freddie

Hitting the Reset Button On Home Mortgages

I don't want to sound cold, but judging by the TV interviews of folk being forclosed or walking, and the few I know here in California that were speculating with no money down deals, I have no sympathy.

The majority went in with eyes open hoping for the bubble to continue and to get out in two to five years with tax advantaged big capital gains. They gambled and lost, tough luck and good luck next time. In any case, the bailout is for the lenders, and if interest rates continue to be lowered, maybe another bubble down the road. I lived in Argentina, a nation in almost perpetual stagflation, and every time the housing bubble busted, it revived again a few years later when other speculative outlets dried up. The Argentines were flipping years before the US bubble. But all you stock market fanatics should look to property price recoveries and rents for the long term (think in 10 year periods) by getting started now. I bought residential and a little industrial in the early 1990s downturn in CA and would be a sad sack today if I had just depended on my gambling in equities for my retirement.