The Housing Bubble

Polly:

If he funded his Ira’s and put the money in 529 accounts or in trust for the kids education, how does all that play out in a BK?

OK, thanks, when you said “jugdment proof” I thought he had some legal standing. Nope, just broke.

IRAs are protected. They weren’t for a while, but since 401(k)s were (technically owned by the company) they changed the rules for IRAs so people whose companies didn’t have 401(k)s wouldn’t be at a disadvantage. And it put both forms of retirement savings in a situtation comparable to a person slowly earning a pension but not yet able to tap into it for anything.

I think 529s are the same. Not sure. Someone want to correct me?

Just “in trust” for a kid’s education would depend on all sorts of things. How good the trust instrument is, when it was put in, etc. There are bankruptcy rules that can claw back certain things if it is seen as unfair to the creditors. That is why the people who want to set you up to be asset poor so Medicaid will pay for your nursing home have to start working with you while you are still years from needing care. They want to get your assets out of your name at least X (probably varies by state) years before you need the help.

But I think that normal yearly contributions to retirement savings and 529 wouldn’t be considered some way to duck out of your other debts. It is public policy to get people to save for retirement and kids education so that has probably been harmonized with the bankruptcy laws.

I’m in serious speculation land here, so special warning that no legal advice is being given. It is the sort of thing you could find in an estate planning book at the library. Make sure it is specific to your state.

Polly, do you know if the protection of retirement accounts still holds when you are of age to start withdrawing without penalty?

I did some quick poking around. It looks like there are limits to how much is protected from the bankruptcy estate. There is a federal limit and a bunch of states have them too and you would have to figure out which one was controlling. So the protection does not appear to be absolute. If your balances are low enough to not be added to your bankruptcy estate, then the withdrawal amounts are vulnerable just like any other assets you have on hand - the fact that it used to be in an IRA wouldn’t protect it. I don’t know if they can compel you to make higher withdrawals than the minimum to fund the bankruptcy estate.

This is the sort of thing you can find in a good book on financial planning that explicitly goes into bankruptcy issues. Look for something long and boring and specifically aimed at your state and/or the state where the assets and creditors reside.

If anyone you know is really in this situation, they need a lawyer.

That being said, what is the median value of combined retirement account assets for people in the US? Something absurdly low. I bet those amounts are very much protected.

Thanks Polly its just what if he put the mortgage money into all those protected accounts…i know almost no one did….

Or what if he paid off his student loans just prior to BK…and now is broke…can they claw back that money? again I know only 1 who stopped paying the mortgage and actually did this and so far no repercussions.

There will never be reprecussions until someone tries to sue them. If I were a bank attorney, I would look through my stack and go after the guy with a healthy brokerage account or a rental property before I would try to go after the one with $70K in an IRA or recently discharged student loans. And in a lot of states your primary residence is protected too, so you can’t even necessarily go after a paid off house unless you know they don’t live there.

When there are limited resources, you go after the low hanging fruit. There is a chance that people whose files look “difficult” will never be sued. If the owner of the loan is very organized, the file will get reviewed again a few months before the statute of limitations runs out in the hope that they will have aquired some accessible assets in the mean time. If the 529 plan is accessible, then it will be visible. You can change the beneficiary on those, so the parents or someone else must legally own them.

Assuming we are talking about federally guaranteed student loans, I can’t imagine that the bankruptcy code would let you claw those back to pay back to pay the mortgage holder and leave the government vulnerable to being stiffed on the loan. It just doesn’t make sense that they would write it like that. You wouldn’t expect them to claw back recently paid off federal tax debts either.

“Mr. Sawyer, who works as an operations and policy analyst for a state government agency…”

Mr. Sawyer has no business in a government job considering his financial dalliances and deceit.

And yet almost no one did this…one last question what if they paid their kids student loans off before BK?

Assuming we are talking about federally guaranteed student loans, I can’t imagine that the bankruptcy code would let you claw those back

based on the notion that things would be worse for the poor and middle class if they acted to the contrary.

Is he right? Cause I know that’s the popular opinion but I was there so is he right?? ……….Say it! SAY IT!

SAM KINISON IN BACK TO SCHOOL

http://www.youtube.com/watch?v=Xfi4s8cjLFI

“based on the notion that things would be worse for the poor and middle class if they acted to the contrary.”

I think you give them far too much credit. Do you really believe that they believe that their mission is to look our for the best interests of the poor and middle class???

I want some of what you’re smoking.

instead of “based on the notion” i should have said “sold on the notion”.

based on the notion that things would be worse for the poor and middle class if they acted to the contrary.

Let’s see we could have used the trillions spent on war and bank bailouts by the FED to create jobs improve infrastructure improve energy efficiency.

Instead we chose to bailout bankers and their bonus payouts.

We could have let them fail taken them over and restructred them and sold them back onto the market to people who were resonsible.

I was just going to say that. House prices sure as heck weren’t “stable” from 2002-2007… Maybe they need to define “stable” as compared to the last 50 years instead of just month over month. Oh, but wait, then they would have to show the sheeple a couple graphs. And the sheeple would see all those lines spiking up, and even they would know that something was wrong.

Whatever 2000 calories a day is, that’s the point of no more discretion.

based on the obesity problem in this country…there appears to be alot of discretion.

Obesity foods are the most fattening foods, and also the cheapest foods (subsidies!!): wheat, rice, and above all, CORN. Corn and all the additives they make out of it.

2000 calories alone isn’t going to cut it because you’ve still got to get essential vitamins from somewhere or eventually you’ll get sick.

Scurvy anyone?

FWIW, I know plenty of families that have cut back on the luxuries: eating out, cable TV, etc. Internet is definitely a must have for work and other things.

People are definitely hanging onto the cars well past the payoff date, at least those who bought their cars, those on the lease treadmill are learning the beauty of a paid off car.

Things that remain on the budget buster menu are healthcare, energy, food and education.

Not “needed” but let’s say a couple or family went to the movies every weekend and now are cutting back to their basic cable.

Two words: Red Box

Two words: Red Box

Around here it’s one word: Library

Depending on your gas milage and your location, Red Box might be cheaper than going to the lidrary.

Two more words: health insurance. Shutting down all the Applebees in the world isn’t going to make up for 20% YOY increases in premiums.

The state of Texas hasn’t laid off anyone and is hiring for a few positions.

New FCC program. If your kid gets free lunch at school, you can get high speed internet for $10 a month. Everyone else, keeps paying $50. Well soon to be $52 with the extra $2 going to subsidize the $10 for the “poor”.

well if its barely high speed 768kd 256kup and HD videos on youtube will never play straight through…….its ok with me….

Some poor person getting cheaper internet than I do is not something on which I choose to focus. I’m am focused on those who took much more from me and everyone else through their rapacious greed.

You might lock your car doors when going through a “bad” neighborhood. I lock them when driving by golf courses and gated communities. Those thieves have stolen more than any kid who gets free lunch at school.

Some will rob you with a six-gun and some with a fountain pen. I’ve never been robbed at gunpoint, so the suit wearing robbers are still way out in front in terms of the magnitude of their larceny against me.

This is the problem, the gorging has become so entrenched that you’ve been cowed into overlooking the small stuff and can only pray that someone fixes the big stuff. IMHO that’s the tipping point to tell you the system is failed and it’s just a matter of waiting for the BK to hit. There is no fixing this pig.

One guy has the only real solution and it is a painful solution. People say he will destroy the country implementing his plan. Yes I mean Ron Paul. His plan probably will destroy many plans for PhD’s, Bachelors, Masters, and probably even some MD’s. People say we will have old folks dying in the streets with no Medical, medicare, section 8 housing, Fannie Mae/Freddie Mac, drawn down military, and depleted department of energy.

It seems that everyone forgets these things will happen 2x as badly if we don’t make the correction and instead go BK… But like I said, it seems like everyone wants promises of “hope and change” without pain as opposed to real plans for cutting that will incur significant pain. That’s why I think we are screwed.

“One guy has the only real solution… Yes I mean Ron Paul.”

It’s amazing how much you Ron Paulers sound like christers.

Refute the argument… who else is running with a solution.

And guess what, a very polite “f*!@k you” to you. I am happy to be compared with a “christer” . 99.9% of them are wonderful people even if I disagree with their beliefs.

Ad hominem passive aggressiveness is useless. If you don’t like me, tell me I’m a jerk and that I am wrong, and tell me why. Otherwise, go F yourself, you are contributing nothing.

Also, you may not have noticed this, but I said “one guy has the only solution” (there could be more guys who have it too), not “there is only one guy who can be the solution”. You should try to make more accurate analogies when you attack people. You putz.

“who else is running with a solution”

Um, last time I checked, every candidate offered a ’solution’. You just happen to believe that your guy has the ‘only solution’. Much like other true-believers.

“Ad hominem passive aggressiveness is useless…You putz.”

I’ll take your word for it.

Oh, and your hero wears eyebrow toupees.

You didn’t make an argument. You just admitted that Ron Paul’s plan would cause a lot of horrible stuff to happen and asserted that it would happen twice as badly if his plan didn’t happen. Where is that an argument?

Hopefully i got my point across about ad hominem. If you want to attack, do it directly. Just say it.. I think you are an idiot… Fine. Irrelevant to the topic, but noted. Like calling someone a putz.

The assertion that things will be twice as bad if our country defaults or goes into a hyper inflationary period…. do you dispute it? Instead of just not having a dept of education or student loans, we will have nothing available for defense, postal, judicial (FBI), foregn policy.. IN ADDITION to no education, transportation, HUD, EPA, etc….

Do you dispute that very bad things happen when currencies collapse?

Even worse than when austerity measures are put in place ?

Do you dispute that our current administration(Obama) and the previous administration (Bush) both failed to reduce our national deficit and instead grew it at an exponential rate?

Do you dispute that both administrations supported the policy of the Federal Reserve of pumping massive amounts of FIAT currency into the system by nominating Alan Greenspan and Ben Bernanke to lead the charge with this stated policy?

Do you dispute the claim that Ron Paul is the only candidate calling for the end of the Federal Reserve and its policy of loaning money to Wall St at a near 0% interest rate for them to buy our treasuries at 2% ?

Rick Perry recently tried to jump on board with a claim of cutting 3 .. wait 2 .. wait..oops .departments from the gov’t. Is oops going to solve our debt problem?

Is appointing Tim Geitner as Treasury Secretary going to get us out of being in Wall St’s pocket?

Is emulating Greece’s strategy of massive public spending going to put our country in a position of power by running more money through the Feds? Should we emulate Italy instead? Everyone says France has a great health care system.. should we emulate their budgeting?

Also note , “you putz” isn’t ad-hominem. It’s an attack against you directly, non-passively , unrelated to the argument. I told you I don’t like you. It’s because I think you are being a misogynist with your comments.

“Also note , “you putz” isn’t ad-hominem. It’s an attack against you directly,”

LOL- Thanks for clearing that up. It wasn’t ad hominem, it was just an attack directed at me personally.

“I think you are being a misogynist”

Again, I don’t think that word means what you think it means.

The rest of your argument is just repeating that your guy has the answer, and nobody else does- much like a christer. Saying Greece has a budget problem, for example, doesn’t prove that Paul has the ‘only solution’.

Your last few points about Italy and French health care aren’t even worth refuting, since they make no sense. But they certainly don’t prove that Paul has the ‘only’ answer. Except maybe to the True Believers.

Alpha Math thanks for the laughs today….sometime this board gets so serious….and a few putzes and ad hominems cracks me up.

Ya gotta look at the big picture, the only way to solve our problems is public financing of all elections…everyone who is on the ballot gets the same amount of money….then lets have a dog/cat fight

yes even the socialists the right to lifers and the rent is too damn high party. no lobbyists and no need for fund-raising anymore.

I know a pipe dream maybe that should be the #1 message of OWS…we the 99% can pay more to elect honest,reasonable & smart people then all of wall street combined.

when that happens people like ron paul should have an excellent chance of winning.

alpha, i can admit when someone is right, and you are right. I meant that you were being a misanthrope not a misogynist. I’m repulsed by your equally bad view of people of both sexes.

I think that the military service population that stays in long enough to get the pension is pretty small. I’d venture to guess that the percentage is well below 10%.

Not sure about right now, but in the peacetime army of the late 80s it seemed to me that at least half were trying to career. And most of those were the ones that would have a hardest time finding a real career “on the outside”.

Trying to career, and making it to 20 years, are two different things. I think the 10% number is about right. Certainly not more than 20%.

Back in the day we enlistees and draftees concluded that “NCO” meant “no chance outside.” In many cases I think it was true. But nowadays the service branches can be a lot more selective in who they let in, and especially who they promote.

Are they? The military doesn’t pre-fund its pension obligations?

I found this:

http://eh.net/encyclopedia/article/craig.pensions.public.us

” U.S. Army pensions have always been funded on a “pay-as-you-go” basis from the general revenues of the U.S. Treasury. Thus army pensions have always been simply one more liability of the federal government”

The military population doesn’t have a baby boom explosion as does the general population that is collecting/funding SS.

SS went from 130 contributors per 1 recipient to 3 contributors per 1 recipient.

The military never had that kind of shift in contributors and collectors. Even if the military is drastically cut over the next decade or two, it won’t be anywhere close to the shifts seen in the SS population.

The military never had that kind of shift in contributors and collectors.

Given that that half of the military’s spending is funded by borrowing I would say that it is in far worse shape than SS will be anytime in the next 100 years.

The military population doesn’t have a baby boom explosion as does the general population that is collecting/funding SS.

It’s worse.

There are more retired Air Force than active duty. (My father retired at age 37 from the AF).

Currently, 17% make it to 20 years.

But nowadays the service branches can be a lot more selective in who they let in, and especially who they promote.

I have a friend who’s a retired Air Force officer. He was trying to get promoted to full bird colonel, but guess what, that’s a major weeding-out point in the officer corps. He didn’t get the promotion, so he retired at age 50 after 24 years of service.

The guy is one of those people who often gets maligned because his college major was English. And, gasp, he also got a master’s degree in English.

Well, here’s the rest of the story: Not only was he trained to the level of flying F-15s, which he thoroughly enjoyed. He also said that his ability to write well (something that comes naturally to most English majors) opened a lot of career doors.

He also said that his ability to write well (something that comes naturally to most English majors) opened a lot of career doors.

Inside the military or outside of it?

Inside the military or outside of it?

Inside the military.

It’s never wise to piss off the constituency that carries M-16s.

I think our military is soft anyway

I think the pointy end of the spear is harder than it’s been in a long time. The rest is always relatively soft. And I say that as a proud REMF :-).

I wouldn’t use “soft”.

I will say that there are a lot of REMF jobs where the difference between in the military, and being a civilian are insignificant.

A guy who “shoveled horse $hit in Louisiana” for 20 years is still considered a “veteran”.

Likewise, the guy who has worked for 20 years on KC-135s at Tinker or Hill AFB. Basically doing the same job as the guy working for the airlines. Without the 30 years of pay freezes, pension cuts/eliminations, resets to zero, etc.

(Evidently, the guys in the Air Force don’t turn wrenches on airplanes after they get 10 years in…..we’d hire recent USAF retirees, and most of them would try to sit around shuffling inspection documents and drink coffee……for some reason, we didn’t have the same issue with the ex USN/USMC/Army and Coast Guard guys we’d get.)

thanks GS

2004, 2005, 2006. Those were some good times, right?!?!?!

It was pure hell for us Bay Area “lowly renters” at cocktail parties. I KNEW I was right but there were some nights where I started to doubt. A lot of my friends got mangled in the bubble mess.

“It was pure hell for us Bay Area “lowly renters” at cocktail parties.”

+11

I knew that I was right as well, but it was hard to stay the course. Just kept buying physical silver at ~15 with the money that I wasn’t spending on a “death pledge” and kept my mouth shut. I had had enough arguing when I sold my NoVA condo in 2005 and went back to renting.

Onbviously, my sarcasm and the fact I’ve been around the HBB since 2005 got missed.

I’ve got family that doesn’t talk to me because of the bubble and the observations I made to them in 2004. The only time they’ve talked to me since then is when they called to tell me they were contemplating a strategic default in 2010. My advice?

“What have you got to lose?” Apparently, nothing, from what I heard is she had her friends rent a 24′ uHaul and pull up in the middle of the night to move. She didn’t tell her neighbors. Left the keys in the mailbox and a voicemail to the bank at midnight. She drank the Kool-Aid and the the Falv-or-ade; couldn’t figure out what I was doing as a renter.

Anyway, another character I miss: Casey Serin. Oh, he was a character! Me and the Ms. Chile were newlyweds when he destructed. We sat in our tiny apartment that was next to a Wal-mart parking lot and talk about Casey’s adventures over dinner. Good times.

I don’t know. I think that the “?!?!?!” was a pretty good hint that there was some sarcasm!

I don’t know. I think that the “?!?!?!” was a pretty good hint that there was some sarcasm!

LOL, yes. I didn’t miss it.

The principle, which you seem to have missed, is that no one should be above the law.

I think Marie Antionette happened before automatic weapons. Sadam and Kadafi kept the majority of their citizens under their heal. If not for US intervention no revolt and overthrow. Mubarek was dependent on US charity and this would not continue if he slaughtered his people. China Iran N. Korea. The reality is that an overthrow requires a rich powerful country to back you in the era of automatic weapons. This is particularly true when the leadership has an outside source of wealth like oil and the general population is poor and unarmbed.

This is particularly true when the leadership has an outside source of wealth like oil and the general population is poor and unarmbed.

Luckily we’re covered in those areas…but we’re getting poorer.

Darn those facts.

Who bought the loans? You can’t keep selling what no one is buying… Did or did not Fannie and Freddie buy up the loans once they were written?

“Who bought the loans?”

All sorts of pension funds, institutional investors, sovereign wealth funds, etc, around the world, who were assured they were buying triple AAA securities.

Wow! “a first-of-its-kind Fair Lending Unit staffed with more than 20 lawyers, economists, and statisticians”! That’s like 7 of each! No wonder Goldman and JPMorgan and the mega-banks and the ratings firms all folded in the face of such an onslaught, and reluctantly made billion$ in the bubble, never mentioning to anyone that they were being forced to do so against their will.

And now F&F are suing the ones that are still around for selling them stuff that didn’t meet their (F&F’s) requirements. F&F were defrauded. It is going to take a heck of a long time to sort out and they won’t get it all back (not even close) but it was because of fraud.

I don’t think most of hte loans at F and F were subprime. That’s why the banks needed securitization to get rid of the really crapy stuff. What changed in the years leading up to the crash.

Securitization accelerated in the mid-1990s. The total amount of mortgage-backed securities issued almost tripled between 1996 and 2007, to $7.3 trillion. The securitized share of subprime mortgages (i.e., those passed to third-party investors via MBS) increased from 54% in 2001, to 75% in 2006.[85] A sample of 735 CDO deals originated between 1999 and 2007 showed that subprime and other less-than-prime mortgages represented an increasing percentage of CDO assets, rising from 5% in 2000 to 36% in 2007.[104] American homeowners, consumers, and corporations owed roughly $25 trillion during 2008. American banks retained about $8 trillion of that total directly as traditional mortgage loans. Bondholders and other traditional lenders provided another $7 trillion. The remaining $10 trillion came from the securitization markets. The securitization markets started to close down in the spring of 2007 and nearly shut-down in the fall of 2008.

Which illustrates the point. When the banksters ran out of “prime” borrowers, they had to go farther down the scale to keep the securitization machine running. Until you have a system loaning $800K to $20K a year strawberry pickers.

The banksters didn’t care, they were selling the risk to someone else. While making a commission off the sale.

Follow the money. When it all blew up, who had the cash, and who had the rapidly depreciating “assets”?

Besides, they would have gotten to making absurd loans even without the CRA because they sold the loans a few weeks later anyway. Who cares about the ability of the borrower to pay when you have no exposure to the risk?

This is the KEY.

You could write a number on a piece of paper, do some kabuki with having someone claim they’re going to pay it back, and you couldn’t possibly care less if it were true. And sell the paper for a tidy profit.

Pure monopoly money. Except you get to pocket real money one the sale of the piece of paper.

Never seen this poster before and he/she seemed kind of serious. I think that you might be mistaken about the sarcasm. And I would reckon that your rebuttal is equally as predictable.

And the responses are sooo predictable.

But good.

Just for you MrBubble

Don’t you love farce?
My fault I fear.
I thought that you’d want what I want.
Sorry, my dear.
But where are the Trolls?
Quick, send in the Trolls.
Don’t bother, they’re here.

Nice sentiment, for the trolls and the clowns are already here (not on the blog per se, just in general). “The [world] was being run by a bunch of [CEO/GUMMINT] clowns who were gonna end up giving the whole circus away…”

But that is another evil song that you put in my head! It is competing with the Leon Redbone that I have on right now. Maybe Getz can blow it out of my head. Back to work.

I doubt any here have the stones to waddle over to a protest, but just in case: please armchair warriors, I beg of you - please proceed to your nearest occupation. Wear an HBB insignia on your beret so you can be identified on the news (as well as in any police reports).

Enough has been typed. Time to walk the walk.

‘I doubt any here have the stones to waddle over to a protest’

I’ve initiated more protests than you’ve seen on TV.

That’s not saying much, seeing as I don’t watch TV.

Notice I didn’t say that I saw the protests on TV, but rather read about them. Also note that I didn’t say I was going to watch any of the armchair warriors on TV myself. There’s that reading comprehension thing raising its ugly head again. Now what did I say about correlation (below)?

Somebody get kicked off of here in the past but just can’t stay away?

There’s that reading comprehension thing again. I posted no articles, just commented on what I’ve been reading. You can pick a newspaper of your choice in any of a dozen major cities in the US and read up on OWS. Go ahead - pick the most liberal ones you can find. The truth isn’t so pretty. Personally, I did not know what to make of the movement and thought cops were overreacting initially, but I believe OWS has morphed into a different beast in recent weeks and its time the deniers here see reality.

Shall I delve into my correlation question again?

“You can pick a newspaper of your choice in any of a dozen major cities in the US and read up on OWS.”

So it’s not really a ‘reading’ comprehension problem, but rather inadequate research on our part. Those are two different things, aren’t they? Perhaps you’re not good at expressing your points accurately.

And let’s just read some of those articles- for comprehension! Here’s one:

“The Fulton County Health Department confirmed Wednesday that residents at the homeless shelter where protesters have been occupying have contracted the drug-resistant disease [TB]. WGCL reports that a health department spokeswoman said there is a possibility that both Occupy Atlanta protesters and the homeless people in the shelter may still be at risk since tuberculosis is contracted through air contact.”
CBS Atlanta

So there’s not really any proof of TB in OWS. Just that some OWS protesters stayed at a shelter and the “possibility that both Occupy Atlanta protesters and the homeless people in the shelter may… be at risk” from the infection. So you didn’t comprehend that one very well, did you? You just leaped to the conclusion that the OWS must have TB. Fail.

Next up:

“Police are investigating a fatal shooting just outside the Occupy Oakland encampment in Northern California”
AP

Hmm…”outside”. What would reading comprehension tell us about that word? That there’s no proof that there’s any connection between the shooting and the OWS? Perhaps you could help me by pointing out where in the article it says there is. Or didn’t you comprehend the article? Fail.

Don’t mistake your willingness to jump to false conclusions for reading comprehension. It’s quite the opposite.

Demanding moratorium on foreclosures and foregiveness of all student loan debt does not represent my opinion. Demanding that the financial terrorists be tried, convicted, stripped of their assets, and summarily executed does

Hell, I have some “poll results”

-Percentage of OWS who are not the 1%ers = 100%

-Percentage of Housing Bubble Bloggers who are not part of the 1%ers = 100%

So see, you do have something in common with them.

And besides, the fact that OWS is supposedly composed of “rich kids” should tell you something. If they think that they are being screwed around by the 1%ers, what do you think the actual “wretched refuse” thinks?