2012 Mar 6, 2:53am
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I predict eventually through the varying and numerous federal programs from HUD,Phoney,Fraudie,FHA,HAMP,TARP, moratoriums, giveaways, money printing and bailouts housing will be permanently 'broken' by too much government meddleing.
A house will cost '31% of whatever you decide to report on your tax return'.
We are already there since if you apply for a HAMP mod they will use this ratio to rework the mortgage to 31% of gross reported income. Really many of these people should be in jail for lying on the original loan application - very easy to get that document and prosecute them if they wanted to BUT instead they get loan mods and/or principal writedown/reworked loan. obscene beyond belief.
Someone with a sweethart 2% mortgage will NOT ever move or sell that property - its a cash cow even though its underwater. This will raise prices due to less inventory.
The fraud is endless: have wife quite job, get loan mod, she goes back to work keep 2% loan. Self employed only reports partial income to 'get loan mod' which is double win as you pay way less taxes too.
This will all blow up when feds can no longer spend double what they take in. I have no idea what the collapse will look like but look at last 4 years - the banks/gov/union employees will survive somehow.
It seems like you have to buy a house with a 'communist country' mindset. Just fill out whatever paperwork with whatever lies they want to hear and you 'get to live there while they let you'. I might buy with as little down as possible, quit job, get loan mod, go back to work. Then stop making payments whenever i feel like moving and sqaut/rent it out for 2 years free. Get bailout, start over. This does not seem like a good way to run things - must be bad for economy in many many ways.