1. Welcome! Please take a few seconds to create your free account to post threads, make some friends, remove a few ads while surfing and much more. ClutchFans has been bringing fans together to talk Houston Sports since 1996. Join us!

Kevin Martin defaults on mortgage

Discussion in 'Houston Rockets: Game Action & Roster Moves' started by blunto, Oct 15, 2010.

  1. melvimbe

    melvimbe Member

    Joined:
    Jan 6, 2010
    Messages:
    554
    Likes Received:
    22
    Regarding the tax incentive for taking a low, it can make a big difference if it knocks you to a lower tax bracket....I think the deduction applies to that...not sure.

    And the arguement that loans lessen your ability to handle emergencies doesn't make sense. If you have $500k and purchase a $400k home with cash, you have $100k available for investments and expenses. If you were to get a mortgage for the $400k home, you now have $500k for investments and expenses.
     
  2. ryano2009

    ryano2009 Member

    Joined:
    Feb 19, 2009
    Messages:
    7,627
    Likes Received:
    5,002

    hmmm,,, really ..? :confused:
     
  3. leebigez

    leebigez Contributing Member

    Joined:
    Jun 24, 2001
    Messages:
    15,522
    Likes Received:
    605
    I'm with you on this and i'm pretty sure this should go into d&d. Since we're talking about martin, then i guess its appropiate.

    Before i ever read dave ramsey, my dad has always run our household this way. This is also the way i run my household. If you cant buy it in cash now, then you cant afford it. The money people spend on non neccessity bills greatly reduce their ability to invest. I can take the house thats paid for and instead of paying a mortgage, i can use that money to invest if i so choose. If the house the couple purchased is meant to be the house you raise your family and grow old in, at some point the value is going to go back up and stabilize. Just like my cousin and the lotto, the only thing she has to do is pay taxes on the house. Her great grandkids can have the house in the future or when she gets old and wants to sell, she can do that too.

    JepordE, i really disagree with your take on how rich people and poor people think or act. I know some rich or well off people and they dont have a bill except for the basic bills. They have the life,health,utilities,no car or house payments and invest. When i say rich, they're loaded too. I'm well off, but these people are self made and they talk about having cash on hand at all times.
     
  4. ryano2009

    ryano2009 Member

    Joined:
    Feb 19, 2009
    Messages:
    7,627
    Likes Received:
    5,002
    more like randy moss.
     
  5. leebigez

    leebigez Contributing Member

    Joined:
    Jun 24, 2001
    Messages:
    15,522
    Likes Received:
    605
    If u have 500k, you shouldnt buy a 400k home anyway. If 40% of your net is going out,you're closer to bankruptcy than the golden trails of success. If u have 500k, whats wrong with a 175k house and invest the 325k?
     
  6. DaDakota

    DaDakota If you want to know, just ask!

    Joined:
    Mar 14, 1999
    Messages:
    124,357
    Likes Received:
    33,269
    Leeb, I find it very hard to believe that you are struggling with the concept of using OPM as a source.

    It is what almost everyone that has money does.

    DD
     
  7. JeopardE

    JeopardE Contributing Member

    Joined:
    Jun 29, 2006
    Messages:
    7,418
    Likes Received:
    246
    It's not a black-and-white statement ... perhaps I should have phrased it differently. My implication is not that "to get rich, you have to be able to leverage debt". My point is that there is a difference in mentality between someone who is deep in the hole and trying to balance paying monthly bills and getting back to solvency, and someone like Kevin Martin who is highly liquid and can afford to make such decisions as whether to spend a significant amount of cash buying a mansion outright or try to leverage a mortgage contract into a money-making opportunity.

    The bottom line is that when you're rich, you try to make your money work for you to create more money instead of just blindly allocating expenses. In this case the opportunity cost of money spent paying for the house cash down is the expected investment return on that money, and it would be foolish to ignore it.
     
    2 people like this.
  8. MadMax

    MadMax Contributing Member

    Joined:
    Sep 19, 1999
    Messages:
    73,808
    Likes Received:
    20,383
    very well said.
     
  9. leebigez

    leebigez Contributing Member

    Joined:
    Jun 24, 2001
    Messages:
    15,522
    Likes Received:
    605
    You said it right, almost. I find it easy to use straight cash to do what i need to do because i dont have money going out. The trucks were straight cash and if i buy more, they will be done the same way. With a pile of cash, the bank if i needed would finance me for multiple $120 trucks. I'm good, its just not the way i function. I don't need or want the low interest rate.
     
  10. pippendagimp

    pippendagimp Member

    Joined:
    Sep 1, 2000
    Messages:
    27,074
    Likes Received:
    21,342
  11. TXRoxBBall

    TXRoxBBall Member

    Joined:
    Feb 16, 2008
    Messages:
    1,143
    Likes Received:
    17
    The right thing to do is pay the money if you have it. He has no excuse to not pay this loan off. There is some tax benefits to having the loan, but he should have just paid cash and been done with it. Be the way, most of the banks have paid back the money they got so that they won't have to deal with Obama and group of control freaks.
     
  12. coachbadlee

    coachbadlee Member

    Joined:
    Feb 5, 2010
    Messages:
    28,092
    Likes Received:
    8,590
    How did you guys do that twice? :confused:
     
  13. Aleron

    Aleron Contributing Member

    Joined:
    Jun 24, 2010
    Messages:
    11,685
    Likes Received:
    1,113

    take the loss, buy it back yourself, save $800k
     
  14. Aleron

    Aleron Contributing Member

    Joined:
    Jun 24, 2010
    Messages:
    11,685
    Likes Received:
    1,113
    the moment i saw money owed and value of property so disproportionate, it became obvious what he's doing.

    When you earn $10m a year, the effect on your credit rating is pretty much "lol" since anyone who earns that much will do the same thing and anyone lending to them knows it :p
     
  15. J-Man

    J-Man Member

    Joined:
    May 25, 2010
    Messages:
    577
    Likes Received:
    8
    He makes 11 million dollars so how could he......
     
  16. Deckard

    Deckard Blade Runner
    Supporting Member

    Joined:
    Mar 28, 2002
    Messages:
    56,817
    Likes Received:
    39,132
    I know it's the preseason and some cats are still bored (I'm not!), but how on earth is this worthy of several pages of posts? Heck, in my opinion, it should be moved to Hangout, where folks can discuss mortgages and the price of housing.
     
  17. Aleron

    Aleron Contributing Member

    Joined:
    Jun 24, 2010
    Messages:
    11,685
    Likes Received:
    1,113
    Why? do you think a bank wouldn't default on money owed to you if it could save 800k by doing so?

    Do you enjoy playing games where your opponent gets to play by friendlier rules than you?
     
    1 person likes this.
  18. Pole

    Pole Houston Rockets--Tilman Fertitta's latest mess.

    Joined:
    Feb 15, 1999
    Messages:
    8,506
    Likes Received:
    2,629
    Martin is not "exercising his contractual rights." He's playing chicken with the lender who now has a lien on a piece of collateral that has been devalued to the point to where it no longer covers the outstanding balance on the note. He is very specifically and conscientiously breaking his contractual obligation to pay when he no doubt has the funds to carry out the obligation he originally agreed upon. Legally though, he can do this by threatening to walk away and let them foreclose, so I guess he is exercising his legal right. I’m curious if Martin’s people will be good enough to negotiate the short sale AND protect his credit score; the lender will have to agree not to ding him. My only issue with all of this is how so many people think this is just “good business.” It seems like it was just one generation ago where so many people talked about all the business deals that were agreed upon with nothing more than a handshake. Granted, I’m starting to get a bit long in the tooth myself, but damn………..where has the honor gone? And I'm certainly not sticking up for mortgage lenders, but like my mom used to say: two wrongs don't make a right. Just seems kind of sad.
     
  19. texanskan

    texanskan Contributing Member

    Joined:
    Feb 27, 2006
    Messages:
    4,529
    Likes Received:
    105
    You must spread some Reputation around before giving it to Carl Herrera again.
     
  20. RoxBeliever

    RoxBeliever Member

    Joined:
    Nov 1, 2009
    Messages:
    6,608
    Likes Received:
    134

    I'm assuming the lender is the bank and I'm assuming what Martin wants is that both he as the buyer and the lender (bank) share the cost of devaluation that his property has taken.

    I don't see how that makes Martin a bad guy.
     

Share This Page

  • About ClutchFans

    Since 1996, ClutchFans has been loud and proud covering the Houston Rockets, helping set an industry standard for team fan sites. The forums have been a home for Houston sports fans as well as basketball fanatics around the globe.

  • Support ClutchFans!

    If you find that ClutchFans is a valuable resource for you, please consider becoming a Supporting Member. Supporting Members can upload photos and attachments directly to their posts, customize their user title and more. Gold Supporters see zero ads!


    Upgrade Now