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I think that prices really began to decouple from fundamentals in the early 2000s (around '02 or '03). By the time the U.S. housing bubble burst, you could look at Canadian data and tell that something was wrong here. Unfortunately, it's gotten worse since then, and I think we're at the point where, once the poo poo hits the fan, you will have a lot of people demanding that the government provide them with the money they had been counting on from the perpetual increase in value they thought they were entitled to.
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# ? Dec 5, 2013 16:47 |
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# ? May 11, 2024 13:37 |
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tagesschau posted:you will have a lot of people demanding that the government provide them with the money they had been counting on from the perpetual increase in value they thought they were entitled to. A virtual certainty.
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# ? Dec 5, 2013 17:20 |
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Their demands will be met, too.
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# ? Dec 5, 2013 19:09 |
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Anyone looked in the great white north recently? I was perusing job openings in Whitehorse and was immediately scared away by the fact that a city of 30,000 has vacancy rates somewhere between zero and "We rented that yesterday, had 500 people banging down our door!". The average house price up there is over $400,000 now, up from $150,000 in 2006. Both points are loving insane. It's an administrative center with little else driving the economy. Rime fucked around with this message at 20:34 on Dec 5, 2013 |
# ? Dec 5, 2013 20:30 |
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Rime posted:Anyone looked in the great white north recently? I was perusing job openings in Whitehorse and was immediately scared away by the fact that a city of 30,000 has vacancy rates somewhere between zero and "We rented that yesterday, had 500 people banging down our door!". The average house price up there is over $400,000 now, up from $150,000 in 2006. My sister is in Yellowknife and paid over $400k for her townhouse. She and her husband also make a boatload of money and pay effectively no taxes. You can own a mobile home for the low price of $339,000! http://bux10.biz/pdf_listings/dmPDF/81hordalroad/81hordalroad.pdf
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# ? Dec 5, 2013 21:22 |
Isn't the population of Whitehorse under 10,000?
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# ? Dec 5, 2013 21:25 |
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Northern pay grades and taxation are ridiculous and could easily contribute to a McMurray-like inflation of prices. I don't know if it's on the same level as a Toronto-style pay-for-it-with-debt bubble.
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# ? Dec 5, 2013 21:38 |
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The sad part of all this is that what people are willing to spend, per month, on a home hasn't budged that much. People make this judgement based on how much they earn, how hard they work for that money, and a sort of 'inner feeling' they have for the value of money, learned as they grew up. The total price of a home isn't anywhere near as important to most people as the monthly cost. So, when interest rates go down, people are able to borrow more for the same 'acceptable' monthly payment. They can, it follows, spend more, and so the people making homes (condo's, houses, etc) are able to charge more. This increase is the price of new homes is reflected into older homes as well, because we treat all homes as 'equal' (unlike, say, cars, where one model or manufacturer is treated very differently form another). Low interest rates don't promote home ownership, they just promote price increases (and the attendant speculation, bubbles, etc). We can do home ownership promoting things, but low interest rates aren't one of them.
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# ? Dec 5, 2013 21:49 |
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EoRaptor posted:
See also: the student loan catastrophe brewing up in the states. This is something even lolbertarians can get through their thick skulls but I think the more market-apologetic of liberals haven't quite grasped it: Public subsidies for a private sector that cannot increase supply without difficulty is a phenomenally bad idea. Doing it via subsidizing loans, even more so. Doing it by socializing risk, could easily be one of the top 10 worst economic policies of the century.
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# ? Dec 5, 2013 22:05 |
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Kafka Esq. posted:I don't know if it's on the same level as a Toronto-style pay-for-it-with-debt bubble. Rural prices are your best indicator of whether the entire market has gone off the rails, rather than this being a mere metropolitan bubble. Take BC for example, the lower mainland has been so inflated for so long that there are homes in literal ghost towns selling for over $100k. This isn't isolated, browse MLS and look at how much people are flogging 70's era bungalows in dying company towns for in this province. The situation in the Yukon is demonstrating that our markets are pretty sick.
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# ? Dec 5, 2013 23:36 |
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Rime posted:Rural prices are your best indicator of whether the entire market has gone off the rails, rather than this being a mere metropolitan bubble. Take BC for example, the lower mainland has been so inflated for so long that there are homes in literal ghost towns selling for over $100k. This isn't isolated, browse MLS and look at how much people are flogging 70's era bungalows in dying company towns for in this province. Yeah it's the other side effect of the cheap credit since it leads to price inflation even in hee-haw towns.
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# ? Dec 6, 2013 15:55 |
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Mr. Wynand posted:See also: the student loan catastrophe brewing up in the states. In the short term it seems as though this policy has allowed the Canadian government to keep consumer spending up even though wages are stagnating or even falling. Rising home values has seemingly become a major prop in keeping aggregate demand up at a time when the government is cutting spending and the corporate sector is hoarding cash. It's also given a lot of people jobs in industries like construction and real estate. None of this, of course, is to say that you're wrong about how disastrous the long term effects of this policy could turn out to be. But there is an underlying logic here that seems to tie into a reliance on housing to help power the economy ever since the great productivity slow down of the 1970s. It seems like politicians have relied on housing (though perhaps not consciously) to mask the weakness of our economic performance over the last few decades.
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# ? Dec 6, 2013 16:33 |
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Helsing posted:It seems like politicians have relied on housing (though perhaps not consciously) to mask the weakness of our economic performance over the last few decades. I guess the only other bright side is the energy boom.
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# ? Dec 6, 2013 16:36 |
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The energy boom is contributing to the wrecking of the environment and its crowding out value added industries like manufacturing so I'm not sure how much of a bright side it really is. Its given a lot of people out west jobs and that's certainly a good thing but it would be easier to celebrate if places like Alberta were at least spending some of that money to prepare for the day when the energy boom ends.
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# ? Dec 6, 2013 16:43 |
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Helsing posted:The energy boom is contributing to the wrecking of the environment and its crowding out value added industries like manufacturing so I'm not sure how much of a bright side it really is. Its given a lot of people out west jobs and that's certainly a good thing but it would be easier to celebrate if places like Alberta were at least spending some of that money to prepare for the day when the energy boom ends. Do you even understand how many long term jobs cleaning up the mess it will create? Or the mercenary army needed to guard the pipelines from "eco-terrorists"! If a broken window creates jobs just imagine how many jobs a broken country will create.
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# ? Dec 6, 2013 18:47 |
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Baronjutter posted:Do you even understand how many long term jobs cleaning up the mess it will create? Or the mercenary army needed to guard the pipelines from "eco-terrorists"! If a broken window creates jobs just imagine how many jobs a broken country will create. Too bad nobody in China is willing to pay for an un-wrecked environment. Unless...
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# ? Dec 6, 2013 20:03 |
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Helsing posted:None of this, of course, is to say that you're wrong about how disastrous the long term effects of this policy could turn out to be. But there is an underlying logic here that seems to tie into a reliance on housing to help power the economy ever since the great productivity slow down of the 1970s. I don't think there has been a 'productivity slump' at least not by any metric I have seen. Can you explain this?
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# ? Dec 7, 2013 05:41 |
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MickeyFinn posted:I don't think there has been a 'productivity slump' at least not by any metric I have seen. Can you explain this? I didn't say anything about a slump, which would suggest an actual decline in labour productivity, I said that productivity growth has slowed down after its postwar peak: From Statistics Canada: Other than a slight bump in the 1990s - due to the implementation of computers? - the trend has been toward slower growth. The picture is even worse when you compare Canada to other advanced countries, in particular the US. The Globe and Mail posted:Canadian productivity: Even worse than previously thought Glend Hodgson tries to dance around the implications of his own conclusion by suggesting that maybe somehow the oil sands will eventually start contributing more substantially to productivity growth rather than just draining capital out of the value added sectors of the economy, but the following graphs taken from Jim Stanford's "Staples, Deindustrialization, and Foreign Investment give further evidence that the rise and fall of the Canadian manufacturing sector play a large role here, and that our drift back toward being a raw resource economy plays a big role in the slow down. Note how mining lags behind manufacturing in terms of productivity:
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# ? Dec 7, 2013 18:48 |
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Ever wonder who Vancouver's Mayor hangs out with? http://www.francesbula.com/uncategorized/the-vision-vancouver-annual-fundraiser-a-precis/ quote:For those who missed my scintillating tweets on Monday night, when I was at the Vision Vancouver fundraiser at Floata, here’s a recap, plus a bit more about the 650-person event, which included some singing by the Jewish contingent and people imitating salmon swimming upstream at a certain point. Designated talking point of the evening seemed to be: “We still have lots to do to make the city better.”
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# ? Dec 7, 2013 19:51 |
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How is there not video of a bunch of the Vancouver business and political elite all miming sperm just like Homer Simpson?
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# ? Dec 7, 2013 20:42 |
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Still really sad how Vancouver had a multi-billionaire dollar cleanup after the 80s condo boom but is repeating the exact same mistakes. Which brings to mind the Einstein quote about the definition of insanity is repeating the same steps but expecting a different result.
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# ? Dec 8, 2013 04:46 |
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Rime posted:Anyone looked in the great white north recently? I was perusing job openings in Whitehorse and was immediately scared away by the fact that a city of 30,000 has vacancy rates somewhere between zero and "We rented that yesterday, had 500 people banging down our door!". The average house price up there is over $400,000 now, up from $150,000 in 2006. Same thing is happening in parts in Newfoundland due to jobs expansion in oil and mining industries (mainly oil). My folks purchased a house near my grandmothers in northern newfoundland, away from any large cities in a town of 3000, for $10,000-15,000 in 1999 along with a few plots of land. Today? The occasional real estate agent calls and tells them if they were willing to sell they can get $200,000 easy just for the land alone, and St. Anthony is about as far as you can get from the oil sector in Newfoundland. Moms planning on selling while the going is good and retiring down in the US Southwest to be closer to me and not have to deal with snow anymore. Unfortunately that means swapping huge heating bills with A/C bills. Parts of St. John's are more expensive than Los Angeles now
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# ? Dec 8, 2013 19:54 |
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Big K of Justice posted:Same thing is happening in parts in Newfoundland due to jobs expansion in oil and mining industries (mainly oil). Yeah you've got that right. The load of people working in Alberta and coming back with lots of money buying houses and putting in a basement apartment is keeping the price crazy high where I am in Newfoundland as well. This town has basically nothing in terms of employment besides a hospital and schools and a soon to be closed mill but houses are around the 300,000 mark for anything decent. I just keep hoping for the money supply to tighten up and at least if nothing else keep prices stagnant for a few years while I continue to save for a down payment, as it's pretty hard to stomach throwing out 300k to live in a "suburb" of a town of 20 thousand people.
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# ? Dec 8, 2013 21:14 |
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Helsing posted:In the short term it seems as though this policy has allowed the Canadian government to keep consumer spending up even though wages are stagnating or even falling. Rising home values has seemingly become a major prop in keeping aggregate demand up at a time when the government is cutting spending and the corporate sector is hoarding cash. It's also given a lot of people jobs in industries like construction and real estate. Well sure, I mean it's not straight up government spending but it might as well be - just in a roundabout way (the bill will be due later, if the CMHC has to actually starting eating bad mortgages, and I do think it's still "if" not "when" - it may not actually happen). Risk is still risk, even if the "bad" scenario doesn't actually come to pass - it's still artificially injecting the economy with action on the government's tab. Keynes "works" IMO, it always has, even if over the long term it can't help but be unreliable and self-defeating. You make an interesting point though - it probably wasn't a conscious decision. But Conservatives may well draw all the right conclusions from this using hindsight: this is a great way of propping up the economy without making any intellectual concessions to the idea of social spending. It lets you continue with the narrative of austerity without actually putting your money where your mouth is. And hey if it all comes crashing down you can always have a "revelation" about what you were really doing - "Can't you see? It was this indirect spending we were doing all along! Oh what fools we were, we have once more failed Conservatism and if anything must redouble our discipline!"
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# ? Dec 9, 2013 02:51 |
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Helsing posted:I didn't say anything about a slump, which would suggest an actual decline in labour productivity, I said that productivity growth has slowed down after its postwar peak... Yeah, I misunderstood your original post, but I got a good answer anyway!
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# ? Dec 9, 2013 02:58 |
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Assuming you accept the premise that we live in bizarro-house price land (and in late 2013, this tends to be uncontroversial among thinking, non-captured, people), two opposing points of view emerge regarding our big-5 charter banks. Either:
Both seem equally plausible, but both cannot be true, at least as far as I can deduce it. So which is it?
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# ? Dec 9, 2013 03:07 |
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Seems either way the tax payer is hosed.
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# ? Dec 9, 2013 08:29 |
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Lexicon posted:Assuming you accept the premise that we live in bizarro-house price land (and in late 2013, this tends to be uncontroversial among thinking, non-captured, people), two opposing points of view emerge regarding our big-5 charter banks. Either: I suspect that a lot of insured loans would not stand up to an audit of the originating paperwork, if push came to shove from the CMHC. However, my gut tells me that the Conservative party would shut down the tar sands before they let the banks take a hit remotely resembling what happened in the USA, Ireland and Spain. Our banks being rock solid, prudent lenders operating in a perfectly regulated market is just too strong of a national narrative to endanger. (I personally think it is a nice fairy tale.) They will let the banks eat some of it, likely the outright fraudulent parts, but the taxpayers will foot the lions share. You can see them already starting this by requiring the CMHC to start paying into a risk fund to the government. If you are paying attention, you probably are asking "Isn't the CMHC already the housing risk fund for the government?" e: I am actually not sure if that announcement only applied to third party insurers. ee: Nope, it was just for the CMHC. ocrumsprug fucked around with this message at 19:19 on Dec 9, 2013 |
# ? Dec 9, 2013 19:12 |
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ocrumsprug posted:However, my gut tells me that the Conservative party would shut down the tar sands before they let the banks take a hit remotely resembling what happened in the USA, Ireland and Spain. Haha what? The banks in all those countries except for Lehman were bailed out by the taxpayers? Ireland's government expanded public debt from 20% of GDP to 120% of GDP specifically so that the banks didn't lose a penny. "let the banks take a hit"
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# ? Dec 9, 2013 19:42 |
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Didn't Iceland actually just let "the market" sort out the banks rather than socialize their losses?
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# ? Dec 9, 2013 19:59 |
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e: Iceland couldn't have socialized the losses even if they wanted to. It was out-right fraud that dwarfed their actual economy.Throatwarbler posted:Haha what? The banks in all those countries except for Lehman were bailed out by the taxpayers? Ireland's government expanded public debt from 20% of GDP to 120% of GDP specifically so that the banks didn't lose a penny. Oh, not every bank in the US got bailed out. There was a pretty hefty round of enforced banking consolidations that occurred post-2008. However, Ireland managed to go the extra mile and also bailed out foreign banks that were heavily invested in their real estate. Full bailout is my expectation for what will happen here too. However, the credit unions being provincially regulated might be left to their own devices. ocrumsprug fucked around with this message at 20:05 on Dec 9, 2013 |
# ? Dec 9, 2013 20:00 |
Also Iceland is now in another major bubble. When I was there in 2012 it was really big news that once again prices were rising to unsustainable levels, and they were actually quite worried about it since they saw what had happened the last time a bubble burst, which had been literally four years earlier
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# ? Dec 9, 2013 21:11 |
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Baronjutter posted:Didn't Iceland actually just let "the market" sort out the banks rather than socialize their losses? Their banks had liabilities exceeding the GDP of the country by some factor of 5-10 or so, and were completely insolvent.
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# ? Dec 9, 2013 21:37 |
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HookShot posted:Also Iceland is now in another major bubble. When I was there in 2012 it was really big news that once again prices were rising to unsustainable levels, and they were actually quite worried about it since they saw what had happened the last time a bubble burst, which had been literally four years earlier I would hazard that, since the people responsible for the previous bubble are neither dead nor in prison and for the most part still in their former jobs, if this is a surprise to anyone they may be too stupid to live.
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# ? Dec 9, 2013 22:26 |
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This is what housing bulls think: http://thethirtiesgrind.com/2013/12/10/my-vancouver-real-estate-story/ quote:
Well melissa carr, I think you and your husband are incapable of assessing financial risk. You've forsaken your financial health for a housegasm. Enjoy living without savings!
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# ? Dec 10, 2013 20:25 |
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In other news, consumer confidence is high! http://www.businessweek.com/news/2013-12-09/canada-consumer-confidence-increases-on-resilient-housing-market
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# ? Dec 10, 2013 20:28 |
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Can someone enlighten me: if a parent dies with $750k outstanding on their $800k mortgage, what happens to the house? Can it be willed to the child, forcing them to take on the mortgage or sell it? Does the bank repossess it and put a lien on the remainder of the estate? I'm interested in what's going to happen to the market when all these over-leveraged boomers start dying off soonish.
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# ? Dec 10, 2013 20:46 |
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Rime posted:Can someone enlighten me: if a parent dies with $750k outstanding on their $800k mortgage, what happens to the house? Can it be willed to the child, forcing them to take on the mortgage or sell it? Does the bank repossess it and put a lien on the remainder of the estate? According to this: http://www.ratesupermarket.ca/blog/what-happens-to-debt-after-death/ A mortgage is a secured loan so the creditor will pursue the estate for the balance. Apparently with credit cards, since they're unsecured loans, the CC company eats the loss.
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# ? Dec 10, 2013 21:00 |
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Cultural Imperial posted:According to this: http://www.ratesupermarket.ca/blog/what-happens-to-debt-after-death/ Surely they'd also pursue the estate for CC bills also? It seems inconceivable they would do otherwise. If not, wouldn't you generally hear about cards being revoked from elderly or infirm holders?
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# ? Dec 10, 2013 21:15 |
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# ? May 11, 2024 13:37 |
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Lexicon posted:Surely they'd also pursue the estate for CC bills also? It seems inconceivable they would do otherwise. I think it is unsecured in that if the debt > assets of the estate CC companies get to eat the loss. Though they will try and make your heirs believe that they owe. The mortgage holder can foreclose the house to recoup their money.
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# ? Dec 10, 2013 21:20 |