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Thread: the Mogambo concludes belly up mortgages = death by plastic

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    Banned Melonie's Avatar
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    Default the Mogambo concludes belly up mortgages = death by plastic

    (snip)"Mike Larson at Money and Markets hears me absently babbling incoherently at this shocking revelation, and adds to my misery by saying, “The Mortgage Bankers Association says 0.58% of ALL mortgages entered foreclosure in the first three months of this year. That’s the highest level in US history!”

    Grabbing a calculator instead of an Uzi (as is my usual response to stark terror), I find that this means that about 1-in-200 homes in America are in foreclosure! Yikes!

    But Mr. Larson is not impressed with my impressive math skills, and ignoring me completely goes on to say, “A whopping 14.51% of a specific group of subprime mortgages made in the second half of 2006 are already either being paid late, in foreclosure, or in a position where the underlying property has been seized. That’s simply amazing considering these loans are less than a year old!”

    And it gets worse when he reports that loans made in the first half of 2006 are performing even worse: “almost 18% of them are failing”.

    I was going to ask, “What about the ones made in 2005?”, but I sensed that I would discover that I would rather not know, so I kept my mouth shut for once in my life.

    And the news that “foreclosed properties are popping up all over the place” is made worse because, “They typically aren’t as well-maintained as inhabited homes or even ‘regular’ homes for sale. Some have even been stripped of all their fixtures, wiring, and piping.

    So how does a gutted, derelict eyesore affect surrounding property prices?"(snip)

    (snip)"But this is not about how my neighbours are all a bunch of whiners who can’t mind their own business, but about money and mortgages, and if people don’t have the money to pay their mortgages, then that may explain why consumer credit rose at an annual rate of 6.4% in May.

    The stunning statistic was that the majority of the additional borrowing was by people using their credit cards, and their “total debt and death by plastic” increased at an annual rate of 9.8%! Yikes!

    And what were they buying? Well, I hear that an estimated 700,000 of Apple’s new iPhones were sold on the first day they were put on sale. And most iPhone buyers opted for the more expensive eight-gigabyte model, too, which retailed for US$599!"(snip)

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    God/dess Deogol's Avatar
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    Default Re: the Mogambo concludes belly up mortgages = death by plastic

    I know more money was passing through my credit card because of fuel prices. I don't know what the percent increase has been for a given time period - only that MORE money was going through the card.

    I think it is pretty rare for someone to pay for fuel with cash these days so it is a percentage of increase that would effect the plastic population.

    (And what does an Australian care about the United States?)

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    Banned Melonie's Avatar
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    Default Re: the Mogambo concludes belly up mortgages = death by plastic

    ^^^ the link was australian but the author is American.

    My obvious take on the Mogambo's point is that a whole lot of US homeowners who are now 'cornered' in regard to rising ARM payments, rising taxes, rising gas prices, rising food prices etc. are already technically bankrupt, but are still trying to avoid the inevitable by running up their credit card balances to the max (and continuing to buy status symbol toys on credit to help their denial).

    This goes hand in hand with a recent study showing that today people are more concerned about making their credit card payments than their mortgage payments (which was discussed in another thread) because if their credit cards are cut off they are dead meat re next week's grocery bill and gas tank fillup. This also goes hand in hand with other studies showing sales at WalMart and DollarGeneral are up, which tends to indicate that people who would have shopped at more upscale retailers for food and necessities a few months ago are now forced to pinch every penny.

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    Default Re: the Mogambo concludes belly up mortgages = death by plastic

    I think credit cards are the devil! Thankfully I have no credit card debt, but one of my friends is encouraging me to apply for cards with high limits "for emergencies" and I think to myself... I would rather sleep in my car and live on oatmeal than run up credit card debt I couldn't pay off immediately... because of the interest fees, that's just GIVING your hard earned money away in my mind...

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