foreclosure wave about to hit — again! — and with a thunderous roar no less (per TG’s ladyfriend)

[CA renter]

Part of my prediction for 2010 on the HBB:

The GSEs will become the ultra-super-SIV, and principal reductions will become the norm on GSE loans. IMHO, one of the reasons inventory has been kept off the market is because the PTB wanted housing prices high enough that borrowers can refi into GSE loans. I believe a good portion of the toxic loans now belongs to the GSEs, and they can now do what they’ve wanted to do, without the complications of multiple layers of investors in the private, securitized market.

http://www.thehousingbubbleblog.com/?p=5808#comment-1725591
——————

IMHO, the PTB are not stupid. They know we cannot prop up the housing market forever; and forcing U.S. workers to continually overpay for housing will prevent us from competing with other countries with lower wages.

We need to allow for lower wages, and we cannot do that until we let housing prices fall to afordable levels (at these reduced wages).

IMHO, all the moratoriums, govt programs, inventory suppression, etc. were required to get as many private bank loans refinanced into publicly guaranteed or held loans (FHA or GSEs). They had to keep prices artificially inflated for political reasons — the prices had to drop AFTER the risks were already transferred, or the public would have been up in arms about making Goldman Sachs (or the public pensions) whole on the taxpayers’ dime. They needed to refi a $500K loan (from the private lenders) into a $500K (or $450K) loan (to the public lender), or else there would have been a public outcry.

Once they’ve done everything they can to save the banks, they will allow the housing market to fall again, IMHO. They’ve had over two years to work on this, and I believe they are near the end of their “risk-transfer” program.

This was never about saving Joe Sixpack. It was always about saving the banks.

Not sure why anyone would have ever questioned the existence of the “shadow inventory.” Where there’s smoke, there’s fire; and there was plenty of smoke.

[Nor-LA-SD-guy]

I am with TG mostly on this,

Seems like the ball is rolling and recovery starting to gain traction, But on the other hand (I should be an economist) while the lower tier areas have been taken out and shot (no blind fold or cigarette offered), the mid to high end area’s have been hardly touched in comparison.

If the Wave does come I think there is little more damage it can do to the area’s it already obliterated but it may move up to the higher ground so to speak.

[Nor-LA-SD-guy]

I am with TG mostly on this,

Seems like the ball is rolling and recovery starting to gain traction, But on the other hand (I should be an economist) while the lower tier areas have been taken out and shot (no blind fold or cigarette offered), the mid to high end area’s have been hardly touched in comparison.

If the Wave does come I think there is little more damage it can do to the area’s it already obliterated but it may move up to the higher ground so to speak.

[Nor-LA-SD-guy]

I am with TG mostly on this,

Seems like the ball is rolling and recovery starting to gain traction, But on the other hand (I should be an economist) while the lower tier areas have been taken out and shot (no blind fold or cigarette offered), the mid to high end area’s have been hardly touched in comparison.

If the Wave does come I think there is little more damage it can do to the area’s it already obliterated but it may move up to the higher ground so to speak.

[Nor-LA-SD-guy]

I am with TG mostly on this,

Seems like the ball is rolling and recovery starting to gain traction, But on the other hand (I should be an economist) while the lower tier areas have been taken out and shot (no blind fold or cigarette offered), the mid to high end area’s have been hardly touched in comparison.

If the Wave does come I think there is little more damage it can do to the area’s it already obliterated but it may move up to the higher ground so to speak.

[Nor-LA-SD-guy]

I am with TG mostly on this,

Seems like the ball is rolling and recovery starting to gain traction, But on the other hand (I should be an economist) while the lower tier areas have been taken out and shot (no blind fold or cigarette offered), the mid to high end area’s have been hardly touched in comparison.

If the Wave does come I think there is little more damage it can do to the area’s it already obliterated but it may move up to the higher ground so to speak.

[Effective Demand]

I actually see the banks liquidating as a point of strength not weakness. They are finally strong enough to take the losses. And the politicians & regulators realize that the decks will have to be cleared at some point.

It isn’t 100% sure the liquidation wave has arrived, there is some strong circumstantial evidence that the leading wave is hitting but it needs to be followed up by several months of stronger trustee sales before I say it has arrived. I think April is a possible inflection point for realization, when people point back to their charts they will be pointing to April.

That said I think the reality of some of the undealt with issues we are facing will hit sometime in 2011 or late 2010 (post-election) as the market is only looking at the recovery and not all the things that aren’t “normal” that need to go on to make it happen.

I think the Fed saw the freefall and it hit the emergency brake. Now that things basically are at a standstill, they will ease off the brake and let reality….. slowly… take effect.

For some reason the site doesnt like this link, trying again:
http://effectivedemand.blogspot.com/2010/03/on-that-bofa-increasing-foreclosures.html

[Effective Demand]

I actually see the banks liquidating as a point of strength not weakness. They are finally strong enough to take the losses. And the politicians & regulators realize that the decks will have to be cleared at some point.

It isn’t 100% sure the liquidation wave has arrived, there is some strong circumstantial evidence that the leading wave is hitting but it needs to be followed up by several months of stronger trustee sales before I say it has arrived. I think April is a possible inflection point for realization, when people point back to their charts they will be pointing to April.

That said I think the reality of some of the undealt with issues we are facing will hit sometime in 2011 or late 2010 (post-election) as the market is only looking at the recovery and not all the things that aren’t “normal” that need to go on to make it happen.

I think the Fed saw the freefall and it hit the emergency brake. Now that things basically are at a standstill, they will ease off the brake and let reality….. slowly… take effect.

For some reason the site doesnt like this link, trying again:
http://effectivedemand.blogspot.com/2010/03/on-that-bofa-increasing-foreclosures.html

[Effective Demand]

I actually see the banks liquidating as a point of strength not weakness. They are finally strong enough to take the losses. And the politicians & regulators realize that the decks will have to be cleared at some point.

It isn’t 100% sure the liquidation wave has arrived, there is some strong circumstantial evidence that the leading wave is hitting but it needs to be followed up by several months of stronger trustee sales before I say it has arrived. I think April is a possible inflection point for realization, when people point back to their charts they will be pointing to April.

That said I think the reality of some of the undealt with issues we are facing will hit sometime in 2011 or late 2010 (post-election) as the market is only looking at the recovery and not all the things that aren’t “normal” that need to go on to make it happen.

I think the Fed saw the freefall and it hit the emergency brake. Now that things basically are at a standstill, they will ease off the brake and let reality….. slowly… take effect.

For some reason the site doesnt like this link, trying again:
http://effectivedemand.blogspot.com/2010/03/on-that-bofa-increasing-foreclosures.html

[Effective Demand]

I actually see the banks liquidating as a point of strength not weakness. They are finally strong enough to take the losses. And the politicians & regulators realize that the decks will have to be cleared at some point.

It isn’t 100% sure the liquidation wave has arrived, there is some strong circumstantial evidence that the leading wave is hitting but it needs to be followed up by several months of stronger trustee sales before I say it has arrived. I think April is a possible inflection point for realization, when people point back to their charts they will be pointing to April.

That said I think the reality of some of the undealt with issues we are facing will hit sometime in 2011 or late 2010 (post-election) as the market is only looking at the recovery and not all the things that aren’t “normal” that need to go on to make it happen.

I think the Fed saw the freefall and it hit the emergency brake. Now that things basically are at a standstill, they will ease off the brake and let reality….. slowly… take effect.

For some reason the site doesnt like this link, trying again:
http://effectivedemand.blogspot.com/2010/03/on-that-bofa-increasing-foreclosures.html

[Effective Demand]

I actually see the banks liquidating as a point of strength not weakness. They are finally strong enough to take the losses. And the politicians & regulators realize that the decks will have to be cleared at some point.

It isn’t 100% sure the liquidation wave has arrived, there is some strong circumstantial evidence that the leading wave is hitting but it needs to be followed up by several months of stronger trustee sales before I say it has arrived. I think April is a possible inflection point for realization, when people point back to their charts they will be pointing to April.

That said I think the reality of some of the undealt with issues we are facing will hit sometime in 2011 or late 2010 (post-election) as the market is only looking at the recovery and not all the things that aren’t “normal” that need to go on to make it happen.

I think the Fed saw the freefall and it hit the emergency brake. Now that things basically are at a standstill, they will ease off the brake and let reality….. slowly… take effect.

For some reason the site doesnt like this link, trying again:
http://effectivedemand.blogspot.com/2010/03/on-that-bofa-increasing-foreclosures.html

[sdcellar]

[quote=temeculaguy]2. Home price declines have either stopped or bounced off bottom, traditional affordibility metrics have returned to 90% of the market, maybe not the one’s the more active posters are looking at, but sanity has retrned to most of the country.[/quote]Say, is this a reference to me?!!? I am not an active poster. I may repeat myself quite a bit, which might provide the illusion of activity, but I assure you it is not!

If you weren’t referring to me, then it’s just me being self-centered, which is absolutely squarely in the middle of the realm of possibility.

…and good luck with the hookup.

[sdcellar]

[quote=temeculaguy]2. Home price declines have either stopped or bounced off bottom, traditional affordibility metrics have returned to 90% of the market, maybe not the one’s the more active posters are looking at, but sanity has retrned to most of the country.[/quote]Say, is this a reference to me?!!? I am not an active poster. I may repeat myself quite a bit, which might provide the illusion of activity, but I assure you it is not!

If you weren’t referring to me, then it’s just me being self-centered, which is absolutely squarely in the middle of the realm of possibility.

…and good luck with the hookup.

[sdcellar]

[quote=temeculaguy]2. Home price declines have either stopped or bounced off bottom, traditional affordibility metrics have returned to 90% of the market, maybe not the one’s the more active posters are looking at, but sanity has retrned to most of the country.[/quote]Say, is this a reference to me?!!? I am not an active poster. I may repeat myself quite a bit, which might provide the illusion of activity, but I assure you it is not!

If you weren’t referring to me, then it’s just me being self-centered, which is absolutely squarely in the middle of the realm of possibility.

…and good luck with the hookup.

[sdcellar]

[quote=temeculaguy]2. Home price declines have either stopped or bounced off bottom, traditional affordibility metrics have returned to 90% of the market, maybe not the one’s the more active posters are looking at, but sanity has retrned to most of the country.[/quote]Say, is this a reference to me?!!? I am not an active poster. I may repeat myself quite a bit, which might provide the illusion of activity, but I assure you it is not!

If you weren’t referring to me, then it’s just me being self-centered, which is absolutely squarely in the middle of the realm of possibility.

…and good luck with the hookup.

[Author]

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