Bailout – What does it mean for real estate for us waiting?

[jpinpb]

Someone please help me understand what it means for all of us that have been waiting. Will this bailout allow banks to release the inventory they are holding on to? Will they reduce the loan amount and there will be no foreclosures? Will prices continue to decline or not?

I am a little confused by what this all means for housing prices. Can we expect further declines or is this bailout putting the brakes on all the foreclosures in the pipeline?

I have seen home prices decline significantly in less desired neighborhoods. Places that are desired, for example, 4$ – although not an area I’m looking to buy in – 4$ seemed poised for a tumble. Prices came down somewhat there, but IMO still very high compared to incomes. I was expecting eventually there would be greater declines there. Same w/Carmel Valley. Is this bailout saving the day, despite what it means for taxpayers?

Will this bailout really allow money to flow freely again and stupid loans are going to be made all over again?

Thanks for feedback.

[moneymaker]

Hope I don’t kill this thread as I am also interested in the savy opinions of others on this board. My wife and I have good incomes and good FICO’s and we also are of the opinions that even though prices have fallen quite a bit, they are still too high. Interest rates are bound to go up and when they do that will affect the bottom investors(people that don’t have 100% cash). I could not help but think when viewing the Lisa Ling video about foreclosure alley that she is probably drolling at buying a few of those houses for cash and renting them out. I also noticed that interest rates seem to be instep with unemployment.

[moneymaker]

Hope I don’t kill this thread as I am also interested in the savy opinions of others on this board. My wife and I have good incomes and good FICO’s and we also are of the opinions that even though prices have fallen quite a bit, they are still too high. Interest rates are bound to go up and when they do that will affect the bottom investors(people that don’t have 100% cash). I could not help but think when viewing the Lisa Ling video about foreclosure alley that she is probably drolling at buying a few of those houses for cash and renting them out. I also noticed that interest rates seem to be instep with unemployment.

[moneymaker]

Hope I don’t kill this thread as I am also interested in the savy opinions of others on this board. My wife and I have good incomes and good FICO’s and we also are of the opinions that even though prices have fallen quite a bit, they are still too high. Interest rates are bound to go up and when they do that will affect the bottom investors(people that don’t have 100% cash). I could not help but think when viewing the Lisa Ling video about foreclosure alley that she is probably drolling at buying a few of those houses for cash and renting them out. I also noticed that interest rates seem to be instep with unemployment.

[moneymaker]

Hope I don’t kill this thread as I am also interested in the savy opinions of others on this board. My wife and I have good incomes and good FICO’s and we also are of the opinions that even though prices have fallen quite a bit, they are still too high. Interest rates are bound to go up and when they do that will affect the bottom investors(people that don’t have 100% cash). I could not help but think when viewing the Lisa Ling video about foreclosure alley that she is probably drolling at buying a few of those houses for cash and renting them out. I also noticed that interest rates seem to be instep with unemployment.

[moneymaker]

Hope I don’t kill this thread as I am also interested in the savy opinions of others on this board. My wife and I have good incomes and good FICO’s and we also are of the opinions that even though prices have fallen quite a bit, they are still too high. Interest rates are bound to go up and when they do that will affect the bottom investors(people that don’t have 100% cash). I could not help but think when viewing the Lisa Ling video about foreclosure alley that she is probably drolling at buying a few of those houses for cash and renting them out. I also noticed that interest rates seem to be instep with unemployment.

[NotCranky]

At least another year or two where prices are falling to varying extents with only a few exceptions.

[NotCranky]

At least another year or two where prices are falling to varying extents with only a few exceptions.

[NotCranky]

At least another year or two where prices are falling to varying extents with only a few exceptions.

[NotCranky]

At least another year or two where prices are falling to varying extents with only a few exceptions.

[NotCranky]

At least another year or two where prices are falling to varying extents with only a few exceptions.

[Huckleberry]

Here is my take on this.

Based on this article:
http://money.cnn.com/2008/10/01/real_estate/hope_for_homeowners/index.htm

The new $300 billion Hope for Homeownership program will more than likely be a template for subsequent programs.

It states these criteria for eligibility:

– have taken out their mortgages on or before Jan. 1, 2008 and have made at least six payments.

– be unable to afford their current loan, but did not intentionally miss payments.

– have a debt-to-income ratio of at least 31%.

– live in the house and not own other homes.

– have provided accurate information on their loan documents and not been convicted of fraud in the past decade.

Under the program, borrowers will get:

– a 30-year, fixed rate mortgage of up to $550,440.

– a new appraisal and loan for no more than 90% of the home’s value.

– released from second mortgages and prepayment penalties.

– But homeowners must pay a premium of 3% of the loan’s value upfront, and 1.5% of the outstanding mortgage amount annually. Also, they must share any appreciation in the home’s value with the FHA when they sell.

But, based on MR. Mortgages analysis of the banks and modeling of RE values:
http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/

I can’t see how this convinces SoCal owners to use the program(s), considering how upside down most are. I would personally rather walk away than pay 10% down (based on the new loan only being 90% of appraised value), 3% premium, a 1.5% annual fee plus appreciation sharing w/ FHA.

I would much rather walk away, take the credit hit, save money while renting, let values decline more, then try again in five years.

Additionally, without the exotic loan programs there still aren’t enough buyers on the fence to soak up all of the coming inventory. This is backed up by MM analysis of how the bailout doesn’t even scratch the surface of the defaults in the pipeline:
http://mrmortgage.ml-implode.com/2008/09/23/mortgage-defaults-already-at-50bb-per-month700bb-wont-go-too-far/

And again, I can guarantee many won’t even qualify for this program, as they will be proven to have fraudulently acquired their original loans.

So Piggs, what are your thoughts on this? I would also like to hear some opinions…

peterb and temeculaguy, what are your thoughts? You guys usually have good insight to these topics…

[Huckleberry]

Here is my take on this.

Based on this article:
http://money.cnn.com/2008/10/01/real_estate/hope_for_homeowners/index.htm

The new $300 billion Hope for Homeownership program will more than likely be a template for subsequent programs.

It states these criteria for eligibility:

– have taken out their mortgages on or before Jan. 1, 2008 and have made at least six payments.

– be unable to afford their current loan, but did not intentionally miss payments.

– have a debt-to-income ratio of at least 31%.

– live in the house and not own other homes.

– have provided accurate information on their loan documents and not been convicted of fraud in the past decade.

Under the program, borrowers will get:

– a 30-year, fixed rate mortgage of up to $550,440.

– a new appraisal and loan for no more than 90% of the home’s value.

– released from second mortgages and prepayment penalties.

– But homeowners must pay a premium of 3% of the loan’s value upfront, and 1.5% of the outstanding mortgage amount annually. Also, they must share any appreciation in the home’s value with the FHA when they sell.

But, based on MR. Mortgages analysis of the banks and modeling of RE values:
http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/

I can’t see how this convinces SoCal owners to use the program(s), considering how upside down most are. I would personally rather walk away than pay 10% down (based on the new loan only being 90% of appraised value), 3% premium, a 1.5% annual fee plus appreciation sharing w/ FHA.

I would much rather walk away, take the credit hit, save money while renting, let values decline more, then try again in five years.

Additionally, without the exotic loan programs there still aren’t enough buyers on the fence to soak up all of the coming inventory. This is backed up by MM analysis of how the bailout doesn’t even scratch the surface of the defaults in the pipeline:
http://mrmortgage.ml-implode.com/2008/09/23/mortgage-defaults-already-at-50bb-per-month700bb-wont-go-too-far/

And again, I can guarantee many won’t even qualify for this program, as they will be proven to have fraudulently acquired their original loans.

So Piggs, what are your thoughts on this? I would also like to hear some opinions…

peterb and temeculaguy, what are your thoughts? You guys usually have good insight to these topics…

[Huckleberry]

Here is my take on this.

Based on this article:
http://money.cnn.com/2008/10/01/real_estate/hope_for_homeowners/index.htm

The new $300 billion Hope for Homeownership program will more than likely be a template for subsequent programs.

It states these criteria for eligibility:

– have taken out their mortgages on or before Jan. 1, 2008 and have made at least six payments.

– be unable to afford their current loan, but did not intentionally miss payments.

– have a debt-to-income ratio of at least 31%.

– live in the house and not own other homes.

– have provided accurate information on their loan documents and not been convicted of fraud in the past decade.

Under the program, borrowers will get:

– a 30-year, fixed rate mortgage of up to $550,440.

– a new appraisal and loan for no more than 90% of the home’s value.

– released from second mortgages and prepayment penalties.

– But homeowners must pay a premium of 3% of the loan’s value upfront, and 1.5% of the outstanding mortgage amount annually. Also, they must share any appreciation in the home’s value with the FHA when they sell.

But, based on MR. Mortgages analysis of the banks and modeling of RE values:
http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/

I can’t see how this convinces SoCal owners to use the program(s), considering how upside down most are. I would personally rather walk away than pay 10% down (based on the new loan only being 90% of appraised value), 3% premium, a 1.5% annual fee plus appreciation sharing w/ FHA.

I would much rather walk away, take the credit hit, save money while renting, let values decline more, then try again in five years.

Additionally, without the exotic loan programs there still aren’t enough buyers on the fence to soak up all of the coming inventory. This is backed up by MM analysis of how the bailout doesn’t even scratch the surface of the defaults in the pipeline:
http://mrmortgage.ml-implode.com/2008/09/23/mortgage-defaults-already-at-50bb-per-month700bb-wont-go-too-far/

And again, I can guarantee many won’t even qualify for this program, as they will be proven to have fraudulently acquired their original loans.

So Piggs, what are your thoughts on this? I would also like to hear some opinions…

peterb and temeculaguy, what are your thoughts? You guys usually have good insight to these topics…

[Huckleberry]

Here is my take on this.

Based on this article:
http://money.cnn.com/2008/10/01/real_estate/hope_for_homeowners/index.htm

The new $300 billion Hope for Homeownership program will more than likely be a template for subsequent programs.

It states these criteria for eligibility:

– have taken out their mortgages on or before Jan. 1, 2008 and have made at least six payments.

– be unable to afford their current loan, but did not intentionally miss payments.

– have a debt-to-income ratio of at least 31%.

– live in the house and not own other homes.

– have provided accurate information on their loan documents and not been convicted of fraud in the past decade.

Under the program, borrowers will get:

– a 30-year, fixed rate mortgage of up to $550,440.

– a new appraisal and loan for no more than 90% of the home’s value.

– released from second mortgages and prepayment penalties.

– But homeowners must pay a premium of 3% of the loan’s value upfront, and 1.5% of the outstanding mortgage amount annually. Also, they must share any appreciation in the home’s value with the FHA when they sell.

But, based on MR. Mortgages analysis of the banks and modeling of RE values:
http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/

I can’t see how this convinces SoCal owners to use the program(s), considering how upside down most are. I would personally rather walk away than pay 10% down (based on the new loan only being 90% of appraised value), 3% premium, a 1.5% annual fee plus appreciation sharing w/ FHA.

I would much rather walk away, take the credit hit, save money while renting, let values decline more, then try again in five years.

Additionally, without the exotic loan programs there still aren’t enough buyers on the fence to soak up all of the coming inventory. This is backed up by MM analysis of how the bailout doesn’t even scratch the surface of the defaults in the pipeline:
http://mrmortgage.ml-implode.com/2008/09/23/mortgage-defaults-already-at-50bb-per-month700bb-wont-go-too-far/

And again, I can guarantee many won’t even qualify for this program, as they will be proven to have fraudulently acquired their original loans.

So Piggs, what are your thoughts on this? I would also like to hear some opinions…

peterb and temeculaguy, what are your thoughts? You guys usually have good insight to these topics…

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