Research (or Speculation) as to timeline for Mortgage Resets and NODs

[kewp]

Watch the foreclosures. They should peak, drop, then plateau, which should be as close to a bottom as anyone can call.

[kewp]

Watch the foreclosures. They should peak, drop, then plateau, which should be as close to a bottom as anyone can call.

[SD Realtor]

Nancy I would agree. The only caviot is that they (the entity servicing the loans) would also need to be motivated to enforce the denominator “value” stipulation to trigger the early reset. I also assume that the speculative “value” would be determined in each individual case by what, an independent appraisal? So I am not sure how motivated the lenders or loan servicers will be to add snow to a fast moving avalanche.

SD Realtor

[SD Realtor]

Nancy I would agree. The only caviot is that they (the entity servicing the loans) would also need to be motivated to enforce the denominator “value” stipulation to trigger the early reset. I also assume that the speculative “value” would be determined in each individual case by what, an independent appraisal? So I am not sure how motivated the lenders or loan servicers will be to add snow to a fast moving avalanche.

SD Realtor

[Borat]

A further devaluing of the dollar could change the picture quite a bit. Let’s say it declines another 20% relative to the more stable currencies, interest rates increase accordingly to keep the chinese and japanese money coming in, which of course causes inflation to go up as well. Salaries then of course become inflated as they try to keep pace and those “higher” mortgage payments after reset are more managable since they are denominated in pre-devaluation dollars. My guess is this is the government/fed plan to get us out of this problem. They already devalued the dollar by almost half in the last seven years to make us think things were still okay, they’ll keep on doing it as long as they can get away with it.

[Borat]

A further devaluing of the dollar could change the picture quite a bit. Let’s say it declines another 20% relative to the more stable currencies, interest rates increase accordingly to keep the chinese and japanese money coming in, which of course causes inflation to go up as well. Salaries then of course become inflated as they try to keep pace and those “higher” mortgage payments after reset are more managable since they are denominated in pre-devaluation dollars. My guess is this is the government/fed plan to get us out of this problem. They already devalued the dollar by almost half in the last seven years to make us think things were still okay, they’ll keep on doing it as long as they can get away with it.

[4plexowner]

Borat – your scenario would be more plausible IF inflation were feeding into salaries which it isn’t – real wages have been declining for several years now and the ongoing outsourcing of US jobs doesn’t bode well for salary inflation

some analysts are pointing out that the Fed has lost control of the monetary system – they can pump up the printing presses and spew fiat currency all over the planet but they can’t control where that funny money flows

the idea that the Fed can control interest rates is another debatable point in today’s financial world

[4plexowner]

Borat – your scenario would be more plausible IF inflation were feeding into salaries which it isn’t – real wages have been declining for several years now and the ongoing outsourcing of US jobs doesn’t bode well for salary inflation

some analysts are pointing out that the Fed has lost control of the monetary system – they can pump up the printing presses and spew fiat currency all over the planet but they can’t control where that funny money flows

the idea that the Fed can control interest rates is another debatable point in today’s financial world

[Borat]

That’s true that it hasn’t been keeping up but salaries always lag inflation — maybe they’ll start catching up soon. But regardless of what happens to salaries I expect that the fed/government will attempt to inflate their way out of the problem, primarily because they have no other arrow in their quiver at this point. Even if salaries stay flat, a devalued dollar will help people make those payments after the reset occurs since it is priced in pre-inflationary dollars.

[Borat]

That’s true that it hasn’t been keeping up but salaries always lag inflation — maybe they’ll start catching up soon. But regardless of what happens to salaries I expect that the fed/government will attempt to inflate their way out of the problem, primarily because they have no other arrow in their quiver at this point. Even if salaries stay flat, a devalued dollar will help people make those payments after the reset occurs since it is priced in pre-inflationary dollars.

[Nancy_s soothsayer]

“Even if salaries stay flat, a devalued dollar will help people make those payments after the reset occurs since it
is priced in pre-inflationary dollars.”

Borat, the tooth fairy will magically infuse the pockets of upside-down ARM debtors with lots of cash because their salaries can’t keep up with the alligators’ feeding.

Yes, voodoo economics, my friend – magic happens.

[Nancy_s soothsayer]

“Even if salaries stay flat, a devalued dollar will help people make those payments after the reset occurs since it
is priced in pre-inflationary dollars.”

Borat, the tooth fairy will magically infuse the pockets of upside-down ARM debtors with lots of cash because their salaries can’t keep up with the alligators’ feeding.

Yes, voodoo economics, my friend – magic happens.

[pencilneck]

Wages flat? Minimum wage is going up another 6.6% Jan 2008 (to $8) here in California. Unfortunately, I don’t think this will help the housing market much.

From our helpful state’s website on the matter:

Q. What is the minimum wage?

A. Beginning January 1, 2007, the minimum wage in California is $7.50 per hour. Effective January 1, 2008, the minimum wage in California will be $8.00 per hour.

For sheepherders, however, effective July 1, 2002, the minimum wage was set at $1,200.00 per month. Effective January 1, 2007 this wage was increased to a minimum monthly salary of $1,333.20. Effective January 1, 2008, the minimum monthly salary for sheepherders will be $1,422.52. Wages paid to sheepherders may not be offset by meals or lodging provided by the employer. Instead, there are provisions in IWC Order 14-2007, Sections 10(F), (G) and (H) that apply to sheepherders with respect to monthly meal and lodging benefits required to be provided by the employer.

[pencilneck]

Wages flat? Minimum wage is going up another 6.6% Jan 2008 (to $8) here in California. Unfortunately, I don’t think this will help the housing market much.

From our helpful state’s website on the matter:

Q. What is the minimum wage?

A. Beginning January 1, 2007, the minimum wage in California is $7.50 per hour. Effective January 1, 2008, the minimum wage in California will be $8.00 per hour.

For sheepherders, however, effective July 1, 2002, the minimum wage was set at $1,200.00 per month. Effective January 1, 2007 this wage was increased to a minimum monthly salary of $1,333.20. Effective January 1, 2008, the minimum monthly salary for sheepherders will be $1,422.52. Wages paid to sheepherders may not be offset by meals or lodging provided by the employer. Instead, there are provisions in IWC Order 14-2007, Sections 10(F), (G) and (H) that apply to sheepherders with respect to monthly meal and lodging benefits required to be provided by the employer.

[4plexowner]

Let’s see, minimum wage of $8/hour – 2000 hours per work year

WOW – that’s $16,000 annual income !!!!!! (before Uncle Sam and Uncle California take their share)

Holey smokes – mattress sales should be going up since all these workers will need somewhere to hide all this income

[Author]

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