[betting on fall]

That Oak ave. one is impressive. Nothing makes me want to run out and buy like a picture of a half a computer monitor.

[betting on fall]

I’m not attending, but I am keeping my eye on the Halifax street house in San Diego that is being auctioned (Allied gardens/del cerro area). Those houses were built in late 2002 early 2003 and went then for the low to mid $500,000’s. I nearly bought one then since there are so few new homes in that area. I am very surprised it ended up on the auction block since you would think a newer house would sell in that area.

I do think attendance at these auctions is a good gauge of casual interest in real estate investing. If there are still lots of “Flip this House!” wannabes there, its a sign the market still has a long way to go to hit bottom.

[betting on fall]

I’m not attending, but I am keeping my eye on the Halifax street house in San Diego that is being auctioned (Allied gardens/del cerro area). Those houses were built in late 2002 early 2003 and went then for the low to mid $500,000’s. I nearly bought one then since there are so few new homes in that area. I am very surprised it ended up on the auction block since you would think a newer house would sell in that area.

I do think attendance at these auctions is a good gauge of casual interest in real estate investing. If there are still lots of “Flip this House!” wannabes there, its a sign the market still has a long way to go to hit bottom.

[betting on fall]

On that Boxwood one, that backyard is classic. But my favorite thing is the line in the description- “appears to be a canyon area behind the home.” Umm, you mean you actually can’t be sure???

I do think when a home is a true POS, the agent might be right to include pictures of few ugly features so buyers don’t have the wrong expectation. However, if I’m the owner or an agent expecting a commission, why not spend $100 on a gardener to clear out the backyard? Houses just are not going to sell themselves like they used to.

[betting on fall]

On that Boxwood one, that backyard is classic. But my favorite thing is the line in the description- “appears to be a canyon area behind the home.” Umm, you mean you actually can’t be sure???

I do think when a home is a true POS, the agent might be right to include pictures of few ugly features so buyers don’t have the wrong expectation. However, if I’m the owner or an agent expecting a commission, why not spend $100 on a gardener to clear out the backyard? Houses just are not going to sell themselves like they used to.

[betting on fall]

The difference between a mortgage and many of those things you mention that getting a mortgage should be a self-regulating transaction. If I have $400,000 to lend, I am going to make sure the person getting it has the ability to repay and adequate collateral in case they don’t. I don’t need to government to tell they are a good risk.

Things went wrong when there was a complete disconnect between those approving loans and those bearing the risk of bad loans.

[betting on fall]

The difference between a mortgage and many of those things you mention that getting a mortgage should be a self-regulating transaction. If I have $400,000 to lend, I am going to make sure the person getting it has the ability to repay and adequate collateral in case they don’t. I don’t need to government to tell they are a good risk.

Things went wrong when there was a complete disconnect between those approving loans and those bearing the risk of bad loans.

[betting on fall]

Its the people with the money to lend who set the rules, and since that lending money has been coming from wall street- when the mortgage is packaged into a bond and sold- they decide, not a broker.
Actually, I think now people are still guessing what wall street will be willing to buy up. I would assume that whoever set the rules outlined in the original post thinks mortgages meeting those criteria will be sellable on wall street, but I don’t think anyone knows right now.

I think the real test of this housing market will be the next few months. How many buyers will this new criteria drive out of the market? How many people who need to refi will not be able to and will foreclose instead? These are the million (billion?) dollar questions.

[betting on fall]

Its the people with the money to lend who set the rules, and since that lending money has been coming from wall street- when the mortgage is packaged into a bond and sold- they decide, not a broker.
Actually, I think now people are still guessing what wall street will be willing to buy up. I would assume that whoever set the rules outlined in the original post thinks mortgages meeting those criteria will be sellable on wall street, but I don’t think anyone knows right now.

I think the real test of this housing market will be the next few months. How many buyers will this new criteria drive out of the market? How many people who need to refi will not be able to and will foreclose instead? These are the million (billion?) dollar questions.

[betting on fall]

I don’t claim to be an expert on this, but I thought that the furniture was not normally included when the model is sold. It was put there by some company that decorates model homes for a living then it gets moved to the next model when no longer needed. I think the added value in model homes is that you get all the upgrade options like slate granite, hardwood floors, better molding, better carpeting, etc.- the things they can’t really take out and that are properly included in a calculation of the value of the home.

[betting on fall]

I don’t claim to be an expert on this, but I thought that the furniture was not normally included when the model is sold. It was put there by some company that decorates model homes for a living then it gets moved to the next model when no longer needed. I think the added value in model homes is that you get all the upgrade options like slate granite, hardwood floors, better molding, better carpeting, etc.- the things they can’t really take out and that are properly included in a calculation of the value of the home.

[betting on fall]

can someone explain the difference between withdrawn, cancelled and expired?

[betting on fall]

can someone explain the difference between withdrawn, cancelled and expired?

[betting on fall]

Ozzie-
I think the issue is that these loans get chopped up and some bonds are based on the riskiest parts. Those risky bonds are now essentially worthless, and the “good” parts are not looking as good.

But you are very right that many piggingtons and others may overestimate the amount of money being lost. Even if 10 % of all mortgages default, and there is a 75% recovery on those defaulted loans, only 2.5% of the total mortgage value is lost (plus lost interest payments.) Lots of money lost, but not a “crash the banking system” type of problem.

But the bigger issue is the loss of appetite for mortgage bonds. Mortgage companies need to sell their mortgages to make money, and if Wall Street stops buying- or pays less for them- the business model that drove mortgage lending the last few years is over. Lots of those radio station ad re-fi guys will be out of work. And people that need those exotic loans to stay in their houses (or to buy) will have more trouble finding someone to write the mortgage. To me, that the more important part of the story.

[betting on fall]

Ozzie-
I think the issue is that these loans get chopped up and some bonds are based on the riskiest parts. Those risky bonds are now essentially worthless, and the “good” parts are not looking as good.

But you are very right that many piggingtons and others may overestimate the amount of money being lost. Even if 10 % of all mortgages default, and there is a 75% recovery on those defaulted loans, only 2.5% of the total mortgage value is lost (plus lost interest payments.) Lots of money lost, but not a “crash the banking system” type of problem.

But the bigger issue is the loss of appetite for mortgage bonds. Mortgage companies need to sell their mortgages to make money, and if Wall Street stops buying- or pays less for them- the business model that drove mortgage lending the last few years is over. Lots of those radio station ad re-fi guys will be out of work. And people that need those exotic loans to stay in their houses (or to buy) will have more trouble finding someone to write the mortgage. To me, that the more important part of the story.

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