Help me prove my theory

[serryjw]

I believe that RW is trying to eliminate home ownership for working class people. I think home equity loans are insidious, high interest rates, variable/interest only loans. All these lead to volatility in a demographics that needs stability. In most major cities developers are only building very expensive country club gated communities. What happened to the 1200 sq foot home? Now 'starter' homes are 2500 sq feet and un-affordable to most. Does everything in America have to be super sized?

[this_side_up]

1. By playing the Home Futures Market

Taking stock of your property -- on the financial market
Los Angeles Times, CA - May 5, 2006
... The Chicago Mercantile Exchange has created five new futures and options contracts designed to follow home prices in the same six cities, plus Boston, Denver ...

http://www.latimes.com/business/la-re-lew7may07,1,335659.story?coll=la-mininav-business

[serryjw]

2. I had read it already

How does that hurt middle class home ownership?

[this_side_up]

4. The same way sucking out equity does

and gas etc prices go higher, they suck out more.

This gives people the opportunity to think they can win
big and pay off their bills.

[padia]

6. The have mores get to make

money from nothing. It does not prevent middle class from owning a home but they work and proportionately still have less

[padia]

3. I think that is only a piece of it

I think that the Neocons are trying to return us to serfdoms by eliminating the middle class and by making housing out of reach for the average folk that means that getting their homes, the main part of their wealth, away from them. Some of the tricks you did not mention are the more insidious ones, the negative amortization loans & the reverse mortgages.
The negative amortizations are designed for "flippers" the reverse mortgage allows the government to buy billions of dollars of wealth away from the middle class, thereby leaving only the investor class able to buy up essentially a families fortune for pennies on the dollar. I am not sure how it works but it seems to me that if you sign your house over to collect a check from the government then 10 years later you die they get a house @ 1/2 price & are only concerned about getting their money back plus some interest. Who but wealth can afford an additional house right now off of the auction block? Even if regular people can this still takes the equity that they should have been able to inherit, or it will drive down the housing market thereby costing the rest of the class their equity, also it could take the equity that we should be getting & putting into the hands of the fortunate because they sold it right away for what the market could bare. Because of all of these programs it is keeping the middle class a float and if we lose this wealth or the access that it provides it will break us.
I think you are right, but I believe that it is a tool to deepen the cleavage in our society, so that the haves can have proportionately more.

[serryjw]

5. I thought reverse mortgages were for the elderly

so they can stay in their home?? I know little about it. Wish someone would explain how it works. Probably doesn't work out well for the kids that want to inherit.
In the big picture, I agree. Everything they are doing points to have serfdom. I love working out of my house. At 56, it's a trade off between freedom and salary/benefits. There is only me, so I don't have to worry about dependants or spouse.

[padia]

7. From what I understand

they are marketing to the elderly but why not they have the best chance of dying off before the full loan would be paid off.

[mcscajun]

11. How reverse mortgages work.

There are federal reverse mortgage programs, but the government is not in the business of making reverse mortgages; they still leave that to the banks. The government doesn't "get" your home.

A reverse mortgage requires no repayment for as long as you live in your home.

You must be at least 62 years old and own your home (your principal residence) free and clear of any other mortgage, to qualify. You can also use an immediate advance from the reverse mortgage to pay off the existing mortgage. This is subject to loan qualification, of course.

You can take payment on your reverse mortgage as a lump sum, monthly advance, credit line, or combination of these.

When the last surviving borrower dies, sells the home, or permanently moves away, the mortgage then falls due. You could be in default if you don't pay your property taxes, let your homeowner's insurance lapse, or neglect your home's upkeep.

When the reverse mortgage falls due, you *(or your heirs)* will owe the total of all cash advances received, plus interest, up to the loan's "nonrecourse" limit. What that means is that you cannot owe more than the value of the home at the time the mortgage falls due. The lender has no recourse to any other assets, either yours or that of your heirs. If the heirs want title to the home, they would need to repay the loan. If the loan balance is less than the home's value, and either you or your heirs pay the amount owed, the lender does not "get" the house.

So, if you end up living in your home for as long (or longer) than you anticipated and/or your home appreciates at low interest rates, you could come out ahead. If you die in just a few years after taking out the reverse mortgage, or interest rates rise substatially, or you decide to sell and relocate, or have to move, say to a nursing home, then you might not.

It's quite a complicated financial instrument, and a serious decision that requires full information, so do plenty of research before you or anyone you love makes such a leap.

http://www.mortgagecontent.net/findCounselorApplication/fanniemae/findCounselor
http://www.fanniemae.com/global/pdf/homebuyers/moneyfromhome.pdf

[serryjw]

16. Thanks for a great explanation

we could all understand

[Indy_Dem_Defender]

8. I was a delivery driver

up until last summer, and I did a lot of delivering in these up scale crack jack built over price neighborhoods. I always wanted to know who bought these 2500-3000 square foot homes in central indiana, since the job market for college educated people sucked in indiana. I always wanted to ask these people what do they do for a living that they can afford this 300k house? Then any house that is considered a starter home (1200-1400 Sq Ft) are all in neighborhoods where they basically give anyone a home loan to build. You end up getting some chick who works a 7 dollar an hour job who can't afford the place to begin with build a house with her unemployed fresh out of prison drug dealing boyfriend who starts all kinds of trouble in the neighborhood moving in. After 9 months they get evicted and the place lays empty for the next year. BEFORE anyone starts flaming me about stereotyping people this scenario has happened a least 2 dozen times in my uncle's neighborhood. It's actually pretty racially diverse the idiots mortgage company's give houses the people are white, black and hispanic but all are pretty much trouble.

Next thing that happens some filthy rich asshole buys the house out of foreclosure and makes it a rental, nothing against renters "I Rent myself, but I treat the place as if it's my own to maintain" but the people who they rent to are more times than not, worse than the person who had the house built. This cause any decent people in these neighborhoods to sale and try to get a house in a "Better neighborhood" and then they end up getting something they can't afford.

[Toucano]

9. Can I help disprove your theory?

"The right is trying to eliminate home ownership for working class people."

There is a simpler explanation. GREED. Developers, lenders, and homeowners are all linked by greed.

The right doesn't care if working class people own their homes or rent. The right simply cares about money and whatever makes them the most money. If you or I rent or own it doesn't make a difference as long as they're on the receiving end of the check.

Insidious and predatory lending practices are simply a means of getting more money, more quickly.

And consumers are buying the McMansions. I have frequently said to myself, "Who can afford that?" and then along comes someone who can. It's amazing what a zero documentation, 110% LTV mortgage can do! In a society that is increasingly centered on the acquisition of things, a big house in which to put all your things is increasingly important.

Everything is not a vast right-wing conspiracy. The thing we have to remember is that while there is a vast right-wing conspiracy, there is also vast right-wing stupidity. Many times their actions and positions are based on their failure to fully understand the consequences of their actions due to their blinding selfishness and greed. And this speaks to the fundamental difference between the left and the right. By definition, the right cannot grasp the concept of long-term effect just as they lack the ability to imagine something from someone else's point of view. That defect is the reason they're Republicans in the first place.

There's actually a whole array of right-wing policies to which this applies. Here's a short list:

Outsourcing
Off-shoring
Predatory lending
Suburbanization
Big box stores
Voodoo economics or "trickle-down" theory
Privatization
School vouchers
Corporate welfare

All of these provide enormous short-term gain and are completely unsustainable. Are they trying to destroy the United States from their mountain fortress like Dr. Evil? No. They're just selfish and stupid.

Will the results be the same as if they were trying to destroy the United States from their mountain fortress like Dr. Evil? Absolutely!

Afterall, it was GWB who told Woodward his vision of the future: "We'll all be dead."

[salin]

14. Bingo!

Greed for short-term gain. A belief that one is entitled to squeeze more money out of others - with no compunction about the cost to others or to the country. A belief that if one is smart enough to come up with a good scam/way to squeeze more money into the pocket (at any cost) than one is smart enough to keep it with no guilt of cost. There is absolutely no concern for citizens. No concern for country. No allegiance to anything but the ability to make more and more money.

[OneBlueSky]

10. ah, but that's just a small part of the story . . .

(well, not so small, maybe) . . .

the philosophical underpinnings of the BushCo and the PNAC pretty much add up to abolition of the middle class, at least in the US . . .

they want to be the rulers, and everyone else their subjects . . .

(damn . . . that sounds an awful lot like totalitarianism) . . .
:shrug:

[applegrove]

12. Well - for profit health care is a transfer of wealth from poor to rich.

Death is sometimes the only way out. Health care was traditionally a common good.

[converted_democrat]

13. I was going to point that out too.. Many seniors, and seriously ill

people are forced to sign over their homes before being able to get state sponsored treatment, or stay in a nursing home.. I mean, to some degree I can understand it, but if health care weren't so expensive people wouldn't be forced into these positions.. Some States have Homestead laws that protect them, but most do not.. People end up losing everything they've ever worked just to be able get care..

[applegrove]

15. Families that have some chronic illness and are middle class loose

their homes. Bankruptcies are up. Health coverage is down. And people a sicker in the USA than in Britain. Sharing risk across the country and over generations is the only way. Small businesses too that have bad luck with one or two very sick employees - get screwed too.