"consumers rein in borrowing"

[SLC Tortfeasor]

I agree with most of the comments posted above. It sounds like we're all preaching to the choir here.

Isn't it amazing how, over time, luxuries start seeming like needs? Especially in the entertainment department. Remember when things like color TV, a VCR, and cable TV were luxuries? It seems so long ago. I can't even imagine what life would be like if, as in the Depression, we had to entertain ourselves, by talking, reading, and playing games.

So many of us have never tasted true economic hardship. Whenever there's been a downturn in the economy, we've managed to smooth the rough edges with credit cards, cash-out refinancing, and 7-year car loans. Consumers are finally hitting bottom. There is no more easy credit. Next up: the US government, with over $10 trillion in debt.

It seems to be human nature to resist in every way possible doing things that are uncomfortable in the short term, even if they are necessary in the long term.

[Urchina]

Originally Posted by dex

If a person is going to a payday loan place they are in trouble. But without them we would be back to organized crime loan sharks. To get rid of them would be like prohibition - people didn't stop drinking instead they went to organized crime.

Credit card interest rates, penalties and other fees are also outrageous.

Dex, thanks for the Wikipedia link. I certainly don't have any answers, other than a better-educated and better-disciplined public.

As for outrageous credit card stuff, so true. I also find it even more horrible that the payday places justify their high interest rates by saying that they have so many loans default, they have to charge higher rates to make money. So the poor people who use them and actually pay back the loan are penalized for the poor people who use them and don't pay back the loan. This is like hospitals charging two or three times more for folks without insurance than they charge insurance companies for people who do have insurance -- the ones who need the help aren't the ones with insurance! AAAARRRRGH!

But that's another rant.

Thanks for the links!

[freebird5825]

Originally Posted by FinanceDude

I think the folks with marginal and bad credit should be thankful for the large screen TVs, vacations, and homes they got they probably didn't deserve.........

I talked to a banker I know, and he said that the HELOC business is on life support, and his bank is only loaning to folks that have stellar credit and a long-term relationship with the bank...........

i guess i'm cold-hearted...but if people use credit cards to spend money that they don't have and will never have, it is almost like using Monopoly money to pay for things. it's not too far a stretch to call it theft - and last time i checked, theft means taking something you can't pay for.
all done in the open with a piece of plastic.
re: "HELOC biz on life support". please explain...is that due to burst of real estate bubble and house values used when HELOC was signed are meaningless?

[Gardnr]

Originally Posted by FinanceDude

I talked to a banker I know, and he said that the HELOC business is on life support, and his bank is only loaning to folks that have stellar credit and a long-term relationship with the bank...........

Good!! It's about time.

[Gardnr]

Originally Posted by Sarah in SC

Urchina, that is interesting, because it is one of the reasons I did the CFP, was the idea that I could work in consumer credit counseling at some point, either paid or as a volunteer.

I think that my frustration level with what I call "stupid spending" would have to be dialed back considerably to be able to assist folks, though. Like my DH has said, "Sarah's got some good information, if you can get past her presentation skills!"

Yep, I agree. On one hand I think that doing this kind of work would be very rewarding personally and valuable societally. On the other hand I don't know if I could stand to witness the absolute stupidity and greed on the part of many of the people you'd end up dealing with.

I sometimes listen to Dave Ramsey (I can only take so much), and I just get livid when I hear people say that they "just started listening to you Dave, so we didn't know" that we shouldn't spend more than we make and have an emergency fund to fall back on, and similar type statements. I mean really. Ahhhh!!!!

[OAG]

Glad I taped about 80% of my HELOC a couple of months ago. But then I have enough savings in the same institution to pay it off about 5 times. Talk about lending to those that really do not need it.

[FinanceDude]

Originally Posted by freebird5825

re: "HELOC biz on life support". please explain...is that due to burst of real estate bubble and house values used when HELOC was signed are meaningless?

No banks are writing HELOCS because the housing prices are down, and noone has equity to borrow. I think banks relaxed their underwriting standards considerably, starting after 9/11. I know MANY of my neighbors got HELOCS and a LOT of remodeling/landscaping/buying was done.

Of course, there were some lenders that would let you borrow 115% or even 120% of your house's value.........those days are OVER thank goodness........

[freebird5825]

thanks so much for answering my questions. i know i put some doozies out there sometimes...but what do they say about the question that goes unasked?

[FinanceDude]

Originally Posted by freebird5825

thanks so much for answering my questions. i know i put some doozies out there sometimes...but what do they say about the question that goes unasked?

Its a question everyone else had but were too chicken to say........

[bow-tie]

Originally Posted by BarbaraAnne

...For those who have never seen "Cinderella Man" with Russell Crowe, it is an excellent depiction of true desperation during the Depression. I highly recommend it. It also paints a positive picture of what true "character" is all about.

That movie hit me like a ton of bricks. Went a long way in re-affirming what I had learned from my dad about living efficiently ('cheap' some might say). The lesson was duly noted.

[freebird5825]

just put it on the netflix q. thanks for the recommendation. russell crowe in anything (or nothing )is awesome. maybe this movie will cheer me up vs looking at my portfolio.

[mews]

Freebird, you had to THINK about that choice?

I mean, really:

Look at portfolio

Look at Russell Crowe in anything ( or nothing )
ding, ding, ding, we have a winner!!!!!!!!!!!!!!!!!

ta,
mews

[freebird5825]

Originally Posted by mews

Freebird, you had to THINK about that choice?
I mean, really:
Look at portfolio
Look at Russell Crowe in anything ( or nothing )
ding, ding, ding, we have a winner!!!!!!!!!!!!!!!!!
ta,
mews

the decision took me exactly 2.1 nanoseconds.