How come no talk of the 2nd wave of mortgage resets (ie. option ARMs) in 2009-2012?!?

[4plexowner]

the only way to rescue the Option ARMs is for the govt to provide mortgage debt forgiveness to the FBs holding these toxic loans

here’s an example: FB buys a low-quality tract home for $780K and finances almost 100% of the price – current market value in a forced sale is $599K or so – the monthly payment after the OptionARM resets will double or triple – there are no conventional mortgage products available to help this FB at reset time unless he has $180K available to buy down the mortgage

the govt rescue comes by offering the FB $180K in debt forgiveness and a low interest rate mortgage for $600K – the banks currently holding the mortgage(s) are made whole and the national debt grows by $180K – the FB continues to be a wage-slave chained to a house and everyone is happy (as long as they remain asleep)

~

that would be the rescue plan that politicians and the banking cartel would like to facilitate but there’s a catch (isn’t there always?) – some (many? most?) of these FBs can’t afford the payment on a fixed-rate, fully amortized mortgage even at a below market rate – that is why these people took an OptionARM in the first place!!!

we have to understand that these are people who should NEVER, EVER been allowed to ‘purchase’ residential real estate and they don’t have a chance in hell of retaining ‘ownership’ of these properties long term – providing the FBs handouts from the taxpayer’s pocketbook will only prolong the misery – the result will be the same: short of the taxpayer giving these properties to the FBs, they will end up as NODs, NOTs, foreclosures, REOs, etc until they reach a price where the mortgage can be supported by local rents/wages

the ‘investor’ is another category of OptionARM holder – this person is also going to walk away from their property and mortgage when it resets because they can’t afford the monthly payments that their ‘investment’ will require – the only way they will continue to pay on the property long-term is if the mortgage can be supported by the rents – without some kind of mortgage debt relief there is very little incentive for this ‘investor’ to continue supporting an upside-down property with negative cashflow

~

we have discussed the ARM reset chart several times – search the archives on ‘arm reset chart’ and ‘credit suisse’ and you will find them

[jpinpb]

I think that people did learn from the bust of the 90’s. I did. Problem is that now you have a batch of new people to the game, people who were not benefitting from the experience of the 90’s.

I put 20% down in the 90’s and I did NOT walk away, but did everything I could to hold on until the market got better and then I got out. Aged a lot during those struggling years. Won’t bite off more than I can chew now. That is the main reason I wasn’t suckered into the subprime loan this time around. But believe it or not, people were telling me to walk away back then. And I had a lot of money into it.

ortho – you’re right. If people put money down, harder to just walk.

I know there are charts for percentage of subprimes, but I thought it was nationally. I think San Diego is a different animal.

I know someone who bought a condo in La Jolla in about ’98. In 2002 bought another condo. Flipped that in 2005 and made $$$. Last year bought an expensive home from bank. Now trying to sell for more. Not moving. That person makes very good money (dr.) I just don’t see him going under. Wouldn’t the bank on the new house attach a lien on the condo he owns in La Jolla? I don’t think he can walk. He even has $$ down on the house. Tough situation. Probably can last a year of making payments. After that, it’s going to hurt.

[jpinpb]

I think that people did learn from the bust of the 90’s. I did. Problem is that now you have a batch of new people to the game, people who were not benefitting from the experience of the 90’s.

I put 20% down in the 90’s and I did NOT walk away, but did everything I could to hold on until the market got better and then I got out. Aged a lot during those struggling years. Won’t bite off more than I can chew now. That is the main reason I wasn’t suckered into the subprime loan this time around. But believe it or not, people were telling me to walk away back then. And I had a lot of money into it.

ortho – you’re right. If people put money down, harder to just walk.

I know there are charts for percentage of subprimes, but I thought it was nationally. I think San Diego is a different animal.

I know someone who bought a condo in La Jolla in about ’98. In 2002 bought another condo. Flipped that in 2005 and made $$$. Last year bought an expensive home from bank. Now trying to sell for more. Not moving. That person makes very good money (dr.) I just don’t see him going under. Wouldn’t the bank on the new house attach a lien on the condo he owns in La Jolla? I don’t think he can walk. He even has $$ down on the house. Tough situation. Probably can last a year of making payments. After that, it’s going to hurt.

[jpinpb]

I think that people did learn from the bust of the 90’s. I did. Problem is that now you have a batch of new people to the game, people who were not benefitting from the experience of the 90’s.

I put 20% down in the 90’s and I did NOT walk away, but did everything I could to hold on until the market got better and then I got out. Aged a lot during those struggling years. Won’t bite off more than I can chew now. That is the main reason I wasn’t suckered into the subprime loan this time around. But believe it or not, people were telling me to walk away back then. And I had a lot of money into it.

ortho – you’re right. If people put money down, harder to just walk.

I know there are charts for percentage of subprimes, but I thought it was nationally. I think San Diego is a different animal.

I know someone who bought a condo in La Jolla in about ’98. In 2002 bought another condo. Flipped that in 2005 and made $$$. Last year bought an expensive home from bank. Now trying to sell for more. Not moving. That person makes very good money (dr.) I just don’t see him going under. Wouldn’t the bank on the new house attach a lien on the condo he owns in La Jolla? I don’t think he can walk. He even has $$ down on the house. Tough situation. Probably can last a year of making payments. After that, it’s going to hurt.

[jpinpb]

I think that people did learn from the bust of the 90’s. I did. Problem is that now you have a batch of new people to the game, people who were not benefitting from the experience of the 90’s.

I put 20% down in the 90’s and I did NOT walk away, but did everything I could to hold on until the market got better and then I got out. Aged a lot during those struggling years. Won’t bite off more than I can chew now. That is the main reason I wasn’t suckered into the subprime loan this time around. But believe it or not, people were telling me to walk away back then. And I had a lot of money into it.

ortho – you’re right. If people put money down, harder to just walk.

I know there are charts for percentage of subprimes, but I thought it was nationally. I think San Diego is a different animal.

I know someone who bought a condo in La Jolla in about ’98. In 2002 bought another condo. Flipped that in 2005 and made $$$. Last year bought an expensive home from bank. Now trying to sell for more. Not moving. That person makes very good money (dr.) I just don’t see him going under. Wouldn’t the bank on the new house attach a lien on the condo he owns in La Jolla? I don’t think he can walk. He even has $$ down on the house. Tough situation. Probably can last a year of making payments. After that, it’s going to hurt.

[jpinpb]

I think that people did learn from the bust of the 90’s. I did. Problem is that now you have a batch of new people to the game, people who were not benefitting from the experience of the 90’s.

I put 20% down in the 90’s and I did NOT walk away, but did everything I could to hold on until the market got better and then I got out. Aged a lot during those struggling years. Won’t bite off more than I can chew now. That is the main reason I wasn’t suckered into the subprime loan this time around. But believe it or not, people were telling me to walk away back then. And I had a lot of money into it.

ortho – you’re right. If people put money down, harder to just walk.

I know there are charts for percentage of subprimes, but I thought it was nationally. I think San Diego is a different animal.

I know someone who bought a condo in La Jolla in about ’98. In 2002 bought another condo. Flipped that in 2005 and made $$$. Last year bought an expensive home from bank. Now trying to sell for more. Not moving. That person makes very good money (dr.) I just don’t see him going under. Wouldn’t the bank on the new house attach a lien on the condo he owns in La Jolla? I don’t think he can walk. He even has $$ down on the house. Tough situation. Probably can last a year of making payments. After that, it’s going to hurt.

[SD Realtor]

First off, I believe the lag time is longer then 6 months regarding a reset and then a foreclosure. I think in reality it is closer to 9 months. The banks are so overwhelmed that it seems NODs don’t even go out until the 4th or 5th month after the first missed payment. Then there is another 3 months for the NOT. It is now becoming commonplace for NOTs to get postponed. I have a listing right now and we just received our 4th postponement while the lender reviews another offer.

So I think the shift to the right is greater then suspected.

*****

I give odds of at least 50/50 that we WILL see a socialization of housing coming with the next president. If it is Billary then those odds are higher. If it is Mcopentheborders the odds are a little lower. The program arraya posted about is a perfect example. Don’t be surprised if YOUR government subsidizes these homes.

The BEST CASE will indeed be if this second wave hits. In the end yeah we would see another 2 years of very nice price declines in areas that most of us want to live in thus pushing a bottom out until 2012.

4plex your example is a good one however don’t underestimate the establishment to get around the catch you posed. If the gov and banks can simply change the rules. Why not amortize the loan over 50 years, 100 years? Why not just have the taxpayers suck up more then the 180k that is owed in your example where they continue to subsidize the difference between what the owner can afford and what the real payment should be?

Don’t underestimate our next president.

Realtor

[SD Realtor]

First off, I believe the lag time is longer then 6 months regarding a reset and then a foreclosure. I think in reality it is closer to 9 months. The banks are so overwhelmed that it seems NODs don’t even go out until the 4th or 5th month after the first missed payment. Then there is another 3 months for the NOT. It is now becoming commonplace for NOTs to get postponed. I have a listing right now and we just received our 4th postponement while the lender reviews another offer.

So I think the shift to the right is greater then suspected.

*****

I give odds of at least 50/50 that we WILL see a socialization of housing coming with the next president. If it is Billary then those odds are higher. If it is Mcopentheborders the odds are a little lower. The program arraya posted about is a perfect example. Don’t be surprised if YOUR government subsidizes these homes.

The BEST CASE will indeed be if this second wave hits. In the end yeah we would see another 2 years of very nice price declines in areas that most of us want to live in thus pushing a bottom out until 2012.

4plex your example is a good one however don’t underestimate the establishment to get around the catch you posed. If the gov and banks can simply change the rules. Why not amortize the loan over 50 years, 100 years? Why not just have the taxpayers suck up more then the 180k that is owed in your example where they continue to subsidize the difference between what the owner can afford and what the real payment should be?

Don’t underestimate our next president.

Realtor

[SD Realtor]

First off, I believe the lag time is longer then 6 months regarding a reset and then a foreclosure. I think in reality it is closer to 9 months. The banks are so overwhelmed that it seems NODs don’t even go out until the 4th or 5th month after the first missed payment. Then there is another 3 months for the NOT. It is now becoming commonplace for NOTs to get postponed. I have a listing right now and we just received our 4th postponement while the lender reviews another offer.

So I think the shift to the right is greater then suspected.

*****

I give odds of at least 50/50 that we WILL see a socialization of housing coming with the next president. If it is Billary then those odds are higher. If it is Mcopentheborders the odds are a little lower. The program arraya posted about is a perfect example. Don’t be surprised if YOUR government subsidizes these homes.

The BEST CASE will indeed be if this second wave hits. In the end yeah we would see another 2 years of very nice price declines in areas that most of us want to live in thus pushing a bottom out until 2012.

4plex your example is a good one however don’t underestimate the establishment to get around the catch you posed. If the gov and banks can simply change the rules. Why not amortize the loan over 50 years, 100 years? Why not just have the taxpayers suck up more then the 180k that is owed in your example where they continue to subsidize the difference between what the owner can afford and what the real payment should be?

Don’t underestimate our next president.

Realtor

[SD Realtor]

First off, I believe the lag time is longer then 6 months regarding a reset and then a foreclosure. I think in reality it is closer to 9 months. The banks are so overwhelmed that it seems NODs don’t even go out until the 4th or 5th month after the first missed payment. Then there is another 3 months for the NOT. It is now becoming commonplace for NOTs to get postponed. I have a listing right now and we just received our 4th postponement while the lender reviews another offer.

So I think the shift to the right is greater then suspected.

*****

I give odds of at least 50/50 that we WILL see a socialization of housing coming with the next president. If it is Billary then those odds are higher. If it is Mcopentheborders the odds are a little lower. The program arraya posted about is a perfect example. Don’t be surprised if YOUR government subsidizes these homes.

The BEST CASE will indeed be if this second wave hits. In the end yeah we would see another 2 years of very nice price declines in areas that most of us want to live in thus pushing a bottom out until 2012.

4plex your example is a good one however don’t underestimate the establishment to get around the catch you posed. If the gov and banks can simply change the rules. Why not amortize the loan over 50 years, 100 years? Why not just have the taxpayers suck up more then the 180k that is owed in your example where they continue to subsidize the difference between what the owner can afford and what the real payment should be?

Don’t underestimate our next president.

Realtor

[SD Realtor]

First off, I believe the lag time is longer then 6 months regarding a reset and then a foreclosure. I think in reality it is closer to 9 months. The banks are so overwhelmed that it seems NODs don’t even go out until the 4th or 5th month after the first missed payment. Then there is another 3 months for the NOT. It is now becoming commonplace for NOTs to get postponed. I have a listing right now and we just received our 4th postponement while the lender reviews another offer.

So I think the shift to the right is greater then suspected.

*****

I give odds of at least 50/50 that we WILL see a socialization of housing coming with the next president. If it is Billary then those odds are higher. If it is Mcopentheborders the odds are a little lower. The program arraya posted about is a perfect example. Don’t be surprised if YOUR government subsidizes these homes.

The BEST CASE will indeed be if this second wave hits. In the end yeah we would see another 2 years of very nice price declines in areas that most of us want to live in thus pushing a bottom out until 2012.

4plex your example is a good one however don’t underestimate the establishment to get around the catch you posed. If the gov and banks can simply change the rules. Why not amortize the loan over 50 years, 100 years? Why not just have the taxpayers suck up more then the 180k that is owed in your example where they continue to subsidize the difference between what the owner can afford and what the real payment should be?

Don’t underestimate our next president.

Realtor

[4plexowner]

good point SDR – there will always be some combination of debt relief and subsidized interest rates that will allow all the FBs to remain in their homes – perhaps there will be a sliding scale based on income – the lower the income, the more relief / subsidy the FB qualifies for

the effect of stretching the loan past 50 yrs is minimal – the Japanese went down this road and were offering 100 yr mortgages at the height of their mania

payments on $400K @ 4.5% (assuming govt subsidized rate):

30 yr $2026
50 yr $1677
75 yr $1553
100 yr $1516

$400K on 30 yr fixed, fully amortized at 5.75% is $2334 / month

[4plexowner]

good point SDR – there will always be some combination of debt relief and subsidized interest rates that will allow all the FBs to remain in their homes – perhaps there will be a sliding scale based on income – the lower the income, the more relief / subsidy the FB qualifies for

the effect of stretching the loan past 50 yrs is minimal – the Japanese went down this road and were offering 100 yr mortgages at the height of their mania

payments on $400K @ 4.5% (assuming govt subsidized rate):

30 yr $2026
50 yr $1677
75 yr $1553
100 yr $1516

$400K on 30 yr fixed, fully amortized at 5.75% is $2334 / month

[4plexowner]

good point SDR – there will always be some combination of debt relief and subsidized interest rates that will allow all the FBs to remain in their homes – perhaps there will be a sliding scale based on income – the lower the income, the more relief / subsidy the FB qualifies for

the effect of stretching the loan past 50 yrs is minimal – the Japanese went down this road and were offering 100 yr mortgages at the height of their mania

payments on $400K @ 4.5% (assuming govt subsidized rate):

30 yr $2026
50 yr $1677
75 yr $1553
100 yr $1516

$400K on 30 yr fixed, fully amortized at 5.75% is $2334 / month

[4plexowner]

good point SDR – there will always be some combination of debt relief and subsidized interest rates that will allow all the FBs to remain in their homes – perhaps there will be a sliding scale based on income – the lower the income, the more relief / subsidy the FB qualifies for

the effect of stretching the loan past 50 yrs is minimal – the Japanese went down this road and were offering 100 yr mortgages at the height of their mania

payments on $400K @ 4.5% (assuming govt subsidized rate):

30 yr $2026
50 yr $1677
75 yr $1553
100 yr $1516

$400K on 30 yr fixed, fully amortized at 5.75% is $2334 / month

[Author]

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