Effect of the Mega Bailout on home prices

[kev374]

There has been a lot of discussion on the bailout itself but not a lot on how it affects the current decline in home prices here in Southern California. It seems like a big hope for this bailout is that it will stem the declines. NY times has an article out that the bailout should stop or even reverse price declines.

What are your thoughts? Has this bailout now created a bottom in housing prices? Will Southern California prices start rising again??

If housing prices are driving by affordability how can this bailout prevent housing prices from declining to a point where they should be? I fail to understand the logic of those who are saying this bailout is going to stem the decline in housing prices.

[bubba99]

The only tool that RTC2 will have to stabalize housing prices is to manage the interest rates on loans. If they lower the interest rate to 1 or 2% on the troubled CMO’s, presto the mortgage gets paid even though the principal is twice the market value. Two times the cost at half the rate is just about right.

[bubba99]

The only tool that RTC2 will have to stabalize housing prices is to manage the interest rates on loans. If they lower the interest rate to 1 or 2% on the troubled CMO’s, presto the mortgage gets paid even though the principal is twice the market value. Two times the cost at half the rate is just about right.

[bubba99]

The only tool that RTC2 will have to stabalize housing prices is to manage the interest rates on loans. If they lower the interest rate to 1 or 2% on the troubled CMO’s, presto the mortgage gets paid even though the principal is twice the market value. Two times the cost at half the rate is just about right.

[bubba99]

The only tool that RTC2 will have to stabalize housing prices is to manage the interest rates on loans. If they lower the interest rate to 1 or 2% on the troubled CMO’s, presto the mortgage gets paid even though the principal is twice the market value. Two times the cost at half the rate is just about right.

[bubba99]

The only tool that RTC2 will have to stabalize housing prices is to manage the interest rates on loans. If they lower the interest rate to 1 or 2% on the troubled CMO’s, presto the mortgage gets paid even though the principal is twice the market value. Two times the cost at half the rate is just about right.

[Running Bear]

Kev,

You are missing the point of what just happened here. Home prices at this point are the least of our worries. We are now talking about the survival of the American way of life. We are going to put on the Gov’t balance sheet the excesses of the past 20+ years. The repercussions of this choice are going to be so painful that I won’t even bother putting them down because they will be seen as tinfoil. In a matter of years people will understand just how bad this decision was.

I consider myself a patriot and love this country dearly. I served as an officer in the USMC for over 12 years. I honestly now believe that I will retire in a foreign country because the standard of living in this country will go down that much.

[Running Bear]

Kev,

You are missing the point of what just happened here. Home prices at this point are the least of our worries. We are now talking about the survival of the American way of life. We are going to put on the Gov’t balance sheet the excesses of the past 20+ years. The repercussions of this choice are going to be so painful that I won’t even bother putting them down because they will be seen as tinfoil. In a matter of years people will understand just how bad this decision was.

I consider myself a patriot and love this country dearly. I served as an officer in the USMC for over 12 years. I honestly now believe that I will retire in a foreign country because the standard of living in this country will go down that much.

[Running Bear]

Kev,

You are missing the point of what just happened here. Home prices at this point are the least of our worries. We are now talking about the survival of the American way of life. We are going to put on the Gov’t balance sheet the excesses of the past 20+ years. The repercussions of this choice are going to be so painful that I won’t even bother putting them down because they will be seen as tinfoil. In a matter of years people will understand just how bad this decision was.

I consider myself a patriot and love this country dearly. I served as an officer in the USMC for over 12 years. I honestly now believe that I will retire in a foreign country because the standard of living in this country will go down that much.

[Running Bear]

Kev,

You are missing the point of what just happened here. Home prices at this point are the least of our worries. We are now talking about the survival of the American way of life. We are going to put on the Gov’t balance sheet the excesses of the past 20+ years. The repercussions of this choice are going to be so painful that I won’t even bother putting them down because they will be seen as tinfoil. In a matter of years people will understand just how bad this decision was.

I consider myself a patriot and love this country dearly. I served as an officer in the USMC for over 12 years. I honestly now believe that I will retire in a foreign country because the standard of living in this country will go down that much.

[Running Bear]

Kev,

You are missing the point of what just happened here. Home prices at this point are the least of our worries. We are now talking about the survival of the American way of life. We are going to put on the Gov’t balance sheet the excesses of the past 20+ years. The repercussions of this choice are going to be so painful that I won’t even bother putting them down because they will be seen as tinfoil. In a matter of years people will understand just how bad this decision was.

I consider myself a patriot and love this country dearly. I served as an officer in the USMC for over 12 years. I honestly now believe that I will retire in a foreign country because the standard of living in this country will go down that much.

[Coronita]

…Well, considering that the Fed owns Fannie and Freddie, for practical considerations AIG, and just about every bad mortgage that there will be, what do you think will happen? You think the Fed is going to led home prices crater overnight? You think the Fed isn’t going to step in again and again?What started out to be a slow decline appears now to going to be even slower and slower and slower.

I wouldn’t be surprised if they start making these ridiculous low payment plans to keep people in homes longer to prolong the foreclosure issue (rather than one big bang, it’s a slow and now slower decline). I wonder what rates are going to look like soon. I have a feeling they are still going to stay low at least in the short term.

Personal reason, this is precisely why I don’t dick around considering my primary home being an investment. I’m not smart enough to time the markets and figure out when when the Fed is going to stop pissing into the wind. Inflation is eating “safe” savings, and we’re finding out things really aren’t that “safe”. And now fed keeps intervening in the housing/financial markets, who knows when we’ll see that additional 40% decline that some have claimed is yet to start.

NOTE: Selfishly, I hope I can refinance into a 2% 30 year fixed loan soon. Or maybe soon, it will be a -1% 30 year fixed loan, in which the Fed rebates me back to buy a home with a mortgage. Yeah, that would do it for me. 🙂

But more alarming (echoing Running Bear), I weep for our children who are going to be on the hook for this. I hope before than it either miraculously gets fixed OR my child decides to live in a better environment somewhere else.

[Coronita]

…Well, considering that the Fed owns Fannie and Freddie, for practical considerations AIG, and just about every bad mortgage that there will be, what do you think will happen? You think the Fed is going to led home prices crater overnight? You think the Fed isn’t going to step in again and again?What started out to be a slow decline appears now to going to be even slower and slower and slower.

I wouldn’t be surprised if they start making these ridiculous low payment plans to keep people in homes longer to prolong the foreclosure issue (rather than one big bang, it’s a slow and now slower decline). I wonder what rates are going to look like soon. I have a feeling they are still going to stay low at least in the short term.

Personal reason, this is precisely why I don’t dick around considering my primary home being an investment. I’m not smart enough to time the markets and figure out when when the Fed is going to stop pissing into the wind. Inflation is eating “safe” savings, and we’re finding out things really aren’t that “safe”. And now fed keeps intervening in the housing/financial markets, who knows when we’ll see that additional 40% decline that some have claimed is yet to start.

NOTE: Selfishly, I hope I can refinance into a 2% 30 year fixed loan soon. Or maybe soon, it will be a -1% 30 year fixed loan, in which the Fed rebates me back to buy a home with a mortgage. Yeah, that would do it for me. 🙂

But more alarming (echoing Running Bear), I weep for our children who are going to be on the hook for this. I hope before than it either miraculously gets fixed OR my child decides to live in a better environment somewhere else.

[Coronita]

…Well, considering that the Fed owns Fannie and Freddie, for practical considerations AIG, and just about every bad mortgage that there will be, what do you think will happen? You think the Fed is going to led home prices crater overnight? You think the Fed isn’t going to step in again and again?What started out to be a slow decline appears now to going to be even slower and slower and slower.

I wouldn’t be surprised if they start making these ridiculous low payment plans to keep people in homes longer to prolong the foreclosure issue (rather than one big bang, it’s a slow and now slower decline). I wonder what rates are going to look like soon. I have a feeling they are still going to stay low at least in the short term.

Personal reason, this is precisely why I don’t dick around considering my primary home being an investment. I’m not smart enough to time the markets and figure out when when the Fed is going to stop pissing into the wind. Inflation is eating “safe” savings, and we’re finding out things really aren’t that “safe”. And now fed keeps intervening in the housing/financial markets, who knows when we’ll see that additional 40% decline that some have claimed is yet to start.

NOTE: Selfishly, I hope I can refinance into a 2% 30 year fixed loan soon. Or maybe soon, it will be a -1% 30 year fixed loan, in which the Fed rebates me back to buy a home with a mortgage. Yeah, that would do it for me. 🙂

But more alarming (echoing Running Bear), I weep for our children who are going to be on the hook for this. I hope before than it either miraculously gets fixed OR my child decides to live in a better environment somewhere else.

[Coronita]

…Well, considering that the Fed owns Fannie and Freddie, for practical considerations AIG, and just about every bad mortgage that there will be, what do you think will happen? You think the Fed is going to led home prices crater overnight? You think the Fed isn’t going to step in again and again?What started out to be a slow decline appears now to going to be even slower and slower and slower.

I wouldn’t be surprised if they start making these ridiculous low payment plans to keep people in homes longer to prolong the foreclosure issue (rather than one big bang, it’s a slow and now slower decline). I wonder what rates are going to look like soon. I have a feeling they are still going to stay low at least in the short term.

Personal reason, this is precisely why I don’t dick around considering my primary home being an investment. I’m not smart enough to time the markets and figure out when when the Fed is going to stop pissing into the wind. Inflation is eating “safe” savings, and we’re finding out things really aren’t that “safe”. And now fed keeps intervening in the housing/financial markets, who knows when we’ll see that additional 40% decline that some have claimed is yet to start.

NOTE: Selfishly, I hope I can refinance into a 2% 30 year fixed loan soon. Or maybe soon, it will be a -1% 30 year fixed loan, in which the Fed rebates me back to buy a home with a mortgage. Yeah, that would do it for me. 🙂

But more alarming (echoing Running Bear), I weep for our children who are going to be on the hook for this. I hope before than it either miraculously gets fixed OR my child decides to live in a better environment somewhere else.

[Author]

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