Flaws in a barter society

[Dypsomaniacs]

You're problem isn't with bankers then, it's mad at executives who are making more than you.

HUH???

[Caninope]

The majority of people who are making mortgage payments are paying money to a bank - Because the bank owns the property... Surprise!

No, banks don't. The person who has his name on the deed is the owner. The banks loaned money, and the house is collateral, meaning it is not the property of the bank until he cannot afford the repay the loan.

Foreclosure does not necessarily cause a houses value to decline. The house is usually sold at a price that covers what is owed on the property, the value of the property is not affected. Still, the bank grants the new owner a new mortgage - They still make money.

Foreclosure almost always causes the house value to decline- no one wants to buy a house that was just foreclosed on. And the bank doesn't automatically grant new mortgages with people who buy foreclosed homes, they only do so if the people ask for it.

[Dypsomaniacs]

The majority of people who are making mortgage payments are paying money to a bank - Because the bank owns the property... Surprise!

No, banks don't. The person who has his name on the deed is the owner. The banks loaned money, and the house is collateral, meaning it is not the property of the bank until he cannot afford the repay the loan.

Possibly - your statement may be true for a loan taken on property you already own, but not when obtaining a loan for the purpose of purchasing a property - Especially if it is a bank owned property...
Obviously, you are unfamiliar with what happened in Florida recently. Many people were losing their homes to foreclosure. These people stalled the foreclosures by demanding lenders to produce proof of mortgage ownership. The lender does in fact own the property until it is paid for. Every mortgage paperwork I have ever had (or seen) lists the lender as the property owner... Just like buying a car - You are responsible for it, but the lender owns it until you pay for it...

Foreclosure does not necessarily cause a houses value to decline. The house is usually sold at a price that covers what is owed on the property, the value of the property is not affected. Still, the bank grants the new owner a new mortgage - They still make money.

Foreclosure almost always causes the house value to decline- no one wants to buy a house that was just foreclosed on. And the bank doesn't automatically grant new mortgages with people who buy foreclosed homes, they only do so if the people ask for it.

Foreclosed property trading is BIG business - Really... The automatic mortgage line is just silly nit picking nonsense... Thanks for that! Obviously, if the person purchasing the property does not need a loan the bank is not going to force one on them - Silly!

[Azzers]

The major flaw in the market economy is that it doesn't distribute goods by greatest need, but rather by who has the most money. (although this could also be a problem in a barter economy)

[Sibirsky]

Foreclosure costs money. Lots of money. The value of the house declines. The bank losses money on foreclosures. Banks do not hold property waiting for prices to rise, they are not landlords or property managers.

I could still use money to buy cows.

I agree completely that home foreclosures cost lots of money - Anyone who has ever lost their home would not argue that point. In any foreclosure banks profit while those losing their homes pay the costs... Sometimes for years...

Those poor poverty stricken bankers -
Brian Moynihan CEO of Bank of America gets $950,000 per year base salary...
Lloyd Blankfein Goldman CEO gets base pay of $2,000,000...
Salary Caps - Obama's salary cap aimed at CEO's of those banks that we the tax payers bail out set a $500,000 limit on annual salaries...

Yeah - you people might have a point - The bank system seems to be working really well...

Did you even read what I said? The bank losses money on foreclosures.

[Sibirsky]

PART 2 - (Sorry had to run)

The majority of people who are making mortgage payments are paying money to a bank - Because the bank owns the property... Surprise!

They make payments to a bank because they borrowed money from that bank. Do you have an issue with borrowing?

Years ago I was offered a job from a bank to do repairs on the properties they owned. I turned them down after finding out that I would need a sheriff to escort me to some properties where I would need to throw families personal property into dumpsters...

Some people leave their shit behind.

The property I currently rent is owned by a bank. I make my rent payments to the bank - Because they own the property... Surprise!

That's rare. Banks do not like owning property. That isn't what they're good at.

Foreclosure does not necessarily cause a houses value to decline. The house is usually sold at a price that covers what is owed on the property, the value of the property is not affected. Still, the bank grants the new owner a new mortgage - They still make money.

You are aware that housing values are down more than 30% nationwide, correct? Foreclosures do cause the house's value to decline, and even those in it's neighborhood.

While the banks are not the actual landlord or property managers, some banks do actually have departments within their organizations that do handle those details...

A rarity. Banks don't like owning property.

[Sibirsky]

No, banks don't. The person who has his name on the deed is the owner. The banks loaned money, and the house is collateral, meaning it is not the property of the bank until he cannot afford the repay the loan.

Possibly - your statement may be true for a loan taken on property you already own, but not when obtaining a loan for the purpose of purchasing a property - Especially if it is a bank owned property...
Obviously, you are unfamiliar with what happened in Florida recently. Many people were losing their homes to foreclosure. These people stalled the foreclosures by demanding lenders to produce proof of mortgage ownership. The lender does in fact own the property until it is paid for. Every mortgage paperwork I have ever had (or seen) lists the lender as the property owner... Just like buying a car - You are responsible for it, but the lender owns it until you pay for it...

Owning a mortgage is nothing like owning a house. When you obtain a loan for the purchase of property the borrowers name is on the deed and the bank holds a lien. Nothing more.

Foreclosure does not necessarily cause a houses value to decline. The house is usually sold at a price that covers what is owed on the property, the value of the property is not affected. Still, the bank grants the new owner a new mortgage - They still make money.

Foreclosure almost always causes the house value to decline- no one wants to buy a house that was just foreclosed on. And the bank doesn't automatically grant new mortgages with people who buy foreclosed homes, they only do so if the people ask for it.

Foreclosed property trading is BIG business - Really... The automatic mortgage line is just silly nit picking nonsense... Thanks for that! Obviously, if the person purchasing the property does not need a loan the bank is not going to force one on them - Silly![/quote]
Which has nothing to do with the decline of the property's value.

[Sibirsky]

The major flaw in the market economy is that it doesn't distribute goods by greatest need, but rather by who has the most money. (although this could also be a problem in a barter economy)

That's interesting because I am far from the one with the most money yet I am well fed and clothed, decently housed etc.

In short, you analysis is dead wrong.

[Mongolian Khanate]

The major flaw in the market economy is that it doesn't distribute goods by greatest need, but rather by who has the most money. (although this could also be a problem in a barter economy)

That's interesting because I am far from the one with the most money yet I am well fed and clothed, decently housed etc.

In short, you analysis is dead wrong.

*jedi mind trick*
Sib, you are hallucinating. You are neither clothed, fed, and you live in a cardboard home

[Dypsomaniacs]

Sibirsky -

First of all it is "loses" not 'losses' - Wanted to clarify that earlier, but felt that it was just a simple typo... Did not want to be a nit-picking lune... Obviously you need all the help you can get - So, it is "loses" NOT losses...

Hopefully, you never find out how tremendously wrong you are - But, with the impending collapse of the entire worlds economic system it seems unlikely that any of us will not feel the misery that we have created for ourselves...

Please, before you respond - Google "bank owned property" and see just how many results show up... It is not anywhere near as uncommon as you seem to think... 40,000,000 results for something that is as "rare" as you want to make it seem?!?!?...

[Sibirsky]

That's interesting because I am far from the one with the most money yet I am well fed and clothed, decently housed etc.

In short, you analysis is dead wrong.

*jedi mind trick*
Sib, you are hallucinating. You are neither clothed, fed, and you live in a cardboard home

Crap. I knew it.

[Sibirsky]

Sibirsky -

First of all it is "loses" not 'losses' - Wanted to clarify that earlier, but felt that it was just a simple typo... Did not want to be a nit-picking lune... Obviously you need all the help you can get - So, it is "loses" NOT losses...

Hopefully, you never find out how tremendously wrong you are - But, with the impending collapse of the entire worlds economic system it seems unlikely that any of us will not feel the misery that we have created for ourselves...

Please, before you respond - Google "bank owned property" and see just how many results show up... It is not anywhere near as uncommon as you seem to think... 40,000,000 results for something that is as "rare" as you want to make it seem?!?!?...

What I meant by rare, is that it's rare for banks to retain ownership of the property and rent it out. I thought that was clear. As far as your claim that foreclosures do not lose value, source please. Not only are foreclosed homes cheaper, the discount is getting larger. Go on, click it....

Discount for foreclosed homes widened in 2010

Alex Veiga, AP Real Estate Writer, On Thursday February 24, 2011, 12:23 am EST
LOS ANGELES (AP) -- The gap between the average sale price of a foreclosed home and that of other properties grew wider last year, giving homebuyers who snapped up bank-owned homes big discounts.

And homebuyers can expect to see more of those bargains this year, because fewer foreclosed homes were sold in 2010 than were taken back by banks, foreclosure listing firm RealtyTrac Inc. said Thursday.

Buyers who purchased a foreclosed home last year got, on average, a 28 percent discount to a non-foreclosure sale. That's up from a 27 percent average discount in 2009, RealtyTrac said.

While only a slight increase, the trend suggests a widening price spread between foreclosure sales and other types of residential properties.

Foreclosed homes made up nearly 26 percent of all home sales last year, according to RealtyTrac. That's down from 29 percent in 2009 but up from 23 percent in 2008.

Traditionally, foreclosures account for less than 10 percent of all home sales.

In all, 831,574 foreclosed properties were sold last year, including those in some stage of foreclosure but not yet taken back by lenders, the firm said.

That's down 31 percent from 2009 and down nearly 14 percent from 2008.

Sales of homes outside of the foreclosure process declined nearly 19 percent in 2010 from the prior year, according to RealtyTrac.

While the pace of foreclosure sales slowed, lenders stepped up their home repossessions, taking back more than 1 million homes last year.

That deepened the so-called shadow inventory of foreclosed homes that have yet to hit the market. Experts contend that the housing market won't fully recover until banks find buyers for those properties.

"We need to clear out the inventory if the market is going to come back," Rick Sharga, a senior vice president at RealtyTrac.

Banks are reluctant to put too many foreclosed homes on the market at once, because they would face booking sizeable losses on the sales.

Generally, about 30 percent of banks' foreclosure inventory is on the market, Sharga said.

More foreclosure sales, however, would almost certainly send overall home values lower in many markets, because foreclosed homes often sell at a sharp discount to other properties.

Already, housing experts predict home prices will slide another 5 percent this year.

"You could have a scenario where housing prices could be pushed lower," Sharga said.

Foreclosure sales, like home sales overall, fell sharply in the last three months of the year. Government tax credits earlier in 2010 helped gin up home sales, but pulled forward transactions that would have typically occurred later in the year.

Lenders' efforts to deal with foreclosure documentation problems and heightened scrutiny in states where courts play a role in the foreclosure process also dampened sales of bank-owned homes.

That slowdown began to ease in December, however, and foreclosure sales spiked 21 percent, the firm said.

Nevada, Arizona and California had the highest percentage of foreclosure sales last year.

Nevada led the nation with foreclosure sales accounting for nearly 57 percent of all home sales, RealtyTrac said. That was down from 67 percent the year before.

Several other states had foreclosure sales that accounted for at least one quarter of all home sales last year: Florida, Michigan, Georgia, Idaho, Oregon, Illinois, Virginia and Colorado.

[Luna Amore]

Barter society. Well, it would kill professional theatre. Actually, it'd fuck most things up.

[Homeland Russia]

I think we should have a barter system where everybody trades things for money. I haven't thought of a name for it yet but when I do I'm going to write a book about it and try to get the world to follow my system.

Trading things for money hmmmm I wonder what that is called......

[Dypsomaniacs]

What I meant by rare, is that it's rare for banks to retain ownership of the property and rent it out. I thought that was clear. As far as your claim that foreclosures do not lose value, source please. Not only are foreclosed homes cheaper, the discount is getting larger. Go on, click it....

What you said, in my response to a statement about bank owned property, was -

Banks do not hold property waiting for prices to rise, they are not landlords or property managers.

I then went on to inform you of my current situation in which I pay my rent directly to the bank - because they own the property... To which you stated how rare that is also... The article you present does in fact contradict this quoted statement of yours...

Your presented article does pretty much prove my points while doing little, if anything, to help your cause... Highlighting selected words does not change the message those words are trying to convey...
1 - Banks do in fact own property, and apparently manage those properties.
2 - Foreclosed property selling is BIG business.
3 - The foreclosed property is sold at reduced prices because the bank can only sell the property for the amount left on the mortgage.
4 - If the banks were not making money on foreclosures they would certainly be seeking alternatives other than increasing the amount of homes they are foreclosing on into the millions.
5 - Too many properties being placed on the market after a foreclosure will lower property values - That is why the banks have property management divisions. What you were trying to say earlier was that a foreclosed home reduces property values, which is not true as your article makes clear...

Now that we are both in agreement -
Bottom line - A person has a mortgage on a house and they make their payments for however long... Thats ten years worth of interest payments on their loan that the bank is profiting... Then they foreclose on the property... They pay a few minor legal fees... They place the home on the market... Usually, any money they lose from the sale is still the responsibilty of the person who lost the house... If the new buyer applies for a loan the bank profits big time - if the new buyer pays for it outright the bank just profits...

I am not an economic scientist and I don't know how all the little technical details work - I do know that the system does not benefit the working American citizen, the system works so that corporate executives prosper from the blood sweat and tears of average joe americans...

[Sibirsky]

What I meant by rare, is that it's rare for banks to retain ownership of the property and rent it out. I thought that was clear. As far as your claim that foreclosures do not lose value, source please. Not only are foreclosed homes cheaper, the discount is getting larger. Go on, click it....

What you said, in my response to a statement about bank owned property, was -

Banks do not hold property waiting for prices to rise, they are not landlords or property managers.

I then went on to inform you of my current situation in which I pay my rent directly to the bank - because they own the property... To which you stated how rare that is also... The article you present does in fact contradict this quoted statement of yours...

Your presented article does pretty much prove my points while doing little, if anything, to help your cause... Highlighting selected words does not change the message those words are trying to convey...
1 - Banks do in fact own property, and apparently manage those properties.

They do not want to. It's not what they are good at. It's their last resort.

2 - Foreclosed property selling is BIG business.

Not for the banks.

3 - The foreclosed property is sold at reduced prices because the bank can only sell the property for the amount left on the mortgage.

They can sell the property for any price they can get for it. The mortgage is irrelevant.

4 - If the banks were not making money on foreclosures they would certainly be seeking alternatives other than increasing the amount of homes they are foreclosing on into the millions.

Alternatives exist. Loan modifications, short sales. Foreclosure is the last resort. And the banks lose money on all those options.

5 - Too many properties being placed on the market after a foreclosure will lower property values - That is why the banks have property management divisions. What you were trying to say earlier was that a foreclosed home reduces property values, which is not true as your article makes clear...

They do lower value.

Now that we are both in agreement -
Bottom line - A person has a mortgage on a house and they make their payments for however long... Thats ten years worth of interest payments on their loan that the bank is profiting... Then they foreclose on the property... They pay a few minor legal fees... They place the home on the market... Usually, any money they lose from the sale is still the responsibilty of the person who lost the house... If the new buyer applies for a loan the bank profits big time - if the new buyer pays for it outright the bank just profits...

We're not in agreement. A few minor legal fees? Consider yourself, uninformed. A typical foreclosure costs $50,000 to the lender. The homeowner has a typical loss of $7,200 which includes loss of equity in the property, moving expenses, and perhaps some legal fees.

Those neighbors living in close proximity to the foreclosed house suffer $1,508 in losses from the decrease in the value of their own home as the neighborhood begins to deteriorate.

The local government loses $19,227 through diminished taxes and fees and a shrinking tax base as home prices decrease.

On average. How could the neighbors lose money if foreclosed homes do not decline in value?
http://www.mortgagenewsdaily.com/622008 ... _Costs.asp

I am not an economic scientist and I don't know how all the little technical details work - I do know that the system does not benefit the working American citizen, the system works so that corporate executives prosper from the blood sweat and tears of average joe americans...

Blood, sweat and tears? The system was designed so the Average Joe American, making (with his wife) say, $48,000 per year, can go and buy a home for $365,000. The home is collateral. It's that simple. Stop paying for the home, and lose it. That isn't in the bank's interest, for reasons already listed.

[Sibirsky]

Sibirsky -

First of all it is "loses" not 'losses' - Wanted to clarify that earlier, but felt that it was just a simple typo... Did not want to be a nit-picking lune... Obviously you need all the help you can get - So, it is "loses" NOT losses...

No I don't. I scored in the 98th percentile in English. I consider that adequate for a dumb ass foreigner.

You also sound very rude. I suggest you don't talk like that, especially in real life.

Banks suffer losses. Happy now?

[Dypsomaniacs]

Sibirsky -

When bank executives are being paid salaries in the hundreds of thousands and even millions it seems obvious that foreclosures on millions of homes is not causing too much economic difficulties for the banks...

Banks have property management divisions that employ people for the purpose of managing their bank owned properties.

When did I ever say that foreclosed properties was big business for the banks? That is just silly and argumentative of you.

Banks try to sell the foreclosed property at a price that covers the debt left on the property. Nit pick some more.

A foreclosed property being sold in a neighborhood will not lower the property values of that neighborhood. Selling all the houses in a neighborhood because of foreclosures will lower the property value. Apples and oranges...

When a person loses their home due to foreclosure they lose a whole lot more than $7,200. Loss of equity in the property is the last thing they would care about...

The idea that a foreclosure causes deterioration to a neighborhood is silliness. The price that a foreclosed property is sold for is not a reflection of what that property is worth. A person that buys a $250,000 house for $10,000 does not pay property tax on a $10,000 property - If they are lucky they pay the property tax on the $250,000 property...

$48,000 per year for two people is well below the poverty level. A bank would be crazy to lend money to people who earn so little. They could barely cover basic living expenses. Wait - isn't that part of the current problem - the banks were lending money to anyone that could sign on a dotted line...

I was not being rude - Grammatical errors like the one I pointed out tend to reduce the credibility of the person making them. Since you kept repeating the same error it seemed necessary to point out the problem. As for your 98% remark, congratulations... Last quarter a friend of mine got a perfect score on his mid-term and he guessed every answer without reading the questions...

Thank you for your remarkably rude suggestion as to how I should communicate with others. Nice way to turn a simple attempt to help you out into a personal attack towards me...

Done with you - We are getting too far off topic and you are getting too upset over a simple conversation... Kids these days...

[Natapoc]

$48,000 per year for two people is well below the poverty level. A bank would be crazy to lend money to people who earn so little. They could barely cover basic living expenses. Wait

Source? Most families I know make less then that... And most of them consider themselves to be middle class... Not in poverty.


In 2009, in the United States of America, the poverty threshold for a single person under 65 was US$11,161; the threshold for a family group of four, including two children, was US$21,756.

http://en.wikipedia.org/wiki/Poverty_threshold

[Sibirsky]

Sibirsky -

When bank executives are being paid salaries in the hundreds of thousands and even millions it seems obvious that foreclosures on millions of homes is not causing too much economic difficulties for the banks...

Incorrect. There are more loans than executives.

Banks have property management divisions that employ people for the purpose of managing their bank owned properties.

Irrelevant. It's not their business.

When did I ever say that foreclosed properties was big business for the banks? That is just silly and argumentative of you.

You kept talking about banks, and how foreclosures are big business.

Banks try to sell the foreclosed property at a price that covers the debt left on the property. Nit pick some more.

No, this is just common sense.

A foreclosed property being sold in a neighborhood will not lower the property values of that neighborhood. Selling all the houses in a neighborhood because of foreclosures will lower the property value. Apples and oranges...

Yes it will. A source was provided.

When a person loses their home due to foreclosure they lose a whole lot more than $7,200. Loss of equity in the property is the last thing they would care about...

We are discussing finance.

The idea that a foreclosure causes deterioration to a neighborhood is silliness. The price that a foreclosed property is sold for is not a reflection of what that property is worth. A person that buys a $250,000 house for $10,000 does not pay property tax on a $10,000 property - If they are lucky they pay the property tax on the $250,000 property...

Again, incorrect. Foreclosures do cause other property values to decline.

$48,000 per year for two people is well below the poverty level. A bank would be crazy to lend money to people who earn so little. They could barely cover basic living expenses. Wait - isn't that part of the current problem - the banks were lending money to anyone that could sign on a dotted line...

This just cements the fact that you are terribly misinformed. I used the $48,000 figure because it's the approximate average household income in the US. It is well above the poverty level. I then used the standard 20% down rule, and the current average mortgage rates (30 year foxed) to arrive at the $365,000 figure. I don't know what you consider basic living expenses but $4000 per month is quite adequate for most.

I was not being rude - Grammatical errors like the one I pointed out tend to reduce the credibility of the person making them. Since you kept repeating the same error it seemed necessary to point out the problem. As for your 98% remark, congratulations... Last quarter a friend of mine got a perfect score on his mid-term and he guessed every answer without reading the questions...

Thank you for your remarkably rude suggestion as to how I should communicate with others. Nice way to turn a simple attempt to help you out into a personal attack towards me...

Done with you - We are getting too far off topic and you are getting too upset over a simple conversation... Kids these days...

Telling someone that "they need all the help they can get" is rude.

I'm not kid.

[Sibirsky]

$48,000 per year for two people is well below the poverty level. A bank would be crazy to lend money to people who earn so little. They could barely cover basic living expenses. Wait

Source? Most families I know make less then that... And most of them consider themselves to be middle class... Not in poverty.


In 2009, in the United States of America, the poverty threshold for a single person under 65 was US$11,161; the threshold for a family group of four, including two children, was US$21,756.

http://en.wikipedia.org/wiki/Poverty_threshold

That's correct. $48k is roughly the average household income which is why I used it. I may be off by a few grand but it's not "little" or "poverty" or anywhere close.

[Azzers]

The major flaw in the market economy is that it doesn't distribute goods by greatest need, but rather by who has the most money. (although this could also be a problem in a barter economy)

That's interesting because I am far from the one with the most money yet I am well fed and clothed, decently housed etc.

In short, you analysis is dead wrong.

Yes, but a starving child has more need for food than a millionaire in an MEDC but the food goes to the millionaire because he can afford it.

A cancer patient needs medicine more than a rich man with a less severe illness (I know they both won't need the same medicine but the analogy still stands) but it will go to the rich man because he has more money.

And on another note, if someone is wrong you should tell them properly, not be so big-headed as to say flat out "you're wrong".

[Qatarab]

Bartering isn't really a great way to go in my opinion. Sure it helps but without a currency its hard for that item to be of any helpful worth. A town 1 mile east might easily give you a bottle of whiskey for a sheep but the one on the west would want 4 sheeps for a bottle. Both would be in the same region as yours. A currency,especially a national one,would have a sort of "known" value you can't argue against. Of course the prices might fluctuate the same way but then you could argue that the guys wanting an absurd amount of money for something that is originally cheaper elsewhere.

Bartering also requires having the transaction of items. Not sure if they'd stick your goat and your sofa in a vault for safekeeping. If bartering had been an efficient way then im sure we'd all still be bartering.

[Dypsomaniacs]

Sibirsky -

Census numbers are interesting things...
These are pre tax numbers that don't really mean to much - Below is what census.gov says about the US Census numbers...

Although the thresholds in some sense reflect families needs,
•They are intended for use as a statistical yardstick, not as a complete description of what people and families need to live.

Still - They estimate that 303,820,000 in the US fall into that category... Now that is no small number.

[Caninope]

Sibirsky -

Census numbers are interesting things...
These are pre tax numbers that don't really mean to much - Below is what census.gov says about the US Census numbers...

Although the thresholds in some sense reflect families needs,
•They are intended for use as a statistical yardstick, not as a complete description of what people and families need to live.

Still - They estimate that 303,820,000 in the US fall into that category... Now that is no small number.

What category?