Quote of the Day

I was thinking about the housing bubble and why most of the "experts" failed to see that there was a problem, and I realized it's because they're all rich. There was one unavoidable and obvious fact that was apparent to anyone who isn't especially rich, and that's that there was no possible way that many households in this country had large enough incomes to be able to afford the monthly mortgage payments they were supposed to be paying, even without ridiculous interest rate resets. There just aren't enough people who make enough money to support that many $800,000 homes. - Atrios

How long have I been saying exactly that? Dallas is awash in 500k+ houses, and I've never understood who all those people are that could afford 5k+ a month mortgage payments. Turns out, there are far fewer of them than there are houses.

It's not like it's rocket science.. and it's not like the people who bought all these expensive homes have super low I.Q's.. It's a result of people desperate for what has become the American dream.. or as Doug defines it...

American Dream of liberty, happiness, freedom, and wealth.

That whole "life" thing is no longer applicable.. apparently.. it's the drive for wealth. I don't necessarily have a problem with it, and ambition is a good thing that spurs innovation and achievement, however it's become such a factor in what Americans define as "successful" that people will latch on to any symbol of wealth, even if they can't back it up with actual money..

How funny is it that it Doug took;

Life, liberty, and the pursuit of happiness

And appended "wealth" to it.. LOL

And when creative financing gives people the illusion that they are "wealthy", they'll jump at it every time, and not worry about flaming out later.. and they are definitely flaming out now.

...

John and I went out last weekend and looked at some multi-million dollar homes. It's fun to do. I've noticed that most every home has some cool design feature in it, but fails in some other design. There's very few that put it all together.

For example.. a house that was not particularly appealing had a large master bath, with this really cool walk-in shower, with multiple shower heads, a row of sprayers like something out of a car wash, and a "rain" type shower head above. The tile was really nice, and had a long glass top over it. You'd kind of have to see it, but it's really cool. The next house had a lot of really cool features, but the shower in the master bath would be crowded with 2 people in it.. and was boring. The next house had a badass 4 car garage.

If I were designing houses, there would be a list of mandatory features.. It wouldn't be hard to do.. and it would avoid those shoppers leaving because one thing was horribly designed.. like a shower.

Also via Atrios;

“A Discovery Bay man who asked not to be identified said he is ‘upside down’ on his house by about $260,000. Instead of bemoaning the situation, he plans to capitalize on it.”

“‘I refinanced a couple of years ago and pulled out $100,000 and put in a fabulous pool,’ he said. ‘Now I’ve got this fabulous pool and fabulous house, but it’s not worth anything. Why shouldn’t I be building equity over the next four to five years instead of playing catch-up?’”

“The man said he has not made a mortgage payment for five months.”

“‘I’m playing the bank game,’ he said. ‘I’m playing chicken with them. I already got them to agree to put (the unpaid) payments on the tail end of the loan. What I’m really pushing them to do is to (adjust my mortgage) for the current market value and write off the rest. I’d love (to have it) lopped down to a $450,000 basis rather than $710,000.’”

“If the bank won’t negotiate, he’ll walk away, the man said.”

Most people don't try and negotiate with the banks.. but for those that do, I can't imagine the bank just writing off the market adjustment on a mortgage. That's patently unfair to those of us that make our mortgage payments like clockwork.