The right to own property

Originally posted by Nemesio
People who have not paid off their house do not own the house; the bank does. That is,
people who have fully paid off their houses aren't in a crisis right now, nor are people who are
making their mortgage payments (like me, for example).

The banks lend their money in good faith, that the people to whom they lend them will pay them
according to the sc it.
If they can't acquire it, they had no right to it in the first place.

Nemesio

You are incorrect; in the vast majority of states (perhaps all now) a homeowner owns his property whether the mortgage is fully paid or not. A mortgage is simply a debt secured by the property.

Originally posted by Wajoma
Capitalism = Inflation?
There is no inflation in communist nations?

Wrong

In a free society i.e. a capitalist society, you are free to form any collectives you like. This way everyone (except the busybodies) is happy.

If there prices are fixed by the state, then inflation is whatever the state decides...officially. Obviously what we often see is in cases of price fixing is simply the other side of the coin: rationing.

But I like your way of arguing. No inflation in Commies countries? Wrong. Why? Because in capitalism we are free! WTF? 😕

Originally posted by Palynka
If there prices are fixed by the state, then inflation is whatever the state decides...officially. Obviously what we often see is in cases of price fixing is simply the other side of the coin: rationing.

But I like your way of arguing. No inflation in Commies countries? Wrong. Why? Because in capitalism we are free! WTF? 😕

You can only understand it if you allow him to brainwash you into the wajamabannana hobobuddies fan club. (okay so its really a cult but dont say that he gets cranky when you call his reli....worldview a cult)

Hey but you get a free trip to wajomaland. It cant be all that bad. Just don't eat the brown fush und chups

Originally posted by no1marauder
You are incorrect; in the vast majority of states a homeowner owns his property whether the mortgage is fully paid or not. A mortgage is simply a debt secured by the property.

I agree.

So the issue before us is much more complex than the simplistic hoo hah that set up this silly thread.

here are some questions, not so serious ones given what has preceded us here in this discussion. then I will refer to some sensible and interesting views on the true nature of what we are facing here in the USA.

To begin with, what if everything is an illusion and nothing exists? In that case, I definitely overpaid for my mutual funds.

What if nothing exists and we're all in somebody's dream? Or what's worse, what if only that wrinkled old white dude and his trailer trash sidekick exist?

Look, seriously, the USA stands on the edge of one of the truly great financial panics of all time -- we're not just living in interesting times, we are privileged to be here as though we're standing on the foretop of a great, tall 100-gun ship of the line in the Napoleonic era and looking into the very teeth of a cyclone coming right at us; the waves are putting the bowsprit deep under the combers, only for the ship to rise up and cleave the great waves while making way as close to the wind as we can.

So, in a sense, more than any other time in history, the USA and the global economy faces a crossroads. One path leads to panic, despair and utter hopelessness -- depression and/or total extinction. There are other paths that I will make reference to below.

Let us pray we have the wisdom to choose correctly.

For an interesting view on alternatives to the Paulson Plan, see

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092403033_pf.html

See also John Maynard Keynes's 1936 treatise, "The General Theory of Employment, Interest and Money." It's a book about economic panics and the market psychology that produces them -- and the consequent need for government intervention.

David Ignatius writes in today's Wash Post:

"The problem with financial markets, Keynes argued, was that investors were periodically seized by an extreme form of what he called "liquidity preference," which made them wary of putting their money into anything but the safest investments. "It is of the nature of organized investment markets . . . that, when disillusion falls upon an over-optimistic and over-bought market, it should fall with sudden and even catastrophic force," he wrote. "Once doubt begins it spreads rapidly."

"That's a pretty good description of what has been happening on Wall Street over the past few months. We've gone from a bubble of overenthusiasm, in which interest-rate spreads took little account of risk, to a state of panic in which financial institutions are so risk-averse that they don't want to lend to anyone. As Keynes observed, "the actual, private object of the most skilled investment today is . . . to outwit the crowd, and to pass the bad, or depreciating, half-crown to the other fellow."

"Keynes's revolutionary idea was that financial markets were not inherently self-correcting, as classical economics had argued. Left to itself, Wall Street might remain in a liquidity trap in which the markets would stay frozen and productive investment would cease. So it fell to the government to take actions that would restore confidence and stimulate investment. "I conclude that the duty of ordering the current volume of investment cannot safely be left in private hands," he wrote.

"Which brings us to Treasury Secretary Henry Paulson and the present financial crisis. Since he intervened to rescue Bear Stearns in March, Paulson has been trying to pump cash into markets that are locking up because of the extreme liquidity preference of investors. But each rescue measure only sets up the next disaster -- so that Paulson lurches from Bear Stearns to Fannie and Freddie to AIG, and now to a government pledge to buy up $700 billion or more of mortgage-backed securities.

"What advice would Keynes offer Paulson and Fed Chairman Ben Bernanke? His first instinct, I think, would be to reiterate that markets, left to themselves, will not solve this sort of crisis. They need government help -- in this case, on a scale that would have daunted even Keynes -- including underwriting mortgage loans, backstopping the market for credit swaps and other steps. But if these measures are taken piecemeal, without broad political support, they may only add to the public's anxiety. Indeed, that's a real worry now: A Wall Street panic may become a Main Street panic.

"A truly Keynesian rescue plan should do more than bail out foolish investors. How might the pieces fit into a larger design? Well, if the taxpayers are going to acquire a stake in the nation's largest insurance company, perhaps that company can be the cornerstone of a new system of universal private health coverage. If the taxpayers are going to acquire $700 billion in real estate assets, perhaps the eventual profits can fund new investments in infrastructure or energy technology.

"Keynes spoke in the finicky English of a Cambridge don, but listen to what he said: "When the capital development of a country becomes a byproduct of the activities of a casino, the job is likely to be ill-done." Keynes wouldn't have wanted to nationalize that casino; he was an active investor himself. But he reminds us that public purposes are best served by public institutions."

Originally posted by Scriabin

"Keynes spoke in the finicky English of a Cambridge don, but listen to what he said: "When the capital development of a country becomes a byproduct of the activities of a casino, the job is likely to be ill-done."

Is that considered finicky? Good grief.

Originally posted by Bosse de Nage
Is that considered finicky? Good grief.

Its probably the edited revised standard version. I'll post a link when I can source the original King James.

Originally posted by no1marauder
You are incorrect; in the vast majority of states (perhaps all now) a homeowner owns his property whether the mortgage is fully paid or not. A mortgage is simply a debt secured by the property.

Perhaps I've misunderstood all these years, but I think this sounds like a semantics argument.

My understanding is that, while a mortgage is a debt secured by the property (i.e., the property
is the collateral for the loan), defaulting on the debt results in the legal right for the bank to
begin the process of trying to reclaim the remaining difference on the loan. Since the property
is collateral (and, invariably, the deed is not solely in the name of the 'owner'😉, it effectively
ceases to be the 'property' of the owner and becomes the property of the bank, who in turn
strives to sell it to recover their losses.

This process, as I understand it, is agreed upon in advance by both parties. So, while a person
in good standing with her mortgage 'owns' her house because she is meeting the terms of that
agreement, as soon as a person deviates from that agreement, the collateral (property) can come
into play and rightly repossessed and legally become the property of the bank.

Have I summarized that incorrectly (and, if I have, please correct it...)?

Given that I have captured the essentials, it seems the idea (not the legal standing) that a
mortgaged property is actually owned by the individual seems an in nomine sort of stance.
My definition of property includes the idea that it cannot be forcibly taken away from me.

An analogue might be if I'm shopping in a store and I put a box of Cheerios in my wagon. I
and all the other customers accept that the cereal is mine even though I haven't paid for it;
no one with any social graces will take it out of my wagon. And, if I shop for another five minutes,
or another two hours, people tacitly regard the contents of my wagon (including the cereal).
But if I try to walk out of the supermarket without it, no matter how long it has been in my
wagon, they are going to stop me because I haven't fulfilled my obligations to become the
true owner of that property. And if I cannot or will not meet those obligations, they are going
to take the cereal away from me.

Despite the legal assignments, I see the ownership (inasmuch as it can be considered this way)
of a mortgaged property very much the same way. I suspect that the reason the law is different
is because the legal ramifications for making the person who has the mortgage the owner
rather than the bank; that is, if we call the bank the owner, then the bank is responsible for
this or that legal issue if they should crop up. It's in the bank's interest to consider the person
who borrows the money the 'owner' because the owner is the person responsible for the sorts
of legal property things that come up (rather than one who leases an apartment), like if someone
falls on a property, or if a tree on the property lands in someone else's yard or whatever.

Again, I defer if I've misunderstood things royally, but I think there's a reason people say,
'I don't own my house yet; the bank does.'

Nemesio

Originally posted by Bosse de Nage
Is that considered finicky? Good grief.

"ill-done"

the very essence of finicky in this day and age.

I must admit that the dumbing down of the language proceeds apace.

Originally posted by Nemesio
Perhaps I've misunderstood all these years, but I think this sounds like a semantics argument.

My understanding is that, while a mortgage is a debt secured by the property (i.e., the property
is the collateral for the loan), defaulting on the debt results in the legal right for the bank to
begin the process of trying to reclaim the remaining difference ...[text shortened]... a reason people say,
'I don't own my house yet; the bank does.'

Nemesio

You're flat out wrong, old man.

For example: I own my home. In fact, I own two homes. One house I own outright with no mortgage and no lien on it. The other house has a mortgage and therefore a lien on it.

Yet the key legal point is that I hold title to both houses and that is the very essence of legal ownership.

Of course, should I default on the loan and otherwise have no other assets but the collateral with which to satisfy the debt, foreclosure is the contractually agreed upon way to fulfill the contract.

But that is an issue quite apart from the issue of ownership.

the bank does not own my mortgaged property because I and I alone hold title.

Originally posted by Nemesio
Perhaps I've misunderstood all these years, but I think this sounds like a semantics argument.

My understanding is that, while a mortgage is a debt secured by the property (i.e., the property
is the collateral for the loan), defaulting on the debt results in the legal right for the bank to
begin the process of trying to reclaim the remaining difference ...[text shortened]... a reason people say,
'I don't own my house yet; the bank does.'

Nemesio

Your analogy with the Cheerios is "false". You don't own the Cheerios until you pay for them. Someone who buys a house has already paid for it; if he uses a mortgage to do so, he simply borrowed the money to pay for it. The condition for getting the loan is that the house is collateral to pay the money back, but that has no effect on his ownership interest. I've never seen a deed with anyone on it but the buyer and seller and the property tax rolls and other government agencies that list who owns the property list the owner, not any mortgage holder. People who make the statement you gave are simply wrong.

Originally posted by no1marauder
Your analogy with the Cheerios is "false". You don't own the Cheerios until you pay for them. Someone who buys a house has already paid for it; if he uses a mortgage to do so, he simply borrowed the money to pay for it. The condition for getting the loan is that the house is collateral to pay the money back, but that has no effect on his ownership intere ...[text shortened]... the owner, not any mortgage holder. People who make the statement you gave are simply wrong.

I own my house, this is true. But, due to the current market, I am slightly upside down (no worries for now...don't plan on moving soon...). However, while techincally inaccurate, it is essentially true that the bank owns my house. Yes, it is simplifying and taking out the step of me defaulting on the loan and the bank assuming possession.

You are right, but I think you are being a bit crummudgeony about it.

Originally posted by MrHand
I own my house, this is true. But, due to the current market, I am slightly upside down (no worries for now...don't plan on moving soon...). However, while techincally inaccurate, it is essentially true that the bank owns my house. Yes, it is simplifying and taking out the step of me defaulting on the loan and the bank assuming possession.

You are right, but I think you are being a bit crummudgeony about it.

Do bank employees come into the house whenever they please?

Originally posted by Nemesio
People who have not paid off their house do not own the house; the bank does. That is,
people who have fully paid off their houses aren't in a crisis right now, nor are people who are
making their mortgage payments (like me, for example).

The banks lend their money in good faith, that the people to whom they lend them will pay them
according to the sc ...[text shortened]... it.
If they can't acquire it, they had no right to it in the first place.

Nemesio

The amount of the home that you've paid for is yours though.

Originally posted by shavixmir
Well, you seem to have things mixed up there.

Communism doesn't say you can't own property. If you want a TV and you work to get a TV... it's yours. End of story. Communism says nothing about that.

If you're talking about land. Well, that's something else isn't it? It's like water and air. You can't own that. It's ludicrous to even think of a system ...[text shortened]... e), you automatically become the main "renter".

Sounds so logical to me.

Communism says the common folks can't own capital, AKA "the means of production". It keeps economic power out of the hands of the people and keeps in in the Party/government.