Carborendum Posted September 21, 2023 Report Share Posted September 21, 2023 I've recently been hearing about an "Immigrant Enclave" in Texas. it's on a different side of Houston from where I am. The reason why people are complaining is that apparently they're offering financing without proof of citizenship. I'm not sure why that would be illegal. I haven't looked up the laws about mortgages. But I figure if someone wanted to make a loan, they get to choose who they lend it to and as long as the rates aren't predatory, I don't see a problem. And he also figured that the immigration crisis is not his responsibility. They're going to continue to come, so we might as well get them housing. And I've got the business model to get them those homes. The interesting thing about this development is that I was going to be designing these communities. The developer is a friend of a friend who was looking for a new engineer. We spoke. It didn't work out. He explained that one of his revenue streams for his developments was owner financing. As far as I understood from him, as long as they were willing to pay per the payment schedule, he was fine with anyone. And if they sold their home, there was some incentive for the new owners to use the same financing. It was his business model. Make less profit on the sale of the home (allowing low income individuals to purchase the home in the first place) and he'd make money off the back end through at least three avenues that I recall from the conversation. One big thing about some of his communities was that it tended to vary between Blacks and Latinos. They purposefully congregated away from each other. DISCLAIMER: this is his account of what the community members were saying. I did not originate these statements. I have paraphrased because some of his direct quotes can't be published here. The poor Black people didn't want to be in the same neighborhoods with Latinos because a lot of them were illegals. This would attract police. And a lot of the Blacks have warrants out on them. So, to have police coming by for immigrants... The poor Latinos? Precisely the converse. Many of them were illegals. And they didn't want these Black people with warrants to attract the police. That was a very interesting insight. People in Texas are raising a fuss, asking Abbott to get involved. The concern seems to be based on the fact that these illegals provide an avenue for drug cartels to distribute. I didn't hear much in the way of evidence that most of the immigrants are subjects of drug cartels. But apparently, that is the concern. It is certainly different than the perspective the developer provided me. Quote Link to comment Share on other sites More sharing options...
NeuroTypical Posted September 21, 2023 Report Share Posted September 21, 2023 1 hour ago, Carborendum said: I figure if someone wanted to make a loan, they get to choose who they lend it to and as long as the rates aren't predatory, I don't see a problem. Oh, that's easy. "I'm a giant bank. I make money by lending money to people who pay me interest. I usually have a vested interest in prequalifying folks to make sure they are at a low risk of default. Sometimes immature folks with starry eyes want something now, so they get a loan, and then can't pay it back. I seize their collateral, but sometimes it isn't worth what they owe, and I end up losing money. But you know what's cool? The government will often get full of social justice and guarantee the loans, so I'm happy to loan money to people who are bad risks, because the govt will cover my losses. What could possibly go wrong?" https://www.investopedia.com/news/10-years-later-lessons-financial-crisis/ https://en.wikipedia.org/wiki/Savings_and_loan_crisis#Imprudent_real_estate_lending https://www.cnn.com/2019/06/14/homes/quicken-loans-fha-lending-settlement/index.html https://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis Hopefully you see the problem now. Quote Link to comment Share on other sites More sharing options...
Carborendum Posted September 21, 2023 Author Report Share Posted September 21, 2023 (edited) 12 minutes ago, NeuroTypical said: Oh, that's easy. "I'm a giant bank. I make money by lending money to people who pay me interest. I usually have a vested interest in prequalifying folks to make sure they are at a low risk of default. Sometimes immature folks with starry eyes want something now, so they get a loan, and then can't pay it back. I seize their collateral, but sometimes it isn't worth what they owe, and I end up losing money. But you know what's cool? The government will often get full of social justice and guarantee the loans, so I'm happy to loan money to people who are bad risks, because the govt will cover my losses. What could possibly go wrong?" <snip> Hopefully you see the problem now. In other situations, certainly. But I'll say two things. 1. For some reason, he doesn't seem to be foreclosing on all that many of his homeowners. Although, we didn't discuss it, my guess is that it would had to have been that the individuals in question do have a dependable source of income. Now, if what the naysayers are saying is true, then that would mean that he's actually receiving payments from drug money. I would have no way of knowing if that is so or not. The point is that all those bad statistics are not coming out of these developments. They're coming out of a lot of other government programs, most of which were forced onto banks by the government. 2. If the government is setting up conditions where we can legally do XYZ and make a bunch of money off of it, is it really my fault for taking advantage of it? Or is it the politicians and bureaucrats who created the situation? 3. The people clamoring are not yelling about the govt programs or anyone taking advantage of them. They're saying that simply offering a commercial exchange under good terms is somehow morally offensive because half of the exchange deals with people who are here illegally. And that is a moot point because if the federal government refuses to enforce a law, then it has no legal force. If it has no legal force, then is anyone breaking the law? We can argue all day about whether we should enforce it. And I think we should. But being that the government is not of the same mind, what do you expect me to do? Or this developer? Edited September 21, 2023 by Carborendum Quote Link to comment Share on other sites More sharing options...
askandanswer Posted September 22, 2023 Report Share Posted September 22, 2023 12 hours ago, Carborendum said: The developer is a friend of a friend who was looking for a new engineer. We spoke. It didn't work out. Perhaps part of the reason why it didn't work out is that its probably been quite a while since you were a new engineer? Carborendum 1 Quote Link to comment Share on other sites More sharing options...
Carborendum Posted September 22, 2023 Author Report Share Posted September 22, 2023 5 hours ago, askandanswer said: Perhaps part of the reason why it didn't work out is that its probably been quite a while since you were a new engineer? That has more truth to it than you realize. Quote Link to comment Share on other sites More sharing options...
Carborendum Posted January 10 Author Report Share Posted January 10 UPDATE: The foreclosure rate is nearly 50%. That's a lot more than I was led to believe earlier. The article blames this on the 12.9% interest rate. This is reminiscent of the sub-prime mortgage market that contributed to the '08 collapse. Usually, banks and mortgage companies are required to give back any additional proceeds from the sale of the property back to the homeowner. However, because the financing arm (separate business entity) arranges public auctions with the most minimal compliance with the law, they end up selling it back to the developer at sub-principal prices. Then the developer can sell the property to any new purchaser at market rates. So, yes, I guess it is a predatory practice. The development says that they have to charge higher for the tremendous risk that they take on with such a development. But they wouldn't need to do that if they offered the properties to people who they knew could actually afford it. Additionally, they are about to be investigated by the IRS, EPA, USACE, and TCEQ. I saw some of their plans when I was negotiating with them. I didn't see any problems with the EPA, USACE, and TCEQ issues. There were some concerns. But as far as I could tell, they did it the legal & technically correct way. They could have a problem with the TCEQ because of construction conditions. But the overall final design looked compliant. As for the IRS, I have no idea. One of the stupidest comments I read about this was that the site was prone to flooding. Well, duh-uh. It's Houston. The entire region is prone to flooding. But the plans I saw had proper mitigations in place. All the same, I'm glad we were not able to come to an agreement. I may have had my license taken away for simply being involved with the guy. Quote Link to comment Share on other sites More sharing options...
NeuroTypical Posted January 10 Report Share Posted January 10 https://www.ramseysolutions.com/ Quote Link to comment Share on other sites More sharing options...
Carborendum Posted January 10 Author Report Share Posted January 10 10 minutes ago, NeuroTypical said: https://www.ramseysolutions.com/ I wonder if his books are available in Spanish. Quote Link to comment Share on other sites More sharing options...
NeuroTypical Posted January 10 Report Share Posted January 10 https://store.ramseysolutions.com/money/books/transformacion-total-de-su-dinero-dave-ramsey/ Carborendum 1 Quote Link to comment Share on other sites More sharing options...
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