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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: JBTFD who wrote (16132)	1/17/2004 5:51:33 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Mortgages are an enabling device which do little to change the long-term price equation. CMOs do provide an endless source of funds for mortgages, at a price. This price plus the real estate tax and other expenses add up to the total cost of holding a mortgaged property. When the rental income is less than the total cost of holding the property it attracts few buyers and perhaps the price declines - even though an endless supply of mortgages may be at hand. The owner-occupied market often becomes more irrational than the rental market. Not every owner thinks very logically about what price they're paying for rent. But bubble markets do collapse back to reality with a vengeance.

To: JBTFD who wrote (16132)	1/19/2004 9:33:50 AM
From: Tradelite	Respond to of 306849

>>It seems like this process could result in an almost endless source of funds for mortgages>> Mark, this is precisely what your government intended when it created fannie and freddie....and when it created sallie mae for student loans and the farm loan entity whose name escapes me at the moment. Your government wants people to own homes, it wants people to go to college.....it created sources for the recycling of money to achieve these social/economic goals. If we had to rely on the limited resources of local banks to obtain money for these things, we'd be......sorta nowhere.