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Bank of Canada warns of possible debt, mortgage default... - 12/12/2008 6:42:48 AM   
came4U


Posts: 3572
Joined: 1/23/2007
From: London, Ontario
Status: offline 		Now it is coming here...uhhg.

The blame (they say) is the banks lending to people who are trying to live beyond their means, oh I believe it now.

My neighbors (a young couple, 2 'yungins under 4) are going once a week with a realtor to view homes yet she comes over twice a month here to borrow up to 20 bucks because she is strapped till her bf's payday.  I don't mind, she always pays me back promptly.

He says he makes about 19/hr at a spice factory (before taxes).  She doesn't work nor have more than a grade 11 education (no diploma).  She has never worked actually. They have such high (unrealistic) hopes of buying homes in the 120-130g range. 

I have to bite my lip when she leaves feeling all giddy and comes home all disappointed at her 'shabby' choices. . I discussed in summertime with him when he asked advice on buying a home (what to look for etc) and even suggested that they wait a while (it is a new relationship of 1 year also). I didn't even mention to him that their 'lifestyle' (hmm she smokes pot maybe 8x day outside) cannot be sustained if they buy a home.  He said her cost in pot alone is 140ish bucks per week.  She buys gardening junk yet told me she bought her girl some new socks out of change from her um's own piggy bank lol.

I often stare at her blankly, unsure of what to say., so I don't say nuffin. (and trust me, it is hard lol).

It is not for me to burst her bubble so WHYYYY the hell aren't the realtors or banks stopping this kind of trainwreck before it occurs?






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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 8:06:02 AM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		Looks like they will have to learn the hard way. A shame really.

T

(in reply to came4U)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 9:10:25 AM   
came4U


Posts: 3572
Joined: 1/23/2007
From: London, Ontario
Status: offline 		Quite the shame actually.  I babysit (for free) when they go on these lil field trips to househunt, she comes home with junk from department stores and asks for an extra few minutes of my time so she can unpack her purchases.

I did mention in summer about he American housing crisis, he nodded and agreed, seemed to understand somewhat of what I was saying, yet I think it went over his head.

Can I note that I once did the sitting over there on a fri night and out of boredom (the lil ones slept and I had pushed the wrong buttons on their satellite remote so I was shitouttaluck in watching tv) I washed dishes.  It took me 40 minutes there were so many (not fresh either).  Even some babe bottles had mold YES mold in em. I found 2 forks were actually stuck to the floor.  I thought an scoop up of a tiny plastic baby spork would be easy, ended up wrenching my back because it had been there for quite some uhhg. I felt like I was attempting olympic weighlifting lol.

Sigh, how do you tell or not enable people who just don't get it?? 

She screams at him constantly and the tikes.  These townhouses are rentals, people are more tolerant around here.  I had to stop doing favours for them.  I found it impossible to not simply explain that in the 'real world' her ideas of home ownership takes responsibility and sacrifice.






< Message edited by came4U -- 12/12/2008 9:12:32 AM >

(in reply to Termyn8or)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 9:14:57 AM   
Musicmystery


Posts: 30259
Joined: 3/14/2005
Status: offline
quote:

WHYYYY the hell aren't the realtors or banks stopping this kind of trainwreck before it occurs?


Banks long ago, and increasingly today, stopped banking, and turned to outright fraud. Anything to grap cash.

We used to call it usury. Now it's banking.

We can choose our institutions, but now it's so widespread that reality is all credit is dangerous. That alone is a major brake on the economy, and one getting worse, not better.

(in reply to came4U)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 10:00:46 AM   
celticlord2112


Posts: 5732
Status: offline
quote:

reality is all credit is dangerous.

When has credit ever NOT been dangerous?

Folks have just been basking in an illusion of "safe" credit....and now that illusion is being shredded (as generally happens with illusions).

As reluctant as banks are to lend these days, people (and businesses) should be about ten times more reluctant to borrow as a general rule. WIthout debt, people would have less, but they'd own more.

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 10:14:23 AM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		Mus, I think we can say that about near any business today, especially the large ones. You have to watch every bill you get. The whole world has turned into a scamathon.

This did not start overnight. There was a time before variable rate mortgages, let's move on to history. Those 900 numbers, sex lines and so forth. Anyone in the house could dial the phone and defraud the payer of the phone bill. When someone noticed, they offered 900 and 976 blocking so then a foreign telephone company started doing it, so you also had to block the 809 (I think) area code.

Your cable bill, did you order these PPVs ? Or are there all the sudden new charges on it that they just dreamed up for some feature you will never use ? Electric and gas companies sending estimated bills.

Used to be life was simple, they read the meter, send you a bill, you pay it and you have heat and light. Not anymore, the rates through the roof now you got payment plans and budgets and who the hell knows what else.

There is not even any point to getting a detailed cellphone bill anymore, the best thing to do is look for unlimited plans, because how will you ever know if that bill is accurate ? You have to read your bank statement anyway, but when you live in an ATM and POS transaction world, it can get icky.

Now, as the OP depicts, the guy makes about 40K a year. In Canada I think it would be reasonable to say that he takes home 20K. Under good conditions, the principal and interest on a hundred grand is (30 year at 5.8%) about $450 a month..That is $5400 per year and does not included the required taxes and insurance, which I dunno about Canada, but there are places in Ohio where they effectively double the payment.

The fact of the matter is that "they" changed the root formula to make more money. It used to be a certain income to payment ratio, it was seemingly etched in stone. Then somehow the American dream of home ownership became some sort of birthright or something and they got to the point where you could just about buy a house on welfare. I kid you not !

My suggestion is to spend about a third of what they say you can. I mean on time, if you can save up billions on 40K a year you can buy an island or something, but only mortgage maybe thirty grand of it. That's the old way to get nicer houses, the equity in your old house helps to make the downstroke on the new house. But I guess that just wasn't working well enough for "them". Oh well.

T

(in reply to Musicmystery)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 10:28:08 AM   
came4U


Posts: 3572
Joined: 1/23/2007
From: London, Ontario
Status: offline 		Yes Term but I was told by several home owners that you should not even consider buying a home without at LEAST 15% (of the total cost down).

20g's/yearly income is below poverty line here, in fact 31,$126 is the marker point of being barely above poverty line (2004) for a family of 3. 

I don't think they know the responsibility (nor how to do basic upkeeps) to an owned property.  I think for sanity sake I will dodge this bullet and not say a word.  In fact, been doing so much of that lately, I don't even answer the door anymore when she dingdings the door.

(in reply to Termyn8or)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 10:29:31 AM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		Hey Term,

I got done of those phone 'packages".   I use a phone card.  Well- poof $6 now gone.  The card good for a whole year- lasted 1 month.  No warning, no explanation, no money.

Everyone at this rate will probaly have to provide a retainer to get any type of service what so ever. 

I hate when the computer makes out the bill.   No, I want a living breathing person to make up the bill. And not by a book formula... by real time.   One mechanic I went to the bill was more hours then the car was there.   But then, maybe it was presumptuous to  think a car should work.

I think we as a society are about to see suffering like we have never seen before.   There has been so much trickery to life that life itself is so tricked that to breath- error screen 404 comes up.

So- if the person can function with out the bells and whistles- that guy will find it easier to adapt.  But to those who cant live with out ABC.  you know the type...the type that claims they cut back- but hasn't really..   thats the person who will find things very unfair.

one day at the plant- I was sorta amused.  A parts guy came by ..and this was an urgent part.   Well- he could not release it w/o a certified check.    well this was not the plan... so he phoned the office.

...guess what he got?       "for English press one".,..."your call is important"....

Man it was hard not to laugh.   We by then did not need the part ASAP, but they had other deliveries to make.   his call is important all right....



(in reply to Termyn8or)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 10:30:21 AM   
Musicmystery


Posts: 30259
Joined: 3/14/2005
Status: offline 		T,

It's true. I was speaking of banking specifically, but houses and cars are built to bilk.

Unless people just walk away from those products (and yes, that's easier said than done), "they" will continue to bilk.

(in reply to Termyn8or)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 11:19:43 AM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		MM,

in light of the world around us going into uncertainty,  things will have to go the other way.

the lone person as a rule is not bent on all the .... tho the prisons are past capacity.   but now general business practices....  gone nuts.

There at one time was a line.  But today- there isn't much of a line.   These men that caused the money mess- they will somehow misdirect the valuables.  And then flea to a no extradition country.

Maybe people will get serious about what the meaning of life is.    No matter how you or I don't like what the world is today...nature can outsmart man.    After one refuses the earths laws long enough there is an uncanny and severe method of restoring equilibrium.

We are in extreme disequilibrium right now.   This will not last.  The laws of the planets wont have it.  It isn't my rules, the mans rules or even any groups rules.  

As a species we are shown ways to live with dazzling inventions.   But when we stray from the soil, the soil will bring us back.

I am boisterous over the collapse of the money system.   But once the masses tune into that, I and others have a calling to help others get thru it.  to find an equilibrian.

I seen Obama wants to cut military spending. I expect a fight.  The bomb makers wont have of it. 
Even tho the folly of it all is bring us down, there is no army on earth that can stop this at this second.  The collapse has begun, and is sprialing downwards. 

What will leaders do?  Stroke of a pen and make it better?   No.  It is past that point.


The time for setting policy is passed.   I expect some shocks after 12-25.  right now folks are tuned into the holiday.  But after wards, things take a step.  People will have visited with friends and loved ones. The glare of the TV will be less of a fog for the moment.   People will get a peak that the offspring is doomed to a garbagey world that WE constructed for them.

So people will then take steps to begin to get finances in order.

The thing is- when all hell breaks loose, this is when we ( those of us tuned in) will have to be the voice of reason.  We have a certain duty to be calm and cool, and at peace and to make a plan no matter if it is for the immediate family or the whole block.... we face and are entrusted with a unique calling in history to help pick up the peices of those around us.  The breathing bleeding peopple.  Not the corporations or systems which sped us up to here.

We are being called in ways I dont know yet.  But I do know we are all being called to help humanity.    So get the anger, the outrage, the blame, the negative energy out now.  Because when the shit hits the fan....  we have to be ready to pick up the peices.  To be our brothers keeper.  To do (Im not so clear in how or what) but to escape this calling is to be a coward.   To be part of the mess.  It is an affront to larger humanity and to ourself.

So get ready. The world is (shortly) upon oour shoulders.   And my friend, we have no choice but to handle it as a fragile egg of utmost importance.

If anything, it will be interesting.  

(in reply to Musicmystery)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 11:23:35 AM   
LaTigresse


Posts: 26123
Joined: 1/15/2006
Status: offline 		Welcome to what we've been seeing down here for some time now.....

It sucks.


_____________________________

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Just because you are well educated, articulate, and can use big, fancy words, properly........does not mean you are right!

(in reply to came4U)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 12:11:07 PM   
came4U


Posts: 3572
Joined: 1/23/2007
From: London, Ontario
Status: offline 		Well so far only one bank (CIBC) is infected with this housing crisis (virus) activity.

yet, didn't the US one start with AIG uhhhhg.

I don't like the fact that people want to jump into something that is beyond their means but if someone really doesn't have a clue about world economy, mortgage markets and their trends, or even how to sustain their current lifestyle sucessfully who am I to jump in to save them. 

<hides from ding dong

(in reply to LaTigresse)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 12:40:12 PM   
UncleNasty


Posts: 1108
Joined: 3/20/2004
Status: offline
quote:

ORIGINAL: Musicmystery

quote:

WHYYYY the hell aren't the realtors or banks stopping this kind of trainwreck before it occurs?


Banks long ago, and increasingly today, stopped banking, and turned to outright fraud. Anything to grap cash.

We used to call it usury. Now it's banking.

We can choose our institutions, but now it's so widespread that reality is all credit is dangerous. That alone is a major brake on the economy, and one getting worse, not better.


Yep, out right consumer fraud in origination.

Lenders have a duty under TILA to tell consumers the truth about the documents they are signing, and what their committments will be in terms of repayment. This burden is rightfully on lenders. When they fail to live up to their obligations they have broken the law AND the contracts are null and void.  Regulations like Truth in Lending Act, Home Owners Equity Protecion Act, Real Estate Settlement Procedures Act, Fair Housing Act, etc., are for the express purpose of curbing abusive and deceptive practices on the part of lenders.

The corporate players aren't stopping the train wreck because they are making money causing it. Attorneys don't defend individuals that need this representaion because their bread butter is typically corporate, and people that need it usually can't pay hefty retainers up front. The courts aren't stopping it because they are loathe to accord pro se litigants any respect whatsoever, even those savvy enough to make the sophisticated arguments intelligently.

Ultimately I see it as a judicial failing. Most of the foreclosures occurring are unlawful and illegal so it falls squarely on the courts shoulders. In some jurisdictions courts are ruling sua sponte, or on their own initiative. That, unfortunately, is the exception.

Uncle Nasty, happily back to 1 1/2 hands.

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 12:47:59 PM   
came4U


Posts: 3572
Joined: 1/23/2007
From: London, Ontario
Status: offline
quote:

The corporate players aren't stopping the train wreck because they are making money causing it. Attorneys don't defend individuals that need this representaion because their bread butter is typically corporate, and people that need it usually can't pay hefty retainers up front. The courts aren't stopping it because they are loathe to accord pro se litigants any respect whatsoever, even those savvy enough to make the sophisticated arguments intelligently.


They are merely loansharks then.  They prey on the weak then break your back, your family and your heart.

Still, if someone doesn't have the means, they still should have enough brains not to run out and attempt to have something beyond their means. 

The dreamy thoughts of a this huge backyard, swings, garage, even a POOL of some wide-eyed people that think life is like hollywood maybe...that STUFF is the answer to everything.

Just disturbs me that some agents will allow this to occur.  It is like allowing the mentally incompetent to sign on the dotted line.  I have such a headache from the whole thing.  If I didn't blow up about it here, I would likely tell my neighbor some reality until it hurt lol.  Bad enough I have to ignore her. 

(in reply to UncleNasty)
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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 1:07:29 PM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		"But when we stray from the soil, the soil will bring us back. "

One of your better lines Hunky. And so true. Not being religious, it still stands - ashes to ashes, dust to dust. If people would just get a handle on what is real rather than the ideal, we would be alot better off. If people would think about what they need before what they want, they would be alot better off.

There is indeed a sucker born every minute, but why is that ? This problem has it's roots alot deeper than simple government deregulation and predatory practices by lending institutions, if the suckers didn't exist, the scams wouldn't work.

However the voice of reason is easily overridden by the media every day. The local news here has a mansion on every day and invites people to guess the price. That is news ? And it's not just that, every charcter in every show almost has issues other than money.  The never go to work, hell they never even go to the bathroom.

People watch these stories and based on that prioritize. I need a house like that, I need a couch like that, I need an etegare' like that and so forth. They actually WANT all the kids to come storming in on Christmas to collect their once a year meal of gifts, like cattle. They see it as a good thing.  They promote materialism to the nth degree, ingraining it in their heads so deeply that it is almost impossible to get rid of.

And the cycle continues until ............

T

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 1:12:53 PM   
bluepanda


Posts: 328
Joined: 12/12/2005
Status: offline
quote:

ORIGINAL: came4U

Sigh, how do you tell or not enable people who just don't get it?? 



Tell them? You can't, because they can't hear you. It's pretty clear that these kids have serious, serious issues with basic adult responsibility. It goes way deeper than anything you could fix with a 20-minute sit-down-and-lay-it-out tutorial.

You're right, they don't get it. You might as well be speaking Chinese. For some people (like your neighbors), things like this can not be taught. They can only be learned, and unfortunately the only way that usually happens is the people need to fuck up their lives even worse until it starts to sink in that maybe they aren't quite as all-together as they thought they were. Until that happens, you might as well be trying to teach a cocker spaniel how to play the piano. Good luck to you, and hats off for all that you're trying to do for them.

< Message edited by bluepanda -- 12/12/2008 1:13:53 PM >

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 1:20:33 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		I think most people have way more then what they realize in terms of stamina and bringing needs to be met,   we have it inside of us.  It now will be a question of how it comes out.     The long way or the shorter route.

We can deal with alot more then we know of.     Not that we will like it, be ready for it, or that it will be convenient.    People dont like change.

There could be some pluses to the mess.   It sure will be a challenge no doubt.

I dont think anyone really knows where it will end up.    Certainly the jog is up, and things are coming to a crash.

Not everything worth having in life is measured by dollars.   So who knows... we may end up a whole lot richer in non-money ways....     I sure will enjoy todays dinner.      Ill savor every bite.  

I know the dirt thing.  I like to play in it all summer.  :-)   This year tho- I will have to grow things I can eat.  :-)   Not the flowers or christmas trees that I usually do.

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 2:44:53 PM   
SilverMark


Posts: 3457
Joined: 5/9/2007
Status: offline 		As a man who has purchased a few homes, the realtors always say "You can afford this much on a house $............
My normal response is....yes, if I don't want to do any more than own a home.
Personal Responsibility!!!!! Credit can be dangerous.....Buying a house should scare the hell out of anyone....look at the bottom figures....the payback....the interest....the fees....
Is it a realtor's fault....NO....the Mortgage Lender....NO.....the Consumer.....YES!..
The blame could be spread around but, at closing an Attorney sits there with you and explains and goes over every single paper...every question you have can be answered....The consumer signs the documents....agrees to the terms....no one holds a gun to their heads....I am amazed at those who will blame anyone but themselves....Damn....maybe I have been reading too many Merc posts!

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 2:58:24 PM   
LadyEllen


Posts: 10931
Joined: 6/30/2006
From: Stourport-England
Status: offline 		Its easy to blame the mortgagees

But considering the situation in the UK, the housing situation has forced people to sign for mortgages they patently should not have. There is no social housing and little in the way of affordable rental housing. Meanwhile the price of houses has risen relentlessly and strongly, so people have been forced in one way and encouraged on the other to buy now (whenever now was) before the price rises still further - its been presented as a great deal; the house after all will be worth twice the mortgage within a few years.

The governments of several decades are at fault here for ensuring a housing shortage through various means. The financial industry (our only real industry for those decades) must also bear responsibility - they financed increasingly larger mortgages year on year, driving prices up and encouraging the notion of a house as an investment "safe as houses". The financial people profitted hugely and will also profit hugely now as they foreclose and take possession, sell up at a price well below the outstanding mortgage and chase the debtor for the balance. The government profited hugely too with tax takes on house purchases rising year after year - add in the insurance tax take and its a winner for them too.

Now the bubble has been burst, the banks come crying to the very people they fucked over and the government hand them money from these people that will ensure poverty for generations - after all, if the government blame the banks they risk being revealed as players in the whole episode when the banks spill the beans.

E

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RE: Bank of Canada warns of possible debt, mortgage def... - 12/12/2008 3:05:35 PM   
NormalOutside


Posts: 622
Joined: 1/8/2008
Status: offline 		I haven't read the article(s) that sparked this thread, but obviously it has grown into more than what the OP intended.

Anyway, I have to say, I feel a bit vindicated by the current events of the world.  This is something I've felt for years, and something I've been researching and talking about for 1 or 2.  Things just don't make sense anymore.  Businesses main goal seems to screw people out of their money in various ways.  That's their bottom line, to get more money, to buy more stuff.  Speaking of stuff, what's more valuable, money or stuff?  If it's useful stuff, I say the stuff.  Money is electronic digits or paper garbage.  As my six year old asked me the other day, "why is money so good, it doesn't do anything?"  I guess he just hasn't been taught enough yet.  Money, kid, makes the world go round.  It's why we're here on this planet.  It gives us meaning.  Learn to love the money, son.  It's the only thing worthwhile.

For Christmas he's getting four $1 re-packs of hockey cards.  There's about 20 in each, and he's going to be thrilled. 

And they'll still work when the power goes out sometime early next year.


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