Info Have we learned nothing from the 2007 meltdown?

[Genx87]

Federal government has dramatically expanded exposure to risky mortgages

Looks like the pols and the banks get their way no matter the risk.

Started before Trump. And is it a coincidence once govt backed these loan we are at all time highs? Sounds like student loan debacle. When the risk goes out the door, so does the fear of loss.

 

[Jhhnn]

Then you'll need to deal with the unhinged elements of the Democrats like @Jhhnn who gets mad because someone eventually owns those houses. If it ends up being the rich because we no longer backstop mortages to poors and they can't obtain them anymore he'll complain about how the "rentier class" is taking advantage of the poors who are caught in an neverending poverty cycle yada yada.

That's personal attack, right? You don't seem to realize that prime vs subprime lending isn't an issue of income but rather FICO rating. Even upper middle class people have poor credit putting them into subprime territory. People who haven't missed a payment in many years or who never really used credit much don't have high FICO scores. Actual poor people don't get mortgages at all unless the lender is running a scam because they have insufficient income.

Beyond that, owning one's home outright makes retirement possible for a lot of people. Low overhead is a key ingredient. Renters never get that. Even people who still owe late in their mortgage receive benefit because their payments are extremely low by modern standards.

 

[glenn1]

I don't think that's how it's worked in reality. NYC has strong rent control laws and far from not bringing more supply on line developers are desperate to create more supply - the government just doesn't let them.

In a perfect world though what we would do is either eliminate zoning entirely or drastically scale it back, then end rent control after the market stabilizes and use that additional tax money to subsidize housing for the very poor who still can't afford it.

They're desperate to create more supply of non-rent controlled units. Nobody is wanting to bring on more supply of rent controlled units and IIRC anything built nowadays isn't subject to rent stabilization anyway. The landlords would be happy to tear down every single rent controlled building in the city and replace it with multiples more non-controlled units but they effectively cannot.

 

[dainthomas]

It'll just be more socialized losses. Republican MO since forever.

 

[s0me0nesmind1]

That's not how rent control works, any landlord that did as you describe would be in a world of shit. I mean NYC has had rent control for decades and decades now and what you describe does not happen. Basically if a landlord tried to do that the tenant just takes them to court and the court invalidates that.

One of the problems with rent control is that landlords will try very hard to get around it as you mention here, meaning that it also requires hefty tenant protection laws to stop that sort of thing. This then makes it very difficult to evict tenants from rent controlled apartments even for good cause.

I'm not an expert on renting and the laws of it - but what prevents a home owner from declaring "I no longer wish to rent out my property to this person after this lease is up"?

Presuming that they comply with other laws (e.g. notify them 3 months ahead of time or whatever the local laws are concerning this)

 

[fskimospy]

I'm not an expert on renting and the laws of it - but what prevents a home owner from declaring "I no longer wish to rent out my property to this person after this lease is up"?

Presuming that they comply with other laws (e.g. notify them 3 months ahead of time or whatever the local laws are concerning this)

The law prevents it, it's literally illegal for them to do that. Tenants in rent controlled or rent stabilized apartments have the right to demand a new 1 or 2 year lease on substantially equal terms as the prior one. So long as they want to live there the landlord must comply. There are some exceptions to this but 'I don't want to rent this to you' is not one of them.

 

[glenn1]

I'm not an expert on renting and the laws of it - but what prevents a home owner from declaring "I no longer wish to rent out my property to this person after this lease is up"?

Presuming that they comply with other laws (e.g. notify them 3 months ahead of time or whatever the local laws are concerning this)

The tenant can basically squat on the property and veto new development.

Incoming Midtown tower with ‘private sky gardens’ delayed by rent-controlled tenant

Triangle Assets’ 41-story condo cannot move forward before the two parties come to an agreement.

ny.curbed.com

 

[s0me0nesmind1]

The law prevents it, it's literally illegal for them to do that. Tenants in rent controlled or rent stabilized apartments have the right to demand a new 1 or 2 year lease on substantially equal terms as the prior one. So long as they want to live there the landlord must comply. There are some exceptions to this but 'I don't want to rent this to you' is not one of them.

That doesn't sound right... Maybe for where you live in NYC areas where landlords are shackled and seen as evil?

Quick google is telling me that your notion is incorrect for the majority of the nation.

Generally, a landlord may terminate a lease without reason at the expiration of the lease term. That means your landlord is under no obligation to renew your lease or allow you to stay in the property for additional time unless you are able to invoke an anti-retaliation law. Your landlord typically will give you an advance notice that your lease will not be renewed (usually 30 days), but tenants are generally responsible for making arrangements for lease extensions.

Does the Landlord Need a Reason to Terminate the Lease at the Expiration of the Term? - FindLaw

Renting is a viable option to owning a residence, but not all landlord-tenant relations go well. Learn about your rights as a tenant along with types of leases, holdover tenancy, and much more at FindLaw.com.

realestate.findlaw.com

 

[fskimospy]

The tenant can basically squat on the property and veto new development.

Incoming Midtown tower with ‘private sky gardens’ delayed by rent-controlled tenant

Triangle Assets’ 41-story condo cannot move forward before the two parties come to an agreement.

ny.curbed.com

Yes, another dumb side effect of rent controlled apartments is that occasionally random people effectively win the lottery by someone deciding they want to build new development there. At that point they can basically extort the developers for huge amounts of cash.

 

[fskimospy]

That doesn't sound right... Maybe for where you live in NYC areas where landlords are shackled and seen as evil?

I don't think it's right, I think rent control is dumb. It is absolutely the situation here though - once you lease a rent controlled/stabilized apartment to someone you must continue to renew the lease as long as they wish to continually occupy that apartment as their primary residence.

Quick google is telling me that your notion is incorrect:

Does the Landlord Need a Reason to Terminate the Lease at the Expiration of the Term? - FindLaw

Renting is a viable option to owning a residence, but not all landlord-tenant relations go well. Learn about your rights as a tenant along with types of leases, holdover tenancy, and much more at FindLaw.com.

realestate.findlaw.com

Quick Google is wrong, haha. Also, my description is only relevant for New York State/NYC:

https://hcr.ny.gov/system/files/documents/2018/09/orafac4.pdf

 

[Jhhnn]

Yes, another dumb side effect of rent controlled apartments is that occasionally random people effectively win the lottery by someone deciding they want to build new development there. At that point they can basically extort the developers for huge amounts of cash.

Yeh, it's terrible when the little guy exploits the game. Just terrible.

 

[Puffnstuff]

I listened to an economist recently who said that the subprime auto market is flashing warning signs.

 

[theeedude]

US Economy has concentrated wealth and income so heavily at the top, it can't run effectively without never ending debt binges and crashes anymore. There is too much money at the top where it's accumulated and not enough money at the bottom where it's spent.

 

[ch33zw1z]

I listened to an economist recently who said that the subprime auto market is flashing warning signs.

It's been flashing warning signs for a while, and will eventually come to a screeching halt. I think John Oliver did a piece on it a while back.

 

[s0me0nesmind1]

I listened to an economist recently who said that the subprime auto market is flashing warning signs.

It's been flashing warning signs for a while, and will eventually come to a screeching halt. I think John Oliver did a piece on it a while back.

ANYONE WITH A PULSE! BUY NOW BUY NOW! DONT WAIT! Upgrade your 3 year old car today, you don't want your car to explode right? Get a bigger Truck now only $35,000 drive off the lot now! Anyone with a pulse can finance!

I guess the difference is that when someone doesn't pay up they can usually cover part of the issue with the collateral of the vehicle itself.

As far as the whole narrative of car loans, I can't say it sounds like the mortgage crisis though...

 

[IronWing]

My understanding is that in NYC, a landlord can get out of rent control by going condo.

 

[ch33zw1z]

ANYONE WITH A PULSE! BUY NOW BUY NOW! DONT WAIT! Upgrade your 3 year old car today, you don't want your car to explode right? Get a bigger Truck now only $35,000 drive off the lot now! Anyone with a pulse can finance!

I guess the difference is that when someone doesn't pay up they can usually cover part of the issue with the collateral of the vehicle itself.

As far as the whole narrative of car loans, I can't say it sounds like the mortgage crisis though...

Dunno how close it is detail by detail, it's still a subprime lending scheme.

Google Search

 

[fskimospy]

My understanding is that in NYC, a landlord can get out of rent control by going condo.

No, renters still have the right to remain as renters in their units even if the building was converted to condos.

Basically the only ways to get out of rent control/rent stabilization are to move back into the apartment yourself or demolish the building.

 

[glenn1]

Yeh, it's terrible when the little guy exploits the game. Just terrible.

Well it kinda sucks for the other hundreds or thousands of little guys who can't get housing because the first little guy is squatting on their rent controlled unit preventing a new 41 story building from being erected to provide new housing and add to supply/lower prices.

 

[zinfamous]

I listened to an economist recently who said that the subprime auto market is flashing warning signs.

It's been that way for over a year now--but not as big of a deal because very little-to-none of the market is tied into the auto sub-prime lending market like it was with housing mortgages. Those things were found clinging to every nook and cranny of every major investment house, or in some cases the majority exposure for major investment houses, intentionally disguised in bundles of shitty debt that very few investors could easily identify the source of.

 

[hal2kilo]

Started before Trump. And is it a coincidence once govt backed these loan we are at all time highs? Sounds like student loan debacle. When the risk goes out the door, so does the fear of loss.

What's this got to do with Trump. So defensive.

 

[zinfamous]

ANYONE WITH A PULSE! BUY NOW BUY NOW! DONT WAIT! Upgrade your 3 year old car today, you don't want your car to explode right? Get a bigger Truck now only $35,000 drive off the lot now! Anyone with a pulse can finance!

I guess the difference is that when someone doesn't pay up they can usually cover part of the issue with the collateral of the vehicle itself.

As far as the whole narrative of car loans, I can't say it sounds like the mortgage crisis though...

Man, I saw this ad on prime time the other week, from a local dealer (so not a scummy used car lot), but a very large Ford dealership that promised:

--no credit? terrible credit? no history? Get approved instantly for a $30k--60k financing!
--no money down! Just prove that you make $300 per week and you are approved!

I mean...what the hell with that last scammy bit? um....who the hell can afford a $30k loan if they are pulling in $300/week? I guess this works if your plan is to live in the car...

 

[glenn1]

Man, I saw this ad on prime time the other week, from a local dealer (so not a scummy used car lot), but a very large Ford dealership that promised:

--no credit? terrible credit? no history? Get approved instantly for a $30k--60k financing!
--no money down! Just prove that you make $300 per week and you are approved!

I mean...what the hell with that last scammy bit? um....who the hell can afford a $30k loan if they are pulling in $300/week? I guess this works if your plan is to live in the car...

Poor deal at the individual level and lots of desperate folks will likely get scammed, but not indicative of a systemic issue of abuse. Nor likely to lead to a cascading failure of financial institutions if things do go pear shaped. I'm hoping the relaxation of strict mark-to-market rules mean a 2008 style meltdown centered on real estate won't happen again, or if it does it will need to happen via an entirely different set of circumstances.

 

[darkswordsman17]

Man, I saw this ad on prime time the other week, from a local dealer (so not a scummy used car lot), but a very large Ford dealership that promised:

--no credit? terrible credit? no history? Get approved instantly for a $30k--60k financing!
--no money down! Just prove that you make $300 per week and you are approved!

I mean...what the hell with that last scammy bit? um....who the hell can afford a $30k loan if they are pulling in $300/week? I guess this works if your plan is to live in the car...

So naive, you think there aren't scummy new car dealerships?

 

[zinfamous]

So naive, you think there aren't scummy new car dealerships?

I tend to think they are all scammy, but that kind of financing is beyond the pale. It is an entirely different level, especially when you consider that authorized dealerships do offer financing through primary legitimate lenders...one would think that those lenders wouldn't want to associate with a business that is also pushing this kind of scammery.