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TheBreeze
ParticipantWe got to start doing something with all these old people. Can we export them to somewhere?
ParticipantWe got to start doing something with all these old people. Can we export them to somewhere?
ParticipantMy goodness! Another reason not to buy.
September 17, 2007 at 4:52 PM in reply to: Hovnanian claims 2100 sales during 3-day sales event #84873ParticipantHow many people that bought from HOV in the past month will now cancel their contracts? How many people that bought in the last year will try to get a rebate from HOV or will just walk away from their home — especially if they were an “investor”? How many people will buy at full price between now and the end of the year? How many people will be willing to buy at full price next year?
ParticipantIt looks like you guys are on a never-ending quest to raise the level of discourse on this site.
September 11, 2007 at 9:38 PM in reply to: August numbers out. No impact of the credit crunch in San Diego… #84228ParticipantOne more thing: If I understand the accounting rules correctly, public companies are allowed to book revenues for ARM payments at a steady rate over the entire life of the loan. So, for example, if Countrywide wrote a 2-year ARM that had a $1K monthly payment for 2 years and then a $2K monthly payment for the remaining life of the loan, then Countrywide is allowed to book revenue at a rate of $1.94K per month for the life of the loan. Look for banks such as Countrywide, Wamu and others who wrote lots of ARMs to either do major earnings restatements as they foreclose on those loans or to take huge charges.
The mortgage unraveling is just beginning.
September 11, 2007 at 9:26 PM in reply to: August numbers out. No impact of the credit crunch in San Diego… #84226Participant“And its going to stay this way as long as the damn banks are sitting on the inventory!”
I have a theory about why banks are holding onto their REOs like they are pure gold. Basically, I believe the REOs are marked at a much higher price on the banks’ books than they will sell for. Further, I believe that if the banks were to lower their prices enough to actually sell them that it is very likely that many banks would then be insolvent.
If this is true (and keep in mind that my theory is pure speculation), then the banks actually have a perverse incentive to hold onto their REOs as long as possible in hopes that something will cause the market to pick up. The banks have a choice between slow death through carrying costs or quick deaths through foreclosure auctions. Not surprisingly, they’ve chosen the slow death because it’s the only thing that gives them a chance at survival. I also believe this same phenomenom applies to the builders, such as Standard Pacific.
The next stage in the housing crash we are likely to see is bankruptcy for banks and home builders. At that point, we will have not only flippers competing against REOs, but also bankruptcy trustees thrown into the mix as wells. Because trustees are accountable to all creditors, they will have an incentive to sell their housing inventory quickly. This should drive prices down nicely. Well, at least according to my totally speculation-based theory.
Also, I’m not buying this tech strength in the stock market. I think the tech stocks are still running off the easy credit that existed until just a few weeks ago. Soon enough tech stocks will be feeling the pinch also. We’re still on course for a housing crash (and likely a recession also). We just have to give it time to play out.
Participant“basically what tgey are saying is that they want a Govt subsidization of the difference between the teaser rate and the risk adjusted full rate…I.E they want the savers to pay their mortgage.”
This isn’t necesarilly true, is it? It could be that whoever holds the loan now would be doing the subsidizing.
Participant“man fuck those immigrants who got screwed, my tax dollars spend too much to give them there benifits,now i have to give them a bailout too.fuck you.
america wake up !!!!! a Depression is coming for you.”
Yeah, I’m sick of hearing about all this bailout crap too. One thing this article doesn’t mention is whether these supposed “victims” committed fraud on their mortgage applications.
As far as I’m concerned, the borrowers, the mortgage brokers, the lenders, and the buyers of the MBSs/CDOs/etc. can all burn in hell. None of them deserve saving as they were all complicit.
Participantucodegen,
Thanks for all the great info … and you are correct that I’m looking for a place to live in. I’ll check out http://www.forrent.com for better rental comparisons.
ParticipantHopefully Bush won’t let the bailout get too big:
http://thehill.com/business–lobby/major-bailout-is-unlikely-on-sub-prime-mortgages-2007-09-04.html
He’s not good for much else, but maybe he can help keep any bailout to a small size.
ParticipantInteresting that there is a similar condo for sale in the same complex asking $120K more (37% more than the property listed above). That’s got to hurt:
ParticipantWhat percentage of people can still buy a home based on the new standards. Is anyone writing 100% financing loans anymore?
Kim Dicce, a Realtor in Tampa, where housing inventory is piling up, notes that lenders now seem to be requiring buyers in her area to put 15 to 20 percent down and have a credit score above 700. “Now we only have one third of the eligible buyers that we had before, and five times as many houses.” Higher-income earners with good credit haven’t been spared, as chastened lenders focus on making loans that they can quickly sell to Fannie Mae and Freddie Mac, which buy mortgages only up to $417,000. Rates on 30-year fixed jumbo loans have risen in the past month from 6.625 percent to about 7.5 percent, says Michael Daversa, president of Atlantic National Mortgage, a mortgage broker in Westport, Conn. On a $500,000 mortgage, that’s an extra $4,375 per year in interest—a 13 percent increase.
http://www.msnbc.msn.com/id/20546324/site/newsweek/page/0/
I love the smell of mortgage resets in the morning.
Participantbsrsharma,
I don’t dispute the foreclosure numbers. I just dispute that all of those foreclosures will happen to families. When you had “investors” buying multiple houses at 100% financing (how many did the Montecastros buy? 50? 100?) it’s obvious that each foreclosure isn’t going to result in one family on the street.
More likely, the ratio will be something like one family displaced for every 5 foreclosures. Do these families deserve assistance from the federal government? If they financed at 100% and aren’t losing any equity and simply have to go back to renting … is that something the federal government should be concerned with?
It certainly creates a perverse incentive. Under your plan people would have an incentive to buy homes they can’t afford because they know the federal government will be around to bail them out. I don’t want to live in that world.
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