Is it ALT-A turn

[farbet]

Lift a rock, find more schlock
I believe the next area of the credit sector to implode will likely be Alt-A — loans granted to people who didn’t want to document their income, also known as liar loans — which will help illuminate the fact that our mortgage problems were never just subprime. Rather, they sprang from one big credit bubble, thanks to which mortgages were handed out to anyone who could fog a mirror. Most people took on more than they should have. (Some are now walking away from their obligations, a development recently highlighted in the media.)

In time, it will be clear that prime mortgages are also vulnerable….

[farbet]

The rest is here

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextShoeToDropPrimeMortgages.aspx

[Mean Reversion]

I believe the next area of the credit sector to implode will likely be Alt-A…

If you follow the credit markets, it is already pretty well known that the meltdown has affected Alt-A and beyond, not just subprime.

Witness Thornburg Mortgage (TMA) which supposedly had no direct exposure to subprime mortgages.

[peterb]

With about $550B in mortgages set to adjust this year, all sectors will have trouble meeting this requirement. Whether the loan is Prime, Alt-A or subprime. Having a high FICO score does not mean you didnt lie about your “stated income”. Most of these loans are 1 to 3 years old, so the odds are good that most are upside down at or at best 0$ equity. Combine this with a recession and the new “Debt Relief Act of 2008” and I think the lenders are going to be owning a lot more realestate this year compared to 2007!

[peterb]

With about $550B in mortgages set to adjust this year, all sectors will have trouble meeting this requirement. Whether the loan is Prime, Alt-A or subprime. Having a high FICO score does not mean you didnt lie about your “stated income”. Most of these loans are 1 to 3 years old, so the odds are good that most are upside down at or at best 0$ equity. Combine this with a recession and the new “Debt Relief Act of 2008” and I think the lenders are going to be owning a lot more realestate this year compared to 2007!

[peterb]

With about $550B in mortgages set to adjust this year, all sectors will have trouble meeting this requirement. Whether the loan is Prime, Alt-A or subprime. Having a high FICO score does not mean you didnt lie about your “stated income”. Most of these loans are 1 to 3 years old, so the odds are good that most are upside down at or at best 0$ equity. Combine this with a recession and the new “Debt Relief Act of 2008” and I think the lenders are going to be owning a lot more realestate this year compared to 2007!

[peterb]

With about $550B in mortgages set to adjust this year, all sectors will have trouble meeting this requirement. Whether the loan is Prime, Alt-A or subprime. Having a high FICO score does not mean you didnt lie about your “stated income”. Most of these loans are 1 to 3 years old, so the odds are good that most are upside down at or at best 0$ equity. Combine this with a recession and the new “Debt Relief Act of 2008” and I think the lenders are going to be owning a lot more realestate this year compared to 2007!

[peterb]

With about $550B in mortgages set to adjust this year, all sectors will have trouble meeting this requirement. Whether the loan is Prime, Alt-A or subprime. Having a high FICO score does not mean you didnt lie about your “stated income”. Most of these loans are 1 to 3 years old, so the odds are good that most are upside down at or at best 0$ equity. Combine this with a recession and the new “Debt Relief Act of 2008” and I think the lenders are going to be owning a lot more realestate this year compared to 2007!

[Mean Reversion]

I believe the next area of the credit sector to implode will likely be Alt-A…

If you follow the credit markets, it is already pretty well known that the meltdown has affected Alt-A and beyond, not just subprime.

Witness Thornburg Mortgage (TMA) which supposedly had no direct exposure to subprime mortgages.

[Mean Reversion]

I believe the next area of the credit sector to implode will likely be Alt-A…

If you follow the credit markets, it is already pretty well known that the meltdown has affected Alt-A and beyond, not just subprime.

Witness Thornburg Mortgage (TMA) which supposedly had no direct exposure to subprime mortgages.

[Mean Reversion]

I believe the next area of the credit sector to implode will likely be Alt-A…

If you follow the credit markets, it is already pretty well known that the meltdown has affected Alt-A and beyond, not just subprime.

Witness Thornburg Mortgage (TMA) which supposedly had no direct exposure to subprime mortgages.

[Mean Reversion]

I believe the next area of the credit sector to implode will likely be Alt-A…

If you follow the credit markets, it is already pretty well known that the meltdown has affected Alt-A and beyond, not just subprime.

Witness Thornburg Mortgage (TMA) which supposedly had no direct exposure to subprime mortgages.

[farbet]

The rest is here

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextShoeToDropPrimeMortgages.aspx

[farbet]

The rest is here

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextShoeToDropPrimeMortgages.aspx

[farbet]

The rest is here

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextShoeToDropPrimeMortgages.aspx

[farbet]

The rest is here

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextShoeToDropPrimeMortgages.aspx

[BKinLA]

Looks like it's already begun…

 

http://www.housingwire.com/2008/03/10/moodys-downgrades-hundreds-of-bear-stearns-alt-a-mbs/

[Mean Reversion]

I am shopping in the $1.5M to $2M range of CA, and I have already seen 2 beautiful new homes built in 2005 being foreclosed upon that have been stripped of their high end appliances. One was also stripped of its kitchen cabinets.

One would’ve thought that this only happens in the shittiest of places and homes, but this was a gated community for crying out loud!

[Mean Reversion]

I am shopping in the $1.5M to $2M range of CA, and I have already seen 2 beautiful new homes built in 2005 being foreclosed upon that have been stripped of their high end appliances. One was also stripped of its kitchen cabinets.

One would’ve thought that this only happens in the shittiest of places and homes, but this was a gated community for crying out loud!

[Mean Reversion]

I am shopping in the $1.5M to $2M range of CA, and I have already seen 2 beautiful new homes built in 2005 being foreclosed upon that have been stripped of their high end appliances. One was also stripped of its kitchen cabinets.

One would’ve thought that this only happens in the shittiest of places and homes, but this was a gated community for crying out loud!

[Mean Reversion]

I am shopping in the $1.5M to $2M range of CA, and I have already seen 2 beautiful new homes built in 2005 being foreclosed upon that have been stripped of their high end appliances. One was also stripped of its kitchen cabinets.

One would’ve thought that this only happens in the shittiest of places and homes, but this was a gated community for crying out loud!

[Mean Reversion]

I am shopping in the $1.5M to $2M range of CA, and I have already seen 2 beautiful new homes built in 2005 being foreclosed upon that have been stripped of their high end appliances. One was also stripped of its kitchen cabinets.

One would’ve thought that this only happens in the shittiest of places and homes, but this was a gated community for crying out loud!

[patientlywaiting]

Subprime, Alt-A? The are the red herrings.

Even, the prime loans will be affected. It’s the ARMs and exotics, no matter the “grade.”

[(former)FormerSanDiegan]

LIBOR Index Watch …

Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.

Current 1-year LIBOR index : 2.71%

This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.

They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[farbet]

Is Ninja loans same as ALT A loans

[(former)FormerSanDiegan]

LIBOR Index Watch …

Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.

Current 1-year LIBOR index : 2.71%

This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.

They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.

[(former)FormerSanDiegan]

LIBOR Index Watch …

Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.

Current 1-year LIBOR index : 2.71%

This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.

They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.

[(former)FormerSanDiegan]

LIBOR Index Watch …

Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.

Current 1-year LIBOR index : 2.71%

This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.

They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.

[(former)FormerSanDiegan]

LIBOR Index Watch …

Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.

Current 1-year LIBOR index : 2.71%

This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.

They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.

[patientlywaiting]

Subprime, Alt-A? The are the red herrings.

Even, the prime loans will be affected. It’s the ARMs and exotics, no matter the “grade.”

[patientlywaiting]

Subprime, Alt-A? The are the red herrings.

Even, the prime loans will be affected. It’s the ARMs and exotics, no matter the “grade.”

[patientlywaiting]

Subprime, Alt-A? The are the red herrings.

Even, the prime loans will be affected. It’s the ARMs and exotics, no matter the “grade.”

[patientlywaiting]

Subprime, Alt-A? The are the red herrings.

Even, the prime loans will be affected. It’s the ARMs and exotics, no matter the “grade.”

[BKinLA]

Looks like it's already begun…

 

http://www.housingwire.com/2008/03/10/moodys-downgrades-hundreds-of-bear-stearns-alt-a-mbs/

[BKinLA]

Looks like it's already begun…

 

http://www.housingwire.com/2008/03/10/moodys-downgrades-hundreds-of-bear-stearns-alt-a-mbs/

[BKinLA]

Looks like it's already begun…

 

http://www.housingwire.com/2008/03/10/moodys-downgrades-hundreds-of-bear-stearns-alt-a-mbs/

[BKinLA]

Looks like it's already begun…

 

http://www.housingwire.com/2008/03/10/moodys-downgrades-hundreds-of-bear-stearns-alt-a-mbs/

[DWCAP]

FSD, I was one of those who looked at the numers, and said we are screwed too. I am starting to adjust my thinking to what you are saying alittle, but I dont know if things arnt deeper than the interest rate suggests.
This whole mess was triggered by the FED raising rates. With inflation rising, they can only hold off on worrying about inflation for so long. It takes a year to get cuts into the economy, they started in Sept. so we are half way there. In 6-8 months they will have to start fighting inflation instead of fanning it, and the resets on these morgages will rise.
Also, just because these things are reseting, even to a lower interst rate, doesnt mean the monthly payments are not jumping. How many of these had horrendiously low teaser rates for the first year or two at maybe 1%-3%. How many had intro periods where they were interest only (or not even that) and then now are reseting to include principal into the mix. That could be a jump of 20%+ even if the interest rate didnt move an inch.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.

[(former)FormerSanDiegan]

DWCAP –
I agree with you. Those with teaser (neg-am) payments will still be screwed. Those with Interest-only options will also see a substantial jump (say 20% or more) and those in this second group that did not plan ahead (by saving) or who haven’t experienced at least 4% annual raises will also get pinched.

The wild card of course is rates. Inflation expectations could result in higher rates down the road … say a year from now. If short-term rates returned to their recent peak (up a couple percent from current rates) the payment shocks would be difficult for anyone to absorb.

It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.
Well said.

[(former)FormerSanDiegan]

DWCAP –
I agree with you. Those with teaser (neg-am) payments will still be screwed. Those with Interest-only options will also see a substantial jump (say 20% or more) and those in this second group that did not plan ahead (by saving) or who haven’t experienced at least 4% annual raises will also get pinched.

The wild card of course is rates. Inflation expectations could result in higher rates down the road … say a year from now. If short-term rates returned to their recent peak (up a couple percent from current rates) the payment shocks would be difficult for anyone to absorb.

It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.
Well said.

[(former)FormerSanDiegan]

DWCAP –
I agree with you. Those with teaser (neg-am) payments will still be screwed. Those with Interest-only options will also see a substantial jump (say 20% or more) and those in this second group that did not plan ahead (by saving) or who haven’t experienced at least 4% annual raises will also get pinched.

The wild card of course is rates. Inflation expectations could result in higher rates down the road … say a year from now. If short-term rates returned to their recent peak (up a couple percent from current rates) the payment shocks would be difficult for anyone to absorb.

It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.
Well said.

[(former)FormerSanDiegan]

DWCAP –
I agree with you. Those with teaser (neg-am) payments will still be screwed. Those with Interest-only options will also see a substantial jump (say 20% or more) and those in this second group that did not plan ahead (by saving) or who haven’t experienced at least 4% annual raises will also get pinched.

The wild card of course is rates. Inflation expectations could result in higher rates down the road … say a year from now. If short-term rates returned to their recent peak (up a couple percent from current rates) the payment shocks would be difficult for anyone to absorb.

It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.
Well said.

[(former)FormerSanDiegan]

DWCAP –
I agree with you. Those with teaser (neg-am) payments will still be screwed. Those with Interest-only options will also see a substantial jump (say 20% or more) and those in this second group that did not plan ahead (by saving) or who haven’t experienced at least 4% annual raises will also get pinched.

The wild card of course is rates. Inflation expectations could result in higher rates down the road … say a year from now. If short-term rates returned to their recent peak (up a couple percent from current rates) the payment shocks would be difficult for anyone to absorb.

It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.
Well said.

[cr]

Yes ALT-A were the No Income, No Job, or Asset loans that helped coin the phrase “if you can fog a mirror, you can get a loan.”

I think they basically assume the people applying for them have good credit. The alt refers to them being “alternative”.

In other words they’re gay.

Seriously though, the default rate on these could be worse than sub-prime. Realtors/brokers would say these are for people with fluctuating incomes like actors or entrepreneurs, but not in recent years. Unless you replace actor with teacher, and entrepreneur with house wife.

[farbet]

I guess we will start seeing “walk Aways” soon

[farbet]

I guess we will start seeing “walk Aways” soon

[farbet]

I guess we will start seeing “walk Aways” soon

[farbet]

I guess we will start seeing “walk Aways” soon

[farbet]

I guess we will start seeing “walk Aways” soon

[cr]

Yes ALT-A were the No Income, No Job, or Asset loans that helped coin the phrase “if you can fog a mirror, you can get a loan.”

I think they basically assume the people applying for them have good credit. The alt refers to them being “alternative”.

In other words they’re gay.

Seriously though, the default rate on these could be worse than sub-prime. Realtors/brokers would say these are for people with fluctuating incomes like actors or entrepreneurs, but not in recent years. Unless you replace actor with teacher, and entrepreneur with house wife.

[cr]

Yes ALT-A were the No Income, No Job, or Asset loans that helped coin the phrase “if you can fog a mirror, you can get a loan.”

I think they basically assume the people applying for them have good credit. The alt refers to them being “alternative”.

In other words they’re gay.

Seriously though, the default rate on these could be worse than sub-prime. Realtors/brokers would say these are for people with fluctuating incomes like actors or entrepreneurs, but not in recent years. Unless you replace actor with teacher, and entrepreneur with house wife.

[cr]

Yes ALT-A were the No Income, No Job, or Asset loans that helped coin the phrase “if you can fog a mirror, you can get a loan.”

I think they basically assume the people applying for them have good credit. The alt refers to them being “alternative”.

In other words they’re gay.

Seriously though, the default rate on these could be worse than sub-prime. Realtors/brokers would say these are for people with fluctuating incomes like actors or entrepreneurs, but not in recent years. Unless you replace actor with teacher, and entrepreneur with house wife.

[cr]

Yes ALT-A were the No Income, No Job, or Asset loans that helped coin the phrase “if you can fog a mirror, you can get a loan.”

I think they basically assume the people applying for them have good credit. The alt refers to them being “alternative”.

In other words they’re gay.

Seriously though, the default rate on these could be worse than sub-prime. Realtors/brokers would say these are for people with fluctuating incomes like actors or entrepreneurs, but not in recent years. Unless you replace actor with teacher, and entrepreneur with house wife.

[DWCAP]

FSD, I was one of those who looked at the numers, and said we are screwed too. I am starting to adjust my thinking to what you are saying alittle, but I dont know if things arnt deeper than the interest rate suggests.
This whole mess was triggered by the FED raising rates. With inflation rising, they can only hold off on worrying about inflation for so long. It takes a year to get cuts into the economy, they started in Sept. so we are half way there. In 6-8 months they will have to start fighting inflation instead of fanning it, and the resets on these morgages will rise.
Also, just because these things are reseting, even to a lower interst rate, doesnt mean the monthly payments are not jumping. How many of these had horrendiously low teaser rates for the first year or two at maybe 1%-3%. How many had intro periods where they were interest only (or not even that) and then now are reseting to include principal into the mix. That could be a jump of 20%+ even if the interest rate didnt move an inch.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.

[DWCAP]

FSD, I was one of those who looked at the numers, and said we are screwed too. I am starting to adjust my thinking to what you are saying alittle, but I dont know if things arnt deeper than the interest rate suggests.
This whole mess was triggered by the FED raising rates. With inflation rising, they can only hold off on worrying about inflation for so long. It takes a year to get cuts into the economy, they started in Sept. so we are half way there. In 6-8 months they will have to start fighting inflation instead of fanning it, and the resets on these morgages will rise.
Also, just because these things are reseting, even to a lower interst rate, doesnt mean the monthly payments are not jumping. How many of these had horrendiously low teaser rates for the first year or two at maybe 1%-3%. How many had intro periods where they were interest only (or not even that) and then now are reseting to include principal into the mix. That could be a jump of 20%+ even if the interest rate didnt move an inch.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.

[DWCAP]

FSD, I was one of those who looked at the numers, and said we are screwed too. I am starting to adjust my thinking to what you are saying alittle, but I dont know if things arnt deeper than the interest rate suggests.
This whole mess was triggered by the FED raising rates. With inflation rising, they can only hold off on worrying about inflation for so long. It takes a year to get cuts into the economy, they started in Sept. so we are half way there. In 6-8 months they will have to start fighting inflation instead of fanning it, and the resets on these morgages will rise.
Also, just because these things are reseting, even to a lower interst rate, doesnt mean the monthly payments are not jumping. How many of these had horrendiously low teaser rates for the first year or two at maybe 1%-3%. How many had intro periods where they were interest only (or not even that) and then now are reseting to include principal into the mix. That could be a jump of 20%+ even if the interest rate didnt move an inch.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.

[DWCAP]

FSD, I was one of those who looked at the numers, and said we are screwed too. I am starting to adjust my thinking to what you are saying alittle, but I dont know if things arnt deeper than the interest rate suggests.
This whole mess was triggered by the FED raising rates. With inflation rising, they can only hold off on worrying about inflation for so long. It takes a year to get cuts into the economy, they started in Sept. so we are half way there. In 6-8 months they will have to start fighting inflation instead of fanning it, and the resets on these morgages will rise.
Also, just because these things are reseting, even to a lower interst rate, doesnt mean the monthly payments are not jumping. How many of these had horrendiously low teaser rates for the first year or two at maybe 1%-3%. How many had intro periods where they were interest only (or not even that) and then now are reseting to include principal into the mix. That could be a jump of 20%+ even if the interest rate didnt move an inch.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.

[DWCAP]

I have a dumb question, but how acurate is the reset chart we always refer to? March 08 seems to be the biggest month for resets, so in theory shorts, defaults and prefoclosures in June/July should be jumping. But how many of these March resets are already paid off? If a morgage was orginated in March of 2005 for a reset in March of 2008, but was paid out when the house was sold in Feb 2007 (assuming it was paid in full) is the reset still counted?
I guess what I am wondering is what the refinancing binges of early 08 will do to the resets. Is the reset still counted in all those charts and graphs we use to justify our position, even though the morgage is paid and no reset will ever be seen?

[(former)FormerSanDiegan]

DWCAP – To some extent the reset charts are obsolete soon after they are created. The profile of loans out there will presumably constantly shift due to property sales, refinance activity, early re-sets (due to negative amortization), etc. However, with property values generally declining I doubt that huge segments of these loans have been completely worked out.

[(former)FormerSanDiegan]

DWCAP – To some extent the reset charts are obsolete soon after they are created. The profile of loans out there will presumably constantly shift due to property sales, refinance activity, early re-sets (due to negative amortization), etc. However, with property values generally declining I doubt that huge segments of these loans have been completely worked out.

[(former)FormerSanDiegan]

DWCAP – To some extent the reset charts are obsolete soon after they are created. The profile of loans out there will presumably constantly shift due to property sales, refinance activity, early re-sets (due to negative amortization), etc. However, with property values generally declining I doubt that huge segments of these loans have been completely worked out.

[(former)FormerSanDiegan]

DWCAP – To some extent the reset charts are obsolete soon after they are created. The profile of loans out there will presumably constantly shift due to property sales, refinance activity, early re-sets (due to negative amortization), etc. However, with property values generally declining I doubt that huge segments of these loans have been completely worked out.

[(former)FormerSanDiegan]

DWCAP – To some extent the reset charts are obsolete soon after they are created. The profile of loans out there will presumably constantly shift due to property sales, refinance activity, early re-sets (due to negative amortization), etc. However, with property values generally declining I doubt that huge segments of these loans have been completely worked out.

[Bugs]

The reset charts are indirect indicators that we’ve been using to project the direct results. So far, it’s been working out. The number of NODs has been increasing behind the resets, the number of foreclosures have been increasing behind the NODs, and the prices have been dropping as a result of the foreclosures.

What’s interesting is that those reset charts are reporting the trends on a national basis. One really has to wonder what the true trends are like locally. I would think the situation here is even worse than average.

Anyways, my point is that the charts don’t have to be that accurate ’cause we’re just using them to project broad trends.

[cr]

Do the reset charts in HELOC’s too? Or just new mortgages?

That will make quite a difference too.

[DaCounselor]

Regarding loan resets, I think there is little doubt that we find ourselves in an entirely different scenario than we were in as recently as last summer. USD LIBOR indices have fallen off a cliff and can now be found in a familiar place relative to the FFR. What percentage of impending resets are on loans with extremely (1-3%) teaser rates (and I’m talking straight 3/1 or 5/1 IO ARMS, not neg-ams) is worth discussing but my sources indicate that the majority of such ARMS did not carry the ultra-low teaser rates but instead the prevailing ARM intro rates in the mid to high 5’s. What I am hearing is that the ultra-low rates were found primarily in neg-ams, which is an entirely different animal. That’s what I’m hearing, for whatever that’s worth.

In any event and back to my original point, there is no doubt that many, many borrowers have dodged the proverbial exploding ARM thanks to LIBOR’s plunge. If they were in an 80/20 deal they were probably getting pinched on their second mtg. over the years due to the ongoing rise in the Prime rate but now that has been falling and their first mtg. is going to reset close to or below their intro rate. Instead of a short sale or foreclosure, they stay in the house. At least for now.

I just do not see a “V” in the LIBOR or FFR – I think we are looking at low rates for at least several years. I think LIBOR and the FFR are going lower and staying lower for awhile. There will likely be a day of reckoning for all those in these ARMS, particularly those with fatter margins and the IO variety, but it ain’t this year, that is for certain. And who knows what sort of additional mechanisms will be in place down the road to save the upside-down ARM holder whose rate is increasing or whose IO period is up? Make no mistake about it, the LIBOR cliff-dive is having a very large impact on housing in this area.

[SD Realtor]

Counselor and DWCAP good posts. I agree bigtime. I think that the towel has been thrown in such that we went from the stock market bubble to the real estate bubble and now the real estate bubble will deflate into inflation for real goods and services. I really do think the decision has been made to load the helicopters up with money and spray it everywhere. You guys are more in the know then I, but I do think France, Italy, Spain and German governments are in a world of hurt. Seems like a repeat of 1913 to me… Flood the system with money…

SD Realtor

[SD Realtor]

Counselor and DWCAP good posts. I agree bigtime. I think that the towel has been thrown in such that we went from the stock market bubble to the real estate bubble and now the real estate bubble will deflate into inflation for real goods and services. I really do think the decision has been made to load the helicopters up with money and spray it everywhere. You guys are more in the know then I, but I do think France, Italy, Spain and German governments are in a world of hurt. Seems like a repeat of 1913 to me… Flood the system with money…

SD Realtor

[SD Realtor]

Counselor and DWCAP good posts. I agree bigtime. I think that the towel has been thrown in such that we went from the stock market bubble to the real estate bubble and now the real estate bubble will deflate into inflation for real goods and services. I really do think the decision has been made to load the helicopters up with money and spray it everywhere. You guys are more in the know then I, but I do think France, Italy, Spain and German governments are in a world of hurt. Seems like a repeat of 1913 to me… Flood the system with money…

SD Realtor

[SD Realtor]

Counselor and DWCAP good posts. I agree bigtime. I think that the towel has been thrown in such that we went from the stock market bubble to the real estate bubble and now the real estate bubble will deflate into inflation for real goods and services. I really do think the decision has been made to load the helicopters up with money and spray it everywhere. You guys are more in the know then I, but I do think France, Italy, Spain and German governments are in a world of hurt. Seems like a repeat of 1913 to me… Flood the system with money…

SD Realtor

[SD Realtor]

Counselor and DWCAP good posts. I agree bigtime. I think that the towel has been thrown in such that we went from the stock market bubble to the real estate bubble and now the real estate bubble will deflate into inflation for real goods and services. I really do think the decision has been made to load the helicopters up with money and spray it everywhere. You guys are more in the know then I, but I do think France, Italy, Spain and German governments are in a world of hurt. Seems like a repeat of 1913 to me… Flood the system with money…

SD Realtor

[DaCounselor]

Regarding loan resets, I think there is little doubt that we find ourselves in an entirely different scenario than we were in as recently as last summer. USD LIBOR indices have fallen off a cliff and can now be found in a familiar place relative to the FFR. What percentage of impending resets are on loans with extremely (1-3%) teaser rates (and I’m talking straight 3/1 or 5/1 IO ARMS, not neg-ams) is worth discussing but my sources indicate that the majority of such ARMS did not carry the ultra-low teaser rates but instead the prevailing ARM intro rates in the mid to high 5’s. What I am hearing is that the ultra-low rates were found primarily in neg-ams, which is an entirely different animal. That’s what I’m hearing, for whatever that’s worth.

In any event and back to my original point, there is no doubt that many, many borrowers have dodged the proverbial exploding ARM thanks to LIBOR’s plunge. If they were in an 80/20 deal they were probably getting pinched on their second mtg. over the years due to the ongoing rise in the Prime rate but now that has been falling and their first mtg. is going to reset close to or below their intro rate. Instead of a short sale or foreclosure, they stay in the house. At least for now.

I just do not see a “V” in the LIBOR or FFR – I think we are looking at low rates for at least several years. I think LIBOR and the FFR are going lower and staying lower for awhile. There will likely be a day of reckoning for all those in these ARMS, particularly those with fatter margins and the IO variety, but it ain’t this year, that is for certain. And who knows what sort of additional mechanisms will be in place down the road to save the upside-down ARM holder whose rate is increasing or whose IO period is up? Make no mistake about it, the LIBOR cliff-dive is having a very large impact on housing in this area.

[DaCounselor]

Regarding loan resets, I think there is little doubt that we find ourselves in an entirely different scenario than we were in as recently as last summer. USD LIBOR indices have fallen off a cliff and can now be found in a familiar place relative to the FFR. What percentage of impending resets are on loans with extremely (1-3%) teaser rates (and I’m talking straight 3/1 or 5/1 IO ARMS, not neg-ams) is worth discussing but my sources indicate that the majority of such ARMS did not carry the ultra-low teaser rates but instead the prevailing ARM intro rates in the mid to high 5’s. What I am hearing is that the ultra-low rates were found primarily in neg-ams, which is an entirely different animal. That’s what I’m hearing, for whatever that’s worth.

In any event and back to my original point, there is no doubt that many, many borrowers have dodged the proverbial exploding ARM thanks to LIBOR’s plunge. If they were in an 80/20 deal they were probably getting pinched on their second mtg. over the years due to the ongoing rise in the Prime rate but now that has been falling and their first mtg. is going to reset close to or below their intro rate. Instead of a short sale or foreclosure, they stay in the house. At least for now.

I just do not see a “V” in the LIBOR or FFR – I think we are looking at low rates for at least several years. I think LIBOR and the FFR are going lower and staying lower for awhile. There will likely be a day of reckoning for all those in these ARMS, particularly those with fatter margins and the IO variety, but it ain’t this year, that is for certain. And who knows what sort of additional mechanisms will be in place down the road to save the upside-down ARM holder whose rate is increasing or whose IO period is up? Make no mistake about it, the LIBOR cliff-dive is having a very large impact on housing in this area.

[DaCounselor]

Regarding loan resets, I think there is little doubt that we find ourselves in an entirely different scenario than we were in as recently as last summer. USD LIBOR indices have fallen off a cliff and can now be found in a familiar place relative to the FFR. What percentage of impending resets are on loans with extremely (1-3%) teaser rates (and I’m talking straight 3/1 or 5/1 IO ARMS, not neg-ams) is worth discussing but my sources indicate that the majority of such ARMS did not carry the ultra-low teaser rates but instead the prevailing ARM intro rates in the mid to high 5’s. What I am hearing is that the ultra-low rates were found primarily in neg-ams, which is an entirely different animal. That’s what I’m hearing, for whatever that’s worth.

In any event and back to my original point, there is no doubt that many, many borrowers have dodged the proverbial exploding ARM thanks to LIBOR’s plunge. If they were in an 80/20 deal they were probably getting pinched on their second mtg. over the years due to the ongoing rise in the Prime rate but now that has been falling and their first mtg. is going to reset close to or below their intro rate. Instead of a short sale or foreclosure, they stay in the house. At least for now.

I just do not see a “V” in the LIBOR or FFR – I think we are looking at low rates for at least several years. I think LIBOR and the FFR are going lower and staying lower for awhile. There will likely be a day of reckoning for all those in these ARMS, particularly those with fatter margins and the IO variety, but it ain’t this year, that is for certain. And who knows what sort of additional mechanisms will be in place down the road to save the upside-down ARM holder whose rate is increasing or whose IO period is up? Make no mistake about it, the LIBOR cliff-dive is having a very large impact on housing in this area.

[DaCounselor]

Regarding loan resets, I think there is little doubt that we find ourselves in an entirely different scenario than we were in as recently as last summer. USD LIBOR indices have fallen off a cliff and can now be found in a familiar place relative to the FFR. What percentage of impending resets are on loans with extremely (1-3%) teaser rates (and I’m talking straight 3/1 or 5/1 IO ARMS, not neg-ams) is worth discussing but my sources indicate that the majority of such ARMS did not carry the ultra-low teaser rates but instead the prevailing ARM intro rates in the mid to high 5’s. What I am hearing is that the ultra-low rates were found primarily in neg-ams, which is an entirely different animal. That’s what I’m hearing, for whatever that’s worth.

In any event and back to my original point, there is no doubt that many, many borrowers have dodged the proverbial exploding ARM thanks to LIBOR’s plunge. If they were in an 80/20 deal they were probably getting pinched on their second mtg. over the years due to the ongoing rise in the Prime rate but now that has been falling and their first mtg. is going to reset close to or below their intro rate. Instead of a short sale or foreclosure, they stay in the house. At least for now.

I just do not see a “V” in the LIBOR or FFR – I think we are looking at low rates for at least several years. I think LIBOR and the FFR are going lower and staying lower for awhile. There will likely be a day of reckoning for all those in these ARMS, particularly those with fatter margins and the IO variety, but it ain’t this year, that is for certain. And who knows what sort of additional mechanisms will be in place down the road to save the upside-down ARM holder whose rate is increasing or whose IO period is up? Make no mistake about it, the LIBOR cliff-dive is having a very large impact on housing in this area.

[cr]

Do the reset charts in HELOC’s too? Or just new mortgages?

That will make quite a difference too.

[cr]

Do the reset charts in HELOC’s too? Or just new mortgages?

That will make quite a difference too.

[cr]

Do the reset charts in HELOC’s too? Or just new mortgages?

That will make quite a difference too.

[cr]

Do the reset charts in HELOC’s too? Or just new mortgages?

That will make quite a difference too.

[Bugs]

The reset charts are indirect indicators that we’ve been using to project the direct results. So far, it’s been working out. The number of NODs has been increasing behind the resets, the number of foreclosures have been increasing behind the NODs, and the prices have been dropping as a result of the foreclosures.

What’s interesting is that those reset charts are reporting the trends on a national basis. One really has to wonder what the true trends are like locally. I would think the situation here is even worse than average.

Anyways, my point is that the charts don’t have to be that accurate ’cause we’re just using them to project broad trends.

[Bugs]

The reset charts are indirect indicators that we’ve been using to project the direct results. So far, it’s been working out. The number of NODs has been increasing behind the resets, the number of foreclosures have been increasing behind the NODs, and the prices have been dropping as a result of the foreclosures.

What’s interesting is that those reset charts are reporting the trends on a national basis. One really has to wonder what the true trends are like locally. I would think the situation here is even worse than average.

Anyways, my point is that the charts don’t have to be that accurate ’cause we’re just using them to project broad trends.

[Bugs]

The reset charts are indirect indicators that we’ve been using to project the direct results. So far, it’s been working out. The number of NODs has been increasing behind the resets, the number of foreclosures have been increasing behind the NODs, and the prices have been dropping as a result of the foreclosures.

What’s interesting is that those reset charts are reporting the trends on a national basis. One really has to wonder what the true trends are like locally. I would think the situation here is even worse than average.

Anyways, my point is that the charts don’t have to be that accurate ’cause we’re just using them to project broad trends.

[Bugs]

The reset charts are indirect indicators that we’ve been using to project the direct results. So far, it’s been working out. The number of NODs has been increasing behind the resets, the number of foreclosures have been increasing behind the NODs, and the prices have been dropping as a result of the foreclosures.

What’s interesting is that those reset charts are reporting the trends on a national basis. One really has to wonder what the true trends are like locally. I would think the situation here is even worse than average.

Anyways, my point is that the charts don’t have to be that accurate ’cause we’re just using them to project broad trends.

[DWCAP]

I have a dumb question, but how acurate is the reset chart we always refer to? March 08 seems to be the biggest month for resets, so in theory shorts, defaults and prefoclosures in June/July should be jumping. But how many of these March resets are already paid off? If a morgage was orginated in March of 2005 for a reset in March of 2008, but was paid out when the house was sold in Feb 2007 (assuming it was paid in full) is the reset still counted?
I guess what I am wondering is what the refinancing binges of early 08 will do to the resets. Is the reset still counted in all those charts and graphs we use to justify our position, even though the morgage is paid and no reset will ever be seen?

[DWCAP]

I have a dumb question, but how acurate is the reset chart we always refer to? March 08 seems to be the biggest month for resets, so in theory shorts, defaults and prefoclosures in June/July should be jumping. But how many of these March resets are already paid off? If a morgage was orginated in March of 2005 for a reset in March of 2008, but was paid out when the house was sold in Feb 2007 (assuming it was paid in full) is the reset still counted?
I guess what I am wondering is what the refinancing binges of early 08 will do to the resets. Is the reset still counted in all those charts and graphs we use to justify our position, even though the morgage is paid and no reset will ever be seen?

[DWCAP]

I have a dumb question, but how acurate is the reset chart we always refer to? March 08 seems to be the biggest month for resets, so in theory shorts, defaults and prefoclosures in June/July should be jumping. But how many of these March resets are already paid off? If a morgage was orginated in March of 2005 for a reset in March of 2008, but was paid out when the house was sold in Feb 2007 (assuming it was paid in full) is the reset still counted?
I guess what I am wondering is what the refinancing binges of early 08 will do to the resets. Is the reset still counted in all those charts and graphs we use to justify our position, even though the morgage is paid and no reset will ever be seen?

[DWCAP]

I have a dumb question, but how acurate is the reset chart we always refer to? March 08 seems to be the biggest month for resets, so in theory shorts, defaults and prefoclosures in June/July should be jumping. But how many of these March resets are already paid off? If a morgage was orginated in March of 2005 for a reset in March of 2008, but was paid out when the house was sold in Feb 2007 (assuming it was paid in full) is the reset still counted?
I guess what I am wondering is what the refinancing binges of early 08 will do to the resets. Is the reset still counted in all those charts and graphs we use to justify our position, even though the morgage is paid and no reset will ever be seen?

[DWCAP]

Thanks guys, I have been kinda questioning the standard interpertation of the reset charts as of late. These people are being bailed out by the Feds disregard of inflation as they may actually see their payment DECREASE due to lower interest rates and the LIBOR cliff jumping. I have to admit, I dont like it. I am being robbed twice in lower interest AND higher inflation so these jerks can stay in their homes and the bankers that put them there can keep their bonus’s and such. But who really cares what I do and dont like?

I still think this is just more evidence that while we will avoid a total crash right now, the debt must be paid. Eventually rates have to go up and then we will have a day of reconing as these morgages reset and the fact that the owners have no equity means that they will reset. I think the idea is that we can withstand a certain number of resets, but that we cant do with with all our major banks capital impared. So the Fed plays for time, lets the banks heal, then lets these morgages go the way that they will naturally go. Hopefully a few years of lower to no growth are better than a crash and following slow recovery. Smart play I must say even if it doesnt help me to the benifit of others.

[DWCAP]

Thanks guys, I have been kinda questioning the standard interpertation of the reset charts as of late. These people are being bailed out by the Feds disregard of inflation as they may actually see their payment DECREASE due to lower interest rates and the LIBOR cliff jumping. I have to admit, I dont like it. I am being robbed twice in lower interest AND higher inflation so these jerks can stay in their homes and the bankers that put them there can keep their bonus’s and such. But who really cares what I do and dont like?

I still think this is just more evidence that while we will avoid a total crash right now, the debt must be paid. Eventually rates have to go up and then we will have a day of reconing as these morgages reset and the fact that the owners have no equity means that they will reset. I think the idea is that we can withstand a certain number of resets, but that we cant do with with all our major banks capital impared. So the Fed plays for time, lets the banks heal, then lets these morgages go the way that they will naturally go. Hopefully a few years of lower to no growth are better than a crash and following slow recovery. Smart play I must say even if it doesnt help me to the benifit of others.

[DWCAP]

Thanks guys, I have been kinda questioning the standard interpertation of the reset charts as of late. These people are being bailed out by the Feds disregard of inflation as they may actually see their payment DECREASE due to lower interest rates and the LIBOR cliff jumping. I have to admit, I dont like it. I am being robbed twice in lower interest AND higher inflation so these jerks can stay in their homes and the bankers that put them there can keep their bonus’s and such. But who really cares what I do and dont like?

I still think this is just more evidence that while we will avoid a total crash right now, the debt must be paid. Eventually rates have to go up and then we will have a day of reconing as these morgages reset and the fact that the owners have no equity means that they will reset. I think the idea is that we can withstand a certain number of resets, but that we cant do with with all our major banks capital impared. So the Fed plays for time, lets the banks heal, then lets these morgages go the way that they will naturally go. Hopefully a few years of lower to no growth are better than a crash and following slow recovery. Smart play I must say even if it doesnt help me to the benifit of others.

[DWCAP]

Thanks guys, I have been kinda questioning the standard interpertation of the reset charts as of late. These people are being bailed out by the Feds disregard of inflation as they may actually see their payment DECREASE due to lower interest rates and the LIBOR cliff jumping. I have to admit, I dont like it. I am being robbed twice in lower interest AND higher inflation so these jerks can stay in their homes and the bankers that put them there can keep their bonus’s and such. But who really cares what I do and dont like?

I still think this is just more evidence that while we will avoid a total crash right now, the debt must be paid. Eventually rates have to go up and then we will have a day of reconing as these morgages reset and the fact that the owners have no equity means that they will reset. I think the idea is that we can withstand a certain number of resets, but that we cant do with with all our major banks capital impared. So the Fed plays for time, lets the banks heal, then lets these morgages go the way that they will naturally go. Hopefully a few years of lower to no growth are better than a crash and following slow recovery. Smart play I must say even if it doesnt help me to the benifit of others.

[DWCAP]

Thanks guys, I have been kinda questioning the standard interpertation of the reset charts as of late. These people are being bailed out by the Feds disregard of inflation as they may actually see their payment DECREASE due to lower interest rates and the LIBOR cliff jumping. I have to admit, I dont like it. I am being robbed twice in lower interest AND higher inflation so these jerks can stay in their homes and the bankers that put them there can keep their bonus’s and such. But who really cares what I do and dont like?

I still think this is just more evidence that while we will avoid a total crash right now, the debt must be paid. Eventually rates have to go up and then we will have a day of reconing as these morgages reset and the fact that the owners have no equity means that they will reset. I think the idea is that we can withstand a certain number of resets, but that we cant do with with all our major banks capital impared. So the Fed plays for time, lets the banks heal, then lets these morgages go the way that they will naturally go. Hopefully a few years of lower to no growth are better than a crash and following slow recovery. Smart play I must say even if it doesnt help me to the benifit of others.

[DWCAP]

SO we keep flooding the system with money, but that isnt the whole story. As explored in other posts here, oil is going through the roof, killing everything in its wake. Oil is now kinda like gold in that it is viewed as an inflation hedge, so will actually go up in the beginning of recessions as people flee to safty. Hard to find anything safer than gold (it is why they call treasuries the GOLD standard). Oil is looking the same way now, though I think supply and demand restrictions will eventually make this another bubble poping. Eventually all this cheap money has to stop.
BUt in the mean time we have gas at all time high’s and rising fast. I noticed a thing about how disel is 4.25+ now last night on the news. Talked about a bunch of truckers who are independent and considering quiting cause they work for gas $$ now. Who really thinks that wont eat into the budgets of everyone for everything you didnt grow yourself? How many people want to commute from Temc. to SD when gas is $4/gal? Not many, especially when the IE has been tagged a falling market. This will just make it fall more. Who cares about builder costs when the house is already built? If the population isnt there to support the housing demand prices will fall, regardless of builders costs.
This is where itll really get sticky, population declines. Alot of people have been coming to CA for the oppertunity. If things go south, like they are, then that will reverse. If I remember right more CAians are leaving CA than coming from other states. International immigration is the only thing keeping the population growing. How long will that last if jobs disappear? (BTW, I read that crossings of people into the USA from Mexico are down 20%+.) Also, the teachers are getting pink slips in the mail due to budget cuts and already Idaho (who is hiring teachers) is beginning to nibble at advertising for them. It happened in the early 90’s and itll happen again. We havnt seen it yet because usually the economy falls, people leave, and that drags down housing. Instead this time housing pulled the economy down, so people will have to leave. Different chain, one that only really started in December 2007. To early to see where itll go, but my bet rests with my friends, outa state.

[DWCAP]

SO we keep flooding the system with money, but that isnt the whole story. As explored in other posts here, oil is going through the roof, killing everything in its wake. Oil is now kinda like gold in that it is viewed as an inflation hedge, so will actually go up in the beginning of recessions as people flee to safty. Hard to find anything safer than gold (it is why they call treasuries the GOLD standard). Oil is looking the same way now, though I think supply and demand restrictions will eventually make this another bubble poping. Eventually all this cheap money has to stop.
BUt in the mean time we have gas at all time high’s and rising fast. I noticed a thing about how disel is 4.25+ now last night on the news. Talked about a bunch of truckers who are independent and considering quiting cause they work for gas $$ now. Who really thinks that wont eat into the budgets of everyone for everything you didnt grow yourself? How many people want to commute from Temc. to SD when gas is $4/gal? Not many, especially when the IE has been tagged a falling market. This will just make it fall more. Who cares about builder costs when the house is already built? If the population isnt there to support the housing demand prices will fall, regardless of builders costs.
This is where itll really get sticky, population declines. Alot of people have been coming to CA for the oppertunity. If things go south, like they are, then that will reverse. If I remember right more CAians are leaving CA than coming from other states. International immigration is the only thing keeping the population growing. How long will that last if jobs disappear? (BTW, I read that crossings of people into the USA from Mexico are down 20%+.) Also, the teachers are getting pink slips in the mail due to budget cuts and already Idaho (who is hiring teachers) is beginning to nibble at advertising for them. It happened in the early 90’s and itll happen again. We havnt seen it yet because usually the economy falls, people leave, and that drags down housing. Instead this time housing pulled the economy down, so people will have to leave. Different chain, one that only really started in December 2007. To early to see where itll go, but my bet rests with my friends, outa state.

[DWCAP]

SO we keep flooding the system with money, but that isnt the whole story. As explored in other posts here, oil is going through the roof, killing everything in its wake. Oil is now kinda like gold in that it is viewed as an inflation hedge, so will actually go up in the beginning of recessions as people flee to safty. Hard to find anything safer than gold (it is why they call treasuries the GOLD standard). Oil is looking the same way now, though I think supply and demand restrictions will eventually make this another bubble poping. Eventually all this cheap money has to stop.
BUt in the mean time we have gas at all time high’s and rising fast. I noticed a thing about how disel is 4.25+ now last night on the news. Talked about a bunch of truckers who are independent and considering quiting cause they work for gas $$ now. Who really thinks that wont eat into the budgets of everyone for everything you didnt grow yourself? How many people want to commute from Temc. to SD when gas is $4/gal? Not many, especially when the IE has been tagged a falling market. This will just make it fall more. Who cares about builder costs when the house is already built? If the population isnt there to support the housing demand prices will fall, regardless of builders costs.
This is where itll really get sticky, population declines. Alot of people have been coming to CA for the oppertunity. If things go south, like they are, then that will reverse. If I remember right more CAians are leaving CA than coming from other states. International immigration is the only thing keeping the population growing. How long will that last if jobs disappear? (BTW, I read that crossings of people into the USA from Mexico are down 20%+.) Also, the teachers are getting pink slips in the mail due to budget cuts and already Idaho (who is hiring teachers) is beginning to nibble at advertising for them. It happened in the early 90’s and itll happen again. We havnt seen it yet because usually the economy falls, people leave, and that drags down housing. Instead this time housing pulled the economy down, so people will have to leave. Different chain, one that only really started in December 2007. To early to see where itll go, but my bet rests with my friends, outa state.

[DWCAP]

SO we keep flooding the system with money, but that isnt the whole story. As explored in other posts here, oil is going through the roof, killing everything in its wake. Oil is now kinda like gold in that it is viewed as an inflation hedge, so will actually go up in the beginning of recessions as people flee to safty. Hard to find anything safer than gold (it is why they call treasuries the GOLD standard). Oil is looking the same way now, though I think supply and demand restrictions will eventually make this another bubble poping. Eventually all this cheap money has to stop.
BUt in the mean time we have gas at all time high’s and rising fast. I noticed a thing about how disel is 4.25+ now last night on the news. Talked about a bunch of truckers who are independent and considering quiting cause they work for gas $$ now. Who really thinks that wont eat into the budgets of everyone for everything you didnt grow yourself? How many people want to commute from Temc. to SD when gas is $4/gal? Not many, especially when the IE has been tagged a falling market. This will just make it fall more. Who cares about builder costs when the house is already built? If the population isnt there to support the housing demand prices will fall, regardless of builders costs.
This is where itll really get sticky, population declines. Alot of people have been coming to CA for the oppertunity. If things go south, like they are, then that will reverse. If I remember right more CAians are leaving CA than coming from other states. International immigration is the only thing keeping the population growing. How long will that last if jobs disappear? (BTW, I read that crossings of people into the USA from Mexico are down 20%+.) Also, the teachers are getting pink slips in the mail due to budget cuts and already Idaho (who is hiring teachers) is beginning to nibble at advertising for them. It happened in the early 90’s and itll happen again. We havnt seen it yet because usually the economy falls, people leave, and that drags down housing. Instead this time housing pulled the economy down, so people will have to leave. Different chain, one that only really started in December 2007. To early to see where itll go, but my bet rests with my friends, outa state.

[DWCAP]

SO we keep flooding the system with money, but that isnt the whole story. As explored in other posts here, oil is going through the roof, killing everything in its wake. Oil is now kinda like gold in that it is viewed as an inflation hedge, so will actually go up in the beginning of recessions as people flee to safty. Hard to find anything safer than gold (it is why they call treasuries the GOLD standard). Oil is looking the same way now, though I think supply and demand restrictions will eventually make this another bubble poping. Eventually all this cheap money has to stop.
BUt in the mean time we have gas at all time high’s and rising fast. I noticed a thing about how disel is 4.25+ now last night on the news. Talked about a bunch of truckers who are independent and considering quiting cause they work for gas $$ now. Who really thinks that wont eat into the budgets of everyone for everything you didnt grow yourself? How many people want to commute from Temc. to SD when gas is $4/gal? Not many, especially when the IE has been tagged a falling market. This will just make it fall more. Who cares about builder costs when the house is already built? If the population isnt there to support the housing demand prices will fall, regardless of builders costs.
This is where itll really get sticky, population declines. Alot of people have been coming to CA for the oppertunity. If things go south, like they are, then that will reverse. If I remember right more CAians are leaving CA than coming from other states. International immigration is the only thing keeping the population growing. How long will that last if jobs disappear? (BTW, I read that crossings of people into the USA from Mexico are down 20%+.) Also, the teachers are getting pink slips in the mail due to budget cuts and already Idaho (who is hiring teachers) is beginning to nibble at advertising for them. It happened in the early 90’s and itll happen again. We havnt seen it yet because usually the economy falls, people leave, and that drags down housing. Instead this time housing pulled the economy down, so people will have to leave. Different chain, one that only really started in December 2007. To early to see where itll go, but my bet rests with my friends, outa state.

[Author]

Posts