 1975 (HMDA). The Fair Housing Act and the Equal Credit Opportunity Act prohibit discrimination on the basis of race, sex, or other personal characteristics. The Home Mortgage Disclosure Act requires that financial institutions publicly disclose mortgage lending and application data. In contrast with those acts, the CRA seeks to ensure the provision of credit to all parts of a community, regardless of the relative wealth or poverty of a neighborhood

 

[GotIssues]

Considering my wife and I are debt free, I think I am doing better then most people.

Being debt free doesn't mean that you know what you are doing. One of my good friends is debt free and has no damn clue what he's doing when it comes to money. The difference between him and you is that he'll freely admit that.

Your mistake is that you do not know how to take something and make money off of it.

If you lose money off of something (except food), you are living your life wrong. But then again, if you want to take the time, you can make money off of food.

Just because someone doesn't make money off everything buy doesn't mean they are doing it wrong. Do you make money on the toilet paper you buy? What about the toothpaste? Soap?

 

[waggy]

people that only pay cash for cars they can afford and bank their "would be" car payment.

that's what i do with used cars. i usually buy a car 8-10k. i then put the amount of a car payment in a savings account. usually by the time the car needs to be junked i have 8-10k. I just don't see the use of spending $20 on a new car when you can get the same car 2yrs old (with low miles) for $15k or less (Accords are the exception. sometimes cheaper to buy new)

though this last time i got caught. my Windstar died faster then i expected :| i actually loved that van sniff.

 

[IronWing]

My bad, it was Community Reinvestment Act of 1977. Not the 90s. Few other acts surrounded it too.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Effectiveness

Again, the CRA does not require banks to make loans to unqualified borrowers. It prohibited red-lining of neighborhoods. Borrowers had to be evaluated based on objective criteria concerning their individual ability to pay back a loan, not on the characteristics of the neighborhood in which they lived.

 

[rh71]

people that only pay cash for cars they can afford and bank their "would be" car payment.

$25k could barely even get you a family car Camry these days... and families have a lot of other expenses already going on. What happens if their existing car dies? I don't think I'd go the used route at that point either. Unless I'm asking for another untimely break-down.

 

[Texashiker]

Do you make money on the toilet paper you buy? What about the toothpaste? Soap?

Thank you for reminding me, I will have to work on making money off of those items - and no, I am not trolling.

 

[Slew Foot]

very few people plan on spending 30-40 years in a house when they buy. This doesn't mean they bought it to "get rich quick" . Nobody would buy houses if they were marketed as depreciating assets.

Because no one ever buys a car. Oh wait......

 

[IceBergSLiM]

Because no one ever buys a car. Oh wait......

People would buy houses. It would be a limited population that could afford to pay cash or put 80% down.

 

[IceBergSLiM]

Because no one ever buys a car. Oh wait......

Plenty of people buy new cars and finance them. We call them idiots.

 

[alent1234]

people that only pay cash for cars they can afford and bank their "would be" car payment.

if the interest is only .9% i'll take a new car over a used any day

 

[waggy]

Plenty of people buy new cars and finance them. We call them idiots.

not everyone can put down 10k on a vehicle. People need cars even used cars are expensive.

I have no issue with people financing them. I do think people that finance 30k cars every 3 years are insane and wasting money. And lets not even bring up leasing a car!

if the interest is only .9% i'll take a new car over a used any day

thats about the only time i think its worth it. A .9% interest loan and keeping the 20k in the bank? yeah good idea.

 

[IceBergSLiM]

$25k could barely even get you a family car Camry these days... and families have a lot of other expenses already going on. What happens if their existing car dies? I don't think I'd go the used route at that point either. Unless I'm asking for another untimely break-down.

Your obviously free to do whatever you want. However if you owned a used car for 5 years. You should have been putting away a car payment each month to replace that car. Owing a car isn't a free pass to blow extra money each month because you don't have care payment.

 

[IceBergSLiM]

not everyone can put down 10k on a vehicle. People need cars even used cars are expensive.

I have no issue with people financing them. I do think people that finance 30k cars every 3 years are insane and wasting money. And lets not even bring up leasing a car!

Understood but if you don't ever bite the bullet and drive a shitty car how can you ever get out of the cycle of financing your cars?

 

[IceBergSLiM]

if the interest is only .9% i'll take a new car over a used any day

financing a 2 year old car at .9% would still be the better decision. I guess it depends how much the car is to begin with. YOu have to do the math. Most people financing new cars are doing so because they don't have 25k earning 6% interest.

 

[GotIssues]

Thank you for reminding me, I will have to work on making money off of those items - and no, I am not trolling.

Somehow, I don't think the phrase "Made from Recycled Toilet Paper" will go over well.

Plenty of people buy new cars and finance them. We call them idiots.

If they are financing them because they can't afford them, they are idiots. If a person has $30k and purchases a car and gets offered a 0% interest rate, he could just finance and buy bonds and come out ahead.

If one can get a higher return than the interest rate being charged, they'll come out ahead. With today's rates, it's not that hard to do.

 

[waggy]

financing a 2 year old car at .9% would still be the better decision. I guess it depends how much the car is to begin with. YOu have to do the math. Most people financing new cars are doing so because they don't have 25k earning 6% interest.

I have never see anyplace that will give a .9% loan on a 2 yr old car. While i agree that it would be a better decision i have only seen such loans on new cars.

Nearly every place i have seen with used car loans they are 6-25% (and that was at my credit union!)

 

[alent1234]

financing a 2 year old car at .9% would still be the better decision. I guess it depends how much the car is to begin with. YOu have to do the math. Most people financing new cars are doing so because they don't have 25k earning 6% interest.

where are you going to find a used car loan at .9%? loan rates are in the 3% range now for new and used. the .9% is a hidden discount. honda or toyota pay the investor 3% or some similar rate and take the hit on the new car price.

my 2010 CR-V at $28000 some thousand was really a little less because my loan is only .9%. honda finance sells the loan at a discount.

 

[amdhunter]

He should be blaming Obama and not BoA.

 

[Texashiker]

He should be blaming Obama and not BoA.

Wasn't obama supposed to pay all of our bills?

http://www.youtube.com/watch?v=P36x8rTb3jI

I can understand the home owners confusion in the OP. He thought obama was paying the house note.

 

[highland145]

My bad, it was Community Reinvestment Act of 1977. Not the 90s. Few other acts surrounded it too.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Effectiveness

90's and Clinton.

In 1995, the Clinton Administration changed the law governing GSEs’ mission — the Community Reinvestment Act (CRA) — to encourage more lending in poor neighborhoods. Previously, the CRA directed government to monitor banks’ lending practices to make sure they did not violate fair lending rules in poor neighborhoods. With the 1995 change, the government published each bank’s lending activity and started giving bank ratings based primarily upon the amount of lending it performed in poor neighborhoods. These changes empowered community organizations, such as ACORN, to pressure banks to increase lending activities in poorer neighborhoods — which involved reducing mortgage loan standards — or face backlash from those organizations’ private and political associates.

http://tjhancock.wordpress.com/housing-bubble-financial-crisis-detailed-comprehensive-assessment/

 

[GotIssues]

Understood but if you don't ever bite the bullet and drive a shitty car how can you ever get out of the cycle of financing your cars?

25k car, 3 year loan. Trade in after 6 years each time at 50% value (any value works, really).

1st loan: 25k
Every other loan: 12.5k + 12.5k trade in
Save some money each month during the 3 off years and it will become a cycle of trading in and giving cash without any loans.

Not something I would do, but a way to get off the cycle.

financing a 2 year old car at .9% would still be the better decision. I guess it depends how much the car is to begin with. YOu have to do the math. Most people financing new cars are doing so because they don't have 25k earning 6% interest.

I don't think that's true at this point. Used cars are ridiculously priced right now, and they will come crashing down by the time you are ready to get your next car. In a normal used car market, yes. Now? No.