From Subprime to FHA Loans

While catching up on my reading, and I read an article in Business Week that is simply disheartening.

The Federal Housing Administration (FHA) is a federal agency that insures mortgage, where the rate of interest is regulated and loan is insured, to provide modest people with a way to purchase a house. As the subprime sector mostly vaporized, the same people who used to market subprime loans, re-brand themselves, receive certification, and become the people who now market FHA-backed mortgages. Unfortunately, the behavior that’s generic to the subprime business did not change and as one example in the article…

XXX was an unlikely borrower. She had no employment income when she bought a three-bedroom condo in Palmetto Towers, a Hernandez property in Miami, in July 2007 for $318,000. She borrowed almost the entire purchase price from Great Country Mortgage Bankers, XXX’s loan company…

Even though now the subprime has ended, the prediction is that as this goes on, in next few years, the same thing will happened with FHA-backed loans. I said that this is disheartening because of two facts.

  1. The people who made mistakes seem to have no remorse, do not self-reflect, and are not hesitant to perform the same act.
  2. The people who borrowed in this scenario and defaulted are numerous. Many never made one payment, and at most paid for the first 3 months. It is scary to know that so many people have little foresights of their financial situation and probably made the decision while they are blind-sighted by their desires to own a house.

This is the time where we need the change and as people repeat the same actions, it goes to demonstrate how much is inner change, real change is needed where people start taking responsibility for their actions. It is unfortunate and disappointing to observe the opposite. We can keep changing the outside environment, settings, policy, rules, but while we remain the same… the same thing will keep happening. Gah!

Not talk about the executives and bankers who are yet consumed by greed to chase after money, the people who bought the home in this case and had defaulted, surely have a strong desire for a home of their own. However, owning a house doesn’t make it a home.

I will talk more about the topic of home later.

Originally posted 2008-12-02 23:59:08. Republished by Blog Post Promoter

Life is… Life is not…

As I at in the office plugging away at the keyword today, or not, since I got distracted and something hit me…

Life is not sitting in an office/cubicle for most of the day.
Life is not climbing corporate ladders.
Life is not about fame.
Life is not being super-rich.
Life is not having MacMansion.
Life is not about drama.
Life is not killing each other.

Life is compassion.
Life is having genuine relationship.
Life is appreciating what nature offers.
Life is simple.
Life is living in the moment.
Life is changing.
Life is learning.
Life is singing.
Life is playing piano.

Yes, I am a bit of a dreamer and I like it. I tell myself to work hard to move more and more toward what “Life is” everyday.

Originally posted 2008-05-07 23:18:36. Republished by Blog Post Promoter

10 Rules Piggy Lives by Financially

10 rules that I live by in financial aspect (I didn’t know I could come up with 10, yay!):

  1. Spend less than what you make.
  2. Use credit cards wisely – pay off credit card bills each month, make use of 0% APR offer for financing, use reward cards that accumulate points or have % cash back.
  3. Pay off “bad” debt – this includes any high interest rate debt that is not tax deductible, which is credit card debt for most people (there are pay-day loans which should be avoided at all cost anyways because of outrageous interest).
  4. Contribute to and fully utilize 401k – Most employers provide 401k these days, so contribute some or at least the % of employer matching (free money!) but also educate yourself of the available funds and pick wisely (hence the “fully utilize” part).
  5. Contribute regularly to saving.
  6. Develop your own investment portfolio – whether it be individual stocks or funds, but educate yourself first and invest in a style that suits you. I said “your own” because you should never just follow what others do because our needs, situations, and personalities are all different, so understanding yourself is essential here.
  7. Have a spending budget – this allows you to afford hobbies, gadgets, travelling, etc.
  8. Distinguish “want” vs. “need” – this is the most important to keep myself from spending too much because of how I LOOOOOOOOVE gadgets :)
  9. Invest in ourselves – classes, books, or things that contribute to our general well-being.
  10. Remember the ultimate goal – a reminder to be frugal and financial-smart but yet not becoming cheap :) In other words, balance is everything.

Originally posted 2007-04-12 21:40:49. Republished by Blog Post Promoter

Continue to Live Like a Student

I was talking with a friend a few days ago, and on a topic that I cannot recall.
He said something along the line, “Hey, it’s okay to buy/get that, you are not a student anymore.”
To which I respond, “I can still live like a student even if I’m no longer one…”

What is the lesson I’m trying to teach here? I would say it’s one of the more basic rule to controlling your personal finance – you don’t have to spend more because you make more. Here is the most basic rule.

Why is it so important? Let me take my chance to reflect on something came up in conversation with a friend at work, who said, “Things seem to stay the same. I know I’m making more, but I’m also spending more.” The logic is ridiculously simple. You really don’t save more if you are spending more when you make more.

I’m not saying one should be cheap and live like a homeless. I fully believe that there is a certain level of standard of living we should keep to make ourselves content and happy, but we should not justify ourselves to spend twice the money just because we make double (if it ever doubles…) :P Peace~

Originally posted 2007-03-01 00:22:51. Republished by Blog Post Promoter

Pages: 1 2 3 4 5 6 7 8 ... 87 88 89 Next

Subscribe using Email

Get notified of new posts by email.