What is your "Debt Free Date"

[Pilot]

Larry,

It wasn't a few thousand taking out $50,000 loans. It was hundreds of thousands or maybe millions taking out loans of several hundred thousand $. The intent of the regulators may have been folks who could only afford $50,000 loans, but that's not what the system got.

And the banks were pressured to make those loans.

As Eddie said, it wasn't just the democrats or the republicans. I remember in one of Bush's state of the union speeches he mentioned that the rate of home ownership was the highest ever and there were loud cheers from both sides of the aisle. OTOH, just a few weeks before things crashed, Barney Frank loudly claimed that Freddie Mac and Fannie Mae were sound and there was no risk there.

It wasn't deregulation, it was wrong regulation.

Here's another angle. A Texas lawyer, Kathy Patrick forced Bank of America to pay up to the tune of $8.5 BILLION because of their Countrywide subsidiary shenanigans. The largest financial settlement in history. And she is going after several other institutions. Meanwhile, Chris Dodd and Barney Frank have touted their new laws that screw up financial firm operations, regardless of whether or not they screwed borrowers and mortgage security holders. The lawyers target the real culprits and the politicians target the industry. As much as I dislike the legal industry, I'd rather go with the lawyers and screw the politicians.

 

[300UGUY]

Sounds like your mind is made up and offering any more links or information that doesn't agree with what you want to believe would be a waste of time.

Eddie

One thing I think he has 100% right is the deregulation. Prior to the deregulation, banks were carried very little leverage. Deregulation allowed them to go into higher risk asset classes - more risk = more money. I think when it failed, Lehman bros. was @ 35:1

 

[two_bit_score]

Chris Dodd and Barney Frank are out or on their way out. They should be in jail. Now, the thing to do is make sure the rest of the Obama regime is out of office in 2012.

.

 

[EE_Bota]

I am debt free...

Either:

1)I walked away from a $180,000 dollar McMansion built with illegal immigrant labor using Chinese and other foreign money that I managed to run up to $350,000 dollars by pressing the "withdraw" button every time Goldman-Sachs marketed another tranch of risk free high return CDOs to hungry foreign investors. I pocketed the $120,000.

Or

2)I bought a little rock house in '92 for $82,000 and took on a housemate to share the cost because it was cheaper than his rent, and made me feel more at ease about taking on the debt. As I suggest to others, I took on a 30 year mortgage that I could pay back at an accelerated rate without penalty. Since the interest rate was 6%, anytime I couldn't get a return better that 6% and taxes, I paid extra. I had it paid off, even after adding a garage and work shop after 11 years.

It was supposed to be my starter house, but it may very well be my final house. I have saved up enough money to buy a farm, but I am dissuaded by constant offers of the use of more land than I could ever tend.

Yet, due to the lousy, perverse, insane, yet...strangely STILL debatable fiscal situation in this country, I owe arbitrary amounts of money to the taxing authorities, while feeling huge pressure to spend my saved up farm money on an actual farm in an attempt to not be made a pauper by the hidden tax of inflation because you folks refused to give up NPR.
Yes...I said it...I have free to me farms, but now I may have to go buy one so you can listen to Prairie Home Companion.:laughing:

 

[ultrarunner]

Correct me if I'm wrong but aren't your withholdings based on your pay rate and your dependent deductions? Wouldnt your paper losses on investment rentals and accelerated depreciation be taken on your tax return form that you use after the payroll deductions are taken?

But your overall point is accurate and that is the best way to reduce your tax burden.

BTW, only a few days left to take full advantage if the section 179 deduction for business equipment in 2011. The deductions drop off quite a bit in 2012 so if you can apply them you should put the newly acquired equipment in service before 12-31-11. (I am not a tax advisor, talk to your own.)

.

I'm far from a Tax Expert... I have always used the same CPA firm and my instructions are not to get me into grey areas that may be a problem.

It was explained if I paid the same in with holding/quarterlies as the previous year's tax burden that I am penalty proof...

Since I had no previous year tax liability I was able to state exempt... it caused quite a stir when it hit HR... I finally told HR to talk to my CPA... they did and it stood for several more years till I left.

Before I had the Union job and spent all my time in the rental business... I had depreciation, interest expense, repairs, equipment credits and not enough income to offset. Some of the low income rental tax credits were phenomenal... something like 50% the cost of the enrolled property. Property purchases were often scheduled with interest only payments in the beginning and later I would 1031 exchange out into another income property.

Currently, I have a few more "Exemptions" than typical... based on my CPA's recommendation that I come out even when all is said and done...

Depreciation, Tax Credits and Accelerated Depreciation in the 80's let me maximize my money into growing the rental property business...

 

[ultrarunner]

My take on the lax lending goes a little farther from what I personally heard the politicians say here in Oakland...

First, the newspapers ran story after story of the critical housing shortage facing the country especially here in the SF Bay Area at the same time the restrictions and cost to build multiplied...

The politicians said it was blatantly unfair for an entire class of people to be shut out of the chance to prosper via Real Estate...

The rationale was so many people were poor because they were shut out of the lending market ensuring they would stay poor.

This was brought home in spades living in Oakland CA...

Banks signed consent decrees to avoid litigation... not only did they agree to loosen lending they agreed to actively promote it in "Under-served" populations...

No one seemed to care as buckets of money were being made at every step along the way...

Politicians could say that they did their part in making Americans the highest percentage of Home Owners in history by compelling lenders provide easy access to funds...

It did work for awhile and fortunes were made... unfortunately, it was not sustainable...

I often wonder about the Housing Shortage as I drive neighborhoods with several bank owned homes on every street.

 

[Gale Hawkins]

Builders (same in other professions as well) often plan based on the past experiences and not real future needs.

If one just looks at the demographics NO one sees a major housing recovery in their lifetime. Negative birth rates insures that on average.

Now will there be housing demands due to people moving from the rust to sun belt, from high crime to relative low crime (for a time) area, etc. Sure there will be but no new NET housing demand.

Is the housing concerns even a concern to many today? For current 'Debt Free' home owners it really is not a concern. For the debt free with cash it could be a good time in some markets to buy up rental property that will cash flow and in time see prices recover so one may win in two ways at the same time.

The tax man will come at the time of the selling of these depreciated out rental properties but that can be 20 years down the road. Even at a 40% tax rate if one owns the property free and clear and paid for in part by deferred taxes how can they loose?

 

[riptides]

You all are living in a fantasy world blaming deregulation and the government. While it contributed to the issues of the crisis at hand, the banks engaged in fraudulent transactions. It did not matter what the playing field was set at, the bottom line is a lot of banks senior officers including their CEO's signed off on fraudulent transactions.

Last I checked the government did not give me any money for any of my loans, nor was a government official in the room when money changed hands.

 

[CurlyDave]

You all are living in a fantasy world blaming deregulation and the government. While it contributed to the issues of the crisis at hand, the banks engaged in fraudulent transactions. It did not matter what the playing field was set at, the bottom line is a lot of banks senior officers including their CEO's signed off on fraudulent transactions....

I clearly remember that when bank officials initially objected to the loans the government was trying to force them to make, Maxine Waters (a congress critter) threatened that she would hold so many hearings and investigations that the bank management would have to shut down normal operations since they would be in Washington every day for months on end.

This was the real turning point.

Once the banks figured out that they could make these very poor loans and then sell them to someone else, they became complicit in the problem, but the root was the government.

 

[rkeith]

Aside from my mortgage, I'll be debt free in about 1 year and I can't wait!!! Having debt sucks!!!