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peterb.
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October 24, 2008 at 9:17 AM #292662October 24, 2008 at 4:01 PM #292443
beanmaestro
ParticipantTwo hunches and an observation here:
1. I do think moral hazard will prevent many folks with liar loans from seeing a bailout. They’re the homedebtors who have the least defensible position when they go into default, and the (initial, at least) bailout plans will require that they prove their stated income was legit. The Option ARM, subprime, and prime defaulters will get sympathy, but I’m guessing the liars get thrown under a bus. Given the number of those folks in SoCal, this may limit the effect on the market.
2. With prices dropping at 3% a month, and already at cash-flow prices in some areas, prices may drop most of the way before a more-aggressive foreclosure act takes effect. Especially with the global market crises getting increased attention, I suspect any morally egregious foreclosure relief will wait till next year, but which time we’re down another 10%.
But we all did see major loan forgiveness coming, though, right? Last year, when it was obvious that 25% of California was going to end up upside-down, you knew that either through laws or loss-mitigation, someone would do something to limit foreclosures… it’s just not in the loan holder’s interest to foreclose on a quarter of the state. To assume that wouldn’t happen is to be as shortsighted as the banks that made the loans.
October 24, 2008 at 4:01 PM #292767ParticipantTwo hunches and an observation here:
1. I do think moral hazard will prevent many folks with liar loans from seeing a bailout. They’re the homedebtors who have the least defensible position when they go into default, and the (initial, at least) bailout plans will require that they prove their stated income was legit. The Option ARM, subprime, and prime defaulters will get sympathy, but I’m guessing the liars get thrown under a bus. Given the number of those folks in SoCal, this may limit the effect on the market.
2. With prices dropping at 3% a month, and already at cash-flow prices in some areas, prices may drop most of the way before a more-aggressive foreclosure act takes effect. Especially with the global market crises getting increased attention, I suspect any morally egregious foreclosure relief will wait till next year, but which time we’re down another 10%.
But we all did see major loan forgiveness coming, though, right? Last year, when it was obvious that 25% of California was going to end up upside-down, you knew that either through laws or loss-mitigation, someone would do something to limit foreclosures… it’s just not in the loan holder’s interest to foreclose on a quarter of the state. To assume that wouldn’t happen is to be as shortsighted as the banks that made the loans.
October 24, 2008 at 4:01 PM #292795ParticipantTwo hunches and an observation here:
1. I do think moral hazard will prevent many folks with liar loans from seeing a bailout. They’re the homedebtors who have the least defensible position when they go into default, and the (initial, at least) bailout plans will require that they prove their stated income was legit. The Option ARM, subprime, and prime defaulters will get sympathy, but I’m guessing the liars get thrown under a bus. Given the number of those folks in SoCal, this may limit the effect on the market.
2. With prices dropping at 3% a month, and already at cash-flow prices in some areas, prices may drop most of the way before a more-aggressive foreclosure act takes effect. Especially with the global market crises getting increased attention, I suspect any morally egregious foreclosure relief will wait till next year, but which time we’re down another 10%.
But we all did see major loan forgiveness coming, though, right? Last year, when it was obvious that 25% of California was going to end up upside-down, you knew that either through laws or loss-mitigation, someone would do something to limit foreclosures… it’s just not in the loan holder’s interest to foreclose on a quarter of the state. To assume that wouldn’t happen is to be as shortsighted as the banks that made the loans.
October 24, 2008 at 4:01 PM #292804ParticipantTwo hunches and an observation here:
1. I do think moral hazard will prevent many folks with liar loans from seeing a bailout. They’re the homedebtors who have the least defensible position when they go into default, and the (initial, at least) bailout plans will require that they prove their stated income was legit. The Option ARM, subprime, and prime defaulters will get sympathy, but I’m guessing the liars get thrown under a bus. Given the number of those folks in SoCal, this may limit the effect on the market.
2. With prices dropping at 3% a month, and already at cash-flow prices in some areas, prices may drop most of the way before a more-aggressive foreclosure act takes effect. Especially with the global market crises getting increased attention, I suspect any morally egregious foreclosure relief will wait till next year, but which time we’re down another 10%.
But we all did see major loan forgiveness coming, though, right? Last year, when it was obvious that 25% of California was going to end up upside-down, you knew that either through laws or loss-mitigation, someone would do something to limit foreclosures… it’s just not in the loan holder’s interest to foreclose on a quarter of the state. To assume that wouldn’t happen is to be as shortsighted as the banks that made the loans.
October 24, 2008 at 4:01 PM #292841ParticipantTwo hunches and an observation here:
1. I do think moral hazard will prevent many folks with liar loans from seeing a bailout. They’re the homedebtors who have the least defensible position when they go into default, and the (initial, at least) bailout plans will require that they prove their stated income was legit. The Option ARM, subprime, and prime defaulters will get sympathy, but I’m guessing the liars get thrown under a bus. Given the number of those folks in SoCal, this may limit the effect on the market.
2. With prices dropping at 3% a month, and already at cash-flow prices in some areas, prices may drop most of the way before a more-aggressive foreclosure act takes effect. Especially with the global market crises getting increased attention, I suspect any morally egregious foreclosure relief will wait till next year, but which time we’re down another 10%.
But we all did see major loan forgiveness coming, though, right? Last year, when it was obvious that 25% of California was going to end up upside-down, you knew that either through laws or loss-mitigation, someone would do something to limit foreclosures… it’s just not in the loan holder’s interest to foreclose on a quarter of the state. To assume that wouldn’t happen is to be as shortsighted as the banks that made the loans.
October 26, 2008 at 11:20 AM #293093Huckleberry
ParticipantConsidering everyone is going to be bailed out, I have some friends that live in Vegas whom could use this situation to their advantage. I think they are upside down by about 200K now.
They bought a decent home back in 05 or so, fixed it all up then sold their failing business, so could no longer afford the mortgage so just rent it out now.
They now live in Palm Desert, both work “under the table” consulting and make good money but can show they basically have very limited income.
Since everyone and their dog is going to be bailed out, I am going to convince them to seek a principal write down.
No need to give me the moral hazard speech, everyone in the country is going to be trying to figure out how to get their piece of this bailout, even rich people. So, I’m going to start advocating my friends figure out how to get their own “bailout”.
October 26, 2008 at 11:20 AM #293418ParticipantConsidering everyone is going to be bailed out, I have some friends that live in Vegas whom could use this situation to their advantage. I think they are upside down by about 200K now.
They bought a decent home back in 05 or so, fixed it all up then sold their failing business, so could no longer afford the mortgage so just rent it out now.
They now live in Palm Desert, both work “under the table” consulting and make good money but can show they basically have very limited income.
Since everyone and their dog is going to be bailed out, I am going to convince them to seek a principal write down.
No need to give me the moral hazard speech, everyone in the country is going to be trying to figure out how to get their piece of this bailout, even rich people. So, I’m going to start advocating my friends figure out how to get their own “bailout”.
October 26, 2008 at 11:20 AM #293444ParticipantConsidering everyone is going to be bailed out, I have some friends that live in Vegas whom could use this situation to their advantage. I think they are upside down by about 200K now.
They bought a decent home back in 05 or so, fixed it all up then sold their failing business, so could no longer afford the mortgage so just rent it out now.
They now live in Palm Desert, both work “under the table” consulting and make good money but can show they basically have very limited income.
Since everyone and their dog is going to be bailed out, I am going to convince them to seek a principal write down.
No need to give me the moral hazard speech, everyone in the country is going to be trying to figure out how to get their piece of this bailout, even rich people. So, I’m going to start advocating my friends figure out how to get their own “bailout”.
October 26, 2008 at 11:20 AM #293456ParticipantConsidering everyone is going to be bailed out, I have some friends that live in Vegas whom could use this situation to their advantage. I think they are upside down by about 200K now.
They bought a decent home back in 05 or so, fixed it all up then sold their failing business, so could no longer afford the mortgage so just rent it out now.
They now live in Palm Desert, both work “under the table” consulting and make good money but can show they basically have very limited income.
Since everyone and their dog is going to be bailed out, I am going to convince them to seek a principal write down.
No need to give me the moral hazard speech, everyone in the country is going to be trying to figure out how to get their piece of this bailout, even rich people. So, I’m going to start advocating my friends figure out how to get their own “bailout”.
October 26, 2008 at 11:20 AM #293492ParticipantConsidering everyone is going to be bailed out, I have some friends that live in Vegas whom could use this situation to their advantage. I think they are upside down by about 200K now.
They bought a decent home back in 05 or so, fixed it all up then sold their failing business, so could no longer afford the mortgage so just rent it out now.
They now live in Palm Desert, both work “under the table” consulting and make good money but can show they basically have very limited income.
Since everyone and their dog is going to be bailed out, I am going to convince them to seek a principal write down.
No need to give me the moral hazard speech, everyone in the country is going to be trying to figure out how to get their piece of this bailout, even rich people. So, I’m going to start advocating my friends figure out how to get their own “bailout”.
October 26, 2008 at 11:41 AM #293123peterb
ParticipantDefaults are going to go through the roof in 2009. The govt does not care about you! You dont lobby them, nor pay for their campaigns. These bailouts are for their clients. Not you. When was the last time they did anything substantial to help the populace on a level such as this? It’s not part of their history at all. This is no different.
October 26, 2008 at 11:41 AM #293448ParticipantDefaults are going to go through the roof in 2009. The govt does not care about you! You dont lobby them, nor pay for their campaigns. These bailouts are for their clients. Not you. When was the last time they did anything substantial to help the populace on a level such as this? It’s not part of their history at all. This is no different.
October 26, 2008 at 11:41 AM #293475ParticipantDefaults are going to go through the roof in 2009. The govt does not care about you! You dont lobby them, nor pay for their campaigns. These bailouts are for their clients. Not you. When was the last time they did anything substantial to help the populace on a level such as this? It’s not part of their history at all. This is no different.
October 26, 2008 at 11:41 AM #293486ParticipantDefaults are going to go through the roof in 2009. The govt does not care about you! You dont lobby them, nor pay for their campaigns. These bailouts are for their clients. Not you. When was the last time they did anything substantial to help the populace on a level such as this? It’s not part of their history at all. This is no different.
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