Did you know that the big banks have a way to legally steal your house from you even if you don’t owe a single penny on your mortgage? Big banks and hedge funds are buying billions of dollars worth of tax liens from local governments all over the nation, and they are ruthlessly foreclosing on homeowners when they can’t pay the absolutely ridiculous penalties and legal fees that are tacked on to the original tax bill. As you will see below, one 76-year-old man lost his $197,000 home that he fully owned over a $134 tax bill. A 95-year-old woman lost her $300,000 home over a $44.79 tax bill. This is a very, very dirty way to make money, and the predatory financial institutions that are involved in this business definitely do not want to talk about it.
Of course much of the blame should also be shouldered by the local governments that are coldly selling these tax liens to these ruthless predators. If local governments want to collect their tax bills, they should do it themselves. They should not be auctioning off their tax liens to cold-hearted financial institutions that are very eager to commit a legal version of highway robbery.
A few days ago, the Washington Post reported on the tragic story of a 76-year-old former Marine named Bennie Coleman. Coleman had originally purchased his home with cash, but that didn’t stop tax lien predators from stealing his home over an unpaid $134 property tax bill…
On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.
Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.
All because he didn’t pay a $134 property tax bill.
So why couldn’t he pay such a small bill?
Well, as the Post explained, these big banks and hedge funds keep tacking on interest, penalties and legal fees until the tax bills are many times the size that they originally were. When the distressed homeowners can’t come up with thousands of dollars to pay off the debts, the big banks and the hedge funds move in for the kill…
For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.
But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.
In particular, hedge funds have discovered that this is a great way to make huge piles of money. The following is a short excerpt from a CNN article that was published back in May…
With buyers identified only by numbers or unrelated names, the fragmented, unregulated industry is opaque. Even the market’s size is debated — $15 billion a year, according to Howard Liggett, the chief executive of Distressed Real Estate Consulting Services, or $5 billion a year, according to the National Tax Lien Association, a trade group. While returns are a closely kept secret, investors typically make between 2.5% and 10% a year, or in the low teens for larger buys.
“The hedge funds are chasing yield in this business” says Albert Friedman, a principal at Alterna Capital, an alternative investment firm in Boca Raton that buys tax liens.
Insiders estimate hedge funds now control 40% of the tax-lien market, from under 5% five years ago, with regional banks, obscure partnerships sporting names like God’s ATM LLC, and mom-and-pop investors making up the rest.
And a number of “too big to fail” banks are involved in this business as well.
In a previous article, I described exactly how this works…
1) The big Wall Street banks set up or invest in shell companies that will disguise who they really are.
2) These shell companies run around and buy up all of the tax liens that they can get their hands on.
3) Predatory levels of interest (in some states as high as 18 percent), fees and penalties rapidly pile up on these unpaid tax liens. The affected homeowners quickly end up owing much, much more than what the original tax bills were for.
4) If the collecting firm has to hire a lawyer, then that gets charged to the homeowner as well. The bloated legal fees for some of these lawyers can end up being the biggest expense of all.
5) If the tax liens do not get paid, the collecting firms move in to foreclose as quickly as legally possible.
According to the Huffington Post, Wall Street banks such as Bank of America and JPMorgan Chase have been gobbling up several hundred thousand tax liens from local governments. It appears that “distressed housing markets” are being particularly targeted.
Many of these tax liens are sold in online auctions, so it is unclear if many local government officials even realize who the big money behind many of these shell companies is.
These big financial institutions may consider this to be “good business”, but the truth is that they are absolutely shattering lives in the process. This is particularly true when it comes to older people that do not fully understand what is happening to them. Just consider the following examples from a recent Washington Post article…
A 48-year-old math teacher paid his taxes in 2007, but the tax office took his $1,400 payment and applied it to the wrong house, crediting an entirely different taxpayer.
A 58-year-old bank employee almost lost her house in 2010 because the tax office mistakenly sent bills and notices to a wooded lot across from a strip shopping center in Virginia — 12 times.
A 69-year-old hat designer was given the wrong payoff amount and ended up in court to save her property, owned by her family since 1943.
Those homeowners found out about the mistakes in time to fight. Ninety-five-year-old Daisy Dolsey, living in a nursing home and struggling with Alzheimer’s, wasn’t so lucky: She lost her $300,000 house over a $44.79 tax debt even after she paid her taxes.
Doesn’t that just sicken you?
And then the big banks and the hedge funds have the gall to wonder why people dislike them so much.
In this day and age, large financial institutions have become more cold-hearted than ever before.
Always make sure that your property taxes are fully paid, and always keep a paper record of all financial transactions involving your home.
If you do slip up and make a mistake at some point, there is a very good chance that a ruthless financial institution will try to swoop in and steal your home right out from under your nose.
There are very few segments of the U.S. economy that are more heavily affected by interest rates than the real estate market is. When mortgage rates reached all-time low levels late last year, it fueled a little “mini-bubble” in housing which was greatly celebrated by the mainstream media. Unfortunately, the tide is now turning. Interest rates are starting to move up steadily, even though the Federal Reserve has been trying very hard to keep that from happening. A few weeks ago, when Federal Reserve Chairman Ben Bernanke suggested that the Fed may start to “taper” the rate of quantitative easing eventually, the bond market had a conniption and the yield on 10 year U.S. Treasuries shot up dramatically. In an attempt to calm the market, the Fed stopped all talk of a “taper” and that helped settle things down for a brief period of time. But now the yield on 10 year U.S. Treasuries is starting to rise aggressively again. Today it closed at 2.71 percent, and many analysts believe that it will go much higher. This is important for the housing market, because mortgage rates tend to follow the yield on 10 year U.S. Treasuries. And if mortgage rates keep rising like this, another great real estate crash is inevitable.
This wasn’t supposed to happen. Federal Reserve Chairman Ben Bernanke said that he could use quantitative easing to control long-term interest rates. He assured us that he could force mortgage rates down for an extended period of time and that this would lead to a housing recovery.
But now the Fed is losing control of long-term interest rates. If this continues, either the Federal Reserve will have to substantially increase the rate of quantitative easing or else watch mortgage rates rise to absolutely crippling levels.
Three months ago, the average rate on a 30 year mortgage was 3.35 percent. It has shot up more than a full point since then…
Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan rose to 4.39% from 4.31% last week. Rates are a full percentage point higher than in early May.
And as the chart below shows, mortgage rates have a lot more room to go up…
As mortgage rates go up, so do monthly payments.
And monthly payments are already beginning to soar. Just check out this chart.
So what happens if mortgage rates eventually return to “normal” levels?
Well, it would be absolutely devastating to the housing market. As mortgage rates rise, less people will be able to afford to buy homes at current prices. This will force home prices down.
To a large degree, whether or not someone can afford to buy a particular home is determined by interest rates. The following numbers come from one of my previous articles…
A year ago, the 30 year rate was sitting at 3.66 percent. The monthly payment on a 30 year, $300,000 mortgage at that rate would be $1374.07.
If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage at that rate would be $2201.29.
Does 8 percent sound crazy to you?
It shouldn’t. 8 percent was considered to be normal back in the year 2000.
And we are already seeing rising rates impact the market. The number of mortgage applications has fallen for 11 of the past 12 weeks, and this has been the biggest 3 month decline in mortgage applications that we have witnessed since 2009.
Rising interest rates will also have a dramatic impact on other areas of the real estate industry as well. For example, public construction spending is now the lowest that it has been since 2006.
And I find the chart posted below particularly interesting. As a Christian, I am saddened that construction spending by religious institutions has dropped to a stunningly low level…
So what does all of this mean?
Well, unless interest rates reverse course it appears that we are in the very early stages of another great real estate crash.
Only this time, it might not be so easy for the big banks to swoop in and foreclose on everyone. Just check out the radical step that one city in California is taking to stop bank foreclosures…
Richmond is the first city in the country to take the controversial step of threatening to use eminent domain, the power to take private property for public use. But other cities have also explored the idea.
Banks, the real estate industry and Wall Street are vehemently opposed to the idea, calling it “unconstitutional” and a violation or property rights, and something that will likely cause a flurry of lawsuits.
Richmond has partnered with San Francisco-based Mortgage Resolution Partners on the plan. Letters have been sent to 32 servicers and trustees who hold the underwater loans. If they refuse the city’s offer, officials will condemn and seize the mortgages, then help homeowners to refinance.
If more communities around the nation start using eminent domain to stop foreclosures, that is going to change the cost of doing business for mortgage lenders and it is likely going to mean more expensive mortgages for all the rest of us.
In any event, all of this talk about a “bright future” for real estate is just a bunch of nonsense.
You can’t buy a home if you don’t have a good job. And as I wrote about the other day, there are about 6 million less full-time jobs in America today than there was back in 2007.
You can’t get blood out of a stone, and you can’t buy a house on a part-time income. The lack of breadwinner jobs is one of the primary reasons why the homeownership rate in the United States is now at its lowest level in nearly 18 years.
And we aren’t going to produce good jobs if our economy is not growing. And economic growth in the U.S. has been anemic at best, even if you believe the official numbers.
We were originally told that the GDP growth number for the first quarter of 2013 was 2.4 percent. Then it was revised down to 1.8 percent. Now it has been revised down to 1.1 percent.
So precisely what are we supposed to believe?
Overall, since Barack Obama has been president the average yearly rate of growth for the U.S. economy has been just over 1 percent.
That isn’t very good at all.
But remember, the government numbers have been heavily manipulated to look good.
The reality is even worse.
According to the alternate GDP numbers compiled by John Williams of shadowstats.com, the U.S. economy has continually been in a recession since 2005.
And now interest rates are rising rapidly, and that is very bad news for the U.S. economy.
I hope that you have your seatbelts buckled up tight, because it is going to be a bumpy ride.
Did you actually think that mortgage rates were going to stay at all-time lows forever? Federal Reserve Chairman Ben Bernanke was able to grossly distort the market for a while by buying up massive amounts of government bonds and mortgage-backed securities, but there was no way in the world that the market was going to stay that distorted forever. It simply does not make sense to give American families 30 year mortgages at a fixed interest rate of less than four percent when the real rate of inflation is somewhere around eight to ten percent and the mortgage delinquency rate in the United States is 9.72 percent. If we actually did have “free markets” and they were behaving rationally, mortgage rates would be far, far higher. Well, now that the Fed has indicated that they are going to be starting to “taper” QE at some point, bond yields have skyrocketed and this is rapidly pushing up mortgage rates. According to Freddie Mac, we just witnessed the largest weekly increase in mortgage rates in 26 years. Sadly, this is only just the beginning. Unless the Federal Reserve intervenes, mortgage rates are going to continue to try to revert to normal.
When mortgage rates go up, so do monthly payments. All of a sudden, families that could afford the monthly payments on a $300,000 mortgage are no longer able to do so. This is why when mortgage rates rise, it tends to push housing prices down.
If rates continue to go up, it is going to become increasingly difficult to sell your house. Less people will be able to afford the monthly payments as rates rise. Many families will have to end up reducing their selling prices.
And right now we are watching rates rise at a rate that we have not seen since the 1980s. According to Freddie Mac, the average rate of interest on a 30 year fixed-rate mortgage jumped by more than half a percentage point just last week…
The average 30-year fixed-rate mortgage rose from 3.93 percent last week to 4.46 percent this week; the highest it has been since the week of July 28, 2011. This represents the largest weekly increase for the 30-year fixed since the week ended April 17, 1987.
A year ago, the 30 year rate was sitting at 3.66 percent.
The monthly payment on a $300,000 mortgage at that rate would be $1374.07.
Currently, the 30 year rate is sitting at 4.46 percent.
The monthly payment on a $300,000 mortgage at that rate would be $1512.93.
If the 30 year rate rises to 7 percent, the monthly payment on a $300,000 mortgage would be $1995.91.
Does 7 percent sound crazy to you?
As the chart posted below demonstrates, a 7 percent mortgage was considered “normal” a decade ago…
As you can see, mortgage rates have nowhere to go but up.
And as they go up, they are going to absolutely crush any semblance of a “housing recovery”.
Meanwhile, Americans continue to get poorer.
This week we learned that real per capita disposable income plunged at an annualized rate of 9.21 percent in the first quarter of 2013.
That is absolutely astounding. We haven’t seen anything like that since the darkest days of the last recession.
If Americans do not have money to spend, that is going to hurt every industry – including housing.
And already we are seeing pain in the housing market. For example, the number of mortgage applications has fallen by 29 percent over the last eight weeks.
And rising rates are also causing a lot of families to turn to adjustable rate mortgages.
They played a major role in the last housing crash, and according to CNBC they are now making a comeback…
After hovering around record lows for the past few years, mortgage rates are rising dramatically. That has consumers not only shopping more but also considering adjustable rate mortgages, which offer lower rates and lower monthly payments.
These ARMs, many requiring interest payments only, were popular during the latest housing boom but quickly fell out of favor when safer, fixed-rate loan rates fell to record lows.
So what does all of this mean?
It means that the tiny little “mini-bubble” that we have seen in housing this year is rapidly coming to an end.
It also means that it is going to become far more difficult to buy or sell a house. Monthly payments are going to go up substantially, and many homeowners are going to find that they are not going to be able to sell their homes for what they had anticipated.
If you are already in the process of buying a house, hopefully you locked in a really good rate while you could. Those record low mortgage rates sure were nice, and we will probably never see them again.
Now we are headed for a very painful “adjustment” thanks to Ben Bernanke and the Federal Reserve. They should never have distorted the housing market so much, and now we are all going to suffer the consequences.
New home sales in the United States are on pace to set a brand new all-time record low in 2011. This will be the third year in a row that new home sales have set a new record low. Sadly, this is yet another sign that the U.S. economy continues to grow weaker. Back in 2005, more than four times as many new homes were being sold as are being sold today. The home building industry is one of the central pillars of the U.S. economy, and the fact that we are going to set another new record low for home sales in 2011 is a really bad sign for those hoping for an economic recovery. Unlike most of those that work in the financial industry, those that build new homes produce something of lasting value for American families. In addition, millions of Americans have traditionally made a solid living by building and selling new homes. But today the market for new homes has totally dried up and large numbers of those jobs are disappearing. Some of the reasons for this include high unemployment, a glut of foreclosures on the market and the tightening of lending standards on home loans. In order for the U.S. to have anything resembling a healthy economy again, we are going to need a revival in the sale of new homes.
But unfortunately, it looks like things are getting even worse. In August, the number of new home sales declined for the fourth month in a row. That is a very troubling sign because typically summer is the best time for new home sales.
Celia Chen, the director of housing economics at Moody’s Analytics, is saying the following about the dismal numbers….
“With job growth at a standstill, the stock market swinging wildly, Congress wrangling over the debt ceiling and the euro zone’s problems sending consumer confidence down, sales of new homes are slipping from an already weak pace.”
When you take a close look at the numbers, it really is shocking to see how far we have fallen.
Back in 1963, the U.S. Census Bureau began monitoring new home sales. Prior to the most recent economic downturn, the record low for new home sales happened in 1982.
In that year, only 412,000 new homes were sold.
Well, that record was broken in 2009.
Then it was broken again in 2010.
And it will be broken again in 2011.
This year, we are on pace to see only 303,000 new homes sold in America.
That is beyond pathetic.
To get an idea of just how bad that is, just check out the following chart which comes from the Calculated Risk blog. The first number is the year, the second number is the total number of new homes sold during that year, and the third number is the total number of new homes sold through the month of August during that year. The number of new homes sold during 2011 is a projected number….
2000: 877 608
2001: 908 644
2002: 973 670
2003: 1,086 759
2004: 1,203 841
2005: 1,283 906
2006: 1,051 756
2007: 776 577
2008: 485 365
2009: 375 261
2010: 323 231
2011: 303 211
As you can see, this will be the fifth year in a row that new home sales have fallen.
And yet the folks on television keep telling us that the recession is over.
The frightening thing is that new home sales are this anemic even with mortgage rates at historic lows.
So what is going to happen once mortgage rates start going up?
It is hard to imagine new home sales getting even worse than they are now.
And we desperately need to get things turned around. New home construction is very good for the economy.
According to the National Association of Home Builders, each new home that is constructed creates the equivalent of 3 jobs for an entire year and generates approximately $90,000 in taxes.
So what is holding things back?
Well, for one thing, if people do not have good jobs they cannot afford to buy new homes.
Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.
That is a massive problem that needs to be solved.
Unfortunately, our leaders continue to allow millions of our jobs to be shipped overseas.
If you gathered together all of the people in the United States that are “officially unemployed” right now, they would constitute the 68th largest country in the world. It would be a nation larger than Greece.
Secondly, there is a gigantic glut of foreclosed homes on the market right now that is competing with new homes for the few qualified home buyers that are out there.
It is absolutely shocking how many vacant homes there are in some areas of the country.
According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant. That figure is 63 percent larger than it was just ten years ago.
In the city of Detroit alone, there are more than 33,000 abandoned homes.
Until the number of vacant homes goes down, there is just not going to be a need in the marketplace for a lot of new homes.
Sadly, it looks like another huge wave of foreclosures could be on the way.
According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.
That is more than a bit frightening.
Thirdly, lending standards on home loans have dramatically changed.
Five or six years ago, if you were breathing you could get a home loan.
Even the family dog could get a home loan.
But now the pendulum has swung to the opposite end of the spectrum.
Applying for a mortgage today is like getting a series of proctology exams from a very rude and very uncaring doctor.
Many mortgage lenders today will deny you at the slightest hint of a problem.
Even if you have a very high income, near perfect credit, very little debt and a long history of financial responsibility there is still a very good chance that you will be turned down.
If you don’t believe this, just start talking to people that have applied for home loans lately.
A ton of pending home sales are being cancelled because potential home buyers simply cannot get approved.
Until some sort of “balance” is restored to the mortgage lending process, this is going to continue to be a major problem.
It would be nice if I could tell you that things are going to get better soon, but the truth is that there are all kinds of signs that the U.S. economy is getting even worse and there are all kinds of signs that the global financial system is on the verge of a massive nervous breakdown.
So if you make a living by building or selling new homes, you might want to find other ways to supplement your income for a while.
Things are not going to turn around significantly any time soon.
Right now, interest rates are near historic lows. The U.S. government is able to borrow gigantic mountains of money for next to nothing. U.S. consumers are still able to get home loans, car loans and student loans at ridiculously low interest rates. When this low interest rate environment changes (and it will), it is going to absolutely devastate the U.S. economy. Without low interest rates, the U.S. financial system dies. When it comes to borrowing money, it is the rate of interest that causes the pain. If you could borrow as much money as you wanted at a zero rate of interest for the rest of your life you would never, ever have a debt problem. But when there is a cost to borrowing money that changes things. The higher the rate of interest goes, the more painful debt becomes.
The only reason that U.S. government finances have not fallen apart completely already is because the federal government is still able to borrow huge amounts of money very cheaply. If interest rates on U.S. government debt even return just to “average” levels, it is going to be absolutely catastrophic.
So what happens if rates go above “average”?
The reality is that if there is a major crisis that causes interest rates on U.S. Treasuries to go well beyond “normal” levels it is going to cause a complete and total collapse.
In 2010, the U.S. government paid out just $413 billion in interest even though the national debt soared to 14 trillion dollars by the end of the year.
That means that the U.S. government paid somewhere in the neighborhood of 3 percent interest for the year.
Considering how rapidly the U.S. dollar has been declining and how much money printing the Federal Reserve has been doing, a rate of interest that low is absolutely ridiculous.
The shorter the term, the more ridiculous the rates of interest on U.S. Treasuries are.
For example, the rate of interest on 3 month U.S. Treasuries right now is just barely above zero.
The Federal Reserve has been playing all kinds of games in an attempt to keep interest rates on U.S. government debt low, and so far they have been pretty successful at it.
But they aren’t going to be able to do it forever.
Up until now, other nations and investors around the world have continued to participate in the system even though they know that the Federal Reserve is cheating.
However, there are signs that a lot of investors are finally getting fed up and are ready to walk away from U.S. government debt.
China has been dumping short-term U.S. government debt. Russia has been dumping U.S. government debt. Pimco has been dumping U.S. government debt.
Others are taking things even farther.
In fact, there are some investors that plan on cashing in on the loss of confidence in U.S. Treasuries. Renowned investor Jim Rogers says that he is now going to be shorting 30 year U.S. government bonds.
Just check out what Rogers recently told CNBC….
“I cannot imagine or conceive lending money to the United States government for 30-years at 3, 4, 5 or 6 percent —you pick a number — in U.S. dollars”
And he is right. Who in the world would be stupid enough to loan the U.S. government money at a 4 or 5 percent rate of interest for the next 30 years?
Actually, most U.S. government debt is financed in the short-term these days. In fact, the U.S. government issues a higher percentage of short-term debt than any other industrialized nation.
This trend really got started during the Clinton administration. Back then they figured out that the U.S. could reduce its borrowing costs substantially by relying much more heavily on short-term debt. The Bush and Obama administrations have continued this trend.
So these days the U.S. government constantly has huge amounts of debt that are maturing and that need to be rolled over.
This is great as long as interest rates stay very, very low.
But when interest rates rise the whole game will change.
In a recent article, Pat Buchanan explained that the Obama administration is being completely unrealistic when it assumes that interest rates on U.S. government debt will stay incredibly low over the next decade….
“The average rate of interest the Fed has had to pay to borrow for the last two decades has been 5.7 percent. However, President Obama is projecting the cost of money at only 2.5 percent.
A return to the normal Fed rate would, by 2020, add $4.9 trillion to the cumulative deficit”
Most Americans really cannot grasp how incredibly low interest rates are right now.
Sometimes a picture is worth a thousand words.
The following chart shows how interest rates on 10 year U.S. Treasury bonds have declined over the last several decades.
As confidence in the U.S. dollar and in U.S. government debt declines, interest rates will go up.
In fact, there are troubling signs that we are starting to see a move in that direction right now. Last week, the yield on 5 year U.S. Treasuries experienced the biggest one week percentage jump ever recorded.
The big danger is that the political wrangling in Washington D.C. will start to cause a panic. The managing director of Standard & Poor’s recently told Reuters that if the U.S. government starts defaulting on debt at the beginning of August, the credit rating on U.S. Treasury bonds that are supposed to mature on August 4th will go from AAA all the way down to D….
Chambers, who is also the chairman of S&P’s sovereign ratings committee, told Reuters on Tuesday that U.S. Treasury bills maturing on August 4 would be rated ‘D’ if the government fails to honor them. Unaffected Treasuries would be downgraded as well, but not as sharply, he said.
“If the U.S. government misses a payment, it goes to D,” Chambers said. “That would happen right after August 4, when the bills mature, because they don’t have a grace period.”
When a credit rating gets slashed, interest rates on that debt can go up dramatically.
Just ask the citizens of Greece.
Today, the interest rate on 2 year Greek bonds is over 26 percent.
You are delusional if you believe that something like that can never happen here.
Right now the U.S. national debt is completely and totally out of control. If the U.S. government had to start paying interest rates of 10, 15 or 20 percent to borrow money it would be a total nightmare.
This year the U.S. government will have income of about 2.2 trillion dollars.
If in future years the U.S. government is spending a trillion or a trillion and a half dollars just on interest on the national debt, then how in the world is it going to be possible to even run the government, much less balance the budget?
But rising interest rates would not just devastate the federal government.
It would become much more expensive for state and local governments to borrow money.
Student loans would become much more expensive.
Car loans would become much more expensive.
Home loans would become out of reach for everyone except the very wealthy.
As we saw during the housing crash of a few years ago, rising interest rates can absolutely wipe homeowners out.
On a standard home loan, if you change the rate of interest from 5 percent to 10 percent you increase the mortgage payment by approximately 50 percent.
If you change the rate of interest from 5 percent to 15 percent, you roughly double the mortgage payment.
As the 30 year fixed rate mortgage chart below shows, interest rates are near historic lows right now….
Keep in mind that even with such ridiculously low interest rates the U.S. real estate market has been deader than a doornail.
So what would a significant spike in interest rates do to it?
When all of these low interest rates go away the entire financial system is going to change dramatically.
A significant spike in interest rates would wipe out U.S. government finances, it would push state and local governments all over the country to the brink of bankruptcy, it would bring economic activity to a standstill and it would destroy any hopes for a housing recovery.
This country, and in particular the federal government, is enslaved to debt but right now we are not feeling the full pain of that debt because interest rates are so low.
If you want to know when things are really going to start coming apart, just keep an eye on interest rates. When they really start spiking you can start sounding the alarm.
The truth is that the state of the economy is going to continue to get worse. Our debt is growing every single day and our country is getting poorer every single day. When interest rates start surging it is going to start knocking over a lot of dominoes.
I hope you are getting prepared for when that happens.
Unless you have been asleep or hiding under a rock for the past five years, you already know that we are experiencing the worst real estate crisis that the U.S. has ever seen. Home prices in the United States have fallen 33 percent from the peak of the housing bubble, which is more than they fell during the Great Depression. Those that decided to buy a house in 2005 or 2006 are really hurting right now. Just think about it. Could you imagine paying off a $400,000 mortgage on a home that is now only worth $250,000? Millions of Americans are now living through that kind of financial hell. Sadly, most analysts expect U.S. home prices to go down even further. Despite the “best efforts” of those running our economy, unemployment is still rampant. The number of middle class jobs continues to decline year after year, but it takes at least a middle class income to buy a decent home. In addition, financial institutions have really tightened up lending standards and have made it much more difficult to get home loans. Back during the wild days of the housing bubble, the family cat could get a zero-down mortgage, but today the pendulum has swung very far in the other direction and now it is really, really tough to get a home loan. Meanwhile, the number of foreclosures and distressed properties continues to soar. So with a ton of homes on the market and not a lot of buyers the power is firmly in the hands of those looking to buy a house.
So will home prices continue to go down? Possibly. But they won’t go down forever. At some point the inflation that is already affecting many other segments of the economy will affect home prices as well. That doesn’t mean that it will be middle class American families that will be buying up all the homes. An increasing percentage of homes are being purchased by investors or by foreigners. There are a lot of really beautiful homes in the United States, and wealthy people from all over the globe love to buy a house in America.
But because of the factors mentioned above, it is quite possible that U.S. home prices could go down another 10 or 20 percent, especially if the economy gets worse.
So what is the right time to buy a house?
Nobody really knows for sure.
Mortgage rates are near record lows right now and there are some great deals to be had in many areas of the country. But that does not mean that you won’t be able to get the same home for even less 6 months or a year from now.
In any event, this truly has been a really trying time for the U.S. housing market. Hordes of builders, construction workers, contractors, real estate agents and mortgage professionals have been put out of work by this downturn. The housing industry is one of the core pillars of the economy, and so a recovery in home sales is desperately needed.
The following are 20 really wacky statistics about the U.S. real estate crisis….
#1 According to Zillow, 28.4 percent of all single-family homes with a mortgage in the United States are now underwater.
#2 Zillow has also announced that the average price of a home in the U.S. is about 8 percent lower than it was a year ago and that it continues to fall about 1 percent a month.
#3 U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.
#4 During the first quarter of 2011, home values declined at the fastest rate since late 2008.
#5 According to Zillow, more than 55 percent of all single-family homes with a mortgage in Atlanta have negative equity and more than 68 percent of all single-family homes with a mortgage in Phoenix have negative equity.
#6 U.S. home values have fallen an astounding 6.3 trillion dollars since the housing crisis first began.
#7 In February, U.S. housing starts experienced their largest decline in 27 years.
#8 New home sales in the United States are now down 80% from the peak in July 2005.
#9 Historically, the percentage of residential mortgages in foreclosure in the United States has tended to hover between 1 and 1.5 percent. Today, it is up around 4.5 percent.
#10 According to RealtyTrac, foreclosure filings in the United States are projected to increase by another 20 percent in 2011.
#11 It is estimated that 25% of all mortgages in Miami-Dade County are “in serious distress and headed for either foreclosure or short sale“.
#12 Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months. Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.
#13 Sales of foreclosed homes now represent an all-time record 23.7% of the market.
#14 4.5 million home loans are now either in some stage of foreclosure or are at least 90 days delinquent.
#15 According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.
#16 In September 2008, 33 percent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent.
#17 During the first quarter of 2011, less new homes were sold in the U.S. than in any three month period ever recorded.
#18 According to a recent census report, 13% of all homes in the United States are currently sitting empty.
#19 In 1996, 89 percent of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 percent.
#20 According to Zillow, the United States has been in a “housing recession” for 57 straight months without an end in sight.
So should we be confident that the folks in charge are doing everything that they can to turn all of this around?
Sadly, the truth is that our “authorities” really do not know what they are doing. The following is what Fed Chairman Ben Bernanke had to say about the housing market back in 2006….
“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”
Since that time U.S. housing prices have experienced their biggest decline ever.
At some point widespread inflation is going to reverse the trend we are experiencing right now, but that doesn’t mean that most American families will be able to afford to buy homes when that happens.
As I have written about previously, the middle class in America is shrinking. The number of Americans on food stamps has increased by 18 million over the past four years and today 47 million Americans (a new all-time record) are living in poverty.
Millions of our jobs are being shipped overseas, the cost of living keeps going up and an increasing percentage of American families are losing faith in the economy.
More Americans than ever are talking about “the coming economic collapse” as if it is a foregone conclusion. Our federal government is swamped with debt, our state and local governments are swamped with debt and our economic infrastructure is being ripped to shreds by globalization.
So sadly, no, there are not a whole lot of reasons to be optimistic at this point about a major economic turnaround.
The U.S. economy is going down the toilet and the coming collapse is going to be incredibly painful for all of us.
Hopefully when that collapse comes you will have somewhere warm and safe to call home. If not, hopefully someone will have compassion on you. In any event, we all need to buckle up because it is going to be a wild ride.
If you make your living by building or selling new homes in the United States, you might want to consider taking up a different career for a while. New homes sales in the United States hit yet another new all-time record low in the month of February, and there are a whole lot of reasons why new home sales are going to stay extremely low for an extended period of time. The massive wave of foreclosures that we have seen has produced a giant glut of unsold homes in the marketplace, mortgage lenders are making it really hard to get approved for home loans, unemployment is still rampant and the global economy looks like it may soon plunge into another major recession. None of those things is good news for the new home construction industry. The truth is that we were supposed to have seen new home sales already bounce back by now. If you look at the historical numbers, new home sales in the U.S. always increased significantly after the end of every recession since World War 2. But that did not happen this time. Instead, new home sales have just continued to decline. This is absolutely unprecedented, and economists are puzzled. So what is going to happen if the U.S. economy suffers another major downturn?
New home construction has always been one of the foundational pillars of the U.S. economy. When times were good new home construction would boom, and when times were bad new home construction would falter.
Well, unfortunately the industry is stuck in the midst of a multi-year decline right now. The reality is that you can stick a fork in the new home construction industry in the United States. It is toast. There is going to be no recovery for the foreseeable future.
Not that previously owned homes are doing that much better. According to the National Association of Realtors, sales of previously existing homes in the United States dropped 9.6 percent in February. But at least sales of previously owned homes are not at all-time record lows like new home sales are.
As you can see from the facts posted below, new home sales are absolutely abysmal right now, and there are a lot of indications that things may get even worse. The following are 18 reasons why you can stick a fork in the new home construction industry….
#1 New home sales in the United States set a brand new all-time record low in the month of February.
#2 Only 19,000 new homes were sold in the United States during the month of February. The previous record low for new home sales during the month of February was 27,000, which was set last year.
#3 The “months of supply” of new homes in the U.S. rose from 7.4 months in January to 8.9 months in February.
#4 The median price of a new home in the United States declined almost 14 percent to $202,100 in the month of February.
#5 The median price of a new home in the U.S. is now the lowest it has been since December 2003.
#6 As of the end of 2010, new home sales in the United States had declined for five straight years, and they are expected to be lower once again in 2011.
#7 Now home sales in the United States are now down 80% from the peak in July 2005.
#8 New home construction starts in the United States fell 22.5 percent during the month of February. This was the largest decline in 27 years.
#9 In February, the number of new building permits (a measure of future home building activity) declined to the lowest level in more than 50 years. In fact, new building permits were 20 percent lower during February 2011 than they were in February 2010.
#10 There is a major glut of foreclosed homes that still need to be sold off. David Crowe, the chief economist for the National Association of Home Builders, recently told CNN that the constant flow of new foreclosures being put on the market is a huge hindrance to a recovery for new home sales….
“One of the biggest detriments to building new homes is the flow of existing foreclosed homes.”
#11 The number of foreclosures just continues to increase. This means that those trying to sell new homes are going to continue to be competing against a giant mountain of foreclosed homes for the foreseeable future. An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010, and that number is expected to be even higher in 2011.
#12 In fact, there are a whole lot of signs that there will be very high levels of foreclosures for years to come. For example, according to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments at this point.
#13 A stunningly high number of Americans are “underwater” on their mortgages right now. This could lead to an increase in the number of “strategic defaults”. 31 percent of the homeowners that responded to a recent Rasmussen Reports survey indicated that they are “underwater” on their mortgages, and Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.
#14 The truth is that the U.S. doesn’t need a whole lot of new housing at the moment. Right now, 11 percent of all homes in the United States are currently standing empty.
#15 Mortgage lending standards have become extremely tight. Back during the housing bubble, almost anyone that was breathing could get a zero-down mortgage. Today, mortgage lenders have made it extremely difficult to acquire a home loan, and it is quite typical these days for lenders to demand down payments of 20 percent or more. This is dramatically reducing the number of home buyers in the marketplace.
#16 American families cannot buy homes if they do not have good jobs. Unfortunately, it has become extremely difficult to find a job in the United States today. This is especially true if you are looking for a good job. It now takes the average unemployed worker in America about 33 weeks to find a job.
#17 There is not going to be a jobs recovery until the overall economy improves. Unfortunately, the price of oil continues to rise dramatically and economic disasters all over the planet threaten to plunge the global economy into another major recession.
#18 On top of everything else, perceptions regarding home ownership are shifting in the United States. In 1996, 89 percent of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 percent.
Today there are two very different Americas. In one America, the stock market is soaring, huge bonuses are taken for granted, the good times are rolling and people are spending money as if they will be able to “live the dream” for the rest of their lives. In the other America, the one where most of the rest of us live, unemployment is rampant, a million families were kicked out of their homes last year and hordes of American families are drowning in debt. The gap between the rich and the poor is bigger today than it ever has been before. In fact, this article is not so much about “rich vs poor” as it is about “the rich vs the rest of us”. Barack Obama and Ben Bernanke keep touting an “economic recovery”, but the truth is that the only ones that seem to be benefiting from this recovery are those at the very top of the economic food chain.
Below you will find 14 funny statistics about this economic recovery and 14 not so funny statistics about this economic recovery. Actually, if you find yourself deeply struggling in this economy you will probably not find any of the statistics funny. In fact, you will probably find most of them infuriating. After all, there are very few people that actually enjoy hearing about how well the rich are doing when they are barely able to pay the mortgage and put food on the table.
In any event, the 28 statistics below show the stark contrast between the “two Americas” that share this nation today. Many liberals will likely try to use these statistics as an example of why we should tax the rich. But handing more money to the government is not going to magically create more jobs for the poor. What the American people desperately need are good jobs, and many liberals don’t seem to understand that. Many conservatives will likely try to use these statistics as evidence that “capitalism” is working. But the truth is that what we have in the United States today is not capitalism. Rather, it is more aptly described as “corporatism”, because money and power is increasingly becoming concentrated in the hands of gigantic corporations that individuals and small businesses simply cannot compete with. The truth is that when wealth is concentrated at the very top it does not “trickle down” to the rest of us. In the old days the wealthy at least were forced to hire the rest of us to run their factories and their businesses, but with the advent of globalism that isn’t even true anymore. Now they can just move their factories and businesses overseas to places where they can legally pay slave labor wages to their employees.
Very large concentrations of money and power are almost always bad for the prosperity of average citizens. Our founding fathers never intended for our central government to have so much power and they never intended for giant corporations to have so much power. But we have abandoned the principles of our founding fathers.
When large concentrations of power (whether governmental or corporate) are allowed to flourish, it almost becomes inevitable that the gap between the rich and the poor will grow. We are seeing this happen all over the world today.
Unfortunately, it does not appear that any of this is going to change any time soon. In the United States, both the federal government and multinational corporations are constantly attempting to grab even more power. It has gotten to the point where individual Americans really don’t have much power left at all.
In any event, hopefully you will find the following statistics informative or at least entertaining. The wealthy are most definitely enjoying an “economic recovery” while most of the rest of us are still really struggling….
Funny – Who said that the titans of Wall Street couldn’t look hot? According to the American Society of Plastic Surgeons, facelifts for men jumped 14 percent last year.
Not Funny – According to the U.S. Labor Department, unemployment actually increased in 351 of the 372 largest U.S. cities during the month of January.
Funny – The average bonus for a worker on Wall Street in 2010 was only $128,530. It appears that more Wall Street bailouts may be needed.
Not Funny – During this most recent economic downturn, employee compensation in the United States has been the lowest that it has been relative to gross domestic product in over 50 years.
Funny – According to DataQuick Information Systems, the sale of million dollars homes rose an average of 18.6 percent in the top 20 major metro areas in the U.S. in 2010. But is spending a million dollars on one house really worth it? After all, over the past several years there have been times when you could buy a house in some bad areas of Detroit for just one dollar.
Not Funny – In 2010, for the first time ever more than a million U.S. families lost their homes to foreclosure, and that number is expected to go even higher in 2011.
Funny – According to Moody’s Analytics, the wealthiest 5% of households in the United States now account for approximately 37% of all consumer spending. Most of the rest of us don’t have much discretionary income to spend these days, but at least we have Justin Bieber, American Idol and Dancing with the Stars to keep us entertained.
Not Funny – According to Gallup, the U.S. unemployment rate in mid-March was 10.2%, which was virtually unchanged from the 10.3% figure that it was sitting at exactly one year ago.
Funny – According to the Wall Street Journal, sales of private jumbo jets to the ultra-wealthy are absolutely soaring….
Sales of private jumbo jets are so strong that Airbus and Boeing now have special sales forces devoted to potentates and the hyper-rich.
Not Funny – There are now over 6.4 million Americans that have given up looking for work completely. That number has increased by about 30 percent since the economic downturn began.
Funny – Porsche recently reported that sales increased by 29 percent during 2010. Even Porsche jokes are coming back into style….
Question: Why did the blonde try and steal a police car?
Answer: She saw “911” on the back and thought it was a Porsche.
Not Funny – Approximately half of all American workers make $25,000 a year or less.
Funny – Cadillac recently reported that sales increased by 36 percent during 2010.
Not Funny – According to the U.S. Energy Department, the average U.S. household will spend approximately $700 more on gasoline in 2011 than it did during 2010.
Funny – Rolls-Royce recently reported that sales increased by 171 percent during 2010.
Not Funny – According to a new study by America’s Research Group, approximately 75 percent of all Americans are doing less shopping because of rising gasoline prices.
Funny – According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010. Apparently Barack Obama was not talking about himself when he told the American people the following….
“If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.”
Not Funny – When 2007 began, 26 million Americans were on food stamps. Today, an all-time record 44 million Americans are on food stamps.
Funny – Ralph Lauren reported a 24 percent increase in revenue in the fourth quarter of 2010. It is good to know that preppies are thriving in this economy.
Not Funny – The Ivex Packaging Paper plant in Joliet, Illinois is shutting down for good after 97 years in business. 79 good jobs will be lost. Meanwhile, China has become the number one producer of paper products in the entire world.
Funny – Luxury jewelry retailer Tiffany & Co. recently announced that their profits increased by 29 percent in the 4th quarter of 2010. All of the men that did not buy their women jewelry during the holidays are trying to keep this particular news item from getting passed around.
Not Funny – Average household debt in the United States has now reached a level of 136% of average household income.
Funny – In 2009, only 18,288 vehicles with a price tag of $100,000 or more were sold in the United States. In 2010, 32,144 such vehicles were sold. It appears that “showing off for chicks” is now very much back in style.
Not Funny – The U.S. economy now has 10 percent fewer “middle class jobs” than it did just ten years ago.
Funny – Porsche has announced that they will soon be taking orders for their first hybrid sports car, the 918 Spyder. The price tag on one of these puppies will only be $845,000.
Not Funny – The average CEO now makes approximately 185 times more money than the average American worker.
Funny – Barack Obama recently played only his 61st round of golf since moving into the White House. Many are now concerned that Obama is simply not getting enough free time.
Not Funny – According to one recent study, 21 percent of all children in the United States were living below the poverty line during 2010.
We are officially in the middle of the worst housing collapse in U.S. history – and unfortunately it is going to get even worse. Already, U.S. housing prices have fallen further during this economic downturn (26 percent), then they did during the Great Depression (25.9 percent). Approximately 11 percent of all homes in the United States are currently standing empty. In fact, there are many new housing developments across the U.S. that resemble little more than ghost towns because foreclosures have wiped them out. Mortgage delinquencies and foreclosures reached new highs in 2010, and it is being projected that banks and financial institutions will repossess at least a million more U.S. homes during 2011. Meanwhile, unemployment is absolutely rampant and wage levels are going down at a time when mortgage lending standards have been significantly tightened. That means that there are very few qualified buyers running around out there and that is going to continue to be the case for quite some time to come. When you add all of those factors up, it leads to one inescapable conclusion. The “housing Armageddon” that we have been experiencing since 2007 is going to get even worse in 2011.
Right now there is a gigantic mountain of unsold homes in the United States. It is estimated that banks and financial institutions will repossess at least a million more homes this year and this will make the supply of unsold properties even worse. At the same time, millions of American families have been scared out of the market by this recent crisis and millions of others cannot qualify for a home loan any longer. That means that the demand for unsold homes is at extremely low levels.
So what happens when supply is really high and demand is really low?
That’s right – prices go down.
Hopefully housing prices don’t have too much farther to go down. Ben Bernanke and the boys over at the Federal Reserve are doing their best to flood the system with new dollars in order to prop up asset values, but you just can’t create qualified home buyers out of thin air.
Many analysts are projecting that U.S. housing prices will decline another ten or twenty percent before they hit bottom. In fact, quite a few economists believe that the total price decline from the peak of the market in 2006 will end up being somewhere in the neighborhood of 40 percent.
But whether prices go down any further or not, the truth is that the housing crash that we have already witnessed is absolutely unprecedented.
The following are 12 facts which show that we are in the midst of the worst housing collapse in U.S. history….
#1 Approximately 11 percent of all homes in the United States are currently standing empty.
#2 The rate of home ownership in the United States has dropped like a rock. At this point it has fallen all the way back to 1998 levels.
#3 According to the S&P/Case-Shiller index, U.S. home prices fell 1.3 percent in October and another 1 percent in November. In fact, November represented the fourth monthly decline in a row for U.S. housing prices. Many economists are now openly using the term “double-dip” to describe what is happening to the housing market.
#4 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.
#5 According to RealtyTrac, a total of 3 million homes were repossessed by mortgage lenders between January 2007 and August 2010. This represents a huge amount of additional inventory that somehow must be sold.
#6 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.
#7 According to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments.
#8 It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.
#9 Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.
#10 Some formerly great industrial cities are rapidly turning into ghost towns. For example, in Dayton, Ohio today 18.9 percent of all houses are now standing empty. 21.5 percent of all houses in New Orleans, Louisiana are standing vacant.
#11 According to Zillow, U.S. home prices have already fallen further during this economic downturn (26 percent) than they did during the Great Depression (25.9 percent).
#12 There are very few signs that the employment situation in the United States is going to improve any time soon. 4.2 million Americans have been unemployed for one year or longer at this point. While there has been some nominal improvement in the government unemployment numbers recently, other organizations are reporting that things are getting even worse. According to Gallup, the unemployment rate actually rose to 9.6% at the end of December. This was a significant increase from 9.3% in mid-December and 8.8% at the end of November.
But even many Americans that do have jobs are finding out that it has become very, very hard to qualify for a home loan.
In an attempt to avoid the mistakes of the past, banks and financial institutions have become very stingy with home loans. While it was certainly wise for them to make some changes, the truth is that perhaps the pendulum has swung too far at this point. The U.S. housing industry will never fully recover if they can’t get their customers approved for mortgages.
Congress is talking about passing even more laws that will make it even more difficult to get home loans. Even though they give speeches about how they want to help the U.S. housing industry, the truth is that Republicans and Democrats are both backing proposals that would make home mortgages much more expensive and much more difficult to obtain as a Bloomberg article recently explained….
Government officials and lawmakers want to make the market less vulnerable to another credit crisis, and all the options lead the same general direction: Borrowers will need larger down payments than in the bubble years, have higher credit scores, and pay extra fees to cover risks and premiums for federal guarantees on government-backed mortgage bonds.
While all that may sound reasonable, the truth is that the U.S. middle class has become so cash poor that the vast majority of them cannot afford homes without the kind of mortgages that were available in the past.
Not that we should go back and repeat the mistakes of the past 20 years. It is just that nobody should expect the U.S. housing market to “bounce back” in an environment that has fundamentally changed.
The housing market is not like other financial markets. It is difficult to artificially pump it up with funny money. If the U.S. housing market is going to rebound, it is going to take lots of average American families getting qualified for loans and going out and buying houses. But they can’t do this if they do not have good jobs. Today, only 47 percent of working-age Americans have a full-time job at this point. Without a jobs recovery there never will be a housing recovery.
In fact, there are all kinds of warning signs that seem to indicate that the U.S. economy could get even worse in 2011. Many economists are now openly using the word “stagflation” for the first time since the 1970s. Back in the 70s we had both high unemployment and high inflation at the same time.
Well, we have already had very high unemployment, and thanks to the relentless money printing of the Federal Reserve, it looks like we are going to have high inflation as well.
Middle class American families are going to be spending even more of their resources just trying to survive, and this is going to make it more difficult for them to purchase homes.
In fact, in recent years average Americans have been getting significantly poorer. Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them. That is very troubling news.
Now the price of food is soaring and the price of oil is about to cross $100 a barrel again. So what is going to happen if we have another major financial crisis and we witness another huge spike in the unemployment rate?
The Federal Reserve is trying to smooth all of our problems over with a flood of paper money, but it isn’t going to work. Yes, increasing the money supply will produce some false highs on the stock market and some false economic growth statistics for a while, but the tremendous damage that will be done to the economy is just not worth it.
In any event, let us all hope that we see some really great real estate deals over the next couple of years, because in the times ahead land will be something very good to own. In fact, down the road it will be much better to own land than to have your money sitting in the bank where it will continuously decline in value.
Use your paper money wisely. It will never have more value than it does today.
So what do all of you think? Is the “housing Armageddon” almost over, or do housing prices still need to decline a bit more? Feel free to leave a comment with your opinion below….