[Bugs]

What’s really going to do all the damage is the dollar amounts of the losses from the Alt-A loans.

When a $400k mortgage goes down those losses have been amounting to (generally) $100k – $150k after consideration of the holding costs, foreclosure costs and costs of resale as REOs. The Alt-A loans were the financing vehicles of choice for all these $600k+ mortgages throughout the new subdivision areas. When they go down the losses will start at $200k each and work their way up.

The other thing that I think will happen is that these markets will be playing catchup with the bottom end. That means the pricing structure will collapse all that much more quickly, thereby running the losses up even faster.

The last time we went through a correction the pricing structure compressed. That meant that there were huge differences between what you got for $250k vs $300k, even though $50k doesn’t sound like a lot of money right now.

Really, how many $500k losses will it take to gut any lender?

[Bugs]

What’s really going to do all the damage is the dollar amounts of the losses from the Alt-A loans.

When a $400k mortgage goes down those losses have been amounting to (generally) $100k – $150k after consideration of the holding costs, foreclosure costs and costs of resale as REOs. The Alt-A loans were the financing vehicles of choice for all these $600k+ mortgages throughout the new subdivision areas. When they go down the losses will start at $200k each and work their way up.

The other thing that I think will happen is that these markets will be playing catchup with the bottom end. That means the pricing structure will collapse all that much more quickly, thereby running the losses up even faster.

The last time we went through a correction the pricing structure compressed. That meant that there were huge differences between what you got for $250k vs $300k, even though $50k doesn’t sound like a lot of money right now.

Really, how many $500k losses will it take to gut any lender?

[Bugs]

What’s really going to do all the damage is the dollar amounts of the losses from the Alt-A loans.

When a $400k mortgage goes down those losses have been amounting to (generally) $100k – $150k after consideration of the holding costs, foreclosure costs and costs of resale as REOs. The Alt-A loans were the financing vehicles of choice for all these $600k+ mortgages throughout the new subdivision areas. When they go down the losses will start at $200k each and work their way up.

The other thing that I think will happen is that these markets will be playing catchup with the bottom end. That means the pricing structure will collapse all that much more quickly, thereby running the losses up even faster.

The last time we went through a correction the pricing structure compressed. That meant that there were huge differences between what you got for $250k vs $300k, even though $50k doesn’t sound like a lot of money right now.

Really, how many $500k losses will it take to gut any lender?

[Bugs]

What’s really going to do all the damage is the dollar amounts of the losses from the Alt-A loans.

When a $400k mortgage goes down those losses have been amounting to (generally) $100k – $150k after consideration of the holding costs, foreclosure costs and costs of resale as REOs. The Alt-A loans were the financing vehicles of choice for all these $600k+ mortgages throughout the new subdivision areas. When they go down the losses will start at $200k each and work their way up.

The other thing that I think will happen is that these markets will be playing catchup with the bottom end. That means the pricing structure will collapse all that much more quickly, thereby running the losses up even faster.

The last time we went through a correction the pricing structure compressed. That meant that there were huge differences between what you got for $250k vs $300k, even though $50k doesn’t sound like a lot of money right now.

Really, how many $500k losses will it take to gut any lender?

[Bugs]

What’s really going to do all the damage is the dollar amounts of the losses from the Alt-A loans.

When a $400k mortgage goes down those losses have been amounting to (generally) $100k – $150k after consideration of the holding costs, foreclosure costs and costs of resale as REOs. The Alt-A loans were the financing vehicles of choice for all these $600k+ mortgages throughout the new subdivision areas. When they go down the losses will start at $200k each and work their way up.

The other thing that I think will happen is that these markets will be playing catchup with the bottom end. That means the pricing structure will collapse all that much more quickly, thereby running the losses up even faster.

The last time we went through a correction the pricing structure compressed. That meant that there were huge differences between what you got for $250k vs $300k, even though $50k doesn’t sound like a lot of money right now.

Really, how many $500k losses will it take to gut any lender?

[Bugs]

Imagine this scenario on a FHA purchase – a buyer purchasing a home today at $450,000 with 3% down. At today’s rate of 6.375%, the principal and interest payment (including the 1.50 up front MI financed) would be $2764.04. Down payment would be $13,500.

versus

A buyer holding off on their dream purchase in hopes of the market declining another 5%, or in comparison to above, the sales price now being $427,500. That’s nice but what if interest rates were to increase a ½% to 6.875%. The principal and interest payment would be $2764.98 ($0.94 higher). The down payment would be $12,825 ($675 less).

Notice the alternative in this scenario is limited to a 5% loss, and even that possibility is debated.

Let’s run the same alternative with a $100,000 discount, not a $22,500 (@5%) discount. Further, let’s say the interest rates go to 7%.

At that point, the downpayment will be $10,500, and the monthly – even with the higher interest rate – will be $2,315, a larger percentage of which will be eligible for tax writeoffs.

– Who’s to say that $450k home won’t decline lower than $350k?

– If I’m saving $100k on the principle and $2,500 on the downpayment, what the hell do I care if the seller doesn’t give me concessions.

– If I’m a renter I will have saved $6,200+ dollars in the last year for housing expenses PLUS the $100,000 decline by not being trigger happy. Go ahead, call me a renter; having profited by $106,200 that I didn’t lose I can afford it.

– As a home buyer, I’m not interested in losing $100k or more just so you can clear your Beemer payment this month. While we’re at it, I should be questioning YOUR patriotism due to your feeble attempts to prolong an adjustment cycle that would be better left alone.

[Bugs]

Imagine this scenario on a FHA purchase – a buyer purchasing a home today at $450,000 with 3% down. At today’s rate of 6.375%, the principal and interest payment (including the 1.50 up front MI financed) would be $2764.04. Down payment would be $13,500.

versus

A buyer holding off on their dream purchase in hopes of the market declining another 5%, or in comparison to above, the sales price now being $427,500. That’s nice but what if interest rates were to increase a ½% to 6.875%. The principal and interest payment would be $2764.98 ($0.94 higher). The down payment would be $12,825 ($675 less).

Notice the alternative in this scenario is limited to a 5% loss, and even that possibility is debated.

Let’s run the same alternative with a $100,000 discount, not a $22,500 (@5%) discount. Further, let’s say the interest rates go to 7%.

At that point, the downpayment will be $10,500, and the monthly – even with the higher interest rate – will be $2,315, a larger percentage of which will be eligible for tax writeoffs.

– Who’s to say that $450k home won’t decline lower than $350k?

– If I’m saving $100k on the principle and $2,500 on the downpayment, what the hell do I care if the seller doesn’t give me concessions.

– If I’m a renter I will have saved $6,200+ dollars in the last year for housing expenses PLUS the $100,000 decline by not being trigger happy. Go ahead, call me a renter; having profited by $106,200 that I didn’t lose I can afford it.

– As a home buyer, I’m not interested in losing $100k or more just so you can clear your Beemer payment this month. While we’re at it, I should be questioning YOUR patriotism due to your feeble attempts to prolong an adjustment cycle that would be better left alone.

[Bugs]

Imagine this scenario on a FHA purchase – a buyer purchasing a home today at $450,000 with 3% down. At today’s rate of 6.375%, the principal and interest payment (including the 1.50 up front MI financed) would be $2764.04. Down payment would be $13,500.

versus

A buyer holding off on their dream purchase in hopes of the market declining another 5%, or in comparison to above, the sales price now being $427,500. That’s nice but what if interest rates were to increase a ½% to 6.875%. The principal and interest payment would be $2764.98 ($0.94 higher). The down payment would be $12,825 ($675 less).

Notice the alternative in this scenario is limited to a 5% loss, and even that possibility is debated.

Let’s run the same alternative with a $100,000 discount, not a $22,500 (@5%) discount. Further, let’s say the interest rates go to 7%.

At that point, the downpayment will be $10,500, and the monthly – even with the higher interest rate – will be $2,315, a larger percentage of which will be eligible for tax writeoffs.

– Who’s to say that $450k home won’t decline lower than $350k?

– If I’m saving $100k on the principle and $2,500 on the downpayment, what the hell do I care if the seller doesn’t give me concessions.

– If I’m a renter I will have saved $6,200+ dollars in the last year for housing expenses PLUS the $100,000 decline by not being trigger happy. Go ahead, call me a renter; having profited by $106,200 that I didn’t lose I can afford it.

– As a home buyer, I’m not interested in losing $100k or more just so you can clear your Beemer payment this month. While we’re at it, I should be questioning YOUR patriotism due to your feeble attempts to prolong an adjustment cycle that would be better left alone.

[Bugs]

Imagine this scenario on a FHA purchase – a buyer purchasing a home today at $450,000 with 3% down. At today’s rate of 6.375%, the principal and interest payment (including the 1.50 up front MI financed) would be $2764.04. Down payment would be $13,500.

versus

A buyer holding off on their dream purchase in hopes of the market declining another 5%, or in comparison to above, the sales price now being $427,500. That’s nice but what if interest rates were to increase a ½% to 6.875%. The principal and interest payment would be $2764.98 ($0.94 higher). The down payment would be $12,825 ($675 less).

Notice the alternative in this scenario is limited to a 5% loss, and even that possibility is debated.

Let’s run the same alternative with a $100,000 discount, not a $22,500 (@5%) discount. Further, let’s say the interest rates go to 7%.

At that point, the downpayment will be $10,500, and the monthly – even with the higher interest rate – will be $2,315, a larger percentage of which will be eligible for tax writeoffs.

– Who’s to say that $450k home won’t decline lower than $350k?

– If I’m saving $100k on the principle and $2,500 on the downpayment, what the hell do I care if the seller doesn’t give me concessions.

– If I’m a renter I will have saved $6,200+ dollars in the last year for housing expenses PLUS the $100,000 decline by not being trigger happy. Go ahead, call me a renter; having profited by $106,200 that I didn’t lose I can afford it.

– As a home buyer, I’m not interested in losing $100k or more just so you can clear your Beemer payment this month. While we’re at it, I should be questioning YOUR patriotism due to your feeble attempts to prolong an adjustment cycle that would be better left alone.

[Bugs]

Imagine this scenario on a FHA purchase – a buyer purchasing a home today at $450,000 with 3% down. At today’s rate of 6.375%, the principal and interest payment (including the 1.50 up front MI financed) would be $2764.04. Down payment would be $13,500.

versus

A buyer holding off on their dream purchase in hopes of the market declining another 5%, or in comparison to above, the sales price now being $427,500. That’s nice but what if interest rates were to increase a ½% to 6.875%. The principal and interest payment would be $2764.98 ($0.94 higher). The down payment would be $12,825 ($675 less).

Notice the alternative in this scenario is limited to a 5% loss, and even that possibility is debated.

Let’s run the same alternative with a $100,000 discount, not a $22,500 (@5%) discount. Further, let’s say the interest rates go to 7%.

At that point, the downpayment will be $10,500, and the monthly – even with the higher interest rate – will be $2,315, a larger percentage of which will be eligible for tax writeoffs.

– Who’s to say that $450k home won’t decline lower than $350k?

– If I’m saving $100k on the principle and $2,500 on the downpayment, what the hell do I care if the seller doesn’t give me concessions.

– If I’m a renter I will have saved $6,200+ dollars in the last year for housing expenses PLUS the $100,000 decline by not being trigger happy. Go ahead, call me a renter; having profited by $106,200 that I didn’t lose I can afford it.

– As a home buyer, I’m not interested in losing $100k or more just so you can clear your Beemer payment this month. While we’re at it, I should be questioning YOUR patriotism due to your feeble attempts to prolong an adjustment cycle that would be better left alone.

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Author]

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