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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: John Vosilla who wrote (36024)	7/14/2005 3:10:26 PM
From: Wyätt Gwyön	Read Replies (5) of 110194

i remember an anecdote from the Great Depression about a guy who went to a nice restaurant and had a big steak dinner and dessert. then he said, "i can't pay. you can arrest me now; i just wanted a good meal first." i wonder if the negam program allows this approach to real estate, with the end game being bankruptcy in the worst case, after five years of easy living. for example, if anybody can qualify for low 1% negam no doc, then it's a wonder anybody who's poor rents. in the case of people who don't mind going bankrupt, what if they just buy a million-dolllar house (or even a $500,000 hovel) and do 1.25% negam for five years, paying a little over a thousand a month (or $500-600 for the $500K shack). they might rent out some rooms in their palace to pay for the loan (and food, while you're at it). after five years, if the market has gone up, they make money. if they can't afford it, they go bankrupt, but they were poor to begin with so what's the difference. so, is there anything in the negam program which prevents this kind of thing from happening?

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