Help! My Fiat is Falling!

[aaron]

Everything is going up... gold, silver, oil... Why didn't I buy more!? Is it too late?

I am starting to fear inflation. It has gone from a "what if" to "it has started". I guess I had to see it with my own two eyes. I thought there might be a problem with deflation. With all the money being printed/spent now, are we going to be crushed? ("we" being those with $usd) .

Theory:

What is the average mortgage payment these days? It seems to me that there are a lot of people who, rather than pay their mortgage, are spending their money on stuff and things. With this next wave of foreclosures to hit, that means there are a lot of people with extra cash these days. Even unemployment insurance goes pretty far if you do not pay any rent. I think you can stay in your house about 8 months before the bank kicks you out, or even longer if you multi-mod. If the average mortage payment is $2000, then that is an extra 16K in cash to spend/save per household. Let's face it, I am not the only one who can do math: Rent = $2200/month. Mortgage = $4400. Home Value= -$100,000 and counting. What is the sensible thing to do?

Somebody who knows real numbers could probably tell me if this is an amount of money worthy of mention. I know some people who feel extremely "rich" right now because of this. That will change once they have to pay rent, but that has not stopped them from returning to their previous lifestyle. Could that be the source of the extra money that is floating through the system?

[cjppjc]

Re: Help! My Fiat is Falling!

Aaron:
Are you saying you know a lot of people 3,4,5? who are not paying their mortgage and instead spending it?

[aaron]

Re: Help! My Fiat is Falling!

I am ranting and raving that there are supposedly tons of pending foreclosures. Those all represent x dollars in savings over a period of 8 months (free rent). Some of it MUST be spent into the economy.

There are supposed to be 3 million foreclosures this year. The trend seems to be hitting the upper priced homes now too. If each foreclosure represents $10 thousand dollars spent into the economy... with a multiplier, this might be equivalent to $50 thousand dollars of economic activity for each foreclosure! And, remember, this is likely being spent on general consumption of items under $1000 that do not need to be financed. This would include services, lattes, car trips, education, health care, etc.

$50,000 * 3 million foreclosures = $150,000,000,000

Of course, I am making the numbers up... but you can see that each foreclosure MIGHT be good for the economy as a whole... temporarily. And, might explain some of things that we have been seeing in the markets. It would also explain why the government does not want to help out under-water home owners.

[cjppjc]

Re: Help! My Fiat is Falling!

Okay. So you don't know personally anyone doing this. Let me suggest this. Some number of those people have lost their jobs, so there really isn't a lot a disposable income there. Some others probably are spending the money that should be going to housing, but it might not be as large an amount of money as you think. They are most likely in debt and paying a lot of other creditors.

Here is a great scam. Not sure if I've suggested it before. This works for a man and a woman. One who owns a residence and one who doesn't. Now trust and love are important here. Let's say the man owns a condo. He can stop paying the mortgage. Bank the proceeds. Once they marry the can purchase a home with only the wifes credit score and income being used. The down payment comes from the previously banked money.

[vinoveri]

Re: Help! My Fiat is Falling!

Here is a great scam. Not sure if I've suggested it before. This works for a man and a woman. One who owns a residence and one who doesn't. Now trust and love are important here. Let's say the man owns a condo. He can stop paying the mortgage. Bank the proceeds. Once they marry the can purchase a home with only the wifes credit score and income being used. The down payment comes from the previously banked money.

Unfortunately, this type of activity would no longer be considered "a scam" but simply "prudent business", and this is why they system cannot sustain itself indefinitely. the policies and activities of our gov, particulary over the past 10 months, have led (I would suppose) a large group of folks to realize that the economic system is run in a counter-intutitive way that does not reward savings, frugality, and real production, but rather punishes the first two and instead reward by insuring excessive risk taking and profligacy.

Our society's base of work ethic, fair dealings, and personal responsiblity and self-reliance has been crumbling and I would submit is undergoing a seachange at present.

[ricket]

Re: Help! My Fiat is Falling!

So you don't know personally anyone doing this. Let me suggest this.

12+ months and counting.

[cjppjc]

Re: Help! My Fiat is Falling!

12+ months and counting.

Have you been able to bank a lot. If I were you I would have been buying coins like crazy.

[ricket]

Re: Help! My Fiat is Falling!

Have you been able to bank a lot. If I were you I would have been buying coins like crazy.

Well it started out as unintentional due to a slowdown of my business and cash got tight. But after things picked back up, and after continual reading of the big giant bankster fraud, I'm plotting a way to "starve the beast" and eventually file a lawsuit against my mortgage company for outright criminal fraud.

I doubt they could even prove they own a right to the house in a court of law. I am trying to debunk the legality of the contract (using contract law) under the umbrella of loan consideration, impossibility of performance, and outright fraud. There's so many holes, fraud, and deception in my mortgage (not on my part), that it should easily take 1-2 years to clear up in a court of law since my "mortgage lender" has since gone out of business twice and each of their "successors" had to liquidate or be bought out (1st it was Homebanc, then Countrywide, now on to BAC).

[cjppjc]

Re: Help! My Fiat is Falling!

Well it started out as unintentional due to a slowdown of my business and cash got tight. But after things picked back up, and after continual reading of the big giant bankster fraud, I'm plotting a way to "starve the beast" and eventually file a lawsuit against my mortgage company for outright criminal fraud.

I doubt they could even prove they own a right to the house in a court of law. I am trying to debunk the legality of the contract (using contract law) under the umbrella of loan consideration, impossibility of performance, and outright fraud. There's so many holes, fraud, and deception in my mortgage (not on my part), that it should easily take 1-2 years to clear up in a court of law since my "mortgage lender" has since gone out of business twice and each of their "successors" had to liquidate or be bought out (1st it was Homebanc, then Countrywide, now on to BAC).

Good luck.

[Guest]

Re: Help! My Fiat is Falling!

I thought someone was recalling living through an existential moment while their Italian FIAT car was falling off an overpass [ :p ] after they flew off the road. Thought this was gonna be exciting, with lots of lurid details. But it's only another finance/econ discussion.

[flintlock]

Re: Help! My Fiat is Falling!

A former "friend" of mine lived almost 2 years without paying the mortgage on his house on the golf course before they kicked him out. Then he filed for his second bankruptcy in 10 years. I'm sure he's back at it again. At least he didn't try to blame it on a banking conspiracy.:rolleyes: