The "official" housing bubble thread
#761
I feel the need...
Originally Posted by moeronn
So what happened that made mortgage rates jump over night ? That can't help the housing market any.
10 year treasuries (mortgage benchmark) are actually close to the same yields from Jun 04.
What has made the market perceive that mortage rates are significantly higher is because many bubble chasers financed their loans with ARM's and now those are adjusting to higher levels, since shorter rates were indeed lower the previous few years.
Now that credit is tighter and it's more difficult for people to get piggyback loans, many borrowers are stuck with the adjusted rate and are unable to refinance into fixed rate because either A. their credit sucks B. they don't qualify C. there is no increased equity to withdraw -- or any combination of the three.
#762
is learning to moonwalk i
^^ Thank you for that information, but I literally mean over-night.
I was referring to a "jump" in rates of about 0.375% from yesterday to today. Since I am considering buyng a house, I check rates daily and noticed a significant increase this morning over yesterday.
I was referring to a "jump" in rates of about 0.375% from yesterday to today. Since I am considering buyng a house, I check rates daily and noticed a significant increase this morning over yesterday.
#763
I feel the need...
Originally Posted by moeronn
I was referring to a "jump" in rates of about 0.375% from yesterday to today.
I watch bond yields very closely and the curve was pretty much unchanged today over Tuesday. Mortgage originations can't be that much different between SoCal and Motown.
#764
is learning to moonwalk i
Originally Posted by Fibonacci
That doesn't compute. Quoted from the same lender???
I watch bond yields very closely and the curve was pretty much unchanged today over Tuesday. Mortgage originations can't be that much different between SoCal and Motown.
I watch bond yields very closely and the curve was pretty much unchanged today over Tuesday. Mortgage originations can't be that much different between SoCal and Motown.
I check here to see relative rates and noticed each lender (or brokerage) increased at least 0.25% with pretty much the same buy down costs:
http://www.greenlightloans.com/Green...web/index.aspx
#765
Profits tumbled yesterday for the nation's largest home mortgage firm - Countrywide Financial - even as its chief Angelo Mozilo was quietly cashing out a $118.2 million options windfall ahead of its new troubles.
The company reported a 33 percent drop in profits, and expects deep losses across the industry in the wake of housing's thundering crash that's sending cracks this summer throughout the financial services landscape.
http://www.nypost.com/seven/07252007...paul_tharp.htm
"We are experiencing home price depreciation almost like never before, with the exception of the Great Depression"
"As I try to walk through what happened there and could a lot of this have been foreseen ... nobody saw this coming"
- Angelo Mozilo, Countrywide Mortgage CEO, July 2007
Saying this was unexpected, when he's unloaded this much stock:
http://finance.yahoo.com/q/it?s=CFC
Kind of makes you wonder.
How is this not subject to an SEC investigation?
The company reported a 33 percent drop in profits, and expects deep losses across the industry in the wake of housing's thundering crash that's sending cracks this summer throughout the financial services landscape.
http://www.nypost.com/seven/07252007...paul_tharp.htm
"We are experiencing home price depreciation almost like never before, with the exception of the Great Depression"
"As I try to walk through what happened there and could a lot of this have been foreseen ... nobody saw this coming"
- Angelo Mozilo, Countrywide Mortgage CEO, July 2007
Saying this was unexpected, when he's unloaded this much stock:
http://finance.yahoo.com/q/it?s=CFC
Kind of makes you wonder.
How is this not subject to an SEC investigation?
#766
is learning to moonwalk i
Originally Posted by Fibonacci
That doesn't compute. Quoted from the same lender???
I watch bond yields very closely and the curve was pretty much unchanged today over Tuesday. Mortgage originations can't be that much different between SoCal and Motown.
I watch bond yields very closely and the curve was pretty much unchanged today over Tuesday. Mortgage originations can't be that much different between SoCal and Motown.
With all the woes of subprime loans, raising rates will compound the problem, since the adjustables will rise faster and force more defaults.
#767
I feel the need...
Originally Posted by moeronn
Rates appear to have gone up again since yesterday. I have no idea why
With all the woes of subprime loans, raising rates will compound the problem, since the adjustables will rise faster and force more defaults.
#768
is learning to moonwalk i
Originally Posted by Fibonacci
I just got quoted a 15 yr fixed at 6.375, doesn't seem so bad to me. We need to lock sometime in August.
Originally Posted by Fibonacci
#769
I feel the need...
Originally Posted by moeronn
Conforming or Jumbo?
WHY THE HELL ARE THEY DOING IT?
So even though the FOMC hasn't raised overnight rates since June 2006 and treasury prices are rising (yields falling) because of a flight to quality. The act of lending has gotten more expensive - look at all the debt offerings which have been shelved in the last few weeks.
The price of borrowing is reverting to it's historical mean.
#771
I feel the need...
Originally Posted by zamo
thank god i locked in a 30 year fixed I/O with no escrow @ 5.625% back in Feb. The worst is yet to come IMO.
#772
If Wall Street wants to get even more worried about the real estate market, it need look no further than southern California. There, the culprits aren't just the bad-credit borrowers whom banks and lenders loaded up with ballooning debt to purchase their dream homes. The well-to-do have partaken of those treacherous loans as well. And now everyone is hard pressed to pay as interest rates rise.
The spectacularly bad trend was coupled with news from mega-mortgage lender Countrywide Financial that homeowners with good credit are starting to fall behind on mortgage payments. It has all contributed to a contagiously pessimistic mood. "We thought the upper end of the market was immune," says Steve Johnson, of real estate consulting firm Metrostudy. "But this is now like Kudzu in the South, spreading into all product types in the southern California housing market."
http://www.time.com/time/business/ar...647607,00.html
The spectacularly bad trend was coupled with news from mega-mortgage lender Countrywide Financial that homeowners with good credit are starting to fall behind on mortgage payments. It has all contributed to a contagiously pessimistic mood. "We thought the upper end of the market was immune," says Steve Johnson, of real estate consulting firm Metrostudy. "But this is now like Kudzu in the South, spreading into all product types in the southern California housing market."
http://www.time.com/time/business/ar...647607,00.html
#773
I feel the need...
Five Signs That Subprime Infection Is Worsening
By Mark Gilbert July 30 (Bloomberg)
The collapse in subprime mortgages doesn't pose ``any threat to the overall economy,'' U.S. Treasury Secretary Henry Paulson said last week. He would, wouldn't he? He's hardly going to advocate we all stock up on tinned food and bottled water in our basements.
The tremors from the subprime debacle are vibrating throughout the interconnected web of modern global financial markets. Derivatives, corporate debt, loans and bank stocks are all getting trashed. Here are five reasons to expect the turmoil to worsen.
Don't Bet on Helicopter Ben . . .
A week ago, traders in the futures and options markets were pricing the chances of December interest-rate cuts from the U.S. Federal Reserve at about 21 percent. Prices now suggest a 47 percent chance that Fed Chairman Ben Bernanke will sanction lower borrowing costs to rescue the mortgage market, based on July 26 closing levels.
The rapid turnaround in interest-rate expectations shows the financial community is far from convinced that the wider economy is immune from the woes afflicting particular pockets of the bond and credit markets.....
http://www.bloomberg.com/apps/news?p...d=ageDhNv.n1A4
The tremors from the subprime debacle are vibrating throughout the interconnected web of modern global financial markets. Derivatives, corporate debt, loans and bank stocks are all getting trashed. Here are five reasons to expect the turmoil to worsen.
Don't Bet on Helicopter Ben . . .
A week ago, traders in the futures and options markets were pricing the chances of December interest-rate cuts from the U.S. Federal Reserve at about 21 percent. Prices now suggest a 47 percent chance that Fed Chairman Ben Bernanke will sanction lower borrowing costs to rescue the mortgage market, based on July 26 closing levels.
The rapid turnaround in interest-rate expectations shows the financial community is far from convinced that the wider economy is immune from the woes afflicting particular pockets of the bond and credit markets.....
http://www.bloomberg.com/apps/news?p...d=ageDhNv.n1A4
#774
Originally Posted by moeronn
^^ Thank you for that information, but I literally mean over-night.
I was referring to a "jump" in rates of about 0.375% from yesterday to today. Since I am considering buyng a house, I check rates daily and noticed a significant increase this morning over yesterday.
I was referring to a "jump" in rates of about 0.375% from yesterday to today. Since I am considering buyng a house, I check rates daily and noticed a significant increase this morning over yesterday.
Today’s Average Mortgage Rates
Loan Type Rate APR
30-yr Fixed 6.26% 6.45%
15-yr Fixed 5.93% 6.2%
5/1 ARM 5.87% 7.07%
#775
is learning to moonwalk i
Originally Posted by CL Type Slim
Interest rates are back down.
Today’s Average Mortgage Rates
Loan Type Rate APR
30-yr Fixed 6.26% 6.45%
15-yr Fixed 5.93% 6.2%
5/1 ARM 5.87% 7.07%
Today’s Average Mortgage Rates
Loan Type Rate APR
30-yr Fixed 6.26% 6.45%
15-yr Fixed 5.93% 6.2%
5/1 ARM 5.87% 7.07%
#776
05/5AT/Navi/ABP/Quartz
Just curious, why are you watching so closely? I was under the impression that it would be a while before you are ready. The market is incrementally volatile. Unless you will be locking the loan within 90 days why sweat it?
The rates may swing up to 1/2 point or so depending on news revived during the period. If your not near ready, just driving yourself nuts for no good reason. You can't lock early and can't change the rate. You can only put a loan rate contingency in your purchase contract.
The rates may swing up to 1/2 point or so depending on news revived during the period. If your not near ready, just driving yourself nuts for no good reason. You can't lock early and can't change the rate. You can only put a loan rate contingency in your purchase contract.
Last edited by MR1; 07-30-2007 at 06:53 PM.
#777
is learning to moonwalk i
Originally Posted by MR1
Just curious, why are you watching so closely?
2. Now that my wife's property is nearly sold (should close in about 2 weeks), we might jump on something if we found the right property/price.
3. Rate changes of 0.5% might make a difference on what we would purchase. I want to keep my wife's expectations in check so she doesn't fall in love with a house we can't afford (or shouldn't stretch ourselves for).
4. See #1
Originally Posted by MR1
I was under the impression that it would be a while before you are ready. The market is incrementally volatile. Unless you will be locking the loan within 90 days why sweat it?
The rates may swing up to 1/2 point or so depending on news revived during the period.
The rates may swing up to 1/2 point or so depending on news revived during the period.
#778
05/5AT/Navi/ABP/Quartz
Originally Posted by moeronn
1. Because I'm anal about certain things
2. Now that my wife's property is nearly sold (should close in about 2 weeks), we might jump on something if we found the right property/price.
3. Rate changes of 0.5% might make a difference on what we would purchase. I want to keep my wife's expectations in check so she doesn't fall in love with a house we can't afford (or shouldn't stretch ourselves for).
4. See #1
It is possible that we could move on a property within 90 days.
2. Now that my wife's property is nearly sold (should close in about 2 weeks), we might jump on something if we found the right property/price.
3. Rate changes of 0.5% might make a difference on what we would purchase. I want to keep my wife's expectations in check so she doesn't fall in love with a house we can't afford (or shouldn't stretch ourselves for).
4. See #1
It is possible that we could move on a property within 90 days.
If you are really anal, worry about your buyer remaining qualified and finalizing that transaction first. But, they told me to only worry about the things that I can control. Anyway, good luck.
#779
Riskiest U.S. Housing Markets (Forbes)
Those looking to spin the real estate roulette wheel might want to steer clear of Miami. It ranks first on our list of the nation's riskiest real estate markets.
There, a high share of adjustable-rate mortgages, high vacancy rates and slumping prices still too elevated for the local populous means should long-term bond yields climb, interest rates jump or the housing crisis linger much longer, things could go from bad to worse.
Affairs are not much better farther north--or west. Following in Miami's wake are Orlando, Sacramento and San Francisco.
1) Miami
2) Orlando
3) Sacramento
4) San Fran
5) San Diego
6) Phoenix
7) KC
8) Cincy
9) Chicago
10) Denver
http://promo.realestate.yahoo.com/ri...g_markets.html
Those looking to spin the real estate roulette wheel might want to steer clear of Miami. It ranks first on our list of the nation's riskiest real estate markets.
There, a high share of adjustable-rate mortgages, high vacancy rates and slumping prices still too elevated for the local populous means should long-term bond yields climb, interest rates jump or the housing crisis linger much longer, things could go from bad to worse.
Affairs are not much better farther north--or west. Following in Miami's wake are Orlando, Sacramento and San Francisco.
1) Miami
2) Orlando
3) Sacramento
4) San Fran
5) San Diego
6) Phoenix
7) KC
8) Cincy
9) Chicago
10) Denver
http://promo.realestate.yahoo.com/ri...g_markets.html
#780
Houses Won't Depreciate?
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Originally Posted by Fibonacci
Zamo, Why I/O???
#782
I feel the need...
^^ Wow wow wee wah
Housing market ---> <--- US Economy
Greenspan may have to readjust his call on recession next year, looks like the odds are now better than 30%
Housing market ---> <--- US Economy
Greenspan may have to readjust his call on recession next year, looks like the odds are now better than 30%
#783
Team Owner
Originally Posted by amisconception
http://video.google.com/videoplay?do...arch&plindex=0
Jim Cramer says to just default on your mortgage if you're in a bad regional market.
Jim Cramer says to just default on your mortgage if you're in a bad regional market.
Yesterday on Mad Money he was saying that he would set his house on fire and collect the insurance.
#784
05/5AT/Navi/ABP/Quartz
Originally Posted by doopstr
Yesterday on Mad Money he was saying that he would set his house on fire and collect the insurance.
Now watch arson skyrocket. Not because of Jim just general circumstances.
#785
Senior Moderator
Originally Posted by amisconception
http://video.google.com/videoplay?do...arch&plindex=0
Jim Cramer says to just default on your mortgage if you're in a bad regional market.
Jim Cramer says to just default on your mortgage if you're in a bad regional market.
Granted the equity fallout due to an overinflated market does hurt (thank you speculators). However, I believe this is temporary (even in the midwest, southwest and southeast) if not short term. And if nothing else, simply uprooting the family and abandoning the home is simply not an option.
(I will not even dignify the arson angle from Mad Money, though I hope it was a tongue-in-cheek comment as insurance fraud is a felony.....which will come back to bite one in the arse far worst than any real estate losses)
#786
I feel the need...
The Capital Markets at Work...
Teh rooster is coming home to nest...
The ninth largest mortgage originator is tightening up it's lending practices and the nations 10th largest, American Home Mortgage will be closing it's doors on Friday.
Indymac to Make `Major Changes' to Mortgage Lending
The ninth largest mortgage originator is tightening up it's lending practices and the nations 10th largest, American Home Mortgage will be closing it's doors on Friday.
Indymac to Make `Major Changes' to Mortgage Lending
IndyMac Bancorp Inc. is joining rival lenders in making ``very major changes'' to loan standards and raising interest rates because of a slump in mortgage securities, an e-mail to the company's employees said.
The market for mortgage bonds has become ``very panicked and illiquid,'' Chief Executive Officer Michael Perry wrote in the Aug. 1 e-mail. National City Corp. also told companies it buys loans from that it won't accept second mortgages and some low- documentation loans, according to a notice on its Web site.
``Unlike past private secondary mortgage market disruptions, which have lasted a few weeks or so, our industry and IndyMac have to be prudent and assume that this present disruption, which appears broader and more serious, might take longer to correct itself,'' Perry wrote.
The additional credit tightening by IndyMac, the ninth largest U.S. mortgage lender, and its rivals comes at a time when it's ``difficult'' to trade even AAA rated mortgage bonds that aren't guaranteed by government-chartered Fannie Mae and Freddie Mac, or federal agency Ginnie Mae, Perry wrote.....
http://www.bloomberg.com/apps/news?p...d=aiYQzFpS01wU
The market for mortgage bonds has become ``very panicked and illiquid,'' Chief Executive Officer Michael Perry wrote in the Aug. 1 e-mail. National City Corp. also told companies it buys loans from that it won't accept second mortgages and some low- documentation loans, according to a notice on its Web site.
``Unlike past private secondary mortgage market disruptions, which have lasted a few weeks or so, our industry and IndyMac have to be prudent and assume that this present disruption, which appears broader and more serious, might take longer to correct itself,'' Perry wrote.
The additional credit tightening by IndyMac, the ninth largest U.S. mortgage lender, and its rivals comes at a time when it's ``difficult'' to trade even AAA rated mortgage bonds that aren't guaranteed by government-chartered Fannie Mae and Freddie Mac, or federal agency Ginnie Mae, Perry wrote.....
http://www.bloomberg.com/apps/news?p...d=aiYQzFpS01wU
#788
I feel the need...
Originally Posted by mrsteve
So what you all are saying is now is not a good time for me to buy my first home?
Au contraire, if you have good credit and saved up 20% for a downpayment, it's a most excellent time to be a buyer.
#789
is learning to moonwalk i
Originally Posted by Fibonacci
Au contraire, if you have good credit and saved up 20% for a downpayment and need a conforming loan, it's a most excellent time to be a buyer.
After reading your previous post, I definitely stand by my statement that non-conforming (jumbo) rates have gone up. I had a breif discussion about this yesterday with my agent/broker and he didn't believe me. He pulled out some rate sheets and showed me that conforming and non rates were within a quarter point. Then he notices the rate sheets were from nearly a month ago. Next time I talk to him I'll see if he has any more recent sheets.
#790
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Originally Posted by Fibonacci
Au contraire, if you have good credit and saved up 20% for a downpayment, it's a most excellent time to be a buyer.
I can't get into a house around here for under $300,000. Not really even a condo. I don't know anyone my age that has $60,000 saved up for a 20% down payment.
Also, since me and my 2 roommates are living in house a friend of ours inherited my portion of the rent is only $300.
Since it appears that I wouldn't be making any equity on the house any time soon should I still really be looking to buy?
#791
I feel the need...
Originally Posted by moeronn
After reading your previous post, I definitely stand by my statement that non-conforming (jumbo) rates have gone up. I had a breif discussion about this yesterday with my agent/broker and he didn't believe me.
Dude, I never said non-conforming weren't more expensive. Of course they are, because conforming loans aren't bought by the Gov't Agencies - they're packaged as whole loans which have (as stated) widened considerably.
Feel free to move to MI, there are plenty of beautiful homes to buy under 500k which will allow you to have a conforming mortgage. :wink:
#792
is learning to moonwalk i
Originally Posted by Fibonacci
Dude, I never said non-conforming weren't more expensive. Of course they are, because conforming loans aren't bought by the Gov't Agencies - they're packaged as whole loans which have (as stated) widened considerably.
Originally Posted by Fibonacci
Feel free to move to MI, there are plenty of beautiful homes to buy under 500k which will allow you to have a conforming mortgage. :wink:
#793
I feel the need...
Originally Posted by moeronn
This seriously throws a monkey wrench in our plans.
#794
I feel the need...
Originally Posted by mrsteve
Also, since me and my 2 roommates are living in house a friend of ours inherited my portion of the rent is only $300.
Since it appears that I wouldn't be making any equity on the house any time soon should I still really be looking to buy?
Since it appears that I wouldn't be making any equity on the house any time soon should I still really be looking to buy?
That rent is cheap, ride that horse for as long as you can stand.
The market in DC land will cheapen too, imo the Uncle Sam hog feader which has been subsidized by US taxpayers is bound to normalize sooner or later. The wacky coasts are overbought and overleveraged, be patient.
#795
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The thing about this area is with so many government jobs and so many people losing and gaining those jobs every time the administration changes there are always a good pool of buyers and sellers. Lots of turn over in the area. Although, if I would have bought back in '03 when I left college I'd be sitting pretty high and mighty right now. Now I simply can't afford it even with a salary north of $50k
#796
I feel the need...
^^ Dude, don't sweat it, don't regret it. How many kids right out of school buy a house? Few that I know of, unless Daddy Warbucks is paying.
You've got a great situation, seriously $300 mo rent! If you put your mind too it, I'm sure you can save like a fiend for a year or so. The RE market will not run away from you, if anything it will be flat or cheaper over the next few years and your salary will grow.
You've got a great situation, seriously $300 mo rent! If you put your mind too it, I'm sure you can save like a fiend for a year or so. The RE market will not run away from you, if anything it will be flat or cheaper over the next few years and your salary will grow.
#797
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Yeah $300 is ridiculously low I realize that and I'm milking it for all it's worth. I was living in a 1 bedroom apartment paying $1,050 a month. That killed any real savings for a while.
We'll see what happens in a year or so. I need a new job too...
We'll see what happens in a year or so. I need a new job too...
#798
05/5AT/Navi/ABP/Quartz
Originally Posted by mrsteve
Yeah $300 is ridiculously low I realize that and I'm milking it for all it's worth. I was living in a 1 bedroom apartment paying $1,050 a month. That killed any real savings for a while.
We'll see what happens in a year or so. I need a new job too...
We'll see what happens in a year or so. I need a new job too...
Not directed specifically at you but you certainly outline the problem for most. Generally it is and should be necessary to sacrifice to get the things we want. Somewhere along the line too many people got the idea that they deserve things just cause they want them.
Now, back to you. How about putting the difference between your $300 rent and payments on a $240,000 house in the bank every month? This will give you a real good idea if you really want the pleasure of owning said house. Side benefit is you will be closer to ready when prices have fallen enough. Just a random thought on my part. No offense intended.
#799
I feel the need...
A good time for a squeeze
Tighter credit conditions are just what the markets need
BANKERS and investors might not agree, but the recent sell-off in financial markets is good news. It may, at last, have brought people to their senses. For the past few years, too much money has been lent too cheaply and too easily to too many people, whether it was speculators trying to make a fast buck in Miami condominiums or private-equity groups financing their latest multi-billion-dollar takeover. This wake-up call came too late to save the American housing market from frenzy and subsequent bust. But it may have arrived in time to stop the takeover boom getting out of control—and when the world economy is strong enough to cope with the consequences.
Watch out for the American consumer
The big question now is how serious those consequences are likely to be. The impact on debt markets themselves will be big (see article). As standards are tightened, many of the reckless practices that have become the norm in corporate lending will be abandoned. We will now hear a lot less about firms getting “covenant lite” loans, under which lenders give up their rights to monitor the behaviour of borrowers; or “payment-in-kind notes”, which allow borrowers to substitute more IOUs for interest payments. As investors steer clear of riskier debt, the takeover bids that have pumped this year's stockmarket froth will be curtailed and the most debt-laden borrowers may find it impossible to raise funds.
But most companies will be able to shrug off the credit squeeze. That is partly because creditworthy borrowers still have access to debt (albeit at a higher price), and partly because many firms don't have to borrow. Across the rich world, firms are flush with cash. Their profits have been fat for the past five years and, on average, companies have been funding their capital spending from their own resources. Credit wobbles by themselves, therefore, need not prompt an investment slump.....
http://www.economist.com/opinion/dis...src=nwlbtwfree
Watch out for the American consumer
The big question now is how serious those consequences are likely to be. The impact on debt markets themselves will be big (see article). As standards are tightened, many of the reckless practices that have become the norm in corporate lending will be abandoned. We will now hear a lot less about firms getting “covenant lite” loans, under which lenders give up their rights to monitor the behaviour of borrowers; or “payment-in-kind notes”, which allow borrowers to substitute more IOUs for interest payments. As investors steer clear of riskier debt, the takeover bids that have pumped this year's stockmarket froth will be curtailed and the most debt-laden borrowers may find it impossible to raise funds.
But most companies will be able to shrug off the credit squeeze. That is partly because creditworthy borrowers still have access to debt (albeit at a higher price), and partly because many firms don't have to borrow. Across the rich world, firms are flush with cash. Their profits have been fat for the past five years and, on average, companies have been funding their capital spending from their own resources. Credit wobbles by themselves, therefore, need not prompt an investment slump.....
http://www.economist.com/opinion/dis...src=nwlbtwfree
#800
Senior Moderator
Is Fibonacci a bear for life? Just curious. Or will I one day see you in M&I posting about how the market is poised for a big run.
Once bitten , twice shy I guess.
Once bitten , twice shy I guess.