Is it ALT-A turn

[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.

[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.

[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

[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.

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