[LA_Renter]

That letter represents the perfect world for me. It shows how much Demand there is for people that actually have credit. My overall strategy in all of this mess is to wait until the lending standards weed out the weak hands and reward those of us that are financially responsible (didn’t the lending standards of yesteryear provide a barrier of entry for homeownership predicated on a downpayment and one’s ability to pay??). There will be a point where lending standards will be at there tightest which will leave a small pool of legitimate potential buyers choosing from a peak inventory of properties left in the wake of this debacle (they will not be cheap by any stretch but within reason). I just simply refused to compete for properties, that I would have to stretch myself to the maximum reasonable limit, with people of much lesser means. No I am not a snob that is just common sense. IMO right now is not the time to buy, there are still alot of weeds to be pulled. My biggest fear/concern is a major bailout of some sort. I don’t mind the FED taking steps to ensure the whole house of cards doesn’t fall but there is a growing drum beat on Wall Street wanting major action in regards to RE. There is a saying “be careful what you wish for you just might get it”. A major bailout would have ramifications beyond housing. I just hope our new Fed Chairman knows this and doesn’t fall prey to the financial/political pressures mounting with each and every day.

[LA_Renter]

I have no idea what to expect anymore but while the Asian markets are soaring right now our futures are actually slightly down. The Nikkei fell over 800 pts on Friday and did not get to respond to the monumental .50 discount rate cut from the Fed. I was not impressed with the 200+ plus move on Friday in the Dow, I was expecting a 350 to 500 pt move especially with the amount of short interest in the market. It was actually a pretty weak short squeeze. Anyway I wish you luck with your investments, you are mighty brave in this environment.

[LA_Renter]

I have no idea what to expect anymore but while the Asian markets are soaring right now our futures are actually slightly down. The Nikkei fell over 800 pts on Friday and did not get to respond to the monumental .50 discount rate cut from the Fed. I was not impressed with the 200+ plus move on Friday in the Dow, I was expecting a 350 to 500 pt move especially with the amount of short interest in the market. It was actually a pretty weak short squeeze. Anyway I wish you luck with your investments, you are mighty brave in this environment.

[LA_Renter]

I have no idea what to expect anymore but while the Asian markets are soaring right now our futures are actually slightly down. The Nikkei fell over 800 pts on Friday and did not get to respond to the monumental .50 discount rate cut from the Fed. I was not impressed with the 200+ plus move on Friday in the Dow, I was expecting a 350 to 500 pt move especially with the amount of short interest in the market. It was actually a pretty weak short squeeze. Anyway I wish you luck with your investments, you are mighty brave in this environment.

[LA_Renter]

HLS, I agree with you that getting a loan is not as dismal as many are saying but what is dismal are the loans that are available juxtaposed to current home prices. Yes nonconforming loans will come back on the market but I can guarantee you they will not look anything like they did during the boom, they will be at much higher rates. From what i am seeing and hearing it is the underwriting of the conforming, jumbo and non-conforming loans that is experiencing the most profound change i.e they are actually underwriting the loans now. I think we all agree it is a good thing to see sanity come back into the lending industry. But there are going to be consequences. We are seeing falling home prices now and in some cases severe drops. That puts the lender in a bind to loan money for an asset that is falling in value due to the unknown reaction of the conforming good credit borrower facing a home which will be valued at substantially less than the balance of the loan. It is going to take a long time to get through this phase.

[LA_Renter]

HLS, I agree with you that getting a loan is not as dismal as many are saying but what is dismal are the loans that are available juxtaposed to current home prices. Yes nonconforming loans will come back on the market but I can guarantee you they will not look anything like they did during the boom, they will be at much higher rates. From what i am seeing and hearing it is the underwriting of the conforming, jumbo and non-conforming loans that is experiencing the most profound change i.e they are actually underwriting the loans now. I think we all agree it is a good thing to see sanity come back into the lending industry. But there are going to be consequences. We are seeing falling home prices now and in some cases severe drops. That puts the lender in a bind to loan money for an asset that is falling in value due to the unknown reaction of the conforming good credit borrower facing a home which will be valued at substantially less than the balance of the loan. It is going to take a long time to get through this phase.

[LA_Renter]

HLS, I agree with you that getting a loan is not as dismal as many are saying but what is dismal are the loans that are available juxtaposed to current home prices. Yes nonconforming loans will come back on the market but I can guarantee you they will not look anything like they did during the boom, they will be at much higher rates. From what i am seeing and hearing it is the underwriting of the conforming, jumbo and non-conforming loans that is experiencing the most profound change i.e they are actually underwriting the loans now. I think we all agree it is a good thing to see sanity come back into the lending industry. But there are going to be consequences. We are seeing falling home prices now and in some cases severe drops. That puts the lender in a bind to loan money for an asset that is falling in value due to the unknown reaction of the conforming good credit borrower facing a home which will be valued at substantially less than the balance of the loan. It is going to take a long time to get through this phase.

[LA_Renter]

“I fully expect to see a scooby doo episode where David Lereah goes “laces out” nuts and for ruining his career he kidnaps Roubini and pulls his mask off only to find Shiller underneath”

Thats hilarious!

[LA_Renter]

“I fully expect to see a scooby doo episode where David Lereah goes “laces out” nuts and for ruining his career he kidnaps Roubini and pulls his mask off only to find Shiller underneath”

Thats hilarious!

[LA_Renter]

“I fully expect to see a scooby doo episode where David Lereah goes “laces out” nuts and for ruining his career he kidnaps Roubini and pulls his mask off only to find Shiller underneath”

Thats hilarious!

[LA_Renter]

It appears the Fed is trying to restore some sort of order here. The root cause of all these problems are bad mortgages which resulted from ridiculously low rates and literally no underwritng, the Fed recognizes this. I don’t think they see the Fed Funds rate as being too high. I imagine the market will price in a pretty steep Fed Funds rate cut, I don’t think that is going to happen and in the face of a structurally weak dollar I still think it would be a mistake. IMO they need to send the message that they will not bail lenders out of the bad loans and poor practices. This latest action was not a bail out and was probably the right move.

[LA_Renter]

It appears the Fed is trying to restore some sort of order here. The root cause of all these problems are bad mortgages which resulted from ridiculously low rates and literally no underwritng, the Fed recognizes this. I don’t think they see the Fed Funds rate as being too high. I imagine the market will price in a pretty steep Fed Funds rate cut, I don’t think that is going to happen and in the face of a structurally weak dollar I still think it would be a mistake. IMO they need to send the message that they will not bail lenders out of the bad loans and poor practices. This latest action was not a bail out and was probably the right move.

[LA_Renter]

It appears the Fed is trying to restore some sort of order here. The root cause of all these problems are bad mortgages which resulted from ridiculously low rates and literally no underwritng, the Fed recognizes this. I don’t think they see the Fed Funds rate as being too high. I imagine the market will price in a pretty steep Fed Funds rate cut, I don’t think that is going to happen and in the face of a structurally weak dollar I still think it would be a mistake. IMO they need to send the message that they will not bail lenders out of the bad loans and poor practices. This latest action was not a bail out and was probably the right move.

[LA_Renter]

A good bellwether to follow on high quality jumbo loans is Thornburg Mortgage which is getting slammed right now on Wall Street

“AP
Thornburg Shares Hit 52-Week Low
Monday August 13, 1:49 pm ET
Thornburg Shares Fall on Lower Credit Rating and Mortgage Market Worries, Hit 52-Week Low

NEW YORK (AP) — Shares of Thornburg Mortgage Inc., a prime mortgage lender and real estate investment trust, fell in Monday trading after Standard & Poor’s downgraded its credit rating Friday and as concerns in the mortgage market persist.’

>

“Despite the fact that Thornburg has executed well on its strategy to underwrite, purchase, and hold extremely high quality assets, it appears lenders are not differentiating,” among mortgage products, Hochstim wrote in the note. “Thus, Thornburg may be getting very little credit for its careful management of credit risk.”

http://biz.yahoo.com/ap/070813/thornburg_mortgage_mover.html?.v=1

If these guys are having problems then they are all having problems.

[LA_Renter]

A good bellwether to follow on high quality jumbo loans is Thornburg Mortgage which is getting slammed right now on Wall Street

“AP
Thornburg Shares Hit 52-Week Low
Monday August 13, 1:49 pm ET
Thornburg Shares Fall on Lower Credit Rating and Mortgage Market Worries, Hit 52-Week Low

NEW YORK (AP) — Shares of Thornburg Mortgage Inc., a prime mortgage lender and real estate investment trust, fell in Monday trading after Standard & Poor’s downgraded its credit rating Friday and as concerns in the mortgage market persist.’

>

“Despite the fact that Thornburg has executed well on its strategy to underwrite, purchase, and hold extremely high quality assets, it appears lenders are not differentiating,” among mortgage products, Hochstim wrote in the note. “Thus, Thornburg may be getting very little credit for its careful management of credit risk.”

http://biz.yahoo.com/ap/070813/thornburg_mortgage_mover.html?.v=1

If these guys are having problems then they are all having problems.

[Author]

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