A perfect storm brewing 2010-2012?

[pencilneck]

I put together a quick summary of housing issues we’re facing over the next few years. I’ve seen many of these issues discussed individually, but hadn’t several of these issues all put together.

We seem currently face a “perfect storm” in housing in the 2010-2012 time-frame. Of course, everything is subject to change at the governments whim.

1. First time home owner’s tax credit expires May 1, 2010.

2. The Federal Reserve has said that they would begin winding down purchasing MBS debt so that it should end after the first quarter of 2010. They currently support said 90% of mortgage market. Several predict 30 year interest rates will increase and/or mortgages will be more difficult to attain.

3. A large percentage of Option ARMs, a loan said to have been especially popular in California during the boom, are resetting in 2011.

4. The part of the Emergency Economic Stabilization Act of 2008, in which forgiven mortgage debt is not considered taxable income by the IRS, expires January 1, 2013. This may only apply to those with recourse loans, but this is still a large portion of the So-Cal market.

Those who may hold recourse loans include: Many of those that refinanced or had certain loan modifications, many second home purchases, virtually all cash out refinancing. Any recourse loan holder that feels that they may eventually face foreclosure or enter a short sale has a huge incentive to complete this on or before December 31, 2012.

On the other hand:

1. There is the HAMP program.

2. The Nuclear Option: White House could ban any foreclosure unless the loan in question has been screened for HAMP.

3. The government can extend any of the above programs or introduce new ones. And nearly certainly will.

Commentary: There seems to be increasing resistance in Washington to extending these types of programs.

[briansd1]

[quote=pencilneck] Of course, everything is subject to change at the governments whim.
[/quote]

We have conservatives here who like to argue the government f—- everything it touches.

But when it comes to propping up housing prices? Surprise!! Government action works!!!

[briansd1]

[quote=pencilneck] Of course, everything is subject to change at the governments whim.
[/quote]

We have conservatives here who like to argue the government f—- everything it touches.

But when it comes to propping up housing prices? Surprise!! Government action works!!!

[briansd1]

[quote=pencilneck] Of course, everything is subject to change at the governments whim.
[/quote]

We have conservatives here who like to argue the government f—- everything it touches.

But when it comes to propping up housing prices? Surprise!! Government action works!!!

[briansd1]

[quote=pencilneck] Of course, everything is subject to change at the governments whim.
[/quote]

We have conservatives here who like to argue the government f—- everything it touches.

But when it comes to propping up housing prices? Surprise!! Government action works!!!

[briansd1]

[quote=pencilneck] Of course, everything is subject to change at the governments whim.
[/quote]

We have conservatives here who like to argue the government f—- everything it touches.

But when it comes to propping up housing prices? Surprise!! Government action works!!!

[XBoxBoy]

[quote=briansd1]We have conservatives here who like to argue the government f—- everything it touches.[/quote]

So simple question. What would it take to get you past your constant framing of issues as conservative vs liberal, or democrat vs republican?

[quote]But when it comes to propping up housing prices? Surprise!! Government action works!!![/quote]

I guess it depends on what you mean by work. I’ll certainly grant you that all the govt action probably has slowed if not stopped the fall of house prices. I for one have been rather surprised at how things played out in the last year.

But would it have stopped without govt action? That’s a worthwhile question to ask. I don’t really have an answer, and I’m not sure anyone could do more than offer an opinion(guess?).

But still, somehow it strikes me as wrong to use the word “works” in a sentence about the current housing market.

XBoxBoy

[XBoxBoy]

[quote=briansd1]We have conservatives here who like to argue the government f—- everything it touches.[/quote]

So simple question. What would it take to get you past your constant framing of issues as conservative vs liberal, or democrat vs republican?

[quote]But when it comes to propping up housing prices? Surprise!! Government action works!!![/quote]

I guess it depends on what you mean by work. I’ll certainly grant you that all the govt action probably has slowed if not stopped the fall of house prices. I for one have been rather surprised at how things played out in the last year.

But would it have stopped without govt action? That’s a worthwhile question to ask. I don’t really have an answer, and I’m not sure anyone could do more than offer an opinion(guess?).

But still, somehow it strikes me as wrong to use the word “works” in a sentence about the current housing market.

XBoxBoy

[XBoxBoy]

[quote=briansd1]We have conservatives here who like to argue the government f—- everything it touches.[/quote]

So simple question. What would it take to get you past your constant framing of issues as conservative vs liberal, or democrat vs republican?

[quote]But when it comes to propping up housing prices? Surprise!! Government action works!!![/quote]

I guess it depends on what you mean by work. I’ll certainly grant you that all the govt action probably has slowed if not stopped the fall of house prices. I for one have been rather surprised at how things played out in the last year.

But would it have stopped without govt action? That’s a worthwhile question to ask. I don’t really have an answer, and I’m not sure anyone could do more than offer an opinion(guess?).

But still, somehow it strikes me as wrong to use the word “works” in a sentence about the current housing market.

XBoxBoy

[XBoxBoy]

[quote=briansd1]We have conservatives here who like to argue the government f—- everything it touches.[/quote]

So simple question. What would it take to get you past your constant framing of issues as conservative vs liberal, or democrat vs republican?

[quote]But when it comes to propping up housing prices? Surprise!! Government action works!!![/quote]

I guess it depends on what you mean by work. I’ll certainly grant you that all the govt action probably has slowed if not stopped the fall of house prices. I for one have been rather surprised at how things played out in the last year.

But would it have stopped without govt action? That’s a worthwhile question to ask. I don’t really have an answer, and I’m not sure anyone could do more than offer an opinion(guess?).

But still, somehow it strikes me as wrong to use the word “works” in a sentence about the current housing market.

XBoxBoy

[XBoxBoy]

[quote=briansd1]We have conservatives here who like to argue the government f—- everything it touches.[/quote]

So simple question. What would it take to get you past your constant framing of issues as conservative vs liberal, or democrat vs republican?

[quote]But when it comes to propping up housing prices? Surprise!! Government action works!!![/quote]

I guess it depends on what you mean by work. I’ll certainly grant you that all the govt action probably has slowed if not stopped the fall of house prices. I for one have been rather surprised at how things played out in the last year.

But would it have stopped without govt action? That’s a worthwhile question to ask. I don’t really have an answer, and I’m not sure anyone could do more than offer an opinion(guess?).

But still, somehow it strikes me as wrong to use the word “works” in a sentence about the current housing market.

XBoxBoy

[pencilneck]

Observation about point 4 above and shadow inventory:

If the vast pool of shadow inventory still exists into the near future, won’t it be funny if these people actually start begging the banks to foreclose before 2013? Otherwise they could face financially crippling tax bills when the banks do finally get around to foreclosing.

Delayed foreclosure could be a boon for the IRS.

[pencilneck]

Observation about point 4 above and shadow inventory:

If the vast pool of shadow inventory still exists into the near future, won’t it be funny if these people actually start begging the banks to foreclose before 2013? Otherwise they could face financially crippling tax bills when the banks do finally get around to foreclosing.

Delayed foreclosure could be a boon for the IRS.

[pencilneck]

Observation about point 4 above and shadow inventory:

If the vast pool of shadow inventory still exists into the near future, won’t it be funny if these people actually start begging the banks to foreclose before 2013? Otherwise they could face financially crippling tax bills when the banks do finally get around to foreclosing.

Delayed foreclosure could be a boon for the IRS.

[pencilneck]

Observation about point 4 above and shadow inventory:

If the vast pool of shadow inventory still exists into the near future, won’t it be funny if these people actually start begging the banks to foreclose before 2013? Otherwise they could face financially crippling tax bills when the banks do finally get around to foreclosing.

Delayed foreclosure could be a boon for the IRS.

[Author]

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