60 Minutes: House of Cards

[TheBreeze]

Pretty decent coverage of the housing collapse from 60 minutes:

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3756665n&channel=/sections/60minutes/videoplayer3415.shtml

Click on “House of Cards”. The clip is 16 minutes long.

One amazing part of the video is when they showed the number of pre-foreclosures graphically in Stockton, CA usimg foreclosureradar.com. The realtor they were interviewing said there was currently 2 years worth of inventory. However, with the number of homes in pre-foreclosure, I don’t see how there won’t be at least 10 years supply in Stockton at some point in the near future. Nasty.

[davelj]

For a mainstream news organization that was a pretty good piece. And it’s nice that they actually bothered to talk to an erudite credit expert – Jim Grant. To me, that was the most interesting part of the story. It said, “We’re actually serious about covering this issue.” Doesn’t happen too often, unfortunately.

[davelj]

For a mainstream news organization that was a pretty good piece. And it’s nice that they actually bothered to talk to an erudite credit expert – Jim Grant. To me, that was the most interesting part of the story. It said, “We’re actually serious about covering this issue.” Doesn’t happen too often, unfortunately.

[davelj]

For a mainstream news organization that was a pretty good piece. And it’s nice that they actually bothered to talk to an erudite credit expert – Jim Grant. To me, that was the most interesting part of the story. It said, “We’re actually serious about covering this issue.” Doesn’t happen too often, unfortunately.

[davelj]

For a mainstream news organization that was a pretty good piece. And it’s nice that they actually bothered to talk to an erudite credit expert – Jim Grant. To me, that was the most interesting part of the story. It said, “We’re actually serious about covering this issue.” Doesn’t happen too often, unfortunately.

[davelj]

For a mainstream news organization that was a pretty good piece. And it’s nice that they actually bothered to talk to an erudite credit expert – Jim Grant. To me, that was the most interesting part of the story. It said, “We’re actually serious about covering this issue.” Doesn’t happen too often, unfortunately.

[bubble_contagion]

My favorite part: “It doesn’t make sense not to foreclose now that the prices are going down.”

[Anonymous]

This video was very informative, and it helped to further put things in perspective for me. It really makes this whole fiasco sound so dirty. I would agree that the house of cards is about to fall. I don’t see how raising the limits for conforming home loans is going to do much of anything.

As I said before, most people are going to do what’s in their own best interests, signed contracts notwithstanding. That would be walking away from a house that they owe more than the value on for the next decade at least.

[Multiplepropertyowner]

If you missed this piece, you have to see it. It is up on the sixty minutes site in its entirety.

[patientlywaiting]

My favorite: “It’s contained, but only on planet Earth.”

[davelj]

Jim Grant is fantastic. He’s one of the very best financial commentators. I rarely plug investment-related publications, but Grant’s Interest Rate Observer is one of a very small number of truly essential financial publications out there. Highly recommended.

[djc]

http://globaleconomicanalysis.blogspot.com/2008/01/60-minutes-legitimizes-walking-away.html

another view

[temeculaguy]

Very well done piece, but then again 60 minutes has been doing fairly in depth pieces for a few decades so it’s not suprising. What scares me the most is that a long time ago we used to joke that the time to buy was when the cover of time magazine read “real estate is dead.” In my view the prices have not returned to fundamentals yet, however the folks at time may have already contemplated the cover art for that issue.

[sdrealtor]

Very sobering for John Q. I thought it was a very good show also. One thing bothered me though. The sense of entitlement by the gal in the 2BR hopuse who said it doesnt make sense to stay and that the lender should just fix her loan. My response is a resonding NO! You screwed up! Walk away if you want but you should be financially screwed for the next 5 to 10 years as punishment for your stupidity.

[Trojan4Life]

That was one of the best broadcast mainstream media newspieces I’ve seen on this subject. Now watch what happens as the rest of the world finds out house truly fragile our housing market has become.

[ltokuda]

Are there any statistics for how many distressed non-recourse loans are out there? It seems like walking away while you’re underwater can be a very logical option. But I wonder how many people really have that option.

[Eugene]

how many distressed non-recourse loans are out there?

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

The remaining buyers (mostly move-up buyers) made some real down-payments. These will start to shake out if their neighborhoods correct by 20-30% or more.

[ltokuda]

esmith, thanks for the info. Those are some alarming numbers.

[GoUSC]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, “Yea but only if the home is going up in value.”

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where’s the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that’s what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we’ve gotten so far is to walk away.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[sdrealtor]

radelow,
that is exactly what I was referring to above. if I was Steve kroft I would have slapped her.

[JWM in SD]

JWM in SD

No, I wasn’t surprised at all. Should it really be that surprising when you consider that they were really speculators to begin with? It’s reprehensible, but perfectly legal. Look, I don’t like FBs as much as anyone else, but, I want them to stick it to the lenders as much as possible.

[CogSciGuy]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

[Raybyrnes]

CogSciGuy

It was a business decision by the bank to make the loan. They profit when things work out and lose money when they don’t. Just a business decision by both parties.

Where is becomes fraudulaent is when people lie or decieve the other party from the borrwer standpoint or when people are encouraged to lie from the broker standpoint.

[CogSciGuy]

Agreed, Raybyrnes. I’d add that the banks are complicit on the liar-loan debacle, though, rather than just victims of fraud by brokers and borrowers. They knew what was going on and continued issuing such loans because of their own blind greed.

[Raybyrnes]

Go one step further Cogsci. You might suggest that it was the rating agencies who were complicit in rating the debt. It then gets distributed to investors. Those buying the debt might be held accountable. So all in all if everyone is trying to make as much money as they can buy buying and selling securities on the backs of the homebuyers and originators then wehn it fails to produce profits in accordance with expectations then let’s jsut call it waht it is . A BAD INVESTMENT.

Over the long haul I think that subprime loans are going to reemerge. Thjey will be written with tighter underwriting standards and theere will be investors will to take riskes to increase there rate of return. And the cycle will start all over.

[Raybyrnes]

Go one step further Cogsci. You might suggest that it was the rating agencies who were complicit in rating the debt. It then gets distributed to investors. Those buying the debt might be held accountable. So all in all if everyone is trying to make as much money as they can buy buying and selling securities on the backs of the homebuyers and originators then wehn it fails to produce profits in accordance with expectations then let’s jsut call it waht it is . A BAD INVESTMENT.

Over the long haul I think that subprime loans are going to reemerge. Thjey will be written with tighter underwriting standards and theere will be investors will to take riskes to increase there rate of return. And the cycle will start all over.

[Raybyrnes]

Go one step further Cogsci. You might suggest that it was the rating agencies who were complicit in rating the debt. It then gets distributed to investors. Those buying the debt might be held accountable. So all in all if everyone is trying to make as much money as they can buy buying and selling securities on the backs of the homebuyers and originators then wehn it fails to produce profits in accordance with expectations then let’s jsut call it waht it is . A BAD INVESTMENT.

Over the long haul I think that subprime loans are going to reemerge. Thjey will be written with tighter underwriting standards and theere will be investors will to take riskes to increase there rate of return. And the cycle will start all over.

[Raybyrnes]

Go one step further Cogsci. You might suggest that it was the rating agencies who were complicit in rating the debt. It then gets distributed to investors. Those buying the debt might be held accountable. So all in all if everyone is trying to make as much money as they can buy buying and selling securities on the backs of the homebuyers and originators then wehn it fails to produce profits in accordance with expectations then let’s jsut call it waht it is . A BAD INVESTMENT.

Over the long haul I think that subprime loans are going to reemerge. Thjey will be written with tighter underwriting standards and theere will be investors will to take riskes to increase there rate of return. And the cycle will start all over.

[Raybyrnes]

Go one step further Cogsci. You might suggest that it was the rating agencies who were complicit in rating the debt. It then gets distributed to investors. Those buying the debt might be held accountable. So all in all if everyone is trying to make as much money as they can buy buying and selling securities on the backs of the homebuyers and originators then wehn it fails to produce profits in accordance with expectations then let’s jsut call it waht it is . A BAD INVESTMENT.

Over the long haul I think that subprime loans are going to reemerge. Thjey will be written with tighter underwriting standards and theere will be investors will to take riskes to increase there rate of return. And the cycle will start all over.

[CogSciGuy]

Agreed, Raybyrnes. I’d add that the banks are complicit on the liar-loan debacle, though, rather than just victims of fraud by brokers and borrowers. They knew what was going on and continued issuing such loans because of their own blind greed.

[CogSciGuy]

Agreed, Raybyrnes. I’d add that the banks are complicit on the liar-loan debacle, though, rather than just victims of fraud by brokers and borrowers. They knew what was going on and continued issuing such loans because of their own blind greed.

[CogSciGuy]

Agreed, Raybyrnes. I’d add that the banks are complicit on the liar-loan debacle, though, rather than just victims of fraud by brokers and borrowers. They knew what was going on and continued issuing such loans because of their own blind greed.

[CogSciGuy]

Agreed, Raybyrnes. I’d add that the banks are complicit on the liar-loan debacle, though, rather than just victims of fraud by brokers and borrowers. They knew what was going on and continued issuing such loans because of their own blind greed.

[Raybyrnes]

CogSciGuy

It was a business decision by the bank to make the loan. They profit when things work out and lose money when they don’t. Just a business decision by both parties.

Where is becomes fraudulaent is when people lie or decieve the other party from the borrwer standpoint or when people are encouraged to lie from the broker standpoint.

[Raybyrnes]

CogSciGuy

It was a business decision by the bank to make the loan. They profit when things work out and lose money when they don’t. Just a business decision by both parties.

Where is becomes fraudulaent is when people lie or decieve the other party from the borrwer standpoint or when people are encouraged to lie from the broker standpoint.

[Raybyrnes]

CogSciGuy

It was a business decision by the bank to make the loan. They profit when things work out and lose money when they don’t. Just a business decision by both parties.

Where is becomes fraudulaent is when people lie or decieve the other party from the borrwer standpoint or when people are encouraged to lie from the broker standpoint.

[Raybyrnes]

CogSciGuy

It was a business decision by the bank to make the loan. They profit when things work out and lose money when they don’t. Just a business decision by both parties.

Where is becomes fraudulaent is when people lie or decieve the other party from the borrwer standpoint or when people are encouraged to lie from the broker standpoint.

[TheBreeze]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

I wouldn’t get worked up if it were just private parties involved. But, in this case, the Federal Reserve loaned money (taxpayer funds) to the banks who in turn gave that money to borrowers through 100% no-doc no-income-needed loans. These loans were then packaged up and sold to government pension funds. Thus, it now looks like we are on the brink of a massive taxpayer-funded bailout.

If this were just some hedge fund giving money to home buyers with no income and the resultant mortgage were securitized and sold to some other hedge fund … well it’s likely no one would care. As it is, people tend to get a little PO’d when they think about their tax dollars going to fund some couple’s speculative home buying.

I’m actually on the fence about this. I know that walking away is the correct business decision for borrowers, but it steams me a bit to think that I will have to pay for it.

[Raybyrnes]

Steams me a bit that I didn’t have the balls to roll the dice back in 2000 ans realize that theere was very little downside risk. Worst case scenario was that I walk away with a blemish ion my credit.

[Raybyrnes]

Steams me a bit that I didn’t have the balls to roll the dice back in 2000 ans realize that theere was very little downside risk. Worst case scenario was that I walk away with a blemish ion my credit.

[Raybyrnes]

Steams me a bit that I didn’t have the balls to roll the dice back in 2000 ans realize that theere was very little downside risk. Worst case scenario was that I walk away with a blemish ion my credit.

[Raybyrnes]

Steams me a bit that I didn’t have the balls to roll the dice back in 2000 ans realize that theere was very little downside risk. Worst case scenario was that I walk away with a blemish ion my credit.

[Raybyrnes]

Steams me a bit that I didn’t have the balls to roll the dice back in 2000 ans realize that theere was very little downside risk. Worst case scenario was that I walk away with a blemish ion my credit.

[TheBreeze]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

I wouldn’t get worked up if it were just private parties involved. But, in this case, the Federal Reserve loaned money (taxpayer funds) to the banks who in turn gave that money to borrowers through 100% no-doc no-income-needed loans. These loans were then packaged up and sold to government pension funds. Thus, it now looks like we are on the brink of a massive taxpayer-funded bailout.

If this were just some hedge fund giving money to home buyers with no income and the resultant mortgage were securitized and sold to some other hedge fund … well it’s likely no one would care. As it is, people tend to get a little PO’d when they think about their tax dollars going to fund some couple’s speculative home buying.

I’m actually on the fence about this. I know that walking away is the correct business decision for borrowers, but it steams me a bit to think that I will have to pay for it.

[TheBreeze]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

I wouldn’t get worked up if it were just private parties involved. But, in this case, the Federal Reserve loaned money (taxpayer funds) to the banks who in turn gave that money to borrowers through 100% no-doc no-income-needed loans. These loans were then packaged up and sold to government pension funds. Thus, it now looks like we are on the brink of a massive taxpayer-funded bailout.

If this were just some hedge fund giving money to home buyers with no income and the resultant mortgage were securitized and sold to some other hedge fund … well it’s likely no one would care. As it is, people tend to get a little PO’d when they think about their tax dollars going to fund some couple’s speculative home buying.

I’m actually on the fence about this. I know that walking away is the correct business decision for borrowers, but it steams me a bit to think that I will have to pay for it.

[TheBreeze]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

I wouldn’t get worked up if it were just private parties involved. But, in this case, the Federal Reserve loaned money (taxpayer funds) to the banks who in turn gave that money to borrowers through 100% no-doc no-income-needed loans. These loans were then packaged up and sold to government pension funds. Thus, it now looks like we are on the brink of a massive taxpayer-funded bailout.

If this were just some hedge fund giving money to home buyers with no income and the resultant mortgage were securitized and sold to some other hedge fund … well it’s likely no one would care. As it is, people tend to get a little PO’d when they think about their tax dollars going to fund some couple’s speculative home buying.

I’m actually on the fence about this. I know that walking away is the correct business decision for borrowers, but it steams me a bit to think that I will have to pay for it.

[TheBreeze]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

I wouldn’t get worked up if it were just private parties involved. But, in this case, the Federal Reserve loaned money (taxpayer funds) to the banks who in turn gave that money to borrowers through 100% no-doc no-income-needed loans. These loans were then packaged up and sold to government pension funds. Thus, it now looks like we are on the brink of a massive taxpayer-funded bailout.

If this were just some hedge fund giving money to home buyers with no income and the resultant mortgage were securitized and sold to some other hedge fund … well it’s likely no one would care. As it is, people tend to get a little PO’d when they think about their tax dollars going to fund some couple’s speculative home buying.

I’m actually on the fence about this. I know that walking away is the correct business decision for borrowers, but it steams me a bit to think that I will have to pay for it.

[CogSciGuy]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

[CogSciGuy]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

[CogSciGuy]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

[CogSciGuy]

It continues to amaze me that people get all worked up when people make the very logical, very legal choice to walk away from houses they’re upside down of. They made no agreement not to do that and to act like they have some kind of moral obligation to the bank to make a stupid financial decision is just silly.

[JWM in SD]

JWM in SD

No, I wasn’t surprised at all. Should it really be that surprising when you consider that they were really speculators to begin with? It’s reprehensible, but perfectly legal. Look, I don’t like FBs as much as anyone else, but, I want them to stick it to the lenders as much as possible.

[JWM in SD]

JWM in SD

No, I wasn’t surprised at all. Should it really be that surprising when you consider that they were really speculators to begin with? It’s reprehensible, but perfectly legal. Look, I don’t like FBs as much as anyone else, but, I want them to stick it to the lenders as much as possible.

[JWM in SD]

JWM in SD

No, I wasn’t surprised at all. Should it really be that surprising when you consider that they were really speculators to begin with? It’s reprehensible, but perfectly legal. Look, I don’t like FBs as much as anyone else, but, I want them to stick it to the lenders as much as possible.

[JWM in SD]

JWM in SD

No, I wasn’t surprised at all. Should it really be that surprising when you consider that they were really speculators to begin with? It’s reprehensible, but perfectly legal. Look, I don’t like FBs as much as anyone else, but, I want them to stick it to the lenders as much as possible.

[Coronita]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, "Yea but only if the home is going up in value."

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where's the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that's what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we've gotten so far is to walk away.

What I find interesting is how some people can make those $3200+/month payments. That's a lot of money. I doubt those folk make that much to support this. Seriously, how do people come up with this.

 

I can't believe some of the stuff I get in the mail. I get spammed alot with new car flyers. Some of the outrageous "deals" I get are things like "lease a BMW 750il for the incredible lease of $800/month"…. $800/month to LEASE A CAR? That's just nuts.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, "Yea but only if the home is going up in value."

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where's the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that's what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we've gotten so far is to walk away.

What I find interesting is how some people can make those $3200+/month payments. That's a lot of money. I doubt those folk make that much to support this. Seriously, how do people come up with this.

 

I can't believe some of the stuff I get in the mail. I get spammed alot with new car flyers. Some of the outrageous "deals" I get are things like "lease a BMW 750il for the incredible lease of $800/month"…. $800/month to LEASE A CAR? That's just nuts.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, "Yea but only if the home is going up in value."

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where's the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that's what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we've gotten so far is to walk away.

What I find interesting is how some people can make those $3200+/month payments. That's a lot of money. I doubt those folk make that much to support this. Seriously, how do people come up with this.

 

I can't believe some of the stuff I get in the mail. I get spammed alot with new car flyers. Some of the outrageous "deals" I get are things like "lease a BMW 750il for the incredible lease of $800/month"…. $800/month to LEASE A CAR? That's just nuts.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, "Yea but only if the home is going up in value."

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where's the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that's what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we've gotten so far is to walk away.

What I find interesting is how some people can make those $3200+/month payments. That's a lot of money. I doubt those folk make that much to support this. Seriously, how do people come up with this.

 

I can't believe some of the stuff I get in the mail. I get spammed alot with new car flyers. Some of the outrageous "deals" I get are things like "lease a BMW 750il for the incredible lease of $800/month"…. $800/month to LEASE A CAR? That's just nuts.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, "Yea but only if the home is going up in value."

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where's the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that's what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we've gotten so far is to walk away.

What I find interesting is how some people can make those $3200+/month payments. That's a lot of money. I doubt those folk make that much to support this. Seriously, how do people come up with this.

 

I can't believe some of the stuff I get in the mail. I get spammed alot with new car flyers. Some of the outrageous "deals" I get are things like "lease a BMW 750il for the incredible lease of $800/month"…. $800/month to LEASE A CAR? That's just nuts.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[GoUSC]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, “Yea but only if the home is going up in value.”

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where’s the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that’s what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we’ve gotten so far is to walk away.

[GoUSC]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, “Yea but only if the home is going up in value.”

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where’s the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that’s what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we’ve gotten so far is to walk away.

[GoUSC]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, “Yea but only if the home is going up in value.”

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where’s the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that’s what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we’ve gotten so far is to walk away.

[GoUSC]

Was anyone else blown away by the woman (who talked about foreclosing because they were underwater in their mortgage) responded to the commentators question about being in a contract and honoring that contract with, “Yea but only if the home is going up in value.”

Un-freaking-believable.

Edit. Here is the actually conversation:

Matt: The value of the house keeps going down and the payments keep going up. Where’s the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that’s what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we’ve gotten so far is to walk away.

[ltokuda]

esmith, thanks for the info. Those are some alarming numbers.

[ltokuda]

esmith, thanks for the info. Those are some alarming numbers.

[ltokuda]

esmith, thanks for the info. Those are some alarming numbers.

[ltokuda]

esmith, thanks for the info. Those are some alarming numbers.

[barnaby33]

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

Actually only a first mortgage is non-recourse in Ca. Refinances, seconds and HELOCs are recourse. HELOCs are callable too.

Josh

[barnaby33]

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

Actually only a first mortgage is non-recourse in Ca. Refinances, seconds and HELOCs are recourse. HELOCs are callable too.

Josh

[barnaby33]

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

Actually only a first mortgage is non-recourse in Ca. Refinances, seconds and HELOCs are recourse. HELOCs are callable too.

Josh

[barnaby33]

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

Actually only a first mortgage is non-recourse in Ca. Refinances, seconds and HELOCs are recourse. HELOCs are callable too.

Josh

[barnaby33]

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

Actually only a first mortgage is non-recourse in Ca. Refinances, seconds and HELOCs are recourse. HELOCs are callable too.

Josh

[Eugene]

how many distressed non-recourse loans are out there?

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

The remaining buyers (mostly move-up buyers) made some real down-payments. These will start to shake out if their neighborhoods correct by 20-30% or more.

[Eugene]

how many distressed non-recourse loans are out there?

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

The remaining buyers (mostly move-up buyers) made some real down-payments. These will start to shake out if their neighborhoods correct by 20-30% or more.

[Eugene]

how many distressed non-recourse loans are out there?

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

The remaining buyers (mostly move-up buyers) made some real down-payments. These will start to shake out if their neighborhoods correct by 20-30% or more.

[Eugene]

how many distressed non-recourse loans are out there?

In 2005 and 2006 San Diegans bought around 100,000 houses and condos. 25-30% of those had no equity in their houses to begin with (zero down). Every single one of these is distressed and non-recourse.

The remaining buyers (mostly move-up buyers) made some real down-payments. These will start to shake out if their neighborhoods correct by 20-30% or more.

[ltokuda]

Are there any statistics for how many distressed non-recourse loans are out there? It seems like walking away while you’re underwater can be a very logical option. But I wonder how many people really have that option.

[ltokuda]

Are there any statistics for how many distressed non-recourse loans are out there? It seems like walking away while you’re underwater can be a very logical option. But I wonder how many people really have that option.

[ltokuda]

Are there any statistics for how many distressed non-recourse loans are out there? It seems like walking away while you’re underwater can be a very logical option. But I wonder how many people really have that option.

[ltokuda]

Are there any statistics for how many distressed non-recourse loans are out there? It seems like walking away while you’re underwater can be a very logical option. But I wonder how many people really have that option.

[Trojan4Life]

That was one of the best broadcast mainstream media newspieces I’ve seen on this subject. Now watch what happens as the rest of the world finds out house truly fragile our housing market has become.

[Trojan4Life]

That was one of the best broadcast mainstream media newspieces I’ve seen on this subject. Now watch what happens as the rest of the world finds out house truly fragile our housing market has become.

[Trojan4Life]

That was one of the best broadcast mainstream media newspieces I’ve seen on this subject. Now watch what happens as the rest of the world finds out house truly fragile our housing market has become.

[Trojan4Life]

That was one of the best broadcast mainstream media newspieces I’ve seen on this subject. Now watch what happens as the rest of the world finds out house truly fragile our housing market has become.

[sdrealtor]

Very sobering for John Q. I thought it was a very good show also. One thing bothered me though. The sense of entitlement by the gal in the 2BR hopuse who said it doesnt make sense to stay and that the lender should just fix her loan. My response is a resonding NO! You screwed up! Walk away if you want but you should be financially screwed for the next 5 to 10 years as punishment for your stupidity.

[sdrealtor]

Very sobering for John Q. I thought it was a very good show also. One thing bothered me though. The sense of entitlement by the gal in the 2BR hopuse who said it doesnt make sense to stay and that the lender should just fix her loan. My response is a resonding NO! You screwed up! Walk away if you want but you should be financially screwed for the next 5 to 10 years as punishment for your stupidity.

[sdrealtor]

Very sobering for John Q. I thought it was a very good show also. One thing bothered me though. The sense of entitlement by the gal in the 2BR hopuse who said it doesnt make sense to stay and that the lender should just fix her loan. My response is a resonding NO! You screwed up! Walk away if you want but you should be financially screwed for the next 5 to 10 years as punishment for your stupidity.

[sdrealtor]

Very sobering for John Q. I thought it was a very good show also. One thing bothered me though. The sense of entitlement by the gal in the 2BR hopuse who said it doesnt make sense to stay and that the lender should just fix her loan. My response is a resonding NO! You screwed up! Walk away if you want but you should be financially screwed for the next 5 to 10 years as punishment for your stupidity.

[temeculaguy]

Very well done piece, but then again 60 minutes has been doing fairly in depth pieces for a few decades so it’s not suprising. What scares me the most is that a long time ago we used to joke that the time to buy was when the cover of time magazine read “real estate is dead.” In my view the prices have not returned to fundamentals yet, however the folks at time may have already contemplated the cover art for that issue.

[temeculaguy]

Very well done piece, but then again 60 minutes has been doing fairly in depth pieces for a few decades so it’s not suprising. What scares me the most is that a long time ago we used to joke that the time to buy was when the cover of time magazine read “real estate is dead.” In my view the prices have not returned to fundamentals yet, however the folks at time may have already contemplated the cover art for that issue.

[temeculaguy]

Very well done piece, but then again 60 minutes has been doing fairly in depth pieces for a few decades so it’s not suprising. What scares me the most is that a long time ago we used to joke that the time to buy was when the cover of time magazine read “real estate is dead.” In my view the prices have not returned to fundamentals yet, however the folks at time may have already contemplated the cover art for that issue.

[temeculaguy]

Very well done piece, but then again 60 minutes has been doing fairly in depth pieces for a few decades so it’s not suprising. What scares me the most is that a long time ago we used to joke that the time to buy was when the cover of time magazine read “real estate is dead.” In my view the prices have not returned to fundamentals yet, however the folks at time may have already contemplated the cover art for that issue.

[djc]

http://globaleconomicanalysis.blogspot.com/2008/01/60-minutes-legitimizes-walking-away.html

another view

[djc]

http://globaleconomicanalysis.blogspot.com/2008/01/60-minutes-legitimizes-walking-away.html

another view

[djc]

http://globaleconomicanalysis.blogspot.com/2008/01/60-minutes-legitimizes-walking-away.html

another view

[djc]

http://globaleconomicanalysis.blogspot.com/2008/01/60-minutes-legitimizes-walking-away.html

another view

[davelj]

Jim Grant is fantastic. He’s one of the very best financial commentators. I rarely plug investment-related publications, but Grant’s Interest Rate Observer is one of a very small number of truly essential financial publications out there. Highly recommended.

[davelj]

Jim Grant is fantastic. He’s one of the very best financial commentators. I rarely plug investment-related publications, but Grant’s Interest Rate Observer is one of a very small number of truly essential financial publications out there. Highly recommended.

[davelj]

Jim Grant is fantastic. He’s one of the very best financial commentators. I rarely plug investment-related publications, but Grant’s Interest Rate Observer is one of a very small number of truly essential financial publications out there. Highly recommended.

[davelj]

Jim Grant is fantastic. He’s one of the very best financial commentators. I rarely plug investment-related publications, but Grant’s Interest Rate Observer is one of a very small number of truly essential financial publications out there. Highly recommended.

[patientlywaiting]

My favorite: “It’s contained, but only on planet Earth.”

[patientlywaiting]

My favorite: “It’s contained, but only on planet Earth.”

[patientlywaiting]

My favorite: “It’s contained, but only on planet Earth.”

[patientlywaiting]

My favorite: “It’s contained, but only on planet Earth.”

[Multiplepropertyowner]

If you missed this piece, you have to see it. It is up on the sixty minutes site in its entirety.

[Multiplepropertyowner]

If you missed this piece, you have to see it. It is up on the sixty minutes site in its entirety.

[Multiplepropertyowner]

If you missed this piece, you have to see it. It is up on the sixty minutes site in its entirety.

[Multiplepropertyowner]

If you missed this piece, you have to see it. It is up on the sixty minutes site in its entirety.

[Anonymous]

This video was very informative, and it helped to further put things in perspective for me. It really makes this whole fiasco sound so dirty. I would agree that the house of cards is about to fall. I don’t see how raising the limits for conforming home loans is going to do much of anything.

As I said before, most people are going to do what’s in their own best interests, signed contracts notwithstanding. That would be walking away from a house that they owe more than the value on for the next decade at least.

[Anonymous]

This video was very informative, and it helped to further put things in perspective for me. It really makes this whole fiasco sound so dirty. I would agree that the house of cards is about to fall. I don’t see how raising the limits for conforming home loans is going to do much of anything.

As I said before, most people are going to do what’s in their own best interests, signed contracts notwithstanding. That would be walking away from a house that they owe more than the value on for the next decade at least.

[Anonymous]

This video was very informative, and it helped to further put things in perspective for me. It really makes this whole fiasco sound so dirty. I would agree that the house of cards is about to fall. I don’t see how raising the limits for conforming home loans is going to do much of anything.

As I said before, most people are going to do what’s in their own best interests, signed contracts notwithstanding. That would be walking away from a house that they owe more than the value on for the next decade at least.

[Anonymous]

This video was very informative, and it helped to further put things in perspective for me. It really makes this whole fiasco sound so dirty. I would agree that the house of cards is about to fall. I don’t see how raising the limits for conforming home loans is going to do much of anything.

As I said before, most people are going to do what’s in their own best interests, signed contracts notwithstanding. That would be walking away from a house that they owe more than the value on for the next decade at least.

[bubble_contagion]

My favorite part: “It doesn’t make sense not to foreclose now that the prices are going down.”

[bubble_contagion]

My favorite part: “It doesn’t make sense not to foreclose now that the prices are going down.”

[bubble_contagion]

My favorite part: “It doesn’t make sense not to foreclose now that the prices are going down.”

[bubble_contagion]

My favorite part: “It doesn’t make sense not to foreclose now that the prices are going down.”

[Coronita]

This video reminds me of every single newspaper and tv documentary on housing during the 90ies that i watched. I recall people in areas like Lancaster getting screwed, and folks that were knife catchers buying foreclosures themselves getting foreclosed 1-2 years out. it's eerie how history repeats itself in so many ways.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[patientlywaiting]

FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

[Coronita]

 FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

 

Honestly. None of the reasons were rationale decision in nature. If there was any  "rationale", it would be

1) We didn't stretch too much for our current place of resident. It's not elaborate, but it "will do for now". We live within our means, fairly modestly, and if you saw me on the street, you would think I was a homeless bum and wonder what the heck is that woman doing hanging around him.

2) We sold one of our homes at peak, so it will cushion the sting for a bit, though we essential paid more for this "upgrade"…Property taxes bite in the trade up. If things get really bad, we'll ask for a  reassessment, big deal. 

3) The remaining balance on our mortgage can be covered, and most of it is in a low-no thrill interest account, which btw is depreciating fast as we speak. Plus being a d.i.n.c for a few years helped, though our status is now d.i.w.c.

4) If it makes Mrs. FLU happy, it makes me happy. Plus I like tinkering around a bit when our stucco box fall apart. Or the occasional mishaps I have when I close a garage door on a car.

5) I love hanging up Christmas lights and being the most annoying neighbor that has the most lights starting the day after thanksgiving until 1 week after new years. 

6) Trying to capture gophers is always entertaining, especially ripping apart your lawn doing so. I love those gas charges you light up and stick in the ground. They're sooooo cool.

7) If i didn't take the loss on the home, I'd probably find a more creative way to loose our money. I find that while some people are good at saving for the next, I probably could also save a bit, but my efficiency wouldn't be that great.  One needs to figure out how much savings "leakage" one has when one actually has money on hand. I find that among many people sometimes it's worse to have cash on hand rather to spend part of it on something that actually have value. Losing 20-25% in a year is easy to do in the stock market. Losing the same amount in RE year  is a lot more difficult, unless you're a complete idiot. I'm probably an idiot, just not trying to be a complete idiot.

8) You only live once. Save for another 15-20 years, and finally get hit by a bus. Uh, ok that would kinda suck..You're kids won't even be able to enjoy it with huge estate taxes (at least a living trust can help somewhat)..On the flip side, spend above your means, and have a miserable life being a slave to money, that would also suck. I believe if you can comfortably afford what you want, get what you want and be done with it. Again, probably not the most financially sound thing to do. 

9) While i saw the carnage in areas like Lancaster, etc, the place my parents raised me (though also corrected), didn't see the 40%+ decline that some people here are convinced will happen. I would equate where my parents raised me equivalent to the areas like CV. Considering their purchase price was $200k and subsequently fell 25% after they purchased and probably could sell 8-9times of that right now 28 years later, I don't this a big deal in the long run.  Don't think I have the skill to spot the bottom, so I'd probably miss out anyway.

10)I remember the people that got burned the most were the people that  were speculators who overleveraged and oversimplified RE. Teachers at my school were foreclosed left and right because they too thought they could make money in RE speculation. one teacher actually talked about his experience, and it was sort of sad. That taught me to be careful with leverage, and risk and reward go hand in hand.

11) I'm asian and really can't resist the urge to put in that god-awful dark cherry wood flooring,  heavy furniture complete with plastic covers, and  "Forbidden City" red colored fencing, complete with asian characters on  iron dark red iron fence of which  I haven't the faintest idea what it means.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

 

Honestly. None of the reasons were rationale decision in nature. If there was any  "rationale", it would be

1) We didn't stretch too much for our current place of resident. It's not elaborate, but it "will do for now". We live within our means, fairly modestly, and if you saw me on the street, you would think I was a homeless bum and wonder what the heck is that woman doing hanging around him.

2) We sold one of our homes at peak, so it will cushion the sting for a bit, though we essential paid more for this "upgrade"…Property taxes bite in the trade up. If things get really bad, we'll ask for a  reassessment, big deal. 

3) The remaining balance on our mortgage can be covered, and most of it is in a low-no thrill interest account, which btw is depreciating fast as we speak. Plus being a d.i.n.c for a few years helped, though our status is now d.i.w.c.

4) If it makes Mrs. FLU happy, it makes me happy. Plus I like tinkering around a bit when our stucco box fall apart. Or the occasional mishaps I have when I close a garage door on a car.

5) I love hanging up Christmas lights and being the most annoying neighbor that has the most lights starting the day after thanksgiving until 1 week after new years. 

6) Trying to capture gophers is always entertaining, especially ripping apart your lawn doing so. I love those gas charges you light up and stick in the ground. They're sooooo cool.

7) If i didn't take the loss on the home, I'd probably find a more creative way to loose our money. I find that while some people are good at saving for the next, I probably could also save a bit, but my efficiency wouldn't be that great.  One needs to figure out how much savings "leakage" one has when one actually has money on hand. I find that among many people sometimes it's worse to have cash on hand rather to spend part of it on something that actually have value. Losing 20-25% in a year is easy to do in the stock market. Losing the same amount in RE year  is a lot more difficult, unless you're a complete idiot. I'm probably an idiot, just not trying to be a complete idiot.

8) You only live once. Save for another 15-20 years, and finally get hit by a bus. Uh, ok that would kinda suck..You're kids won't even be able to enjoy it with huge estate taxes (at least a living trust can help somewhat)..On the flip side, spend above your means, and have a miserable life being a slave to money, that would also suck. I believe if you can comfortably afford what you want, get what you want and be done with it. Again, probably not the most financially sound thing to do. 

9) While i saw the carnage in areas like Lancaster, etc, the place my parents raised me (though also corrected), didn't see the 40%+ decline that some people here are convinced will happen. I would equate where my parents raised me equivalent to the areas like CV. Considering their purchase price was $200k and subsequently fell 25% after they purchased and probably could sell 8-9times of that right now 28 years later, I don't this a big deal in the long run.  Don't think I have the skill to spot the bottom, so I'd probably miss out anyway.

10)I remember the people that got burned the most were the people that  were speculators who overleveraged and oversimplified RE. Teachers at my school were foreclosed left and right because they too thought they could make money in RE speculation. one teacher actually talked about his experience, and it was sort of sad. That taught me to be careful with leverage, and risk and reward go hand in hand.

11) I'm asian and really can't resist the urge to put in that god-awful dark cherry wood flooring,  heavy furniture complete with plastic covers, and  "Forbidden City" red colored fencing, complete with asian characters on  iron dark red iron fence of which  I haven't the faintest idea what it means.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

 

Honestly. None of the reasons were rationale decision in nature. If there was any  "rationale", it would be

1) We didn't stretch too much for our current place of resident. It's not elaborate, but it "will do for now". We live within our means, fairly modestly, and if you saw me on the street, you would think I was a homeless bum and wonder what the heck is that woman doing hanging around him.

2) We sold one of our homes at peak, so it will cushion the sting for a bit, though we essential paid more for this "upgrade"…Property taxes bite in the trade up. If things get really bad, we'll ask for a  reassessment, big deal. 

3) The remaining balance on our mortgage can be covered, and most of it is in a low-no thrill interest account, which btw is depreciating fast as we speak. Plus being a d.i.n.c for a few years helped, though our status is now d.i.w.c.

4) If it makes Mrs. FLU happy, it makes me happy. Plus I like tinkering around a bit when our stucco box fall apart. Or the occasional mishaps I have when I close a garage door on a car.

5) I love hanging up Christmas lights and being the most annoying neighbor that has the most lights starting the day after thanksgiving until 1 week after new years. 

6) Trying to capture gophers is always entertaining, especially ripping apart your lawn doing so. I love those gas charges you light up and stick in the ground. They're sooooo cool.

7) If i didn't take the loss on the home, I'd probably find a more creative way to loose our money. I find that while some people are good at saving for the next, I probably could also save a bit, but my efficiency wouldn't be that great.  One needs to figure out how much savings "leakage" one has when one actually has money on hand. I find that among many people sometimes it's worse to have cash on hand rather to spend part of it on something that actually have value. Losing 20-25% in a year is easy to do in the stock market. Losing the same amount in RE year  is a lot more difficult, unless you're a complete idiot. I'm probably an idiot, just not trying to be a complete idiot.

8) You only live once. Save for another 15-20 years, and finally get hit by a bus. Uh, ok that would kinda suck..You're kids won't even be able to enjoy it with huge estate taxes (at least a living trust can help somewhat)..On the flip side, spend above your means, and have a miserable life being a slave to money, that would also suck. I believe if you can comfortably afford what you want, get what you want and be done with it. Again, probably not the most financially sound thing to do. 

9) While i saw the carnage in areas like Lancaster, etc, the place my parents raised me (though also corrected), didn't see the 40%+ decline that some people here are convinced will happen. I would equate where my parents raised me equivalent to the areas like CV. Considering their purchase price was $200k and subsequently fell 25% after they purchased and probably could sell 8-9times of that right now 28 years later, I don't this a big deal in the long run.  Don't think I have the skill to spot the bottom, so I'd probably miss out anyway.

10)I remember the people that got burned the most were the people that  were speculators who overleveraged and oversimplified RE. Teachers at my school were foreclosed left and right because they too thought they could make money in RE speculation. one teacher actually talked about his experience, and it was sort of sad. That taught me to be careful with leverage, and risk and reward go hand in hand.

11) I'm asian and really can't resist the urge to put in that god-awful dark cherry wood flooring,  heavy furniture complete with plastic covers, and  "Forbidden City" red colored fencing, complete with asian characters on  iron dark red iron fence of which  I haven't the faintest idea what it means.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

 

Honestly. None of the reasons were rationale decision in nature. If there was any  "rationale", it would be

1) We didn't stretch too much for our current place of resident. It's not elaborate, but it "will do for now". We live within our means, fairly modestly, and if you saw me on the street, you would think I was a homeless bum and wonder what the heck is that woman doing hanging around him.

2) We sold one of our homes at peak, so it will cushion the sting for a bit, though we essential paid more for this "upgrade"…Property taxes bite in the trade up. If things get really bad, we'll ask for a  reassessment, big deal. 

3) The remaining balance on our mortgage can be covered, and most of it is in a low-no thrill interest account, which btw is depreciating fast as we speak. Plus being a d.i.n.c for a few years helped, though our status is now d.i.w.c.

4) If it makes Mrs. FLU happy, it makes me happy. Plus I like tinkering around a bit when our stucco box fall apart. Or the occasional mishaps I have when I close a garage door on a car.

5) I love hanging up Christmas lights and being the most annoying neighbor that has the most lights starting the day after thanksgiving until 1 week after new years. 

6) Trying to capture gophers is always entertaining, especially ripping apart your lawn doing so. I love those gas charges you light up and stick in the ground. They're sooooo cool.

7) If i didn't take the loss on the home, I'd probably find a more creative way to loose our money. I find that while some people are good at saving for the next, I probably could also save a bit, but my efficiency wouldn't be that great.  One needs to figure out how much savings "leakage" one has when one actually has money on hand. I find that among many people sometimes it's worse to have cash on hand rather to spend part of it on something that actually have value. Losing 20-25% in a year is easy to do in the stock market. Losing the same amount in RE year  is a lot more difficult, unless you're a complete idiot. I'm probably an idiot, just not trying to be a complete idiot.

8) You only live once. Save for another 15-20 years, and finally get hit by a bus. Uh, ok that would kinda suck..You're kids won't even be able to enjoy it with huge estate taxes (at least a living trust can help somewhat)..On the flip side, spend above your means, and have a miserable life being a slave to money, that would also suck. I believe if you can comfortably afford what you want, get what you want and be done with it. Again, probably not the most financially sound thing to do. 

9) While i saw the carnage in areas like Lancaster, etc, the place my parents raised me (though also corrected), didn't see the 40%+ decline that some people here are convinced will happen. I would equate where my parents raised me equivalent to the areas like CV. Considering their purchase price was $200k and subsequently fell 25% after they purchased and probably could sell 8-9times of that right now 28 years later, I don't this a big deal in the long run.  Don't think I have the skill to spot the bottom, so I'd probably miss out anyway.

10)I remember the people that got burned the most were the people that  were speculators who overleveraged and oversimplified RE. Teachers at my school were foreclosed left and right because they too thought they could make money in RE speculation. one teacher actually talked about his experience, and it was sort of sad. That taught me to be careful with leverage, and risk and reward go hand in hand.

11) I'm asian and really can't resist the urge to put in that god-awful dark cherry wood flooring,  heavy furniture complete with plastic covers, and  "Forbidden City" red colored fencing, complete with asian characters on  iron dark red iron fence of which  I haven't the faintest idea what it means.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

 

Honestly. None of the reasons were rationale decision in nature. If there was any  "rationale", it would be

1) We didn't stretch too much for our current place of resident. It's not elaborate, but it "will do for now". We live within our means, fairly modestly, and if you saw me on the street, you would think I was a homeless bum and wonder what the heck is that woman doing hanging around him.

2) We sold one of our homes at peak, so it will cushion the sting for a bit, though we essential paid more for this "upgrade"…Property taxes bite in the trade up. If things get really bad, we'll ask for a  reassessment, big deal. 

3) The remaining balance on our mortgage can be covered, and most of it is in a low-no thrill interest account, which btw is depreciating fast as we speak. Plus being a d.i.n.c for a few years helped, though our status is now d.i.w.c.

4) If it makes Mrs. FLU happy, it makes me happy. Plus I like tinkering around a bit when our stucco box fall apart. Or the occasional mishaps I have when I close a garage door on a car.

5) I love hanging up Christmas lights and being the most annoying neighbor that has the most lights starting the day after thanksgiving until 1 week after new years. 

6) Trying to capture gophers is always entertaining, especially ripping apart your lawn doing so. I love those gas charges you light up and stick in the ground. They're sooooo cool.

7) If i didn't take the loss on the home, I'd probably find a more creative way to loose our money. I find that while some people are good at saving for the next, I probably could also save a bit, but my efficiency wouldn't be that great.  One needs to figure out how much savings "leakage" one has when one actually has money on hand. I find that among many people sometimes it's worse to have cash on hand rather to spend part of it on something that actually have value. Losing 20-25% in a year is easy to do in the stock market. Losing the same amount in RE year  is a lot more difficult, unless you're a complete idiot. I'm probably an idiot, just not trying to be a complete idiot.

8) You only live once. Save for another 15-20 years, and finally get hit by a bus. Uh, ok that would kinda suck..You're kids won't even be able to enjoy it with huge estate taxes (at least a living trust can help somewhat)..On the flip side, spend above your means, and have a miserable life being a slave to money, that would also suck. I believe if you can comfortably afford what you want, get what you want and be done with it. Again, probably not the most financially sound thing to do. 

9) While i saw the carnage in areas like Lancaster, etc, the place my parents raised me (though also corrected), didn't see the 40%+ decline that some people here are convinced will happen. I would equate where my parents raised me equivalent to the areas like CV. Considering their purchase price was $200k and subsequently fell 25% after they purchased and probably could sell 8-9times of that right now 28 years later, I don't this a big deal in the long run.  Don't think I have the skill to spot the bottom, so I'd probably miss out anyway.

10)I remember the people that got burned the most were the people that  were speculators who overleveraged and oversimplified RE. Teachers at my school were foreclosed left and right because they too thought they could make money in RE speculation. one teacher actually talked about his experience, and it was sort of sad. That taught me to be careful with leverage, and risk and reward go hand in hand.

11) I'm asian and really can't resist the urge to put in that god-awful dark cherry wood flooring,  heavy furniture complete with plastic covers, and  "Forbidden City" red colored fencing, complete with asian characters on  iron dark red iron fence of which  I haven't the faintest idea what it means.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[patientlywaiting]

FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

[patientlywaiting]

FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

[patientlywaiting]

FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

[patientlywaiting]

FLU, with that experience, why did you buy a personal residence Carmel Valley at the peak? I was around in the 90s too and I knew better. (Although I did buy some investment properties which I sold)

[Coronita]

This video reminds me of every single newspaper and tv documentary on housing during the 90ies that i watched. I recall people in areas like Lancaster getting screwed, and folks that were knife catchers buying foreclosures themselves getting foreclosed 1-2 years out. it's eerie how history repeats itself in so many ways.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

This video reminds me of every single newspaper and tv documentary on housing during the 90ies that i watched. I recall people in areas like Lancaster getting screwed, and folks that were knife catchers buying foreclosures themselves getting foreclosed 1-2 years out. it's eerie how history repeats itself in so many ways.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

This video reminds me of every single newspaper and tv documentary on housing during the 90ies that i watched. I recall people in areas like Lancaster getting screwed, and folks that were knife catchers buying foreclosures themselves getting foreclosed 1-2 years out. it's eerie how history repeats itself in so many ways.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

This video reminds me of every single newspaper and tv documentary on housing during the 90ies that i watched. I recall people in areas like Lancaster getting screwed, and folks that were knife catchers buying foreclosures themselves getting foreclosed 1-2 years out. it's eerie how history repeats itself in so many ways.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[GunDoctor]

this was perfect. I sat my wife down and had her watch this. She is not the most financially savy person I know, but has a good deal of common sence.
After watching the segment I poped up some charts from this site on

Prices, rent to income.
the double wave of sub-prime and option arms and when they reset.

Bottom line, this woman who is always on my case for buying said that we need / have to wait.
Bout time the main stream media helped my out.
thanks 60 min.
gun

[Raybyrnes]

Gundoctor,

You mention the interest rate resets. If rate are resetting based on todasy envoironment, form in terest rate standpoint these peopl who took out option arms are going to look fairly smart. Additionally if their payments stay in line with what they wer previously paying then it could stem the decline in housihng long enough fo prices to stage a rally. That would suck as it would lock many of the savers (myslef included ) out of the housing market.

[NotCranky]

RAY “Steams me a bit that I didn’t have the balls to roll the dice back in 2000 and realize that there was very little downside risk. ”

Did you have the knowlege then that you have now? If so why did you think the market was risky in 2000? I hope when it hits a “2000” like period in the cycle again we all know what to do. It wasn’t really a fluke until 2003ish was it? I am not picking on you. I had a little bit of knowlege ,instincts and good luck but definitely did not know a fraction of what I have learned since coming here.

Hang in there. You know that houses will be a lot more affordable soon. One way or another.

[NotCranky]

RAY “Steams me a bit that I didn’t have the balls to roll the dice back in 2000 and realize that there was very little downside risk. ”

Did you have the knowlege then that you have now? If so why did you think the market was risky in 2000? I hope when it hits a “2000” like period in the cycle again we all know what to do. It wasn’t really a fluke until 2003ish was it? I am not picking on you. I had a little bit of knowlege ,instincts and good luck but definitely did not know a fraction of what I have learned since coming here.

Hang in there. You know that houses will be a lot more affordable soon. One way or another.

[NotCranky]

RAY “Steams me a bit that I didn’t have the balls to roll the dice back in 2000 and realize that there was very little downside risk. ”

Did you have the knowlege then that you have now? If so why did you think the market was risky in 2000? I hope when it hits a “2000” like period in the cycle again we all know what to do. It wasn’t really a fluke until 2003ish was it? I am not picking on you. I had a little bit of knowlege ,instincts and good luck but definitely did not know a fraction of what I have learned since coming here.

Hang in there. You know that houses will be a lot more affordable soon. One way or another.

[NotCranky]

RAY “Steams me a bit that I didn’t have the balls to roll the dice back in 2000 and realize that there was very little downside risk. ”

Did you have the knowlege then that you have now? If so why did you think the market was risky in 2000? I hope when it hits a “2000” like period in the cycle again we all know what to do. It wasn’t really a fluke until 2003ish was it? I am not picking on you. I had a little bit of knowlege ,instincts and good luck but definitely did not know a fraction of what I have learned since coming here.

Hang in there. You know that houses will be a lot more affordable soon. One way or another.

[NotCranky]

RAY “Steams me a bit that I didn’t have the balls to roll the dice back in 2000 and realize that there was very little downside risk. ”

Did you have the knowlege then that you have now? If so why did you think the market was risky in 2000? I hope when it hits a “2000” like period in the cycle again we all know what to do. It wasn’t really a fluke until 2003ish was it? I am not picking on you. I had a little bit of knowlege ,instincts and good luck but definitely did not know a fraction of what I have learned since coming here.

Hang in there. You know that houses will be a lot more affordable soon. One way or another.

[GunDoctor]

It really depends on how much more they can pay per month above the teaser rate. I belive that most of these folks streched so far and so hight that even a small bump up in monthly payments is going to cause problems. Without being able to refinance and get living money there will be nothing left after paying the rent..I mean mortgage.
I can’t see how prices could rally in the face of so much inventory already out there.
time will tell. If people with option arms reset and can afford the payments then I am happy that they get to keep their house…really. What I am counting on are the speculators whose intention was never really to live in a home but to make money, reset or not these homes are going back to the bank and will set future comps.
gun

[GunDoctor]

It really depends on how much more they can pay per month above the teaser rate. I belive that most of these folks streched so far and so hight that even a small bump up in monthly payments is going to cause problems. Without being able to refinance and get living money there will be nothing left after paying the rent..I mean mortgage.
I can’t see how prices could rally in the face of so much inventory already out there.
time will tell. If people with option arms reset and can afford the payments then I am happy that they get to keep their house…really. What I am counting on are the speculators whose intention was never really to live in a home but to make money, reset or not these homes are going back to the bank and will set future comps.
gun

[GunDoctor]

It really depends on how much more they can pay per month above the teaser rate. I belive that most of these folks streched so far and so hight that even a small bump up in monthly payments is going to cause problems. Without being able to refinance and get living money there will be nothing left after paying the rent..I mean mortgage.
I can’t see how prices could rally in the face of so much inventory already out there.
time will tell. If people with option arms reset and can afford the payments then I am happy that they get to keep their house…really. What I am counting on are the speculators whose intention was never really to live in a home but to make money, reset or not these homes are going back to the bank and will set future comps.
gun

[GunDoctor]

It really depends on how much more they can pay per month above the teaser rate. I belive that most of these folks streched so far and so hight that even a small bump up in monthly payments is going to cause problems. Without being able to refinance and get living money there will be nothing left after paying the rent..I mean mortgage.
I can’t see how prices could rally in the face of so much inventory already out there.
time will tell. If people with option arms reset and can afford the payments then I am happy that they get to keep their house…really. What I am counting on are the speculators whose intention was never really to live in a home but to make money, reset or not these homes are going back to the bank and will set future comps.
gun

[GunDoctor]

It really depends on how much more they can pay per month above the teaser rate. I belive that most of these folks streched so far and so hight that even a small bump up in monthly payments is going to cause problems. Without being able to refinance and get living money there will be nothing left after paying the rent..I mean mortgage.
I can’t see how prices could rally in the face of so much inventory already out there.
time will tell. If people with option arms reset and can afford the payments then I am happy that they get to keep their house…really. What I am counting on are the speculators whose intention was never really to live in a home but to make money, reset or not these homes are going back to the bank and will set future comps.
gun

[Raybyrnes]

Gundoctor,

You mention the interest rate resets. If rate are resetting based on todasy envoironment, form in terest rate standpoint these peopl who took out option arms are going to look fairly smart. Additionally if their payments stay in line with what they wer previously paying then it could stem the decline in housihng long enough fo prices to stage a rally. That would suck as it would lock many of the savers (myslef included ) out of the housing market.

[Raybyrnes]

Gundoctor,

You mention the interest rate resets. If rate are resetting based on todasy envoironment, form in terest rate standpoint these peopl who took out option arms are going to look fairly smart. Additionally if their payments stay in line with what they wer previously paying then it could stem the decline in housihng long enough fo prices to stage a rally. That would suck as it would lock many of the savers (myslef included ) out of the housing market.

[Raybyrnes]

Gundoctor,

You mention the interest rate resets. If rate are resetting based on todasy envoironment, form in terest rate standpoint these peopl who took out option arms are going to look fairly smart. Additionally if their payments stay in line with what they wer previously paying then it could stem the decline in housihng long enough fo prices to stage a rally. That would suck as it would lock many of the savers (myslef included ) out of the housing market.

[Raybyrnes]

Gundoctor,

You mention the interest rate resets. If rate are resetting based on todasy envoironment, form in terest rate standpoint these peopl who took out option arms are going to look fairly smart. Additionally if their payments stay in line with what they wer previously paying then it could stem the decline in housihng long enough fo prices to stage a rally. That would suck as it would lock many of the savers (myslef included ) out of the housing market.

[GunDoctor]

this was perfect. I sat my wife down and had her watch this. She is not the most financially savy person I know, but has a good deal of common sence.
After watching the segment I poped up some charts from this site on

Prices, rent to income.
the double wave of sub-prime and option arms and when they reset.

Bottom line, this woman who is always on my case for buying said that we need / have to wait.
Bout time the main stream media helped my out.
thanks 60 min.
gun

[GunDoctor]

this was perfect. I sat my wife down and had her watch this. She is not the most financially savy person I know, but has a good deal of common sence.
After watching the segment I poped up some charts from this site on

Prices, rent to income.
the double wave of sub-prime and option arms and when they reset.

Bottom line, this woman who is always on my case for buying said that we need / have to wait.
Bout time the main stream media helped my out.
thanks 60 min.
gun

[GunDoctor]

this was perfect. I sat my wife down and had her watch this. She is not the most financially savy person I know, but has a good deal of common sence.
After watching the segment I poped up some charts from this site on

Prices, rent to income.
the double wave of sub-prime and option arms and when they reset.

Bottom line, this woman who is always on my case for buying said that we need / have to wait.
Bout time the main stream media helped my out.
thanks 60 min.
gun

[GunDoctor]

this was perfect. I sat my wife down and had her watch this. She is not the most financially savy person I know, but has a good deal of common sence.
After watching the segment I poped up some charts from this site on

Prices, rent to income.
the double wave of sub-prime and option arms and when they reset.

Bottom line, this woman who is always on my case for buying said that we need / have to wait.
Bout time the main stream media helped my out.
thanks 60 min.
gun

[Coronita]

Gun, Raybyrnes,

 

I don't think people looking for deals will be disappointed. I think one thing to keep in mind though is that while primary home owners might to some extent be somewhat bailed out, isn't there the gamut of speculators/flippers that is still out there? Isn't SD a market that was highly speculative? If so, we should see some fallout, because I don't think those efforts to raise conforming limits etc are really going to help the speculators, save perhaps refinancing their own home to bridge over to their speculation, which would be a baffoon move… So I wouldn't say all is lost here. How that shakes out, heck knows. But something 's going to shake out. The 90ies RE recession I remember the worst got hit were the speculators and people who couldn't hold on. You still going to have a percentage of those people. Add in a Democratic Government win and a reduction of the defense spending following that, so cal economy will go into the crapper. Happened in the 90ies, and frankly the industry here isn't as diverse as one would think. We haven't seen nothing yet compared to the 90ies. You have people barely making it while still have relatively high employment. Wait to the effect of unemployment. Suddenly all the folks barely scrape by will now be in trouble. Doesn't matter how low you could refinance..If you don't got employment, you're still screwed…..Personally, I'm not looking forward to that if it happens..because it will be ugly.. But the defense spending days are numbered, i'm afraid. This is probably lousy advice..but folks that are I know that are working in the defense/gov sector…I'm telling them to get out now while they can. Ask any aerospace/defense engineer from the 80ies/90ies, and they'll have interesting stories to tell you. (like my pops).

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Mayer]

“Ask any aerospace/defense engineer from the 80ies/90ies, and they’ll have interesting stories to tell you. (like my pops).”

I hear you on that one, from GD to MA/COM to Rohr. Everyone I knew was working in the same industry and we were all screwed at once.

I also agree that while the plunging rates will help out some folks, a lot of people have zilch saved up and won’t be able to hold on once unemployment takes its toll and the economy slows down. They’re currently only able to survive in a best case scenario (nothing breaks down, they’ll have their jobs forever with bi-annual raises, etc).

Also, I can’t see real estate making a crazy run again. Simple attrition will wear out speculators who are hoping for another roller coaster ride up. They’ll eventually realize that their money would be productive elsewhere.

A question I don’t have an answer to is what impact the boomers will have on the housing market? If the stock market cools and their variable annuity isn’t providing adequate income, will they sell their home to live on? Will they do it anyways irregardless of the stock market, and to hell with their heirs? How many of these folks are planning on selling their home to live off the income?

I think it’s too early to call a bottom because of Mr. Bernanke’s trigger finger.

[robson]

Why would all the boomers sell their homes instead of just getting reverse mortgages for income?
Seems like everyday there’s more and more adds for these things.

[Mayer]

I never said all the boomers would or should sell their homes. It’s just a possibility and a choice that many of them will face and have to make a decision on.

There are plenty of reasons for not getting into a reverse mortgage. They may not want to live there any longer, they don’t want to maintain the place, they don’t want to pay property taxes, they want to have their money free and clear without obligations to a lender, they don’t own it outright and have enough equity in the place, etc…

[Borat]

FLU, didn’t defense spending decline a lot under Bush I? I was working in defense around that time and I remember tons of layoffs in the 1990-1991 timeframe. Remember “Falling Down”? That came out in early 93 so the script had probably been written in 90-91, and it’s all about a laid off defense worker in LA. So I’m not sure it had anything to do with democrats being in power because we had a democrat congress under Reagan as well as Bush, right? And there was tons of spending in the 80s. We didn’t get a Republican congress until 94. I guess my only point is that defense spending doesn’t seem to correlate with party as much as is often thought. Both parties like to send pork home to their constituents and defense projects are always popular. So I don’t see it ending even if Hillary gets elected. She votes for all the wars and stuff just like everybody else. If anything she might be like Margaret Thatcher and try to be even tougher because she’s afraid of being seen as weak. The only way I see it ending is when the Chinese quit picking up the tab. Just thinking out loud…

[Borat]

FLU, didn’t defense spending decline a lot under Bush I? I was working in defense around that time and I remember tons of layoffs in the 1990-1991 timeframe. Remember “Falling Down”? That came out in early 93 so the script had probably been written in 90-91, and it’s all about a laid off defense worker in LA. So I’m not sure it had anything to do with democrats being in power because we had a democrat congress under Reagan as well as Bush, right? And there was tons of spending in the 80s. We didn’t get a Republican congress until 94. I guess my only point is that defense spending doesn’t seem to correlate with party as much as is often thought. Both parties like to send pork home to their constituents and defense projects are always popular. So I don’t see it ending even if Hillary gets elected. She votes for all the wars and stuff just like everybody else. If anything she might be like Margaret Thatcher and try to be even tougher because she’s afraid of being seen as weak. The only way I see it ending is when the Chinese quit picking up the tab. Just thinking out loud…

[Borat]

FLU, didn’t defense spending decline a lot under Bush I? I was working in defense around that time and I remember tons of layoffs in the 1990-1991 timeframe. Remember “Falling Down”? That came out in early 93 so the script had probably been written in 90-91, and it’s all about a laid off defense worker in LA. So I’m not sure it had anything to do with democrats being in power because we had a democrat congress under Reagan as well as Bush, right? And there was tons of spending in the 80s. We didn’t get a Republican congress until 94. I guess my only point is that defense spending doesn’t seem to correlate with party as much as is often thought. Both parties like to send pork home to their constituents and defense projects are always popular. So I don’t see it ending even if Hillary gets elected. She votes for all the wars and stuff just like everybody else. If anything she might be like Margaret Thatcher and try to be even tougher because she’s afraid of being seen as weak. The only way I see it ending is when the Chinese quit picking up the tab. Just thinking out loud…

[Borat]

FLU, didn’t defense spending decline a lot under Bush I? I was working in defense around that time and I remember tons of layoffs in the 1990-1991 timeframe. Remember “Falling Down”? That came out in early 93 so the script had probably been written in 90-91, and it’s all about a laid off defense worker in LA. So I’m not sure it had anything to do with democrats being in power because we had a democrat congress under Reagan as well as Bush, right? And there was tons of spending in the 80s. We didn’t get a Republican congress until 94. I guess my only point is that defense spending doesn’t seem to correlate with party as much as is often thought. Both parties like to send pork home to their constituents and defense projects are always popular. So I don’t see it ending even if Hillary gets elected. She votes for all the wars and stuff just like everybody else. If anything she might be like Margaret Thatcher and try to be even tougher because she’s afraid of being seen as weak. The only way I see it ending is when the Chinese quit picking up the tab. Just thinking out loud…

[Borat]

FLU, didn’t defense spending decline a lot under Bush I? I was working in defense around that time and I remember tons of layoffs in the 1990-1991 timeframe. Remember “Falling Down”? That came out in early 93 so the script had probably been written in 90-91, and it’s all about a laid off defense worker in LA. So I’m not sure it had anything to do with democrats being in power because we had a democrat congress under Reagan as well as Bush, right? And there was tons of spending in the 80s. We didn’t get a Republican congress until 94. I guess my only point is that defense spending doesn’t seem to correlate with party as much as is often thought. Both parties like to send pork home to their constituents and defense projects are always popular. So I don’t see it ending even if Hillary gets elected. She votes for all the wars and stuff just like everybody else. If anything she might be like Margaret Thatcher and try to be even tougher because she’s afraid of being seen as weak. The only way I see it ending is when the Chinese quit picking up the tab. Just thinking out loud…

[Mayer]

I never said all the boomers would or should sell their homes. It’s just a possibility and a choice that many of them will face and have to make a decision on.

There are plenty of reasons for not getting into a reverse mortgage. They may not want to live there any longer, they don’t want to maintain the place, they don’t want to pay property taxes, they want to have their money free and clear without obligations to a lender, they don’t own it outright and have enough equity in the place, etc…

[Mayer]

I never said all the boomers would or should sell their homes. It’s just a possibility and a choice that many of them will face and have to make a decision on.

There are plenty of reasons for not getting into a reverse mortgage. They may not want to live there any longer, they don’t want to maintain the place, they don’t want to pay property taxes, they want to have their money free and clear without obligations to a lender, they don’t own it outright and have enough equity in the place, etc…

[Mayer]

I never said all the boomers would or should sell their homes. It’s just a possibility and a choice that many of them will face and have to make a decision on.

There are plenty of reasons for not getting into a reverse mortgage. They may not want to live there any longer, they don’t want to maintain the place, they don’t want to pay property taxes, they want to have their money free and clear without obligations to a lender, they don’t own it outright and have enough equity in the place, etc…

[Mayer]

I never said all the boomers would or should sell their homes. It’s just a possibility and a choice that many of them will face and have to make a decision on.

There are plenty of reasons for not getting into a reverse mortgage. They may not want to live there any longer, they don’t want to maintain the place, they don’t want to pay property taxes, they want to have their money free and clear without obligations to a lender, they don’t own it outright and have enough equity in the place, etc…

[robson]

Why would all the boomers sell their homes instead of just getting reverse mortgages for income?
Seems like everyday there’s more and more adds for these things.

[robson]

Why would all the boomers sell their homes instead of just getting reverse mortgages for income?
Seems like everyday there’s more and more adds for these things.

[robson]

Why would all the boomers sell their homes instead of just getting reverse mortgages for income?
Seems like everyday there’s more and more adds for these things.

[robson]

Why would all the boomers sell their homes instead of just getting reverse mortgages for income?
Seems like everyday there’s more and more adds for these things.

[Mayer]

“Ask any aerospace/defense engineer from the 80ies/90ies, and they’ll have interesting stories to tell you. (like my pops).”

I hear you on that one, from GD to MA/COM to Rohr. Everyone I knew was working in the same industry and we were all screwed at once.

I also agree that while the plunging rates will help out some folks, a lot of people have zilch saved up and won’t be able to hold on once unemployment takes its toll and the economy slows down. They’re currently only able to survive in a best case scenario (nothing breaks down, they’ll have their jobs forever with bi-annual raises, etc).

Also, I can’t see real estate making a crazy run again. Simple attrition will wear out speculators who are hoping for another roller coaster ride up. They’ll eventually realize that their money would be productive elsewhere.

A question I don’t have an answer to is what impact the boomers will have on the housing market? If the stock market cools and their variable annuity isn’t providing adequate income, will they sell their home to live on? Will they do it anyways irregardless of the stock market, and to hell with their heirs? How many of these folks are planning on selling their home to live off the income?

I think it’s too early to call a bottom because of Mr. Bernanke’s trigger finger.

[Mayer]

“Ask any aerospace/defense engineer from the 80ies/90ies, and they’ll have interesting stories to tell you. (like my pops).”

I hear you on that one, from GD to MA/COM to Rohr. Everyone I knew was working in the same industry and we were all screwed at once.

I also agree that while the plunging rates will help out some folks, a lot of people have zilch saved up and won’t be able to hold on once unemployment takes its toll and the economy slows down. They’re currently only able to survive in a best case scenario (nothing breaks down, they’ll have their jobs forever with bi-annual raises, etc).

Also, I can’t see real estate making a crazy run again. Simple attrition will wear out speculators who are hoping for another roller coaster ride up. They’ll eventually realize that their money would be productive elsewhere.

A question I don’t have an answer to is what impact the boomers will have on the housing market? If the stock market cools and their variable annuity isn’t providing adequate income, will they sell their home to live on? Will they do it anyways irregardless of the stock market, and to hell with their heirs? How many of these folks are planning on selling their home to live off the income?

I think it’s too early to call a bottom because of Mr. Bernanke’s trigger finger.

[Mayer]

“Ask any aerospace/defense engineer from the 80ies/90ies, and they’ll have interesting stories to tell you. (like my pops).”

I hear you on that one, from GD to MA/COM to Rohr. Everyone I knew was working in the same industry and we were all screwed at once.

I also agree that while the plunging rates will help out some folks, a lot of people have zilch saved up and won’t be able to hold on once unemployment takes its toll and the economy slows down. They’re currently only able to survive in a best case scenario (nothing breaks down, they’ll have their jobs forever with bi-annual raises, etc).

Also, I can’t see real estate making a crazy run again. Simple attrition will wear out speculators who are hoping for another roller coaster ride up. They’ll eventually realize that their money would be productive elsewhere.

A question I don’t have an answer to is what impact the boomers will have on the housing market? If the stock market cools and their variable annuity isn’t providing adequate income, will they sell their home to live on? Will they do it anyways irregardless of the stock market, and to hell with their heirs? How many of these folks are planning on selling their home to live off the income?

I think it’s too early to call a bottom because of Mr. Bernanke’s trigger finger.

[Mayer]

“Ask any aerospace/defense engineer from the 80ies/90ies, and they’ll have interesting stories to tell you. (like my pops).”

I hear you on that one, from GD to MA/COM to Rohr. Everyone I knew was working in the same industry and we were all screwed at once.

I also agree that while the plunging rates will help out some folks, a lot of people have zilch saved up and won’t be able to hold on once unemployment takes its toll and the economy slows down. They’re currently only able to survive in a best case scenario (nothing breaks down, they’ll have their jobs forever with bi-annual raises, etc).

Also, I can’t see real estate making a crazy run again. Simple attrition will wear out speculators who are hoping for another roller coaster ride up. They’ll eventually realize that their money would be productive elsewhere.

A question I don’t have an answer to is what impact the boomers will have on the housing market? If the stock market cools and their variable annuity isn’t providing adequate income, will they sell their home to live on? Will they do it anyways irregardless of the stock market, and to hell with their heirs? How many of these folks are planning on selling their home to live off the income?

I think it’s too early to call a bottom because of Mr. Bernanke’s trigger finger.

[Coronita]

Gun, Raybyrnes,

 

I don't think people looking for deals will be disappointed. I think one thing to keep in mind though is that while primary home owners might to some extent be somewhat bailed out, isn't there the gamut of speculators/flippers that is still out there? Isn't SD a market that was highly speculative? If so, we should see some fallout, because I don't think those efforts to raise conforming limits etc are really going to help the speculators, save perhaps refinancing their own home to bridge over to their speculation, which would be a baffoon move… So I wouldn't say all is lost here. How that shakes out, heck knows. But something 's going to shake out. The 90ies RE recession I remember the worst got hit were the speculators and people who couldn't hold on. You still going to have a percentage of those people. Add in a Democratic Government win and a reduction of the defense spending following that, so cal economy will go into the crapper. Happened in the 90ies, and frankly the industry here isn't as diverse as one would think. We haven't seen nothing yet compared to the 90ies. You have people barely making it while still have relatively high employment. Wait to the effect of unemployment. Suddenly all the folks barely scrape by will now be in trouble. Doesn't matter how low you could refinance..If you don't got employment, you're still screwed…..Personally, I'm not looking forward to that if it happens..because it will be ugly.. But the defense spending days are numbered, i'm afraid. This is probably lousy advice..but folks that are I know that are working in the defense/gov sector…I'm telling them to get out now while they can. Ask any aerospace/defense engineer from the 80ies/90ies, and they'll have interesting stories to tell you. (like my pops).

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Gun, Raybyrnes,

 

I don't think people looking for deals will be disappointed. I think one thing to keep in mind though is that while primary home owners might to some extent be somewhat bailed out, isn't there the gamut of speculators/flippers that is still out there? Isn't SD a market that was highly speculative? If so, we should see some fallout, because I don't think those efforts to raise conforming limits etc are really going to help the speculators, save perhaps refinancing their own home to bridge over to their speculation, which would be a baffoon move… So I wouldn't say all is lost here. How that shakes out, heck knows. But something 's going to shake out. The 90ies RE recession I remember the worst got hit were the speculators and people who couldn't hold on. You still going to have a percentage of those people. Add in a Democratic Government win and a reduction of the defense spending following that, so cal economy will go into the crapper. Happened in the 90ies, and frankly the industry here isn't as diverse as one would think. We haven't seen nothing yet compared to the 90ies. You have people barely making it while still have relatively high employment. Wait to the effect of unemployment. Suddenly all the folks barely scrape by will now be in trouble. Doesn't matter how low you could refinance..If you don't got employment, you're still screwed…..Personally, I'm not looking forward to that if it happens..because it will be ugly.. But the defense spending days are numbered, i'm afraid. This is probably lousy advice..but folks that are I know that are working in the defense/gov sector…I'm telling them to get out now while they can. Ask any aerospace/defense engineer from the 80ies/90ies, and they'll have interesting stories to tell you. (like my pops).

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Gun, Raybyrnes,

 

I don't think people looking for deals will be disappointed. I think one thing to keep in mind though is that while primary home owners might to some extent be somewhat bailed out, isn't there the gamut of speculators/flippers that is still out there? Isn't SD a market that was highly speculative? If so, we should see some fallout, because I don't think those efforts to raise conforming limits etc are really going to help the speculators, save perhaps refinancing their own home to bridge over to their speculation, which would be a baffoon move… So I wouldn't say all is lost here. How that shakes out, heck knows. But something 's going to shake out. The 90ies RE recession I remember the worst got hit were the speculators and people who couldn't hold on. You still going to have a percentage of those people. Add in a Democratic Government win and a reduction of the defense spending following that, so cal economy will go into the crapper. Happened in the 90ies, and frankly the industry here isn't as diverse as one would think. We haven't seen nothing yet compared to the 90ies. You have people barely making it while still have relatively high employment. Wait to the effect of unemployment. Suddenly all the folks barely scrape by will now be in trouble. Doesn't matter how low you could refinance..If you don't got employment, you're still screwed…..Personally, I'm not looking forward to that if it happens..because it will be ugly.. But the defense spending days are numbered, i'm afraid. This is probably lousy advice..but folks that are I know that are working in the defense/gov sector…I'm telling them to get out now while they can. Ask any aerospace/defense engineer from the 80ies/90ies, and they'll have interesting stories to tell you. (like my pops).

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Gun, Raybyrnes,

 

I don't think people looking for deals will be disappointed. I think one thing to keep in mind though is that while primary home owners might to some extent be somewhat bailed out, isn't there the gamut of speculators/flippers that is still out there? Isn't SD a market that was highly speculative? If so, we should see some fallout, because I don't think those efforts to raise conforming limits etc are really going to help the speculators, save perhaps refinancing their own home to bridge over to their speculation, which would be a baffoon move… So I wouldn't say all is lost here. How that shakes out, heck knows. But something 's going to shake out. The 90ies RE recession I remember the worst got hit were the speculators and people who couldn't hold on. You still going to have a percentage of those people. Add in a Democratic Government win and a reduction of the defense spending following that, so cal economy will go into the crapper. Happened in the 90ies, and frankly the industry here isn't as diverse as one would think. We haven't seen nothing yet compared to the 90ies. You have people barely making it while still have relatively high employment. Wait to the effect of unemployment. Suddenly all the folks barely scrape by will now be in trouble. Doesn't matter how low you could refinance..If you don't got employment, you're still screwed…..Personally, I'm not looking forward to that if it happens..because it will be ugly.. But the defense spending days are numbered, i'm afraid. This is probably lousy advice..but folks that are I know that are working in the defense/gov sector…I'm telling them to get out now while they can. Ask any aerospace/defense engineer from the 80ies/90ies, and they'll have interesting stories to tell you. (like my pops).

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[SHILOH]

This reinforces what I have thought about rating agencies..
and the supposed securities analysts…the new breed of them through the 90s to now…are not to be believed.
AAA BONDS now 50 cents on the dollar.

Thanks for that superb rating analysis!

And the homeowners….It was “fine” as a long as the value is going up..up..up..
Says a woman who says “why pay a $3200 mortgage payment on a 1200 SF house? IN STOCKTON?? She didn’t figure that out before?

These buyers were stupid to begin with…but now they are parroting the line….I didn’t know, realize…etc..they wised up real fast on how to pass the buck. But it does appear in Stockton…it’s epidemic.

Now they’re spinning it “Free Money”…uh…free means you don’t pay it back. A contract for repayment does not mean “free.”

Who knows…maybe the guv was paying people to buy homes.

[kewp]

Thanks for that superb rating analysis!

A friend of mine that work in the financial services industry in NYC says this wasn’t much of a surprise to him as ratings work is about as low on the totem pole as you can get career-wise.

[kewp]

Thanks for that superb rating analysis!

A friend of mine that work in the financial services industry in NYC says this wasn’t much of a surprise to him as ratings work is about as low on the totem pole as you can get career-wise.

[kewp]

Thanks for that superb rating analysis!

A friend of mine that work in the financial services industry in NYC says this wasn’t much of a surprise to him as ratings work is about as low on the totem pole as you can get career-wise.

[kewp]

Thanks for that superb rating analysis!

A friend of mine that work in the financial services industry in NYC says this wasn’t much of a surprise to him as ratings work is about as low on the totem pole as you can get career-wise.

[kewp]

Thanks for that superb rating analysis!

A friend of mine that work in the financial services industry in NYC says this wasn’t much of a surprise to him as ratings work is about as low on the totem pole as you can get career-wise.

[SHILOH]

This reinforces what I have thought about rating agencies..
and the supposed securities analysts…the new breed of them through the 90s to now…are not to be believed.
AAA BONDS now 50 cents on the dollar.

Thanks for that superb rating analysis!

And the homeowners….It was “fine” as a long as the value is going up..up..up..
Says a woman who says “why pay a $3200 mortgage payment on a 1200 SF house? IN STOCKTON?? She didn’t figure that out before?

These buyers were stupid to begin with…but now they are parroting the line….I didn’t know, realize…etc..they wised up real fast on how to pass the buck. But it does appear in Stockton…it’s epidemic.

Now they’re spinning it “Free Money”…uh…free means you don’t pay it back. A contract for repayment does not mean “free.”

Who knows…maybe the guv was paying people to buy homes.

[SHILOH]

This reinforces what I have thought about rating agencies..
and the supposed securities analysts…the new breed of them through the 90s to now…are not to be believed.
AAA BONDS now 50 cents on the dollar.

Thanks for that superb rating analysis!

And the homeowners….It was “fine” as a long as the value is going up..up..up..
Says a woman who says “why pay a $3200 mortgage payment on a 1200 SF house? IN STOCKTON?? She didn’t figure that out before?

These buyers were stupid to begin with…but now they are parroting the line….I didn’t know, realize…etc..they wised up real fast on how to pass the buck. But it does appear in Stockton…it’s epidemic.

Now they’re spinning it “Free Money”…uh…free means you don’t pay it back. A contract for repayment does not mean “free.”

Who knows…maybe the guv was paying people to buy homes.

[SHILOH]

This reinforces what I have thought about rating agencies..
and the supposed securities analysts…the new breed of them through the 90s to now…are not to be believed.
AAA BONDS now 50 cents on the dollar.

Thanks for that superb rating analysis!

And the homeowners….It was “fine” as a long as the value is going up..up..up..
Says a woman who says “why pay a $3200 mortgage payment on a 1200 SF house? IN STOCKTON?? She didn’t figure that out before?

These buyers were stupid to begin with…but now they are parroting the line….I didn’t know, realize…etc..they wised up real fast on how to pass the buck. But it does appear in Stockton…it’s epidemic.

Now they’re spinning it “Free Money”…uh…free means you don’t pay it back. A contract for repayment does not mean “free.”

Who knows…maybe the guv was paying people to buy homes.

[SHILOH]

This reinforces what I have thought about rating agencies..
and the supposed securities analysts…the new breed of them through the 90s to now…are not to be believed.
AAA BONDS now 50 cents on the dollar.

Thanks for that superb rating analysis!

And the homeowners….It was “fine” as a long as the value is going up..up..up..
Says a woman who says “why pay a $3200 mortgage payment on a 1200 SF house? IN STOCKTON?? She didn’t figure that out before?

These buyers were stupid to begin with…but now they are parroting the line….I didn’t know, realize…etc..they wised up real fast on how to pass the buck. But it does appear in Stockton…it’s epidemic.

Now they’re spinning it “Free Money”…uh…free means you don’t pay it back. A contract for repayment does not mean “free.”

Who knows…maybe the guv was paying people to buy homes.

[DoJC]

These folks who are thinking about breaking their contracts on the premise of dropping values would scream and sue everyone involved if the reverse situation was true – home prices appreciating nicely and the bank decided it wanted to break their contract and take back the house and sell it for more money. If an contractual agreement is simply a matter of convenience it should hold true that both parties that entered into the agreement aren’t bound by its terms. If people who can afford to pay are allowed to simply walk away for their own convenience and lack of due diligence then the banks have every right to enforce the contract.

My favorite line is from the woman who states: Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

I bet you that when the house was appreciating at 15-20% per year she was fine with making a payment like that. But, when she gambled on that trend continuing into the future, and lost that gamble, it suddenly doesn’t make sense.

Man, David Hannum (not PT Barnum who was mistakenly attributed with the famous quote) was dead on, and way ahead of his time – “There is a sucker born every minute!”

-Doug

[DoJC]

These folks who are thinking about breaking their contracts on the premise of dropping values would scream and sue everyone involved if the reverse situation was true – home prices appreciating nicely and the bank decided it wanted to break their contract and take back the house and sell it for more money. If an contractual agreement is simply a matter of convenience it should hold true that both parties that entered into the agreement aren’t bound by its terms. If people who can afford to pay are allowed to simply walk away for their own convenience and lack of due diligence then the banks have every right to enforce the contract.

My favorite line is from the woman who states: Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

I bet you that when the house was appreciating at 15-20% per year she was fine with making a payment like that. But, when she gambled on that trend continuing into the future, and lost that gamble, it suddenly doesn’t make sense.

Man, David Hannum (not PT Barnum who was mistakenly attributed with the famous quote) was dead on, and way ahead of his time – “There is a sucker born every minute!”

-Doug

[DoJC]

These folks who are thinking about breaking their contracts on the premise of dropping values would scream and sue everyone involved if the reverse situation was true – home prices appreciating nicely and the bank decided it wanted to break their contract and take back the house and sell it for more money. If an contractual agreement is simply a matter of convenience it should hold true that both parties that entered into the agreement aren’t bound by its terms. If people who can afford to pay are allowed to simply walk away for their own convenience and lack of due diligence then the banks have every right to enforce the contract.

My favorite line is from the woman who states: Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

I bet you that when the house was appreciating at 15-20% per year she was fine with making a payment like that. But, when she gambled on that trend continuing into the future, and lost that gamble, it suddenly doesn’t make sense.

Man, David Hannum (not PT Barnum who was mistakenly attributed with the famous quote) was dead on, and way ahead of his time – “There is a sucker born every minute!”

-Doug

[DoJC]

These folks who are thinking about breaking their contracts on the premise of dropping values would scream and sue everyone involved if the reverse situation was true – home prices appreciating nicely and the bank decided it wanted to break their contract and take back the house and sell it for more money. If an contractual agreement is simply a matter of convenience it should hold true that both parties that entered into the agreement aren’t bound by its terms. If people who can afford to pay are allowed to simply walk away for their own convenience and lack of due diligence then the banks have every right to enforce the contract.

My favorite line is from the woman who states: Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

I bet you that when the house was appreciating at 15-20% per year she was fine with making a payment like that. But, when she gambled on that trend continuing into the future, and lost that gamble, it suddenly doesn’t make sense.

Man, David Hannum (not PT Barnum who was mistakenly attributed with the famous quote) was dead on, and way ahead of his time – “There is a sucker born every minute!”

-Doug

[DoJC]

These folks who are thinking about breaking their contracts on the premise of dropping values would scream and sue everyone involved if the reverse situation was true – home prices appreciating nicely and the bank decided it wanted to break their contract and take back the house and sell it for more money. If an contractual agreement is simply a matter of convenience it should hold true that both parties that entered into the agreement aren’t bound by its terms. If people who can afford to pay are allowed to simply walk away for their own convenience and lack of due diligence then the banks have every right to enforce the contract.

My favorite line is from the woman who states: Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

I bet you that when the house was appreciating at 15-20% per year she was fine with making a payment like that. But, when she gambled on that trend continuing into the future, and lost that gamble, it suddenly doesn’t make sense.

Man, David Hannum (not PT Barnum who was mistakenly attributed with the famous quote) was dead on, and way ahead of his time – “There is a sucker born every minute!”

-Doug

[Author]

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