The "official" housing bubble thread
09-21-2007, 08:08 PM
#881
I feel the need...
Originally Posted by zamo
I though it was 1 trillion, but still its a ridiculous amount of money. The difference, there was no collateral.
The difference is that there was no clamoring for taxpayer funded bailout's of internet stock shareholders. :wink:
09-21-2007, 08:19 PM
#882
has Gloryhole Girls in
Join Date: Mar 2001
Location: Ballston Lake, NY
Age: 48
Posts: 11,473
Likes: 0
Received 1 Like
on
1 Post
Originally Posted by Fibonacci
The difference is that there was no clamoring for taxpayer funded bailout's of internet stock shareholders. :wink:
The govt is a bunch of retards bottom line.
09-21-2007, 10:29 PM
#883
Moderator Alumnus
Originally Posted by Fibonacci
The difference is that there was no clamoring for taxpayer funded bailout's of internet stock shareholders. :wink:
There were massive tax cuts because of the recession (or near recession) that was caused in large part by the stockmarket bubble bursting.
09-25-2007, 04:31 AM
#885
I feel the need...
Fed's Rate Cut May Give Little Relief to Homeowners
Americans may be disappointed that the Federal Reserve's interest rate cut won't translate into lower monthly mortgage payments and a revival of the housing market.
``Mortgage rates won't stimulate demand,'' said Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis. ``The Fed may be a little impotent here because what caused this housing crash was overpriced housing, not mortgages.''
The average 30-year fixed mortgage rose 0.10 of a percentage point to 6.08 percent today, according to North Palm Beach, Florida-based Bankrate.com's survey of banks and lenders in the 50 U.S. states. It peaked this year at 6.42 percent on June 14, Bankrate.com said.
The housing industry, now in the second year of its worst recession since 1991, erased 0.6 percent from gross domestic product in the second quarter. Home prices probably will fall on a year-over-year basis for the first time since the Great Depression of the 1930s, Anderson said.....
``Mortgage rates won't stimulate demand,'' said Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis. ``The Fed may be a little impotent here because what caused this housing crash was overpriced housing, not mortgages.''
The average 30-year fixed mortgage rose 0.10 of a percentage point to 6.08 percent today, according to North Palm Beach, Florida-based Bankrate.com's survey of banks and lenders in the 50 U.S. states. It peaked this year at 6.42 percent on June 14, Bankrate.com said.
The housing industry, now in the second year of its worst recession since 1991, erased 0.6 percent from gross domestic product in the second quarter. Home prices probably will fall on a year-over-year basis for the first time since the Great Depression of the 1930s, Anderson said.....
09-25-2007, 04:31 PM
#886
Make MyTL Great Again
Originally Posted by Fibonacci
Fed's Rate Cut May Give Little Relief to Homeowners
http://www.bloomberg.com/apps/news?p...d=aPsVlLnMH164
http://www.bloomberg.com/apps/news?p...d=aPsVlLnMH164
I'm disappointed so far. Rates haves actually increased since the announcement and prices are still high.
09-25-2007, 04:37 PM
#887
Houses Won't Depreciate?
Thread Starter
Join Date: Feb 2003
Location: Weston, FL
Posts: 6,238
Likes: 0
Received 0 Likes
on
0 Posts
^^ With a weak dollar, we "might" have a chance of getting outside investor buying houses, and thus, not letting the prices go down that fast.
09-26-2007, 02:01 AM
#888
Moderator Alumnus
Originally Posted by Fibonacci
The Dubya tax cuts weren't initiated because of the tech bubble bursting, they were spawned because of the Budget Surplus at the time.
There never was a surplus because by Q2 01 the GDP had fallen to 0.2%. The tax cuts were framed as a "shot in the arm" for the economy.
And the 03 tax cuts were clearly due to the weak economy which was due in large part to the stock marker bubble bursting.
10-16-2007, 06:50 PM
#890
Moderator Alumnus
Trouble appearing in the great white north... 
Cracks are starting to show in the Alberta housing market, with a flood of new listings dramatically outpacing the number of resale homes sold in the third quarter.
There has been a surge of new listings in Edmonton and Calgary as home owners seek to cash in while prices remain high. Listings of resale homes in Edmonton rose almost 51 per cent this September from the year before to 3,919 units, according to third-quarter data on the country's resale housing market released by the Canadian Real Estate Association (CREA).
However, sales slipped by 44 per cent compared with September, 2006, to 1,042 units.
In Calgary, 5,330 residences hit the market last month, an 11 per cent increase from the year before. But sales for the month fell by 11 per cent year-over-year to 1,935 units.
“Momentum is fading fast in the Alberta housing market,” said Robert Kavcic, economic analyst at BMO Capital Markets, in a research note. In September, sales in Edmonton had their sharpest decline since the early 1980s, Mr. Kavcic said.
While soaring prices are drawing sellers in droves, it also means potential buyers in Alberta are waiting or being priced out of the market.
http://www.reportonbusiness.com/serv...l_gam_mostview
Cracks are starting to show in the Alberta housing market, with a flood of new listings dramatically outpacing the number of resale homes sold in the third quarter.
There has been a surge of new listings in Edmonton and Calgary as home owners seek to cash in while prices remain high. Listings of resale homes in Edmonton rose almost 51 per cent this September from the year before to 3,919 units, according to third-quarter data on the country's resale housing market released by the Canadian Real Estate Association (CREA).
However, sales slipped by 44 per cent compared with September, 2006, to 1,042 units.
In Calgary, 5,330 residences hit the market last month, an 11 per cent increase from the year before. But sales for the month fell by 11 per cent year-over-year to 1,935 units.
“Momentum is fading fast in the Alberta housing market,” said Robert Kavcic, economic analyst at BMO Capital Markets, in a research note. In September, sales in Edmonton had their sharpest decline since the early 1980s, Mr. Kavcic said.
While soaring prices are drawing sellers in droves, it also means potential buyers in Alberta are waiting or being priced out of the market.
http://www.reportonbusiness.com/serv...l_gam_mostview
10-26-2007, 07:27 PM
#891
I feel the need...
U.S. Housing Decline Threatens to Last Into 2009
Originally Posted by Silver™
And the 03 tax cuts were clearly due to the weak economy which was due in large part to the stock marker bubble bursting.
Anyways, back on topic...
Ivy Zelman's view of the U.S. housing market is gloomy, but it's probably the most realistic.
A veteran Wall Street analyst, Zelman, chief executive of the research firm Zelman & Associates, says it's unlikely the U.S. housing market will recover before 2009, adding there's a ``50 to 60 percent chance of a recession,'' as the housing slump curbs consumer spending.
Zelman paints a much darker picture than Federal Reserve Chairman Ben Bernanke, who said last week that housing will be a ``significant drag'' on the economy into next year.
When you consider the huge home inventories and tight-as-a- drum mortgage restrictions, it's easy to conclude that the housing slump could extend well past 2008. Unless financing loosens up and buyers return, her prophecy will become a reality.
``I've never seen the market as bad as this,'' Zelman said. ``And it could get worse. The home-price decline could range from 16 percent to 22 percent.''
Monitoring inventory, builder incentives and demand, Zelman is also watching adjustable-rate mortgage resets. Homeowners with these loans will automatically face higher monthly payments that they may not be able to afford, another trigger for foreclosures or sales. Some $500 billion of these loans will re- adjust through 2008, Zelman says.
While foreclosures have declined somewhat from August to September, they still doubled from a year ago, according to RealtyTrac Inc., which monitors the housing market. Since more homes are coming on the market, Zelman says that will only add to the misery.....
A veteran Wall Street analyst, Zelman, chief executive of the research firm Zelman & Associates, says it's unlikely the U.S. housing market will recover before 2009, adding there's a ``50 to 60 percent chance of a recession,'' as the housing slump curbs consumer spending.
Zelman paints a much darker picture than Federal Reserve Chairman Ben Bernanke, who said last week that housing will be a ``significant drag'' on the economy into next year.
When you consider the huge home inventories and tight-as-a- drum mortgage restrictions, it's easy to conclude that the housing slump could extend well past 2008. Unless financing loosens up and buyers return, her prophecy will become a reality.
``I've never seen the market as bad as this,'' Zelman said. ``And it could get worse. The home-price decline could range from 16 percent to 22 percent.''
Monitoring inventory, builder incentives and demand, Zelman is also watching adjustable-rate mortgage resets. Homeowners with these loans will automatically face higher monthly payments that they may not be able to afford, another trigger for foreclosures or sales. Some $500 billion of these loans will re- adjust through 2008, Zelman says.
While foreclosures have declined somewhat from August to September, they still doubled from a year ago, according to RealtyTrac Inc., which monitors the housing market. Since more homes are coming on the market, Zelman says that will only add to the misery.....
11-20-2007, 04:39 PM
#893
Freddie Mac has hired Goldman Sachs and Lehman Brothers to help it look into raising capital and said it is seriously considering cutting its fourth-quarter dividend in half.
The quasigovernmental company, which buys residential mortgages and mortgage-related securities, made the announcement as it reported a loss of $2 billion for the third quarter ended Sept. 30. Freddie Mac attributed the loss to a higher provision for credit losses and a markdown in the value of its assets.
http://www.thestreet.com/_yahoo/news...FREE&cm_ite=NA
Mortgage financing firm Freddie Mac rocked the credit markets further Tuesday as it reported a large loss along with an $8.1 billion drop in the value of its assets, as it set aside $1.2 billion to cover credit losses.
The firm reported a net loss of $2 billion, or $3.29 a share, in the period, wider than the loss of $715 million, or $1.17 a share, a year earlier.
http://money.cnn.com/2007/11/20/news...ion=2007112008
The quasigovernmental company, which buys residential mortgages and mortgage-related securities, made the announcement as it reported a loss of $2 billion for the third quarter ended Sept. 30. Freddie Mac attributed the loss to a higher provision for credit losses and a markdown in the value of its assets.
http://www.thestreet.com/_yahoo/news...FREE&cm_ite=NA
Mortgage financing firm Freddie Mac rocked the credit markets further Tuesday as it reported a large loss along with an $8.1 billion drop in the value of its assets, as it set aside $1.2 billion to cover credit losses.
The firm reported a net loss of $2 billion, or $3.29 a share, in the period, wider than the loss of $715 million, or $1.17 a share, a year earlier.
http://money.cnn.com/2007/11/20/news...ion=2007112008
11-20-2007, 05:52 PM
#894
I feel the need...
At Subprime Event Too Early to Tell Who'll Survive
They dubbed it ``The Survivors' Conference.'' In early November, 2,000 people who handle asset- backed securities for a living crowded into a ballroom at the JW Marriott hotel in Orlando, Florida, just 3 miles from Disney World, to hear speaker after speaker explain why 2008 may be their worst year ever.
The subprime crisis, which has claimed the jobs of three chief executive officers and prompted more than $45 billion in writedowns at the world's biggest banks, may end up spilling into 2009.
``These events tend to become deeper and play out longer than most people initially expect,'' says Michael Mayo, an analyst who covers securities firms at Deutsche Bank AG in New York. ``This is one of the slowest-moving train wrecks we've seen.''
The tumbling U.S. housing market will continue to inflict the damage. Mortgage-backed securities and collateralized debt obligations containing those securities are falling in price and won't find their footing anytime soon. That's because most of the subprime mortgages, which provide collateral for $800 billion in securities, have yet to go bad, says Christopher Whalen of Hawthorne, California-based Institutional Risk Analytics.....
The subprime crisis, which has claimed the jobs of three chief executive officers and prompted more than $45 billion in writedowns at the world's biggest banks, may end up spilling into 2009.
``These events tend to become deeper and play out longer than most people initially expect,'' says Michael Mayo, an analyst who covers securities firms at Deutsche Bank AG in New York. ``This is one of the slowest-moving train wrecks we've seen.''
The tumbling U.S. housing market will continue to inflict the damage. Mortgage-backed securities and collateralized debt obligations containing those securities are falling in price and won't find their footing anytime soon. That's because most of the subprime mortgages, which provide collateral for $800 billion in securities, have yet to go bad, says Christopher Whalen of Hawthorne, California-based Institutional Risk Analytics.....
11-20-2007, 06:43 PM
#896
I feel the need...
^^ When they hit teh bottom... 
I've been knocked for being Dr. Doom, but my caution was based on sound reasoning. The best investments often to turn out to be the out of favor sectors - dunno when exactly we'll see the bottom on REITS, they are not my area of specialty, but as a general rule, I love dividend and income plays. REITS are getting back to attractive levels.
http://money.cnn.com/2007/10/17/pf/e...pert.moneymag/
I've been knocked for being Dr. Doom, but my caution was based on sound reasoning. The best investments often to turn out to be the out of favor sectors - dunno when exactly we'll see the bottom on REITS, they are not my area of specialty, but as a general rule, I love dividend and income plays. REITS are getting back to attractive levels.
http://money.cnn.com/2007/10/17/pf/e...pert.moneymag/
11-20-2007, 10:21 PM
#897
Originally Posted by Silver™
Trouble appearing in the great white north...
Cracks are starting to show in the Alberta housing market, with a flood of new listings dramatically outpacing the number of resale homes sold in the third quarter.
There has been a surge of new listings in Edmonton and Calgary as home owners seek to cash in while prices remain high. Listings of resale homes in Edmonton rose almost 51 per cent this September from the year before to 3,919 units, according to third-quarter data on the country's resale housing market released by the Canadian Real Estate Association (CREA).
However, sales slipped by 44 per cent compared with September, 2006, to 1,042 units.
In Calgary, 5,330 residences hit the market last month, an 11 per cent increase from the year before. But sales for the month fell by 11 per cent year-over-year to 1,935 units.
“Momentum is fading fast in the Alberta housing market,” said Robert Kavcic, economic analyst at BMO Capital Markets, in a research note. In September, sales in Edmonton had their sharpest decline since the early 1980s, Mr. Kavcic said.
While soaring prices are drawing sellers in droves, it also means potential buyers in Alberta are waiting or being priced out of the market.
http://www.reportonbusiness.com/serv...l_gam_mostview
Cracks are starting to show in the Alberta housing market, with a flood of new listings dramatically outpacing the number of resale homes sold in the third quarter.
There has been a surge of new listings in Edmonton and Calgary as home owners seek to cash in while prices remain high. Listings of resale homes in Edmonton rose almost 51 per cent this September from the year before to 3,919 units, according to third-quarter data on the country's resale housing market released by the Canadian Real Estate Association (CREA).
However, sales slipped by 44 per cent compared with September, 2006, to 1,042 units.
In Calgary, 5,330 residences hit the market last month, an 11 per cent increase from the year before. But sales for the month fell by 11 per cent year-over-year to 1,935 units.
“Momentum is fading fast in the Alberta housing market,” said Robert Kavcic, economic analyst at BMO Capital Markets, in a research note. In September, sales in Edmonton had their sharpest decline since the early 1980s, Mr. Kavcic said.
While soaring prices are drawing sellers in droves, it also means potential buyers in Alberta are waiting or being priced out of the market.
http://www.reportonbusiness.com/serv...l_gam_mostview
Terry
11-21-2007, 02:08 PM
#898
Moderator Alumnus
For Amis...
When it comes to nasty surprises, this is the credit crisis that keeps on giving. Until recently it had been assumed that Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that tower over America’s mortgage market, could survive the storm with merely a few bruises. They may own or guarantee almost half of the $11 trillion in outstanding loans but, the thinking went, they would avoid severe pain because they had generally stuck to good-quality credits. Indeed, they even stood to benefit as rival sources of funding dried up.
That script is now being dramatically rewritten. Earlier this month, Fannie posted a $1.4 billion quarterly loss. An even bigger blow came on Tuesday November 20th, when Freddie joined its ugly sister in the red, to the tune of $2 billion, and said that it would seek (read: have) to raise new capital to shore up its balance sheet. Fannie has already tapped markets for more than $500m in fresh equity. Freddie’s share price dropped by 29% on the day of its results, wiping out several years of gains.
Only a few weeks ago, politicians were calling for the lifting of regulatory caps on the portfolios of GSEs—imposed in 2005 after they were found to have mis-stated profits by a combined $11.3 billion—so that they could take up the slack in the mortgage market as private lenders fold or retreat. They have already picked up a lot of extra business and have also been able to raise the fees they charge to guarantee loans. But their capital squeeze—Freddie is down to a mere $600m more than the required minimum—leaves them poorly placed to continue serving as liquidity providers of last resort. As they tighten the spigot to conserve equity, the result will be to exacerbate the housing downturn, says Howard Shapiro of Fox-Pitt, Kelton.
Unlike many banks, Fannie and Freddie are not waist-deep in the most complex and radioactive structured products, collateralised-debt obligations. They stuck to simple loans and relatively straightforward mortgage-backed bonds. But they took on more risk in recent years, including substantial amounts of paper linked to adjustable-rate mortgages (ARMs) for low-income borrowers. ARMs and securities tied to them accounted for almost a fifth of Freddie’s new business in 2006, up from negligible amounts five years earlier.
Actual credit losses are only part of the problem. Freddie set aside $1.2 billion for such hits in the third quarter. Its accountants forced it to mark down other assets by three times that amount to reflect sagging market prices, even though most of them will be held to maturity. Anthony Piszel, the firm’s chief financial officer, says that its numbers are distorted by lots of “uneconomic noise” such as the requirement that Freddie mark its derivatives book to daily market prices, while not being allowed to record offsetting gains in its loan portfolio until much later.
Things would also look less bad if Fannie and Freddie did not have to keep their capital-to-assets ratio 30% above normal requirements. They have been lobbying hard for this “surcharge”—also introduced after their accounting scandals—to be removed. But their regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), first wants to see more progress in improving risk management and internal controls. “This kind of market increases operational risk,” says James Lockhart, OFHEO’s director. Among those who agree with this assessment is the Treasury. It worries about the “systemic risk” posed by the GSEs by virtue of their enormous portfolios, and derivatives markets: the cost of insuring Freddie’s debt against default leapt this week, despite an implicit government guarantee that allows it to borrow at rock-bottom rates.
Mr Piszel told analysts this week that the fourth quarter “will not be pretty”. Nor, in all likelihood, will several after that. Another concern is that the woes ripple out, hurting banks that rely on them to buy or guarantee their mortgages. It was no coincidence that Countrywide, America’s biggest mortgage lender, was forced to deny rumours of imminent bankruptcy on the day that Freddie broke its bad news. If losses continue to eat into the housing giants’ capital cushions, they will not be the only ones left sitting uncomfortably.
http://www.economist.com/daily/news/...58&top_story=1
When it comes to nasty surprises, this is the credit crisis that keeps on giving. Until recently it had been assumed that Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that tower over America’s mortgage market, could survive the storm with merely a few bruises. They may own or guarantee almost half of the $11 trillion in outstanding loans but, the thinking went, they would avoid severe pain because they had generally stuck to good-quality credits. Indeed, they even stood to benefit as rival sources of funding dried up.
That script is now being dramatically rewritten. Earlier this month, Fannie posted a $1.4 billion quarterly loss. An even bigger blow came on Tuesday November 20th, when Freddie joined its ugly sister in the red, to the tune of $2 billion, and said that it would seek (read: have) to raise new capital to shore up its balance sheet. Fannie has already tapped markets for more than $500m in fresh equity. Freddie’s share price dropped by 29% on the day of its results, wiping out several years of gains.
Only a few weeks ago, politicians were calling for the lifting of regulatory caps on the portfolios of GSEs—imposed in 2005 after they were found to have mis-stated profits by a combined $11.3 billion—so that they could take up the slack in the mortgage market as private lenders fold or retreat. They have already picked up a lot of extra business and have also been able to raise the fees they charge to guarantee loans. But their capital squeeze—Freddie is down to a mere $600m more than the required minimum—leaves them poorly placed to continue serving as liquidity providers of last resort. As they tighten the spigot to conserve equity, the result will be to exacerbate the housing downturn, says Howard Shapiro of Fox-Pitt, Kelton.
Unlike many banks, Fannie and Freddie are not waist-deep in the most complex and radioactive structured products, collateralised-debt obligations. They stuck to simple loans and relatively straightforward mortgage-backed bonds. But they took on more risk in recent years, including substantial amounts of paper linked to adjustable-rate mortgages (ARMs) for low-income borrowers. ARMs and securities tied to them accounted for almost a fifth of Freddie’s new business in 2006, up from negligible amounts five years earlier.
Actual credit losses are only part of the problem. Freddie set aside $1.2 billion for such hits in the third quarter. Its accountants forced it to mark down other assets by three times that amount to reflect sagging market prices, even though most of them will be held to maturity. Anthony Piszel, the firm’s chief financial officer, says that its numbers are distorted by lots of “uneconomic noise” such as the requirement that Freddie mark its derivatives book to daily market prices, while not being allowed to record offsetting gains in its loan portfolio until much later.
Things would also look less bad if Fannie and Freddie did not have to keep their capital-to-assets ratio 30% above normal requirements. They have been lobbying hard for this “surcharge”—also introduced after their accounting scandals—to be removed. But their regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), first wants to see more progress in improving risk management and internal controls. “This kind of market increases operational risk,” says James Lockhart, OFHEO’s director. Among those who agree with this assessment is the Treasury. It worries about the “systemic risk” posed by the GSEs by virtue of their enormous portfolios, and derivatives markets: the cost of insuring Freddie’s debt against default leapt this week, despite an implicit government guarantee that allows it to borrow at rock-bottom rates.
Mr Piszel told analysts this week that the fourth quarter “will not be pretty”. Nor, in all likelihood, will several after that. Another concern is that the woes ripple out, hurting banks that rely on them to buy or guarantee their mortgages. It was no coincidence that Countrywide, America’s biggest mortgage lender, was forced to deny rumours of imminent bankruptcy on the day that Freddie broke its bad news. If losses continue to eat into the housing giants’ capital cushions, they will not be the only ones left sitting uncomfortably.
http://www.economist.com/daily/news/...58&top_story=1
11-21-2007, 04:06 PM
#899
Originally Posted by Silver™
Thank Silver,
On a related note: Sen. Chuck Schumer (D-N.Y.) is a moron.
Schumer wants Fannie and Freddie to be able to take on $1 million loans.
It shouldn't surprise anyone that Sen. Chuck Schumer thinks this is a peachy idea. Chuck -- who, of course, said absolutely nothing about the problems and excesses in lending while the housing bubble was inflating -- has been making hay about the correction for months.
That's understandable. After all, his Wall Street constituents -- Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS), and Wachovia (NYSE: WB) -- need a major metaphorical Heimlich to save them from choking on a diet of bad-loan dog food of their own making.
A taxpayer-sponsored plan to let Fannie and Freddie buy up big loans would certainly help them out, providing the "liquidity" that real investors -- quite rightly -- are loath to provide these days.
http://www.fool.com/investing/value/...ur-pocket.aspx
Top Contributors to Charles E. Schumer (D) During the 2006 Election Cycle
1. JP Morgan Chase & Co - $129,800
2. Merrill Lynch - $127,000
3. Bear Stearns - $126,400
4. Citigroup Inc - $111,550
5. Morgan Stanley - $109,500
http://www.sourcewatch.org/index.php...=Chuck_Schumer
11-21-2007, 05:19 PM
#900
Moderator Alumnus
Originally Posted by amisconception
On a related note: Sen. Chuck Schumer (D-N.Y.) is a moron.
Schumer wants Fannie and Freddie to be able to take on $1 million loans.
It shouldn't surprise anyone that Sen. Chuck Schumer thinks this is a peachy idea. Chuck -- who, of course, said absolutely nothing about the problems and excesses in lending while the housing bubble was inflating -- has been making hay about the correction for months.
That's understandable. After all, his Wall Street constituents -- Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS), and Wachovia (NYSE: WB) -- need a major metaphorical Heimlich to save them from choking on a diet of bad-loan dog food of their own making.
A taxpayer-sponsored plan to let Fannie and Freddie buy up big loans would certainly help them out, providing the "liquidity" that real investors -- quite rightly -- are loath to provide these days.
http://www.fool.com/investing/value/...ur-pocket.aspx
Top Contributors to Charles E. Schumer (D) During the 2006 Election Cycle
1. JP Morgan Chase & Co - $129,800
2. Merrill Lynch - $127,000
3. Bear Stearns - $126,400
4. Citigroup Inc - $111,550
5. Morgan Stanley - $109,500
http://www.sourcewatch.org/index.php...=Chuck_Schumer
Schumer wants Fannie and Freddie to be able to take on $1 million loans.
It shouldn't surprise anyone that Sen. Chuck Schumer thinks this is a peachy idea. Chuck -- who, of course, said absolutely nothing about the problems and excesses in lending while the housing bubble was inflating -- has been making hay about the correction for months.
That's understandable. After all, his Wall Street constituents -- Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS), and Wachovia (NYSE: WB) -- need a major metaphorical Heimlich to save them from choking on a diet of bad-loan dog food of their own making.
A taxpayer-sponsored plan to let Fannie and Freddie buy up big loans would certainly help them out, providing the "liquidity" that real investors -- quite rightly -- are loath to provide these days.
http://www.fool.com/investing/value/...ur-pocket.aspx
Top Contributors to Charles E. Schumer (D) During the 2006 Election Cycle
1. JP Morgan Chase & Co - $129,800
2. Merrill Lynch - $127,000
3. Bear Stearns - $126,400
4. Citigroup Inc - $111,550
5. Morgan Stanley - $109,500
http://www.sourcewatch.org/index.php...=Chuck_Schumer
The average home price in CA is over $500K. With loans being capped at IIRC $417K is means an awful number of middle class buyers can't get the loans they need to buy in many areas of the country that have starter homes in the $700K+ range. You know SoCal real estate.
11-21-2007, 06:12 PM
#902
Originally Posted by Silver™
The average home price in CA is over $500K. With loans being capped at IIRC $417K is means an awful number of middle class buyers can't get the loans they need to buy in many areas of the country that have starter homes in the $700K+ range. You know SoCal real estate.
Californians used a disproportionately higher amount of sub-prime/Alt-A/Option-ARM mortgages to fuel the boom here. (http://www.economist.com/opinion/dis...ory_id=8885853)
A lot of which are still set to reset:
Out of the top 10 metro area foreclosures in the country, 5 are in CA. (http://www.msnbc.msn.com/id/21773741/)
Add to that the glut of new construction AND foreclosures by non-owned investment properties and you can see where this is headed.
FNMA's original mission statement was to provide mortgages for affordable housing. A $1mil dollar house certainly does not fall under the category of affordable housing.
11-21-2007, 06:22 PM
#903
has Gloryhole Girls in
Join Date: Mar 2001
Location: Ballston Lake, NY
Age: 48
Posts: 11,473
Likes: 0
Received 1 Like
on
1 Post
The shit sub prime loans were all written mostly in 2006 when you could get 100% stated income stated asset non owner occupied financing with sub par credit (580 fico) and they wont adjust till 2008-2009 so we haven't seen anything yet. Most of these people will simply walk away from these properties because they put little or nothing into them at the time they bought them and they won't be able to afford them when the rate adjusts.
11-21-2007, 06:24 PM
#904
Moderator Alumnus
Originally Posted by fdl
What can I get in Cali for $500K?
If you are serious though, perhaps I could interest you in this fine specimen of SoCal real estate. Don't let the name of the city scare you away, this is one of the most Canadian friendly neighborhoods in LA. It is a little over your budget but this property has income potential, during the months you are back in Canada you can rent it out to the local drug dealers and make it into a crack house.
http://www.redfin.com/stingray/do/pr...ing-id=1218742
11-21-2007, 06:29 PM
#905
Moderator Alumnus
Originally Posted by amisconception
The average home price in CA is over $500k because they're largely overvalued. Overvalued using any method of valuation.
The value is what the market will pay. And people want to pay and they can pay, they just can't get loans right now because the jumbo loans are drying up.
You know how hard is is to get a housing development done is CA. We will need to build as fast as we can just to try and catch up with the population projections.
CA has always had high prices for a reason.
11-21-2007, 06:37 PM
#906
Originally Posted by Silver™
The value is what the market will pay. And people want to pay and they can pay, they just can't get loans right now because the jumbo loans are drying up.
You know how hard is is to get a housing development done is CA. We will need to build as fast as we can just to try and catch up with the population projections.
CA has always had high prices for a reason.
You know how hard is is to get a housing development done is CA. We will need to build as fast as we can just to try and catch up with the population projections.
CA has always had high prices for a reason.
The liquidity in the jumbo loan world is evidence of this. Were it not for the GSE's, guidelines would return back to reality (like the jumbo loan world).
Let me ask you this to put it in perspective: Do you believe home prices in CA on average will go up in the next 2 years or down?
11-21-2007, 09:35 PM
#908
Senior Moderator
Originally Posted by Silver™
Are you talking about real money or your worthless canadian money.
If you are serious though, perhaps I could interest you in this fine specimen of SoCal real estate. Don't let the name of the city scare you away, this is one of the most Canadian friendly neighborhoods in LA. It is a little over your budget but this property has income potential, during the months you are back in Canada you can rent it out to the local drug dealers and make it into a crack house.
http://www.redfin.com/stingray/do/pr...ing-id=1218742
If you are serious though, perhaps I could interest you in this fine specimen of SoCal real estate. Don't let the name of the city scare you away, this is one of the most Canadian friendly neighborhoods in LA. It is a little over your budget but this property has income potential, during the months you are back in Canada you can rent it out to the local drug dealers and make it into a crack house.
http://www.redfin.com/stingray/do/pr...ing-id=1218742
11-22-2007, 12:11 AM
#909
Moderator Alumnus
Originally Posted by amisconception
Silver, the reason people were able to afford the mortgages that blew CA's median home sales price up was because of very, very, very loose guidelines/underwriting that will NEVER come back. These people simply could not afford the homes. The pseudo-affordability is what drove these home prices higher than statistical averages.
How much higher did prices go because of that? How much would they have gone up otherwise?
And the loan market has swung to the opposite extreme and made credit too tight.
Let me ask you this to put it in perspective: Do you believe home prices in CA on average will go up in the next 2 years or down?
Likely a small decrease if you look at it over a 2 year period, over the long term it will remain a great investment. Most people are doing just fine from an equity standpoint, unless you bought since 05 and were a first time buyer.
California's population will grow by about 1,000,000 per year. The low dollar will allow foreign buyers to buy into California, certainly one of the most desirable markets in the world. High paying industries will continue to grow (hi-tech, entertainment, bio-tech, etc...).
11-22-2007, 02:11 AM
#910
Moderator Alumnus
California brokered a deal with four major loan servicing companies that would aid homeowners on brink of default by extending low, introductory interest rates on mortgages.
The agreement with Gov. Arnold Schwarzenegger includes Countrywide Financial Corp., GMAC Financial Services, Litton Loan Serving and HomEq Servicing.
http://www.msnbc.msn.com/id/21914618/
The agreement with Gov. Arnold Schwarzenegger includes Countrywide Financial Corp., GMAC Financial Services, Litton Loan Serving and HomEq Servicing.
http://www.msnbc.msn.com/id/21914618/
11-30-2007, 11:39 AM
#911
Moderator Alumnus
The Bush administration is working behind the scenes with industry on a plan to extend lower, introductory interest rates on home loans before they reset at higher levels amid hints by Fed Chairman Ben Bernanke of another cut in a key interest rate to keep the economy from falling into recession.
Treasury Secretary Henry C. Paulson and other top regulators met Thursday with loan servicing companies — firms that collect and distribute loan payments — and other industry executives. No formal agreement was announced, but an accord on this issue could be be revealed in the next week or two.
“We’ve all agreed that there should be some sort of standardized approach to reaching more homeowners faster,” Treasury Department spokeswoman Jennifer Zuccarelli, who declined to name those at the meeting, said in response to questions.
A story published Thursday by American Banker named Washington Mutual Inc., Countrywide Financial Corp., Wells Fargo & Co. and JPMorgan Chase & Co. as companies participating in the briefing.
http://www.msnbc.msn.com/id/22039594/
Treasury Secretary Henry C. Paulson and other top regulators met Thursday with loan servicing companies — firms that collect and distribute loan payments — and other industry executives. No formal agreement was announced, but an accord on this issue could be be revealed in the next week or two.
“We’ve all agreed that there should be some sort of standardized approach to reaching more homeowners faster,” Treasury Department spokeswoman Jennifer Zuccarelli, who declined to name those at the meeting, said in response to questions.
A story published Thursday by American Banker named Washington Mutual Inc., Countrywide Financial Corp., Wells Fargo & Co. and JPMorgan Chase & Co. as companies participating in the briefing.
http://www.msnbc.msn.com/id/22039594/
11-30-2007, 04:10 PM
#912
I feel the need...
Housing Slump's Third Year to Be `Deepest' Since WWII
Originally Posted by Silver™
The Bush administration is working behind the scenes with industry on a plan to extend lower, introductory interest rates on home loans before they reset at higher levels....
Hope they can pull this off better than Katrina, can't wait to see my bill for this taxpayer funded bail out. 
Does
care to take back his words about the Housing Bubble Hangover not being worse than the Internet Tech Wreck of 2001-2002??? 
As the U.S. housing slump enters its third year, there is no sign of dawn in the darkness that is paralyzing home building, home buying and home lending.
Standard & Poor's 15-member Supercomposite Homebuilding Index tumbled 62 percent this year as of yesterday, the largest drop since the benchmark was started in 1995. The companies have lost about $35 billion of market value.
The outlook is bleak with new home sales projected to fall 13 percent in 2008, according to estimates from the National Association of Realtors in Chicago, even as interest rates drop. Losses at Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing, may restrict the availability of home loans, and chief executive officers at D.R. Horton Inc. and Centex Corp. expect another tough year.
``This looks like it's going to be the deepest correction of any housing correction since World War II, and the question really is, `What's the duration, how long will it be?''' Centex CEO Timothy Eller said at a JPMorgan Chase & Co. conference in Las Vegas on Nov. 27.....
Standard & Poor's 15-member Supercomposite Homebuilding Index tumbled 62 percent this year as of yesterday, the largest drop since the benchmark was started in 1995. The companies have lost about $35 billion of market value.
The outlook is bleak with new home sales projected to fall 13 percent in 2008, according to estimates from the National Association of Realtors in Chicago, even as interest rates drop. Losses at Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing, may restrict the availability of home loans, and chief executive officers at D.R. Horton Inc. and Centex Corp. expect another tough year.
``This looks like it's going to be the deepest correction of any housing correction since World War II, and the question really is, `What's the duration, how long will it be?''' Centex CEO Timothy Eller said at a JPMorgan Chase & Co. conference in Las Vegas on Nov. 27.....
11-30-2007, 04:40 PM
#913
Moderator Alumnus
Originally Posted by Fibonacci
Does
care to take back his words about the Housing Bubble Hangover not being worse than the Internet Tech Wreck of 2001-2002??? Most people who did not buy their first home since 2005 are doing just fine
And are you ever going to admit that the tax cuts after 01 were due in large part to the economic downturn that resulted from the "tech wreck"?
12-03-2007, 04:59 PM
#914
I feel the need...
Foreclosure gridlock threatens economy
Originally Posted by Silver™
Most people who did not buy their first home since 2005 are doing just fine
And are you ever going to admit that the tax cuts after 01 were due in large part to the economic downturn that resulted from the "tech wreck"?
12-03-2007, 05:06 PM
#915
Moderator Alumnus
Originally Posted by Fibonacci
See post 891
If you were only talking about the 2001 tax cuts you would be partly right, but the remaining tax cuts were due to and framed around the need for economic stimulus post dot-com crash and post 9/11.
There was no surplus in 2003
12-03-2007, 05:09 PM
#916
Moderator Alumnus
Originally Posted by Fibonacci
Millions in limbo, some of whom are screwed, but there are another 100 million homeowners out there...
12-03-2007, 08:19 PM
#917
I feel the need...
Originally Posted by Silver™
If you were only talking about the 2001 tax cuts you would be partly right.....
There was no surplus in 2003
Millions in limbo, some of whom are screwed, but there are another 100 million homeowners out there...
You must surely be a glutton for punishment - stringing your posts of denial from the day one must surely be an embarrassment, oh -- I forgot,
has no shame! 
12-04-2007, 01:27 AM
#918
Moderator Alumnus
Originally Posted by Fibonacci
Tax cut talk was spawned in '01 - thanks for confirming.
***cough***
Over the past several months, the economy has slowed dramatically. President Bush’s tax cut will give the economy a timely second wind by placing more money in the hands of consumers and entrepreneurs.
---
Every week we hear about another round of layoffs. Last month, Federal Reserve Chairman Alan Greenspan testified that the economy had almost stopped growing. President Bush believes that the best way to ensure that prosperity continues is to put more money in the hands of consumers and entrepreneurs. That is why he advocates cutting tax rates now. President Bush will work with the Congress to accelerate a portion of his tax plan to the beginning of 2001. An immediate tax cut would give the economy a timely second wind.
http://www.whitehouse.gov/news/reports/taxplan.html
***cough***
There are 300 million Americans, I'm pretty sure 1 out of 3 American's are NOT homeowners. And you're missing my point - I'm not saying EVERY homeowner is screwed, just that the implications of the housing bubble have farther reaching effects than the dot-com bubble bursting as evidenced by so called talk of a taxpayer funded bailout of sub-prime borrowers.
And my point is that the majority of people will weather this just fine.
12-04-2007, 01:28 AM
#919
Moderator Alumnus
Many borrowers with subprime mortgages have reasonably good credit and may be able to refinance into a less costly mortgage by taking advantage of government programs, Eric Rosengren, president of the Federal Reserve Bank of Boston, said in a speech this morning.
Pulling from research conducted by members of the bank's staff, Mr. Rosengren noted that 55% of subprime adjustable-rate mortgages, where the owner occupied the home, hadn't missed a mortgage payment in the past year. That translates to about 1.2 million borrowers.
"These subprime borrowers may meet the credit standards required for FHA [Federal Housing Administration] guarantees or for similar state programs, with potentially a significant savings," Mr. Rosengren said in his speech, delivered in Boston at a breakfast sponsored by the Massachusetts Institute for a New Commonwealth. In addition, half of borrowers nationally -- and 71% of those in New England -- had "reasonable credit scores" of above 620 when they took out their mortgage.
---
Moreover, Mr. Rosengren said research by the Boston Fed shows that 20% of borrowers with subprime ARMS nationally -- and 26% of these borrowers in New England -- should be able to "relatively easily" refinance into a prime mortgage or a loan guarantee program. At the time they took out their original loan, these borrowers had credit scores above 620, at least 10% equity in their homes, provided full documentation of their income and assets and said they planned to live in the home.
http://online.wsj.com/article/SB119668898789911772.html
Pulling from research conducted by members of the bank's staff, Mr. Rosengren noted that 55% of subprime adjustable-rate mortgages, where the owner occupied the home, hadn't missed a mortgage payment in the past year. That translates to about 1.2 million borrowers.
"These subprime borrowers may meet the credit standards required for FHA [Federal Housing Administration] guarantees or for similar state programs, with potentially a significant savings," Mr. Rosengren said in his speech, delivered in Boston at a breakfast sponsored by the Massachusetts Institute for a New Commonwealth. In addition, half of borrowers nationally -- and 71% of those in New England -- had "reasonable credit scores" of above 620 when they took out their mortgage.
---
Moreover, Mr. Rosengren said research by the Boston Fed shows that 20% of borrowers with subprime ARMS nationally -- and 26% of these borrowers in New England -- should be able to "relatively easily" refinance into a prime mortgage or a loan guarantee program. At the time they took out their original loan, these borrowers had credit scores above 620, at least 10% equity in their homes, provided full documentation of their income and assets and said they planned to live in the home.
http://online.wsj.com/article/SB119668898789911772.html
12-04-2007, 01:29 AM
#920
Moderator Alumnus
Housing and Urban Development (HUD) Secretary Alphonso Jackson today predicted 70 pct of all sub-prime loans would not fall into foreclosure.
Speaking at the Office of Thrift Supervision's second annual housing forum, Jackson said not all sub-prime loans are bad, and said the government is working with private industry to differentiate between sub-prime loans that are good loans, and those that are structured in a way that pose a risk that delinquencies or foreclosures will follow.
He said the sub-prime crisis is at a 'decisive moment', and noted the US government needs to help set the housing market on the 'most positive course that we can'.
One way to help, Jackson said, is to require responsible lending standards, something the Federal Reserve is already working on.
Another step is to use existing government tools, and to improve them when possible. He said a new program at the Federal Housing Authority called FHA Secure is expected to help 80,000 families that are struggling with mortgage payments to refinance, and said FHA is expected to help another 160,000 borrowers next year.
A HUD statement released today said 33,000 borrowers have already refinanced their home through the program, which was announced in late September, and another 20,000 borrowers should be approved for refinancing this month. It added that the programme is saving homeowners an average of 400 usd a month in mortgage payments.
http://www.forbes.com/markets/feeds/...fx4398328.html
Speaking at the Office of Thrift Supervision's second annual housing forum, Jackson said not all sub-prime loans are bad, and said the government is working with private industry to differentiate between sub-prime loans that are good loans, and those that are structured in a way that pose a risk that delinquencies or foreclosures will follow.
He said the sub-prime crisis is at a 'decisive moment', and noted the US government needs to help set the housing market on the 'most positive course that we can'.
One way to help, Jackson said, is to require responsible lending standards, something the Federal Reserve is already working on.
Another step is to use existing government tools, and to improve them when possible. He said a new program at the Federal Housing Authority called FHA Secure is expected to help 80,000 families that are struggling with mortgage payments to refinance, and said FHA is expected to help another 160,000 borrowers next year.
A HUD statement released today said 33,000 borrowers have already refinanced their home through the program, which was announced in late September, and another 20,000 borrowers should be approved for refinancing this month. It added that the programme is saving homeowners an average of 400 usd a month in mortgage payments.
http://www.forbes.com/markets/feeds/...fx4398328.html