Tuesday, March 25, 2008

The Perils Of Home Buying And A Great White Shark Named Cindy

The current economic situation in the United States has everyone in a frenzy and rightfully so. A factor in the economy is the housing market and it is in relatively bad shape at the moment. A point that everyone either overlooks or chooses not to espouse, is that the majority of the housing woes are self inflicted.

Real estate and it's markets are always cyclical and if one looks back in market history, you can see the highs and lows, the booms and the recessions and you can basically see the causes and effects. Having been in real estate for 35 years, it is no surprise to me that the market is in it's current shape and I predicted this would come to pass almost two years ago.

Investors/buyers, when they encounter a good investment are normally quick to act and as they word gets out that the investment is making money, other investors follow suit. Herein lies the problem. At a certain point in time one must look at the market to determine exactly how many investors have "jumped on the bandwagon".

This the point where the wise investor/buyer removes himself from that market and either moves on to a different type of investment or simply waits for the next trend to appear. Unfortunately, all investors/buyers are not equal and sooner or later, someone usually gets stuck holding the bag.

At the same time, many lending institutions began enjoying the real estate boom and as profits came in, some of the more greedy institutions lowered the qualifying levels and increased the loan to value amounts to a point where one could realistically buy a property with nothing down. Combine this with interest only adjustable mortgages and you have the makings of a disaster and that's exactly what has happened.

Many people, now in foreclosure, purchased properties knowing full well that it was over their heads. Why did they buy anyway? They bought thinking that property would continue to rise in value at a rate of 10 to 15 percent annually and when the time came for the mortgage to adjust, they could either sell at a tidy profit or refinance their loans. Timing was their downfall as too many people jumped on the easy money bandwagon and they were left holding the proverbial bag.

When this happened, many of the greedy and unethical lenders such as Countrywide Mortgage and Bear Stearns, who practiced making these risky loans, were left with severe cash problems due to the enormous amount of failed mortgages and lost millions of dollars.

Bottom line, there are no free lunches. Anytime you purchase a home, it should be at a fixed rate of interest, you should have a minimum down payment of ten percent (preferably twenty percent) and your monthly payment should be equal to one week's income, more or less. This criteria is critical and any thing else is potentially going to be financial downfall.

The Pictures: There was this fisherman from southern Australia named Arnold Pointer and while attending his fishing nets, he discovered a female Great White Shark had been snagged in the nets. He reasoned that the shark would die if she was not untangled from the nets, so, he untangled and released her.

End of story, right? Well, not quite. It seems the great white shark (who he named "Cindy") appreciated the act of kindness and Cindy decided to adopt the fisherman.

In a story by The French Magazine, in its 56 edition, Pointer said, "It's been almost two years now she doesn't leave me alone. She follows me everywhere and she scares away the fish."

It's sometimes difficult to break off a relationship and Arnold is a fisherman. Besides that, Great White Sharks are protected by the wildlife conservation. But a "mutual affection" has been established between Cindy and Arnold.

Arnold says,"Once I stop the boat, she comes to me. She turns on her back and lets me pet her belly and neck. She grunts, turns her eyes and flaps her fins in the water."

I've had what I would call a few perilous shark-like relationships myself, but this one is pushing the envelope. Well, judge for  yourselves.... 

This Date In History: 1634; The first settlers arrive in Maryland and found the town of Saint Mary's. 1807; Britain abolishes the African slave trade. 1957; The Treaty of Rome was signed, providing for the establishment of the European Economic Community (EEC), or Common Market. 1975; King Faisal of Saudi Arabia was assassinated by his half brother, Prince Khalid ibn Abdul Aziz.

Birthdays:Howard Cosell, television sports commentator (1920), Flannery O'Connor, writer (1925), Aretha Franklin, singer (1942), Elton John, singer-songwriter (1947).

The Hits Just Keep On Coming:

A Scotsman, American, and an Irishman are in a bar. They are having a good time and all agree that the bar is a nice place.

Then the Scotsman says, "Aye, this is a nice bar, but where I come from, back in Glasgow, there's a better one. At MacDougal's, you buy a drink, you buy another drink, and MacDougal himself will buy your third drink!" The others agree that sounds like a good place.

Then the American says, "Yeah,that's a nice bar, but where I come from, there's a better one. Over in Brooklyn, there's this place, Vinny's. At Vinny's, you buy a drink, Vinny buys you a drink. You buy another drink, Vinny buys you another drink." Everyone agrees that sounds like a great bar.

Then the Irishman says, "You think that's great? Where I come from in Dublin, there's this place called Murphy's. At Murphy's, they buy you your first drink, they buy you your second drink, they buy you your third drink, and then, they take you in the back and get you laid!"

"Wow!" say the other two. "That's fantastic! Did that actually happen to you?"

"No," replies the Irish guy, "but it happened to me sister!"

And then there was......

An Irish woman of advanced age visited her doctor to ask his help in reviving her husband's libido. The doctor asked, "What about trying Viagra?" The woman replied, "Not a chance, he won't even take an aspirin."

The doctor said, "No problem. Give him an Irish Viagra. Simply drop it into his coffee. He won't even taste it. Give it a try and call me in a week to let me know how things went.

A week later the old lady called and said, "Oh, faith, bejaysus and begorrah! T'was horrid. Just terrible." The doctor said, "Really, What happened?" The woman said, "Well, I did as you advised and slipped it in his coffee and the effect was almost immediate. He jumped his self straight up, with a twinkle in his eye and his pants a-bulging fiercely! With one swoop of his arm he sent the cups and tablecloth flying, ripped me clothes to tatters and took me then and there, making wild passionate love to me on the tabletop. It was a nightmare, I tell you, an absolute nightmare!"

The doctor asked, "Why so terrible?  Do you mean the sex your husband provided wasn't good?"

The woman said, "Oh, no, no, no, doctor. The sex was fine. In fact it was the best sex I've had in 25 years. But sure as I'm sittin' here, I'll never be able to show me face in Starbucks again."

That's it for today my little peanut butter cups. More tomorrow.

Stay Tuned !


lsfp1960 said...

I have a friend who's daughter (age 26) decided she wanted to buy a house.  She'd been getting a free ride for herself and her young son with mom & dad since she a kid.  They helped by babysitting so she could finish high school, go to Licensed Practical Nurses training and when she graduated (a 1 year course) she got a job for $11.50 an hour at a state mental institution.  She came home all excited one day, telling her parents that she'd been approved to buy a $200,000 house and the loan was an interst only loan for the first 5 years.  Fortunately my friends were able to talk their daughter out of this but I think there's alot of people out there who fell for this sort of deal, when they could barely afford to put food in their faces.  It's a shame.  And it's happened all over this country.   Linda in WA

midwestvintage said...

 With housing costs these years don't think we didn't examine every bit of my sons finances before agreeing to sell him the house.  Fortunately he is buying well within his means and it should have a happy ending along as world war 3 or something doesn't happen.    I just couldn't believe what houses were going for.

  Loved the shark story but no way....and I mean no way would I trust a shark to love me more then a meal.


bamawmn46 said...

To bad you didn't have the IRish jokes for St. Patrick's Day!!  LOL

The real estate market is really something. I'm ALMOST at a place where I can begin to loook to buy a house. If you have any great tips, e-mail them to me. You know the address....

Have a good one, Jimmy!!

luvrte66 said...

Well said. One has to wonder what happened to common sense....


garnett109 said...

I'm not sure but I think Bear Sterns lost 8 billion in foreclosures and what a great story about the shark.