[DaisyDuke]

Smarty Pants! I knew there were intellects on this site. This economics stuff is so interesting to learn.

I understand why Inflation is a concern to the FedRes and why they would raise rates. But, in some articles I have seen that employment is an indicator they follow. Can you explain how employment would affect their decision to raise/lower the rates . . . or am I just reading things wrong?

Economics novice. DD

[DaisyDuke]

Thank you both for reading the article. I appreciate your feedback.

I don’t see rates coming down either. Could the FedR really stand to lower them farther? I don’t think so.

One thing though is I like the philosophy of this speaker in that he feels the Feds shouldn’t wield their weight like they did in the stock market crash of the 30’s. Everything I have read tells me that the Federal Reserve Bank, by implementing monetary policy, caused the crash, or at least I’ve seen a speech by Barnake at some guy’s 90th birthday where he outlines facts that the Federal Reserve caused the crash by implementing monetary policy and that he wouldn’t permit that again. (sorry I’m not more articulate. If anyone is interested I will pull up names and articles).

While the Fed Reserv isn’t coming right out and saying it, they are acutely aware of the predatory lending and as recently as September 2006 have implemented “supverisory” guidance over lending institutions to protect [the stupid/ignorant] consumers . . . which I almost was, until I tripped on a bubble on the internet and then this site. Thank you Lord.

[DaisyDuke]

I really feel that with the baby boomers ready to make their exit from the working force, they are going to tax what is even left of Social Security. Hmmm. Home equity gone. Social security gone. We are in a mess. We are going to have soooo many people who are in a serious financial mess.

Why my friend (aged 55) who just developed leukemia is now facing huge hospital bills. Her husband just underwent knee surgery and isn’t working and won’t be going back to work. She has some retirement dollars put away, but that was for retirement. It was never planned to be used for day-to-day living NOW and expensive medical treatments.

We are going to have some many people stuck. Stuck in their homes, stuck with huge mortgages, stuck with losing their home, stuck with . . . well, just stuck. Stuck sucks.

[DaisyDuke]

Thank you for the congrats! It was touch and go the whole way. I wish I could feel happy but unfortunately a good friend was just diagnosed with leukemia and it made me push all of the home sale matters out of the wayside and remember what’s real and important.

Anyway, handling large class action lawsuits is very labor intensive, especially for a solo practitioner. Next, the attorneys for the corporations will throw up a huge defense and “paper” the small guys so they can’t see the light of day. Ultimately, the big corporation(s) will, as we are seeing already, go “belly up” and they will seek bankruptcy protection. They will just dissolve and there will be nothing left. You surely remember the saying . . . “you can’t get blood out of a turnip” or some such nonsense. Even if one does win, the masses who joined the class action suit will dilute any settlement dollars handed out.

The thing I find interesting is that there are obviously attorneys out there hearing that people (and a number of them) are having serious financial problems due to the ARMS.

[DaisyDuke]

Knowledge is power !!!! Thank goodness for public records!

[DaisyDuke]

You are absolutely right, no one knows. That is one of the reasons why I posted the lead “Pulling a Rabbit out of the Hat” — I’m just wondering who will come to the rescue, but I’m not seeing that in the cards and I wanted to know what you intellectuals knew/felt about that. Hmmmm, do you think the NAR’s new 40 Million Dollar advertising campaign they allegedly began on 1/15/07 will do it?

I dunno, this almost feels like I’m playing a game of craps and betting on the “don’t pass” line. I love craps, but I never would play craps with something on the line as big as my house. But I think that is just what I’ve done. That makes me a speculator too, no?

[DaisyDuke]

Perspective — This housing bubble only occurred in several “hot” markets – California/Florida/Arizona/Nevada. It did not happen nationwide. Homes in other parts of the country appreciated in value at a year over year rate in a much more normal manner — those areas should be fine.

So, while California’s economy is what, 7th largest in the World, and the housing bubble will definitely criple those “hot” cities exposed to the bubble, in my humble opinion, it won’t be devasating on a nationwide scale. That is of course unless more predatory lenders/banks go belly up and the unemployment rate increases all over the country.

This theory is given to you from my last reading on my crystal ball and it’s been cloudy these days — So it’s probably a load of junk. 🙂

[DaisyDuke]

I am still waiting. My agent spoke with the lending officer yesterday and they said that all conditions were met for the loan, except one. The buyer just needs to bring in a bank statement. So I wait until Tuesday. I can’t believe this is going to (maybe) happen with all the subprime lenders starting to close their doors.

Learning what I have learned (from this site and others) since listing my property, I can’t help but feel guilty with this sale. I feel like I am prolonging the bubble frenzie that needs to come to and end sooner and perhaps that I am taking advantage of a buyer who doesn’t know better than to not buy right now. BUT, on the other hand, if this goes through and I sit out patiently for up to a year I believe, I will have a healthy (not greedy) downpayment for my next home.

My first Mantra has always been ‘Just keep Swimming’ (Dori from the movie Nemo), but these days I am saying “Que sera sera” — If all fails though, I’m going on a vacation to Hawaii with lots of tall cocktails!

FYI . . . More info on subprime lenders taking a dive. http://www.rgemonitor.com/blog/roubini/172409

[DaisyDuke]

TheBreeze . . . that seller would be me. I am going to be S U R P R I S E D if the deal goes through. I was told by my agent this morning that the buyer has gone through two levels of “approval authority” and all looks “in order/good” and that just a couple “conditions”, that aren’t a big deal, need to be met. I am told loan documents are going to be ready tomorrow.

My agent tells me that if loan documents are drawn then it is pretty much near completion . . . he added that he has never had one fall through after that juncture, unless I am really special and things fall apart. He said I don’t want to be that special. I could be the first for him. We’ll see.

But you are absolutely correct, there is no way easy money will be flowing in the VERY near future.

[DaisyDuke]

Indeed. Well put. But, we don’t want it to be the

I D 10 T’s market

so, that’s why we all signed on. To help each other save our hard earned cha ching.

DD

[DaisyDuke]

Yep. I’m no doubt a sucker too. To what extent remains to be seen. I’m just working hard to minimize the damage of my ignorance.

The “home prices are too high” chant resonates throughout my firm so while I doubt any of these Harvard/Yale/Duke grads know anything about the economy since their heads have been tied up in law books/tests and now in working hard to keep their billable hours up so the partners don’t come down on them, they are feeling it too. Suckers (or not).

[DaisyDuke]

Not implying VW & BMWs break down more often, those just seem to be the car of choice of many of our lawyers. Sorry for any miscommunication. Interestingly, they cost as much as much as one would have bought a home back in the 60’s/70’s? No ??

Anyway, my thinking is that lenders are still giving loans to people “s t r e t c h i n g” themselves as opposed to others coming into the market who are putting down solid down payments and can afford the homes due to a fundamental such as “income”. This data would probably be meangingless and most likely not trackable. But I think that would also be a determinative factor on how the bubble will deflate.

I had read in the OFEHA (ha ha) or whatever that government site is that Fannie Mae was immediately told to STOP writing risky loans and that they may not write loans over $417,000 per loan. Fannie and Freddie were doing this as well, along with their bogus accounting practices to hide the income they were making from the loans. By being told to stop, my belief is that a huge number of potential sketchy buyers will be foreclosed from the market to help shrink the massive inventory of the overvalued homes.

http://www.ofheo.gov/News.asp?FormMode=Releases – OFHEO ANNOUNCES THIRD QUARTER 2006 MINIMUM AND RISK-BASED CAPITAL C LASSIFICATION FOR FANNIE MAE; RECLASSIFIES FOURTH QUARTER 2002 AND 2003 AS SIGNIFICANTLY UNDERCAPITALIZED – December 28, 2006

I also read that a large number of people purchasing investment property were indicating on their loans that the purchase was going to be used as a primary residence. I’ve learned through reading and reading and reading that this is completely inaccurate and considered Loan Fraud. The lenders were told to clamp down on this too.

Okay, I’ve probably bored you enough . . .

[DaisyDuke]

What I am feeling (intuition) or sensing is that the Feds will be more likely to raise interest rates to address inflation and the sinking dollar and that they don’t really give a damn about the 10/15 coastal cities experiencing an overvaluation (overzealous speculator) market. With our debt to foreigners that you bring to light, that surely must weigh more than our housing market. Am I just a knucklehead in this belief?

[DaisyDuke]

Desperate Sellers are cropping up every day. I know of at least six of them close to foreclosure in my area. They have their homes listed but they are also in default.

Sad thing is they bought their home within the last three years and they can’t sell them for what they own on them. It’s only going to get worse.

[DaisyDuke]

Deutsch Bank – A reator sent me a listing of Notices of Default for OC/LA . . . Deutsch Bank was on no less than 30 of them — how come no one has mentioned this subprime lender?

Does anyone have info on this bank?

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