Jon Smirl

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  • New Mortgage Bankruptcy Bill Does Not Address Real Problem
    Why is this so hard for everyone to understand? If you don't pay your rent you get evicted. If you don't pay your mortgage you get foreclosed. If mortgage cram downs are allowed why not rent cram downs? It's obvious, if a landlord is vulnerable to rent cram downs they are going to raise all of their rents to cover the costs. Same for a lender. Cram downs raise the costs for the responsible people and only benefit the irresponsible ones. I'd prefer to be in control of my own charitable giving and not have it done for me.

    The answer is making the foreclosure process faster and less painful. Mortgages are a thirty year problem, applying a band aid for a year is just going to cause a redefault a year later. If the occupant is in a house beyond their means it is highly unlike that the situation will be any different a year from now. In the long run fast foreclosures minimize the pain for everyone.

    And stop whining about sticking it to the "corporations&quo... Corporations are not physical entities. The only real thing in the world is people. People ultimately own everything. Sticking it to the corporations is ruining my retirement investments and probably yours too. Us 'people' own these corporations whether you realize it or not.
    Jan 07 13:09 pm |Rating: +2 -1 |Link to Comment |View article
  • Understanding Levered ETFs and Geometric Returns
    Why don't they create levered ETFs with longer time periods?
    Jan 04 10:48 am |Rating: 0 0 |Link to Comment |View article
  • Why Would We Want to Bail Out This Homeowner?
    I know a builder that took in almost $4M in rent before losing all of his properties. During the two years of court proceedings around the foreclosures he gave nothing to the banks. He legally fought foreclosure every step of the way.

    He took another $5M out by shrewdly refinancing his unsold houses for cash out as the homes escalated during the bubble. For example one house sold for $1.6M recently and it had a $2.5M loan on it. It cost him $1.7M to build but it appraised at $2.7M at the peak.

    Bottom line he extracted $9M minus some court costs and never sold half of the homes he built. His corporation is bankrupt but he'll just create a new one. He thinks he did great as a builder.

    Note that he didn't plan for any of this to happen. He just sort of fell into it. Initially he didn't know he could keep the rent and not send it onto the banks. Once he figured that out he used the courts to delay the foreclosures while collecting as much rent as he could.
    Dec 17 09:59 am |Rating: +1 0 |Link to Comment |View article
  • GPU Wars: Attack of the $200-300 GPUs
    Long run Nvidia is toast. The new integrated GPU/CPU combos under design at Intel/AMD are going to destroy the low and middle cost GPU market. Nvidia could still dominate the high end but it will be a much smaller company. Over time the GPU/CPU combos will move towards the high end.

    There have been rumors of Nvidia buying an x86 CPU design in order to compete with the integrated GPU/CPU but there is no confirmation that they have bought one.
    Dec 15 14:39 pm |Rating: 0 0 |Link to Comment |View article
  • A Little Known Fact, And Good News, About This Crisis
    Mortgage deductions were a tiny factor in this mess. What created this mess was allowing people to gamble with "Other People's Money". Buy a million dollar house for nothing down, flip it a year later for $1.2M. Profit $200K, risk zero. House goes to $800K instead, take a foreclosure. Live it for three years without making payments while you fight the foreclosure. You effectively made $200K. Nothing down and you made money in both directions, it was a great bet - you couldn't lose.

    Require 20% down, or 10% down with PMI and none of this would have happened.
    Dec 02 08:04 am |Rating: +3 0 |Link to Comment |View article
  • Ten Reasons to Hate Mortgage Modifications
    Nothing down == renter. If payments aren't being made then a quick foreclosure is no different than an eviction and eviction happens all of the time. Negotiate with the bank to not destroy your credit.

    If you can't make your payments then you bought more house than you could afford. Temporary assistance is not going to make the problem go away. Quick foreclosure will.
    Nov 25 08:47 am |Rating: +1 0 |Link to Comment |View article
  • Calling for Fed Intervention in the Housing Market
    Direct intervention is a bureaucratic nightmare and ripe for massive corruption in who gets help and who doesn't. If the government wants to lower the supply of housing on the market it can do so more efficiently by lowing the cost of holding onto an existing house. Temporarily allowing the deduction of 150-200% of interest paid on an existing loan lowers the holding cost without renegotiating millions of loans. Lower holding costs will result in houses coming off the market while people wait for better prices.
    Nov 24 09:36 am |Rating: 0 0 |Link to Comment |View article
  • Solve the Housing Crisis by Rewarding the Prudent
    A simpler way to implement this is to allow the tax deduction of 150-200% of mortgage interest paid, not accrued. That would achieve the same effect without needing to refinance everything. Limit the deduction to pre-existing loans on your primary residence.



    Nov 19 08:56 am |Rating: 0 0 |Link to Comment |View article
  • Ten Reasons to Invest in Florida
    I suspect the water problems would go away in Florida if the massive federal subsidies for sugar were cut.
    Nov 09 10:29 am |Rating: 0 0 |Link to Comment |View article
  • It Might Be Impossible to Stop the Decline of Housing Prices
    A simple short term fix would be to temporarily lower the cost of keeping a home. This could be done by allowing the tax deduction of double the amount of interest paid on an existing loan on your primary residence.

    The government knows how much interested is being paid and can calculate exactly what this would cost. Lower the multiplying factor each year until the excess inventory clears.

    This would be trivial to administer and it delivers the largest benefits to the people who need it the most; ones with large, high interest loans. It a lot of cases it would wipe out this group's federal tax liability completely.

    It would have cost a lot less than $700B and the banks would have been ok since everyone would have paid their mortgages. You only get the deduction for interest PAID not accrued.
    Nov 09 07:43 am |Rating: 0 -2 |Link to Comment |View article
  • 'Too Much House' Buyers To Be Rewarded?
    Best solution is quick, easy foreclosures. If you can't afford the house today you probably still won't be able to afford it ten years from now.

    Nothing or little down == renter.

    Why didn't I buy that $15M Florida ocean front mansion for nothing down? I could have gotten my loan adjusted into something that I can afford!
    Oct 31 13:07 pm |Rating: 0 0 |Link to Comment |View article
  • Economic Anomalies Explained
    It's Congress that spends the money, not the President. Congress routinely ignores the President's budget requests. It doesn't matter which party is in power, it is Congress spending the money.
    Oct 31 11:02 am |Rating: 0 0 |Link to Comment |View article
  • On Rescuing Homeowners Undergoing Foreclosure
    I agree, the way to fix the housing mess is to speed up the rate of foreclosures rather than slow it down. If someone has bought beyond their means how is short term government support going to help? As soon as the support ends they'll be back in trouble. These are 30 year mortgages and 30 year problems.

    Given the stat that 45% of homes under foreclosure are unoccupied makes me think that far more people in trouble are speculators than owners. I'm renting a second home in FL right now for thirty cents on the dollar of what it would cost me to buy and the price is falling 20% a year on it.
    Oct 28 09:17 am |Rating: 0 0 |Link to Comment |View article
  • The Lease-Back Bailout
    "How can we help people who are genuinely having difficulty making their mortgage payments, without needlessly bailing out any old homeowner who'd simply like to pay less?"

    I'm having genuine trouble making payments on the $15M nothing down house I wish I had bought.

    If you can't make your payments you bought more house than you can afford. You are better off in the long run losing it.
    Oct 22 14:42 pm |Rating: 0 0 |Link to Comment |View article
  • The Debate: McCain's Insane Mortgage Proposal
    Why should the government buy defaulted mortgages at 50% of face? I'll default on my CountryWide Alt-A tomorrow if that's the case. I'm sick of hearing hedge fund managers on CNBC saying they can't sell Alt-A's at 50 cents on the dollar. I called up and offered 75 cents on the dollar for my Alt-A and was told to get lost or pay 100%.

    If banks are so desperate for capital why won't they deal with the mortgage holders? The only way to get them to deal is to purposely send the loan into foreclosure.

    I am completely at a lost as to why anybody would sell at a loan at 30 cents on the dollar without first sending letters to the mortgage holders offering 30 day payoff deals at 50 cents first.
    Oct 08 13:16 pm |Rating: 0 0 |Link to Comment |View article

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