Re: PK on GDP surge - what could a socialist say ?

[joanna bujes <jbujes@xxxxxxxxx>]

That's what I suspected...but, just to make sure, doesn't this mean that
folks are borrowing against "inflated" values? Now I totally understand
that it's only "inflated" if the bubble bursts; but, let's suppose,
housing prices drop 20%? And there are additional job losses...say in
hi-tech...and people can't pay the mortgage...

Who gets left holding the bag? Will it be like the S & L crisis all over
again?

Joanna

Devine, James wrote:

> it's based on the expected future market value of the
> house, which is mostly based on its current market value.
>
> ------------------------
> Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine
>
>
>
>
>
>
> > -----Original Message-----
> > From: joanna bujes [mailto:jbujes@xxxxxxxxx]
> > Sent: Friday, October 31, 2003 12:42 PM
> > To: PEN-L@xxxxxxxxxxxxxxxx
> > Subject: Re: [PEN-L] PK on GDP surge - what could a socialist say ?
> >
> >
> > Here's what I'm curious about: I buy a house for 300,000. Within five
> > years, the house is valued at 500,000 (not unusual in the Bay
> > area); now
> > I re-finance. Is my "collateral" based on the portion of the 300,000 I
> > have paid off? Or is it based on the revised market value of
> > the house?
> >
> > Joanna