by Dr. Jerome, TF Metals Report:
I have a close friend since 1977, rooming with him before married life and keeping in touch over the years as our careers have moved us all over the nation. He was attempting to purchase an older home in Ohio using a realtor and a bank, like we are all supposed to do. But things got screwy. After verbally accepting his offer of 52K for a foreclosed home, the seller (a bank) demanded that he use a particular mortgage broker instead of the bank that had pre-approved him (I smell a kickback). After some discussion, my wife and I offered to help him with our real estate business. We cut out one realtor and limited the power of the bank. He got the home for 20% below an already low asking price, has lowered his housing costs by 35%, and paid for the renovation of the house by just cutting the bank out of 50% of this deal.
Banks cost me a lot of money! I live in a modest little home (too small) by American standards. But last year I paid over 10% of my income to the bank in interest. They also required me to buy private mortgage insurance, and to buy title insurance when I bought the home, piling the costs even higher. We could have sold our stack and bought a cheaper home outright, but my fear of imminent collapse caused me to hold onto my stack.
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