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DaCounselor
Participant“Keep hope alive, right? There’s got to be a way to avoid a collapse in the value of my investment, er, home, right? I know there is….I can just feel it! (Pretend Will Farrell’s “Elf” character is speaking and re-read the last two lines;)”
______________________________There was a wonderful post on another thread – by I believe FSD – that stated something to the effect of “don’t confuse someone who insists on facts over sensationalism as being a housing bull.”
I’m just reporting the facts and providing the links re the modification issue. While I have been and remain a mild-to-moderate housing bear, I don’t ignore developments that may affect the market in a positive way. Some people are so married to their beliefs that they choose to ignore or ridicule facts that don’t support their position. Me? I prefer to see the full picture. To each his own.
ParticipantJust a quick update regarding the status of FAS 140 interpretation. The SEC itself has weighed in and has opened the door for modifications without servicer/seller accounting repercussions. The significance of the SEC statement will be reflected by the number of modifications that are actually undertaken by previously concerned servicers. The door now appears wide open for modifications. We’ll see what actually happens.
Christopher Cox’s July 24 letter to Barney Frank, which summarizes the SEC’s position, can be found here:
http://www.house.gov/apps/list/press/financialsvcs_dem/sec_response072507.pdf
ParticipantJust a quick update regarding the status of FAS 140 interpretation. The SEC itself has weighed in and has opened the door for modifications without servicer/seller accounting repercussions. The significance of the SEC statement will be reflected by the number of modifications that are actually undertaken by previously concerned servicers. The door now appears wide open for modifications. We’ll see what actually happens.
Christopher Cox’s July 24 letter to Barney Frank, which summarizes the SEC’s position, can be found here:
http://www.house.gov/apps/list/press/financialsvcs_dem/sec_response072507.pdf
ParticipantGood thread. Just a couple of random thoughts regarding afforability:
I often see posts on this site regarding affordability issues that seem to focus (implicitly) only on folks who are first-time buyers with no $$ down. I think it’s important to take into account the number of move-up buyers with alot of equity to roll into the new purchase when considering affordability. I think SDR or sdr posted some North County stats many months ago that highlighted this fact. I’m not saying that there aren’t affordability issues, but I do think a fuller perspective is in order on this topic.
As to % of income applied to housing costs, it’s certainly plausible that higher-income households may be able to devote a higher % of take-home income toward housing costs than lesser earners due to economies of scale. This opens up the can of worms on lifestyle expense, etc, of course, but when looking at the raw numbers alone the higher earners are still going to have considerably more excess income to play with.
Anyway, just some random thoughts.
ParticipantGood thread. Just a couple of random thoughts regarding afforability:
I often see posts on this site regarding affordability issues that seem to focus (implicitly) only on folks who are first-time buyers with no $$ down. I think it’s important to take into account the number of move-up buyers with alot of equity to roll into the new purchase when considering affordability. I think SDR or sdr posted some North County stats many months ago that highlighted this fact. I’m not saying that there aren’t affordability issues, but I do think a fuller perspective is in order on this topic.
As to % of income applied to housing costs, it’s certainly plausible that higher-income households may be able to devote a higher % of take-home income toward housing costs than lesser earners due to economies of scale. This opens up the can of worms on lifestyle expense, etc, of course, but when looking at the raw numbers alone the higher earners are still going to have considerably more excess income to play with.
Anyway, just some random thoughts.
Participant“The other thing I think not so much to myself, if they bought before 2003 and didn’t HELOC themselves to death, they don’t have to think about it either.”
________________________this is a fact, nsr, that is mostly ignored on this site. it’s more fun to talk about folks who may be losing sleep because they are upside down and about to lose their homes than talk about those who are doing just fine. i may be wrong but i suspect the latter outweigh the former by a large sum in SD.
of course this is a bear site so to expect much if any effort focused on those who have made a killing in real estate is unrealistic. i’m not being critical because i really like this site and most of the posters – it just is what it is. i don’t think anyone is kidding themselves and refusing to believe that a vast number of folks have been aboard the RE train and are way up now.
nevertheless, the bear in me does expect this downturn to continue, so those ’03 purchasers may be finding themselves in the on-deck circle.
Participant“The other thing I think not so much to myself, if they bought before 2003 and didn’t HELOC themselves to death, they don’t have to think about it either.”
________________________this is a fact, nsr, that is mostly ignored on this site. it’s more fun to talk about folks who may be losing sleep because they are upside down and about to lose their homes than talk about those who are doing just fine. i may be wrong but i suspect the latter outweigh the former by a large sum in SD.
of course this is a bear site so to expect much if any effort focused on those who have made a killing in real estate is unrealistic. i’m not being critical because i really like this site and most of the posters – it just is what it is. i don’t think anyone is kidding themselves and refusing to believe that a vast number of folks have been aboard the RE train and are way up now.
nevertheless, the bear in me does expect this downturn to continue, so those ’03 purchasers may be finding themselves in the on-deck circle.
July 19, 2007 at 6:24 PM in reply to: Is the liquidity tide finally rushing out of Wall Street? #66612ParticipantNah, keep weighing in on this stuff, Chris. You’re a valuable contributor in my book.
From my perspective, the world is full of folks who can spout fancy theories and concoct countless predictions and play endless semantical games. At the end of the day, each person knows what their account balances are, what moves they have made and what level of success they are having in employing their strategies. Their personal numbers are what they are.
And it’s not about the market being right or wrong – it’s about the investor being right or wrong as far as I’m concerned. Like bears that were early – being early is the same as being wrong. Those that decided to pull their $$ out of the market or even worse short the market over the past year or so have missed a great run. It really has been a great run.
July 19, 2007 at 6:24 PM in reply to: Is the liquidity tide finally rushing out of Wall Street? #66676ParticipantNah, keep weighing in on this stuff, Chris. You’re a valuable contributor in my book.
From my perspective, the world is full of folks who can spout fancy theories and concoct countless predictions and play endless semantical games. At the end of the day, each person knows what their account balances are, what moves they have made and what level of success they are having in employing their strategies. Their personal numbers are what they are.
And it’s not about the market being right or wrong – it’s about the investor being right or wrong as far as I’m concerned. Like bears that were early – being early is the same as being wrong. Those that decided to pull their $$ out of the market or even worse short the market over the past year or so have missed a great run. It really has been a great run.
Participant“So, is the correct thing for the 2nd lender to do is let the 1st foreclose & hope that there is enough $ after the sale to pay the 2nd lender ?”
_____________________________I don’t believe so. I believe if the 1st mortgage is foreclosed, the 2nd mtg will be extinguished. Not a good result for the 2nd mtg holder.
I believe the play is for the 2nd mtg to foreclose, extinguishing all junior liens, and take the property to sale. 1st position gets paid off and 2nd position takes the rest.
Participant“So, is the correct thing for the 2nd lender to do is let the 1st foreclose & hope that there is enough $ after the sale to pay the 2nd lender ?”
_____________________________I don’t believe so. I believe if the 1st mortgage is foreclosed, the 2nd mtg will be extinguished. Not a good result for the 2nd mtg holder.
I believe the play is for the 2nd mtg to foreclose, extinguishing all junior liens, and take the property to sale. 1st position gets paid off and 2nd position takes the rest.
Participant“Drunkle I hope that is still the case since that was 26/07/2005.”
______________________Actually, it’s no longer the case. The fund is now much larger, with a current market value of $248 billion.
Also, it’s probably worth recalling that Calpers lost about $20 billion – that’s right I said billion – in ’01-’02 as the market went south. They lost about a billion on Enron alone.
Just a little perspective.
Participant“Drunkle I hope that is still the case since that was 26/07/2005.”
______________________Actually, it’s no longer the case. The fund is now much larger, with a current market value of $248 billion.
Also, it’s probably worth recalling that Calpers lost about $20 billion – that’s right I said billion – in ’01-’02 as the market went south. They lost about a billion on Enron alone.
Just a little perspective.
Participantbof – you are absolutely correct regarding loss limitations on the underlying assets (mortgages) as well as the potential credit contraction due to loss of appetite for mortgage-backed securities.
Another aspect to consider is the impact of credit derivatives. We’re potentially talking about trillions of dollars in credit derivatives at stake as the default process unfolds. So a hedge fund or investment house’s exposure on derivatives may far exceed their exposure on CDO’s. Therefore, potential losses are not limited to the underlying asset alone.
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