On Sat, 02 Aug 2008 16:22:55 -0400, Goomba >
wrote:

>sf wrote:
>
>> My point is they are dangling those loans in front of people that they
>> shouldn't... and they are setting them up for failure. Most of those
>> people were first time buyers with no previous experience in real
>> estate. The housing market around here was very tight and when I was
>> reading about the orchards being converted into suburbs, my "uhoh"
>> meter went off the charts. But housing nearer the city was
>> astronomical and new housing was "affordable"... with first time buyer
>> incentives and iffy loan packages. My own kids paid over $500,000 for
>> 800 sq ft (used) boxes last September. One is in San Francisco, the
>> other in San Jose. They are hardly McMansions, they are bottom of the
>> line entry level homes in borderline neighborhoods. I have a lot of
>> sympathy for the people who didn't get sound financial advice and were
>> suckered into these predatory loans just because nobody puts the
>> brakes on lending institutions anymore. That's free enterprise for
>> you. Blame the victim... it's the American way.
>>
>
>So are you saying your kids shouldn't have purchased a house because
>they're too naive to know if they could afford the payments?

It's not a matter of affording, it's a matter of understanding the
fine print. When you've gone through a few loans, the fine print that
needs close attention becomes more apparent.

>And the prices in California are insane but it doesn't matter where the
> house is if the buyer can't afford it, they can't afford it! Lord
>knows when in years past when folks in California sold those houses at
>those insane profits they don't pay the lenders any more than was required
>in the original contract, right? Are people in CA exempt from reading
>their contracts or from common sense just because they live in high cost
>areas? Do you feel your kids are victims of lenders or just living in an
>insanely overpriced area?

They are not victims of anything, partially because they consulted us
all along the way. What would you pay for an 800 sq ft box?
Certainly not half a million dollars, yet it was a good deal at the
time.

>Who determines the market selling price of a
>home in California? Not the lenders, I imagine?

Lenders certainly are to blame. If they were still as strict with
their lending requirements as they were when we first bought our
homes, you can bet housing prices wouldn't have gotten so far out of
hand.


--
I never worry about diets. The only carrots that interest me are the number of carats in a diamond.

Mae West