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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Andrew N. Cothran who wrote (89430)	12/6/2004 1:59:57 PM
From: Sig	Read Replies (2) \| Respond to of 793955

Another interesting housing prediction from 1998, and one which home buyers regret reading at that time. businessweek.com It seems we now live in a bubble society since bubbles are all over the place. In car prices and loans, in credit card use. In Mall ownership and industrial lease agreements. At Vegas Hotels and Casinos. What wild and crazy guys, us Yanks. I heard about a man in Calif ten years ago, bought a house for $1.2 mm, couldn't make payment, but could sell it for $800k. He was considering bankruptcy, until he found he would still have to pay for the difference of $400k on the house sometime. No , I dont know how he made out in the end, but he should have used all means to keep the house!. My assumption is that we will get clobbered by inflation sometime. ( I guess $2 gas does not qualify) And a man needs a house over his head to protect his Ferraris, golf clubs, hunting trophies, DVD player and speakers, etc. Sig

To: Andrew N. Cothran who wrote (89430)	12/6/2004 5:36:12 PM
From: frankw1900	Read Replies (1) \| Respond to of 793955

Hot markets lead to creative financing. No different than stock or bond markets. Easy mortgage credit has been fostered by new mortgage products. New types of mortgages have been introduced over the past couple of years that transfer interest rate risk from the financial institution (mortgage owner), to the borrower, while allowing the borrower to take out the largest possible mortgage. Long gone are the days when a borrower borrowed what was considered a safe, prudent amount that they could actually pay back. Today, the borrower takes every penny that lenders will lend. In turn, lenders have "gone crazy" because at the end of the day, the lender is not lending "his" money. The loans go to a GSE security, or into a rated mortgage security, which in turn is bought by a bank or Hedge Fund that is invested just for a short term in the "Cash and Carry Trade"