Fed empties the Armory, expends all ammo, housing has bottomed. SD RE will cost more in August of 09 than it does now.

[TheBreeze]

Mr. Mortgage disagrees:

With respect to mortgage and housing and today’s Fed action, we already knew most of what was announced. If a week from now you can go out and get an Agency Jumbo ($417,001 to $625k) under 6.5% or a bank portfolio Jumbo from $625,001 to $1 million+ under 7.5% I will pay attention. But as of now it is more of the same — the foreclosure market is the real estate market, higher grade paper defaults are accelerating, negative-equity is epidemic, and higher end home prices are compressing on lower end prices due to lack of financing and able buyers.

Will conforming ($417k and below) rates going from 6% a few weeks ago to 5.25% today really have that much impact on the market? What if 4.5% comes around – remember, home ownership was at 68% a couple of years back. Combine that and the fact that at present, some 70% of all home owners with mortgages in the most important housing markets in the nation are either underwater or near-underwater (within 5% and unable to refi or sell without paying), and there is just not enough active participants to quickly solve this problem quickly through low interest rates. There are millions of units presently on the market and millions more in the foreclosure pipeline that have to be churned through. Cramer’s prediction of a housing market bottom in June 2009 is a pipe dream, that is for sure.

http://mrmortgage.ml-implode.com/2008/12/16/millions-of-small-business-owners-with-toxic-mortgages-in-deep/

Are you aware that 60% of all homes in CA are at or near negative equity?

I originally posted the negative equity story below on November 10th. I am hard to shock, but this one is worth revisiting now that analysts and the media think we are going through some major mortgage recovery. Reality could not be further from that. Remember, in bubble states negative equity is so epidemic that 60% of all homes in CA, greater than 95% in NV, 65% in AZ and 63% in FL are in or near negative equity. Nationally, 41.6% of all home owners are at or near negative-equity and can’t refinance or sell without bringing significant cash into the transaction, which very few ever opt to do.

http://mrmortgage.ml-implode.com/2008/12/05/bubble-states-awash-in-negative-equity/

Don’t believe the hype of the realtors on this board. At least one of them bought during the bubble and they all have a vested interest in you buying a house.

[sdrealtor]

Breeze,
You are an idiot. As far as I know SD R is a renter as is Urbanrealtor. Rustico built his own house and I’ve owned mine for about 10 years. Who’s the realtor on this board that bought during the bubble? Inquiring minds want to know.

BTW, Wells fargo is quoting 4.875 with 0 points on their website as I type. Tommorrow they should be lower.

The funny thing is that Mr Mortgage bought Casey Serrin’s website and is lacking in credibility IMO. He’s operating an online business and has a vested interest in you buying what he’s selling.

[sdrealtor]

Breeze,
You are an idiot. As far as I know SD R is a renter as is Urbanrealtor. Rustico built his own house and I’ve owned mine for about 10 years. Who’s the realtor on this board that bought during the bubble? Inquiring minds want to know.

BTW, Wells fargo is quoting 4.875 with 0 points on their website as I type. Tommorrow they should be lower.

The funny thing is that Mr Mortgage bought Casey Serrin’s website and is lacking in credibility IMO. He’s operating an online business and has a vested interest in you buying what he’s selling.

[sdrealtor]

Breeze,
You are an idiot. As far as I know SD R is a renter as is Urbanrealtor. Rustico built his own house and I’ve owned mine for about 10 years. Who’s the realtor on this board that bought during the bubble? Inquiring minds want to know.

BTW, Wells fargo is quoting 4.875 with 0 points on their website as I type. Tommorrow they should be lower.

The funny thing is that Mr Mortgage bought Casey Serrin’s website and is lacking in credibility IMO. He’s operating an online business and has a vested interest in you buying what he’s selling.

[sdrealtor]

Breeze,
You are an idiot. As far as I know SD R is a renter as is Urbanrealtor. Rustico built his own house and I’ve owned mine for about 10 years. Who’s the realtor on this board that bought during the bubble? Inquiring minds want to know.

BTW, Wells fargo is quoting 4.875 with 0 points on their website as I type. Tommorrow they should be lower.

The funny thing is that Mr Mortgage bought Casey Serrin’s website and is lacking in credibility IMO. He’s operating an online business and has a vested interest in you buying what he’s selling.

[sdrealtor]

Breeze,
You are an idiot. As far as I know SD R is a renter as is Urbanrealtor. Rustico built his own house and I’ve owned mine for about 10 years. Who’s the realtor on this board that bought during the bubble? Inquiring minds want to know.

BTW, Wells fargo is quoting 4.875 with 0 points on their website as I type. Tommorrow they should be lower.

The funny thing is that Mr Mortgage bought Casey Serrin’s website and is lacking in credibility IMO. He’s operating an online business and has a vested interest in you buying what he’s selling.

[stockstradr]

I spent November debating the pro’s/con’s of buying a home now in the Bay Area. We hired a Realtor just in anticipation of beginning to view homes.

Then my head cleared, and this simple truth came to me:

It is STUPID to think, even for a second, of buying a home NOW, given economic data indicates a real possibility we are heading straight into an economic depression of once-in-a-lifetime proportions.

Note I didn’t write “an economic depression is probable” but the mere possibility of such a once-in-century economic depression means you must take drastic measures to prepare.

Fully realize THAT possibility is before us, and you’ll realize your prudent move is to prepare the worst, batten down the hatches. The one-in-lifetime economic storm is bearing down.

To fully understand that is to realize that a home bought today could possibly fall FIFTY percent over the next couple years…and you’ll want to assume you’ll be out of a job for several years. We could have deflation for twelve straight months. The stock market could crash another 50% lower. Who knows! This is relatively uncharted territory and so your primary family goal is to merely SURVIVE this economic tsunami with food on your table, and a (rented) roof over your head!

Let me tell you, you start by calculating IF your family can live for TWO YEARS on savings and unemployment assuming one or both parents lose their jobs. And you keep running similar worst-case scenarios and evaluating your preparation, and you take needed and drastic steps

[stockstradr]

I spent November debating the pro’s/con’s of buying a home now in the Bay Area. We hired a Realtor just in anticipation of beginning to view homes.

Then my head cleared, and this simple truth came to me:

It is STUPID to think, even for a second, of buying a home NOW, given economic data indicates a real possibility we are heading straight into an economic depression of once-in-a-lifetime proportions.

Note I didn’t write “an economic depression is probable” but the mere possibility of such a once-in-century economic depression means you must take drastic measures to prepare.

Fully realize THAT possibility is before us, and you’ll realize your prudent move is to prepare the worst, batten down the hatches. The one-in-lifetime economic storm is bearing down.

To fully understand that is to realize that a home bought today could possibly fall FIFTY percent over the next couple years…and you’ll want to assume you’ll be out of a job for several years. We could have deflation for twelve straight months. The stock market could crash another 50% lower. Who knows! This is relatively uncharted territory and so your primary family goal is to merely SURVIVE this economic tsunami with food on your table, and a (rented) roof over your head!

Let me tell you, you start by calculating IF your family can live for TWO YEARS on savings and unemployment assuming one or both parents lose their jobs. And you keep running similar worst-case scenarios and evaluating your preparation, and you take needed and drastic steps

[stockstradr]

I spent November debating the pro’s/con’s of buying a home now in the Bay Area. We hired a Realtor just in anticipation of beginning to view homes.

Then my head cleared, and this simple truth came to me:

It is STUPID to think, even for a second, of buying a home NOW, given economic data indicates a real possibility we are heading straight into an economic depression of once-in-a-lifetime proportions.

Note I didn’t write “an economic depression is probable” but the mere possibility of such a once-in-century economic depression means you must take drastic measures to prepare.

Fully realize THAT possibility is before us, and you’ll realize your prudent move is to prepare the worst, batten down the hatches. The one-in-lifetime economic storm is bearing down.

To fully understand that is to realize that a home bought today could possibly fall FIFTY percent over the next couple years…and you’ll want to assume you’ll be out of a job for several years. We could have deflation for twelve straight months. The stock market could crash another 50% lower. Who knows! This is relatively uncharted territory and so your primary family goal is to merely SURVIVE this economic tsunami with food on your table, and a (rented) roof over your head!

Let me tell you, you start by calculating IF your family can live for TWO YEARS on savings and unemployment assuming one or both parents lose their jobs. And you keep running similar worst-case scenarios and evaluating your preparation, and you take needed and drastic steps

[stockstradr]

I spent November debating the pro’s/con’s of buying a home now in the Bay Area. We hired a Realtor just in anticipation of beginning to view homes.

Then my head cleared, and this simple truth came to me:

It is STUPID to think, even for a second, of buying a home NOW, given economic data indicates a real possibility we are heading straight into an economic depression of once-in-a-lifetime proportions.

Note I didn’t write “an economic depression is probable” but the mere possibility of such a once-in-century economic depression means you must take drastic measures to prepare.

Fully realize THAT possibility is before us, and you’ll realize your prudent move is to prepare the worst, batten down the hatches. The one-in-lifetime economic storm is bearing down.

To fully understand that is to realize that a home bought today could possibly fall FIFTY percent over the next couple years…and you’ll want to assume you’ll be out of a job for several years. We could have deflation for twelve straight months. The stock market could crash another 50% lower. Who knows! This is relatively uncharted territory and so your primary family goal is to merely SURVIVE this economic tsunami with food on your table, and a (rented) roof over your head!

Let me tell you, you start by calculating IF your family can live for TWO YEARS on savings and unemployment assuming one or both parents lose their jobs. And you keep running similar worst-case scenarios and evaluating your preparation, and you take needed and drastic steps

[stockstradr]

I spent November debating the pro’s/con’s of buying a home now in the Bay Area. We hired a Realtor just in anticipation of beginning to view homes.

Then my head cleared, and this simple truth came to me:

It is STUPID to think, even for a second, of buying a home NOW, given economic data indicates a real possibility we are heading straight into an economic depression of once-in-a-lifetime proportions.

Note I didn’t write “an economic depression is probable” but the mere possibility of such a once-in-century economic depression means you must take drastic measures to prepare.

Fully realize THAT possibility is before us, and you’ll realize your prudent move is to prepare the worst, batten down the hatches. The one-in-lifetime economic storm is bearing down.

To fully understand that is to realize that a home bought today could possibly fall FIFTY percent over the next couple years…and you’ll want to assume you’ll be out of a job for several years. We could have deflation for twelve straight months. The stock market could crash another 50% lower. Who knows! This is relatively uncharted territory and so your primary family goal is to merely SURVIVE this economic tsunami with food on your table, and a (rented) roof over your head!

Let me tell you, you start by calculating IF your family can live for TWO YEARS on savings and unemployment assuming one or both parents lose their jobs. And you keep running similar worst-case scenarios and evaluating your preparation, and you take needed and drastic steps

[peterb]

I think Mr Mortgage hits on a very important point, refi’s tend to need equity to get the deal done. That train has left the station for many people now.
With unemployment rising and home prices dropping, who wants to risk entering the market even if rates are low and prices are down. It’s still a big debt load on a depreciatiing asset that is highly iliquid. Not the kind of move most people make that dont have a warm and fuzzy feeling about the economy.
So here’s our conundrum, those in,cant get out, those out, dont want to get in. Not much of a market.
If the govt hurry’s and nationalizes the mortgage market at say 2% interest, 100% LTV on all existing mortgages, no doc needed. That would probably put a floor under it for a while. What, maybe $12T in total? This would go a long way towards helping the problem.
From a purely investment point of view, one should never buy into a very leveraged position until there’s strong confirmation of an uptrend in both the investment and the general economic conditions. This is basic successful investing. Anything else is exremely risky investing. Bottom fishing in real estate is not wise. It’s way too expensive to be wrong.

[peterb]

I think Mr Mortgage hits on a very important point, refi’s tend to need equity to get the deal done. That train has left the station for many people now.
With unemployment rising and home prices dropping, who wants to risk entering the market even if rates are low and prices are down. It’s still a big debt load on a depreciatiing asset that is highly iliquid. Not the kind of move most people make that dont have a warm and fuzzy feeling about the economy.
So here’s our conundrum, those in,cant get out, those out, dont want to get in. Not much of a market.
If the govt hurry’s and nationalizes the mortgage market at say 2% interest, 100% LTV on all existing mortgages, no doc needed. That would probably put a floor under it for a while. What, maybe $12T in total? This would go a long way towards helping the problem.
From a purely investment point of view, one should never buy into a very leveraged position until there’s strong confirmation of an uptrend in both the investment and the general economic conditions. This is basic successful investing. Anything else is exremely risky investing. Bottom fishing in real estate is not wise. It’s way too expensive to be wrong.

[peterb]

I think Mr Mortgage hits on a very important point, refi’s tend to need equity to get the deal done. That train has left the station for many people now.
With unemployment rising and home prices dropping, who wants to risk entering the market even if rates are low and prices are down. It’s still a big debt load on a depreciatiing asset that is highly iliquid. Not the kind of move most people make that dont have a warm and fuzzy feeling about the economy.
So here’s our conundrum, those in,cant get out, those out, dont want to get in. Not much of a market.
If the govt hurry’s and nationalizes the mortgage market at say 2% interest, 100% LTV on all existing mortgages, no doc needed. That would probably put a floor under it for a while. What, maybe $12T in total? This would go a long way towards helping the problem.
From a purely investment point of view, one should never buy into a very leveraged position until there’s strong confirmation of an uptrend in both the investment and the general economic conditions. This is basic successful investing. Anything else is exremely risky investing. Bottom fishing in real estate is not wise. It’s way too expensive to be wrong.

[peterb]

I think Mr Mortgage hits on a very important point, refi’s tend to need equity to get the deal done. That train has left the station for many people now.
With unemployment rising and home prices dropping, who wants to risk entering the market even if rates are low and prices are down. It’s still a big debt load on a depreciatiing asset that is highly iliquid. Not the kind of move most people make that dont have a warm and fuzzy feeling about the economy.
So here’s our conundrum, those in,cant get out, those out, dont want to get in. Not much of a market.
If the govt hurry’s and nationalizes the mortgage market at say 2% interest, 100% LTV on all existing mortgages, no doc needed. That would probably put a floor under it for a while. What, maybe $12T in total? This would go a long way towards helping the problem.
From a purely investment point of view, one should never buy into a very leveraged position until there’s strong confirmation of an uptrend in both the investment and the general economic conditions. This is basic successful investing. Anything else is exremely risky investing. Bottom fishing in real estate is not wise. It’s way too expensive to be wrong.

[Author]

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