[4plexowner]

In case anyone is thinking that I only write negative stuff, this is how I started my New Year’s letter on January 10th:

The economy is really picking up!

Over one hundred banks were closed in 2009 and only one in 2010!

[4plexowner]

In case anyone is thinking that I only write negative stuff, this is how I started my New Year’s letter on January 10th:

The economy is really picking up!

Over one hundred banks were closed in 2009 and only one in 2010!

[4plexowner]

In case anyone is thinking that I only write negative stuff, this is how I started my New Year’s letter on January 10th:

The economy is really picking up!

Over one hundred banks were closed in 2009 and only one in 2010!

[4plexowner]

In case anyone is thinking that I only write negative stuff, this is how I started my New Year’s letter on January 10th:

The economy is really picking up!

Over one hundred banks were closed in 2009 and only one in 2010!

[4plexowner]

In case anyone is thinking that I only write negative stuff, this is how I started my New Year’s letter on January 10th:

The economy is really picking up!

Over one hundred banks were closed in 2009 and only one in 2010!

[4plexowner]

Amherst Securities has done some research on the Option ARM resets and updated the mortgage reset chart to show that they are mostly a California problem

I have seen other articles suggesting that these Option ARMs are part of the reason Fannie and Freddie can now lose as much money as they want – dealing with the Option ARM resets over the next three years is going to be EXPENSIVE

[img_assist|nid=12621|title=Option ARM resets a CA issue|desc=|link=node|align=left|width=400|height=348]

California Housing Forecast for 2010: 5 Reasons why you Shouldn’t Buy a Home in California in 2010. 22 Percent unemployment and underemployment, home owned’ership, California Budget, Option ARMs, and Consumer Psychology.

[4plexowner]

Amherst Securities has done some research on the Option ARM resets and updated the mortgage reset chart to show that they are mostly a California problem

I have seen other articles suggesting that these Option ARMs are part of the reason Fannie and Freddie can now lose as much money as they want – dealing with the Option ARM resets over the next three years is going to be EXPENSIVE

[img_assist|nid=12621|title=Option ARM resets a CA issue|desc=|link=node|align=left|width=400|height=348]

California Housing Forecast for 2010: 5 Reasons why you Shouldn’t Buy a Home in California in 2010. 22 Percent unemployment and underemployment, home owned’ership, California Budget, Option ARMs, and Consumer Psychology.

[4plexowner]

Amherst Securities has done some research on the Option ARM resets and updated the mortgage reset chart to show that they are mostly a California problem

I have seen other articles suggesting that these Option ARMs are part of the reason Fannie and Freddie can now lose as much money as they want – dealing with the Option ARM resets over the next three years is going to be EXPENSIVE

[img_assist|nid=12621|title=Option ARM resets a CA issue|desc=|link=node|align=left|width=400|height=348]

California Housing Forecast for 2010: 5 Reasons why you Shouldn’t Buy a Home in California in 2010. 22 Percent unemployment and underemployment, home owned’ership, California Budget, Option ARMs, and Consumer Psychology.

[4plexowner]

Amherst Securities has done some research on the Option ARM resets and updated the mortgage reset chart to show that they are mostly a California problem

I have seen other articles suggesting that these Option ARMs are part of the reason Fannie and Freddie can now lose as much money as they want – dealing with the Option ARM resets over the next three years is going to be EXPENSIVE

[img_assist|nid=12621|title=Option ARM resets a CA issue|desc=|link=node|align=left|width=400|height=348]

California Housing Forecast for 2010: 5 Reasons why you Shouldn’t Buy a Home in California in 2010. 22 Percent unemployment and underemployment, home owned’ership, California Budget, Option ARMs, and Consumer Psychology.

[4plexowner]

Amherst Securities has done some research on the Option ARM resets and updated the mortgage reset chart to show that they are mostly a California problem

I have seen other articles suggesting that these Option ARMs are part of the reason Fannie and Freddie can now lose as much money as they want – dealing with the Option ARM resets over the next three years is going to be EXPENSIVE

[img_assist|nid=12621|title=Option ARM resets a CA issue|desc=|link=node|align=left|width=400|height=348]

California Housing Forecast for 2010: 5 Reasons why you Shouldn’t Buy a Home in California in 2010. 22 Percent unemployment and underemployment, home owned’ership, California Budget, Option ARMs, and Consumer Psychology.

[4plexowner]

“Last, the only entities that is lending is the government.”

from my end-of-year letter to family and friends:

There must be a ray of sunshine somewhere, how’s the housing sector doing?

Most (over 70%) mortgage loans in 2009 came from Fannie Mae, Freddie Mac or FHA – banks, for the most part, are not originating mortgages that can’t be sold to one of these orgs – all of these agencies offer/guarantee govt subsidized mortgages with low down payments (3-5%) – with the $8000 federal tax credit, many people were able to purchase $250K and under houses with zero money coming out of their pockets – California added a $10K ($20K?) tax credit (http://www.sacbee.com/business/story/1641603.html ) on top of the $8K federal credit so residents of the Golden State could play the zero-down game at a much higher level

What? I thought we were making it harder for people to purchase homes they can’t afford …

Yes, hmmm, let’s move on

Fannie and Freddie have gone from being private corporations with an implicit govt guarantee to being, in essence if not fact, govt agencies with access to the govt’s unlimited checkbook (http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac ) – the supposed bailout limit of $200 billion each for Fannie and Freddie was recently removed – this change was announced Christmas eve after the markets had closed (http://www.dailyfinance.com/story/fannie-and-freddie-get-a-huge-christmas-gift-from-uncle-sam/19295524 ) – ie, this change was so stinky they didn’t want the markets to react, knowing that by Monday the news cycle would have moved onto something else – Fannie and Freddie are now allowed to lose as much of the taxpayer’s money as they want in an effort to prop up the real estate market (http://www.reuters.com/article/idUSTRE5BN2ZI20091224) – they were already broke so all of their losses are now a taxpayer expense (http://www.newstatesman.com/society/2008/07/housing-market-fannie-freddie )

Fannie and Freddie are losing money hand over fist – Fannie alone lost over $60 billion in the first three quarters of 2009 – and the default rates are climbing on all of their mortgage products, even the supposed ‘prime’ ones so their losses will continue to climb (http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html?mod=rss_Today%27s_Most_Popular )

How are Fannie and Freddie financing all these losses? Where is the money coming from?

In order to fund their operations, Fannie and Freddie sell bonds to investors – like US treasury debt, all the usual suspects have stopped buying Fannie and Freddie’s bonds – the only purchaser for this debt in 2009 was the US Federal Reserve

So, in a nutshell, you’re saying that over 70% of the mortgage issuance in 2009 occurred because of govt subsidized loans and tax credits? And the only financer for this government largesse was the US Federal Reserve?

Yep on both counts

But don’t worry about the CEOs of Fannie and Freddie – they will receive $6 mil per year plus bonuses to oversee the squandering of the taxpayer’s money (http://www.bloggingstocks.com/2009/12/26/its-6-million-each-for-fannie-and-freddie-chief-executives/ ) – and this compensation package was announced Christmas eve after the markets closed …

Just as an interesting question, how much do you think housing values would fall from here if the government subsidized mortgages and tax credits were removed?

I’d say 40% but I doubt we’ll get a chance to find out

Well, how about foreclosures, are people staying in their homes?

No, default rates are setting multi-decade records (http://blog.foreclosure.com/2009/05/mortgage-default-rates-set-another-record/ http://www.latimes.com/business/la-fi-foreclosures22-2009dec22,0,7969044.story?track=rss ) and loan workouts aren’t working out (http://www.housingwire.com/2010/01/08/redefault-rates-are-tragic-says-amherst-securities-1/ http://www.reuters.com/article/idUSN0815503520100108 )

[4plexowner]

“Last, the only entities that is lending is the government.”

from my end-of-year letter to family and friends:

There must be a ray of sunshine somewhere, how’s the housing sector doing?

Most (over 70%) mortgage loans in 2009 came from Fannie Mae, Freddie Mac or FHA – banks, for the most part, are not originating mortgages that can’t be sold to one of these orgs – all of these agencies offer/guarantee govt subsidized mortgages with low down payments (3-5%) – with the $8000 federal tax credit, many people were able to purchase $250K and under houses with zero money coming out of their pockets – California added a $10K ($20K?) tax credit (http://www.sacbee.com/business/story/1641603.html ) on top of the $8K federal credit so residents of the Golden State could play the zero-down game at a much higher level

What? I thought we were making it harder for people to purchase homes they can’t afford …

Yes, hmmm, let’s move on

Fannie and Freddie have gone from being private corporations with an implicit govt guarantee to being, in essence if not fact, govt agencies with access to the govt’s unlimited checkbook (http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac ) – the supposed bailout limit of $200 billion each for Fannie and Freddie was recently removed – this change was announced Christmas eve after the markets had closed (http://www.dailyfinance.com/story/fannie-and-freddie-get-a-huge-christmas-gift-from-uncle-sam/19295524 ) – ie, this change was so stinky they didn’t want the markets to react, knowing that by Monday the news cycle would have moved onto something else – Fannie and Freddie are now allowed to lose as much of the taxpayer’s money as they want in an effort to prop up the real estate market (http://www.reuters.com/article/idUSTRE5BN2ZI20091224) – they were already broke so all of their losses are now a taxpayer expense (http://www.newstatesman.com/society/2008/07/housing-market-fannie-freddie )

Fannie and Freddie are losing money hand over fist – Fannie alone lost over $60 billion in the first three quarters of 2009 – and the default rates are climbing on all of their mortgage products, even the supposed ‘prime’ ones so their losses will continue to climb (http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html?mod=rss_Today%27s_Most_Popular )

How are Fannie and Freddie financing all these losses? Where is the money coming from?

In order to fund their operations, Fannie and Freddie sell bonds to investors – like US treasury debt, all the usual suspects have stopped buying Fannie and Freddie’s bonds – the only purchaser for this debt in 2009 was the US Federal Reserve

So, in a nutshell, you’re saying that over 70% of the mortgage issuance in 2009 occurred because of govt subsidized loans and tax credits? And the only financer for this government largesse was the US Federal Reserve?

Yep on both counts

But don’t worry about the CEOs of Fannie and Freddie – they will receive $6 mil per year plus bonuses to oversee the squandering of the taxpayer’s money (http://www.bloggingstocks.com/2009/12/26/its-6-million-each-for-fannie-and-freddie-chief-executives/ ) – and this compensation package was announced Christmas eve after the markets closed …

Just as an interesting question, how much do you think housing values would fall from here if the government subsidized mortgages and tax credits were removed?

I’d say 40% but I doubt we’ll get a chance to find out

Well, how about foreclosures, are people staying in their homes?

No, default rates are setting multi-decade records (http://blog.foreclosure.com/2009/05/mortgage-default-rates-set-another-record/ http://www.latimes.com/business/la-fi-foreclosures22-2009dec22,0,7969044.story?track=rss ) and loan workouts aren’t working out (http://www.housingwire.com/2010/01/08/redefault-rates-are-tragic-says-amherst-securities-1/ http://www.reuters.com/article/idUSN0815503520100108 )

[4plexowner]

“Last, the only entities that is lending is the government.”

from my end-of-year letter to family and friends:

There must be a ray of sunshine somewhere, how’s the housing sector doing?

Most (over 70%) mortgage loans in 2009 came from Fannie Mae, Freddie Mac or FHA – banks, for the most part, are not originating mortgages that can’t be sold to one of these orgs – all of these agencies offer/guarantee govt subsidized mortgages with low down payments (3-5%) – with the $8000 federal tax credit, many people were able to purchase $250K and under houses with zero money coming out of their pockets – California added a $10K ($20K?) tax credit (http://www.sacbee.com/business/story/1641603.html ) on top of the $8K federal credit so residents of the Golden State could play the zero-down game at a much higher level

What? I thought we were making it harder for people to purchase homes they can’t afford …

Yes, hmmm, let’s move on

Fannie and Freddie have gone from being private corporations with an implicit govt guarantee to being, in essence if not fact, govt agencies with access to the govt’s unlimited checkbook (http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac ) – the supposed bailout limit of $200 billion each for Fannie and Freddie was recently removed – this change was announced Christmas eve after the markets had closed (http://www.dailyfinance.com/story/fannie-and-freddie-get-a-huge-christmas-gift-from-uncle-sam/19295524 ) – ie, this change was so stinky they didn’t want the markets to react, knowing that by Monday the news cycle would have moved onto something else – Fannie and Freddie are now allowed to lose as much of the taxpayer’s money as they want in an effort to prop up the real estate market (http://www.reuters.com/article/idUSTRE5BN2ZI20091224) – they were already broke so all of their losses are now a taxpayer expense (http://www.newstatesman.com/society/2008/07/housing-market-fannie-freddie )

Fannie and Freddie are losing money hand over fist – Fannie alone lost over $60 billion in the first three quarters of 2009 – and the default rates are climbing on all of their mortgage products, even the supposed ‘prime’ ones so their losses will continue to climb (http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html?mod=rss_Today%27s_Most_Popular )

How are Fannie and Freddie financing all these losses? Where is the money coming from?

In order to fund their operations, Fannie and Freddie sell bonds to investors – like US treasury debt, all the usual suspects have stopped buying Fannie and Freddie’s bonds – the only purchaser for this debt in 2009 was the US Federal Reserve

So, in a nutshell, you’re saying that over 70% of the mortgage issuance in 2009 occurred because of govt subsidized loans and tax credits? And the only financer for this government largesse was the US Federal Reserve?

Yep on both counts

But don’t worry about the CEOs of Fannie and Freddie – they will receive $6 mil per year plus bonuses to oversee the squandering of the taxpayer’s money (http://www.bloggingstocks.com/2009/12/26/its-6-million-each-for-fannie-and-freddie-chief-executives/ ) – and this compensation package was announced Christmas eve after the markets closed …

Just as an interesting question, how much do you think housing values would fall from here if the government subsidized mortgages and tax credits were removed?

I’d say 40% but I doubt we’ll get a chance to find out

Well, how about foreclosures, are people staying in their homes?

No, default rates are setting multi-decade records (http://blog.foreclosure.com/2009/05/mortgage-default-rates-set-another-record/ http://www.latimes.com/business/la-fi-foreclosures22-2009dec22,0,7969044.story?track=rss ) and loan workouts aren’t working out (http://www.housingwire.com/2010/01/08/redefault-rates-are-tragic-says-amherst-securities-1/ http://www.reuters.com/article/idUSN0815503520100108 )

[4plexowner]

“Last, the only entities that is lending is the government.”

from my end-of-year letter to family and friends:

There must be a ray of sunshine somewhere, how’s the housing sector doing?

Most (over 70%) mortgage loans in 2009 came from Fannie Mae, Freddie Mac or FHA – banks, for the most part, are not originating mortgages that can’t be sold to one of these orgs – all of these agencies offer/guarantee govt subsidized mortgages with low down payments (3-5%) – with the $8000 federal tax credit, many people were able to purchase $250K and under houses with zero money coming out of their pockets – California added a $10K ($20K?) tax credit (http://www.sacbee.com/business/story/1641603.html ) on top of the $8K federal credit so residents of the Golden State could play the zero-down game at a much higher level

What? I thought we were making it harder for people to purchase homes they can’t afford …

Yes, hmmm, let’s move on

Fannie and Freddie have gone from being private corporations with an implicit govt guarantee to being, in essence if not fact, govt agencies with access to the govt’s unlimited checkbook (http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac ) – the supposed bailout limit of $200 billion each for Fannie and Freddie was recently removed – this change was announced Christmas eve after the markets had closed (http://www.dailyfinance.com/story/fannie-and-freddie-get-a-huge-christmas-gift-from-uncle-sam/19295524 ) – ie, this change was so stinky they didn’t want the markets to react, knowing that by Monday the news cycle would have moved onto something else – Fannie and Freddie are now allowed to lose as much of the taxpayer’s money as they want in an effort to prop up the real estate market (http://www.reuters.com/article/idUSTRE5BN2ZI20091224) – they were already broke so all of their losses are now a taxpayer expense (http://www.newstatesman.com/society/2008/07/housing-market-fannie-freddie )

Fannie and Freddie are losing money hand over fist – Fannie alone lost over $60 billion in the first three quarters of 2009 – and the default rates are climbing on all of their mortgage products, even the supposed ‘prime’ ones so their losses will continue to climb (http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html?mod=rss_Today%27s_Most_Popular )

How are Fannie and Freddie financing all these losses? Where is the money coming from?

In order to fund their operations, Fannie and Freddie sell bonds to investors – like US treasury debt, all the usual suspects have stopped buying Fannie and Freddie’s bonds – the only purchaser for this debt in 2009 was the US Federal Reserve

So, in a nutshell, you’re saying that over 70% of the mortgage issuance in 2009 occurred because of govt subsidized loans and tax credits? And the only financer for this government largesse was the US Federal Reserve?

Yep on both counts

But don’t worry about the CEOs of Fannie and Freddie – they will receive $6 mil per year plus bonuses to oversee the squandering of the taxpayer’s money (http://www.bloggingstocks.com/2009/12/26/its-6-million-each-for-fannie-and-freddie-chief-executives/ ) – and this compensation package was announced Christmas eve after the markets closed …

Just as an interesting question, how much do you think housing values would fall from here if the government subsidized mortgages and tax credits were removed?

I’d say 40% but I doubt we’ll get a chance to find out

Well, how about foreclosures, are people staying in their homes?

No, default rates are setting multi-decade records (http://blog.foreclosure.com/2009/05/mortgage-default-rates-set-another-record/ http://www.latimes.com/business/la-fi-foreclosures22-2009dec22,0,7969044.story?track=rss ) and loan workouts aren’t working out (http://www.housingwire.com/2010/01/08/redefault-rates-are-tragic-says-amherst-securities-1/ http://www.reuters.com/article/idUSN0815503520100108 )

[4plexowner]

“Last, the only entities that is lending is the government.”

from my end-of-year letter to family and friends:

There must be a ray of sunshine somewhere, how’s the housing sector doing?

Most (over 70%) mortgage loans in 2009 came from Fannie Mae, Freddie Mac or FHA – banks, for the most part, are not originating mortgages that can’t be sold to one of these orgs – all of these agencies offer/guarantee govt subsidized mortgages with low down payments (3-5%) – with the $8000 federal tax credit, many people were able to purchase $250K and under houses with zero money coming out of their pockets – California added a $10K ($20K?) tax credit (http://www.sacbee.com/business/story/1641603.html ) on top of the $8K federal credit so residents of the Golden State could play the zero-down game at a much higher level

What? I thought we were making it harder for people to purchase homes they can’t afford …

Yes, hmmm, let’s move on

Fannie and Freddie have gone from being private corporations with an implicit govt guarantee to being, in essence if not fact, govt agencies with access to the govt’s unlimited checkbook (http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac ) – the supposed bailout limit of $200 billion each for Fannie and Freddie was recently removed – this change was announced Christmas eve after the markets had closed (http://www.dailyfinance.com/story/fannie-and-freddie-get-a-huge-christmas-gift-from-uncle-sam/19295524 ) – ie, this change was so stinky they didn’t want the markets to react, knowing that by Monday the news cycle would have moved onto something else – Fannie and Freddie are now allowed to lose as much of the taxpayer’s money as they want in an effort to prop up the real estate market (http://www.reuters.com/article/idUSTRE5BN2ZI20091224) – they were already broke so all of their losses are now a taxpayer expense (http://www.newstatesman.com/society/2008/07/housing-market-fannie-freddie )

Fannie and Freddie are losing money hand over fist – Fannie alone lost over $60 billion in the first three quarters of 2009 – and the default rates are climbing on all of their mortgage products, even the supposed ‘prime’ ones so their losses will continue to climb (http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html?mod=rss_Today%27s_Most_Popular )

How are Fannie and Freddie financing all these losses? Where is the money coming from?

In order to fund their operations, Fannie and Freddie sell bonds to investors – like US treasury debt, all the usual suspects have stopped buying Fannie and Freddie’s bonds – the only purchaser for this debt in 2009 was the US Federal Reserve

So, in a nutshell, you’re saying that over 70% of the mortgage issuance in 2009 occurred because of govt subsidized loans and tax credits? And the only financer for this government largesse was the US Federal Reserve?

Yep on both counts

But don’t worry about the CEOs of Fannie and Freddie – they will receive $6 mil per year plus bonuses to oversee the squandering of the taxpayer’s money (http://www.bloggingstocks.com/2009/12/26/its-6-million-each-for-fannie-and-freddie-chief-executives/ ) – and this compensation package was announced Christmas eve after the markets closed …

Just as an interesting question, how much do you think housing values would fall from here if the government subsidized mortgages and tax credits were removed?

I’d say 40% but I doubt we’ll get a chance to find out

Well, how about foreclosures, are people staying in their homes?

No, default rates are setting multi-decade records (http://blog.foreclosure.com/2009/05/mortgage-default-rates-set-another-record/ http://www.latimes.com/business/la-fi-foreclosures22-2009dec22,0,7969044.story?track=rss ) and loan workouts aren’t working out (http://www.housingwire.com/2010/01/08/redefault-rates-are-tragic-says-amherst-securities-1/ http://www.reuters.com/article/idUSN0815503520100108 )

[Author]

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