juniorbean

iTrader: (5)

^ Nice. Time to pick up a sweet foreclosure

moeronn

It's just starting to happen in the neighborhood I'm hoping/planning to move into. A couple of houses have been short sold because the owners couldn't keep up with the payments. I hope to be in a position to move on an upcoming one within the next several months. Just need to get two properties sold, first.

Silver™

At least people are not making the same mistake twice...



Instead of throwing up their arms in financial frustration, borrowers in droves are trading in their ARMs (adjustable rate mortgages) for less risky fixed rate mortgages (FRMs).

In many cases, the new FRMs come with lower rates than their old mortgages, which has adjusted beyond homeowners' financial comfort level.

Freddie Mac said 89 percent of borrowers who originally had a 1-year ARM chose a new FRM when they refinanced and 84 percent of those who had a hybrid-ARM did likewise during the first quarter this year.

http://realtytimes.com/rtcpages/20070529_mayroundup.htm

Silver™

People with sub-prime ARM's probably live in less desirable neighborhoods, so unless you are looking to downgrade

MR1

I think this is so totally untrue. The way the market has been for the past few years lots of people have jumped on the bandwagon.

It's similar to the people that lease expensive cars but they can't afford the purchase payments. Lots of folks buying houses that they could not afford unless they had a pay option mortgage or 3/27 ARM or something similar. Those new to the market within these years figured that by the time the loans adjusted either they would be in a better financial position or could simply sell and make big bucks. Remember, they only had to qualify for the initial payment amount.

I talked to lots of otherwise intelligent people where one spouse insisted that they have a larger house because so and so did. As the market has turned, those houses are finding their way to short sales etc.

Silver™

The facts are that those people most likely to have sub-prime ARM's are lower income people with less education. Which usually means less desirable areas and owners that are less savy about how to avoid foreclosure.

There are certainly exceptions, but in general the above holds true.

MR1

In simple number of transactions you are correct. BUT in dollar volume the higher end stuff wins. Funny, I expected to hear back from you. Real fact is that greed does not go away as you increase formal education. Combined with recent history and stories from friends and associates it was easy to gamble and not miss out on the fun. Then there is the group that loves to work on margins (other peoples money) and make the lowest payments possible. Low initial rates were just additional frosting. Check Nightline tomorrow (Tuesday) for the people stuck in the Miami Condo market.

Lets not get to far into it. I'm an appraiser and get to talk to owners, brokers, title company personal and realtors. I also have some access to the records of the financial transactions. If your reality is different than mine, so be it.

Pick any dollar amount you would like to spend on a house today and I can find you forced or panic sales available in ever increasing numbers.

Silver™

Maybe I am missing something here, but aren't most sub-prime ARM's marketed towards lower income individuals. And while the wealthy aren't immune aren't those in the lower income brackets more susceptible to foreclosures in general?

Sure there are going to be some sub-prime foreclosures in the more desirable areas, but in general, they going to be in less desirable areas. And that is all relative since JB lives in a palace and what you and I think are "high end" would be slumming for him

Out of curiosity, do you have any article you could link to about higher end homes accounting for the majority (in overall dollars) of sub-prime ARM foreclosures?

MR1

On this we can 100% agree. But then his stuff is over the top.

MR1

Oh, Silver, on your last point, most of the information I pay attention to is location specific. I'll keep my eyes open for articles though.

juniorbean

iTrader: (5)

hehe... well, if that's the case then we can flip the homes .

Seriously though, you'd be surprised. A lot of people around here got into their million dollar plus homes b/c of ARM mortgages... and now with them coming due, the chance is there that those will be the homes that foreclose (and those would be the ones I'd have my eye on). I must say though that the people we know in those communities all refinanced to fixed mortgages some time ago... but the possibility still exists since I'm sure not everyone did that. Hopefully no one really stretched themselves that far just to say they're in a million dollar home.

We actually had one home in our community foreclose. Some guy got a steal on it and he's flipping it just weeks after closing. His total investment aside for the home itself... some new paint in a few rooms and carpet cleaning . Thankfully we haven't heard of any other homes in here foreclosing.

And yeah, overall the majority of the homes we're hearing of foreclosing are north of Charlotte and are typically in the $200k range or so.

amisconception

In order for the Great Housing Con Game to work, the bagholders (the buyers of the toxic subprime and liar's loan crap) had to believe that one day they'd get paid back. Even though this garbage was being lent out to people who lied about their jobs, their income and their ability to pay. Or worse yet to people with no jobs, no credit, no income, no honesty, no problem gaming the system themselves and absolutely positively no possible way to make good on the loans once the Ponzi Scheme ended.

Yes, think Casey Serin. Think David Crisp. Think of all the get-rich-quick failed flippers, think the $30,000 income families buying $800,000 homes, think Phoenix, think Miami, think all the sheeple who thought real estate could only go up and up.

So why did the bagholders of these mortgages (China, hedge funds, pension funds, overseas investors), which were so nicely bundled up into neat little CDO's, think they'd get paid back? Why did they think that obvious hilarious loan garbage was worth the price they were paying?

Because the "unbiased ratings agencies" told them so.

Well, not anymore. S&P, one of the three major CDO ratings agencies, now staring lawsuits, jail sentences and the collapse of their game straight in the face, bitchslapped the housing and mortgage market today and simply came clean, in one of the ugliest financial mea-culpas I've ever seen. Simply put, the charade is over. And hundreds of billions, more likley trillions, will now be lost.

So now, the housing collapse goes into overdrive. The Subprime and Alt-A industries die. Hedge funds worldwide fail. Pension funds screw their retirees. Markets crash. China gets pissed. Lending tightens even more. Demand plummets even more. And home prices crash even faster.

It's all over folks. Now we just count up the damage and look for someone to blame.

http://housingpanic.blogspot.com/

-

S&P finally says subprime is mostly junk - New methodology is death knell for the troubled industry

WASHINGTON (MarketWatch) - Standard & Poor's just drove a huge harpoon into the heart of the mortgage credit bubble and it's going to take a long time to clean up the mess once the beast finally dies.

S&P, one of the three main credit-rating agencies that served as enablers of the subprime mortgage boom, announced Tuesday that it would lower its ratings on 612 bonds, a small portion of the mortgage-backed securities it had given its seal of approval to.

But the bigger news is that S&P isn't going along with the charade any more. S&P said it would change its methodology for ratings hundreds of billions of dollars in residential mortgage-backed securities.

And it would review its ratings on hundreds of billions of dollars in the more complex collateralized debt obligations based on those subprime loans.

A lot of debt will be downgraded to junk status. A lot of that debt will have to be sold at fire-sale prices. A lot of pension funds and hedge funds that once thrived on the high returns they could get from investing in subprime junk will now lose a lot of money.

S&P's announcement is a death warrant for the subprime industry. No longer will mortgage brokers be able to help buyers lie their way into a home. Fewer stressed homeowners will be able to refinance their mortgage, thus extending and exacerbating the housing bust.

"We do not foresee the poor performance abating," S&P said. Prices will fall, and foreclosures will rise. More mortgage fraud will be uncovered as the tide goes out.

http://www.marketwatch.com/news/stor...B08FD9AA07D%7D

amisconception

Rating agencies
Measuring the measurers

Moody's and S&P have a combined market share of 80%. Together with Fitch, the number three, they have over 95%. This concentration has long raised questions about competition—and regulators are, at long last, on the case. On May 23rd America's Securities and Exchange Commission (SEC), prompted by Congress, voted to help new agencies gain faster approval. Only half a dozen companies have made the grade since the approvals system began in 1975. Toronto-based Dominion Bond Rating Service had to wait 13 years.

Glenn Reynolds, head of CreditSights, a research firm, says it is time the barriers fell. The big rating agencies are “as close to Shangri-La as you can get, at Microsoft-plus margins,” he says. They wield great power—a downgrade can tip a company into bankruptcy—but lack accountability. After crises, such as Enron's collapse, they have deflected legal assaults by claiming their ratings were “opinions”, constitutionally protected as free speech. That stance may be harder to defend next time.

http://www.economist.com/finance/dis...ory_id=9267952

amisconception

Oops, there goes Moody's

SAN FRANCISCO (Dow Jones) - Wall Street's two largest rating agencies signaled on Tuesday that problems in the subprime mortgage market aren't going away and will probably get worse as rising delinquencies weigh on U.S. house prices.

Standard & Poor's said it may downgrade $12 billion of subprime mortgage- backed securities (RMBS), while rival Moody's Investors Service downgraded 399 RMBS.

S&P also said it's changing the way it evaluates subprime RMBS, partly because of unprecedented levels of misrepresentation and fraud, combined with potentially shoddy initial loan data. The new approach will be applied to new RMBS deals and could affect the ratings of other mortgage-backed securities, such as RMBS issued this year, the agency noted.

"This will impact everyone along the food chain," said Andy Chow, portfolio manager at SCM Advisors LLC, a $14 billion San Francisco-based investment firm specializing in fixed-income and structured-finance markets.

Fibonacci

The irony of all the ratings downgrades is that it has sparked a flight to quality, aka buying treasuries which is bringing long term yields back down, which in turn lowers borrowing costs, which in turn increases the affordability of homes.

Right now the housing story is primarily one of bloated inventory. As long as more people want to live in the USA and more family households are created, long term we'll be okay.

It's just that reality has set in that primary housing, is not a spectacular investment class.

amisconception

I get the feeling that it cuts a lot deeper than that.

Fibonacci

^^ Meh, all bubbles burst. Especially ones fueled by easy money.

But demand for housing will not evaporate. As soon as demand catches up with supply again, housing prices will stabilize. I'm not saying it will happen quickly, it may take 5-10 years for many markets to get back to equilibrium.

Silver™

There is money to be made in this mess. I just don't have $1 mil laying around to put into one



Hedge funds betting on falls in bonds linked to US subprime mortgages raked in returns of almost 40 per cent last month as they profited from the crisis that has engulfed rivals.

A $2bn fund run by New York’s Paulson & Co was the single best-performing fund, rising 39.95 per cent after fees in June thanks to its dedicated bets against subprime mortgages – loans to less credit-worthy homeowners. Other hedge funds following similar strategies produced returns as high as 27.5 per cent in the month, while another manager has tripled investor money this year, according to investors.

The strong returns follow the implosion of two hedge funds run by Bear Stearns, which had borrowed heavily to invest in bonds linked to subprime; the announcement of the winding up of a London-listed fund after big subprime losses; and the suspension of redemptions at a Florida fund invested in the sector.

However, some managers are warning that so many hedge funds piled money last month into bets against subprime that it had pushed up the cost too far. “It is becoming the trade du jour,” said one manager.

http://www.ft.com/cms/s/29f1691c-2f2...b5df10621.html

amisconception

Well, this is also how you can lose a lot of money if WERE in a poorly managed hedge fund

CNBC educational video on subprime loan CDOs and derivatives

http://www.youtube.com/watch?v=0YNyn1XGyWg

fdl

No end in sight for U.S. housing slump

http://www.theglobeandmail.com/servl...?query=housing

Fibonacci

^^ When the real estate bubble burst in Japan, the downturn lasted 15+ years...

I'm not as bearish long term stateside, because our capital markets and banking system are much more transparent and efficient. The sub-prime blowout was widely predicted, it was simply a matter of timing, but the long term ramifications will be minimal. Some doomsayers are calling for a great depression led by US consumers being shocked into there senses and living within their means.

I don't buy it. The propensity for the American consumer to consume is built into our national psyche and as long as jobs are plentiful and China buys our treasuries, we'll be okay.

amisconception

Foreclosure activity rises dramatically
Bay Area defaults, auctions, repossessions nearly triple; nationwide notices are up 87%

Foreclosures continued to rise throughout the country, the state and the Bay Area in June, according to a report to be released today. Nationally, 164,644 foreclosure notices were filed in June, up 87 percent from June of last year, said RealtyTrac.com, an online marketplace for foreclosure properties. In the Bay Area, the number of foreclosure notices was 5,018, almost triple the 1,780 in June 2006.

"The big variable driving the numbers is the much higher-than-anticipated rate of default of subprime loans," said Rick Sharga, vice president of RealtyTrac in Irvine. Subprime loans, which grew in popularity in the past two years, are loans to people with tarnished credit, as well as loans for 100 percent financing.

"The excessive and lax lending practices of the past couple of years of the real estate boom are coming home to roost," Sharga said.

http://www.sfgate.com/cgi-bin/articl...UGP3QUSH41.DTL

It's not just subprime loans

amisconception

"So far, the stock market keeps whistling past the graveyard," said Matt Smith, president and portfolio manager at Smith Affiliated Capital. "But these issues continue to get worse, and eventually they'll impact [mergers and acquisitions] and private-equity activity, which have been the foundations of the stock market."

On Tuesday, S&P announced it might downgrade $12 billion in subprime bonds, known as residential-mortgage-backed securities, or RMBS, while rival Moody's Investors Service downgraded 399 such bonds. See full story.

Re-pricing risk

Until now, the pricing of risks linked to housing and subprime mortgages remained something of a mystery, as risks remained hidden in the complex world of credit derivatives. But changes in ratings will force a re-pricing of the roughly $800 billion in subprime-mortgage bonds sitting in investment portfolios across the globe.

"Whenever you have such a massive growth in derivatives, as we had with housing, it's [used] to hide the losses," said Smith of Smith Affiliated Capital. "Nobody knows the true counterparty risks."

Some market players believe that, with the rating agencies making their moves so late in the game, they're seeing a replay of the Enron and WorldCom debacles, which played significant parts in popping the 1990s stock-market bubble.

The rating agencies, then as now, have come under fire for changing their ratings only after the bad news was already out.

"The credit agencies are always lagging," said Smith Affiliated Capital's Matt Smith. "But the main difference between now and 2000 is that you could sell stocks quickly; for the real-estate market, it takes three or four years to unfold."

Both Enron and WorldCom had used "creative" accounting methods to artificially boost earnings, until the bursting of the stock bubble revealed their overwhelming debt was more real than much of their projected revenue. Yet the main credit-rating agencies had kept an investment-grade rating on both companies' debt until days before they went bankrupt.

In particular, so-called liar loans, or mortgages that were backed by dubious documentation -- if any -- from borrowers, still ended up receiving high-grade ratings from the agencies.

Peter Shiff, president of Euro Pacific Capital, said the rating agencies' moves this week were too little, too late. He said lenders knowingly relied on inaccurate data. "If the lenders themselves call them liar loans, why should we think they're boy scouts?"

Schiff added: "And it's not just people with bad credit that lied on their mortgages."

http://www.marketwatch.com/news/stor...6DA77B7C562%7D

amisconception

Insider's view of the mortgage market:

I own a mortgage shop, I myself stil orginate loans and have for over 10 years and so I thought I'd chime in here on what's really going on.

First of all back in the early part of this year when the crap hit the fan I started reading all of this because well it's important to me and during that time I learned how these CDO's were done.

I've been in lending for over 20 years and what they've effectively done is simply divided up these bonds into different LTV tranches and that makes sense, the lower the ltv the less risky a loan is etc.

The fatal flaw in their thinking as everyone now knows is that in a down market all the loss assumptions are for crap.

In a down market it's not at all unusual to eat upwards of 40% of the principal of a loan because of the term quick sale price, ie a house worth 100k in a down market might only command 60k if it's torn up and the market is weak and investors for various reasons have great incentives to clear these things off as fast as they can, they won't fix them up, they won't dress them up they just want them gone.

That's bad enough but oh it gets much much worse.

I see day to day about 4 applications for loans myself, and upwards of 70 company wide I can look at if I want, that's pretty small in the scheme of things but being I do it every day you get a feel for this stuff and I can tell you that never in my career have I seen anything like this in fact I'm scared out of my ever loving mind!

My company is doing fine, we specialize in cleaning up other lenders mistakes and that's a booming business now, effectively I use my knowledge to replace these improperly placed loans in more correct products and it's a niche market but it's not near big enough to support our whole industry, not even close.

I market to Subprime customers who have the 2/28's all the time and here's what I've found so far.

About 20% or so are can be saved into a better product and made whole, they have income, they have equity and their credit while marginal is good enough to get them out of the death arms, but almost 80% are walking foreclosure zombies.

Now this isn't a scientific sample, of course the bottom of the barrell call in, the more desperate call first etc but that dosen't matter, their loss models will gap WIDE!!!! Their percentages are for crap!

This is depression sized stuff no doubt in my mind, not one shred of doubt we are headed off the cliff, no one can stop this their aint that much money, only a turn around in the market could save this and........

I've also never seen guidelines ratchet up this fast in my life, 80/20's are dead, gone annihilated and My Community, also gone for all intents and purposes because the risk premiums comming into the pricing makes buyers go.... WHAT!!! I thought rates were 6%, your saying 7% plus 1% more in PMI? Well I can't afford squat now...... which is the 2nd shoe dropping.

I do FHA and that's it folks and FHA aint like these other things, too many dings forget it, you can't have a nice pretty collection of collections and get an FHA no money down loan, you can forget it.

People with 2nd mortgages can forget refinancing them, people who bought the last 2 years might be toast with perfect credit if improperly placed in an exploding arm just due to being underwater from lack of appreciation, alt a toast, it's all freaking toast!!!

I've got reps bothering me daily for loans, then they stop calling cause they are gone, suddenly lenders that wouldn't give me the time of day due to my less than impressive volume are kissing my butt, playing solitare when I call with a question.

It's biblical in scope and if I read what they did with CDO's and derivatives OMG it's the end of life as we know it.

You mark my words, this is going down in October in the market, the housing sector will lead down, not lead more like an anchor thrown off the boat that has a chain wrapped around the United States economy.

The MEW's are done, people are actually paying money at close, those that can to refinance out of these abmoninations of evil, and they dance in to sign again those few that can, there is not cash out, no one has any equity, it's all baked out, arb'd out if you would.

I have buddies that own bigger shops, one is out of business now due to buybacks, he used to give me a ration of crap for never stepping up to be a mortgage banker, I told him for years that they don't pay enough more to make it worth holding that bomb for them.

I have another friend of years who just folded his company and then killed himself 2 days later. He was a banker too and the putbacks will destroy almost any banker type lender as this turns down, almost all have 1st payment default clauses built into their line agreements that means even if everything is great, no fraud no hanky panky if the borrower don't pay, toast.

These guys play hard ball especially Merrill, they putback loans at the first whiff of trouble, the mortgage banking field is going to be a complete wasteland, utter devastation, brokers will probably be rounded up and shot by Congress and then we'll all be left with banks that would run screaming into the night if you asked them to do some of the loans we do. It's pretty much the rolling up of an entire industry one month at a time.

Builders are in all out panic mode which dosen't bother me too much as I'm not fond of them except to say that it's never a pretty sight to see true fear in someones face, outright fear.

Realtors, of course think the bottoms just around the corner which of course means it's the exact opposite, sorry for the brief amount of derision towards them I can't help myself.

I'll just say that my industry did fail utterly to police itself, those of us not doing wildly fraudulent lending should have stood up and shouted about it more, done more to protect the industry but we didn't and it's done now, I suppose we deserve this but not all of us took adavantage, just not enough said anything to stop it, to be fair though we were vastly outnumbered, after they allowed net branches it was like a plauge of new loan officers piling in completely amazing and it ruined everything.

In October the earnings will hit for 3Q, that's where all the music will stop IMO, the customers are charging charging charging now but that should tail off by then due to the horror show statements that will start comming through and the realization they can't pay it off again.

It may last longer than October but we will not get through 2008 without the wall comming, October just is a guess of mine, lot's of crashes happen then, I think it's psychological with winter comming on and all.

http://www.tickerforum.org/cgi-ticker/akcs-www?post=431

Fibonacci

$12 billion is a drop in the bucket of $7 Trillion+ in Mortgage Backed Securities outstanding.

amisconception

Right. But this is just the beginning.

Fibonacci

Okay, so every mortgage payer in the land will suddenly stop paying?

MR1

No question it will get much worse before it gets better. Still, I don't think the majority of homeowners over leveraged in this past market frenzy. The CA and SoCal markets are always boom-bust and this the worst ever I grant you.

Still, I know pleanty of homeowners that didn't purchase or refi over the past five years. Far too many did out of greed or ignorance and they will mostly pay the price. Amazing that more people on both sides of the desk didn't put some thought into what was certain to happen with the loose lending and explosive loans.

As far as lending standards changing, I got a loan 60 days ago that I doubt that I could qualify for today. FICO requirements and interest rates marching up in lockstep. I'm hoping not to exercise some job change options in the near future. I've been in the industry for over 16 years.

amisconception

It doesn't need to be every mortgage payer before the over-leveraged system collapses causing an all-out depression.





http://blownmortgage.com/2007/07/18/...a-bad-beating/

And just who do you think was invested in these AAA tranches?

amisconception

Other cities:

Pheonix, AZ


Miami, FL


Sacramento, CA


Washington, DC


Tampa, FL

amisconception

Fibonacci

I know you're in the industry, so I'm a bit surprised that you are posting this now as opposed to two years ago when this thread was started.

The situation that you are now describing is NOT a surprise. For those people who paid attention to the dynamics of the market and recognized classic bubbles, this was widely predicted.

Just as things were artificially pumped up with easy money, the economy won't go to hell in a handbasket now. What is happening now is a retrenchment, and yes, the capital markets will self-correct this bubble. Lending standards have tightened, borrowers will have to have more skin in the game, prices will revert to lower levels until demand reaches equilibrium with supply.

It didn't take a rocket scientist to figure out that FED FUNDS would not remain at 1 percent forever and long term bond yields won't stay low forever too.

I don't mean to be rude, but I would have respected your judgement more if you had been forwarning of this correction before as opposed to simply reporting the consequences of the aftermath as they are occuring.

In a nutshell, to be a good investor, you need to stay ahead of the curve.

Pigs get fat, hogs get slaughtered.

amisconception

I just graduated college a year ago. And I don't have an economics education. Give me a break.

Believe me, I know I missed the realities of this bubble long ago. But Jesus, obviously not everyone knew wtf was gonna happen - at least not EXACTLY how it was going to happen.

I've only recently started paying attention... Only in the past 6 months. I've been inundated with the vast amounts of wealth people in the industry have created for themselves, and didn't see the ramifications of this seemingly classic bubble.

Give me some credit, at least I know now what's going on! I'm not an investor nor have I ever pretended to be. I didn't get duped into believing that you could buy a house and flip it for 150% of what you paid for in just a year.

What I'm doing now is posting RELEVANT articles and data that are STILL just barely coming to the forefront.

Yes, EVENTUALLY capital markets correct themselves. But in the meanwhile, this MASSIVE bubble is popping in front of me and I've had to deal with trying to understand it. At LEAST I'm trying to do that.

I didn't have the education, the knowledge or understanding two years ago to see this coming. You know what I saw two years ago? I saw everyone I know in this industry busting their asses and making a ton of money. Where are they today? Some? I have no idea. Others? A manager for New Century mortgage, 28 years old, clearing $100k a month. A 30 year old broker, with no education, making $150k a month. A rep, 35 years old with no formal education, clearing $50k a month. And on, and on, and on.

I'm fresh out of college in a business that I thought, albeit foolishly, was different. It's a classic mistake. I have learned my lesson but it's been pretty devastating to me personally. If you can't respect that then you really are an asshole and should go fuck yourself - But I don't think you are. You post some good economic info that I do respect and have paid attention to. It's hard for me sometimes because it's complex to an outsider... The vocabulary alone can be challenging.

Anyway, don't be an ass.

Fibonacci

Okay, you didn't post your age and I didn't realize you were fresh out of school AND judging by most of your previous posts, they've been very intelligent - therefore I presumed you were older.

So, unlike , I will cut you some slack. :wink:

I feel your pain and if it means anything to you, I experienced a similar situation in the equity markets. I graduated in '95 and was hoping to get some relevant experience before pursuing a law degree. The reality of the job market at the time was, that unlike now, jobs for noobs were tough to get as the US economy was just emerging from a shallow recession.

A cousin got me an interview at a brokerage firm he worked at and was doing very well at. The manager liked me and gave me a shot.

In hindsight, I was fortunate to catch the beginning of the greatest bull market in US history. I was a cold calling fiend and was mentored by an older guy that taught me a lot. I was reading, studying and learning on the job. These were the days when tech stocks like Cisco and MSFT were rolling. Buy the dip, buy the dip - it was like taking candy from a kid. I though it was because I was smart, but in reality it was just a rising tide lifting all boats.

Long story short, we had a gym at our company and every day after work, I'd play basketball with some other brokers and traders. Thought I was doing okay making low six figures, BUT the traders were making the real dough - you know 500,000 grand and up. I was the same age as these guys and I knew they weren't any smarter than me. It was a classic case of 'grass is greener'.

Shit, I was single, had paid off my student loan debt as fast as possible, had just bought a house and thought, what the fuck - is it worth the risk to give up my book and transfer to the trading desk, NOT knowing if I had the mental make up to withstand the emotional rigors of trading? I was bored of the routine stuff, financial advising, estate planning, asset gathering - was not exciting for me.

So after five years of busting my ass and earning a nice paycheck, I gave up my book and essentially took a six figure pay cut to try my hand on the trading desk in early 2000, pretty close to the then market highs. Lo and behold, the market started tanking, decimalization set in (narrowing spreads from 1/4, 1/8th, 1/16ths to pennies), 9/11, corporate governance scandals --- BLOOSH. There went my trading career and also a shitload of my personal money (of course I was trading on margin).

Anyways, looking back at it now - I don't regret my decision. And I'm glad I learned that lesson in my twenties and not in my later years.

So my advice to you even though residential real estate is tanking, and you see all the guys who've already made a nice nut. DON"T DESPAIR. We still live in the greatest, most free, most dynamic economy in the world. The American spirit is alive and well. We've got the deepest, transparent and most liquid capital markets of any other nation. Yes, it will take some years for many to get back to "even" on their homes, but many people didn't rush to overpay and overextend themselves in the last few years.

Things will get better and if you have the patience, work ethic and love for what you do, you WILL be successful.

Sorry for being tough on you and good luck young jedi

Fibonacci

Miami Condo Glut Pushes Florida's Economy to Brink of Recession

http://www.bloomberg.com/apps/news?p...d=a4qa.rYTWyYA

vs.

Detroit's Contrarian Condo Builders Sense Opportunity Downtown

http://www.bloomberg.com/apps/news?p...d=axYMsnxoTmfU

Fibonacci

By Christine Harper and Jody Shenn July 23 (Bloomberg)

Silver™

FYI - A decade ago when California's population was about 20% smaller we had the same number of defaults as we do today.




Lenders sent California homeowners the highest number of mortgage default notices in more than a decade during the second quarter, the result of flat or falling prices, anemic sales and a market struggling with the excesses of the 2004-2005 home-buying frenzy, a real estate information service reported.

Lenders filed 53,943 notices of default (NoDs) during the April-through-June period, up 15.4 percent from 46,760 for the previous quarter, and up 158 percent from 20,909 for second-quarter 2006, according to DataQuick Information Systems of La Jolla.

Last quarter's default level was the highest since 54,045 NoDs were recorded statewide in fourth-quarter 1996, DataQuick reported. By contrast, defaults peaked in first-quarter 1996 at 61,541 and reached a low of 12,417 in third-quarter 2004. An average of 34,172 NoDs have been filed quarterly since 1992, when DataQuick's NoD statistics begin.

---

The default numbers reflect wide regional differences. The second-quarter numbers were a record in Riverside, Contra Costa, Sacramento and most Central Valley counties. In Los Angeles County it was still less than half the first-quarter 1996 peak, reflecting the depth of the recession in the mid-1990s, as well as the relative strength of today's housing market.

http://www.inman.com/inmanstories.aspx?ID=63974

Fibonacci

I wouldn't exactly be cheering this news yet, we're nearing the end of the first quarter of this game - 3 more quarters to go.



Defaults on Some `Alt A' Loans Surpass Subprime Ones

http://www.bloomberg.com/apps/news?p...d=aeWSvfvHw3cQ

Home Construction Bust May Last Until 2011, U.S. Builders Say

http://www.bloomberg.com/apps/news?p...d=axGDr7aT4k6k

Silver™

Not cheering so much as giving perspective.

If you compare anything to it's peak, the data will look bad, so it is good to step back and see where we have been before, especially with something as cyclical like real estate.

moeronn

So what happened that made mortgage rates jump over night ? That can't help the housing market any.