PDA

View Full Version : BofA CEO: Owners shouldn't look at home as an asset


baja
04-14-2011, 04:58 PM
CHARLOTTE, N.C. Homeowners may need to look elsewhere for long-term investment returns as housing prices in some areas may not rebound long-term, Bank of America Corp Chief Executive Officer Brian Moynihan said on Tuesday.
Moynihan, CEO of the largest U.S. bank, said at a state attorneys general summit that low population growth in some regions of the country indicated that prices might not rise in the wake of the worst financial crisis since the Great Depression.
"It's sobering to think, but some people shouldn't be thinking of (their home) as an asset," Moynihan said at the 2011 National Association of Attorneys General conference. "They should be thinking of it as a great place to live."
Index Last Change
BAC 13.13 -0.14
-1.06%
Quotes delayed 15+ min.


Moynihan said the long-term average annual rise in post-war U.S. home prices of 4 percent owed much to the explosion in domestic population and, in more recent times, the relaxation of credit standards across the mortgage industry.
"The reality is that the population is not expected to grow the way it did post World War I and World War II," he said.
Moynihan noted an Ohio customers' complaint that his 100-year-old home was valued at $50,000. The home, Moynihan said, would be valued as "some multiples of that figure" if it were located elsewhere, but stagnant population levels in the state are driving demand and home prices lower.
The conference included many of the state attorneys general currently engaged in negotiations with BofA and other lenders about a broad settlement to allegations that the industry cut corners on foreclosures.
Moynihan said during his prepared remarks that he had spoken with the attorneys general about industry issues, but declined to comment further about the discussions.

tsiguy96
04-14-2011, 05:13 PM
if youre house isnt an asset, what is? cars arent worth anything after they leave the lot...

baja
04-14-2011, 05:15 PM
if youre house isnt an asset, what is? cars arent worth anything after they leave the lot...

That sucking sound you hear is the American dream going down the drain.

TailgateNut
04-14-2011, 05:55 PM
if youre house isnt an asset, what is? cars arent worth anything after they leave the lot...

My personality:spit:


I hope my house is an asset. I bought during a "buyers market", upgraded throughout, and built an addition. 3 more years and no more payments!:strong: Then it's off to find a nice hideout to relax. Maybe I'll move to Montane and grow some "dental floss" bushes.:approve:

SonOfLe-loLang
04-14-2011, 06:06 PM
That sucking sound you hear is the American dream going down the drain.

Where ya been? Its been gone for YEARS

rugbythug
04-14-2011, 07:28 PM
if youre house isnt an asset, what is? cars arent worth anything after they leave the lot...

Assets make money personal homes have never been an asset. No matter what you tell yourself.

tsiguy96
04-14-2011, 08:03 PM
Assets make money personal homes have never been an asset. No matter what you tell yourself.

Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset

when the value of something as important goes DOWN, its no longer an asset. thats what the BoA CEO is referring to. most fo the time, things like property and houses are assets because the value typically will not decline.

Jay3
04-14-2011, 08:46 PM
That sucking sound you hear is the American dream going down the drain.

You're looking at it! It came true!

http://i.imgur.com/YKhGH.jpg

STBumpkin
04-14-2011, 08:50 PM
You just need to know WHERE to buy. I own a single family home in the vicinity of Seattle (where I was last stationed with the Navy) and now own the one I live in near D.C. Those two places are certain to grow for a long time. Don't buy in the rust belt, south, etc. Just do your research. Real estate will always be the most consistently valuable asset. Land is the only thing they can't make more of.

Jay3
04-14-2011, 09:03 PM
You just need to know WHERE to buy. I own a single family home in the vicinity of Seattle (where I was last stationed with the Navy) and now own the one I live in near D.C. Those two places are certain to grow for a long time. Don't buy in the rust belt, south, etc. Just do your research. Real estate will always be the most consistently valuable asset. Land is the only thing they can't make more of.

Just look at the whole map of the U.S., and decide where to live based on the real estate market?
Hilarious!

STBumpkin
04-14-2011, 09:23 PM
Just look at the whole map of the U.S., and decide where to live based on the real estate market?
Hilarious!

Most people obviously live where their lives take them, but in each location there are good and bad choices. I chose wisely with an established good reputation and growing neighborhood in my Washington neighborhood and an up and coming/rehabbed neighborhood where I bought recently. There are always places where you obviously don't buy and places that are obviously safe no matter the current real estate climate. I bought safe in both cases.

ZachKC
04-14-2011, 11:49 PM
Where ya been? Its been gone for YEARS

Drama.

Meck77
04-15-2011, 12:04 AM
Drama.

Seriously. The American dream is happening every day as new home owners are stepping up.

Dedhed
04-15-2011, 12:13 AM
Assets make money personal homes have never been an asset. No matter what you tell yourself.

Exactly. The home as an asset has always been a complete farce.

TailgateNut
04-15-2011, 04:04 AM
Exactly. The home as an asset has always been a complete farce.


Of course it's better to pay rent to someone and have nothing tangible after decades of making payments, except the warm and fuzzy feeling of knowing that you've "bought the house" for your landlord.:spit:

mhgaffney
04-15-2011, 06:53 AM
The American dream has turned into a nightmare for many people. The jobs have gone off shore -- and they are not coming back.

That is, unless the American people demand the adoption of a different economic model. Our leaders have followed the British free trade model -- that favors the large banks, hollows out industry (by investing abroad) and causes class divisions here at home.

The Germans adopted a different model -- that is friendly to labor and emphasizes investment at home. It results in high wages, full employment and social stability.

How come no one is talking about this? The British model is bankrupt... and leads to war after war --

Spider
04-15-2011, 06:56 AM
if youre house isnt an asset, what is? cars arent worth anything after they leave the lot...

Franklin mint collector plates , Elvis TV dinner trays .........Now that is a portfolio :approve:

elsid13
04-15-2011, 06:58 AM
Franklin mint collector plates , Elvis TV dinner trays .........Now that is a portfolio :approve:

So Hotrod was smart to spend all his money on Velvet Elvis painting and NASCAR Plates? Hotrod the smartest redneck you will never know.

jhns
04-15-2011, 06:58 AM
Old people are silly.

Spider
04-15-2011, 06:58 AM
bran new snow and mud tires for your broke down amc pacer ..never been used ;D turn a buck or 2 on those

Spider
04-15-2011, 06:59 AM
So Hotrod was smart to spend all his money on Velvet Elvis painting and NASCAR Plates? Hotrod the smartest redneck you will never know.

Hotrod is my hero :D

Spider
04-15-2011, 06:59 AM
Old people are silly.

shut up stupid ........

jhns
04-15-2011, 07:01 AM
shut up stupid ........

Or what?

Spider
04-15-2011, 07:02 AM
Or what?

didnt i just tell you to shut up .....

jhns
04-15-2011, 07:04 AM
didnt i just tell you to shut up .....

I wouldn't know. No one undrstands your second grade education.

Spider
04-15-2011, 07:06 AM
I wouldn't know. No one undrstands your second grade education.

you couldnt follow that post ? .....let me guess your the last in your special ed class ......

jhns
04-15-2011, 07:13 AM
you couldnt follow that post ? .....let me guess your the last in your special ed class ......

How can we follow any of your posts? You type like a second grader. Your opinions are those of a second graders. Why didn't you finish school? It was so easy....

Spider
04-15-2011, 07:18 AM
How can we follow any of your posts? You type like a second grader. Your opinions are those of a second graders. Why didn't you finish school? It was so easy....

LOL this coming from someone that cant understand a shut up stupid post ....

jhns
04-15-2011, 07:22 AM
LOL this coming from someone that cant understand a shut up stupid post ....

What was that? You still can't form a sentence? What a surprise!

Spider
04-15-2011, 07:25 AM
What was that? You still can't form a sentence? What a surprise!

shut up stupid .. pretty easy for most ....well except you , maybe you are too butt hurt to think rationally.....

Spider
04-15-2011, 07:27 AM
you know jhns , I dont think we are going to be the friends you was hoping we would be .... to be honest , I think your daddy ruined a perfect prick when he put ears on your head ....

jhns
04-15-2011, 07:30 AM
shut up stupid .. pretty easy for most ....well except you , maybe you are too butt hurt to think rationally.....

Why would anyone in this country not finish school? You don't have to pay for it, it is easy, and it would stop you from continually embarrassing yourself.

Spider
04-15-2011, 07:32 AM
Why would anyone in this country not finish school? You don't have to pay for it, it is easy, and it would stop you from continually embarrassing yourself.
you cant figure it out ? ..... Just how many people did you blow to get your education ?

jhns
04-15-2011, 07:33 AM
you know jhns , I dont think we are going to be the friends you was hoping we would be .... to be honest , I think your daddy ruined a perfect prick when he put ears on your head ....

We never had a chance to be friends. You aren't on my level.

Spider
04-15-2011, 07:38 AM
We never had a chance to be friends. You aren't on my level.

Dont get all butt hurt cause I rejected you ...... time for you to move on

ColoradoDarin
04-15-2011, 07:51 AM
Even better are the people who make the excuse of a huge mortgage just to get the tax deduction. Hey I spent $20K last year in interest, but I got to get $1,000 back in taxes! What a great deal!

Gort
04-15-2011, 07:56 AM
Exactly. The home as an asset has always been a complete farce.

it is an asset.

i think the crook at the BofA meant to say that it's not an investment.

big difference between the two things.

Spider
04-15-2011, 08:04 AM
it is an asset.

i think the crook at the BofA meant to say that it's not an investment.

big difference between the two things.

I think the only way it could be an assets is , if you get the mineral rights .....

baja
04-15-2011, 08:09 AM
it is an asset.

i think the crook at the BofA meant to say that it's not an investment.

big difference between the two things.

No he got it right, an asset is something that holds it's value or increases in value but houses are not doing that. It's actually wiser to rent at this time. Buying a home today almost guarantees you an upside down mortgage (in most areas) in a year. If you need to sell often you can't because the new market value of the house won't payoff the year old mortgage in many areas of the country and it will be a long long time before this changes. This is a huge transfer of wealth that nobody is talking about.

Beantown Bronco
04-15-2011, 08:25 AM
No he got it right, an asset is something that holds it's value or increases in value

I'd disagree with that statement actually. An asset doesn't have to hold or increase in value. It just has to HAVE value. I work on asset schedules for individuals, private and public companies every day and real estate is most certainly listed front and center on these, regardless of whether it gains or loses value.

A similar example is stock. Stock is an asset, even if it loses value. Why is a house any different? It's not.

JJG
04-15-2011, 08:29 AM
of course your going to be upside down if you take out a mortgage and then try to sell a year later.

jhns
04-15-2011, 08:32 AM
No he got it right, an asset is something that holds it's value or increases in value but houses are not doing that. It's actually wiser to rent at this time. Buying a home today almost guarantees you an upside down mortgage (in most areas) in a year. If you need to sell often you can't because the new market value of the house won't payoff the year old mortgage in many areas of the country and it will be a long long time before this changes. This is a huge transfer of wealth that nobody is talking about.

That is completely false. That is true in a small percentage of areas. Why are you so worried abput it anyways? You taking your money to Mexico is horrible for this economy. You living in Mexico means you aren't anywhere close to this "problem".

Why is it that old people act like this? Everything is a conspiracy, everything is falling apart, amd the world is going to end!

Beantown Bronco
04-15-2011, 08:37 AM
it is an asset.

i think the crook at the BofA meant to say that it's not an investment.

big difference between the two things.

Even if that's what he meant (and I think it probably is), he'd be wrong. A house could easily be looked at as an investment. It might look like a bad investment right now in many parts of the country (not all), but it's still an investment. Why? Again, I'd look at the stock example. Nobody would argue that stock isn't an investment, yet stock loses value all the time.

jhns
04-15-2011, 08:43 AM
People do realize that this article could have been written at any time in the last 150 years, right? Homes in some areas are losing value. Yeah, every older part of town. Every part of town that turned into a ghetto. Every town and city that runs pff an outdated industry. This has always happened and it always will.

baja
04-15-2011, 08:47 AM
I'd disagree with that statement actually. An asset doesn't have to hold or increase in value. It just has to HAVE value. I work on asset schedules for individuals, private and public companies every day and real estate is most certainly listed front and center on these, regardless of whether it gains or loses value.

A similar example is stock. Stock is an asset, even if it loses value. Why is a house any different? It's not.

Point taken Bean. But in the case of an asset (home) that has a mortgage against it, should the market value of the asset becomes less than the amount owed to pay it off the "asset" is no longer liquid. I say an asset is not an asset unless it can be liquidated. In the case of the unsellable home the asset has in fact become a prison. This is the new American dream (nightmare) for many Americans today.

WolfpackGuy
04-15-2011, 08:50 AM
Doesn't really apply unless you're a flipper or real estate investor.

I'm surprised this guy came out of hiding after the way Bilk of America ass raped Freddie's Fannie in the Countrywide Financial settlement to the tune of about $35 billion.

jhns
04-15-2011, 08:54 AM
Point taken Bean. But in the case of an asset (home) that has a mortgage against it, should the market value of the asset becomes less than the amount owed to pay it off the "asset" is no longer liquid. I say an asset is not an asset unless it can be liquidated. In the case of the unsellable home the asset has in fact become a prison. This is the new American dream (nightmare) for many Americans today.

You aren't even discussing what your article is about. It is talking abput your home as a long term investment. If you are selling it right after buying it, this article doesn't apply to your situation. So what are you even going on about?

baja
04-15-2011, 09:00 AM
You aren't even discussing what your article is about. It is talking abput your home as a long term investment. If you are selling it right after buying it, this article doesn't apply to your situation. So what are you even going on about?

I'm sorry jhns I can't communicate with you. You can't see to grasp my point.

jhns
04-15-2011, 09:05 AM
I'm sorry jhns I can't communicate with you. You can't see to grasp my point.

That would be because your point doesn't make sense.... You can't even keep up with the articles you post.

Why do you pretend to care about an economy that you are hurting? No one here is doing more damage to it than you. It seems kind of dumb to me.

Dedhed
04-15-2011, 09:12 AM
Of course it's better to pay rent to someone and have nothing tangible after decades of making payments, except the warm and fuzzy feeling of knowing that you've "bought the house" for your landlord.:spit:
...And where did I say that paying rent was an asset or a better idea? Try to read and respond to actual content.

Dedhed
04-15-2011, 09:18 AM
it is an asset.... it's not an investment.

big difference between the two things.

Explain how it's an asset.

A house is nothing more than a money sucking liability that gives people a warm fuzzy feeling that stems from a false sense of security.

baja
04-15-2011, 09:21 AM
That would be because your point doesn't make sense.... You can't even keep up with the articles you post.

Why do you pretend to care about an economy that you are hurting? No one here is doing more damage to it than you. It seems kind of dumb to me.

OK I'll ignore the erroneous slander and accept the challenge to try an explain my point to you.

Say you borrow $90,000 to buy a $100,000 home. A year goes by and you notice homes in your neighborhood are now selling for $80,000. Now lets say you decide you want to sell your house and buy a better one or you get transfered to another city by your employer. What are your options? You still owe the bank almost $90,000 so do you sell your house for $80,000 and pay the the bank the difference out of your pocket in order to be able to move on? Do you sell short (huge hassle) just to escape with your credit rating in tact. Either way tell me how that home is an asset and not an albatross.

As for you long term argument there is no guarantee you house will appreciate. Most markets have not found the bottom yet also wages are trending downward and house prices are tied to what people can afford to pay. (things are different now).

Beantown Bronco
04-15-2011, 09:27 AM
Explain how it's an asset.

A house is nothing more than a money sucking liability that gives people a warm fuzzy feeling that stems from a false sense of security.

Property owned by a person or company, regarded as having value
A valuable item that is owned
The entire property owned by a person, especially a bankrupt, that can be used to settle debts
Anything owned that has exchange value

Dedhed
04-15-2011, 09:32 AM
Property owned by a person or company, regarded as having value
A valuable item that is owned
The entire property owned by a person, especially a bankrupt, that can be used to settle debts
Anything owned that has exchange valueMaybe I should have clarified: explain how it's an asset to you. Only a house bought with cash fits that definition.

Otherwise you're describing the bank's assets, not yours.

jhns
04-15-2011, 09:40 AM
OK I'll ignore the erroneous slander and accept the challenge to try an explain my point to you.

Say you borrow $90,000 to buy a $100,000 home. A year goes by and you notice homes in your neighborhood are now selling for $80,000. Now lets say you decide you want to sell your house and buy a better one or you get transfered to another city by your employer. What are your options? You still owe the bank almost $90,000 so do you sell your house for $80,000 and pay the the bank the difference out of your pocket in order to be able to move on? Do you sell short (huge hassle) just to escape with your credit rating in tact. Either way tell me how that home is an asset and not an albatross.

As for you long term argument there is no guarantee you house will appreciate. Most markets have not found the bottom yet also wages are trending downward and house prices are tied to what people can afford to pay. (things are different now).

The long term argument isn't mine. It is what your article talks about. I am not getting your spin of selling right after you buy it and what that has to do with the article.

No house in this country has lost 1/9 of its value in a year without some kind of natural disaster ot someone burning it down. In fact, houses were assessed to be worth more in most areas around me this past year as most are now paying more in taxes. Houses in some areas have always lost value as towns/cities grow. Eventually you end up in the older part of town or the ghetto. I can get cheap houses in these areas that look like they would have been five times as much thirty years ago. Then there are those that live in areas supported by dying industries. This has always happened. Anyways, aside from the fact that houses aren't losing value the way you claim, it has never once been a good idea to sell so soon after buying. That is unless you are buying a frap house and fixing it up or getting a repoed house...

Homes have always lost value over time "in some areas." The article is stateing the obvious. This isn't new. The qupted guy with the 100 year old home is a dumbass. Since when did people buy houses that old for as much as a new house would cost? Why would they?

There was no eronious slander. What I said is a fact. Where do you spend your money? Point proven.

Taco John
04-15-2011, 09:42 AM
I think he's right... SOME people shouldn't look at their houses as assetts. But other people should. It really depends on whether you overstretched yourself.

I'll be honest with you, we stretched ourselves a little. There were times when I wondered if we'd make it. We reached for a house that we would "grow into," expecting raises and a strong economy to allow us this reach. Things looked great for awhile, but the downturn (along with us growing our family) really put us in a pinch. There were nights when I wondered if we'd make it. But we buckled down, got our budget in order. Put together a debt plan, and started expanding ourselves at work. We now see a lot of light at the end of the tunnel.

I don't think the American dream is dead by any stretch of the imagination. Things would have been a lot more comfortable for us if we didn't reach as far as we did, but the market was artificially inflated by government forces. In my opinion, that's the lesson here. When you mess with the market, it will eventually find its point of equalibrium, and the people that get caught in the bubble will suffer.

Gort
04-15-2011, 09:42 AM
No he got it right, an asset is something that holds it's value or increases in value but houses are not doing that. It's actually wiser to rent at this time. Buying a home today almost guarantees you an upside down mortgage (in most areas) in a year. If you need to sell often you can't because the new market value of the house won't payoff the year old mortgage in many areas of the country and it will be a long long time before this changes. This is a huge transfer of wealth that nobody is talking about.

no, an asset is anything that has value. whether it appreciates or depreciates in value while you own it is irrelevant. if you can sell it and get value in return, then it's an asset.

http://www.investorwords.com/273/asset.html

Beantown Bronco
04-15-2011, 09:43 AM
Maybe I should have clarified: explain how it's an asset to you. Only a house bought with cash fits that definition.

Otherwise you're describing the bank's assets, not yours.

Not necessarily. Paying cash is one way, but not the only way. If you merely have $1.00 in equity or had a mortgage at one time that is now paid off, it's certainly an asset. I'd only entertain the argument that it's not an asset if you are under water.

I certainly don't think "a house is nothing more than a money sucking liability that gives people a warm fuzzy feeling that stems from a false sense of security." I could easily prove the opposite for myself at least.

Taco John
04-15-2011, 09:47 AM
Maybe I should have clarified: explain how it's an asset to you. Only a house bought with cash fits that definition.

Otherwise you're describing the bank's assets, not yours.

In a keynsian economic system, debt can be an asset...

Dedhed
04-15-2011, 09:48 AM
no, an asset is anything that has value. whether it appreciates or depreciates in value while you own it is irrelevant. if you can sell it and get value in return, then it's an asset.

http://www.investorwords.com/273/asset.html

The problem is, if you have a mortgage on your house, it's not your asset; it's the bank's.

Gort
04-15-2011, 09:48 AM
Explain how it's an asset.

A house is nothing more than a money sucking liability that gives people a warm fuzzy feeling that stems from a false sense of security.

anything you own that has value is an asset by definition. if you can sell it and get value in return (e.g. money), it's an asset.

a car. a sofa. a house. your wife's diamond necklace. etc.

whether these things are investments is a different argument. whether these things are GOOD investments is yet another argument.

but an asset is an asset. there is clause in the definition that says you must get back more value than you gave to get it.

if you're desperate to get out of town and need $4K for a plane ticket and your car is worth $5K and you sell it to buy the ticket, then that car was an asset. you got value in return for it (a plane ticket + $1K). the fact that the car may have cost you $15K five years ago is irrelevant. what you got for it now was most definitely of value now. see my point?

Dedhed
04-15-2011, 09:50 AM
In a keynsian economic system, debt can be an asset...

Let me know how that works out for you.

Dedhed
04-15-2011, 09:51 AM
anything you own that has value is an asset by definition.

You don't own your house if you have a mortgage.

Beantown Bronco
04-15-2011, 09:53 AM
The problem is, if you have a mortgage on your house, it's not your asset; it's the bank's.

The individual still technically owns the home and therefore it is their asset. The bank just holds the first priority lien on the home.

baja
04-15-2011, 09:54 AM
It's not an asset when you own more on it that you can sell it for.

Furthermore it's not an asset if you can't sell it or borrow against it.

jhns
04-15-2011, 09:56 AM
It's not an asset when you own more on it that you can sell it for.

Furthermore it's not an asset if you can't sell it.

Do you have a single example of someone thats ows more than their house is worth after living in it for a long time?

Beantown Bronco
04-15-2011, 09:56 AM
You don't own your house if you have a mortgage.

Yes you do. The bank holds a lien but doesn't technically become the owner of your house unless you default on the mortgage and they foreclose.

Gort
04-15-2011, 09:56 AM
The problem is, if you have a mortgage on your house, it's not your asset; it's the bank's.

it's still your asset. you have equity in it. you are the one who sells it. the bank only has a legal claim against the home as collateral on your debt if you default.

elsid13
04-15-2011, 09:58 AM
It's not an asset when you own more on it that you can sell it for.

Furthermore it's not an asset if you can't sell it or borrow against it.

It is still an assets, it just own something that is very poor return on your investment.

baja
04-15-2011, 09:58 AM
An item becomes an asset only if it is liquid. If you can't use an asset to acquire something you need or desire than it is not really an asset, furthermore if it costs something to maintain than it can slip into being a liability. many homes in America are in that position right now.

Gort
04-15-2011, 10:00 AM
Do you have a single example of someone thats ows more than their house is worth after living in it for a long time?

this actually happens alot when people or corporations use the equity in their properties as collateral for additional loans. for example, my old college fraternity house still has a housing corporation making mortgage payments on the fraternity house, more than 80 years after the house was purchased. this is because the house has been renovated many times over the years and additional loans were taken out on the property to finance those renovations. i don't know the particulars of these loans, but i know the housing corporation still exists and i know that when i was in school some 20+ years ago, they were still making payments against the mortgage.

it's not hard to envision such a scenario being common with commercial properties, especially if there are legal or tax advantages to doing so.

jhns
04-15-2011, 10:01 AM
This argument of owing more than it is worth doesn't make sense for one other reason. Who gets a loan and house without a down payment?

jhns
04-15-2011, 10:03 AM
this actually happens alot when people or corporations use the equity in their properties as collateral for additional loans. for example, my old college fraternity house still has a housing corporation making mortgage payments on the fraternity house, more than 80 years after the house was purchased. this is because the house has been renovated many times over the years and additional loans were taken out on the property to finance those renovations. i don't know the particulars of these loans, but i know the housing corporation still exists and i know that when i was in school some 20+ years ago, they were still making payments against the mortgage.

it's not hard to envision such a scenario being common with commercial properties, especially if there are legal or tax advantages to doing so.

I could see that. I would say it was their own poor decisions that screwed them if they were trying to sell that property and couldn't get that money back though. It isn't because of the economy or housing markets.

Gort
04-15-2011, 10:03 AM
An item becomes an asset only if it is liquid. If you can't use an asset to acquire something you need or desire than it is not really an asset, furthermore if it costs something to maintain than it can slip into being a liability. many homes in America are in that position right now.

your objection is merely that you don't like the definition of the word. but you can't just change the meanings of words to win a forum debate. the word has a meaning. the meaning is clear. also, liquid is an adjective. asset is a noun. that allows you to construct 2 types of assets.

liquid assets.
non-liquid assets.

i'm saying that both types can exist.

you're saying that only the first type can exist and thus, no need for the preceding adjective.

Beantown Bronco
04-15-2011, 10:04 AM
An item becomes an asset only if it is liquid. If you can't use an asset to acquire something you need or desire than it is not really an asset, furthermore if it costs something to maintain than it can slip into being a liability. many homes in America are in that position right now.

A non-liquid asset is still technically an asset.

http://www.mycashflownotes.com/blog/2011/02/05/liquid-assets-vs-non-liquid-assets.html

Gort
04-15-2011, 10:06 AM
before the lockout, we would bitterly argue about Cutler or Hillis or Tebow or McD.

after the lockout, we bitterly argue the meaning of the word "asset".

methinks the world has gone mad.

:yayaya:

Dedhed
04-15-2011, 10:08 AM
The individual still technically owns the home and therefore it is their asset. The bank just holds the first priority lien on the home.
Fine. Who gets their money first?

Gort
04-15-2011, 10:11 AM
Fine. Who gets their money first?

the homeowner does. the buyer's funds go immediately into the escrow account of the homeowner. the escrow company then pays off all debts before the seller can access the funds.

Rohirrim
04-15-2011, 10:12 AM
Now let's fight about what a debit is. ;D

baja
04-15-2011, 10:16 AM
our objection is merely that you don't like the definition of the word. but you can't just change the meanings of words to win a forum debate. the word has a meaning. the meaning is clear. also, liquid is an adjective. asset is a noun. that allows you to construct 2 types of assets.

liquid assets.
non-liquid assets.

i'm saying that both types can exist.

you're saying that only the first type can exist and thus, no need for the preceding adjective.



A non-liquid asset is still technically an asset.

http://www.mycashflownotes.com/blog/2011/02/05/liquid-assets-vs-non-liquid-assets.html


Fine oweing more on a house than it's worth makes you the owner of a non liquid asset.

Enjoy paying for something you no longer want an feel good about it because it's an "non liquid asset


I have a better word for it. Economic slavery.

TailgateNut
04-15-2011, 10:16 AM
...And where did I say that paying rent was an asset or a better idea? Try to read and respond to actual content.

Hey dumbass, you stated that a home wasn't an asset. If you aren't buying a home, don't own, don't rent, then you must be frigging homeless!

I may be better in these lean times to considered renting, but considering the deflated/ adjusted home prices, I disagree. Now is a good time to buy! Plenty of bargains.

Dedhed
04-15-2011, 10:17 AM
it's still your asset. you have equity in it.

People rarely do the math on their "equity". People think they have earned equity if they bought their home for $200,000 and it appreciates at 3% annually.

They will say they've created equity, but fail to see that they have spent far more than 3% annually on loan interest alone, and that doesn't include insurance, upkeep, taxes, etc.

Equity is a complete farce.

jhns
04-15-2011, 10:19 AM
Fine oweing more on a house than it's worth makes you the owner of a non liquid asset.

Enjoy paying for something you no longer want an feel good about it because it's an "non liquid asset


I have a better word for it. Economic slavery.

This is not at all what your article is about and you aren't making sense. Who owes more than their house is worth that didn't take out additional loans for home improvements(which would be their own doing)?

Gort
04-15-2011, 10:23 AM
People rarely do the math on their "equity". People think they have earned equity if they bought their home for $200,000 and it appreciates at 3% annually.

They will say they've created equity, but fail to see that they have spent far more than 3% annually on loan interest alone, and that doesn't include insurance, upkeep, taxes, etc.

Equity is a complete farce.

alot of people put 10% or 20% or more down on their home purchase. that's equity from day 1. let's say you purchased a home for $500K 5 years ago. you put 20% down. now the house is only worth $450K in today's market. you still have equity. you have $50K of that $100K downpayment left as equity + whatever principal you've paid off in the 5 years of making mortgage payments. of course, if you sell now, the whole thing ends up being a bad "investment". but most people buy homes to live in them, not to flip them for a quick profit. so wait 5 years or 10 years. by then the house may be worth $650K...

this of course neglects the negative impact of inflation on the value of money, so things get a bit more complicated when figuring out exactly when they're in the black on their home purchase.

but they still have equity from day 1.

TailgateNut
04-15-2011, 10:23 AM
The individual still technically owns the home and therefore it is their asset. The bank just holds the first priority lien on the home.

The guy is pretty set in his assessment of an asset. I consider my home an asset. I didn't bite off more than I could chew, and I have enough cash on hand to pay it off in a heartbeat if I wanted to.

Dedhed
04-15-2011, 10:23 AM
Hey dumbass, you stated that a home wasn't an asset. If you aren't buying a home, don't own, don't rent, then you must be frigging homeless!


Not very bright are you? You mistakenly think that because I don't view a mortgaged house as an asset that I think that renting one is.

All living expenses are liabilities, not assets. Get it genius?

Dedhed
04-15-2011, 10:25 AM
The guy is pretty set in his assessment of an asset. I consider my home an asset. I didn't bite off more than I could chew, and I have enough cash on hand to pay it off in a heartbeat if I wanted to.

I love to hear people brag about how they mismanage their money.


"I don't have to pay interest, I just like to!"

baja
04-15-2011, 10:25 AM
This is not at all what your article is about and you aren't making sense. Who owes more than their house is worth that didn't take out additional loans for home improvements(which would be their own doing)?

First of all it's not my article

Secondly this is post 89 or there abouts, conversations are not static but you should know that by now given how many threads you have derailed with your Cutler love.

Gort
04-15-2011, 10:27 AM
This is not at all what your article is about and you aren't making sense. Who owes more than their house is worth that didn't take out additional loans for home improvements(which would be their own doing)?

some people overpaid on their homes a few years ago, or took out adjustable rate loans that have put them underwater.

IMHO, there was collusion between the banks and real estate industry to hyper-inflate property values, but nobody in DC is going to investigate that because alot of them had their hands in the cookie jar (e.g. Christopher Dodd).

jhns
04-15-2011, 10:28 AM
First of all it's not my article

Secondly this is post 89 or there abouts, conversations are not static but you should know that by now given how many threads you have derailed with your Cutler love.

You haven't once discussed what the article is about. You have been going on this rant from the start.

Who owes more than their house is worth and didn't take out additional loans to screw themselves?

Dedhed
04-15-2011, 10:28 AM
alot of people put 10% or 20% or more down on their home purchase. that's equity from day 1.

That's absurd rationale. You haven't created equity, you've converted a liquid asset into illiquid form. Nothing more.

Gort
04-15-2011, 10:30 AM
That's absurd rationale. You haven't created equity, you've converted a liquid asset into illiquid form. Nothing more.

value - debt = equity

$450K - $400K = $50K equity in my example

it's just a definition.

equity is ALWAYS a hypothetical. it means how much "value" will you walk away with IF you sell something. but it's a realworld measurement for assets.

jhns
04-15-2011, 10:30 AM
some people overpaid on their homes a few years ago, or took out adjustable rate loans that have put them underwater.

IMHO, there was collusion between the banks and real estate industry to hyper-inflate property values, but nobody in DC is going to investigate that because alot of them had their hands in the cookie jar (e.g. Christopher Dodd).

Where is this happening? They had to have down payments and whatever they have paid since. Where have homes gone down that much in price? Is this a small dying town thing or somewhere like Detroit?

baja
04-15-2011, 10:30 AM
I see a lot of you guys have been completely hoodwinked by the banksters.

Give the place where you hang your hat any name you want, bottom line the day you sign the mortgage you become a cash cow for them.

Don't believe me add up what you paid after 30 years of mortgage payments.

Gort
04-15-2011, 10:32 AM
Where is this happening? They had to have down payments and whatever they have paid since. Where have homes gone down that much in price?

Florida. Las Vegas. other places too.

baja
04-15-2011, 10:33 AM
You haven't once discussed what the article is about. You have been going on this rant from the start.

</b>Who owes more than their house is worth and didn't take out additional loans to screw themselves?

Here educate yourself;

http://www.npr.org/templates/story/story.php?storyId=101465335

Dedhed
04-15-2011, 10:37 AM
value - debt = equity

$450K - $400K = $50K equity in my example

it's just a definition.

equity is ALWAYS a hypothetical. it means how much "value" will you walk away with IF you sell something. but it's a realworld measurement for assets.

You didn't lose me with the math, or the definition.

If you have $50K and you give it to me, and then I give it back, have you gained any value? No.

Meck77
04-15-2011, 10:37 AM
So Baja did anyone from the orangemane ever buy your Cabo property you tried to unload here? As much as you claim to know about real estate only a desperate person would post pics of their property on here for hopes someone would buy it.

Keep on preaching about how much you know about real estate in America and how bad things are for us here. Good luck unloading your house/asset or whatever it is in Mexico.

I think I offered you 10k for it last time. I'm thinking half that this go round.

Gort
04-15-2011, 10:37 AM
I see a lot of you guys have been completely hoodwinked by the banksters.

Give the place where you hang your hat any name you want, bottom line the day you sign the mortgage you become a cash cow for them.

Don't believe me add up what you paid after 30 years of mortgage payments.

i don't disagree with you. i'm a conservative, but i have no love for big banks. i've always dismissed the tinfoil hat brigade with their conspiracy theories, but when you see how much of the "emergency" bailout funds taken at gunpoint from US taxpayers was simply dispensed to large banks here and overseas, and those banks sat on those funds rather than writing loans, you have to wonder if the Ron Paul crazies haven't actually stumbled onto some truth. look at Giethner. look at the banks that got the taxpayer funds whether they wanted them or not. look at what they did with that money. the whole thing is unseemly and does indicate that there is a class of banking elites who have inordinate control over many worldwide governments.

that, and the fact that you pay 5%-6% interest on your mortgage, but banks pay you 0.01% or 0.02% interest on your accounts, plus whatever fees they feel like assessing, it it's not hard to come to the conclusion that the typical American is having their pockets picked.

alkemical
04-15-2011, 10:37 AM
some people overpaid on their homes a few years ago, or took out adjustable rate loans that have put them underwater.

IMHO, there was collusion between the banks and real estate industry to hyper-inflate property values, but nobody in DC is going to investigate that because alot of them had their hands in the cookie jar (e.g. Christopher Dodd).

Not to mention, in my area the school boards who love to reassess and raise property taxes upon "increased home value".

Gort
04-15-2011, 10:40 AM
You didn't lose me with the math, or the definition.

If you have $50K and you give it to me, and then I give it back, have you gained any value? No.

no, but that's not what equity measures. equity is how much value you have in something you own. if i buy a Picasso for $1, hang it on my wall for 50 years, and then ask Sotheby's to appraise it for me because i might want to sell it, are you telling me that when Sotheby tells me it's easily worth $10M at auction that i don't have $9,999,999.00 in equity in that painting?

if i sell it to you for $10M and the next day buy it back from you for $10M, on the day after that i still have $9,999,999.00 in equity. all i've done is hand your $10M back to you, but my original $1 investment is still worth $9,999,999.00.

Beantown Bronco
04-15-2011, 10:41 AM
I see a lot of you guys have been completely hoodwinked by the banksters.

Give the place where you hang your hat any name you want, bottom line the day you sign the mortgage you become a cash cow for them.

Don't believe me add up what you paid after 30 years of mortgage payments.

I don't think anyone's ever going to argue that a home is expensive and you pay a lot more than the purchase price courtesy of all that mortgage interest. But, really, what are the other options?

1. Live at home with your parents until they die and you hopefully inherit their house? Not realistic for anyone not named Bob.

2. Rent? Even in a good rental market, you're still essentially paying a lot of money with nothing to show for it.

3. Go homeless?

For most, buying is the most attractive option. Especially if you bought recently in this "buyer friendly" market, put down a reasonable down payment and went with a 15-20 year fixed mortage at a rate below 5%. Pay a little extra each month towards the outstanding principle and you're even further ahead. I just can't see how that would be a bad investment. Sure, you have to pay to fix things and you pay taxes, etc. that you wouldn't otherwise, but in the grand scheme of things, it's no biggie to me for the benefits of owning a house with a big ass yard for the kids and pups. And I'll own it outright with no mortgage soon enough.

If buying was such a slam-dunk bad decision, nobody would do it.

alkemical
04-15-2011, 10:42 AM
...and you never really "own" it.

that's the ****ty part.

Gort
04-15-2011, 10:43 AM
I don't think anyone's ever going to argue that a home is expensive and you pay a lot more than the purchase price courtesy of all that mortgage interest. But, really, what are the other options?

1. Live at home with your parents until they die and you hopefully inherit their house? Not realistic for anyone not named Bob.

2. Rent? Even in a good rental market, you're still essentially paying a lot of money with nothing to show for it.

3. Go homeless?

For most, buying is the most attractive option. Especially if you bought recently in this "buyer friendly" market, put down a reasonable down payment and went with a 15-20 year fixed mortage at a rate below 5%. Pay a little extra each month towards the outstanding principle and you're even further ahead. I just can't see how that would be a bad investment. Sure, you have to pay to fix things and you pay taxes, etc. that you wouldn't otherwise, but in the grand scheme of things, it's no biggie to me for the benefits of owning a house with a big ass yard for the kids and pups. And I'll own it outright with no mortgage soon enough.

If buying was such a slam-dunk bad decision, nobody would do it.

+1 for working in an insult of Bob. i was going to post one earlier, but decided not to. was going to write...

Florida. Las Vegas. any neighborhood Bob moves into.

jhns
04-15-2011, 10:43 AM
Give the place where you hang your hat any name you want, bottom line the day you sign the mortgage you become a cash cow for them

Well, yeah.... Do you understand the purpose of a business? Are they supposed to do this for free?

Again though, why do you care so much about an economy that you are doing more damage to than anyone here? Why are you always so excited to tell us how bad we have it? I am living a great life. I just got a nice sized house for pretty cheap. I have a very good job. Yet, I pive in this country were the American dream is now a myth? You don't make much sense.

jhns
04-15-2011, 10:47 AM
Here educate yourself;

http://www.npr.org/templates/story/story.php?storyId=101465335

I would love to educate myself. Do you have a good source for that? This article doesn't give any details about the numbers they use and doesn't cite anything.

alkemical
04-15-2011, 10:50 AM
Well, yeah.... Do you understand the purpose of a business? Are they supposed to do this for free?

Again though, why do you care so much about an economy that you are doing more damage to than anyone here? Why are you always so excited to tell us how bad we have it? I am living a great life. I just got a nice sized house for pretty cheap. I have a very good job. Yet, I pive in this country were the American dream is now a myth? You don't make much sense.

too bad you don't own your house, really.

that's the sucky part.

Requiem
04-15-2011, 10:58 AM
I'm gonna build a house out of pop cans.

TailgateNut
04-15-2011, 10:58 AM
Fine. Who gets their money first?


jhns "lite".

alkemical
04-15-2011, 10:59 AM
I'm gonna build a house out of pop cans.

I'm just getting a T.P.

Requiem
04-15-2011, 11:21 AM
T.P. not gonna be the most awesome in the Fargo winters. :D

rugbythug
04-15-2011, 11:31 AM
A lot of crazy misinformation in here. Since when is rent wasting money? You get to live someplace without huge commitments and of it breaks not your issue.

And why are banks so bad. They gave you a 100k + and let you do whatever you want to the place. Pretty nice of them. And to top it off people can walk away from the house and they don't get to kill you.

alkemical
04-15-2011, 11:34 AM
T.P. not gonna be the most awesome in the Fargo winters. :D

Well, I don't live there. :)

PA winters aren't maybe that harsh, but not fun from jan-feb.

I am actually thinking about storage containers for housing.

alkemical
04-15-2011, 11:34 AM
A lot of crazy misinformation in here. Since when is rent wasting money? You get to live someplace without huge commitments and of it breaks not your issue.

And why are banks so bad. They gave you a 100k + and let you do whatever you want to the place. Pretty nice of them. And to top it off people can walk away from the house and they don't get to kill you.

I rent, it's not a big deal. I am super busy so I do not have time for mowing, fixing, etc.

I just wish I had more access to do my own garden @ my place. I'm glad to have people that have "leased" me land in their yards to do so.

Spider
04-15-2011, 11:46 AM
like these trucking companies , get these guys to lease these trucks letting em think they are owner operators , they are lease operators huge difference .......... Not a bad deal if you know what you are getting into

jhns
04-15-2011, 11:51 AM
like these trucking companies , get these guys to lease these trucks letting em think they are owner operators , they are lease operators huge difference .......... Not a bad deal if you know what you are getting into

What? That doesn't make any sense. The truckers know they are leasing the trucks. There is no confusion unless you are working with **** companies.

baja
04-15-2011, 03:55 PM
So Baja did anyone from the orangemane ever buy your Cabo property you tried to unload here? As much as you claim to know about real estate only a desperate person would post pics of their property on here for hopes someone would buy it.

Keep on preaching about how much you know about real estate in America and how bad things are for us here. Good luck unloading your house/asset or whatever it is in Mexico.

I think I offered you 10k for it last time. I'm thinking half that this go round.


Meck77 you are a small self absorbed little man. I wish you were capable of keeping you promise and ignore me like I do you (unless attacked). I don't like you. I don't care what you think I don't come here to interact with you. I think you are the biggest fool on this board. Why don't you go cruse for chicks in your orange bus. Oh BTW I wouldn't sell you yesterdays shiit for $20,000. We had a deal to co-exist here why can't you honor that little man. You'll never be in my league no matter how hard you wish it were true.

baja
04-15-2011, 04:07 PM
I don't think anyone's ever going to argue that a home is expensive and you pay a lot more than the purchase price courtesy of all that mortgage interest. But, really, what are the other options?

1. Live at home with your parents until they die and you hopefully inherit their house? Not realistic for anyone not named Bob.

2. Rent? Even in a good rental market, you're still essentially paying a lot of money with nothing to show for it.

3. Go homeless?

For most, buying is the most attractive option. Especially if you bought recently in this "buyer friendly" market, put down a reasonable down payment and went with a 15-20 year fixed mortgage at a rate below 5%. Pay a little extra each month towards the outstanding principle and you're even further ahead. I just can't see how that would be a bad investment. Sure, you have to pay to fix things and you pay taxes, etc. that you wouldn't otherwise, but in the grand scheme of things, it's no biggie to me for the benefits of owning a house with a big ass yard for the kids and pups. And I'll own it outright with no mortgage soon enough.

If buying was such a slam-dunk bad decision, nobody would do it.

I agree buying a house under the terms you laid out is the best deal many can hope for. Of course that best deal equals paying about $400,000 for a house that costs $100,000.

You do have an option of doing what I did as a young man. I bought my first house (cheapest house in the best neighborhood that I could afford) and fix it up and sell it and buy again with the cash from the sale. I have never had a mortgage and I have owned several homes and land. I am fee to work or not work because I have never been a slave to a mortgage. I have had great freedom as a result I have traveled for long periods of time because I did not have a monthly nut to cover. At times I even rented out my current house and used the revenue to travel on. I am not rich but I live rich because I never worked for the "man" I do not regret my choices.

baja
04-15-2011, 04:11 PM
Well, yeah.... Do you understand the purpose of a business? Are they supposed to do this for free?

Again though, why do you care so much about an economy that you are doing more damage to than anyone here? Why are you always so excited to tell us how bad we have it? I am living a great life. I just got a nice sized house for pretty cheap. I have a very good job. Yet, I pive in this country were the American dream is now a myth? You don't make much sense.

I sometimes discuss space travel but I am not an astronut

baja
04-15-2011, 04:19 PM
I'm just getting a T.P.

I lived in a tipi for two years on a bluff over looking a beautiful remote beach and made over $100,000 a year for the two years selling lots on that land for a friend of mine and also got a lot worth $60,000 as a bonus. One of the best times of my life.Just me, my dogs and the rattle snakes. ;D

Blart
04-15-2011, 04:34 PM
Renting is awesome

Spider
04-15-2011, 05:13 PM
What? That doesn't make any sense. The truckers know they are leasing the trucks. There is no confusion unless you are working with **** companies.

no they dont , they package it s selling them the trucks , letting these noobies believe that they can own it and be on easy street .....I asked a bunch of cr england drivers how england did their cab cards , not 1 knew what I was talking about , but they will find out on their own ....

fdf
04-15-2011, 10:37 PM
if youre house isnt an asset, what is? cars arent worth anything after they leave the lot...

Liquid assets are strong now and will continue to be strong (in nominal terms) so long as the Fed keeps pumping out the money. But that's not really good news. It just means there is way too much money and it has to go someplace. Stock, gold, commodities have pumped up as a result.

The Fed really has no choice but to keep printing oodles of money so long as the government is spending $1.5 trillion more than it takes in every year. Somebody has to buy treasuries to finance the deficit. (At this point, the Fed owns more in treasuries than does China.) As soon as the Fed stops financing the deficit, interest rates will shoot up and the cost of interest on the national debt will shoot up and so too will the deficit. OTOH, if it continues to monetize the deficit (buy treasuries), we get inflation, which will cause interest rates to rise also. If we raise taxes to close the deficit, the economy tanks and tax revenues will not go up nearly as much as tax rates do.

So the deficit has put us in a trap we really can't escape. The bottom line, our homes are assets but they are falling in value. As soon as interest rates start up, the homes will fall in value even faster.

baja
04-15-2011, 10:42 PM
Liquid assets are strong now and will continue to be strong (in nominal terms) so long as the Fed keeps pumping out the money. But that's not really good news. It just means there is way too much money and it has to go someplace. Stock, gold, commodities have pumped up as a result.

The Fed really has no choice but to keep printing oodles of money so long as the government is spending $1.5 trillion more than it takes in every year. Somebody has to buy treasuries to finance the deficit. (At this point, the Fed owns more in treasuries than does China.) As soon as the Fed stops financing the deficit, interest rates will shoot up and the cost of interest on the national debt will shoot up and so too will the deficit. OTOH, if it continues to monetize the deficit (buy treasuries), we get inflation, which will cause interest rates to rise also. If we raise taxes to close the deficit, the economy tanks and tax revenues will not go up nearly as much as tax rates do.

So the deficit has put us in a trap we really can't escape. The bottom line, our homes are assets but they are falling in value. As soon as interest rates start up, the homes will fall in value even faster.

Yep. and there is less and less work and more and more unrest.


What was that Barry McGuire song?

Meck77
04-16-2011, 12:13 AM
I agree buying a house under the terms you laid out is the best deal many can hope for. Of course that best deal equals paying about $400,000 for a house that costs $100,000.

You do have an option of doing what I did as a young man. I bought my first house (cheapest house in the best neighborhood that I could afford) and fix it up and sell it and buy again with the cash from the sale. I have never had a mortgage and I have owned several homes and land. I am fee to work or not work because I have never been a slave to a mortgage. I have had great freedom as a result I have traveled for long periods of time because I did not have a monthly nut to cover. At times I even rented out my current house and used the revenue to travel on. I am not rich but I live rich because I never worked for the "man" I do not regret my choices.

You do realize you used the word (I) seventeen times in one brief post. :approve::approve::approve:KnowitallKnowitall

"Believe nothing what you hear and only half of what you see". I've heard you, we've all heard you, nobody has seen you or met you. Not sure how I could hate you. I'm not sure you really exist for that matter.

Keep telling us all the way it is though. America is still one of the best countries in the world. Bag on her and our people all you want if it makes you feel better.

Your paranoia about the end of the world is getting to you. Not a healthy way to live.

baja
04-17-2011, 12:23 PM
Well, yeah.... Do you understand the purpose of a business? Are they supposed to do this for free?

Again though, why do you care so much about an economy that you are doing more damage to than anyone here?<b> Why are you always so excited to tell us how bad we have it?</b> I am living a great life. I just got a nice sized house for pretty cheap. I have a very good job. Yet, I pive in this country were the American dream is now a myth? You don't make much sense.

It's not so much a case of wanting to be the barer of bad tidings but rather I feel a responsibility to post my truth here as well as I can on what I think is important to share. I figure people will do what they want with the information but if it helps one brother or sister out there it will have been worth the effort.