CNN Money Hires Titanic Bandmembers

You may have noticed that the housing market isn't doing so hot.  Perhaps you live in Southern Cal or Detroit.   Perhaps you used to work for American Home Mortgage and were one of their 7,200 people who got shitcanned last week right after their CEO sold 3 million of his shares and then sent them all a "We're sorry to inform you" e-mail.   Perhaps you've heard of how all the home builders are tanking.  Or the subprime debacle (I'm sure you've heard of this).  

Well, perhaps you should start reading CNN Money.  Because they've got a helpful new article on their site called

Your Home: When to Cash In

That is right.  Behind on your adjustable rate mortgage?   Eyes bigger than your stomach wallet?  Idiot?  Well, perhaps its time that you just cash in your ticket on the American Dream Consumerama Express and...well...get rich.  Check out this bit

If you are taking care of your major financial responsibilities, you're a good candidate for pre-paying your mortgage, according to Keith Gumbinger, vice president of mortgage information publisher HSH.

Yes.  In one of the worst weeks for the credit market in quite a while, the good folks at CNN are telling you how to prepay your mortgage.  I can't wait for Rupert Murdoch to take over the WSJ so we can really start getting some sound financial advice from the Very Serious Money People.  

Remember when the great Great Alan Greenspan told us all to get Adjustable Rate Mortgages?

•  I don't understand

  why people don't just live within their means.

  by NYCO on Sun Aug 05, 2007 at 04:22:29 PM PDT

  •  Because of Their Spouses nt

    by Gooserock on Sun Aug 05, 2007 at 04:28:11 PM PDT

    •  Greatest... Post... EVAH!!!!!!!!!!!!!!!!!!!!!!!nt

      by PJ Jefferson on Sun Aug 05, 2007 at 06:13:22 PM PDT

  •  neither do they

    I'm sure there are people getting foreclosed on who have huge houses that they haven't been able to even furnish yet.  

    by onemadson on Sun Aug 05, 2007 at 04:29:31 PM PDT

  •  It is not the American way, according to Madison

    Avenue, where the constant barrage of ads continuously bombard us, the consumer, with the idea that the more things we purchase, the better off we are.  The mailbox is filled with credit card applications once or twice every week.

    by Tropical Depression on Sun Aug 05, 2007 at 04:41:11 PM PDT

  •  When my father moved to california

    after ww2 , he got a home , on the beach in redondo , for one years wages . Now a home costs more than a lifetimes work for some . There is a problem for workers .

    What is it when the price of everything goes up but the wages ?
    What is it when lenders give people bad deals ?

    by indycam on Sun Aug 05, 2007 at 04:49:11 PM PDT

    •  Wellll

      That's a bit of an exaggeration.  The average home, I'd wager, costs less than two years salary.  If I think about all my friends and their homes and incomes, that's about right, from artists to schoolteachers to business executives.

      by cartwrightdale on Sun Aug 05, 2007 at 05:07:02 PM PDT

      •  Correction

        I looked it up and I'm beside-myself shocked.  The average home costs 240,000 in the U.S., and the average income is around 40,000.  So, six years.  But I'm really floored at that 240 figure -- of all my family and friends of varying levels of income and success, I know maybe 1 person who has a quarter-million dollar house.  That seems insane.  I would have guessed the average home price in the U.S. much, much lower.  My salary's averaged in the 80s-90s since 2000 and my house was 110 and it's STILL hard to pay the mortgage!!  Maybe I need to eat out less.  :)

        by cartwrightdale on Sun Aug 05, 2007 at 05:13:05 PM PDT

        •  I don't know how people do it

          in areas like D.C.  $1 million still buys a nice house there, but the low end is horrible.  And there are lots of areas where even small houses are over $500k and up.

          by unterhausen on Sun Aug 05, 2007 at 05:18:49 PM PDT

        •  When you add in

          the interest that 240 becomes larger . The home is 240  k cash , >240 on terms . So 6 years wages in cash .

          If I move to a place where I can buy a home cheap , can I make money ?

          by indycam on Sun Aug 05, 2007 at 05:50:31 PM PDT

          •  And that home

            on redondo beach is not a 240 K home . That home today is more like a million . He got it for one years wages as a normal worker . If I wanted to buy that home today , doing the very same job he did , I would need a multi generational mortgage .  

            by indycam on Sun Aug 05, 2007 at 05:55:14 PM PDT

        •  I think that the mean price is

          somewhat lower.

          by StrayCat on Sun Aug 05, 2007 at 06:43:49 PM PDT

          •  Good point

            It only takes a relative handful of 25-million dollar estates to throw off the averages for the rest of us.  :)

            by cartwrightdale on Mon Aug 06, 2007 at 09:23:22 AM PDT

      •  that can't be true

        around here, houses start at $150k or so, which might be two year's wages for a very senior teacher in our well-funded school system, but of course a person like that probably wouldn't be happy in such a house.  And I think $150k is pretty cheap nationally.

        by unterhausen on Sun Aug 05, 2007 at 05:16:19 PM PDT

        •  Around here

          Most starter homes (under 1,500 sq ft) run under 100,000.  I have some friends with rather nice large homes in the 70-90k range in not-great areas, and nicer homes in the 100-120k range in pretty good areas.  There are also many many many many many MANY homes available for sale in the 30-60k range, of course, as there always are in the more economically depressed regions, which is sometimes quite tempting -- I considered a 2,000 sq ft (all wood floors, fireplaces, very good shape) for 65k not too long ago, but that's the Lansing housing market for ya.  :)  

          by cartwrightdale on Sun Aug 05, 2007 at 05:29:08 PM PDT

          •  100 k

            will not get you a garage here .

            by indycam on Sun Aug 05, 2007 at 05:56:59 PM PDT

•  BusinessWeek

  The latest BusinessWeek has several articles on the mortgage meltdown, including one that mentioned something I wasn't aware of--large home builders getting into the mortgage business and "helping" potential customers qualify by lying on their applications.

  The main article is here.

  Honestly, there's way more than enough stupid to go around on this mess.

  by loudGizmo on Sun Aug 05, 2007 at 04:32:19 PM PDT

  •  read about one homebuilder

    who went down for that.   They were working it on several levels to get people loans and apparently they went way over what was legal.   They were a smaller regional builder though, not one of the big ones.

    by onemadson on Sun Aug 05, 2007 at 04:37:24 PM PDT

•  since they use the example of an 8% mortgage

  this is not aimed at recent home buyers, or is just an old recycled article.

  by John DE on Sun Aug 05, 2007 at 04:47:09 PM PDT

  •  actually...

    several mortgage companies have just raised their rates from the low 6%ish to 8 percent.  I'll see if I can get u a link.

    by chillindame on Sun Aug 05, 2007 at 05:04:47 PM PDT

    •  Here's one quote...

      "Last Friday, Wells Fargo announced they were increasing the interest rate on home mortgage loans from 6 7/8 to 8%." This is from bondad's current diary on the rec list.

      by chillindame on Sun Aug 05, 2007 at 05:07:35 PM PDT

      •  wow

        This will only contribute to the collapse.

        by John DE on Sun Aug 05, 2007 at 05:51:30 PM PDT

•  The Titanic Bandmembers

  went down with the ship , no ?
  They made music for others even when they knew they were going to die .

  Who at cnn money is doing anything half as noble ?  

  by indycam on Sun Aug 05, 2007 at 04:54:36 PM PDT

  •  true enough

    perhaps its a bad title.   perhaps I should've titled it, "CNN Hires Fucking Greedy Idiotic Morons to Spew their Filth While the Average American Gets Fucked".  

    by onemadson on Sun Aug 05, 2007 at 05:19:11 PM PDT

    •  Little wordy

      but damn accurate .  

      by indycam on Sun Aug 05, 2007 at 05:59:31 PM PDT

•  yet here in MD...

  they can't build high end homes fast enough, the builders are all gambling that the BRAC realignment is going to carry them through this slow patch.

  by chillindame on Sun Aug 05, 2007 at 05:09:03 PM PDT

  •  "gambling" ?

    in the US markets?   I don't believe it.

    by onemadson on Sun Aug 05, 2007 at 05:17:52 PM PDT

  •  what does BRAC have to do with it?

    I assume that means some military base is going to be closed and given to the builders?

    by unterhausen on Sun Aug 05, 2007 at 05:20:26 PM PDT

    •  They are closing a base...

      in NJ and moving thousands of jobs to MD. Local officals have been having the big O over it for months, dreaming about all those fresh tax dollars and the high income jobs that aresupposedly coming.  Haven't heard anything in about a week, but the House Reps from NJ are fighting it big time.

      by chillindame on Sun Aug 05, 2007 at 06:05:08 PM PDT

      •  interesting

        that doesn't seem like it would have much of an effect on the economy, but I could be wrong.  It's not like government workers make all that much money that they would prop up a real estate market.

        by unterhausen on Sun Aug 05, 2007 at 06:36:18 PM PDT

•  "Starter homes"

  Funny... in the 1970s, a family of four could comfortably grow up in a 1,500 square foot house.  I know, because I did.  It was considered a nice home in a nice neighborhood, not a "starter home."

  What happened?

  Why do Americans today need larger houses?

  I think the answer is, they don't need the space, so much as they need the STUFF to put in the space.

  by NYCO on Sun Aug 05, 2007 at 06:21:14 PM PDT

  •  Because you need

    a bathroom for every bedroom + one for guests, a family room and a living room, a breakfast room and a dining room, a media room, an office...

    by denise b on Sun Aug 05, 2007 at 07:23:36 PM PDT