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Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Can someone please explain to me why this comes as some sort of surprise to these finance wizzards.
http://www.ft.com/cms/s/167c0084-f9b7-11db-9b6b-000b5df10621.html
wmbz,
No I do not think anybody can.
I am guessing they are surprised that Senator Chris Dodd backed away from his earlier idea of bailing out the lending industry with taxpayer funds.
Because they couldn’t see past the the fact that they were going to be charging 10%+ interest rates.
Let’s talk about DL.
d.l. has been on the d.l., for less than a week.
I know he already has a job but we should write his resume for him.
DL - just like the monkey effing the skunk - “i’ve enjoyed about enough of this as i can stand”. Perhaps he may be having some concerns about being sued for the b.s. that he has been peddling for so long to baffle any brains that have been left standing…
Let’s talk about how housing inventory is distorted. Let’s talk about how Days on Market is misused to paint a rosier picture of a home which really isn’t in an area where homes are selling. Let’s talk about how easy it is to mis-use median home prices to distort how healthy a market is.
Notice, No comment on the effect the housing market will have on the economy. It’s all good all the time, Phew I was worried for a monent.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=ag3qcA2no9nU
What I see is that the lowest rungs of economy are already affected. They don’t have any reserves, no savings, no valuables just bills. It might look like the hour class effect. -on the top you don’t really notice that the whole thing is sinking untill you are already going down the tube…Truthfully, having a farm with some animals and potatoes growing is beginning to look like a plan.
There was one fairly negative comment by that president of the SF reserve bank saying that she wouldn’t look for housing to come back by the end of the year.
When is this recession going to get here? Gas prices are going up, housing market is in the dumps and there beginning to have major job layoffs. The ever resilent consumer keeps spending, something is gonna have to give here soon. I am amazed it has not happened yet.
I think that depends on the degree to which MEW lead or lags the consumer spending that it supports. Do people borrow against the house and then go out and buy the Escalade, or do they use the money to pay off maxed out credit cards. As MEW dries up, is this future spending that they’ll have to forego, or past spending that they’ll have to pay high rates on? ISTM that the degree of each will affect the timing and degree of the consumer spending slowdown, and the likely recession that it leads to.
Early on, it looks like it’s the big ticket items (cars etc.) that have been affected. It will probably take a while for moderately profligate consumers who are living beyond their means on their credit cards hit their credit limits and can’t use a REFI to roll their debt into their mortgage. How long it takes before they burn through all their available credit depends firstly on their burn rate, and will later be affected IMHO by credit contraction, which we haven’t seen.
ROFL.
Burn rate? As in, IPO Internet stock term for how long they can keep spending money at this pace before they are BK?
A very apt comparison (if it was intended).
And either way, very funny!
The curse of easy money will mean financial cement overshoes for many.
What’s MEW?
In days of old…
Mew! was something you said when you stepped into dogshit accidentally.
Mortgage Equity Witdhrawal, AKA HELOC Hell.
About the same meaning
Didn’t paulson say everything is fine because the stock market is up?
“When is this recession going to get here?”
How can you tell it is not already here, but just unreported?
Exactly.
I work at the ground level of the economy these days, at a nonprofit that assists those with low to moderate incomes. This month alone my clients have included an aerospace engineer, an orthotist, several software engineers, and a hydrologist…not to mention countless realtors, two mortgage loan officers, two furniture sales people–both of whom were earning in excess of $100K before the housing bust–and a new car salesman.
All are either newly unemployed or marginally employed (significantly reduced income due to lack of sales). They all report that they are currently living off of their savings.
I’d say that the recession is here.
At least illegal immigrants should still be doing OK, as the lending kingpins in NYC are working hard to make sure they still qualify for subprime loans to buy houses they cannot afford.
Because they’re used to hiding from DHS and they won’t have any difficulty hiding from their creditors? Seriously, how many of ‘em will give up on El Norte and jinglemail the keys and volunteer to be deported home?
Peggy;…Where are you ??
Vegas
“They all report that they are currently living off of their savings.”
At least your clientele apparently had enough sense to save some money for the lean times. It bodes ill for the rest of the national economy that the national savings rate has recently remained in negative territory for the longest period since the 1930s (Great Depression).
P.S. By all evidence, the War on Savers will eventually culminate in victory, if the Fed stays the course.
———————————————————————-
First Quarter Figures Show Continued Erosion in Americans’ Appetite for Saving Money, ShareBuilder’s Jeff Seely Says
Personal Savings Rate Numbers Cause for Concern, According to ShareBuilder CEO
BELLEVUE, Wash., April 30 /PRNewswire/ — The United States Commerce Department reported today that the first quarter personal savings rate was negative 1 percent. This figure continues an alarming negative trend, says Jeff Seely, chairman and CEO of ShareBuilder Corporation, parent company of one of the nation’s largest online brokerage firms.
“The amount of money Americans save as a percentage of their income has been declining for almost two years, and the March figures clearly demonstrate that we’re not making any headway,” Jeff Seely said. “A recent ShareBuilder survey found that over half of America does not have a financial game plan for their future. In fact, one in four Americans have no savings at all according to the latest retirement confidence survey from EBRI*. Combined with the negative savings rate, this lack of planning for the future could have severe consequences for the average American’s retirement security.”
The Commerce Department releases savings rate data quarterly as a way to measure the difference between total income and total expenses for all Americans. As recently as the 1980s, Americans’ savings rate was stable at around 10 percent. In 2005, it sunk below zero. This marks the eighth consecutive quarter during which the U.S. personal savings rate was negative. The only other time in U.S. history when the savings rate has been this low for such a sustained period of time was during the Great Depression.
http://sev.prnewswire.com/banking-financial-services/20070430/SFM09030042007-1.html
Yes, I too am surprised at the number of people I meet who have saved. It certainly doesn’t jive with what you read in the press. I had to change my mental model after I started this job.
From my new vantage point, the problem isn’t that people haven’t saved…it’s that many have been forced to tap into their savings far earlier and for far longer than they had ever envisioned. And when their savings is gone they’ve still got to live, so there goes the negative savings rate.
I wish I could find some stats on how much of the negative savings went to pay for household expenses versus “toys.” Might be interesting…
The Goldilocks economy defined:
“Growth” is in the Eye of the Beholder
“U.S. economic growth is a fairy tale! When such gains are measured against the gains in the price of just about anything people buy, or in just about any foreign currency, it’s a whole different story. For example; measured in euros, U.S. GDP has declined from 11.5 trillion in January of 2000 to 10 trillion today. From a European perspective, the U.S. economy has been in a seven-year recession, with GDP declining by close to 2% per annum.
Also ignored in the rhapsodizing over U.S. GDP growth is the extent to which consumption has been paid for with borrowed money. Since these debts must be repaid with interest, GDP will likely decline even more significantly in the future. Had we borrowed primarily to finance capital investment this would not be the case, as the loans could have been repaid out of increased income. However, as the vast majority of borrowing is simply used to purchase consumer goods, the income needed to repay the debts will have to come at the expense of reduced future consumption….”
http://tinyurl.com/238bv5
Peter Schiff
Euro Pacific
May 4, 2007
Hoz: The first post today in Bits Buckets is video of Mr. Schiff being seriously desrespected on CNBC. Lots of eye-rolling, etc. What gives?
“What gives?”
Have you read the story of The Three Little Pigs? Mr. Schiff is like the third pig — the one who built his home out of bricks. The other two pigs, who used straw and sticks to build their homes, then fiddled, are like the CNBC disrespectors, just before the big bad wolf came to huff and puff and blow their houses in.
http://www.shol.com/agita/pigs.htm
Is this a new trend? From USA Today:
Once their kids graduate, parents don’t need a big house or good schools; they need money for tuition. So some move to a smaller house in a less fashionable community that has less prestigious schools and less oppressive taxes.
http://www.usatoday.com/news/nation/2007-05-04-parents-homes_N.htm
A trend that I don’t think enough people are looking at.
People (especially in the bubble areas) are all depending on this huge migration of boomers from their McMansions up north to the southern areas. The problem is; who is going to buy the 1M dollar mansions up north? Almost no normal boomers can afford to keep the McMansion and buy a 500K condo in FL; so if their DLs are right, and the boomers do move to all the bubble areas, who is going to buy all the McMansions up north?
Most boomers want to reduce costs in retirement, not increase them. The allure of the 500K downtown condo just was never there for them (IMHO). And the glut of overpriced McMansions (should the migration ever really happen) will saturate and cause massive home price deflation in the areas the boomers are leaving, no?
Those overpriced/unwanted McCrappyshacks end up in the same fate as earlier adapters in Buffalo, Detroit and the like…
I saw 3 $10,000 houses for sale, in Buffalo, a few years back.
However, in this case (and perhaps in that one, I don’t know the situation there) they need to sell those McMansions for a huge gain to afford the move to some warm southern climate. As the price they sell for goes down, the price they can afford to pay for their little “piece of paradise” also goes down.
I don’t think that there is a huge lack of demand for McMansions in some northern markets, however, there is a huge lack of $$ for the younger generation to afford the McMansion and allow the boomer to move to FL with a bucket of cash.
I think that this is going to be a marginal trend, something that is just going to drag on prices slowly over time; but as (if?) more and more people move south, the price of these older homes up north will have to come down. And, as such, the prices of the homes in the “destination” area will have to come down as well.
Of course, all of this is assuming that the NAR is not just full of sh** and that the mass migration of boomers from northern to southern areas is really going to occur. I think that this assumption is very teneous at best, so perhaps it is not even worth considering.
King in the castle, king in the castle…
Here is an analogy to answer your question Michael. In the human body’s cells’ nuclei, how do chromosomes know how to replicate and do it day and day out with such little error? Nature has provided a mechanism for it. Now, think about how we function as a thinking species. Many things are taken for granite. Many people just assume they will get a top of market price for their homes. The disconnect is there needs to be income to support the community/upkeep/tax coiffures, etc, etc. etc. So, to answer your question, we have no legitimate mechansim to co-ordinate everyone to get what they want. There will be those who will get a “gentic error” when they go to sell their homes and find the market has hiccuped.
Many yuppies are crazy where their kids are concerned. The people described in the article lived in an expensive big house in a place with huge taxes so their precious darling Andrew could attend a prestigious high school. Then they send him to a public university all the way across the country: UC San Diego, while moving to a smaller house in a low-tax town. UC San Diego will charge them 40 grand a year, not including airfare/moving expenses across the country. And it’s impossible to graduate in four years from a UC school without taking summer classes (extra out-of-state tuition) because of budget/class cuts. California residents pay $7500 per year tuition at UC schools, and can choose a campus close to home to save money on room and board. If they told precious Andrew to go to Rutgers they’d save a fortune.
Right on. My father paid for all three of his kids to go to college (tuition, room, and board - we paid for books, spending $$, etc.). His only stipulation was that we attend state schools. If we wanted to go elsewhere, he’d help with tuition, room, board but we’d also have to get student loans.
My brother and I chose Penn State. My sister went to Indiana University of Pennsylvania. My dad paid for all three degrees.
Same here - I was responsible for housing after my freshman year. I’m more well off than my dad was, so I told my kids I’d pay in-state tuition, books, room and board for four years. College has been very affordable for us, and my older kid is graduating on-time this spring. He’s very grateful, because most of his friends had to take out high-interest school loans. Now he has to start working for a living!
If they told precious Andrew to go to Rutgers they’d save a fortune. ??
Yeah but, if I was a 18 year old kid getting ready to launch for the first time, one walk on the beach in San Diego would determine where I would be going to college :)…
You’re right scdave - La Jolla is beautiful. But what kind of a kid lets his parents go broke so he can enjoy the sunshine? On the other hand, they raised him to be that way.
But what kind of a kid lets his parents go broke so he can enjoy the sunshine?
Kids think we have money trees in the backyard remember…..
Try $18,000 for in-state UC tuition .
You sound resentful that someone cared enough about their kid to make that sacrifice for them.
Not true ahansen: University of California in-state tuition and fees are only $7500 this year. I know, because I have two kids there currently. Even grad students only pay about $9000. Out of state tuition is $26,000, and the San Diego dorm costs $12,000 (required for freshmen). I’m not resentful of them, I was merely pointing out that they are paying a boatload of money for a public school. They will pay as much for one year as I will for four, for the same school. And from what the article said, they are having trouble affording it. This is exactly the kind of stuff that this blog rails against. If they’re bound and determined to send their kid to school there, they should sell the big house and rent for the next four years; maybe then they can achieve some financial security.
It might have been. But we’ve been reading all these stories about how people want to move to urban condos, but can’t sell their suburban homes.
The way to break the logjam? Cut the cost of the urban condos to a price that the suburban homeowners can afford given what the people they are selling to can afford. But it could take years for everyone to accept the new realities.
spillovers
weird examples would be interesting
Will the social effect lead to more foreclosures?
We know people aren’t reading the newspaper, let alone the blogs. But when someone they know gives up and walks away from a “no money down” mortgage, those under the gun could decide to do the same — just as tales of friends and relatives getting rich in real estate stoked the frenzy. If the intial defaulters get off relatively easy — no 1099, no deficiency judgement, etc — it could really snowball.
I agree there will likely be demographic, economic and cultural perturbations to the system. Since the system is nonlinear, the effects are unclear (to me anyway). That’s why I suggest waiting to see how these actions play out over the next few years.
ImM interested in hearing anecdotes from observation “on the street” of how consumer spending is doing.
Maybe we are already in a Recession but the “stats” don’t show it yet?
My little snippet, albeit possibly OT. We went to Barbados last June and this March on vacation (love the place). Dead, dead, dead. All the people renting condos etc. complained that there was just not that many tourists around. Even the Cricket World Cup did not do the trick. All sorts of reasons put forth, but maybe it’s just the leading edge of people pulling in their horns?
I’ve spent more than a few days lazilly watching cricket matches I thought would never end…
How about what telecommuting trends might do to housing prices. With gas going up, will telecommuting become more viable, and then how will that distribute the fall? I would like to see others opinions about the recent freeway debacle in Oakland CA where the freeway was melted might further lead to more telecommuting, and thus theoretically reducing need to go to an office, and lead more people to leave the high price areas and go to a lower cost area? Thoughts?
One of the issues voiced by the telecommuter groups is that business/management see telecommuting as professional suicide and that gov and the MSM only trot it out as an emergency measure in cases like the Oakland overpass collapse.
Should telecommuting be accepted I would think that would help sustain the the migration to distant communities like we see here in SoCal where people who work in OC chose to live in Riverside county because prices were more affordable. It also may create migrations away from the coasts and the high prices there to fly over country where property cost is much lower.
Telecommuting was big during the tech bubble because startups were making concessions to scarce, overly-demanding gen-X employees. There was low unemployment then, not the pseudo-low unemployment claimed today. Employers don’t give a damn if their workers have to drive and pay through the nose for gas. Telecommuting makes sense and is employee-friendly, but I don’t see it happening unless business can benefit from it.
You are right. Business needs to see a tangible benefit before telecommuting will be more widely accepted. But it looks like the numbers are improving in this regard over time. This article has a decent discussion of this plus links for both sides of the debate.
http://www.eweek.com/article2/0,1895,2124237,00.asp
Its a trade off for businesses. By having employees work at home employers can reduce cubicle farm costs. The flip side of the coin is the fear that telecommuters will goof off if they work at home.
What I don’t like about telecommuting is that you are in effect always on the job. Whats to stop your boss and coworkers from calling you at anytime of the day, any day, with a work related issue. I worked at a place like that once. My boss would call me Sundays with an issue, and he did not want to hear me say “I’ll look into it first thing Monday morning”. He wanted me to deal with it right now. My brother was once on vacation (but at home). His boss called him and ordered him to come into a meeting that day (he now knows better and always says he will be out of town).
House committee wants to make more home loans available:
http://www.marketwatch.com/news/story/house-committee-votes-make-more/story.aspx?guid=%7BE342BD17%2D495E%2D47C7%2D8C00%2D98D55C9CE7AA%7D
I’d keep an eye on this one.
Sounds like the Republican house members are learning something from this bubble, and the Democrats aren’t paying attention. I wonder if Bush would sign it - he encouraged the lending shenanigans over the past 6 years. Probably not. It seems to me that FHA loans just don’t make sense at all until prices come down a lot more.
I encourage R-candidates to seize the upper hand on the lending debacle, and come out against D-(= dolt) proposals to get more subprime loans into the hands of people who cannot otherwise afford to buy luxury homes.
“The bill, co-sponsored by Reps. Barney Frank, D-Mass., and Maxine Waters, D-Calif., also directs the Federal Housing Administration to extend credit to borrowers with higher credit risk than the government currently serves.”
D = dolt? Haven’t these idiots already heard that there are 2m vacant homes currently on the U.S. market? And that lots of po’ folks are already getting foreclosed because they bought houses they cannot afford with the aid of subprime? What is it that they don’t get?
The Dems seem to be making it a top priority that working people in this country never be able to afford to buy a home again. Having FHA jump in to support home prices is their worst idea yet.
Love the idea of the American taxpayer becoming the subprime lender of choice too. Especially now that we know beyond a shadow of a doubt how well that’s worked out.
Isnt’ that what got us into this mess to begin with? I don’t see how having the government become an irresponsible subprime lender is going to help anything.
Can printing more money fix the aftermath of a residential construction boom which has already left the U.S. national housing market with over 2 million vacant homes on the market? I am confused about how the helicopter drop plan is supposed to work, especially when lots of the money bundles seem to land as mortgages to help illegal aliens buy houses they cannot afford.
About this “just in time” lifestyle…
Prudent people throughout history have always planned in advance, for the mystery of the future and everything it entailed.
We’ve been on the shortest of leashes for at least a generation or 2, now.
I’d be willing to bet that most of you have a week or 2 worth of food in the cupboard and not much else.
Buck this rotten trend and get ready people…
How does two years worth grab you? Hehehe. I bet even you don’t have that?
(of course after several months of rice with peanut butter, starvation might be a better option)
I just finished the rest of last years smoked bass - I love fish, but a single diet of anything is unappetizing.
Can we talk about how to mass educate the young into not subsidizing the elderlies’ retirement by overspending on their overbuilt homes when downsizing time arrives?
I know we are graduating Harvard MBAs every day and they should figure it out by themselves but what can we do to push the idea along?
I think a lot of readers (like myself) are young-ish, have never bought a home before, and feel blessed to have found this blog. I currently live in the heart of NoVA but (thanks to teleworking) will eventually buy a house 100 miles out.
But I’m young, financially inexperienced, and wondering what I’m supposed to be doing to best save for a down payment. Even if the weekend topic is just a list of resources, showing me the wheat amongst the chaff would be a help. Is Money magazine worth the time? Should I be subscribing to the WSJ? Was it smart to contribute to a Roth-IRA while planning to pull it out for a down payment on a house?
In short - help the younger, hopeful-future-first-time-buyers who read this blog to be smart about saving and playing the waiting game.
Don’t buy much stuff. Get familiar with your local public library. Only buy clothes that last for a long time in non-trendy cuts and not very many of them. Realize that you can go to a movie or a concert or a play without eating a meal at a restaurant. Don’t take up expensive hobbies (this may include pets). And, if you can find a job that pays really well and builds your skills, go ahead and do it for a few years even though it doesn’t make you feel “fulfilled” every day - pay off any remaining student loans and save for downpayment during this time.
It ain’t tons of fun, but it works.
“It ain’t tons of fun, but it works.”
The only piece of advice I would add is to find a diversification strategy to help you survive the War on Savers.
Good topic Yuppie,
Here is my top 10 for you young’ins:
1. Save at least 10% of your gross salary. If you work somewhere that offers the 401k with a matching percentage by all means take advantage of that as it is free money. Do not touch what you put away ever.
2. Save up at least 6 months net pay in a high return savings account. EmmigrantDirect is one, there are others paying around 5% today. These are not CD’s.
3. Once you have numbers 1 and 2 in place, then look at your budget and see where you can simplify and contain costs to eek more money to sock into savings for your downpayment. You can put that into the high interest savings account mentioned in item 2.
4. Buy depreciating assets, like cars, used and then pay them off and d\use them until they fail and must be replaced. As a backup consider having an older “collectible” vehicle like a classic sports car or motorcycle that can be insured and registered for less than $200 a year if the annual mileage is
Wow that came out nowhere near what I submitted … I’ll review and repost in a short bit.
Ok, it was just clipped, here is the rest …
5. Buy and eat fresh foods and wean yourself from packaged, processed foods. It will save you lots of
money and is better for you. You can often avoid shopping at the big chain stores and get the best
foods and prices at local farmer’s outlets and markets.
6. Turn off the TV or use Tivo to be selective about what comes into your home and when you watch it.
Remember that most forms of entertainment may really be a vehicle to sell you something you may not need.
7. Watch your budget and savings like a hawk. If you feel something is not right, it probably is not.
Each external entity that you have financial dealing with has an agenda. Make sure you are comfortable
with how those dealings are going and that you are not being taken advantage of. This goes for your
friends and family as well. It is unfortunate, but even those we trust the most may take advantage
of us financially. As long as you know where you stand and what you expect you can set and maintain
firm boundaries.
8. Learn from others. Finding this blog and asking the question you did is proof that you are open to
this. There are some very bright and experienced folks here. Watch and learn, Ask when you do not
understand and then test yourself in safe ways.
9. Remember that you are the final judge of your actions and decisions (ok, for me there is one
other, but that is way off topic so I won’t go there). Trust yourself to know what is right for
you and trust your intuitions as they are usually on target.
“… d\use them until they fail and must be replaced.”
Better yet, use them until the point when the average monthly maintenance costs exceed the cost of maintaining a newer used car + (lower) monthly payment costs on whatever finance charges are incurred (a lesson lost on my dad, as he always drove his clunkers until the point when they had cost him a bundle in maintenance).
It also pays handsomely to purchase cars whose values depreciate less rapidly (think Japanese).
it also helps to pay cash for cars, the financing (unless 0 percent) is for suckers.
You should consider the opportunity cost of funds. If you expect inflation to go up over the time horizon of the ownership period, and conundrumishly low returns are available on all asset classes except for high-risk, then using cash makes good sense.
Yuppie: all of the advice is good. I think that if you can continue to build your Roth IRA it will pay off bigtime in the future. The Roth didn’t exist when we started saving for retirement, and the income limit of $150000 for a couple means that you can’t contribute to it when your income rises to that level. So keep maxing out your Roth while you can, and enjoy the tax-free proceeds later!
I am still seriously vexed by a WSJ article I read yesterday about how big banks are working hard to make more mortgage loans to illegal immigrants. This sounds like a great recipe for screwing American workers, by giving an unfair advantage in the home purchase market to illegal aliens (who presumably do not pay U.S. federal taxes), and also sticking a future bailout tab on U.S. taxpayers, as these people will just migrate back home when they figure out they cannot keep their homes, and will add to the 2 million + vacant homes already in the U.S. for-sale inventory.
Correct me if I am wrong, but isn’t it illegal to hire an illegal immigrant? And if so, why is it legal to loan them money to buy a house they cannot afford, especially with no income or assets (NINJA loans)? Has our legal system gone completely berserk?
———————————————————————————
Big Banks’ Loan Push: Illegal Immigrants
By Robin Sidel
Word Count: 743 | Companies Featured in This Article: J.P. Morgan Chase, Citigroup, Wells Fargo, Fifth Third Bancorp, Genworth Financial, Deutsche Bank
The nation’s big banks, scrambling for customers, are pitching mortgages to illegal immigrants.
Two years ago, making home loans to people who are in the U.S. illegally was largely limited to community banks that wanted to revitalize neighborhoods by offering low-cost mortgages to local workers. There are signs that these loans, which comply with regulatory requirements and which represent a sliver of the nation’s $10 trillion mortgage market, are starting to take off in the broader banking industry.
J.P. Morgan Chase & Co. is developing a pilot program to pitch mortgages to illegal immigrants in Maricopa County, Ariz. If the bank proceeds, the plan could launch as soon as this summer. The New York bank joins Citigroup Inc., Wells Fargo & Co. and Fifth Third Bancorp, which are also experimenting with the loans.
http://online.wsj.com/article/SB117815439999290317.html?mod=home_whats_news_us
P.S. I should have said, “no legal income or assets” (NLINJA loans). But NLINJA is much harder to pronounce than NINJA.
NLINJA = “no legal income, jobs or assets” (UGH!)
Ben,
Here’s the links…that are still calling out for people who “own” home loans. When these are replaced with links to: “Mom’s homemade applesauce” you will no longer be posting about toxic loans or FB’s
And so it goes…
Mortgage Rates Fall Again
$430,000 Loan $1299/mo. Think you pay too much? Calculate new payment.
http://www.LowerMyselfishBills.com
Refinance and Save $1,000S
$150,000 Mortgage for $483/month. Compare up to 4 free quotes.
http://www.pickmynosemortgage.com
I’m interested in a topic reviewing the $40mil of hard earned member money the NAR burnt on its public relations campaign. Did it work somewhat- in other words, would things be worse for the RE Industry than they are now? Or was it a colossal boondoggle promulgated by NAR ‘economists,’ and hence leading to recent insider shake-ups?
If there are a million members and NAR gets $64 from each member, sounds like they spent a big chunk on the campaign. Of course, since the bubble produced an excessive number of dues-paying realtors, the NAR, like most organizations, is interested in continuing to inflate it. But now that the bubble has ended, any money they spend on promotion is wasted.
Red alert! Demo-ratic Congress-supported stealth subprime bailout underway!!!
———————————————————————————-
House Financial Services Committee Passes Comprehensive FHA Reform
Washington, DC - The House Financial Services Committee today passed H.R. 1852, the “Expanding American Homeownership Act of 2007” introduced by Representative Maxine Waters, Chairwoman of the Subcommittee on Housing and Community Opportunity, and Barney Frank, Chairman of the Financial Services Committee. The bill would revitalize the Federal Housing Administration (FHA) to restore its historical role in ensuring critically needed mortgage loans for low and middle income families by authorizing zero down payment loans, directing the Department of Housing and Urban Development (HUD) to serve higher risk borrowers who would otherwise turn to predatory and high priced mortgage loan alternatives, and by raising loan limits so that FHA can serve high cost housing markets. The bill now awaits a vote by the full House of Representatives.
http://www.house.gov/apps/list/press/financialsvcs_dem/press050307.shtml
Give the bill’s sponsors some feedback on what you think of their proposal to use your tax dollars to turn the FHA into a govt sponsored subprime lender.
http://www.house.gov/waters/
http://www.house.gov/frank/
This is the worst bill yet in the political arsenal to protect high home prices. It is mindboggling that, after the carnage we’ve been seeing in subprime, the government would ask taxpayers to step in and take over now that the private lenders have bankrupted themselves with the same non-standards.
I suggest that, this weekend, the email contacts that GS provided be put front center on the “weekend topic thread” and that everyone who visits the blog contact their representative.
The banks making a push to lend to illegals is bizarre too. There’s a female rep. (from some Southern state?) who was working on the banks extending credit to illegals a couple months back. Does anyone know who she is? We could probably all send her some words of encouragement to include home loans in on her project.
I guess that’s my weekend topic of choice: Find out who’s “for” this nonsense and contact them letting them know we’re aginst it.
And find out who’s “anti” and contact them with support and encouragement and thanks.
Americans have spoken out pretty well in their aversion to government sponsored bailouts, etc. But each time the pols give up on one plan, they seem to come up with yet another. So it looks like , for the time being, we’ve got to keep it up. Til they’ve run out new plans.
“Americans have spoken out pretty well in their aversion to government sponsored bailouts, etc.”
That pretty much explains why this FHA bailout proposal is on the brink of passing with no media fanfare whatever, doesn’t it?
If the Repubs can field a candidate for the White House who comes out against these D-crat bailout proposals, I am voting for him.
Come on GS, you would vote Republican either way.
The proper question to GS would be how he would vote if a homeownership-drunken republican meets a democrat who proposes measures that would end the war on savers and renters.
“…if a homeownership-drunken republican meets a democrat who proposes measures…”
I would guess they would end up in bed together.
LOL! All arranged by the Washington madame.
Turns out the Washington Madam owns a condo right here in Orlando. She has a pretty old Lexus in the garage. From the news clip, she doesn’t sound like someone who lives extravagantly Was hoping that someone from Congress or otherwise very, very high up would be on the phone lists, a la 20/20 tonight, but either they aren’t, or they were smart enough never to use a phone number that could lead to them (likely, IMO). Tin-foil version: they pulled a movie-quality Hookergate and “fixed” the phone bills.
The proper question to GS is how he would vote if a homeownership-drunken republican meets a democrat in the election who proposes measures that would end the war on savers and renters.
I didn’t the last two elections.
Just when private subprime lenders cut back due to losses they incur, congress seems to think that government can price risk better and should guarantee 100% loans. And if government can’t price risk better, which is likely, today’s congress doesn’t have to deal with the losses, but tomorrow’s congress has to deal with a larger deficit, increased by today’s stupid guarantees.
Harry Bliss (New Yorker cartoonist) has a fantastic cartoon in today’s SD Union Tribune comic strip page which fits in quite well with the FHA bailout proposal, but unfortunately I cannot find an online link.
It shows a bum with 3-day beard growth holding a cup in one hand and a large sign in the other which says “HOMEOWNER — PLEASE HELP.”
If anyone has an electronic link, please post!
has anyone figured out the burn rate for the homebuilders? a lot of them are starting to lose money during the quarter and didn’t have a lot of cash to begin with. they also used cash to buy stock and even issued debt to buy stock. how long until a homebuilder goes under?
when you say “burn rate,” are you referring to how many FBs torch their houses??? Now THAT might be an interesting statistic 2 years from now.
Google the search terms “arson homeowner” and click on the News button to get treated to a rich selection of homeowner arson stories from across the land. Here is an example:
“House explosion
SLC homeowner charged with arson
He is also charged with causing a catastrophe, a second-degree felony
By Nate Carlisle
The Salt Lake Tribune
Article Last Updated: 04/26/2007 01:03:47 AM MDT
A man accused in the Monday explosion of a Salt Lake City home was charged Wednesday with arson and causing a catastrophe.
Investigators say Bruce M. Gann used gasoline to explode and burn down his house at 653 E. Wilmington Ave. Prosecutors charged Gann with aggravated arson, a first-degree felony carrying a possible life sentence.
He also was charged with causing a catastrophe, a second-degree felony carrying up to 15 years in prison.
An affidavit filed by an investigator says Gann, 33, admitted pouring and igniting gasoline in his home. The affidavit does not say what motivated Gann.”
Got debt?
http://www.sltrib.com/news/ci_5753386
Here’s a topic: How long has the government been involved in the home buying business?
What’s the history of it? And are there any organizations out there that are actually anti- government involvement?
There are so many that are pro- involvement and , lately anyway, more seem to be popping up on a weekly basis. Is there even one single organization that is actively against this concept and, if so, who are they?
I think we should discuss whether there will be a de-coupling. By that I mean………..will the rest of the world follow the US this time. Maybe you guys will have a recession, and just maybe it will be yours alone. If your Fed keep the money supply expanding at the current rate who knows. Maybe it will be different this time.