Professor Elam

4 responses to “Foreclosures, the Rich can Play Too!”

1. 

   gwadalupebarraza@yahoo.com

   March 31, 2007

   Well, now the decline has spread from what is traditionaly known as suprime to the prime market, so I guess now its a “problem”. I smell regulation. I guess if we need someone to protect us from “bad for us” cooking oil, then we need someone to protect us from bad loans:). Some governtment funded programs, such as ACORN,that provide assitance to first time, low income, homebuyers also require that the prospective homebuyers attend budgeting sessions, so that they can understand how much of a home they can actually afford after taking into consideration “all” living expenses, maybe the more afluent also need a course on budgeting? I’ve already read about some views concerning the implementation of such regulations, maybe it wouldn’t be so bad. I just don’t think that I need someone else to tell me what’s good for me. It should not be so hard if two plus two is four then you can’t afford five. But, that’s just me.

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2. 

   Jason Raper

   April 2, 2007

   I have been following alot of the stories from the sub-prime fallout. Loans are typically qualified on before tax income, and the Loan Officer is supposed to only allow you to have a payment of 28% of gross monthly income. Here is the simple math they use though:
   1…total gross income per month /2
   2…deduct monthly payments for car, credit card, loans, etc
   3…that equals the amount you can afford per month.
   So lets say that you have a person that makes $60000 yr or $5000 a month:
   divide that by 2 and you get $2500
   deduct $450 for car payment and you get $2050
   deduct $100 for credit card MONTHLY DEBT and you get $1950
   deduct $150 for school loans MONTHLY DEBT and you get $1800
   if you use the 1% rule for total taxes and payment that means the max loan value can be $180,000….
   FOR SOMEONE THAT MAKES $60000/year that quite a nice house in DFW and one that they have no business buying….
   If you want to regulate you must first start with the loan officers….the banks are somewhat allowed to loan to whomever they want…at whatever rate they want; the requirements need to be in legislation and on paper to prevent sub-primes from bending the rules for the economy.

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3. 

   Urschler

   April 14, 2007

   Foreclosures are a symptom of a greater issue facing our society. We have somehow forgotten that our intrinsic value is not determined by our job title, neighborhood or the car we drive, yet by the content of our character.
   Personal responsiblity is the best deterrant to federal regulation.

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4. 

   Dennis Elam

   April 14, 2007

   Well forgotten might suggest that someone could remember Ariane’s good commnent. Now the WSJ has the Personal Journal with Distincitive Properties featuring homes in the millions, I have suggested one could have graphed the number of listings there to find the top of the real estate bubble. Forbes used to be a great business mag, now their lifestyle issue runs more pages and probably makes more money. Expensive watch ads for mechanical watches, the less reliable model than my 40 buck Timex, adorn Texas Monthly and the WSJ. And I must say several students have noted that their businesses or some they have seen do everything to get folks into homes they cannot afford.
   Good Point Ariane, gee my Grandad could not have coped with the idea that you go out to lunch and put it no a credit card….

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