HOME AGAIN (work)
OTHER STUFFAh tell ya what, after a while, working too many (stressfull) hours will catch up with ya.
I stayed home and slept most of the day, and night.
Looks like ya'll were pretty chatty without me!
Chat away.
Vaughn Tolle said:
Sometimes, Tracy, one just has to do that.
Stress: As some of you know, our elder and her husband live in Minneapolis, and attend grad school at the University of Minnesota. The I35W bridge that collapsed yesterday is very close to where they live, and I'm aware that from time to time, they travel it. Anyway, to make a long story short, after a time of anxiety when we couldn't reach them, we finally made contact, and, happily, all is well. Whew.
Stress: As some of you know, our elder and her husband live in Minneapolis, and attend grad school at the University of Minnesota. The I35W bridge that collapsed yesterday is very close to where they live, and I'm aware that from time to time, they travel it. Anyway, to make a long story short, after a time of anxiety when we couldn't reach them, we finally made contact, and, happily, all is well. Whew.
lindainks55 said:
So happy to hear that good news! I had been told they lived there but hadn't thought of it. I know how you felt. My oldest son was scheduled to fly out of NY City on 9/11. at the right / wrong time. It was many hours before the clogged phone lines allowed us to make contact and for me to learn his business had wrapped up early so he had flown home the night before.
Vaughn Tolle said:
Linda, interestingly, the elder knew her mother was likely "burning the midnight oil" and was still at work, so she did what she considers logical, and emailed her (and me, although I was long gone) that all was OK, then went about her business. She was correct, in that her mother was still at work, but buried under the "massive mailing" stuff, and checking her email was the last thing on her mind. When I joined my wife, after a stint at NEMHS to help with its registration, I mentioned that I had heard, listening to the beginning of the Royals/Twins game, of the bridge collapse, and then turned on the tube to see what was going on. Upon recognition of the bridge and its location, that's when the anxiety started. Both of us should have thought to check email, but we're still old school enough that the first instinct was the telephone. Anyway, all's well that ends well. BTW, I'm an ace at running 91/2"x 12 1/2" envelopes through a postage meter after last night. :-)
On to other things: AG AG says his testimony might have been "confusing', and offers Leahy a private briefing, which has been declined. From the short excerpts of the letter set out in the article linked below, I see word parsing and legalistic arguments at their best:
http://www.cnn.com/2007/POLITICS/08/01/congress.su...
On to other things: AG AG says his testimony might have been "confusing', and offers Leahy a private briefing, which has been declined. From the short excerpts of the letter set out in the article linked below, I see word parsing and legalistic arguments at their best:
http://www.cnn.com/2007/POLITICS/08/01/congress.su...
gster said:
I was watching ABC World news last night and there was a story stating that 1 in 69 homes in Nevada, 1 in 124 in California and 1 in 100+ homes in Ohio were in foreclosure!
If that theme is projected across the country, the
fallout could be HUGE. It really floored me. Some of these were surely the result of speculative purchasing for investing during the housing boom, but many couild be people in "too much" house and in deep caca. This has to have a big effect on the lending industry for years to come, influencing all of us.
If that theme is projected across the country, the
fallout could be HUGE. It really floored me. Some of these were surely the result of speculative purchasing for investing during the housing boom, but many couild be people in "too much" house and in deep caca. This has to have a big effect on the lending industry for years to come, influencing all of us.
Vaughn Tolle said:
Gster, you're right. Big issues, the tip of the iceberg being the current "subprime mortgage" debacle. I don't have statistics for Kansas, but have noticed a definite upswing in the number of foreclosures filed here in Sedgwick County within the past few months. And, it isn't limited to the two specifics you mention in your post. There is also the case of folks who shouldn't even be in a house, and now finding themselves in trouble. And, may I add, the folks who fell for the "borrow the equity" scheme, whose ARM seconds are coming home to roost. The use of home equity as the engine driving consumption has been on my radar for a few years now. The total effects of all this may be catastrophic to the entire economy.
A bit more on the "borrow the equity" plan. As wages (in real terms) have stagnated over the past few years, some folks have found themselves needing additional funds for rational, real reasons, such as paying high medical bills, helping to pay the costs of higher ed for their offspring, etc., and there are some folks who, driven by the "I want it too, and now" ethic, were already up to their ears in consumer debt, and fell for the "pay it off with a home equity loan, the interest on which is (in most cases) tax deductible" who borrowed the equity, did pay down the credit cards, but given their propensities, ran them up again, counting on increased equity due to continuing rise in housing prices to provide a "security blanket" if they got in trouble again. Well, prices are falling (thus depressing real estate values), interest rates on the ARMs are adjusting upwards, as are the monthly finance charges on the plastic, there's no more money at the end of the month than there had been, so the security blanket is gone. What many of the folks who got into this mess failed to realize was that while being hassled by the credit card issuer over late payments, etc., or the collection agency over unpaid medical bills isn't pleasurable, they couldn't lose their residence (in Kansas, at least) if sued; now, they can lose their residence, be liable for a deficiency judgment, still be sued by the credit card companies, et al., and, due to the Bankruptcy Code revisions, be stuck in paying it off anyway (in whole or in part). The only benefit to the Chapter 13 approach is that the creditors cannot garnish wages, bank accounts, etc., but that monthly payment to the Chapter 13 Trustee still has to be made (usually by a direct withholding and remittance by the employer), and there will be major lifestyle adjustments necessary.
A bit more on the "borrow the equity" plan. As wages (in real terms) have stagnated over the past few years, some folks have found themselves needing additional funds for rational, real reasons, such as paying high medical bills, helping to pay the costs of higher ed for their offspring, etc., and there are some folks who, driven by the "I want it too, and now" ethic, were already up to their ears in consumer debt, and fell for the "pay it off with a home equity loan, the interest on which is (in most cases) tax deductible" who borrowed the equity, did pay down the credit cards, but given their propensities, ran them up again, counting on increased equity due to continuing rise in housing prices to provide a "security blanket" if they got in trouble again. Well, prices are falling (thus depressing real estate values), interest rates on the ARMs are adjusting upwards, as are the monthly finance charges on the plastic, there's no more money at the end of the month than there had been, so the security blanket is gone. What many of the folks who got into this mess failed to realize was that while being hassled by the credit card issuer over late payments, etc., or the collection agency over unpaid medical bills isn't pleasurable, they couldn't lose their residence (in Kansas, at least) if sued; now, they can lose their residence, be liable for a deficiency judgment, still be sued by the credit card companies, et al., and, due to the Bankruptcy Code revisions, be stuck in paying it off anyway (in whole or in part). The only benefit to the Chapter 13 approach is that the creditors cannot garnish wages, bank accounts, etc., but that monthly payment to the Chapter 13 Trustee still has to be made (usually by a direct withholding and remittance by the employer), and there will be major lifestyle adjustments necessary.
Danny said:
Gster,
I read something similar, it is why I'm living in an apartment right now, saving money toward a house(downpayment). Granted, the sad part in all of this, I get nothing back from rent. Such is life though, at least we have something over our heads. (P.O.'d neighbors come to mind when Savannah has her 3am I'm hungry, pooped my diaper, and mommy isn't holding me scream session).
Oh well, the life of a newborn. Hoping that she takes after her sister and realizes that in about 3 or so more weeks it really isn't so bad to sleep through the night.
I read something similar, it is why I'm living in an apartment right now, saving money toward a house(downpayment). Granted, the sad part in all of this, I get nothing back from rent. Such is life though, at least we have something over our heads. (P.O.'d neighbors come to mind when Savannah has her 3am I'm hungry, pooped my diaper, and mommy isn't holding me scream session).
Oh well, the life of a newborn. Hoping that she takes after her sister and realizes that in about 3 or so more weeks it really isn't so bad to sleep through the night.
gster said:
I must be really naive or living in another universe: I can't fathom why or how people get in over their heads on something as expensive as a house! I didn't know squat about home buying when I bought mine, but I made damm sure there weren't any surprises in the transaction for the me.
In fact, I bought my house from a friend of mine, and he had bought the same house 3 times! Can you say divorce? Anyway, I figured if it was good enoght for Dave the handyman-type, it was good enought for me, and I was right.
Gary
In fact, I bought my house from a friend of mine, and he had bought the same house 3 times! Can you say divorce? Anyway, I figured if it was good enoght for Dave the handyman-type, it was good enought for me, and I was right.
Gary
Vaughn Tolle said:
Gster, if I may use real examples of clients "in over their heads" gleaned from the years I've been in practice:
1) Costs of routine maintenance and repair not planned for;
2) What? We have to pay taxes?
3) The homeowner's insurance premiums are killing us.
4) The need to replace the roof, e.g.
5) As trivial as it may seem, the costs of trash pickup, paying higher water bills to keep the lawn, etc. going, higher electrical bills, etc.
I could continue, but I think you get the picture.
Many of the above are applicable to first-timers. Amazingly, though, many who are "moving up" don't sufficiently take increased ad valorem taxes, higher utilities due to a bigger space to heat/cool/illuminate into account. Then, the special assessments hit.
The "American Dream" of owning one's own house has many costs associated therewith over and above the payment of the purchase price. Add to that the "subprime" lenders who were making loans barely affordable (or really not affordable) to those who desperately wanting to buy a house but who had been turned down by more conventional lenders that recognized the inability to pay the loan, the siren's song of tax deductibility of mortgage interest (not that great a benefit for many, BTW), real estate taxes, etc., and here we go.
1) Costs of routine maintenance and repair not planned for;
2) What? We have to pay taxes?
3) The homeowner's insurance premiums are killing us.
4) The need to replace the roof, e.g.
5) As trivial as it may seem, the costs of trash pickup, paying higher water bills to keep the lawn, etc. going, higher electrical bills, etc.
I could continue, but I think you get the picture.
Many of the above are applicable to first-timers. Amazingly, though, many who are "moving up" don't sufficiently take increased ad valorem taxes, higher utilities due to a bigger space to heat/cool/illuminate into account. Then, the special assessments hit.
The "American Dream" of owning one's own house has many costs associated therewith over and above the payment of the purchase price. Add to that the "subprime" lenders who were making loans barely affordable (or really not affordable) to those who desperately wanting to buy a house but who had been turned down by more conventional lenders that recognized the inability to pay the loan, the siren's song of tax deductibility of mortgage interest (not that great a benefit for many, BTW), real estate taxes, etc., and here we go.
Danny said:
Vaughn,
I agree. I see part of it to blame on the consumer(not being wise with their money to begin with) and part of it lying squarely on the lenders making it sound like it smells like roses but forgetting to mention the thorns the roses have. So I think some responsibility lies on the lenders to protect consumers from themselves. At the same time, it shouldn't be their sole responsibility, as the consumer has a stake in this also.
It almost seems like people(maybe even a large number of people) need a course on needs vs. wants. Granted, with the cost of needs going up, adjustments in the wants is going to have to occur and adjustments in lifestyle/living arrangements is going to have to occur. I've seen some in my extended family get into this situation themselves.
I guess, that with my having been a student, with a family, I've learned to live without wants and cool gadgetry such that now that I have money I still just go without some of that stuff. I don't need it, and I didn't need it, and I didn't die without it, so... why get it? I chose to just spend more on better food now(which may be difficult to give up).
Fiscal responsibility, can it be taught?
I agree. I see part of it to blame on the consumer(not being wise with their money to begin with) and part of it lying squarely on the lenders making it sound like it smells like roses but forgetting to mention the thorns the roses have. So I think some responsibility lies on the lenders to protect consumers from themselves. At the same time, it shouldn't be their sole responsibility, as the consumer has a stake in this also.
It almost seems like people(maybe even a large number of people) need a course on needs vs. wants. Granted, with the cost of needs going up, adjustments in the wants is going to have to occur and adjustments in lifestyle/living arrangements is going to have to occur. I've seen some in my extended family get into this situation themselves.
I guess, that with my having been a student, with a family, I've learned to live without wants and cool gadgetry such that now that I have money I still just go without some of that stuff. I don't need it, and I didn't need it, and I didn't die without it, so... why get it? I chose to just spend more on better food now(which may be difficult to give up).
Fiscal responsibility, can it be taught?
Danny said:
Vaughn,
I am glad you shared some of the costs associated with owning a home. Some I had been planning for others I had not(trash service bill was an example of not planning for). I don't plan on getting the largest house imaginable either, just something of livable size. I'm not out to compete for the biggest and best.
The insurance premium I did expect. I have alot of questions about what Escrow means, and things like that. I'm not looking right now mind you, but there are questions I'd like answers to before I start to look. I know also to avoid these "subprime" loans like the plague, and I will, as I'll just go through my bank when my wife and do decide to make the plunge and get our own house.
I am glad you shared some of the costs associated with owning a home. Some I had been planning for others I had not(trash service bill was an example of not planning for). I don't plan on getting the largest house imaginable either, just something of livable size. I'm not out to compete for the biggest and best.
The insurance premium I did expect. I have alot of questions about what Escrow means, and things like that. I'm not looking right now mind you, but there are questions I'd like answers to before I start to look. I know also to avoid these "subprime" loans like the plague, and I will, as I'll just go through my bank when my wife and do decide to make the plunge and get our own house.
Dave Shuck said:
Danny a couple of other ones to throw in....
HOA fees (some neighborhoods anyway) - ours is about 800/year.
There are also costs of things like lawn mowers, refrigerators, washers/dryers and other things you might not have to think about as an apartment renter.
Typically though, the tax deductions at the end of the year would certainly outweigh those items. :)
HOA fees (some neighborhoods anyway) - ours is about 800/year.
There are also costs of things like lawn mowers, refrigerators, washers/dryers and other things you might not have to think about as an apartment renter.
Typically though, the tax deductions at the end of the year would certainly outweigh those items. :)
Vaughn Tolle said:
Not a precise, correct to the letter legal definition here, Danny, but Escrow (for taxes and insurance, most commonly known form thereof to most homebuyers) refers to the depositing with an agent (the "Escrow agent") on a monthly basis a sufficient amount calculated to be needed to pay the real estate taxes when due and the annual homeowner's insurance premium. The term implies a fiduciary relationship, as the Escrow agent is analogous to a Trustee, holding (in this case money) "in trust" to be applied to a specific purpose for your benefit (taxes, insurance premium). Unanticipated increases in the taxes or the insurance premium result in a shortage in escrow, to be made up by increased monthly payments (increased not only by the amount of the "shortfall" to cover, e.g., the current year's taxes but also the anticipated additional amount that next year's taxes will be compared to the current year's). Not to be confused with an "Escrow Contract" ( a form of private financing) where the deed to the real estate is held in escrow pending the buyer's completing all payments due the seller for the purchase of the real property, at which time the deed is delivered by the Escrow agent to the buyer for recording. Often, the monthly payment is remitted to the Escrow agent, who then deducts a fee, and transmits the balance to the seller. Used in situations where the seller is willing to take a chance on a buyer who cannot qualify for a conventional mortgage loan, or who cannot come up with the required down payment, but otherwise seems credit worthy to the seller. Used quite a bit in the early 1980s to "wrap" a mortgage which had a "due on sale" clause, or was nonassumable, or both. Also useful to a seller who has investment real estate, as the sale so structured qualifies for "installment sale" treatment for income tax purposes. cf. Contract for Deed.
lindainks55 said:
The cost after an ice storm. You can't even imagine what tree trimmers charge! The two ice storms Wichita had in recent winters were expensive to home owners.
Vaughn Tolle said:
Dave, once was true, maybe not so much anymore. Simplistic example: the Standard Deduction for 2007, married filing jointly, $10,300.
Total itemizable deductions for 2007 (assuming purchase of home in 2007 early enough in the year for these to accrue): $11,000, of which $7,000 represents mortgage interest; $2,000 real estate taxes; and $2,000 state income taxes.
Assuming in the 25% marginal bracket, tax benefit of the additional $700 in itemized deductions is $175.00.
Assuming that rent apartment for entire year at $700 per month, total rental cost $8400.00. No real estate taxes paid (included within rent). So: for net total out-of-pocket: a) buy house (assume total payments for year = interest): $11,000-175 income tax savings = 10,825.00; b) rent apartment = $8400.00
As I said, very simplistic; ignores increase in equity in residence, does not take into effect utilities, etc., insurance, whatever. Just offered to show that the "tax tail should not wag the dog" in making these kind of decisions.
Stated another way, does $175 additional federal income tax savings justify an increase in out of pocket expenditures of $2600 by itself?
This is not to discourage you, Danny, from buying a house; just an example of how sometimes the deductibility of mortgage interest and real estate taxes confuses the real issue of how much it really costs to buy the house, and that the tax savings really shouldn't be (in the case of a modest purchase) given much weight in the decision.
Total itemizable deductions for 2007 (assuming purchase of home in 2007 early enough in the year for these to accrue): $11,000, of which $7,000 represents mortgage interest; $2,000 real estate taxes; and $2,000 state income taxes.
Assuming in the 25% marginal bracket, tax benefit of the additional $700 in itemized deductions is $175.00.
Assuming that rent apartment for entire year at $700 per month, total rental cost $8400.00. No real estate taxes paid (included within rent). So: for net total out-of-pocket: a) buy house (assume total payments for year = interest): $11,000-175 income tax savings = 10,825.00; b) rent apartment = $8400.00
As I said, very simplistic; ignores increase in equity in residence, does not take into effect utilities, etc., insurance, whatever. Just offered to show that the "tax tail should not wag the dog" in making these kind of decisions.
Stated another way, does $175 additional federal income tax savings justify an increase in out of pocket expenditures of $2600 by itself?
This is not to discourage you, Danny, from buying a house; just an example of how sometimes the deductibility of mortgage interest and real estate taxes confuses the real issue of how much it really costs to buy the house, and that the tax savings really shouldn't be (in the case of a modest purchase) given much weight in the decision.
Vaughn Tolle said:
The reason for the simplistic example posted above was my blatant attempt to not take into consideration anticipated increases in value of the real property being purchased over 20 years, compared to anticipated increases in rentals over the same period, then ascertaining an appropriate discount rate to reduce the same to present value, combined with the decreasing interest component of total house payments over the period, the probably rate of increase in real estate taxes over the same period, and making further assumptions on the inflation-adjusted Standard Deduction and tax brackets, assigning arbitrary increases in income, etc., etc., with appropriate discount rates to be applied to arrive at a NPV figure indicating whether, strictly from a financial perspective, buying a house v. renting is appropriate.
Tracy Phillips said:
Speaking of housing....
whadya' wanna bet that the FEMA trailers that are thick with formaldahyde are being sent to Coffeyville as we speak.
Ya' know what FEMA is doing for them now?
NOTHING, except slowing the recovery.
Due to fed regs, homeowners are not allowed to go clean up their own property.
whadya' wanna bet that the FEMA trailers that are thick with formaldahyde are being sent to Coffeyville as we speak.
Ya' know what FEMA is doing for them now?
NOTHING, except slowing the recovery.
Due to fed regs, homeowners are not allowed to go clean up their own property.
Vaughn Tolle said:
Also, trying to avoid the issue of investment of the difference in out of pocket dollars, picking an appropriate rate of return thereon, discount back to NPV, after assigning the appropriate tax rate thereon, whether tax-exempt securities would be a better long-term investment vehicle than taxable investments, etc., etc.
In other words, avoiding the types of necessary analyses conducted by businesses in determining investment in PPE, etc., a part of a course taken as an undergrad modestly titled "Capital Budgeting". Back in the (pre-calculator and most definitely pre-computer) day, these caused my slide rule to glow, my log tables to become dog-eared and dirty from constant reference, many pencils and erasers gone through, etc. just to get an answer.
In other words, avoiding the types of necessary analyses conducted by businesses in determining investment in PPE, etc., a part of a course taken as an undergrad modestly titled "Capital Budgeting". Back in the (pre-calculator and most definitely pre-computer) day, these caused my slide rule to glow, my log tables to become dog-eared and dirty from constant reference, many pencils and erasers gone through, etc. just to get an answer.
Vaughn Tolle said:
Tracy, I thought FEMA had declared a moratorium on the use of those trailers pending resolution of the "off-gassing" issue.
lindainks55 said:
Last I heard the moratorium was lifted for Coffeyville residents. Even heard one elected official saying Kansas people knew they needed to "air out" the trailers. Didn't say out loud residents of New Orleans were stewpid but what wasn't said was loud.
Vaughn Tolle said:
Linda, how could the NOLA residents be "stewpid" when FEMA was stifling any disclosure of the problem? Seems to me the "stewpid" folks include the person making the statement within the set.
lindainks55 said:
Yep! But this was a Kansas person trying to explain why Coffeyville people could have trailers. NO residents have taken a hit from every direction as a result of the disaster they suffered. Gotta blame somebody for all the failings??
Vaughn Tolle said:
Speaking of NOLA residents:
http://www.wdsu.com/news/13806301/detail.html
From what I know of the case, the Court of Appeals decision is correct.
http://www.wdsu.com/news/13806301/detail.html
From what I know of the case, the Court of Appeals decision is correct.
Tracy Phillips said:
Also, if you've never been to Coffeyville,
all the poor* (*read 'black') folks live near the river, projects and all.
I don't have answers, just complaints as usual.
all the poor* (*read 'black') folks live near the river, projects and all.
I don't have answers, just complaints as usual.
Vaughn Tolle said:
So, Tracy, Coffeyville is like many, many other towns and cities in the U.S. If one is "poor", the only "affordable" housing is located in areas next to rivers, usually with surrounding industrial areas, or, as in Wellington, South of the major elevator (about a two-block wide strip running about two to three blocks, back in the day). Places where folks who can afford to obtain housing elsewhere, do.
Danny said:
I'm going to be reading alot in the next couple of years about houses and associated payments and bills it sounds like.
Dave,
I took into consideration washer and drier. HOA, I didn't, but likely my house will not be under an HOA. Lawn mower, see I'm going to use the old one my dad has, no motor, just blades. :D Old fashioned, one man powered mower. :D
Vaughn,
So, Escrow is going to be one of those necessary evils that is going to confuse the heck out of me at first, and I should read more about what it is, how it is used, and when I do get my house(and associated loan for it) ask questions of my lender?
Dave,
I took into consideration washer and drier. HOA, I didn't, but likely my house will not be under an HOA. Lawn mower, see I'm going to use the old one my dad has, no motor, just blades. :D Old fashioned, one man powered mower. :D
Vaughn,
So, Escrow is going to be one of those necessary evils that is going to confuse the heck out of me at first, and I should read more about what it is, how it is used, and when I do get my house(and associated loan for it) ask questions of my lender?
Vaughn Tolle said:
Danny, the answer to your question is "yes". BTW, your lender has an obligation under various federal rules, regs, etc., to give you an explanation of all how all that works, your obligations, its obligations, so on and so on.
Danny said:
Vaughn,
I suspected as much, and I'll likely go into my bank at some point and ask them questions long before my wife and I even start looking. Just to get an idea of costs, repayment, and things like that I will encounter. Gathering information before making a purchase seems like a good idea to me anyway.
I suspected as much, and I'll likely go into my bank at some point and ask them questions long before my wife and I even start looking. Just to get an idea of costs, repayment, and things like that I will encounter. Gathering information before making a purchase seems like a good idea to me anyway.
gster said:
Danny- One smart thing to do when you finally purchase a home is to make at least 13 payments a year. Add to the payment and specify the amount is to be applied to the principal This will really save you interest money and shorten the loan length. It can make a hell of a difference if you do it religiously!
G
G
lindainks55 said:
Dan Froomkin's White House Watch is very interesting. Instead of copying what I found thought provoking, I'll direct you there and you can read what you choose. It's titled, "Karl Rove's Immunity."
http://tinyurl.com/9gx78
http://tinyurl.com/9gx78
Vaughn Tolle said:
Ah, yes, the notorious Rhenquist memo of 1971, repudiated in part, if not in whole, by U.S. v. Nixon. What we learned from the Nixon case is that Executive Privilege, whatever it may be, is not absolute, but is qualified. The assertion of Executive Privilege is stronger in the case of Mr. Rove than the assertion of the same in the Pat Tillman matter, but I digress.
The issue of confrontation of the Legislative against the Executive branches of government was not a part of the U.S. v. Nixon decision. Rather, and interestingly, the same dealt with what was, in fact, an intra-Executive branch dispute, which happened to involved the Judicial branch, as the same arose from a criminal investigation. To my mind, the Courts have never ruled on the straight-up issue of a direct, inter-branch dispute where EP is claimed.
Linda, thanks for the link. BTW, it's raining right now in downtown Wichita.
The issue of confrontation of the Legislative against the Executive branches of government was not a part of the U.S. v. Nixon decision. Rather, and interestingly, the same dealt with what was, in fact, an intra-Executive branch dispute, which happened to involved the Judicial branch, as the same arose from a criminal investigation. To my mind, the Courts have never ruled on the straight-up issue of a direct, inter-branch dispute where EP is claimed.
Linda, thanks for the link. BTW, it's raining right now in downtown Wichita.
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