TheCommodore
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Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 12:18 pm

I have heard about some Aussies buying US real estate for next to nothing, but according to this report its fraught with DANGER    and all because of Americas legal system. Apparently foreclosure victims are planning to go to court to get these houses back !

A paltry $20 grand will get you a house, maybe, and a VERY big maybe at that. But I could imagine you'd spend much more than that in legal fees if your dragged before the courts to defend a legal transaction that is completely above board.

This is what an attorney, MATTHEW WEIDNER, says.

Quote.

" I’m very concerned about our American legal system and so, for Australians that are looking at purchasing property, I’d be very careful.

When you buy a piece of property in the United States of America, there are real questions being raised now about whether you truly own that property fair and square."


So for any Aussies out there planning to buy cheap in the US, forget it, its not worth the risk IMHO !

I'd save up and buy here in Australia, or if you really want to go off shore, buy New Zealand real estate, with the exchange rate at NZ $1.31 for the dollar, there are bound to be bargains over in Kiwi land to be had, and without all that crazy US risk.   

http://www.abc.net.au/7.30/content/2010/s3048994.htm

[Edited 2010-10-26 05:22:29]
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 3:09 pm

Quoting TheCommodore (Thread starter):
When you buy a piece of property in the United States of America, there are real questions being raised now about whether you truly own that property fair and square."


If it sounds too good to be true, it probably is too good to be true. Tears before bedtime. US house prices might be a giveaway, but who knows what is going to happen next let alone the uncertainty re ownership. The US just seems unable to free itself from the mess - a bit like punching tar-baby it seems.

I wonder if any other world power has got to the edge of collapse due to mortgages. Spain and Britain fought too many wars. Arguably the US has done likewise, but even those morasses are not as effective as the mortgage mess. Holland tried with tulips, that must be close.

And then there is outsourcing. Perhaps the clever thing would be to buy real estate in China rather than the US, except I don't suppose you can. Clever lot the Chinese!!! I wonder if the Chinese are buying up distressed US properties, they sure are a force in Aus.
 
mham001
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 3:35 pm

Much ado about nothing. Very few of all the foreclosed houses will be in legal limbo. The number is minuscule.

Besides, you could buy houses in upstate NY for $20k before the bubble burst.
 
ScarletHarlot
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 4:08 pm

Quoting TheCommodore (Thread starter):
When you buy a piece of property in the United States of America, there are real questions being raised now about whether you truly own that property fair and square."

This is very much an overstatement. Sure, there are some situations where this might be the case - a house that has bounced around from owner to owner and is foreclosed, for example. But you could buy my house with no trouble at all.

Even in the case of the foreclosure, I have not heard of anyone who bought a foreclosed home and then had it taken away because of uncertainty of ownership.

Quoting TheCommodore (Thread starter):
Apparently foreclosure victims are planning to go to court to get these houses back !

They can't afford to pay their mortgages. Where are they going to find the money to go to court?

Quoting TheCommodore (Thread starter):
So for any Aussies out there planning to buy cheap in the US, forget it, its not worth the risk IMHO !

Very much an overstatement. Do your homework and you'll be fine.
But that was when I ruled the world
 
Derico
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 4:21 pm

It is not just Australians.

Argentines and I assume Brazilians most certainly, are buying up swaths of properties particularly in Florida. A friend of mine was telling me how Miami, Orlando is overrun with tourists from Argentina and Brazil, leaving malls and shops with carts of goods, because of the dollar losing value (yup, even against the lowly peso, due to internal inflation). In the larger malls they outnumbered the locals.

There is a ''rumour'', I call it rumour since I have not verified this myself but it seems to have some truth given the number of people buying, that the US government will make it easier for a foreigner to buy than a local (who has to jump dozens of hoops because of the hypertight lending). With an up to date passport, an approved visa (in our case), proof of employment and a salary of at least 20.000 pesos a month, (30.000 if you are paying for a mortgage at home), they'll let you buy pretty much on the spot.

What I have also heard is that homes that are repoed, or in owner default, are extremely risky because basically the US mortgage system has collapsed into the stone age, to the point the Argentine system is sounder, the joke goes. There is no legal security with those. So usually it is recommened to buy properties in buildings that are yet uninhabited and thus still very cheap, instead of those that are owner defaulted. In terms of prices, there seems to be not a huge difference between buying in Miami right now than buying in Mendoza or Buenos Aires (150.000 US$ buys you a nice apartment in both).

The bet people are making is that in Argentina the market is at least at fair value if not overvalued because of the (overheating) economy specially BA, Mendoza and Patagonia, where you also have lots of foreigners buying 2nd homes, vineyards, or actually moving in outright... and that in the United States the market is terribly depressed and undervalued.

Thus if you have the money, put it in a Miami studio that probably has much more to rise in 5 to 10 years as opposed to Puerto Madero.
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mham001
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 5:10 pm

Quoting Derico (Reply 4):
There is a ''rumour'', I call it rumour since I have not verified this myself but it seems to have some truth given the number of people buying, that the US government will make it easier for a foreigner to buy than a local (who has to jump dozens of hoops because of the hypertight lending). With an up to date passport, an approved visa (in our case), proof of employment and a salary of at least 20.000 pesos a month, (30.000 if you are paying for a mortgage at home), they'll let you buy pretty much on the spot.

The government does not grant those privileges. That is solely up to the lender, the banks, and I have a very hard time believing that story.

Foreign owners need to be concerned with maintaining the properties long distance. Not an easy task.
 
VonRichtofen
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 6:51 pm

Canadians have been doing this for years.
 
KINDFlyer
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 7:05 pm

Quoting Derico (Reply 4):
Argentines and I assume Brazilians most certainly, are buying up swaths of properties particularly in Florida. A friend of mine was telling me how Miami, Orlando is overrun with tourists from Argentina and Brazil, leaving malls and shops with carts of goods, because of the dollar losing value (yup, even against the lowly peso, due to internal inflation). In the larger malls they outnumbered the locals.

Can't speak to Argentines and Brazilians, but we recently stayed in a very nice condo community just a few miles south of Disney and ran into an incredible number of visitors from the UK. In speaking with them, they too indicated many had taken advantage of the dollar's weakness to buy vacation property.
This isn't flying. This is falling.....with style.
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 10:36 pm

Quoting Baroque (Reply 1):
If it sounds too good to be true, it probably is too good to be true.

Lot of truth in that old saying.

Quoting Baroque (Reply 1):
but who knows what is going to happen next let alone the uncertainty re ownership. The US just seems unable to free itself from the mess

Yes, I was reading somewhere that some forecasters are saying that it could be 20 years before things "stabilize" and even then, once you take inflation into account you will still be behind the eight ball.

Not something I would even considers as an investment with a time frame like that.   

Quoting Baroque (Reply 1):
I wonder if any other world power has got to the edge of collapse due to mortgages.

And at the rate that there printing those US $100 bills, they may only be worth $50 by this time next week !

Quoting mham001 (Reply 2):
Much ado about nothing. Very few of all the foreclosed houses will be in legal limbo. The number is minuscule.

That may be the case that few houses are effected, but with a housing market like the one in the US, one hardly needs ANY reason to be uncertain when entering into a transaction like that, usually the biggest purchase one will ever make in a life time.

Quoting ScarletHarlot (Reply 3):
Even in the case of the foreclosure, I have not heard of anyone who bought a foreclosed home and then had it taken away because of uncertainty of ownership.

Did you read the entire article, because that's not what the story says?

"MARK CALABRIA: There's a tremendous amount of litigation and a tremendous amount of litigation risk for the title insurers, for the lenders - really for anybody involved in the process right now today."

Quoting ScarletHarlot (Reply 3):
They can't afford to pay their mortgages. Where are they going to find the money to go to court?

Legal aid perhaps ?

Quoting ScarletHarlot (Reply 3):
Do your homework and you'll be fine.

Any investment where there is risk involved like this, could not be considered prudent.

Quoting mham001 (Reply 2):
Besides, you could buy houses in upstate NY for $20k before the bubble burst.

So after the market crashed, your saying these houses are now worth about what, a $1000. Good investment.

Quoting Derico (Reply 4):
There is a ''rumour'', I call it rumour since I have not verified this myself but it seems to have some truth given the number of people buying, that the US government will make it easier for a foreigner to buy than a local (who has to jump dozens of hoops because of the hypertight lending). With an up to date passport, an approved visa (in our case), proof of employment and a salary of at least 20.000 pesos a month, (30.000 if you are paying for a mortgage at home), they'll let you buy pretty much on the spot.

So what happens when you default on the mortgage payments, and you don't live in the US. How can they come after you ?

Quoting Derico (Reply 4):
Thus if you have the money, put it in a Miami studio that probably has much more to rise in 5 to 10 years as opposed to Puerto Madero.

That's a very bullish statement in an environment that doesn't hold much promise for the future.
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
Flighty
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 11:00 pm

US real estate ownership is complex. But, it is still clearer than most other countries, many of which don't even allow property ownership by foreigners. Our property rules have imperfections, but overall they meet a very high standard. IMO.
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 11:13 pm

Quoting Flighty (Reply 9):
Our property rules have imperfections, but overall they meet a very high standard. IMO.

Really ?

Very high standards?

You surely must be mistaken.

Remember "low doc loans" and "Sub-Prime loans"

Where people can take out a mortgage, they cant afford, then default on the repayments, and then walk into the bank and just hand over the keys without any ramifications, leaving the banks to sort out the mess ??

Its called "Non recourse lending" and its these practices that have completely stuffed the market

That's not what I'd call high standards at all.

Where is the onus of responsibility on the borrower ?   
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
fridgmus
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 11:30 pm

Just out of curiosity, can Americans purchase homes, property or even motor vehicles in Australia if they are not residents?

Thanks,

F
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TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Tue Oct 26, 2010 11:57 pm

Quoting fridgmus (Reply 11):
Just out of curiosity, can Americans purchase homes, property or even motor vehicles in Australia if they are not residents?

We have something called the "Foreign investment review board" (FIB).

I believe the law is yes, foreigners (Americans included)   can purchase in Australia subject to approval, which is generally given, unless its something to do with the "national interest", which houses generally are not.

However, new house's/apartments especially, off the plan, can be purchased without any consent (FIB) given.

But if a mortgage is needed to fund the purchase then banks will require some type of bond or security in exchange for the loan.

Hope this answers your question .

cheers

[Edited 2010-10-26 17:00:12]
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
Quokka
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 12:16 am

Quoting fridgmus (Reply 11):
Just out of curiosity, can Americans purchase homes, property or even motor vehicles in Australia if they are not residents?


Yes. A lot of property in Australia is held by non-residents/ non-citizens, including Americans.Approval must be sought from the Foreign Investment Review Board (although exemptions apply).

Different rules may apply to whether the land is residential, commercial, industrial or farm land. The main restrictions for residential purchases are, in the case of vacant land a house must be built within a certain period, and in the case of development projects, not more than 50% of units can be bought "off the plan".

Full details can be obtained from http://www.firb.gov.au/content/real_estate/real_estate.asp

Ownership in companies may be subject to scrutiny and there may be upper limits (e.g. no more than 50% of shares in a company) but it varies by industry.
 
mham001
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 2:15 am

Quoting TheCommodore (Reply 8):
So what happens when you default on the mortgage payments, and you don't live in the US. How can they come after you ?

The banks don't 'come after you'. There is no debtors prison. All they can do is take the property back and give you a big red mark on your credit history. The whole idea that they would freely lend out property in a tight, volatile market to foreigners is pretty far-fetched. Cash sales are a different matter.
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 5:26 am

Quoting mham001 (Reply 14):
The banks don't 'come after you'. There is no debtors prison.

Well ,perhaps that's part of the problem then. Borrowing large amounts of money is a very serious matter, its even more serious when you cant pay it back. It effects not only the bank, but the entire society.

Quoting mham001 (Reply 14):
All they can do is take the property back and give you a big red mark on your credit history

Big deal. That is hardly going to matter if I don't live in the US and have no intention of doing any further business in the US then dose it ?

Quoting mham001 (Reply 14):
The whole idea that they would freely lend out property in a tight, volatile market to foreigners is pretty far-fetched.

But that's what they have been doing all this time, up until recently, and not just to foreigners, mostly to your fellow country men.

Quoting mham001 (Reply 14):
Cash sales are a different matter.

That goes without saying I would have thought.
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
Quokka
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 5:41 am

Quoting TheCommodore (Reply 15):
Big deal. That is hardly going to matter if I don't live in the US and have no intention of doing any further business in the US then dose it ?

You do realise that banks and other lenders share credit histories, don't you? US and Australian banks to borrow and lend to each other and can add information about a person's credit-worthiness to credit rating company files. If you borrow in Australia the banks do some checks on your ability to repay and I suspect that the same would occur in the US. If you had a history of defaulting on a debt in the US, would an Australian bank be willing to shower you with extra credit? A loan shark might, but their collection methods are not all that civil, even if they may be effective.

[Edited 2010-10-26 22:45:16]
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 5:43 am

Quoting Quokka (Reply 13):
Quoting fridgmus (Reply 11):
Just out of curiosity, can Americans purchase homes, property or even motor vehicles in Australia if they are not residents?


Yes. A lot of property in Australia is held by non-residents/ non-citizens, including Americans.Approval must be sought from the Foreign Investment Review Board (although exemptions apply).

Just a minute, I will check.

Walks to window looks NE up the street, YES, looks NW across the street, YES, looks SW down the street, YES. Returns to keyboard:

Yes, I think you can fridgmus!! Empirically as well as theoretically this seems to be so.

If you take QF41 to Jakarta, you will likely find yourself next to an Indonesian. This will either be a student returning to mum and dad during a vacation or whatever, or dad or mum returning from visiting sonny or the wee lassie who is at school/university in Australia. I cannot recall one that has been living in rented accommodation. All have a property in Sydney or dad has the property in the case of students.

Aside from the rules that Quokka and The Commodore point out which make our house market much MUCH more safe than the US one, it appears to have been buoyed by foreign buyers. The rewards for legislative virtue one could argue although it does mean that housing affordability in Aus is pretty lousy. Still that seems a lot better than the mess in the US. Just my opinion mind you.
 
PPVRA
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 6:02 am

Quoting TheCommodore (Reply 8):
So what happens when you default on the mortgage payments, and you don't live in the US. How can they come after you ?

They come after your HOUSE. Anyone who knows the basic ABCs of mortgage knows this, and yet you pretend to want to teach people about the mortgage market.

Quoting TheCommodore (Reply 15):
Quoting mham001 (Reply 14):
The banks don't 'come after you'. There is no debtors prison.

Well ,perhaps that's part of the problem then. Borrowing large amounts of money is a very serious matter, its even more serious when you cant pay it back. It effects not only the bank, but the entire society.

You want debt slavery back? Because that's what you are implying.

Every investment comes with risk, and so should lending.

Quoting TheCommodore (Reply 15):
Quoting mham001 (Reply 14):
All they can do is take the property back and give you a big red mark on your credit history

Big deal. That is hardly going to matter if I don't live in the US and have no intention of doing any further business in the US then dose it ?

And all the money you sunk into the house? Thousands of dollars not a big deal?
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 6:36 am

Quoting Quokka (Reply 16):
You do realise that banks and other lenders share credit histories, don't you? US and Australian banks to borrow and lend to each other and can add information about a person's credit-worthiness to credit rating company files. If you borrow in Australia the banks do some checks on your ability to repay and I suspect that the same would occur in the US. If you had a history of defaulting on a debt in the US, would an Australian bank be willing to shower you with extra credit? A loan shark might, but their collection methods are not all that civil, even if they may be effective.

Not to sure about that Quokka,

I am friends of a family from the US. The husband had a failed business (swimming pools) and was bankrupt, some years ago now. They moved to Australia for a new start, as you would. As far as Im aware they have had no trouble getting a loan from (which bank !!) the Commonwealth Bank of course.  
and they are currently living in Epping NSW. They even got the first home buyers grant to boot.

Quoting Baroque (Reply 17):
which make our house market much MUCH more safe than the US one, it appears to have been buoyed by foreign buyers. The rewards for legislative virtue one could argue although it does mean that housing affordability in Aus is pretty lousy. Still that seems a lot better than the mess in the US. Just my opinion mind you.

Yes even with our high house prices, it just goes to show that people (foreign buyers) are prepared to pay for a stable housing market with a stable banking system.

Quoting PPVRA (Reply 18):
They come after your HOUSE. Anyone who knows the basic ABCs of mortgage knows this, and yet you pretend to want to teach people about the mortgage market.

So they, the banks, sell your house if you default, good they do that here in Australia too, and that's the way it should be.

But what if the bank cant get the money that they are owed because the housing market has collapsed, what then.?

who is out of pocket and how do the banks get the money there owed ?

In Australia, if you default on your mortgage and the bank sells your house, and they don't get the money (original purchase price) then they sue you for the difference. I don't believe that's the case in the US.

Quoting PPVRA (Reply 18):
You want debt slavery back? Because that's what you are implying.

That is NOT what I was implying at all, Don't put words into my mouth. You have tried to do the before and I don't appreciate it   .No one else has come to that conclusion except you. Go read the entire post will you and stop spouting off.

Quoting PPVRA (Reply 18):
Every investment comes with risk, and so should lending.

You forgot one thing, and that's personal responsibility too.

Quoting PPVRA (Reply 18):
And all the money you sunk into the house? Thousands of dollars not a big deal?

Its no big deal to the bank, they just want the money that you owe them back. They couldn't give a rats about how much you put into the house.
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 6:45 am

Quoting TheCommodore (Reply 19):
They even got the first home buyers grant to boot.

Interesting indeed. Not exactly following the original concept dare one venture?

Quoting TheCommodore (Reply 19):
In Australia, if you default on your mortgage and the bank sells your house, and they don't get the money (original purchase price) then they sue you for the difference.

I wonder if this misconception is at the root of that bit of cognitive dissonance?
 
Quokka
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 7:10 am

Quoting TheCommodore (Reply 19):
and was bankrupt


But presumably a discharged bankrupt, unless he made a false declaration on his application for migration to Australia. Even with our love for all things American, the Migration Act doesn't allow just anybody to waltz in. So he would have had to either been in a relevant skills bracket, been in the balance of family category, or been a business migrant and for the latter you need minimum assets. In short, he would have had to re-establish his creditworthiness. Unless of course it was his wife who got the loan.  
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 7:20 am

Quoting Quokka (Reply 21):
But presumably a discharged bankrupt

Would that make much difference ?

Its all part of the credit history inst it and a history that is a significantly higher risk than someone with a clean record so to speak, even though it happened in the US, he /they borrowed from an Australian bank ?

As far as I know the loan is in both names.

I failed to mention that she has dual citizenship, maybe that's the difference ?

Quoting Baroque (Reply 20):
Interesting indeed. Not exactly following the original concept dare one venture?

No its not following the original concept really is it. I missed out on all the handouts as I bought before the scheme/s were introduced. Bugger !  
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
melpax
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 9:01 am

When an average 3-bedroom house in Melbourne is around AUD$600,000, a $20-30,000 house in a major US city seems like an absoulte bargain to most Aussies. At those prices, most people would just seek an extension to their existing mortgage here, if they have one.......
Essendon - Whatever it takes......
 
PPVRA
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 6:02 pm

Quoting TheCommodore (Reply 19):
But what if the bank cant get the money that they are owed because the housing market has collapsed, what then.?

That's the risk the bank takes. They can control how much they are exposed to it.

Quoting TheCommodore (Reply 19):
In Australia, if you default on your mortgage and the bank sells your house, and they don't get the money (original purchase price) then they sue you for the difference. I don't believe that's the case in the US.

Australia also has bankruptcy laws. Bankruptcy laws exist to protect people from things like debt slavery and debtor's prison.

Quoting TheCommodore (Reply 19):
Its no big deal to the bank, they just want the money that you owe them back. They couldn't give a rats about how much you put into the house.

It's a big deal to you and the bank. You lose thousands, and so does the bank.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
KPHXFlyer
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 6:34 pm

Quoting TheCommodore (Reply 19):
In Australia, if you default on your mortgage and the bank sells your house, and they don't get the money (original purchase price) then they sue you for the difference. I don't believe that's the case in the US.

Supposedly, according to MSNBC, it is already happening. Homeowners that did a short sale or foreclosure are being sued by the banks for the balance of the mortgage. Why? Because it's cheap to file a lawsuit.

Quoting TheCommodore (Thread starter):
A paltry $20 grand will get you a house, maybe, and a VERY big maybe at that. But I could imagine you'd spend much more than that in legal fees if your dragged before the courts to defend a legal transaction that is completely above board.

I'm not sure where homes are selling for $20K USD in the US. I'm sure that while I could find a house (probably a mobile home) for $20K in the Phoenix, AZ area, it's probably going to be in an area I don't want to live. Having said that, the median home price here in Phoenix sits somewhere around ~$170K. Three years ago (at the peak) it was $268K.

I recall that at the height of the housing boom here in Phoenix that foreign ownership for a second home was nearly impossible. Heck, this restriction even extended to people from neighboring states (Calfiornia primarily). Since the collaspe of the housing market, doors have opened wide for home ownership by anybody that could get the loan.

Quoting TheCommodore (Thread starter):
When you buy a piece of property in the United States of America, there are real questions being raised now about whether you truly own that property fair and square."

This has been true for as long as people have been getting mortgages. You don't own the property; the bank does...fair and square. That has not changed in the last few years.

The current foreclosure crisis revolves around the fact that maybe some of the banks were a bit too precipitious in foreclosing on homeowners (some of which supposedly had fully paid their mortgage). So these homeowners are suing the banks back for the homes they were kicked out of prematurely or unfairly.

All said, where US or AUS, if you're going to buy a foreclosure or a short sale, do your research. 

Cheers,
Cory
 
Flighty
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 7:08 pm

Quoting TheCommodore (Reply 10):
That's not what I'd call high standards at all.

Where is the onus of responsibility on the borrower ?

I was only discussing the quality of ownership itself. Our Constitution and our very many lawyers create a climate of legal protection for property owners.

You can worry about many things in the USA, but property rights, not really. This is why it is easy to build railroads in China, but very hard in the USA, since each landowner has real staying power here.
 
fridgmus
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 7:38 pm

A question for our Australian members,

What is a first time home buyer's grant? Is that where the Australian Govt subsidizes part of your first home?

Thanks,

F
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TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 9:33 pm

Quoting PPVRA (Reply 24):
That's the risk the bank takes. They can control how much they are exposed to it.

Why do you think the US housing market is in this mess ?

One reason could be because of the US banks lending massive amounts of money to people who could never afford to buy a house to start with or pay the money back. Is that an acceptable risk to you. Come off it .

Quoting PPVRA (Reply 24):
They can control how much they are exposed to it.

And haven't the US banks done a great job at that. Nearly bring the entire nation to it's knees. Brilliant, don't you think.

Quoting PPVRA (Reply 24):
Australia also has bankruptcy laws. Bankruptcy laws exist to protect people from things like debt slavery and debtor's prison.

Why are you going on about this. Ive never mentioned any such thing. And I'm well aware of what laws we have in Australia.

Quoting KPHXFlyer (Reply 25):
Supposedly, according to MSNBC, it is already happening. Homeowners that did a short sale or foreclosure are being sued by the banks for the balance of the mortgage. Why? Because it's cheap to file a lawsuit.

No, because at the end of the day, it makes the "borrower" responsible for his/her actions, nothing else.

Quoting fridgmus (Reply 27):
A question for our Australian members,

What is a first time home buyer's grant? Is that where the Australian Govt subsidizes part of your first home?


fridgmus, this should give you some insight as to how the scheme works.

http://www.firsthome.gov.au/
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”
 
Kent350787
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RE: Cashed-up Aussies Buy Up Big In The States

Wed Oct 27, 2010 9:55 pm

Quoting fridgmus (Reply 27):
A question for our Australian members,

What is a first time home buyer's grant? Is that where the Australian Govt subsidizes part of your first home?

Thanks,

F

Yes, see the Commodore's link above. As an economic stimulus program, it's sort of OK, but as a policy to improve housing affordability, it's populist nonsense which simply sees house prices go up by the amount of the grant. Apart from impleemnting policies which actively reduce house prices, I can't see anything much improving affordability. And, given that my modest 3br house which needs work would sell for around $1.2m, affordability is an issue....

I don't know that I'd be taking the risk on the US market, given its diversity and some of the other issues discussed above. But the Kiwi market, with our $ worth NZ$1.30+ and it being a 3.5hr flight away is looking more attractive.  
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Thu Oct 28, 2010 1:41 am

Quoting kent350787 (Reply 29):
As an economic stimulus program, it's sort of OK, but as a policy to improve housing affordability, it's populist nonsense which simply sees house prices go up by the amount of the grant. Apart from implementing policies which actively reduce house prices, I can't see anything much improving affordability.

            Not sure I have enough    s as there are many points in there all of which are true.

Quoting kent350787 (Reply 29):
I don't know that I'd be taking the risk on the US market, given its diversity and some of the other issues discussed above. But the Kiwi market, with our $ worth NZ$1.30+ and it being a 3.5hr flight away is looking more attractive.

Agreed. Of course Asia would be even more attractive except most Asian countries will not permit non-citizens to hold property. Might be a bit of a lesson there do you think?
 
PPVRA
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RE: Cashed-up Aussies Buy Up Big In The States

Thu Oct 28, 2010 2:06 am

Quoting TheCommodore (Reply 28):
Why do you think the US housing market is in this mess ?

One reason could be because of the US banks lending massive amounts of money to people who could never afford to buy a house to start with or pay the money back. Is that an acceptable risk to you. Come off it .
Quoting TheCommodore (Reply 28):
And haven't the US banks done a great job at that. Nearly bring the entire nation to it's knees. Brilliant, don't you think.

The banks had adequate risk policies for decades. Some of the banks that failed were around for decades before any regulation was introduced by FDR in the 1920s. Nor does it make any sense that all these centenary banks essentially failed at the same time. You have to dig deeper than that to find out why this mess happened, why almost nobody saw it coming (and that includes most banks too). My belief is that fault lies with how the US banking system is structured and with Mr. Alan Greenspan's policies at the Fed more than anybody else (but this is not to be interpreted as exonerating the banks). And you can count Mr Greenspan's successor's policies as part of the problem too.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Thu Oct 28, 2010 4:46 am

Quoting PPVRA (Reply 31):
The banks had adequate risk policies for decades. Some of the banks that failed were around for decades before any regulation was introduced by FDR in the 1920s. Nor does it make any sense that all these centenary banks essentially failed at the same time. You have to dig deeper than that to find out why this mess happened, why almost nobody saw it coming (and that includes most banks too).

FDR in the 1920s. Me oh my, I did not know he was that powerful.

Dig away.

In the first 10 months of 1930, a total of 744 US banks failed. In Novmeber and December of that same year, 600+ more banks failed.

Throughout the entirety of the Great Depression, over 9,000 US banks failed, which is by far the worst stretch in US history when it comes to bank failures.

http://www.davemanuel.com/history-of...-failures-in-the-united-states.php
 
PPVRA
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RE: Cashed-up Aussies Buy Up Big In The States

Thu Oct 28, 2010 3:09 pm

Quoting Baroque (Reply 32):
FDR in the 1920s. Me oh my, I did not know he was that powerful.

Whoops. I mean 1930s. I had 1929 in mind when I typed that.

Quoting Baroque (Reply 32):
In the first 10 months of 1930, a total of 744 US banks failed. In Novmeber and December of that same year, 600+ more banks failed.

Throughout the entirety of the Great Depression, over 9,000 US banks failed, which is by far the worst stretch in US history when it comes to bank failures.
http://www.davemanuel.com/history-of...s.php

Federal Reserve was already in place by then.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
travelin man
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 12:32 am

So, just don't buy a short sale or a foreclosed property and you'll be fine.

Give me a break, we just bought a new house (and sold ours). There are plenty of propoerties that are NOT in distress (either a short sale or foreclosure). So buy one that is not bank-owned. You'll be fine.

I love all the doom and gloom from people that extrapolate a PORTION of the market onto the entire market.

(oh, and p.s. -- there really is no US "market". It's a bunch of sub-markets, and depending on where you want to buy, some areas of the country are stronger than others.)
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 1:45 am

Quoting travelin man (Reply 34):
So, just don't buy a short sale or a foreclosed property and you'll be fine.

Wont that just make the problem worse if you quarantine that part of the market ?

These are the top 5 areas for forced sales.
1. Las Vegas, NV
2. Miami, FL
3. Chicago, IL
4. Phoenix, AZ
5. Fort Lauderdale, FL

Good article. Estimation of the number of foreclosed hones by the end if 2010, 2.3 million. A pretty hefty figure in anyone's imagination.

http://www.foxnews.com/politics/2010...foreclosures-face-challenge-court/

Quoting travelin man (Reply 34):
there really is no US "market".

Think the article was talking in "general terms" of the US housing market.
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mham001
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 4:14 am

Quoting TheCommodore (Reply 35):

Good article. Estimation of the number of foreclosed hones by the end if 2010, 2.3 million. A pretty hefty figure in anyone's imagination

Not so much when you consider that there are 131 million homes in the US and over 19 million are empty at any given time.

You've gone to great lengths to trash the US in this thread while proving you know nothing of what you write. Everybody knows the housing market is not exactly healthy, but what gives?
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 4:46 am

Quoting mham001 (Reply 36):
Everybody knows the housing market is not exactly healthy, but what gives?

What gives is the US housing market has one way or another trashed a considerable part of the world financial system. That is what gives. So anything affecting the US housing market is of considerable interest.

So pleased to hear it is all not too bad even if it does not reach "everything is OK". Cos otherwise it is:

http://patrick.net/housing/crash.html

Housing Crash Continues -- It's Still A Terrible Time To Buy
Why?

By Patrick Killelea
Last updated 5 Oct 2010 (minor changes)

1. Because house prices will keep falling in most places. Prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's annual income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the house's annual rent. Yet in affluent areas on the coasts, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines.


AND

http://www.businessinsider.com/15-si...complete-and-total-collapse-2010-8

15 Signs The U.S. Housing Market Is Headed For Complete And Total Collapse
Michael Snyder, The Economic Collapse | Aug. 20, 2010, 11:24 AM | 3,094,438 | comment 187

The U.S. housing market is dying. You will only hear hints of this on the mainstream news and from the politicians in Washington D.C., but as statistic after statistic continues to roll in, the reality of what is happening is becoming very difficult to deny.
Click here to see the signs of a collapse >


Read more: http://www.businessinsider.com/15-si...otal-collapse-2010-8#ixzz13ifdsipy



And a nice page listing the 15 states with the most mortgages under water. Over 50% in Florida according to that link.

So a ray of sunshine is what we all need.
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 4:51 am

Quoting mham001 (Reply 36):
Not so much when you consider that there are 131 million homes in the US and over 19 million are empty at any given time.

So your saying there is no problem then ?

Care to say what is the total number of foreclosed homes in the US (since the crises started) so far.

I'd be very interested to see what the total figure is.

Quoting mham001 (Reply 36):
You've gone to great lengths to trash the US in this thread while proving you know nothing of what you write. Everybody knows the housing market is not exactly healthy, but what gives?

Touchy touchy, did your stub your big toe before you answered me or something.

Give me ONE example where I have "gone to great lengths to trash the US in this thread", just one.

Judging by your pathetic answer I know a lot more than you on the subject.

Read this and learn something.

http://www.wsws.org/articles/2010/may2010/repo-m14.shtml

Quoting mham001 (Reply 36):
Everybody knows the housing market is not exactly healthy, but what gives?

What gives ?

It nearly brought the entire financial system to the brink, and you say "what gives"
  
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Derico
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 5:03 am

Quoting KINDFlyer (Reply 7):
Can't speak to Argentines and Brazilians, but we recently stayed in a very nice condo community just a few miles south of Disney and ran into an incredible number of visitors from the UK

The Brits take advantage of Orlando weak dollar, strong dollar, no dollar. The UK obsession with Orlando is beyond legendary.
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baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 1:28 pm

If anyone is interested in actual rates of this that and the other in the US including foreclosures/repossessions, try

http://www.imf.org/external/pubs/ft/scr/2010/cr10248.pdf

United States: Selected Issues Paper; IMF Country Report 10/248 ...

Stats on just about everything else. It does suggest the closest analogy is with the 30s - so far!!!
 
travelin man
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RE: Cashed-up Aussies Buy Up Big In The States

Fri Oct 29, 2010 4:23 pm

Quoting TheCommodore (Reply 35):
Quoting travelin man (Reply 34):
So, just don't buy a short sale or a foreclosed property and you'll be fine.


Wont that just make the problem worse if you quarantine that part of the market ?

I thought the gist of the whole opening post on this thread was "danger -- Aussies should not buy any property in the US":

Quoting TheCommodore (Thread starter):
for Australians that are looking at purchasing property, I’d be very careful.
Quoting TheCommodore (Thread starter):
So for any Aussies out there planning to buy cheap in the US, forget it, its not worth the risk IMHO !

I am pointing out that there are a vast number of homes for sale that are not in foreclosure or in a short-sell situation. I also know plenty of people who have purchased foreclosed and short sale properties with no issues whatsoever (In fact I don't know of anyone who has had an issue purchasing that type of property -- you just need a lot of patience.)

Since we just went through months of selling and buying a home, I feel fairly qualified to say the original post is quite alarmist, when the amount of properties where there is TRULY a legal issue about who "owns" the property is microscopic compared to the market at large.
 
mham001
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RE: Cashed-up Aussies Buy Up Big In The States

Sun Oct 31, 2010 5:11 am

Quoting TheCommodore (Reply 38):

So your saying there is no problem then ?

I didn't say that at all, but putting some perspective on the numbers does take away some of the drama in this thread.

Quoting TheCommodore (Reply 38):
Read this and learn something.

http://www.wsws.org/articles/2010/ma...shtml

Thats a funny one. An outdated article from the World Socialist Web Site? Thats where your'e getting your talking points?

Quoting TheCommodore (Reply 38):
Give me ONE example where I have "gone to great lengths to trash the US in this thread", just one.

Judging by your pathetic answer I know a lot more than you on the subject.

At least 3 times in this thread, you've proven that you know little to nothing about the intricacies of the US mortgage market, the history behind the crash and have been politely corrected. You also presented blatantly false information from at least one newspaper article when you wrote this...

Quoting TheCommodore (Reply 35):
Good article. Estimation of the number of foreclosed hones by the end if 2010, 2.3 million. A pretty hefty figure in anyone's imagination.

http://www.foxnews.com/politics/2010...ourt/

The article says no such thing. I can't find "2.3" million anywhere in that article, the closest it says is "Banks have seized more than 816,000 homes through the first nine months of the year and had been on pace to seize 1.2 million by the end of 2010. But fewer are expected now....

TheCommodore, why are you resorting to lies to prove a point? Is the World Socialist Web Site not providing enough hype for you to promulgate?
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Sun Oct 31, 2010 5:57 am

Quoting mham001 (Reply 42):
TheCommodore, why are you resorting to lies to prove a point? Is the World Socialist Web Site not providing enough hype for you to promulgate?

I dunno where he got that number either, but given the proliferation of numbers about vacent houses, not difficult to be a bit uncertain.

Within these numbers if he were misrepresenting the truth it might be on the under rather than over side.

http://www.tampabay.com/news/busines...oreclosures-emptying-homes/1111513

Rising number of foreclosures emptying homes

Bloomberg News In Print: Wednesday, July 28, 2010

BOSTON — About 18.9 million homes across the country stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.

The number of vacant properties — including foreclosures, residences for sale and vacation homes — rose from 18.6 million in the year-earlier quarter, a Census Bureau report said Tuesday. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.

Lenders are accelerating foreclosures as borrowers fall behind in mortgage payments after the worst housing crash since the Great Depression. A record 269,962 homes were seized in the second quarter, according to RealtyTrac. Foreclosures probably will top 1 million this year, the Irvine, Calif., data company said in a July 15 report.
......

Foreclosures are included in a part of the Census Bureau report that also tracks vacant properties under renovation or tied up in legal proceedings. There were 3.7 million such empty homes in the second quarter, up from 3.5 million in the year-earlier period, the report said.
.....

A record 4.6 percent of U.S. mortgages were in foreclosure in the first three months of 2010, according to a May 19 report by the Mortgage Bankers Association. The combined share of foreclosures and home loan delinquencies was 14 percent, or about one in every seven U.S. mortgages.


I guess if it is your house being foreclosed it scarcely matters if it is one, one million or a gazillion. But the Census Bureau seems to opt for 3.7 million empty of which a part not stated are foreclosures.

http://www.reuters.com/article/idUSTRE68F0JY20100916

Offers

RealtyTrac sees a record 1.2 million repossessions this year, up from just under 1 million last year, with more than 3.2 million homes in some stage of foreclosure.

In 2005, before the housing bust, banks took over just about 100,000 houses, according to the Irvine, California-based company.


Seems 2.3 mill might be about right????

As you agree, it is a bloody disaster, just surprised nobody is thinking of changing the rules to stop this ridiculous performance. Should not be that difficult.
 
mham001
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RE: Cashed-up Aussies Buy Up Big In The States

Sun Oct 31, 2010 5:05 pm

Quoting Baroque (Reply 43):
BOSTON %u2014 About 18.9 million homes across the country stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.

The number of vacant properties %u2014 including foreclosures, residences for sale and vacation homes %u2014 rose from 18.6 million in the year-earlier quarter, a Census Bureau report said Tuesday. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.

Your numbers don't shed any new light. Empty homes rose 300,000 during a period of a record number of foreclosures, or 1.57%, For perspective, .23% of homes in the US. Not exactly the world-ending calamity being presented.

Quoting Baroque (Reply 43):

Seems 2.3 mill might be about right????

I have no idea where you get that. Total over 2 years? Possible but the claim was for one year. You seem to be confusing repossessions with foreclosure proceedings. The two are very different.

Quoting Baroque (Reply 43):
As you agree, it is a bloody disaster, just surprised nobody is thinking of changing the rules to stop this ridiculous performance. Should not be that difficult.

You see, as a guy who knows several people who have seen home(s) repossessed and looked at dozens of others looking to buy, that statement tells me you have no idea except what you might be reading in some newspaper. Rules have been changed dramatically. Currently it is very, very difficult to get bank financing. The paperwork is enormous. The checking and double checking is unprecedented. The days of just signing a sworn statement of income are long gone.

Which leads us to the history of this crash. It all began with government prodding. policy and legislation to get people who could not otherwise get loans into home ownership. Started in the Clinton years. This drove prices higher, leading to a vicious cycle. Higher prices brought in greedy speculators driving prices even higher. Banks became even more willing to lend to unqualified people because the price was going up 20%/year and there was no way to lose money. And so what if the loan was bad? They were just packaging up the loans and selling them to other greedy investors, many from overseas. The banks were not the only scoundrels here. I know people who had no business buying houses snatching up 3, 4 houses. others were refinancing every year, drawing out tens of thousands of dollars to spend on toys. Most of those people are walking away scot-free with really nothing lost because they had nothing to begin with.
 
baroque
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RE: Cashed-up Aussies Buy Up Big In The States

Sun Oct 31, 2010 5:31 pm

Quoting mham001 (Reply 44):
Quoting Baroque (Reply 43):

Seems 2.3 mill might be about right????

I have no idea where you get that. Total over 2 years? Possible but the claim was for one year. You seem to be confusing repossessions with foreclosure proceedings. The two are very different.

Downscaling from 3.2 million being

Quoting Baroque (Reply 43):
RealtyTrac sees a record 1.2 million repossessions this year, up from just under 1 million last year, with more than 3.2 million homes in some stage of foreclosure.

in some stage of foreclosure.

Quoting mham001 (Reply 44):
Rules have been changed dramatically. Currently it is very, very difficult to get bank financing. The paperwork is enormous. The checking and double checking is unprecedented. The days of just signing a sworn statement of income are long gone.

I would not call those the basic rules, that is just how the OLD rules are being interpreted/applied. I was thinking rather of the person taking out the mortgage having a responsibility to repay the full amount of the loan. That might not be the reason we have had so much less of a problem but it must have an effect.

At an estimate, Aus had about 30,000 houses repossessed by Dec 2009. Pro rated to the US, that might be about 400,000 or so. The annual rate seemed to be about 10,000 so pro rate that to about 140,000 This compares with a rate in the US that seems to be North of a million in a year. So a look at the basic nature of the contract might be useful.

You are correct, I do not understand the US housing market, but do you understand that there are other ways of running a mortgage system?

Quoting mham001 (Reply 44):

I have no idea where you get that. Total over 2 years? Possible but the claim was for one year.

Er no it was not. What he said was:

Quoting TheCommodore (Reply 35):
Good article. Estimation of the number of foreclosed hones by the end if 2010, 2.3 million. A pretty hefty figure in anyone's imagination.

I understand that to be a running total. Only trouble is most of the articles either state a year total or a summed total, but do not state the period over which the summation is made.

If you have as in the article cited by TheCommodore "In all, 930,437 homeowners received a foreclosure-related warning between July and September" this suggests that the annual total is going to be in the millions. Not that far fom the 3.6 million quoted in a source given above.

As to causes, I remember being lectured to by some a.netters in about 2006-7 on the folly of not flipping houses I believe the term was at the time. Not hard to work out how many of them went. It takes two to tango, and I see a lot of blame going in one direction but not much aimed at those who were speculating. Not my fault Gov, it was all the fault of the rules.
 
Alias1024
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RE: Cashed-up Aussies Buy Up Big In The States

Sun Oct 31, 2010 5:48 pm

Quoting TheCommodore (Thread starter):
So for any Aussies out there planning to buy cheap in the US, forget it, its not worth the risk IMHO !

Or just purchase title insurance.....

Quoting mham001 (Reply 2):
Much ado about nothing. Very few of all the foreclosed houses will be in legal limbo. The number is minuscule.

  
It is a mistake to think you can solve any major problems with just potatoes.
 
TheCommodore
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RE: Cashed-up Aussies Buy Up Big In The States

Sun Oct 31, 2010 10:23 pm

Quoting mham001 (Reply 42):
TheCommodore, why are you resorting to lies to prove a point? Is the World Socialist Web Site not providing enough hype for you to promulgate?

I don't care one way or the other if you believe me or not.

The fact is the the US housing market is completely stuffed, whether you think that's the case or not, I don't give a damn.

Everyone else can seem to see that there are massive problems except you, so just go on living with your head in the sand, makes no difference to me.

BTW, your right, I did miss quote the figure of 3.2 million or whatever it was, I can't recall now (after so much time has passed) the exact article where I read it, and I cant find it on the net. But your arguing about the precise numbers, who cares, that's not the issue really and you know it.
Whichever way you look at it, the figures are mind boggling and only reinforce the point the things a terrible.
The figures are huge

If you want to be pedantic over the numbers, keep going.
  
“At first, they'll only dislike what you say, but the more correct you start sounding the more they'll dislike you.”

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