As a renter, I find the behavior of lenders, loan owners, and politicians galling. Lenders and loan owners inflated a massive housing bubble and priced me out of home ownership for over a decade. To make matters worse, politicians decided my tax dollars should go toward bailing out both parties and subsidizing this atrocious behavior. Politicians are compelling me to pay money to the very people whose avarice made it impractical for me to obtain a family home. True homeowners, responsible buyers with equity, should also be incensed by this foolishness, but since the housing bubble folly served to increase the value of their holdings, homeowners have said very little. In fact, most homeowners applaud the efforts to prop up the housing market, although they are also upset about principal reduction because it’s a benefit they won’t receive.
Renters get screwed because they have no voice. Homeowners have the NAr in their corner, and with banking interests also promoting policies which increase home mortgage debt, its not surprising the 65% of the population that owns a home has strong support in Washington. What this country needs is a renter’s union, a voice advocating issues and positions important to renters. Welcome to Renter Nation.
Have you noticed? America is becoming a Renter Nation! There are now more than 100 million residential renters and we are proud to rent our homes.
You can even register to vote on Renter Nation because it’s time we spoke up and made our collective voices heard. We have the power to make a big difference in the way policies and decisions that affect us are made in Washington, DC, our state capitals and our city, town and village halls. Working together we can unleash that power!
If an advocacy group like this were to become popular, there are many political issues it could support:
- Eliminate the home mortgage interest deduction.
- Bring back capital gains taxes on the sale of a primary residence.
- Oppose all bailouts of private mortgage contracts for both bankers and loan owners.
- Extend rent support payments as an unemployment benefit through section 8. Loan owners got to squat while renters got to sleep in their cars.
Of course, as a landlord, I also see potential for abuses and policies I would not be happy to support as well….
I’m Proud to rent!
- I am an American Renter.
- I am proud to rent my home.
- I am a responsible citizen and member of my community and will not be disrespected because I rent.
- I vow to no longer accept being treated as the step-child of American society or the American economy because I rent.
- I support efforts to create national and state tax policies that bring parity and fairness to renters.
- I support efforts to make rental housing more affordable to all Americans.
- I support efforts to ensure that our rights as renters are strengthened and protected.
- I respect the rights of all to enjoy safe, clean and habitable rental housing.
I was always offended by the dismissive treatment I received by loan owners during the bubble. Most could not fathom why anyone would rent when loan ownership was so rewarding. Most assumed it was because I was somehow unworthy of loan ownership. Since anyone with a pulse could obtain a loan, qualification was never an issue. I believed renting was the wiser choice during the bubble. It turns out I was right.
Should Renters Get the Same Rights as Homeowners?
By STEVE YODER, The Fiscal Times — June 7, 2012
If Americans took away one lesson from the housing crash, it’s that a house is not always a Treasury bond. In the latest Fannie Mae survey on attitudes toward housing, only 56 percent of respondents say they consider a home a safe investment—that’s down from 83 percent in 2003.
That’s a great start. There was a time when a house was a save, low-yield investment. Prior to the first California housing bubble of the 1970s, prices were low relative to incomes, and house prices were not very volatile. Lenders changed all that when they inflated the first bubble. We have been inflated and deflating bubbles ever since.
As thousands of foreclosed homeowners have transitioned to apartment living, renting has acquired a certain cool. The number of renters has jumped 16 percent since 2004 to almost 106 million, according to Census figures. …
Though renters’ numbers have surged, their political clout hasn’t. Homeowners receive numerous tax benefits unavailable to renters, including the mortgage interest deduction, home sale deductions, property tax deductions, and tax-free capital gains. Of the federal housing subsidies in 2009, 79 percent went to homeowners and 21 percent to renters, according to the National Multi-Housing Council. In Washington, the major players on national housing policy are groups like the National Association of Realtors, the National Association of Homebuilders, and the Mortgage Bankers Association, which go to bat for homeowners, not renters.
Sixty-year-old Bill Deegan says he’s out to change that. A two-time town councilman and former host of the radio show “Renter Nation” on Phoenix station KFNX, Deegan launched a free-membership organization last month, also called Renter Nation, that aims to advocate for renters. The group’s motto is “by, for, and about America’s residential renters,” …
Renter Nation is a great idea. I suggest every renter who reads this should go to the site and register.
The Fiscal Times (TFT): How did Renter Nation start?
Bill Deegan (BD): I was in my car one day in early 2009 listening to a story about proposed bailouts for existing homeowners and tax credits for new owners. And I’d been reading about people who stay in their homes literally for years without making a mortgage payment before foreclosure. Being a renter, I know that if you don’t pay, you’re often out in a month. I thought this isn’t right, this isn’t fair, so I decided that I was going to call whoever advocates for renters nationally and give them my two cents. Lo and behold, I discovered that there was no such group. So I decided to start one myself.
He is correct. It isn’t fair that loan owners get such favored treatment. I wonder if he ever read the IHB or the OCHN?
TFT: What do you want to accomplish?
BD: We want to empower renters. Our website gives practical information like how you get your security deposit back and what to do about noisy neighbors. You can shop for an apartment and download coupons. We have a blog where people can keep up on issues that affect renters. And there’s Rentertainment, where we and our users post videos, photos, and other entertaining stuff related to renting. It’s a for-profit site, but we also plan to use a portion of the revenues to organize for changes in housing policy.
I hope he succeeds.
TFT: You have a kind of manifesto on your site called “I’m proud to rent.” What are you getting at there?
BD: I think it’s ingrained in our culture that renters are second-class citizens. And that’s reflected in our national policies, especially the mortgage interest tax deduction. The National Multi-Housing Council notes that of the federal housing subsidies in 2009, 79 percent went to homeowners and 21 percent to renters. So I think we’re being shortchanged—we’re about 38 percent now of the population but getting only 21 percent of the resources. I think renters have been silent too long, and it’s time we spoke up.
TFT: What’s wrong with promoting homeownership?
BD: We’ve got nothing against homeownership. It’s fine for some people. Just don’t ask me as a renter to subsidize it. I think a home should just be viewed as a place to live, and if it happens to appreciate in value, good for you. …
As a renter paying fair-market value for my property, I am getting subsidized by no one. I am the odd man out subsidizing everyone else. I subsidize loan owners through the home mortgage interest deduction. I subsidize low-income home owners through low-income housing tax credits. I subsidize other renters through the section 8 program. The government gives me nothing for renting at fair-market value; in fact, section 8 renters actually drive up the rental rates I would be paying by bidding up the prices of all rentals in the marketplace. My tax subsidies are actively working against me.
TFT: But those who support homeownership cite studies indicating that neighborhoods with more homeowners have less crime and better citizen involvement, for example.
BD: I’d point you to research last year by Grace Bucchianeri of the Wharton School of Business called The American Dream or The American Delusion—she notes that if you look at studies that have controlled for income, housing quality, and other factors, homeowners are no happier than renters, and she doesn’t see evidence that homeowners are better citizens.
Studies that show neighborhoods of renters have higher crime put the cart before the horse. It’s not because neighborhoods are full of renters that they have crime. It’s because they have crime that the neighborhood only has renters. Crime drives away homeowners, and renters are all that remain.
TFT: The National Association of Realtors just had 10,000 of their members come to Washington to promote homeownership. Other than fiscal watchdog groups, there doesn’t seem to be a lot of vocal support for your side of the housing debate. What’s your political strategy?
BD: Having been a politician, I know that leaders respond to a constituency that votes. That’s why we’ve affiliated with MTV’s Rock the Vote, so [renters] can register. We want to make renters aware that if they want something in their community that is beneficial to renters, they have to vote.
We also want to mobilize by working with what we estimate are 30,000-plus local, state, and regional tenants associations. We’d love to join with them to organize a million-renter march, for example. We would like to be sitting at the housing policy discussion tables in Washington and our state capitals.
If he wants to be really effective, he needs to develop a platform of issues and get buy-in from the people who join the group.
TFT: What else needs changing?
BD: There are thirteen cities here in Arizona alone that have renter’s taxes, which to me is a discriminatory tax. There are communities in this country like Madison, Mississippi and West St. Paul, Minnesota that put caps on the number of renters who can live there. I view this almost as a civil rights issue. You substitute black or Hispanic for renter and it’s just purely discriminatory. These are the kind of things that we’re going to be working on.
I would add to that list homeowners associations that prohibit renting. Further, I would support legislation that renders any CC&Rs restricting rental as void.
We want to change the culture—not only how society views renting, but how renters feel about themselves. There’s nothing wrong with renting—it’s a good thing. It gives you flexibility, which is especially important when unemployment is high like right now. I know homeowners who got job offers in other cities but can’t move because they’re stuck in underwater mortgages.
Renting has many advantages. Just ask a loan owner how they feel about their ball and chain.
TFT: One of the problems with being a renter is the lack of control—you can’t paint without permission, you can’t change the kitchen, and you could lose your home whenever the landlord sells. Could there be a new model of renting?
BD: It’s a good point. Landlords could make accommodations, say, longer-term leases—so that instead of signing a one-year lease, maybe you go with a five-year lease and then you as the renter have some latitude in terms of design. But local laws would have to be changed to allow that model.
There is no good solution to that problem. Landlords will always have the right to do what they want with the property including evicting tenants for whatever reason they wish. Most landlords won’t evict a paying tenant; after all, landlords want a stable rental income stream. If renters want more security about where they live and the ability to control their own destiny, they should become homeowners.
An early Ponzi implosion becomes long-term shadow inventory
The former owners of today’s featured property were Ponzis who imploded early on in the bust. Their Notice of Default was recorded in early September 2008. The bank let them squat for about two years before taking the property back at a foreclosure auction on 5/5/2010. Rather then liquidate, the bank decided to hold it for better pricing… LOL! Two years later, prices are down at least 10%, and now the bank is finally capitulating and selling this property for what they can get. The longer they hold out the more they lose. That’s what finally drives lenders to capitulate.
- Our Ponzi owners bought this property on 6/24/2003 for $435,000. They used a $348,000 first mortgage, a $43,450 second mortgage, and a $43,550 down payment.
- On 7/2/2004 they obtained a $150,000 HELOC.
- On 11/30/2004 they refinanced with a $530,250 Option ARM with a 1% teaser rate.
- On 5/6/2006 they obtained another $150,000 HELOC.
Assuming they maxed out their HELOC, the total property debt was $680,250 plus negative amortization. Total mortgage equity withdrawal was $288,800.
My guess is that renting isn’t quite so lucrative.
Buena Park Overview
Median home price is $327,000. Based on a rental parity value of $468,000, this market is under valued.
Monthly payment affordability has been improving over the last 10 month(s). Momentum suggests improving affordability.
Resale prices on a $/SF basis increased from $233/SF to $233/SF.
Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.
Median rental rates increased $25 last month from $1,916 to $1,941.
Rents have been rising for 8 month(s). Price momentum suggests rising rents over the next three months.
Market rating = 7
Proprietary OC Housing News home purchase analysis 
5432 BURLINGAME Ave Buena Park, CA 90621
$549,900 …….. Asking Price
$435,000 ………. Purchase Price
6/24/2003 ………. Purchase Date
$114,900 ………. Gross Gain (Loss)
($34,800) ………… Commissions and Costs at 8%
============================================
$80,100 ………. Net Gain (Loss)
============================================
26.4% ………. Gross Percent Change
18.4% ………. Net Percent Change
2.6% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$549,900 …….. Asking Price
$109,980 ………… 20% Down Conventional
3.74% …………. Mortgage Interest Rate
30 ……………… Number of Years
$439,920 …….. Mortgage
$102,538 ………. Income Requirement
$2,035 ………… Monthly Mortgage Payment
$477 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$137 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$2,649 ………. Monthly Cash Outlays
($323) ………. Tax Savings
($664) ………. Equity Hidden in Payment
$137 ………….. Lost Income to Down Payment
$157 ………….. Maintenance and Replacement Reserves
============================================
$1,956 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$6,999 ………… Furnishing and Move In at 1% + $1,500
$6,999 ………… Closing Costs at 1% + $1,500
$4,399 ………… Interest Points
$109,980 ………… Down Payment
============================================
$128,377 ………. Total Cash Costs
$29,900 ………. Emergency Cash Reserves
============================================
$158,277 ………. Total Savings Needed
——————————————————————————————————————————————-
We're sorry, but we couldn't find MLS # P817669 in our database. This property may be a new listing or possibly taken off the market. Please check back again.
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$537,500 5401 LOCKHAVEN Dr |
0.15 miles 3 bd / 3 ba 3,000 Sq. Ft. |
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$739,000 8582 EMERYWOOD Dr |
0.24 miles 5 bd / 3 ba 3,776 Sq. Ft. |
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$845,000 7 LAKETRAIL Cv |
0.33 miles 4 bd / 2.75 ba 3,300 Sq. Ft. |
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$990,000 68 LAKESIDE Dr |
0.46 miles 7 bd / 5.5 ba 3,900 Sq. Ft. |
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$768,000 8841 VESTAVIA Cir |
0.46 miles 4 bd / 3.5 ba 3,900 Sq. Ft. |
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$519,900 15020 COSTA MESA Dr |
1.17 miles 6 bd / 4.5 ba 3,043 Sq. Ft. |
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$959,000 2292 SHAPIRO St |
1.22 miles 5 bd / 4.25 ba 3,229 Sq. Ft. |
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$929,000 2965 HAWKS POINTE Ct |
1.46 miles 4 bd / 4 ba 3,187 Sq. Ft. |
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$889,000 1477 THATCHER St |
1.53 miles 4 bd / 3 ba 3,192 Sq. Ft. |
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$899,000 1879 CATLIN St |
1.88 miles 5 bd / 3.75 ba 3,850 Sq. Ft. |
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33 Responses to “Renters deserve better than to subsidize loan owners”
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As a renter and future cash condo buyer, I support all points of your “Renter’s Platform” except for the last, which is any extension of the Section 8 rental subsidy program.
Most critics of the Section 8 program focus on its destructive effects on neighborhoods, and it has surely been enormously destructive to formerly fine urban neighborhoods. I am older than most of the people posting here, and witnessed first hand the destruction of some of my city’s finest areas after the introduction of Section 8 vouchers that enabled people who could barely buy a box of soap to move into former high-end rentals owned by landlords who were enabled in keeping rentals far above the market while their properties were being ruined. Point taken, but this is nowhere near the worst damage done.
What neither critics nor supporters of the program fully realize is how it has been the single biggest factor in driving rents up to levels unaffordable for the lower-middle class and the working poor, especially in major cities. The amount of subsidy a renter gets on his or her voucher is calculated according to “average” area rents and the number of people in the household. In a market like Chicago, where there is huge variation in rents, the “average” rent is much higher than most working class and lower class renters can afford and are likely to pay, because upper-bracket areas are averaged in with low-income and middle income areas. If you have 5 one-bedroom rentals renting for $450 a month in a low income nabe, 20 middle-bracket one beds renting for about $1000, and five super luxury one beds renting for $2200 each or more, what’s your “average”? Far above the minimum $450 a month apartment, for a fact. In a market like Chicago or Los Angeles, with their large numbers of truly high-end rentals, you have large numbers of Section 8 renters enabled by subsidies to pay rents far above what lower-middle income renters can afford, thus skewing the rental market.
Cancel Section 8 rental subsidies, and watch how fast rentals on middle and lower-bracket properties fall through the floor.
A simple economic law that we all need to get through our heads is that anything that receives government subsidies will go up in price, usually substantially. If we want housing to be affordable, we should get the government totally out of the housing market and sunset all subsidies and incentives, whether housing projects, Section 8 rental subsidies, or subsidies and incentives for buyers.
Section 8 became a replacement for welfare. If we eliminate section 8, there will be many people who can’t afford housing because they have no income. In a perfect world, we would cut off those subsidies, and the people receiving aid would go find jobs. In the real world, many of these people will end up homeless, in modern Hoovervilles, or in shelters — which there are not enough of, and would require government subsidies anyway.
Back in the 1970s we tried large-scale government housing, and that proved to be a total disaster. That’s why section 8 was developed. It was less costly for the government to provide subsidies to private landlords than it was to provide the housing directly.
Section 8 certainly does distort the rental market, but as Winston Churchill noted about Democracy, “democracy is the worst form of government except all the others that have been tried.” The same is true of rental subsidies.
IR, I really don’t believe these people will end up homeless.
I believe that the prices of bottom-end housing will adjust to what their market will pay and that a lot of Section 8-whore landlords will end up losing their overpriced properties to foreclosure.
You see, these properties are selling for prices based on “average” rents because of these subsidies, rather than prices based on the rents these properties could collect if unsubsidized, which is almost nothing. Many slum owners refuse (illegally) to take any tenants BUT those with housing vouchers, so they are guaranteed relatively high rents for properties that would elsewise be lucky to rent for $300 a month.
When you are a Section 8 tenant, you must pay rent equal to one quarter your monthly income, and you are given a voucher whose value is based on the average area rent and the number of dependent children you have. That means that you might only be paying 10% of the stated rent for some outrageously overpriced place that a market rate renter wouldn’t touch for half the money, but it’s OK with you because you are only paying 25% of your income…….if the landlord can collect it from you and the 10 or 20 other folks you have living or “staying” with you either permanently or from time to time. Yeah, sure, you can be booted out of the voucher program if you fail to come up with “your”share of the rent but you know that is most unlikely to happen because the property owner does not want to come up with another $25,000 to rehab the place to HUD codes after you and your gangbanger boyfriends and sons have ripped the place to shreds and pulled out all the copper plumbing… .and then sit with it empty for 6 months looking for another Section 8 tenant, because the working poor and lower middle class cannot afford the rent and wouldn’t come near the neighborhood even if they could.
An example is a house I know of close to South 71st st in Chicago, a small 5 bed, with 2 beds in the basement, for $1400 a month. You can get a 2 bed of equal size with heat included in a decent north nabe for about $1200, market rate. The tenant in the place is a woman who has to be nagged for her $500 rent, which she and 10 or so other people come up with.. Now, if there were no Section 8, this house would sell for maybe $25K at the most, but the Section 8 voucher makes it rentable at much higher price.
Needless to say, the program is shot through with flagrant fraud. Many cases of the most outrageous cheating to be found here in Chicago, mostly by landlords who are hugely wealthy and politically very well connected. One notorious slumlord has about 150 fetid buildings on the south side with unspeakably degraded conditions, and she is getting Section 8 voucher rent off most of the 1000+ units under her control. Another landlord was collecting Section 8 voucher income for 30 vacant units in a 36 unit building. This happens all the time.
Trust me, these people will find places to rent without these vouchers. Mostly the same crummy places, but at a much, much lower rent which the taxpayers will not have to contribute to. We are not giving our poor better living conditions, just paying slumlords more for the same dumps, and driving prices higher for these places, with the result that those who are too “poor” to afford market rate rentals but too “rich” for Section 8 are completely squeezed out of housing in our urban neighborhoods, which was not the intention of the program.
Say it ain’t so! Our government gets involved to “help” people and the result is skewed prices, perverse incentives, and further entrenchment in the conditions intended to “help.”
During the financial crises of 2008, several large banks where taken over by the FDIC. BTW, Countrywide Mortgage was a unit of Countrywide Financial … they were a BANK. The FDIC persuaded other healthy banks (BofA, Wells & JP Morgan Chase) to purchase the assets of failed banks at a reduced price (WaMu, Wachovia & Countrywide). The FDIC offered these healthy banks a sweet heart deal that exposes the tax payer to massive losses and fattens the banks balance sheets with ca$h. It’s called a “LOSS SHARE AGREEMENT”. Now I’ve known about this agreement for a long time, but I didn’t quite understand it until a friend of mine, who also happens to be a real estate attorney, fully explained it to me on Monday.
I saw this video several months ago thinking it was a special deal set-aside for Goldman Sachs (cronyism). But now I understand it to be a nicely explained (in layman’s terms) “Loss Share Agreement” with the FDIC. All the TBTF banks have these agreements with the FDIC:
http://www.youtube.com/watch?v=ssl5yb7FewA&feature=plcp
This is a propaganda video from the FDIC:
http://www.youtube.com/watch?feature=player_embedded&v=ZCb2BJrbzms
One more point … Countrywide had not failed before BofA purchased them, but they were on their way to failing, and the US Treasury and the FDIC convinced them to do it.
Lenders and politicians make a lot more money off of owners, so it makes sense owners are the favored group. Also, there is no better way to punish renters for not participating in the game (ruse) than by making them subsidize losses.
I don’t have as much problem with the Capital Gain exemption, because I put money in townhome every year. I do have a problem with in Home Mortgage Interest Tax Deduction. Let’s phase it out, then maybe lower the tax rate for everyone. But that’s not going to happen because the US will owe $20 trillion in 2014 in debt. To me that debt that’s so scary.
Lenders are starting to chip away at shadow inventory. We still have a long, long way to go.
Non-Performing Bucket Shrinking for Private Label MBS: Amherst
Reperforming and nonperforming loans decreased $6.1 billion to $528.6 billion in May compared to the previous month of April for private label mortgage backed securities (MBS), according to a report from Amherst Securities Group.
The decrease came after a reduction of $6.4 billion in the non‐performing bucket and a $0.3 billion growth in the re‐performing bucket, reflecting elevated liquidations and a slowdown of new defaults, Amherst stated in the report.
Liquidations totaled $8.7 billion in May, falling from last month’s $8.9 billion.
Compared to previous one-year periods, liquidations are declining but remain elevated. According to the report, the increase in foreclosure activity late last year led to liquidations 8 months later.
For the last 12 months starting with May 2012, liquidations averaged $8.2 billion, lower than the $9.4 billion average monthly liquidations for the twelve months ending May 2011, and $13.7 billion for the twelve months ending May 2010.
The average number of months liquidated loans stayed in the pipeline was 27.4 months (17.1 months in delinquency, 7.8 months in foreclosure, and 2.5 months in REO).
Short sales took the shortest number of months to liquidate in May at a little more than 20 months, while REOs took longer than the 27.4 month average and had a timeline averaging above 30 months.
Month-over-month, non-performing loans decreased to $310.9 billion from $317.3 billion. Fewer loans are actually moving into the non-performing category through default than moving out of the non-performing bucket through liquidation or a modification.
Loan modifications totaled 15,672 in May, down from 21,082 in April.
Since February, principal modifications have become the most popular modification type, and accounted for 41.6 percent of all loan modifications last month, according to the report. Rate modifications made up 32.8 percent of all modifications, and capitalization mods 25.6 percent.
Compared to May 2011, principal modifications comprised 25.6 percent of all modifications, rate modifications were 48.4 percent, and capitalization mods were 26 percent.
Renters will not have the political clout as “owners” and the “bank-sters.” As a class, they lack disposable income to kick back to the politicians in the form of campaign contributions and PAC actions.
The politicians vote for subsidies or bailout to the contributors. The contributors send money back to the politicians to vote for more subsidies. Buy some politician with money, out of office jobs or show time. The current system is self amplification. It ends when there too many feeding at the trough or the taxpayers rebel to form a new government only to reset the system to start over.
Your cynicism is accurate. Renters will lack clout because they don’t have a way of organizing and raising money to buy politicians. Populist movements like the 99% could embrace renter’s issues, but once they get going, populist movements often get taken over by someone smart with a hidden agenda — think Adolf Hitler.
When I see what’s going on, it allow me to avoid getting too upset and to continue doing the best I can with the cards that I been dealt.
Hitler was the understudy of Ernst Röhm, the founder of the party. Hitler was thought to be a hero.
Some great movements start out good but goes bad. Some great movements are bad to start with and just goes to worse or better. History repeats itself with changes to the names and places.
There’s nothing new under the sun.
Your featured house is a perfect example why this market is completely effed up. In a normal world, this house should have found a new buyer in late 2008. Here we are half way through 2012 and it’s just coming to market. Take this example and multiply by millions and you get what you have today = a housing market that has lost all fundamentals.
Yep. Lenders will be pulling housing like this out of the shadows for years. They have done everything possible to avoid a costly market clearing, so we will deal with the fallout for a generation.
Next time you meet a smug loan owner (and I know a few) ask them if they enjoy living in subsidized housing. They will gasp and stutter…”Wha…wha..what are you ssssaying?” You can point out how heavily subsidized loan owning is. Then tell them you are a rugged individualist who, in the true American tradition, prefers to peddle his own canoe. Tell the loan owner that he should be thankful to people like you who subsidize his home ownership.
LOL! I like that.
I’m certainly not a smug homeowner, in fact, I really regret owning this LOAN because no one is subsidizing me other than my 20% down payment that was stolen in this giant Ponzi scheme. However, knowing what I know now, I would have gotten 100% financing on a $600,000 loan like the agent was urging me to do. Then I could have saved my 20% for investment in a business (Corporations are almost like God in the US, without corporations people would stand in one place, sh1t themselves, and starve), and once I start a business, I could have really put the screws to he american public through my “losses”, kind of like how GE makes 4 billion in profit, but gets a 4.4 billion dollar “subsidy” from the taxpayers. Yup, hate your neighbor, those rat bastards next door.
By being responsible and putting 20% down, you got screwed. If you had put nothing down and spent the 20% on frivolous entitlements, you could have had a lot more fun and ended up in the same place. What will you and the others witnessing this debacle do next time?
When I was a kid in the 1960′s I remember what I believe were called “Rent to Own” loans. Does such an animal even currently exist?
The basic idea was that it was possible to rent a home but a certain portion of the rent would be accrued as a down payment towards an eventual purchase at a pre-agreed price.
I don’t know who carried the note, if it was a real bank or private lenders or both.
Seems like such a concept would be a way for current renters to work out of their current dilemma.
Disclosure:
Even though I personally own a home in Irvine, I am in full support of abolishing all forms of Government housing subsidies. As noted above, lets work to get rid of the MID, impose capital gains on sale, and lets get rid of the FHA, Fannie, Freddie, HAMP and ever other stupid government housing “support” program. In short, the government (especially Federal) needs to keep their paws out of private markets. All of us, renters, owners and everyone in between would be much better off without these meddling parasites.
Land installment contracts still happen. It’s basically a rent-to-own arrangement. It isn’t very common because it’s all seller financed. No lender will get involved with a rent-to-own contract which is why you don’t see many of them.
“As a renter, I find the behavior of lenders, loan owners, and politicians galling. Lenders and loan owners inflated a massive housing bubble and priced me out of home ownership for over a decade. To make matters worse, politicians decided my tax dollars should go toward bailing out both parties and subsidizing this atrocious behavior.”
Man, this sums it up nicely…
…except the word “galling” might not be strong enough.
You often use photoshopped versions of Grant’s “American Gothic” to illustrate your points – you know, the picture with the guy holding a pitchfork.
Add a flaming torch in the woman’s hand and THAT comes closer than simply “galling” to the way THIS renter feels…
If i think too much about the situation, it really makes me angry. One thing nice about the writing is that I can express my rage then move on. Of course, the anger comes back every time I see another news story about how some loan owner deserves another bailout or how some banker gets one.
I don’t think you’ll find much sympathy for Renters over the past decade within the government or public.
To many people renters this past decade have basically DODGED a bullet by not buying a home.
How poor renters, you aren’t underwater on a mortgage with an albatross around your neck and you don’t have to stress over falling home prices. Whoa is the sad free renter…
So what you are saying is that loan owners deserve our tax dollars because they were stupid enough to participate in a Ponzi scheme and buy overpriced real estate when they could have rented for less?
Actually, how about if the “poor renters” come up with, oh let’s even say…$50,000 for a down payment on an apartment, and then you can quit paying your monthly nut, and we will allow you to stay for 12 months not paying a $2000/month rent. No worries, you got to live for FREE even though you LOST $26,000. Yea, you no good son-of-a-bit..how DARE you take advantage of us like that and get “free” rent subsidized by us. Uh huh…really, what about that $26,000? Yes, in actuality, that poor bastard paid TWICE as much as the renters. Cry me a fuggin river.
Lawmakers throwing around phrases like “Homeowner’s Bill of Rights” certainly isn’t helpful either.
It’s as if homeowners (debtors) are somehow first class citizens deserving of special treatment and different protections. In contrast, renters are nothing more than opportunistic migrant nomads, hopping from one locale to the next (right?). They’re also obviously less committed to their local community, so society doesn’t recognize them or shower them with equal praise and benefits.
Some parents want El Toro high school to build a big football stadium. The response has been mixed, but some are pissed because spending scarce funds on football stadiums while school structures fall apart doesn’t make much sense.
People are also worried about noise, traffic, parking, littering and post-game juvenile issues. Does anybody care about the opinion of apartment and SFH renters in the area? No. Nobody thinks about renters. Instead let’s listen to what “homeowners” have to say. Their opinion is all that counts.
http://lakeforest-ca.patch.com/articles/letter-to-the-editor-el-toro-stadium-would-hurt-area-homeowners
El Toro high school sucks, I’ve had two children go through that worthless husk of an educational institution. Teacher Unions as well as Police/Firefighter Unions need to have their backs broken, and the government cronies who cause ALL the problems (administrators, principals, executives) need to be FIRED.
The teachers end up taking all the crap, yet they have no FREEDOM to teach outside the “approved educational material from the State”. They are stuck, without the union, they make dick trickle, with the union, you have thuggery at the highest, with union officials partying with government officials, and WE pay.
Eradicate the useless bureaucrats, RAISE teachers pay, slash the governments iron fist education system, boot union thugs in the ass.
We are below 2003 prices so the above property should be priced below $435k
If you think ANY of these shenanigans are going on to solely benefit “owners”, than you are much more dense than I actually think you are. Everything….EVERYTHING on the financial end is done for the banksters, not the “owners”. The owners are being used as a diversion so the sheeple can blame “them” for not making an impossible payment, while the banksters get the CASH from their bought out politicians. (Look at John Q. Dick not making his payment, what a dirtbag asshole! —- while trillions of debt is transferred from major bankster families, to the us taxpayer, but hate your neighbor, don’t actually back anything that would cause change through truth). And if you’re so pissed off, default on your own home if you have the nutsack to do so.
Meanwhile, the race to the bottom continues with the TV indoctrinated retards, actually believing that lower pay, lower benefits, lower social services, are all NECESSARY to keep the corporations alive…..yet profits are at an all time high. At this time, I don’t even really care what happens to this country, nor the people who profess to “love it”. My goal is to save enough CASH, and move the F out to a country where my personal freedom is restored outside a fascist system….which is really what this country is becoming. A fascist, repressive police state, run by corporations. Land of the free LMFAO…go get em sheeple!
How about abolishing rent control while your at it. my family owns a small apartment building in LA where the labor party (democarts) have rent control. We can only raise rents 3%/year and our “lucky” tennats pay far below fair market value for thteir apartments and there is nothing we can do about it. Rent control destory’s property values, creates an entitled class of lottery wining renters (most of our tennats make excellent money but hey, why buy when you scored a rent controlled apartment in the miracle mile section of LA for $800/mont. I’ll be more than happy to get rid of the mortgage interest deduction if you outlaw rent contol.
Alan, Why not move into the rent controlled unit? Rent control usually lower the ROE until there’s a conversation to condo or housing/rental blight. The alternative is a mixed system where the rent controlled units are subsidized by the non-rent controlled units in the building. In the 1980′s, Cambridge MA has students paying $1200 per month while junior executives and professionals were paying $400 in their rent controlled units in the same building.
My aunt has one of her floors of a 3 family house rented to an old lady as a rent controlled unit for $450, while the old lady sub-rented out 2 of the rooms for $500 each. Sub-rents as a rooming house was illegal and made problems with the insurance, but not much recourse for my aunt. Hope your relative in not in the same position.
Rent controls should have been ended after WW2, during what time they were instituted to keep housing costs under control at a time when nothing was being built or manufactured that didn’t contribute to the war effort. And I mean NOTHING.. no tires for your car, no cars for civilians, no nylon hose, no civilian housing.
These controls have wrecked every city that has them. NYC’s Bronx neighborhood is an example of the damage done, as thousands of beautiful pre-war buildings were run into the ground, and then abandoned, as rents were not allowed to keep up with the cost of repairs. Worse, the controls militated against the construction of new rental housing, necessitating HUD assistance in building new “rent-stabilized” housing for middle income families hopelessly priced out of apartments, because the few rent controlled apartments remaining increasingly went to the rich and connected. Read about the Trumpster’s adventures with a swank pre-war limestone ediface on Central Park West that he purchased in the 80s, where 10 room apartments with 12′ ceilings, wine and fur closets, 4 baths, and mahogany wainscoting from one end of the place to the other were renting for $800 a month to extremely rich and connected people, while ordinary folk scanned the obits for reasonable places and paid $1500 a month for 400 sq ft studio units.
Government involvement in the housing market at all levels has accomplished nothing but to blight our older cities, promote suburban sprawl, and make decent housing unaffordable for greater numbers of people every decade, while raising builder profit margins to obscene levels for increasingly shoddy construction.
Tyranny of the majority and tyranny of the powerful. Well articulated but the chance of any change in the direction of fairness is minimal at best.