Tuesday, September 22, 2009
BUYING LOCAL THINKING GREEN 3/50
Hi. Well, I have been rather devoted to the whole buy local movement. The idea is to spend $50.00 per month, between the 3 brick and mortar stores local to you, that you'd be upset about losing from your neighborhood if they closed their doors. I think there are some who will not be able to afford that and others who can spend way more than that (ahem...me...just cuz I love to shop!) So, for those of us currently employed and feelin' spendy, let's help boost our local economy by searching for our need to be met first by local merchants, secondly, by the local big box stores and lastly, online or outside our area. With everyone participating, the results can be huge. We collectively have the power to save businesses and our community. It has been hard to pull myself away from finding the better online deal but in the end, it will be worth it. Loyalty is a great thing. It is wonderful to come into a place where the owner/workers remember and welcome you back. Every purchase we make is a vote. This might get a tad deeper but we can also spend our money where the businesses are trying to go greener. For example, Sprint has just introduced a feature rich green phone for $50 bucks. Every purchase is a vote. We can also give more (as we are each able) to neighbors who may have lost jobs recently. Nobody reads me anyway, but it could happen so I wish you peace. :-)
Sunday, September 13, 2009
GREED, BAILOUTS, THE FHA & PERSONAL ACCOUNTABILITY
I get why FDIC came along, so that citizens feel comfortable depositing their hard earned cash into the banking system, knowing that, in the event the bank fails, thier money is guanteed.
What I do not understand is why the Government is anylonger involved in housing loans of any kind.
We have greedy people who have talked so many of us into buying more house than we can afford, taught us that buying a home and "trading up" every few years is the normal thing to do, that it is just a-ok to get into interest only loans and just plan on paying the interest...only....never touching the principle. We are all making other greedy people very very rich.
Now we have baby boomers, who, per Consumer Reports, are turning 65 at a rate of around 10,000 per day. With more than 80% owning their own home, the greedy people want you to get a reverse mortgage so they can charge you 30k+ in fees and interest and make a killing...all backed by the government. On a reverse mortgage, that hits 98% of the maximum lending limit, the FHA currently pays back the lender 98% of the loan and takes on servicing the loan as long as the borrower lives on the property. With the housing market tumbling, many of these houses are under water, leaving the tax payer to shore up the difference when the property gets sold at less than the amount due.
Unless you are completely desperate, and even then, think on it twice, using your home as a piggy bank is a very bad idea. In my opinion, it seems a better avenue to get a HELOC, pay the 1st Mortgage off, if there is one, then use the HELOC for only what is absolutely necessary. This still means you are tying up your home into a debt that could mean you are evicted if you cannot pay, but at least the fees are considerably less and much more flexible.
If I make a bad investment decision, I suffer personally for it. The government does not bail me out for being stupid. So, I have a difficult time grasping why are we bailing out banks who make the poor choice of providing loans that should not be provided in the 1st place. Should they not be held accountable for their own poor choices too?
Life is risk. Business is risk. The greater the reward, typically, means there is inherently a greater risk involved too. There should not be a free ride here.
What I do not understand is why the Government is anylonger involved in housing loans of any kind.
We have greedy people who have talked so many of us into buying more house than we can afford, taught us that buying a home and "trading up" every few years is the normal thing to do, that it is just a-ok to get into interest only loans and just plan on paying the interest...only....never touching the principle. We are all making other greedy people very very rich.
Now we have baby boomers, who, per Consumer Reports, are turning 65 at a rate of around 10,000 per day. With more than 80% owning their own home, the greedy people want you to get a reverse mortgage so they can charge you 30k+ in fees and interest and make a killing...all backed by the government. On a reverse mortgage, that hits 98% of the maximum lending limit, the FHA currently pays back the lender 98% of the loan and takes on servicing the loan as long as the borrower lives on the property. With the housing market tumbling, many of these houses are under water, leaving the tax payer to shore up the difference when the property gets sold at less than the amount due.
Unless you are completely desperate, and even then, think on it twice, using your home as a piggy bank is a very bad idea. In my opinion, it seems a better avenue to get a HELOC, pay the 1st Mortgage off, if there is one, then use the HELOC for only what is absolutely necessary. This still means you are tying up your home into a debt that could mean you are evicted if you cannot pay, but at least the fees are considerably less and much more flexible.
If I make a bad investment decision, I suffer personally for it. The government does not bail me out for being stupid. So, I have a difficult time grasping why are we bailing out banks who make the poor choice of providing loans that should not be provided in the 1st place. Should they not be held accountable for their own poor choices too?
Life is risk. Business is risk. The greater the reward, typically, means there is inherently a greater risk involved too. There should not be a free ride here.
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