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moneybox
The Subprime Good Guys
These mortgage lenders loan to poor people, strengthen communities, and
are still making a profit. How do they do it?
By Daniel Gross
Posted Saturday, Nov. 15, 2008, at 7:42 AM ET

I will give you a different perspective from my own words.

Higher interest rates encourage debt reduction and government for cheap
money broke the controls and this counter balance. Then investors
abandoned the loan market as it had a negative ROI and created a
liquidity problem. Compound it with people not paying their debts,
further liquidity issues arose. Some investors actually borrowed cheap
money to lend elsewhere for profit! Others borrowed to pay other debt.
It wasn't just a US thing. You could borrow yen at 1% from Japan and
lend it to the US for 2% and make 1% for nothing. Banks loved it as it
further multiplied and leveraged them so they could lend more.

Government liked it because for a debtor, which is most voters, want and
love low interest rates as they have financed their whole lifestyle on
cheap under priced debt. With interest rates below inflation is was the
way to go.

Poorer people were encouraged to buy homes there really couldn't have
afforded otherwise. This added even more ponzi debt to the system. A
nation life style funded on leveraged debt and the democratic congress
asleep at the wheel encouraged it happen.

Then someone defaulted. And the whole bank/government pyramid scheme
unravelled. No one got paid back their money so they couldn't pay back
others. So people and banks stopped lending money because at 4% you
want to be really sure you get paid. Without these assurances, you
would have to be nuts to 1) lend money below inflation and 2) lend money
you are not going to get back.

Now you have every debtor and fiscal mismanaged company from coast to
coast threatening the government for tax payers money or job loss.

Don't you like socialism, it is like 100 rats in a cage fighting for the
same piece of cheese. 99 of them will get nothing as even the US
government isn't big enough, and certainly not productive enough to make
100 peaces of cheese for nothing.

The reckoning for socialists, government leaches and debt junkies is
coming. Those with no debt or very positive net worth at the bottom of
this are going to do quite well.

Well done. You have an excellent grasp of the economics of things. What
do you do, if I may ask?

Eisboch

UNIX/Linux Administrator/designer/architect consultant (Information
Technology), hobby is investing and finance.

Fishing and boating when I get the chance. Which isn't often enough.

Where are you in Canada if *I* may ask. My favorite fishing is in NE
Ontario in the Kenora area.

"D.Duck" wrote in message
news

"Canuck57" wrote in message
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"Eisboch" wrote in message
...

"Canuck57" wrote in message
...

"Boater" wrote in message
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moneybox
The Subprime Good Guys
These mortgage lenders loan to poor people, strengthen communities,
and are still making a profit. How do they do it?
By Daniel Gross
Posted Saturday, Nov. 15, 2008, at 7:42 AM ET

I will give you a different perspective from my own words.

Higher interest rates encourage debt reduction and government for cheap
money broke the controls and this counter balance. Then investors
abandoned the loan market as it had a negative ROI and created a
liquidity problem. Compound it with people not paying their debts,
further liquidity issues arose. Some investors actually borrowed cheap
money to lend elsewhere for profit! Others borrowed to pay other debt.
It wasn't just a US thing. You could borrow yen at 1% from Japan and
lend it to the US for 2% and make 1% for nothing. Banks loved it as it
further multiplied and leveraged them so they could lend more.

Government liked it because for a debtor, which is most voters, want
and love low interest rates as they have financed their whole lifestyle
on cheap under priced debt. With interest rates below inflation is was
the way to go.

Poorer people were encouraged to buy homes there really couldn't have
afforded otherwise. This added even more ponzi debt to the system. A
nation life style funded on leveraged debt and the democratic congress
asleep at the wheel encouraged it happen.

Then someone defaulted. And the whole bank/government pyramid scheme
unravelled. No one got paid back their money so they couldn't pay back
others. So people and banks stopped lending money because at 4% you
want to be really sure you get paid. Without these assurances, you
would have to be nuts to 1) lend money below inflation and 2) lend
money you are not going to get back.

Now you have every debtor and fiscal mismanaged company from coast to
coast threatening the government for tax payers money or job loss.

Don't you like socialism, it is like 100 rats in a cage fighting for
the same piece of cheese. 99 of them will get nothing as even the US
government isn't big enough, and certainly not productive enough to
make 100 peaces of cheese for nothing.

The reckoning for socialists, government leaches and debt junkies is
coming. Those with no debt or very positive net worth at the bottom of
this are going to do quite well.

Well done. You have an excellent grasp of the economics of things.
What do you do, if I may ask?

Eisboch

UNIX/Linux Administrator/designer/architect consultant (Information
Technology), hobby is investing and finance.

Fishing and boating when I get the chance. Which isn't often enough.

Where are you in Canada if *I* may ask. My favorite fishing is in NE
Ontario in the Kenora area.

If Kenora, that is in the NW of Ontario on the north side of Lake of the
Woods. Not to far east from the middle of the country. Me, I live further
west, across the border north of Great Falls Montana by about 6 hours drive,
Calgary Alberta. 1 gruelling days drive or 2 easy days to drive there from
here. While Calgary has great river trout fishing, it does not compare to
NW Ontario.

But know Kenora, Rainy River, Quetico, Shebandowan areas pretty well. Was
lucky enough to have grandparents on one 38 mile long loaded with fish lake,
spent endless summers fishing, boating and canoeing many lakes north east of
Rainy River, many not on a map either. Did we catch fish back then. I
remember tossing back in 20" walleye calling them minnows. I wish I got
pictures of the rainbows in a small walk in canoe type lake called Tear
Drop. 5 lb small mouth, what a hoot, last time I went there 7 years ago I
got bursitis nailing some 60+ of those in 3 days. The doctor I saw living
in Wisconsin at the time said right away, "...fishing injury, what did you
catch?". The best times are fishing for sure.

Over due to go back too, in fact planning to in 2009. Can't convince the
wife to retire there, know where we can get a nice home on a lake at a real
good deal right now. But really can't afford two places in retirement
(yet). Might try 2-3 weeks in early September after the yahoo's are off the
lakes. Going to hog tie my wife and bring her if I have to, living in a dry
farm belt is not my style.

On Sat, 15 Nov 2008 08:43:02 -0500, "Eisboch" wrote:

Anyway, this is the second time we have done this with property we bought a
while back. The first one, done about 5 years ago has worked out perfectly
for both the buyers and us. Adding this one provides additional income for
us in our retirement years as well as affords home ownership to a young
couple who otherwise would have a hard time getting a bank mortgage in this
day and age. And *we* make the interest, not a bank.

You know - when you told me about your first experience with financing
a house, Mrs. Wave thought that was a great idea for the last
apartment house we couldn't sell due to market conditions. And she
had a candidate (or candidates) - young couple, married for 10 years,
two little ones - he's a mechanic with his own repair business, she's
a surgical nurse.

We talked with them and did the homework. Our long time friend and
attorney worked his butt off getting the whole deal set up. We had
the house appraised ($183,000) and told them they could have it for
$170,000, 30 year fixed at 6% and if interest rates fall below 6%,
we'll adjust the rate automatically to .25% below prevailing rates
until it hits 4%. We did the insurance thing too - backed up the
mortgage with insurance which didn't cost us a freakin' thing really.

Cost them $1,000 in attorney fees - theirs and ours. We looked at it
like you did - let them keep their money and build for the future.

The best thing is that we don't have to handle anything - it's all
automatic to our bank.

I want to publicly thank you for giving us the idea.

"Canuck57" wrote in message
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news

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"Eisboch" wrote in message
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moneybox
The Subprime Good Guys
These mortgage lenders loan to poor people, strengthen communities,
and are still making a profit. How do they do it?
By Daniel Gross
Posted Saturday, Nov. 15, 2008, at 7:42 AM ET

I will give you a different perspective from my own words.

Higher interest rates encourage debt reduction and government for
cheap money broke the controls and this counter balance. Then
investors abandoned the loan market as it had a negative ROI and
created a liquidity problem. Compound it with people not paying their
debts, further liquidity issues arose. Some investors actually
borrowed cheap money to lend elsewhere for profit! Others borrowed to
pay other debt. It wasn't just a US thing. You could borrow yen at 1%
from Japan and lend it to the US for 2% and make 1% for nothing.
Banks loved it as it further multiplied and leveraged them so they
could lend more.

Government liked it because for a debtor, which is most voters, want
and love low interest rates as they have financed their whole
lifestyle on cheap under priced debt. With interest rates below
inflation is was the way to go.

Poorer people were encouraged to buy homes there really couldn't have
afforded otherwise. This added even more ponzi debt to the system. A
nation life style funded on leveraged debt and the democratic congress
asleep at the wheel encouraged it happen.

Then someone defaulted. And the whole bank/government pyramid scheme
unravelled. No one got paid back their money so they couldn't pay
back others. So people and banks stopped lending money because at 4%
you want to be really sure you get paid. Without these assurances,
you would have to be nuts to 1) lend money below inflation and 2) lend
money you are not going to get back.

Now you have every debtor and fiscal mismanaged company from coast to
coast threatening the government for tax payers money or job loss.

Don't you like socialism, it is like 100 rats in a cage fighting for
the same piece of cheese. 99 of them will get nothing as even the US
government isn't big enough, and certainly not productive enough to
make 100 peaces of cheese for nothing.

The reckoning for socialists, government leaches and debt junkies is
coming. Those with no debt or very positive net worth at the bottom of
this are going to do quite well.

Well done. You have an excellent grasp of the economics of things.
What do you do, if I may ask?

Eisboch

UNIX/Linux Administrator/designer/architect consultant (Information
Technology), hobby is investing and finance.

Fishing and boating when I get the chance. Which isn't often enough.

Where are you in Canada if *I* may ask. My favorite fishing is in NE
Ontario in the Kenora area.

If Kenora, that is in the NW of Ontario on the north side of Lake of the
Woods. Not to far east from the middle of the country. Me, I live
further west, across the border north of Great Falls Montana by about 6
hours drive, Calgary Alberta. 1 gruelling days drive or 2 easy days to
drive there from here. While Calgary has great river trout fishing, it
does not compare to NW Ontario.

But know Kenora, Rainy River, Quetico, Shebandowan areas pretty well. Was
lucky enough to have grandparents on one 38 mile long loaded with fish
lake, spent endless summers fishing, boating and canoeing many lakes north
east of Rainy River, many not on a map either. Did we catch fish back
then. I remember tossing back in 20" walleye calling them minnows. I
wish I got pictures of the rainbows in a small walk in canoe type lake
called Tear Drop. 5 lb small mouth, what a hoot, last time I went there 7
years ago I got bursitis nailing some 60+ of those in 3 days. The doctor
I saw living in Wisconsin at the time said right away, "...fishing injury,
what did you catch?". The best times are fishing for sure.

Over due to go back too, in fact planning to in 2009. Can't convince the
wife to retire there, know where we can get a nice home on a lake at a
real good deal right now. But really can't afford two places in
retirement (yet). Might try 2-3 weeks in early September after the
yahoo's are off the lakes. Going to hog tie my wife and bring her if I
have to, living in a dry farm belt is not my style.



mmm................why did I know right away that you were from Alberta?
;-)