There it was, right on NBC national news, Thursday, March 12, 2009, a late 70'S or early 80'S Barth, bustle and all. It was part of a piece about homeless people in California, some of whom have lost their homes and are living in their motor homes. They lined the street and now some California towns are trying to make arrangements for these RVers to be able to park their motor homes. Didn't see any six figure coaches, though. A Barth with a bustle is a lot better than a tent, and there are a lot of tent cities springing up everywhere. But we will get through this by helping each other. Yes, we can!
Jim

Covered in this recent thread:

http://barthmobile.com/eve/for...241087061/m/38010614

Thanks Scott. When I posted it, I hadn't noticed Jack's post of the day before. Really underscores the very difficult circumstances some are in. I saw an interview with a couple who sold their home and bought a $1million+ motorhome and planned to do full timing. Now the bottom has fallen out of their investments and they said they couldn't even afford to put fuel in it. Hopefully, they can keep it and pay the cost of where they are camped and wait things out.

The following explains pretty clearly how the credit crisis actually happened. http://crisisofcredit.com/

Nick

An excellent explanation and recommended viewing! Thanks Nick.

Great presentation Nick! Explained it well.....
Only thing missing was a pic of Rep. Barney Frank, demanding that banks lend to folks who can't afford it, and Rep. Maxine Waters, complaining that income documentation was an "impediment" to home ownership

Major thread drift. Post being moved to General Discussions from Barth Sightings

quote:

Originally posted by Lee:
Only thing missing was a pic of Rep. Barney Frank, demanding that banks lend to folks who can't afford it, and Rep. Maxine Waters, complaining that income documentation was an "impediment" to home ownership

Yep, exactly right. If you only look at one sliver.

I received a "No Income Verification Loan" back in 1990 for my first house. I was self employed (still am) and wasn't married yet. I had to jump thru several hoops to get this loan.

• Fantastic Credit Score
  
• 30% Down Payment
  
• Multitude of loans FIRST before I could get the mortgage (Construction Loans First)
  
• Co-Signer: Girlfriend who had to have perfect credit too

What a balancing act. The house got its CO on a Friday, I got married on Saturday we converted all of the Construction Loans into a Mortgage late Monday after we went to the county to give documentation about marital status and she got a new license with her married name.

I have been continually & verifiable employed going back to when I was 10yrs old. Yes, you can not deliver Newspapers at 5am without our Uncle Sam getting a cut.

I was ticked off when I saw people who couldn't keep a job and had a terrible work ethic get a Mortgage that I had to jump thru hoops to get myself. I sold my first house, took the profits (every nickle) and plowed it right into my modest second house. They call this trading up.

People all around me were getting Mortgages without any problems and no hoops. They would then get these houses and then get a 110% loans on the value. Their attitude was "Housing Prices Keep Rising" so I can get another loan later if I fall behind.

Few people were paying down their mortgages. If the Mortgage was $1300 a month due on the first, they paid $1300 due at the end of the grace period. What? When is it OK to wait until the end of the grace period? You're Late!!! A Grace Period is used in an emergency only and you should still try to pay down the principle early.

1 extra payment within the first year of a Mortgage would wipe off a year or more of the total length of your Mortgage. I know, I studied the Amortization Sheet like it was my Bible. I kept getting a new Amortization Sheet every time I paid early and each time my mortgage was sold to another entity.

Believe it or not, this is a timeline. What happened next really torqued me off.

House prices doubled and then some. Wow... my 130k house was worth over 300k. People I knew started to take out bigger debt obligations using the same mentality of "Housing Prices Keep Rising". Why was the banks/mortgage companies giving out loans to people who couldn't pay "on time" at $1300?

Now, inflated price cause some people to sell and move south. At first, this was mostly retired couples looking to cash in on their good fortunes and live out their retirement in a modestly priced neighborhood. Southerners pushed back when their neighborhoods were overrun with "Retired Yankees" demanding services and snickering how backwards it is "Down South".

The kids who helped their parents move saw another scam. CLICK... I can get a bigger house that I can not afford, wait a few years and sell too. Move south and live it up. Remember, "Housing Prices Keep Rising". A little simplistic I know, but I heard it come from their mouths.

Housing scarcity started to push prices even higher in all areas. Cheap credit and the ever constant drumbeat of "Home Equity Lines of Credit" to take vacations or buy another house caused a cycle of debt that could not be paid.

Hey, people were working and this balancing act was still sustainable. People were still making money and spending it. Unemployment hit record lows. It was said "If you're unemployed, it's because you're lazy" Few people were paying down their debt obligations. Flipping houses and taking extended vacations or buying a 250k Motorhome on borrowed debt could only go on for so long.............

Screech... Prices for fuel started to rise, an overabundance of consumerism and mounting debt caused the free spending ways of the last few years to tighten up. People started to think scared. How can I pay my mortgage (late/grace period) if I have to put fuel in my SUV?

Money stopped flowing: The economy started to slow down from excess and high fuel prices. Slowly the first domino hit the second. They call this a "Cascade Event". People started to get laid off when the cost of items became too much to afford. Fuel prices affect everything from the plastic cup you drink out of to the bread you buy at the store. Prices rose on a lot of goods... further tightening of the belt and less spending ensued. All of the "Experts" said this would continue. Higher prices on everything... Further belt tightening. A cycle of monetary mayhem is being played out before our eyes.

There is now a glut of excess and this is the aftermath.

Prices dropped on housing. The same people who took out a 400k mortgage on a house that is now worth 185k made people "walk away" from their obligation. Why?

The answer can be summed up many ways. Mindset, greed, shortsightedness, stupidity, outside market forces, overconfidence in "untangeable" things, human nature, no skin in the game, lack of savings, etc.

We have lost confidence and are understandably shy about re-investing in this climate of Madoff greed and future uncertainty.

Don't get me wrong... blame can go to the Democrats, Republicans, and the Machine that had stuff like "Credit Default Swaps" and "Mark to Market" and "Derivatives" But until we look within, sadly this scenario will play out again later on down the road.

A rising tide raises all boats. The same too can be said for a receding tide.