A Debacle That Has To Be Cleared Out Of The System
The Modesto Bee reports from California. “The housing market news just keeps getting worse for the Northern San Joaquin Valley. Stanislaus, San Joaquin and Merced counties had the highest foreclosure rates in the country during August. And home values have plunged. August statistics show home prices fell about 15 percent in Stanislaus and San Joaquin counties and nearly 20 percent in Merced County compared with a year ago, according to DataQuick.”
“Only 450 homes sold in Stanislaus County during August. That’s a 43 percent drop compared with last year. Lenders, meanwhile, foreclosed at record rates last month.”
“‘What we’re hearing from a lot of investors is that there’s just not a lot of equity in these properties,’ said Daren Blomquist, a spokesman for RealtyTrac.”
“In cities such as Patterson, where median home sales prices have plunged nearly 33 percent during the past year, according to DataQuick records. Waterford and Atwater prices dropped 24 percent, Lathrop fell 23 percent and Newman declined 22 percent.”
“Prices in central, western and southern Modesto decreased more than 20 percent.”
The Santa Cruz Sentinel. “Maybe Watsonville private investigator Emilio Martinez has a crystal ball. Seven months ago, he predicted a foreclosure epidemic would sweep Santa Cruz County.”
“Since then, foreclosure sales in the tri-county area — Santa Cruz, Monterey and San Benito counties — have spiked to 786, a tenfold increase compared to a year ago. According to the Santa Cruz Record, the tally in Santa Cruz County is 147. In Monterey, it’s 514. San Benito, 125.”
“Martinez said a steady stream of people have come to his spartan office in a shopping center on East Lake Avenue unable to make their mortgage payments and asking, in Spanish, for his help. ‘Few want to talk about it for one simple reason; it is Latinos taking advantage of Latinos,’ he said.”
“Soquel attorney William Purdy concurred. ‘Hispanics in particular, but by no means exclusively, are having their life dreams stolen from them at an appalling rate,’ he said. ‘It is being done primarily in my experience by other Hispanics.’”
“The story is often the same: The borrower is a landscaper and his household income is about $40,000 a year, but on the loan documents, he is listed as the owner of a landscaping firm making more than $100,000 a year. Now the borrower and his family are in danger of losing a $700,000 home they can’t afford.”
“‘I have never seen as much wire and mail fraud as I’ve seen in the last two years. These are major felonies,’ said Purdy.”
“Martinez added, ‘I have a client in Salinas, a broker lent him $40,000 to make payments and now he wants the $40,000 back. Creative financing is not a mortgage broker lending someone money to make payments.’”
“He finds it incredible that Alan Greenspan, who chaired the Federal Reserve for 18 years until his retirement in January 2006, did not realize what might happen.”
The Press Enterprise. “Foreclosures continued to mushroom in Inland Southern California in August, as the two-county area was reported to have one of the highest rates in the country of households in danger of losing their homes.”
“San Bernardino and Riverside counties had the sixth-highest foreclosure rate in the country in August, according to RealtyTrac. Six of the country’s 10 highest foreclosure rates were in California metropolitan areas.”
“According to RealtyTrac, there were 56,935 Inland properties were in some sort of foreclosure proceeding last month, 32,541 in Riverside County and 24,394 in San Bernardino County.”
From Bloomberg. “Securities backed by prime U.S. jumbo mortgages may be riskier than investors think because almost half of the underlying loans are from California, where home prices may again collapse, according to Barclays PLC.”
“California accounts for 45 percent of jumbo mortgages in securities sold last year, up from 35 percent in 1989, Barclays mortgage-bond analysts wrote in a report yesterday.”
“Following a housing boom, home prices in California declined by 12.5 percent between 1991 and 1995. Losses after foreclosures on jumbo loans securitized in 1989 rose to 3 percent, which would be enough to cause many current investment-grade bonds to default.”
“‘The current housing environment in California appears similar to the 1990s,’ wrote the analysts led by Ajay Rajadhyaksha. ‘Many investors believe that jumbo credit is sound. We think that this sense of security is misplaced.’”
“The housing recession in the early 1990s in California was driven by over-appreciation in the preceding years and job losses in the defense industry, the Barclays analysts wrote. Today, a rapid rise in prices may combine with tightening lending terms to cause another crash.”
“The effects of a California slump on jumbo securities will be worsened by the loans also having ‘become riskier,’ the Barclays analysts wrote. More than half of fixed-rate California jumbo mortgages packaged into bonds in 2005 and 2006 didn’t require borrowers to fully document their incomes or assets, compared with 19 percent in 1989, they said.”
“The median resale price of a single-family home in California in July 2007 was $586,030, compared with $221,500 in December 1999, according to the California Association of Realtors.”
The San Francisco Chronicle. “They say the best cure for a hangover is a little hair of the dog that bit you, meaning a nip of whatever you were drinking the night before. But the same treatment is not likely to alleviate the housing market’s pounding headache.”
“The Federal Reserve has been accused of creating or at least abetting a mortgage and housing bubble by keeping interest rates too low for too long. Now it’s the morning after and lenders, borrowers and investors are clamoring for pain relief in the form of an interest rate cut. Today, the Fed is widely expected to slice the federal funds rate.”
“While that might help the housing debacle from spreading, it’s not going to help the people who need it most.”
“People with ARMs tied to the London Interbank Offered Rate might not get any relief from a Fed rate cut. Corporate credit concerns have put upward pressure on Libor and downward pressure on Treasury yields. A Fed rate cut won’t automatically lead to a lower Libor rate.”
“Meanwhile, rates on jumbo loans of more than $417,000 and other nonconforming mortgages have barely fallen at all because investors are shunning mortgages that can’t be sold to Fannie or Freddie.”
“‘With jumbo loans and other nonconforming loans, price is not the biggest issue. The trust relationship between buyers, sellers and holders of this kind of debt has been shattered. Cheaper money doesn’t fix that,’ says Keith Gumbinger, a VP with HSH Associates.”
“Meanwhile, a Fed rate cut will do nothing to help subprime and other borrowers who are facing steep payment increases and have no hope of either refinancing their mortgages or selling their homes to pay off their debt.”
“‘The Fed cutting interest rates is not going to help a homeowner who is three payments behind on their mortgage,’ says Greg Mc Bride, senior financial analyst with Bankrate.com. ‘It’s like erecting a tent in the middle of a thunderstorm. Some people will stay dry but a lot of people will still get soaked.’”
“It’s possible the Fed has already written off part of the market.”
“‘I think the Fed believes a certain portion of the subprime marketplace is going bankrupt,’ says James Paulsen, chief investment strategist for Wells Capital Management. ‘The Fed thinks they can’t do anything about it. Maybe that’s the way it should be. To try to prevent it otherwise is creating a moral hazard.’”
“The Federal Reserve is expected to lower bank borrowing rates today, but buyers will not rush back to the housing market and foreclosures will not stop their upward spiral, economists and mortgage industry officials said.”
“Chapman University economist Esmael Adibi said because the Federal Reserve rate is a benchmark for all short-term interest rates, a change is likely to be reflected in rates charged to holders of credit cards and adjustable-rate mortgages.”
“But any adjustment will have no impact on long-term rates, such as those on 30-year fixed-rate mortgages.”
“‘The Fed’s fear is that inflation is still a problem and if they reignite the housing market, that inflation …will get out of control,’ Adibi said.”
“Brian Weide, owner of a mortgage broker in Ontario, said mortgage rates have been less of a problem for the Inland housing market than a drying up of mortgage money, reflected in a requirement for borrowers to show higher credit scores and to make larger down payments.”
“Economist Chris Thornberg said he doesn’t believe anything the Federal Reserve does will prevent an impending round of foreclosures.”
“‘We have to take our lumps, period,’ he said. ‘We have a housing debacle on our hands that has to be cleared out of the system. It is going to be a painful.’”
“Leslie Appleton-Young, chief economist for the California Association of Realtors, said, ‘It is certainly a step in the right direction and will calm the markets a bit and make credit a little more available. Every little bit helps. Will it stem the tide of the downturn we are in? No.’”
‘Ryland Group Inc.’s chief financial officer said Tuesday that the company has faired better than other competitors during the housing downturn due to its limited exposure to ‘hot markets’ that have dramatically tailed off.’
‘Many homebuilders are being squeezed by significant sales drop-offs in areas including California and Florida. Milne said Ryland has limited exposure to former ‘hot markets’ Phoenix and Fort Myers, Fla., and only 12 percent of its assets in California.’
‘Milne told the Credit Suisse Homebuilder Conference. The company did not put a lot of money in ‘the very hot markets (that) are the coldest now,’ he said.’
Ben Stein swears by Ryland…..Says its a screaming buy…Considers it the most stable and best home builder in the country….
This man can bring us back from the brink of financial ruin!
http://www.ronpaul2008.com
No, I think financial ruin is imminent now. He might be able to rebuild it the right way, though.
He’d just get blamed for it…as much as I’d like to see him win.
What’s this Stuff!!
Lawmakers also passed an amendment to the bill offered by Frank that would raise the agency’s loan limit from its current $417,000 to as much as $729,750.
“Such an increase would ensure that FHA is a viable option for borrowers who have payment option and interest-only adjustable rate mortgages (ARMs), which will be resetting in the next few years,” said Stanford Group Company analyst Jaret Seiberg.
However, the Bush administration has registered opposition to that and other key parts of the House bill.
If this is factual, then it’s the first smart thing the Bush admin. has done. What we need is to abolish the Fed and remove all these congressmen.
You don’t want to give the man props for negotiating the methane-reduction treaty?
OK, so the second smart thing GWB has done.
I wouldn’t count on Bush doing one smart thing. Don’t get your hopes up. He has failed at everything he’s touched.
Awww, come on, even a broken clock is right twice a day, so to speak…
tesy
The borrowers with pay-option and interest onlies can’t afford a 30-year fixed amortizing mortgage. Why do you think they got a pay-option ARM? More lip service, it won’t help very many people, which is OK by me.
It isn’t the fed’s job to help individual investors and homedebtors. Its to preserve faith in the system. Which usually entails bailing out the biggest banks. The homedebtors will lose their ass.
I thought FHA was for low income? Now taxpayers will have to subsidize people who live in $729,000 houses. You know this is nothing but a bill to get the toxic loans off the books of the banks and into the laps of taxpayers. They might as well call it RTC II. Both parties are run by criminals. There is no denying that.
But the FHA doesn’t actually give the loans does it? The banks themselves do this I think.
The 3X pay still holds even if the down payment doesn’t. As well as income verification.
Mortgage Insider Blog from the OCR.
Fed rate cut little help to subprime borrowers: experts
The Federal Reserve’s surprise half-point cut today in a key short-term interest rate will provide some relief to subprime borrowers but will not dramatically stem the tide of foreclosures, experts say.
Scott Anderson, a senior economist with Wells Fargo, said the Fed is trying to stop a tidal wave of foreclosures from coming ashore in early 2008. But he said cutting the rate half a point to 4.75 percent isn’t enough.
Anderson said he expects the Fed to keep cutting this year until the federal funds rate drops to 4.25 percent. That will be enough to create a new refinance boom and could help subprime borrowers afford payments that are set to jump higher over the next year, he said.
Still, while today’s Fed cut is not an immediate panacea to the housing market, “I think it will go a long way to restoring confidence in the financial system,” Anderson said.
The Federal Reserve cut was the first in about four years. It previously raised rates 17 times.
Kerry Vandell, a finance professor and director of the Center for Real Estate at UCI, said the cut will help subprime borrowers “on the margin.”
He said it also comes as some investors have started up funds to buy distressed home loans. He said that could reduce some of the “log jams” in credit markets.
“The smart money knows not all subprime pools are the same,” Vandell said.
Analysts say many of the 8.37 million adjustable-rate mortgages made between 2004 and 2006 will reset over the next year. Most of the loans coming due in early 2008 are to subprime folks, experts say.
Nothing against you OCKurt, but it won’t matter much. A household with a 720K mortgage would still pay 2 grand a month, EVEN if the interest rate was 0% for 360 months.
The banksters’ mob just doesn’t get it. They need these overextended debt slobs to buy all this overpriced crap, but they also want the interest rates because it is the only way to sell the debt or even come close to making up for the money from the FED.
However, this game cannot and will not go on forever. Just look at how the rest of the world sees the dollar now.
Got a 77 dollar index (and falling)?
Right, it was only because people making $40k got loans as if they were making $100k that this ponzi scam went on as long as it did. That isn’t coming back.
I regularly have clients who’s house payment is 50-90% of their income. They didn’t read docs, mortgage broker does the reverse calculations “. . .In order to qualify for a $700k loan you need to make. . . let’s see, . . .OK, $7k per month, that’s what we’ll put in as your income.”, and at signing no one is there to explain except the Notary who knows nothing and is late picking up her 2 kids so she is rushing you through the signing. The fraud was soooooooo systemic that it became the normal course of business for these guys. Today alone, I had initial consults with clients giving back 11 homes. Drop the rates to zero, raise the conforming to $700k+. It won’t matter.
BK your right. The problem has been affordability not the interest rate. To many bad loans in the pipeline.
Also, I appreciate your point about the fraud becoming almost institutionalized. A lot of the new crop of Mortgage Brokers have never operated in a normal loan environment. They think no doc, stated income loans, collusion with realtors and appraiser is normal
I have a question for you on BK. In October of 2005 the fed, after much lobbying from the credit card industry and other concerns, restructured the Chap 7 laws for individuals, otherwise known as the Credit Card Protection Act of 2005. I don’t think the general public really realizes how Draconian the new rules are. When I heard about this I had predicted that when the bubble popped and the mass of foreclosures followed, it would also increase individual Chap 7 filings and when a sufficient number of people (read voters) suddenly found out that Chap 7 wasn’t a walk in the park anymore, the law would be changed back or at least changed to make Chap 7 easier.
Are people surprised by the new rules? Do you see it changing?
Anderson said he expects the Fed to keep cutting this year until the federal funds rate drops to 4.25 percent. That will be enough to create a new refinance boom and could help subprime borrowers afford payments that are set to jump higher over the next year, he said.
I just don’t really see this happening as housing prices continue to decline, most ARMs have prepayment penalties, and lenders disappear on a daily basis. Sure, maybe these folks can refi into a fixed loan, but they can’t afford that either.
What about this crap???? Hopefully Bush will VETO!
Lawmakers also passed an amendment to the bill offered by Frank that would raise the agency’s loan limit from its current $417,000 to as much as $729,750.
“Such an increase would ensure that FHA is a viable option for borrowers who have payment option and interest-only adjustable rate mortgages (ARMs), which will be resetting in the next few years,” said Stanford Group Company analyst Jaret Seiberg.
However, the Bush administration has registered opposition to that and other key parts of the House bill.
I think Bush will veto it, as he should.
That doesn’t mean I have to start liking the guy, does it?
No, feel free to give him the joshua tree treatment.
Take a few of the spines off, as thanks for opposing Barney’s abortion of a bill.
How about we give both of them the Joshua treatment? It’s sad that criminals so openly run the country.
We’d have to think of something different for Barney, if we didn’t want him to like it.
You can’t refi an upside-down house, especially in todays tight credit market. Most folks who bought in the last two years, or MEWed their equity away, are unable to refinance, period. Rates could drop to zero and they’d be on the outside looking in.
“Anderson said he expects the Fed to keep cutting this year until the federal funds rate drops to 4.25 percent. That will be enough to create a new refinance boom and could help subprime borrowers afford payments that are set to jump higher over the next year, he said.”
The problem isn’t rates. Never has been. It’s always been price. This guy’s a real dreamer.
“That will be enough to create a new refinance boom and could help subprime borrowers afford payments that are set to jump higher over the next year, he said.”
I am sooooo pissed off today I can hardly see straight. Today’s action by the Fed reminds me of how they danced in Charleston after firing the first shots at Fort Sumter to start the civil war. It’s definitely time to move my money out of bank CD’s into T’s and other currencies. How do these idiots think they will recreate a finance boom when borrowers have no skin in the game, lack the income, and housing pricing is falling. And the CC companies are not about to lower any rates as they will be facing large writeoffs. I’ll definitely start doing my part by curtailing as much spending as possible even though I have the money to spend.
“…the CC companies are not about to lower any rates as they will be facing large writeoffs.”
Good point, why should they? They know the state of the consumer as well as anyone.
“…start doing my part by curtailing as much spending as possible even though I have the money to spend.”
That’s right Ron, don’t buy their garbage - stay liquid, better days will come.
BOY you hit the bulls eye! I could not agree more. Who needs the Fed with idiots like this. Why did I learn economics in college. After this display of application of basic economics , I must have missed something along the way……….
buy gold
Yes… it was raised 17 times from 1.00 - the lowest rate in 50 years.. This annoys me to no end. Get it straight you MSM morons.
And it was raised to 6.50 by the Fed after the market bubble burst and before the 2000 elections. Haven’t seen that rate through Bush’s regime now have we?
Sories like these just warm my heart. For us fellow Klownifornians, it is only a matter of time now.
“The median resale price of a single-family home in California in July 2007 was $586,030, compared with $221,500 in December 1999, according to the California Association of Realtors.”
Like this growth (app. 265% in 8 years) was ever sustainable, let alone continue to grow to the sky!
And here’s the result..
“According to RealtyTrac, there were 56,935 Inland properties were in some sort of foreclosure proceeding last month, 32,541 in Riverside County and 24,394 in San Bernardino County.”
That’s a holy sh%t number if ever there was one.
RE: That’s a holy sh%t number if ever there was one.
Think of numbers on the warning tract or are simply flying under the radar!
Holy double sh%t!
But have no fear Helicopter Ben is here!
HD,
Think we’ll see this on the North Shore anytime soon?
Pen
I just wonder what you and the rest of us here will call it when it starts doubling on a monthly rate next year when all those resets come in? I don’t think there is a large enough adjective for what we are going to see next year.
I don’t think there is a large enough adjective for what we are going to see next year.
Hence, the Joshua tree.
Double holier than thou Sh1t
lso note that 1999 was a GREAT year in California… the dotcom boom in full swing, economy going gangbusters, state coffers full to the brim on taxes from exercised stock options. Those were the “good old days” people still talk about, it’s not like housing prices were depressed because we were mired in a slump.
fwiw 221k to 586k is 165% increase in 8 years.
13% yoy price increase
Wow.
And here comes OC, finally catching up in the race for defaults. From the OC Register blog:
“Foreclosure filings in Orange County more than quadrupled in the past year and jumped 82 percent from July, Irvine-based RealtyTrac reported today.
“RealtyTrac reported that there were 2,834 filings here in August, up from 1,560 in July and 606 in August 2006. That’s a 368 percent year-over-year increase.”
“The county’s filing rate was one out of every 359 households last month, compared to one out of every 1,600 O.C. households a year ago.”
http://tinyurl.com/2n5lte
We’ve still got a ways to go, but the trend is definitely, up, up, and away for foreclosures in OC.
Wow,
82 percent increase in one month. That really shows how fast a market can turn. So anyone smug that their market is immune had better realize that in two quarters it can all fall apart…
OC will be interesting as the mortgage companies ‘let go’ employees.
Now if only the big LA would step into line…
Got popcorn?
Neil
I’ve got time Neil…. I just loaded up on popcorn at Costco. Sorry for spending money but I thought it was for a good cause.
Where is Watt when we need him? Oh, he says that when he said that prices would change 15% per yr, he meant, a la Greenspan, that they would go DOWN.
“Leslie Appleton-Young, chief economist for the California Association of Realtors, said, ‘It is certainly a step in the right direction and will calm the markets a bit and make credit a little more available. Every little bit helps. Will it stem the tide of the downturn we are in? No.’”
Crap. If this is coming from LAY, it must be wrong.
‘It is certainly a step in the right direction and will calm the markets a bit and make credit a little more available. Every little bit helps. Will it stem the tide of the downturn we are in? No.’”
This person is not only a Simpleton, she is stupid/clueless and just told the world. The rate cut will not make credit a little more available! Credit is not the problem, a damn amazing she has the job she does. Sad,sad,sad! I’ll bet she even has a degree of so sort.
I thought the contarian “buy” signal would be when the NAR (or CAR) threw in the towel. But I didn’t expect it to happen so soon.
Sounds like euthanasia - Not sure how to spell that
“Soquel attorney William Purdy concurred. ‘Hispanics in particular, but by no means exclusively, are having their life dreams stolen from them at an appalling rate,’ he said. ‘It is being done primarily in my experience by other Hispanics.’”
“The story is often the same: The borrower is a landscaper and his household income is about $40,000 a year, but on the loan documents, he is listed as the owner of a landscaping firm making more than $100,000 a year. Now the borrower and his family are in danger of losing a $700,000 home they can’t afford.”
The above is so very true. I get calls from processors in CA everyday, most can barely put a sentence together in the King’s English. Anyhoo, the files they ask me to look at believing that they were denied due to ‘technical issues’ are astounding - Hispanic borrower’s with $2000 month salaries, supplemented by another $1000 (sometimes more) from welfare trying to get $50,000 cash-back on a refi on a $400,000 house. Even more incredible is the staggering amount of fees that Hispanic lenders hit Hispanic borrowers with. The greed and corruption in the Hispanic mortgage broker industry must be seen to be believed.
I would post more specific details, but I’m dealing with live loans and data here, the above are generalities - but I see that shite every effin’ day. Even worse are the cash-out refi scams where a Hispanic borrower takes a large amount of so called equity from their homes and disappears back to Durango or Jalisco, never to be heard from again….I see lots of those as well.
“Even worse are the cash-out refi scams where a Hispanic borrower takes a large amount of so called equity from their homes and disappears back to Durango or Jalisco, never to be heard from again….I see lots of those as well.”
Well you tell those fence-hoppers to get back over here and take their bail-outs like men!
LOL! Good one!
darn you, ex-nnvmtgbrkr -
I broke a rib earlier today and it hurts when I laugh. Oh, my.
Sadly, it seems they’re smarter than the average American…
Soon they’ll be richer as the USD continues to plummet
What about this CRAP??? Hopefully Bush will VETO!
Lawmakers also passed an amendment to the bill offered by Frank that would raise the agency’s loan limit from its current $417,000 to as much as $729,750.
“Such an increase would ensure that FHA is a viable option for borrowers who have payment option and interest-only adjustable rate mortgages (ARMs), which will be resetting in the next few years,” said Stanford Group Company analyst Jaret Seiberg.
However, the Bush administration has registered opposition to that and other key parts of the House bill.
Sorry for the double post! My posts weren’t taking for a while and this has me really, really, really PISSED!
Sad, but raising the loan limit from its current $417,000 to as much as $729,750 is just what`s going to happen.
If people can’t afford $417k, what makes anyone think they’ll be able to afford $730k.
The sheeple keep digging and the hole they’re in keeps getting deeper.
I’m beginning to think that we might as well join them, because it doesn’t seem that we borrowers are going to beat them!
It just shows you what Jas Jain and I predicted 2 years ago…
Peak Debt. You see, most people, companies, gov’t have reached a point where the Titanic of Debt cannot ever hoped to be repaid. At this point you have 4 choices:
1. BK 2. Inflate the debt 3. Be a debt slave 4. Print your own money or tax people. Unfortunately No. 4 only applies to gov’t, not people or companies.
Sad to say, but eventually we will reach a point when servicing the debt will require so much money, time, and energy that the house of cards finally falls.
Consider this. We have a 9 Trillion dollar national debt. With a DGP of 13 trillion, it would take 8+ months of everything we have, do, etc. to repay this monster. Um, the thought ofnot having food, clothing, shelter, water, gas, car, etc. for me and my family for 8+ months is not what I call the AmeriKon dream.
It’ll get them the lower rate, that’s why. Jumbo is through the roof right now ’cause no ones buying it. But who gives a crap! Just another so-called solution that will not work. I’ve been saying this for two years now that the only way most have been affording these monstrous loans is through extremely low teaser rates, Option-ARM’s with neg-am option, or, with the house appreciation of yesteryear, they’d pull equity every 6 months to pay for the mortgage. All of the above options are long gone regardless of where the conforming loan limit goes. None of these idiots could have afforded a fixed rate back when it was 5%, let alone the low 6% range we see today. Trust me, opening the door for lower rates on the big deals will help a small fraction, but for the most part it will do nothing to stave off the inevitable.
ex-nnvmtgbrkr -
You wouldn’t know that by the way my phone has been ringing today. You would have thought today was Christmas and Santa was giving away big bags of dough.
The question is, Income, was there anything you could do?
LOL…yea answer the phone and say NO!!
Just think it was the good ol’ days of 1996-97 when jumbo loans were 300K. Ahhhhhh, I look back with such fondness. I can’t under any circumstance, other than having oh, I don’t know, maybe a 100 mil in the bank, think of when I would take a 730K loan. Then again, if I had a 100 mil in the bank, I wouldn’t need the loan.
Again I ask, how do these debtors sleep at night?
On empty bellies or bellies full of top ramen.
I imagine they sleep very well, after all no brains no head aches. When they lose the house and toys they will feel betrayed because “THEY” did this to them. Those They people.
The bill passed 348-72, if the Senate vote is similar then a veto wouldn’t even come close to mattering.
I believe the bill also proposed eliminating the 3% (three measly %!) down payment requirement.
I don’t know whether to laugh or cry…
Cry. Hilbil unveiled her health plan today. It would require, as in mandate, that every american buy health insurance, and then show it for job interviews and the like. And no, I am not making this up. Obama wants an 80billion tax cut, plans to grab the funds from “investors” which probably means anyone who ha 2 nickles in the bank. And no, I am not making this up.
I hate bush/cheney, but really, look at these 2 azzhats. What a country…
damn straight. you must be an Edwards man, like me.
How could anyone on this board support anyone but Ron Paul?
Mozillo is already begging for another 1/2 point cut.
Things must be really bad over at Country Wide.
Yeah, and we now know that he will get whatever he asks for. The coyote really is guarding the chicken coop!
If we see another cut…
Helicopter Ben will have truly earned his nickname.
What the heck would the dollar be worth then? Not much. But oil remains are biggest whole in the deficit. We’re not exactly going to grow enough ethanol in the next few years to become energy independent… sigh…
We are in for a wild ride…
Got popcorn?
Neil
The Santa Cruz Sentinel. “Maybe Watsonville private investigator Emilio Martinez has a crystal ball. Seven months ago, he predicted a foreclosure epidemic would sweep Santa Cruz County.”
Well gee, my balls must be made of crystal too because I’ve been predicting a NATIONWIDE foreclosure epidemic for YEARS now.
A very interesting discussion on Zillow. This was reported yesterday, with someone referencing “Alpine292″’s rant against lowballers. This was his comment a few minutes ago which I thought y’all might find interesting:
“There is going to be a massive bailout and there is nothing you can do to stop it. We are in an election year. And the lobbyists must protect the profits of the ultra powerful NAR and NAHB. ”
I hope a few of you can enlighten our delusional friend who thinks somehow HE will be the recipient of a bailout, and not just the lending institutions. On the other hand, it might not be worth the effort as he is not the brighest bulb in the chandelier. But as comments seem to be about 3 to 1 against him, it’s a fun thread.
http://www.zillow.com/forum/site/ViewThread.htm?tid=6530
Let me get this straight…he’s complaining about buyer’s being greedy after he netted $400k on his Manhattan apartment! Are you kidding me?
So if they bail out the stupid ones, shouldn’t the smart people get something, like maybe 529-like account for down-payments with no limit but only used for purchasing your first home.
Down payments? Ha ha! The Federal Reserve has now officially banned down payments, principal payments and, guess what? Interest payments too. Silly you.
LMAo that was funny know my kids are looking at me funny…if only they knew…
know=now
Anyone got info on Walnut Creek - what’s the market like there? What are your predictions?
I apologize for the neophyte question but it appears that the powers that be seem to expect that mortgage rates will decrease following the fed move. In the past the FFR has semi-paralled the rate on the 10 year treasury which seems to be a benchmark for most mortgage rates. It seems though, in the future (especially with ARMS and all that) that the rate to be really following is the LIBOR. True or not?
Also which LIBOR rate do most ARMS tie themselves to? 1 month, 3, 6 or 1 year?
Well, at least we now know Ben Bernanke’s true colors: he will sacrifice the USD to save FBs and Wall Street. True to form, reward speculators and hurt savers. Funny, I have heard little about the fact in MSM about the USD plunging to new lows, gold reaching 27 year highs, and oil achieving record highs. All I’ve heard is how happy FBs and speculators are about the cut in interest rates. This country is even more irresponsible than I ever imagined.
You also won’t hear much about the national debt, state debt (ask Clownifornia), local gubmint debt, corporate debt, and personal debt in this country.
You see Anthony, it’s all good in the AmeriConomy as long as Dylan Ratigan and is MSNBC ilk get their paycheck. These a$$hats look the other way. Everything is fine as long as they eat filet mignon and lobster every night and Maria Baritomo gets her oil changed. When her hubby gets pounded in the financials then she doesn’t get it and that pisses everyone off because now she is a beyatch to be around, as well as Dylan when he has to eat cold cuts.
But I digress. You want responsibility. I hate to say this, but it starts with each person and family. I have said that I was one of those in college up to my eyes in debt. However, it wasn’t until my parents and stepdad finally told me the ATM was closed, pay your way, that I got it. You see as long as whiners and complainers get their way, theri will be no responsibility in the long term in this country among the sheeple. Which is why we each have to do our own part.
Responsibility. Thank the psychobabblers for that. “It’s not my fault. My parents didn’t buy me that doll when I was 3.”
Top News September 18, 2007,
4:17PM EST
Bernanke’s Bailout
The Federal Reserve chairman sent stocks surging and made many investors happy. But he’s also taking risks with inflation
by Peter Coy
Related Items
* Stocks Surge on Big Fed Rate Cut
* The Fed: ‘Wall Street’s Bitch’
Federal Reserve Chairman Ben Bernanke grabbed the spotlight back from his book-writing predecessor, Alan Greenspan, on Sept. 18. Most experts were betting that the low-key academic would move cautiously and cut the federal funds rate by a minimal quarter percentage point. But Bernanke and his rate-setting colleagues cut the funds rate by a half percentage point, from 5.25% to 4.75%.
http://www.businessweek.com/bwdaily/dnflash/content/sep2007/db20070918_707773.htm?chan=top+news_top+news+index_top+story
OT rant:
The half-point rate cut is appalling… disgusting… bring back Volcker. This constitutes nothing less than a war on savers. Why _anyone_ would hold USD is beyond me… my holding of non-USD denominated assets is a little vote of non-confidence in the current fed. The sad thing is that holding gold or FEX you’re still just “keeping even”, AND taxed on your “gains”… of course subject to a higher rate than US capital gains / dividends. What a racket. The taxation structure is already effectively a type of currency control.
I am sick and tired of hearing about people losing their homes and how various forms of bail-outs are required. Nonsense. As that wonderful SNL skit said, “don’t buy stuff you can’t afford”. Or something to that effect. It is time for some pain, in California, Florida, Seattle, the Northeast, Vegas, … and yes, in my little corner of the world, Austin Tx. This is an economy that has rewarded the reckless and the clueless. Time to shake them out.
In the past when they pocket big money on RE deals they were savvy investors.
Now, when the equity has plunged, the ARM has adjusted up, they can’t make the payment on their $700K house with their 50K income and are in foreclosure they are victims.
The other factors is, they’re also voters.
test
test
Sometimes I think it wouldn’t be so bad if the FBs were forced to remain in their homes and pay 80% of their income towards housing. Raise the conforming loan amount too so that $4K to $5k monthly payments become the norm. Then everybody else not stupid enough to fall for this start shouting from the rooftops that they pay approximately $1k for renting a comparable place. I can’t remember that short hair blonde lady who used to say “stop the insanity!”, but I think this debt crisis mirrors in no small way the obesity epidemic in america…people just don’t know when to stop.
The Friar
Susan Powter. She was from Dallas and she went bankrupt. Another in a long line of Dallas poseurs and deadbeats.
I think we need her back doing infomercials to help get the sheeple on the path to financial health. Bring back that lisping little richard guy too.
Juan de Friar
BW’s Web Picks September 18, 2007,
7:18PM EST
The Fed: ‘Wall Street’s Bitch’
The deeper than anticipated rate cut launched bloggers into feats of rhetorical gymnastics that showcased their wit and wonderment
by Karyn McCormack
Related Items
* Bernanke’s Bailout
* Stocks Surge on Big Fed Rate Cut
“Shock and awe” was the pervasive theme on financial blogs after the Federal Reserve cut interest rates by a hefty half percentage point Sept. 18. Many pros were expecting a more muted 25-basis-point cut.
Barry Ritholtz at The Big Picture said he was one of many surprised by the 50-basis-point cut. Along with the tight credit markets and inflation, he wrote that the Fed now has a third problem: “They have become Wall Street’s bitch.”
http://www.businessweek.com/investor/content/sep2007/pi20070918_630235.htm
You’re on top of *IT*…lawd, I don’t like to curse, but flame those FED’s *&&^^%$$$#. Sigh. (potty mouth)
Greedy Buyers are really making this agent Mad
http://www.zillow.com/forum/site/ViewThread.htm?tid=6530
“Home prices are already affordable and there is not a “long way down.” Buyers just have to realize that they need to lower their expectations when they look at homes their income can buy them. I have gotten 2 offers that werwe well below comps, so YES buyers are looking to steal houses. From what I see, most of these lowall offers are being rejected because the sale price and asking price are still very close to one another in my area. I even found one house that was listed for $699,999 and recently sold for $700,000.”
Good find! This guy is a genius.
so YES buyers are looking to steal houses
so YES sellers are looking to steal money
What a freaking crybaby.
Hey, a thought fragment . . . for the people who thought it was funny in the FLa story about the guy only having $6 in his account the day he filed bankruptcy, if you are filing chapter 7, you want to clean all the money out of your account prior to filing. Otherwise it becomes property of your trustee. You want to show de minimus amounts of money on your schedules.
This must be surely a stupid question from me: What do they mean by the following? Is not the ‘equity’ owned by the current owner, so how would it affect the investor intending to buy?
“‘What we’re hearing from a lot of investors is that there’s just not a lot of equity in these properties,’
The house is close to being upside-down. If one buys the house and pays down the leins against it the remaining equity - as determined by the market value of the house - would be close to zero.
At least that’s my take, but I’m not a RE guy.
Which means they are not investors by rather vampires?
Vampires? More like FBs if the price of the house keeps declining, which it most likely will.
Which sums up the current deflationary scenerio. Few want to buy now if they think they will be able to buy later at a lower price. So that means those who want to sell have to substantially lower their price until a buyer is found.
But this lowered price, once the house is sold, lowers the price of all the comps as well. This confirms the suspicion of potential buyers that prices were meant to fall and will probably fall some more. Thus a death spiral of falling prices is created.
And the vampires get to feed.
Plus …
The newly established lower price of the comps eats into the equity of everybody else’s houses.
Those who had moderate equity before the comps were lowered may discover that they have little or no equity left. Thus they may decide to just walk away from the house, which means the banks will have still another house that they will have to sell.
And the only way they can get someone to buy this house is to furthur lower the price. But furthur lowering the price lowers the price of all the comps.
These lowered comps eats into the equity of everybody else’s houses which causes some of them to become upside down on their loans. So some of them will decide to just walk away, and …
I guess we still need cheap and easy money
You know what they say, “Get em while they’re hot.” Anyways, despite all this financial mess is there a viable investment strategy that involves low risk but good pay outs? I’m currently invest in 6 months CD funds to gain some extra cash for that future house.
Gold
Euro
Canadian $
Exxon-Mobil
http://www.dqnews.com/ZIPLAT.shtm
The numbers are out for socal by zipcode.
Santa Monica had a total of 22 sales close citywide. Looking at these numbers one can clearly see that the median is only held up by the absolute highest end zips.
What a day for posts to go down. My pet zipcode 93552 was down 17.8% YOY.
Interesting story
I have some of my investment money at TDameritrade.
With the recent run on banks in the UK I decided I’d switch my sweep account (The place I store money between trades) into an FDIC insured account as opposed to the moneymarket fund it was in. The guy gave me the hard sell, trying to get me to keep it in their money market account that was not FDIC insured.
I left thinking, what does this guy care where I put my $.
Could their be a silent run on non fdic insured money market funds that we don’t know about??
i’m sure it’s just the FDIC rules that bug him. FDIC mandates and restricts the way insured account money can be used, in return for the added security.
He’ll no longer be able to invest the money in whatever his heart desires, including really risky stuff.
wow! Oil is at all time high, Dollar is tanking. The result of cheap money in the US. You got to wonder why people are suffering today. They spend everything they earn to buy crap.
I talked to a guy the other day and he is a single guy making probably
test1
For Immediate Release:
Contact: Steve Adamske (202) 225-7141
or Heather Wong (202) 226-3314
September 18, 2007
House Passes Comprehensive FHA Reform
Washington, DC – The U.S. House of Representatives today overwhelmingly passed H.R. 1852, the “Expanding American Homeownership Act of 2007,” which will revitalize the Federal Housing Administration (FHA), a federally insured loan program that for over 60 years has been a reliable source of affordable fixed rate mortgage loans, especially for first-time homebuyers. The measure, originally introduced by Representative Maxine Waters, Chairwoman of the Subcommittee on Housing and Community Opportunity, and Barney Frank, Chairman of the Financial Services Committee, will enable FHA to serve more subprime borrowers at affordable rates and terms, recapture borrowers that have turned to predatory loans in recent years, and offer refinancing loan opportunities to borrowers struggling to meet their mortgage payments in the midst of the current turbulent mortgage markets.
“There is an affordable housing crisis in America. In recent months, that crisis has exploded beyond the poorest renters and homeowners, to threaten the domestic economy. H.R. 1852 is a necessary step in walking us back from the brink and in the direction of meeting the housing needs of all Americans,” said Chairwoman Waters.
http://www.house.gov/frank/fhareform091807.html
Almost none of my posts have gone through since the FOMC decision…
Posting problems, FHA “reform”, rate cuts - what a pisser of a day.
Oh, well I’m going to go test out that Pay Pal link - maybe that’ll help salvage an otherwise rotten day. Still, too negative - this thing’s so far from being played out and I should know better.
BW’s Web Picks September 18, 2007, 7:18PM EST text size: TT
The Fed: ‘Wall Street’s Bitch’
The deeper than anticipated rate cut launched bloggers into feats of rhetorical gymnastics that showcased their wit and wonderment
by Karyn McCormack
Related Items
* Bernanke’s Bailout
* Stocks Surge on Big Fed Rate Cut
“Shock and awe” was the pervasive theme on financial blogs after the Federal Reserve cut interest rates by a hefty half percentage point Sept. 18. Many pros were expecting a more muted 25-basis-point cut.
Barry Ritholtz at The Big Picture said he was one of many surprised by the 50-basis-point cut. Along with the tight credit markets and inflation, he wrote that the Fed now has a third problem: “They have become Wall Street’s bitch.”
http://www.businessweek.com/investor/content/sep2007/pi20070918_630235.htm
Prof: You gotta love this line re the Fed: “They have become Wall Street’s b*tch.”
Sorry PB, this post got eaten in the comments server problem we are having tonight:
Professor Bear Date: September 18, 2007
For Immediate Release:
September 18, 2007
House Passes Comprehensive FHA Reform
Washington, DC – The U.S. House of Representatives today overwhelmingly passed H.R. 1852, the “Expanding American Homeownership Act of 2007,” which will revitalize the Federal Housing Administration (FHA), a federally insured loan program that for over 60 years has been a reliable source of affordable fixed rate mortgage loans, especially for first-time homebuyers. The measure, originally introduced by Representative Maxine Waters, Chairwoman of the Subcommittee on Housing and Community Opportunity, and Barney Frank, Chairman of the Financial Services Committee, will enable FHA to serve more subprime borrowers at affordable rates and terms, recapture borrowers that have turned to predatory loans in recent years, and offer refinancing loan opportunities to borrowers struggling to meet their mortgage payments in the midst of the current turbulent mortgage markets.
“There is an affordable housing crisis in America. In recent months, that crisis has exploded beyond the poorest renters and homeowners, to threaten the domestic economy. H.R. 1852 is a necessary step in walking us back from the brink and in the direction of meeting the housing needs of all Americans,” said Chairwoman Waters.
http://www.house.gov/frank/fhareform091807.html
You know…I didn’t think this was going to happen. If it passes all bets are off…
What a foul day…
I had a feeling that they’d raise the loan limits. Sure, they could raise it to 730K or 1.3 million or 25 million, but in the end it won’t matter. Housing’s going to tank big time. I still stand by my belief that housing will sink by 40% - 70% in prime areas like Manhattan and 90%+ in the subprime areas of the USA. The only thing that won’t hyperdeflate rapidly will be precious metals and actual currency (as in physical cash). Precious metals will deflate somewhat and currencies could actually gain strength. Problem is, you’ll have a major employment crisis if we have hyper-deflation. The economic growth in this country is all virtual finance, meaning we pull each other’s fingers to inflate the GDP.
I am beginning to doubt whether home prices, in real terms, will go down much more. The government is very determined to keep housing prices artificially high.
First, they suggest to loan companies that they suspend interest payments for FBs or re-write loan terms. When will this become mandatory rather than voluntary?
Second, adjust conforming loan rates up to $700K. That way, the FBs can have their loans at 2% lower interest rate. Funny, if there is no inflation, as Bernanke seems to suggest with his actions today, why are the limits/costs on everything going up by leaps and bounds (including this conforming limit).
Third, we’ll keep cutting interest rates until there are signs of stability. Who cares about savers? They are such a small minority. Maybe, just maybe, we can reduce rates down to 0%, let FBs live in their houses mortgage free for awhile, lower their interest rates, etc.
The FED in no uncertain terms today said they will defend housing prices to the death. Funny, people talk about affordable housing, so why is it everyone is afraid to let housing prices drop.
This has all gotten me really discouraged.
I am beginning to doubt whether home prices, in real terms, will go down much more. The government is very determined to keep housing prices artificially high.
I see your point. I think there are plenty of people still wanting to make money (envy) like the rest did 18 months ago. That’s the main ingredient to the mess, demand. The demand is for easy money, not for real houses.
Makes you want to say F it, lets go out and get 10 credit cards and max it out on vacations, Escalades and powerboats.
Screw that. I’m half-considering maxing out my credit cards on American Eagles (see my inquiry below) and still see a return on my “investment” greater than my borrowing cost of ~7.5% on the plastic.
Anthony,
All I can tell you is I have seen this stuff go one way and another, but always heading the same direction, ultimately. The real questions; are houses unaffordable? Do wages justify the costs? Economic forces will put prices where they should be.
Amen, brutha!
Economic forces will put prices where they should be.
these same economic forces will also blindly punish superficial, misguided economic policy that further enables reckless borrowing.. with an iron hand.. and without remorse.
I think they’ve made things worse, and property prices will fall further than previously expected… and made for a deeper recession.
Well, if you can’t beat ‘em, join ‘em. I’m hoping for 3% rates for 30 year fixed. Then I can refinance, pay couple of hundred a month. Takes care of inflation for a while. Also covers the $5 (or $10) a gal for gas.
“Sure, they could raise it to 730K or 1.3 million or 25 million, but in the end it won’t matter.”
Now if strawberry pickers earning $20,000/year are foreclosed on their $700,000+ McMansions, I guess the FHA guarantee will kick in to make it all good again for the rich guy who loaned them the money.
Someone tell me it’s not hopeless, that the game isn’t entirely rigged and that being responsible is not a bad thing. It’s just hard to believe that anyone in power is going to do the right thing anymore. Last time I felt this defeated was when Nixon was elected. People I know that were almost on board now are looking at me like I’m a tinfoil, black helicopter crazy.
….
here they are - your reps - dont vote for them ever again - put in zipcode and let em know.
http://www.house.gov/writerep/
Thompson, Mike; California, 1st Herger, Wally; California, 2nd
Lungren, Daniel E.; California, 3rd Doolittle, John T.; California, 4th
Matsui, Doris O.; California, 5th Woolsey, Lynn C.; California, 6th
Miller, George; California, 7th Pelosi, Nancy; California, 8th
Lee, Barbara; California, 9th Tauscher, Ellen O.; California, 10th
McNerney, Jerry; California, 11th Lantos, Tom; California, 12th
Stark, Fortney Pete; California, 13th Eshoo, Anna G.; California, 14th
Honda, Michael M.; California, 15th Lofgren, Zoe; California, 16th
Farr, Sam; California, 17th Cardoza, Dennis A.; California, 18th
Radanovich, George; California, 19th Costa, Jim; California, 20th
Nunes, Devin; California, 21st McCarthy, Kevin; California, 22nd
Capps, Lois; California, 23rd Gallegly, Elton; California, 24th
McKeon, Howard P. “Buck”; California, 25th Dreier, David; California, 26th
Sherman, Brad; California, 27th Berman, Howard L.; California, 28th
Schiff, Adam B.; California, 29th Waxman, Henry A.; California, 30th
Becerra, Xavier; California, 31st Solis, Hilda L.; California, 32nd
Watson, Diane E.; California, 33rd Roybal-Allard, Lucille; California, 34th
Waters, Maxine; California, 35th Harman, Jane; California, 36th
Richardson, Laura; California, 37th Napolitano, Grace F.; California, 38th
Sanchez, Linda T.; California, 39th Royce, Edward R.; California, 40th
Lewis, Jerry; California, 41st Miller, Gary G.; California, 42nd
Baca, Joe; California, 43rd Calvert, Ken; California, 44th
Bono, Mary; California, 45th Rohrabacher, Dana; California, 46th
Sanchez, Loretta; California, 47th Campbell, John; California, 48th
Issa, Darrell E.; California, 49th Bilbray, Brian P.; California, 50th
Filner, Bob; California, 51st Hunter, Duncan; California, 52nd
Davis, Susan A.; California, 53rd
I notice my rep - Duncan Hunter isn’t on here - does that mean he voted against the resolution? Or did you just list all the Democrats?
Hey, anybody have the site that had the Gold Eagles for minimal markup?
testy testy
“testy testy”
Oh, no. He is showing his testy’s on the blog…
,,,
DJIA up 335 points - what ever happened to buy the rumor, sell the fact?
See what it does tomorrow. It seems that there’s often a one-day delay with these things… most likely to allow mutual funds to process buy orders in order to line up sheeple for the slaughter.
and why was RYMBX down??????
i expect they will “sell the fact” tomorrow and do a little profit taking.. if not at the opening then at the close.
Headline: “Fed blows it’s wad for the sake of a one-day rally”
well, if you would have bought before the rumored fed rate cut, you would be sitting pretty right now and you could sell off your 300 point in one day gain. That would be a tidy profit wouldn’t it?
Sigh. Hi all…it’s been a long day.
Free, unsolicited advise (feel free to ingore), the people on this board are honest. Losing our moral compass, will not help/hinder the economy.
The question is, “Am I Sheeple?”
Anthony posed a very good question…why should we bother? (paraphrase). And what about us savers?
That is a darn good point…now what are we going to do? (Up for suggestions…also feeling helpless, but do fire off letters!).
Best,
Leigh
If there is a story it is this blog!
Bloggers are angry…I AM!
Yeah, no good deed goes undone…save and be slaughtered…Jeez.
The Fed just sold us out…and I don’t know why. Is Cramer that influential? (Please say NO).
I’m so depressed right now even aspirin cannot cure. Small comfort being here among other *GMTAs*
Best,
Leigh
this always makes me feel a little better:
http://www.smugmug.com/photos/136440158-O.png
The elves, wanting to get a jump on this year’s workload, are already busy printing millions of pink and blue IOU’s..
Dear Johnny,
This certificate entitles you to a brand new bicycle!!**
Love, Santa
**Redeemable at some yet to be determined time in the future.
http://www.thestreet.com/s/kass-bernanke-cant-bail-us-out/markets/activetraderupdate/10379811.html?puc=_tsctten
S&P trading at huge resistance at 1525 on globex. That satisfies the move off the Aug lows in my mind but they might push us to a double top. I’ve got a nice cache of index puts again. Unreal, like none of the events of July and August ever happened. All that market panic and at the lows, the Dow was still up for the year. What’s going to happen when we’re down 8 or 10%. Is that never going to be allowed to happen again?