What bankers won’t tell you about owning a home.

What bankers won’t tell you about owning a home.


Excerpt From Original Source With Comments & Permission Where Appropriate with original link below.

By N2H

crumbling home
“The home is not the asset, the mortgage payer is the asset! The revenue generated by mortgage interest is where the banks make their money.”

People looking to “secure their future” are constantly bombarded with the rhetoric of real estate agents and banks that your home is an ‘investment.’ The rise in home equity that you call wealth is phoney becuase inflation (inflation is caused by central banking) is not taken into account. Homes historically appreciate at a rate at or near the rate of inflation, so the net benefit over time is practically nil. Add to this the cost of mortgage principle, interest, taxes (which often increase as a result of assessed value), maintenance, and utilities, and you have yourself a money sinkhole. Even if you sell a home that has risen rapidly in value, you generally have to buy another home that has risen just as much in value.

Smart investors know that homes are not assets; they’re liabilities. Assets generate income, homes deplete income. Ever notice how banks, upon foreclosure of a house, will quickly sell it? Banks don’t wait for homes to appreciate in value because of the expenses involved in maintenance. The home is not the asset, the mortgage payer is the asset! The revenue generated by mortgage interest is where the banks make their money. Banks and real estate agents have conned an entire generation into believing that their home is their number one investment. The more debt-slaves there are, the better off the leeches in the banking and real estate world will be. Really, have you ever wondered what “mortgage” means? It is a combination of two French words of “mort” (death) and “gage” (contract). So, you are essentially signing a death pledge or contract when taking a loan out for a house! It is total brainwashing.

history of home values

” Viewed purely as an investment, an owner-occupied home has more than a few undesirable traits. In January, during a panel discussion at the annual meeting of the American Economist Association, Karen Pence, head of the Federal Reserve’s household and real estate finance division, pointed out a few of the drawbacks buyers tend to overlook. For instance, a house can’t be divided up and sold, like a stock portfolio, and it is highly correlated to the job market. Also, a house is undiversified; instead, its future is tied to a single neighbourhood. ” Source: Canadian Business
The Canadian Situation

The current system is not true capitalism. The government (CMHC) is using taxpayer dollars to insure bank loans to what would otherwise be considered underqualified borrowers, all in the name of keeping prices artificially inflated. That’s not capitalism, that’s corporate socialism.

In a true capitalistic society banks would be more conservative with their lending. If not they would go under when the bubble inevitably bursts, and the bankers who authorized the risky loans would end up on the street where they belong. If banks knew that their own money was on the line (ie. not insured by the big government), it would be guaranteed that they would require a 25% downpayment and wouldn’t risk an ammortization period longer than 25 years. That was the norm for decades before the big government got involved.

Does anyone really think the so called industry exports would actually come out and openly promote the existence of a bubble? Bank economists on business programs only mention places such as Vancouver in passing as being pricey! We live a society of politically correct. Want to bet lenders are not possibly tightening their lending criteria behind the scene?
USA housing prices about to drop: Peter Schiff

By transferring more underwater mortgage balances onto the public books, the plan puts taxpayers on the hook for further losses if housing prices continue to fall. Given the massive support for real estate already afforded by record-low interest rates and massive federal tax and policy incentives, there are very good reasons to believe that home prices will indeed collapse when these crutches are removed. Recent spikes in long-term interest rates warn of this prospect.

If the Administration had allowed losses to fall where they rightfully belong, namely on those who foolishly loaded up on toxic mortgage bonds, then the housing market would have already found its true clearing level. Instead, every measure is working to prolong and delay the ultimate reckoning, while setting up taxpayers as the patsy. Given the horrendous government deficit projections for the next several years, any losses incurred by thegovernment mortgage portfolio may add a critical stress on America’s fiscal viability. Read the rest from Peter Schiff.







http://www.thecomingdepression.net/main-street/real-estate/what-bankers-wont-tell-you-about-owning-a-home/



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