[Bubblesitter]

Never thought I would here the term “jingle mail” being talked about so much again. It was a common term in the 80s.

The big worry among those in the finance circles is that “just walking away” will become socially acceptable. I personally don’t see a stigma.

If I was hopelessly underwater, knowing that housing prices are heading down and we’re going into recession, I would be very tempted to walk too!

This housing downturn may last 5 years, maybe even longer. The downturn last one in the 90s was at least 4 years. Most folks thing the peak around here in SD was late 2005/early 2006. We’re probably not gonna see any real housing appreciation for a long time.

By the time this whole housing bubble shakes out, you would have time to get your credit back up and buy your next house.

In America, entrepreneurs and investors take big risk and fail all the time. Sometimes you gotta take your losses. Walking away from mortgages may be the best financial decision for your family. Throwing good money at a depreciating asset is usually not a good thing.

Bubblesitter

[Bubblesitter]

Never thought I would here the term “jingle mail” being talked about so much again. It was a common term in the 80s.

The big worry among those in the finance circles is that “just walking away” will become socially acceptable. I personally don’t see a stigma.

If I was hopelessly underwater, knowing that housing prices are heading down and we’re going into recession, I would be very tempted to walk too!

This housing downturn may last 5 years, maybe even longer. The downturn last one in the 90s was at least 4 years. Most folks thing the peak around here in SD was late 2005/early 2006. We’re probably not gonna see any real housing appreciation for a long time.

By the time this whole housing bubble shakes out, you would have time to get your credit back up and buy your next house.

In America, entrepreneurs and investors take big risk and fail all the time. Sometimes you gotta take your losses. Walking away from mortgages may be the best financial decision for your family. Throwing good money at a depreciating asset is usually not a good thing.

Bubblesitter

[Bubblesitter]

Never thought I would here the term “jingle mail” being talked about so much again. It was a common term in the 80s.

The big worry among those in the finance circles is that “just walking away” will become socially acceptable. I personally don’t see a stigma.

If I was hopelessly underwater, knowing that housing prices are heading down and we’re going into recession, I would be very tempted to walk too!

This housing downturn may last 5 years, maybe even longer. The downturn last one in the 90s was at least 4 years. Most folks thing the peak around here in SD was late 2005/early 2006. We’re probably not gonna see any real housing appreciation for a long time.

By the time this whole housing bubble shakes out, you would have time to get your credit back up and buy your next house.

In America, entrepreneurs and investors take big risk and fail all the time. Sometimes you gotta take your losses. Walking away from mortgages may be the best financial decision for your family. Throwing good money at a depreciating asset is usually not a good thing.

Bubblesitter

[Bubblesitter]

Never thought I would here the term “jingle mail” being talked about so much again. It was a common term in the 80s.

The big worry among those in the finance circles is that “just walking away” will become socially acceptable. I personally don’t see a stigma.

If I was hopelessly underwater, knowing that housing prices are heading down and we’re going into recession, I would be very tempted to walk too!

This housing downturn may last 5 years, maybe even longer. The downturn last one in the 90s was at least 4 years. Most folks thing the peak around here in SD was late 2005/early 2006. We’re probably not gonna see any real housing appreciation for a long time.

By the time this whole housing bubble shakes out, you would have time to get your credit back up and buy your next house.

In America, entrepreneurs and investors take big risk and fail all the time. Sometimes you gotta take your losses. Walking away from mortgages may be the best financial decision for your family. Throwing good money at a depreciating asset is usually not a good thing.

Bubblesitter

[Bubblesitter]

Option-ARMS are the next elephant in the room that will be getting lots of press soon.

This “creative” financing scheme was once limited to higher net worth, primariliy independent business owners and consultants who had high seasonality in their incomes. It morphed during the bubble years as a widespread financing option.

They have an interesting features, if you continue to choose the lower payment option and your mortgage balance reaches a preset limit (say 5% larger than your original balance) your ARM resets early. Who reads all the fine print in these exotic mortgages and really understands them?

I bet a large # of those folks have negative equity, they will be walking away in droves.

By the way, on the ARM reset chart, what is the typical lag between ARM reset and eventual foreclosure? 6 months? By shifting this graph to the right you see that the peak of the foreclosure tidal wave is still ahead.

Bubblesitter

[Bubblesitter]

Option-ARMS are the next elephant in the room that will be getting lots of press soon.

This “creative” financing scheme was once limited to higher net worth, primariliy independent business owners and consultants who had high seasonality in their incomes. It morphed during the bubble years as a widespread financing option.

They have an interesting features, if you continue to choose the lower payment option and your mortgage balance reaches a preset limit (say 5% larger than your original balance) your ARM resets early. Who reads all the fine print in these exotic mortgages and really understands them?

I bet a large # of those folks have negative equity, they will be walking away in droves.

By the way, on the ARM reset chart, what is the typical lag between ARM reset and eventual foreclosure? 6 months? By shifting this graph to the right you see that the peak of the foreclosure tidal wave is still ahead.

Bubblesitter

[Bubblesitter]

Option-ARMS are the next elephant in the room that will be getting lots of press soon.

This “creative” financing scheme was once limited to higher net worth, primariliy independent business owners and consultants who had high seasonality in their incomes. It morphed during the bubble years as a widespread financing option.

They have an interesting features, if you continue to choose the lower payment option and your mortgage balance reaches a preset limit (say 5% larger than your original balance) your ARM resets early. Who reads all the fine print in these exotic mortgages and really understands them?

I bet a large # of those folks have negative equity, they will be walking away in droves.

By the way, on the ARM reset chart, what is the typical lag between ARM reset and eventual foreclosure? 6 months? By shifting this graph to the right you see that the peak of the foreclosure tidal wave is still ahead.

Bubblesitter

[Bubblesitter]

Option-ARMS are the next elephant in the room that will be getting lots of press soon.

This “creative” financing scheme was once limited to higher net worth, primariliy independent business owners and consultants who had high seasonality in their incomes. It morphed during the bubble years as a widespread financing option.

They have an interesting features, if you continue to choose the lower payment option and your mortgage balance reaches a preset limit (say 5% larger than your original balance) your ARM resets early. Who reads all the fine print in these exotic mortgages and really understands them?

I bet a large # of those folks have negative equity, they will be walking away in droves.

By the way, on the ARM reset chart, what is the typical lag between ARM reset and eventual foreclosure? 6 months? By shifting this graph to the right you see that the peak of the foreclosure tidal wave is still ahead.

Bubblesitter

[Bubblesitter]

Option-ARMS are the next elephant in the room that will be getting lots of press soon.

This “creative” financing scheme was once limited to higher net worth, primariliy independent business owners and consultants who had high seasonality in their incomes. It morphed during the bubble years as a widespread financing option.

They have an interesting features, if you continue to choose the lower payment option and your mortgage balance reaches a preset limit (say 5% larger than your original balance) your ARM resets early. Who reads all the fine print in these exotic mortgages and really understands them?

I bet a large # of those folks have negative equity, they will be walking away in droves.

By the way, on the ARM reset chart, what is the typical lag between ARM reset and eventual foreclosure? 6 months? By shifting this graph to the right you see that the peak of the foreclosure tidal wave is still ahead.

Bubblesitter

[Bubblesitter]

Guys, PLEASE PLEASE review your bond fund prospectus for exposure to MBS (mortgage backed securites).

Many of you may have shifted big parts of your 401Ks from stocks to supposedly “safe” bond funds. A large number of these have significant exposure to MBS.

I scrubed and rescrubbed my portfolio a few months back of MBS (mortgage-backed securities), and shifted out.

Some additional background.

http://www.chicagotribune.com/business/columnists/chi-fri_gail_0208feb08,0,4103784.column

Bubblesitter

[Bubblesitter]

Guys, PLEASE PLEASE review your bond fund prospectus for exposure to MBS (mortgage backed securites).

Many of you may have shifted big parts of your 401Ks from stocks to supposedly “safe” bond funds. A large number of these have significant exposure to MBS.

I scrubed and rescrubbed my portfolio a few months back of MBS (mortgage-backed securities), and shifted out.

Some additional background.

http://www.chicagotribune.com/business/columnists/chi-fri_gail_0208feb08,0,4103784.column

Bubblesitter

[Bubblesitter]

Guys, PLEASE PLEASE review your bond fund prospectus for exposure to MBS (mortgage backed securites).

Many of you may have shifted big parts of your 401Ks from stocks to supposedly “safe” bond funds. A large number of these have significant exposure to MBS.

I scrubed and rescrubbed my portfolio a few months back of MBS (mortgage-backed securities), and shifted out.

Some additional background.

http://www.chicagotribune.com/business/columnists/chi-fri_gail_0208feb08,0,4103784.column

Bubblesitter

[Bubblesitter]

Guys, PLEASE PLEASE review your bond fund prospectus for exposure to MBS (mortgage backed securites).

Many of you may have shifted big parts of your 401Ks from stocks to supposedly “safe” bond funds. A large number of these have significant exposure to MBS.

I scrubed and rescrubbed my portfolio a few months back of MBS (mortgage-backed securities), and shifted out.

Some additional background.

http://www.chicagotribune.com/business/columnists/chi-fri_gail_0208feb08,0,4103784.column

Bubblesitter

[Bubblesitter]

Guys, PLEASE PLEASE review your bond fund prospectus for exposure to MBS (mortgage backed securites).

Many of you may have shifted big parts of your 401Ks from stocks to supposedly “safe” bond funds. A large number of these have significant exposure to MBS.

I scrubed and rescrubbed my portfolio a few months back of MBS (mortgage-backed securities), and shifted out.

Some additional background.

http://www.chicagotribune.com/business/columnists/chi-fri_gail_0208feb08,0,4103784.column

Bubblesitter

[Bubblesitter]

An interesting quote from the author…..

“So many people are handing their keys back to lenders that a new term has been coined for it: jingle mail.”

Jingle mail is not a new term. For anybody who went thru the downturns in the 80s and 90s, it was commonly used back then.

Walking away from underwater mortgages is becoming socially acceptable.

Bubblesitter

[Author]

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