Re: Gentle(wo)men, grab your wallets
- From: EskWIRED@xxxxxxxxxxxxxxxxxxx
- Date: Sun, 29 Apr 2007 15:53:33 +0000 (UTC)
In misc.survivalism, editor@xxxxxxxxxxx <editor@xxxxxxxxxxx> wrote:
Economic collapse - IN PROGRESS - now is apparent in America. Today's
syndicated real-estate column by Lew Sichelman advocated sellers "buy-
down" the mortgage rate for prospective buyers - in effect, paying
their "buyer's" mortgage in part for several years.
How is creative financing an indication of current collapse?
All that is going on is that the buyer is borrowing more money now, in
exchange for a lower interest rate in the future (like paying points).
The only trick is, the seller is complicit in claiming that the extra
value is part of the house transaction, and he relinquishes this value to
the lender.
It can be structured so that the Seller gets the same as he would have,
absent the buydown, or it can be structured so he gets more, or that he
gets less.
It is not an economically productive structure, but it is hardly an
indication of collapse. When all is said and done, the lender has a more
secure loan, the seller gets rid of his house, and the buyer has a lower
interest rate.
If it is set forth clearly in the documents, nobody is misled, and
everybody agrees that their interests are served.
--
The whole problem with the world is that fools and fanatics are always so
certain of themselves, but wiser people so full of doubts.
-- Bertrand Russel
.
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