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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

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Canada’s home sales top predictions; why a real estate crash is inevitable

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"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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FDIC wants your retirement cash to save banks: Bloomberg

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Content By: The Coming Depression Editorial Staff (dates cited below)
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fat american confused

“Already, U.S. housing prices have fallen further during this economic downturn (26 percent), then they did during the Great Depression (25.9 percent).”

Approximately 11 percent of all homes in the United States are currently standing empty. In fact, there are many new housing developments across the U.S. that resemble little more than ghost towns because foreclosures have wiped them out.

Mortgage delinquencies and foreclosures reached new highs in 2010, and it is being projected that banks and financial institutions will repossess at least a million more U.S. homes during 2011. Meanwhile, unemployment is absolutely rampant and wage levels are going down at a time when mortgage lending standards have been significantly tightened. Source: Business Insider: 12 Signs That The Worst Housing Collapse In U.S. History Is Getting Worse (1)

Average Citizens taking the hit

With an even larger amount of market resets coming over the next 2 years, this does not bode well for the average US citizen; whether you are in foreclosure, notice of default or underwater and made all the right moves.

Americans truly deserve better then this but their political process is fatally flawed, (as most are) when big money interests control the agenda and put their interests above those of the people.

us property values myth

Depression or “second dip” a real possibility

Yes, a double-dip in American housing is a real possibility. As far as we are concerned, there are two main reasons.

Firstly, the US mortgage lending rules were rotten to the core and promoted excesses and bank instability. Non-recourse mortgages are idiotic and do nothing but fuel speculation. It is insane to allow a homeowner, and even more so, an investor, to simply hand the keys back to the bank and not put his other assets at risk. It was obvious from the constant re-mortgage ads on American TV that some giant scam was afoot, but no regulators noticed. Now, the American government seems to be doing absolutely nothing to change lending rules to protect the country from the next housing bubble.

Secondly, both the Obama and George W. Bush administrations clearly believed that the stock market recovery was the best way to end the recession. They were right as far as the rich Americans were concerned, but ignoring housing has and will continue to decimate the prospects for any ordinary American.

This is a big economic problem in the US because the system encourages home owners to over mortgage their properties and relies on that over-mortgaging to be used to buy things. In addition to the tax break for the interest payments, most states can take a home for non-payment of taxes so why would a homeowner ever have equity (a lower mortgage than the home value).

The real problem is the way a lot of the US economy was fueled by the spending of people who remortgaged their properties to more than the appraised value. Some lenders were agreeing to remortgage for significantly more than the appraised value. So now with home prices dropping there is no more remortgage space for homeowners to get new spending money.

A similar thing has happened in Canada, though to a lesser degree, because of the zero-down payment 40 year mortgage policy the Cons introduced in their first budget in 2006. A lot of people are house poor. Their early mortgage payments will pay almost none of the principle. Even after 10 years they will still owe almost the same amount…and they will face higher interest which means they will have less money to spend on other things.

References:

(1) Business Insider

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