Mortgage Defaults Spreading to Higher Priced Areas
Submitted by
CalculatedRisk on Wed, 04/15/2009 - 1:55pm (153 comments)
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Not sure why anybody would actually pay their mortgage at this point.
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Nemo - Yup why not life for free - free rent!
Hmmm.....nobody but Nemo. I wonder if all is well?!
See my anecdote on thread below.
I told my guy to rent the property and I said in my letter to the lender that we were going to rent it.
But they don't ask for a receiver. They never do. I have no idea why.
CR when are you going to post things like "DA HAHAHAHHA I TOLD YOU SO! ! ! This game is just to damn easy!!!!"
Maybe some Friday night after everyones a little lighter.... Take it down quick in the morning! LOL!
I'm still waiting for the NAR to trumpet an increase in the price of housing cause of the changing dynamic of foreclosures....
I think 5 months from now....
(Tho the end of the f.c. moratorium might push that date out some....)
We'll see median house prices go up since there will actually be sales in the high end neighborhoods -- foreclosues & reo.
Live free or die!
Is this because of the dreaded option arm resets beginning?
--
It is well understood that the price declines move from periphery to the core and price decline is the #1 driver of foreclosures.
Jas
I think live free means something it didn't usta mean.
The free livers don't expect any dying to be part of the freebies.
Interesting how 'foreclosure-prone neighborhood' became a synonym for 'not a nice area'.
Well, that'll be changing, it seems.
Where have you been Jas?
"periphery to core"
It is like a wild fire: In the run-up the price increases spread outward. When the bubble pops, ... .
Nevermind, don't answer.
" Starbucks (member) wrote on Wed, 04/15/2009 - 3:05pm.
We'll see median house prices go up since there will actually be sales in the high end neighborhoods -- foreclosues & reo."
Yup, you are right on. I know of some neighborhoods in SoCal that have had ZERO transactions since last August. Once a few multi-million dollar homes go through foreclosure, the median will go up.
Unfortunately, for those holding the loans, losses will go up, since the really big checks will need to be written. Losing 50 - 100K on a loan is nothing compared to losing 1MM+ on a loan.
And in other news, Fannie/Freddie modified 24K loans in Q408.
About 15K of those are probably on the verge of re-defaulting.
I hear(t) toney bandos.
One of my clients is about 700k underwater. In South Fla, where prices never reached to strastphere found in Cali.
I know of another property where BankUnited is about a million bucks in the hole.
bandos, movin' on up
Picking up on Nemo's comment...
What if everyone w/a mortgage did just that, even if they were 1 payment from being done?
What if say everyone decided to not pay the mortgage, rent, lease, etc. for say 6 months. Sorry, but there aren't enough courts, judges, sheriffs, jails, etc. to us all in and in fact, some of those said people would be among us.
Interesting concept. Would probably kill the bankers once and for all, esp. if everyone said fuhgettaboudit regarding taxes, as well.
Wouldn't bother me one iota. Sure, I would lose my job since I am connected to RE property tax, but in the long run, it just might be healthier than what we have now!!!!!!!!!!!!!!!
Alas, my mtg is paid off. Should I take out a mtg and default on it?
Entrepreneurship lives on!!!
Staged Homes Being Burglarized
Piedmont has some nice, older houses -- in the Oakland/Berkeley hills area.
"reached a plateau in lower priced areas"= impact of fannie/freddie moratorium.
Brought to you by the folks from the Money Hole.
Treasury Department Issues Emergency Recall Of All U.S. Dollars | The Onion - America's Finest News Source
Brilliant!
Hey bandos, if you are in Fla, don't forget to post your tax notice and start paying taxes. You are more likely to win a house than you are the lottery.
McMansion stripping sounds more rewarding than stripping the defaulted bubble hovels
Byz,
Your observation from last thread re: UE and CC default rates put the lie to the canard that UE is a lagging indicator...not this time. It is a leading indicator of additional credit losses as the feedback effects from the rate of credit losses in the financial economy propagates through the real economy.
I feel I am viewing the scene from a great vantage point. I have seen the great flash of the explosion and now watch as the devastating shock wave expands in its hemisphere. . . inevitably towards me. I watch my leaders build feeble walls in its way.
I am not surprised when each wall fails. And yet, the wave will eventually get to me.
msn money headline sez that the stock mkt went up 'cause recession fears were fading.
Are they nutz?
that was a nice little spike at the end of the session today, reminded me of some of hank's better days
Do not underestimate the impact of the lifting of the moratoriums around the country, most notably the Fannie/Freddie stall. the Obama "plan" now gives all those servicers cover to start kicking people out of homes. I expect that to happen in spades now.
Median home prices may rise, as previously noted, but the decline in house prices will actually become more widespread. And the better indexes are repeat sales indexes, not medians. So, while the NAR will be spouting off about median house prices rising, Case Shiller will be showing further declines. I think we will see an acceleration of housing losses and house price declines through the summer, when they will finally start to bottom out at a new, lower level.
This activity will lead to the final failure of the rest of the MI industry, leaving the government with the choice of either propping them up or taking the MI risk directly (through suspending the Fannie/Freddie charters).
The Financial Guarantors will also finally fail (i.e. the states will have to take them over).
As far as the housing market goes, I think we are in the eye of the storm, not the edge of the storm.
now that glodman's making the bux, maybe there's some protection back in the plunge team
"msn money headline sez that the stock mkt went up 'cause recession fears were fading."
They have only to say it. If they say it, it must be true!
i always think teevee is truthier than my lying eyes
I like the eye of the storm analogy. Being from Fla, 'n' all.
What's to stop San Diego home prices from falling apart?
They seem highly vulnerable to military cuts, unlike anywhere else that played the housing bubble game.
I must say that I'm gaining a greater and greater respect for Jas Jain's economic, political, and social opinions.
Pssst - wanna buy a toxic asset?
maybe the eye of the storm metaphore is the inflation deflation thing. don't the winds change direction or something? first one side of your roof gets blown off, then the other side
Does anyone know where Hank is and what Hank is doing, you know I miss him. Getting blood transfusions probably, looked as if he was drained dry the last time he was out front on the TV.
GH: time to take the first step
admit that you are a crooked moron
Gavshire -
Before you go too far in buying into the Jainian worldview, you might want to look at the latest post over at Jesse's:
Jesse's Café Américain: This Is Your Economy on Credit Crack - and Heading for a Crack-Up
I have great faith in the ability of our government to eff things up, and that includes our currency.
If you look at Malibu and Calabasas, plenty of carnage, and not much selling. Calabasas has a median home price 70% off of a year ago, the worst performance in LA County except for what must be a horrible part of Palmdale where prices dropped from $250k to $55k in one year. Calabasas' median is below the jumbo conforming limit.
Malibu has 79 properties in various stages of foreclosure or REO. Malibu's median is 65% off from a year ago. Two things are going on to move the median that much. 1. Prices for particular homes keep dropping. 2. The mix of what is actually selling has moved strongly toward less expensive homes.
In both places, 2009 = 2002. Too bad so many homeowners loans = 2006.
Yep, Elmer. We were in the north eye wall in Andrew and the ruination was worst in the back of the house.
If you go thru the eye, the winds zap both sides.
The toxic asset thing was discussed on NPR a couple of days ago. Surprise, surprise, the problem is in valuing the assets!!
Eh? Riverside County considered upscale? When did that happen?
--if there is any uproar over the evolving story of Goldman Sachs's latest raid on the US Treasury, after booking billions in taxpayer-funded payouts funneled through AIG, based on double-hedged credit default swaps. Such magic tricks are understandably hard to follow, but a dozen-or-so federal attorneys with a middling background in differential calculus might suss out the trail that leads from Ben Bernanke's work station to Lloyd Blankfein's cappuccino machine.
--JHK
calabasas, sounds like a place where instead of running water you use gourds
Not a bond person....
Would anyone say that GM bonds maturing in 2033, 8.375% going for 19 cents on the dollar of face amount, yielding 91% a good deal? As a long term investment/long shot, is this worth considering?
Just wanted to ask...
"In both places, 2009 = 2002. "--SIG
2002 seems to be the magic number, I've seen it crop up here before. That's what I'm counting on in my own plans, at least.
i was going to send my taxes to the irs, but decided to cut out the middleman and sent the check directly to GS
"Would anyone say that GM bonds maturing in 2033, 8.375% going for 19 cents on the dollar of face amount, yielding 91% a good deal? As a long term investment/long shot, is this worth considering?"
91% is a great yield. How long will they pay? There is a reason for the low price. I would think of it as a lottery ticket, actually with better odds than a lottery ticket. If they don't default, in 2033 you get your -- actually somenone elses -- principal back. But very risky.
2002 ain't the magic number. That was at least a full 2 years into the bubble. We're looking at a return to 2000 home prices. BUT - that would have been the case even without job losses. Meaning: we're going back to the 90s.
One of my clients is about 700k underwater. In South Fla, where prices never reached to strastphere found in Cali.
I know of another property where BankUnited is about a million bucks in the hole. - Liz
:: ::
Wow - I thought somebody had to buy a farm to lose that kind of money. Got pictures or 'linkies'?
" some investor guy (member) wrote on Wed, 04/15/2009 - 3:44pm.
If you look at Malibu and Calabasas, plenty of carnage, and not much selling. "
Yeah, that whole area is in a state of denial - no buyers, so no sellers. Westlake is the same way. People are locked into their homes because they don't want to take a loss. the problem is some of the borrowers are going to be forced into selling because either their incomes drop or their payments spike.
This is going to be an especially big problem in SoCal and Florida, where many borrowers financed with Option ARMs (NorCal much less so, that was more of a jumbo hybrid market). Many of these OAs are 2005/2006 vintage, so should really start to explode soon. the problem isn't so much a fixed to floating issue, most OAs are floating anyway, and the indexes are dropping - it is a negam to fully am problem. Something like 60% of the OAs that hit their recast go down, and many are hitting their recast before their 5 years are up, as they hit their neg am cap first. this is happening because a lot of the min payments were based on 40 year ams.
Those forced recasts are coming in in droves, and no amount of modification is going to help - these borrowers lied about their income in the first place, and have no ability or incentive to pay a fully am, or even IO, payment. they will just walk.
oh, and a lot of these OAs have a second on top of them.
the explosion is coming.
9 cents
scone - 2002 nominal or real?
Elmer Fudd wrote on Wed, 04/15/2009 - 5:30pm.
that was a nice little spike at the end of the session today, reminded me of some of hank's better days
Timmay's learning - that and the 'China is not a manipulator' meme tells me he has come a long way...
[/snark]
"dryfly (member) wrote on Wed, 04/15/2009 - 3:56pm.
One of my clients is about 700k underwater. In South Fla, where prices never reached to strastphere found in Cali.
I know of another property where BankUnited is about a million bucks in the hole. - Liz
:: ::
Wow - I thought somebody had to buy a farm to lose that kind of money. Got pictures or 'linkies'?"
I can probably find a few that you can look up on Zillow, there are all kinds of examples out there.
Get the Led out...
Oh, nobody's default but mine
Nobody's default but mine, yeah
Trying to save my home tonight
Oh, it's nobody's default but mine
Sheriff he told me to roll
The sheriff he told me to go
How to roll on out tonight?
Nobody's default but mine
Ah, ah, ah ...
Somebody show me the (gun? door? gong?)
Sheriff hit me with the ding dong ding dong
I will get foreclosed out tonight ?????????
Oh, it's nobody's default but mine
That monkey on my back
The m-m-m-m-monkey on my back, back, back
Gonna change my ways tonight
Nobody's default but mine
Off to watch tv.
Market action at the end of the day was incredible. I'm missing the rumor...
Help Is On The Way For Those Less than 5% Underwater!!!
Where are my appraisers? There is work to be done!
scone - 2002 nominal or real? - y
Good question, I don't have a good answer. I do know that in 2002, Oregon was still recovering from the tech wreck, which was pretty severe up here, and my county was still messed up from the timber crash and the 90's recession. (Oregon never seems to get out of recession.) So that's where I'm guessing it will go. And it is a guess, to be sure. We shall see.
" Danny wrote on Wed, 04/15/2009 - 3:56pm.
2002 ain't the magic number. That was at least a full 2 years into the bubble. We're looking at a return to 2000 home prices. BUT - that would have been the case even without job losses. Meaning: we're going back to the 90s."
You'd have to go back to the '90s around here (coastal California) for housing prices to fall in line with prospective rental income. Of course by then rental prices may have fallen as well.
We've serious local job loss here, but the job loss that really matters in over the hill in Silicon Valley, where half the households get some or all of their money. When SV sneezes, we die.
Market action at the end of the day was incredible. I'm missing the rumor...
:: ::
Rumor is the recession is over...
I'm thinking we are going back to the future-1985 prices for homes.
What's to stop the prices from crumbing?
Every comp seems like a self-fulfilling prophecy of downside.
dryfly (member) wrote on Wed, 04/15/2009 - 7:15pm.
Rumor is the recession is over...
Well that's a relief.
Jesses Cafe has an interesting post. If I read it right, and understood it, inflation is lurking. Also a US gov default.
Is what he is saying - the US default and reissues "New Dollars" and those, being worth 1/2 as much ,means everything goes up a 100% overnight?
an interesting para
Thus, our economy has become more addicted than ever to low interest rates. But because bank assets will now be collecting income at record low rates, when and if the Fed tries to raise rates it will only be able to do so on the margin. If Bernanke raises rates substantially to fight inflation, banks will be paying out more on deposits than they collect on their income streams. Couple that with their already distressed balances sheets and look out!
Jesse's Café Américain
" reptillian (member) wrote on Wed, 04/15/2009 - 4:14pm.
Help Is On The Way For Those Less than 5% Underwater!!! Evil
Where are my appraisers? There is work to be done!"
There will be no appraisals done on those refis, the appraisers are pretty p*ssed about it, as they should be, it is a clear violation of the GSE Charters. One more example of the laws being good for the people, but not good for the govt.
At this point it should be obvious to everyone that there are only two potential outcomes:
1) Government default
2) Hyperinflation
Valley Center upscale... that's a laugh!!
" "dryfly (member) wrote on Wed, 04/15/2009 - 3:56pm.
One of my clients is about 700k underwater. In South Fla, where prices never reached to strastphere found in Cali."
Here is an example of a house that sold for $2.45 in 2005 and $1.8 recently. And 2005 wasn't even near the peak of the bubble.
It is hard to find a lot of repeat sales, because, again, a lot of borrowers are avoiding selling, but they will come.
286 Blue Mountain Rd SANTA ROSA BEACH FL 32459
2002 ain't the magic number. That was at least a full 2 years into the bubble. We're looking at a return to 2000 home prices. BUT - that would have been the case even without job losses. Meaning: we're going back to the 90s."
You'd have to go back to the '90s around here (coastal California) for housing prices to fall in line with prospective rental income. Of course by then rental prices may have fallen as well.
We've serious local job loss here, but the job loss that really matters in over the hill in Silicon Valley, where half the households get some or all of their money. When SV sneezes, we die.
:: ::
Good point.
It really is price to income in the market 'region' that drives prices over the long haul... even rents have to fall in line with incomes eventually. If incomes collapse prices & rents follow.
Areas like yours will always have higher multiples [price:income, rent:income] than my world... but it isn't an infinite premium. In my part of the world the ratio is typically something like 2:1 to 3:1... during the bubble it jumped to maybe 4:1 or 5:1. My understanding is in Cali the ratios have typically been in the 4:1 to 5:1 range and went to 12:1 in some places at peak bubble. That is unsustainable by any measure. I doubt Cali prices will ever fall to 3:1 like where I live... but 4-5:1 I'd expect to see and soon [beach front property for you and lake front property for me excluded - that stuff commands premium on top of premium].
Gavshire Hathaway (member) wrote on Wed, 04/15/2009 - 7:24pm.
At this point it should be obvious to everyone that there are only two potential outcomes:
1) Government default
2) Hyperinflation
Not to me. Then I am not the brightest bulb on the blog when it comes to numbers in the billions babe.
GS upgraded reits, SPG in particular, because they have access to more financing. I guess being ablr to borrow is more important that making money. Who would buy a reit that pays it's dividend in stock? Diluted every quarter!
With all the excitement about decling rates of change for various economic measure, I would offer that when approaching zero asymptotically the rate of decline can get smaller and smaller but go on for a very long time!
Who would buy a reit that pays it's dividend in stock? Diluted every quarter!
:: ::
GS clients?
OctoMom About To Cut Documentary Deal
Entrepreneurship lives on!!!
Dryfly, Do you watch the online auctions of heavy equipment? I was surprised VA Dept of Trans (VDOT) was auctioning off heavy equipment. No word in the media but the state is strapped for cash.
Are other states doing this?
--
Trickle Down Poverty anyone? I wish I had coined the phrase but a bankruptcy attorney I knew did.
The supply-side fraud of Trickle Down Prosperity is exposed. Reagan-Limbaugh dopes don’t understand how Reagan-Greenspan started the process of bankrupting the working class.
Jas
Well, there's always music and beer. Off to the White Eagle, there's a battle of the bands on tonight!
:: ::
Dryfly, Do you watch the online auctions of heavy equipment? I was surprised VA Dept of Trans (VDOT) was auctioning off heavy equipment. No word in the media but the state is strapped for cash.
Are other states doing this?
:: ::
No I don't - you have a link for the VA auctions? I would guess all states sell their machinery eventually - but not for 'cash'... rather to move older machines to make room for new ones. But maybe that was pre-bubble.
Fitch Quarterly Report on REITS.
Fitch U.S. Equity REITs: Negative Implications for Credit Quality Continue to Be Pervasive
dr. munch-
"You don't understand finance!"
It's restructuring at both ends, simultaneously.
--
Lawyerliz,
I was visiting and entertaineing friends.
Jas
YouTube - Mister Would You Please Help My Pony - Ween Live
-something more precious than fine ore baby, Im holding you.
Dear Gina: I'm From JP Morgan and I'm Here For Your Father's Car
I'm thinking we are going back to the future-1985 prices for homes.
I have stated for years now that the 1996 trough was my "best-case scenario" for home prices. You're treading into my "middle-case" territory. You don't wanna know my "worst-case".
dryfly,
Current Auctions | Motley's Auction Group
Does any other 1st world country have a dollar menu (Cleveland & Detroit) in terms of their housing market?
--
I am among the most bearish and I think that home prices will find bottom close to 1996-98 levels in most states and lower in few states like MI. Rents will also work their way down to pre-2000 levels in most neighborhoods.
There is no such animal as hyper-deflation. Deflation is self-correcting.
Jas
Given the IP/CU numbers today, how could anyone think the recession is over? Over 30% of capacity sitting idle! 80% CU is normal, 85% a boom, 75% a serious recession. Under 70% is a medical condition best treated with Prozac
Lawyerliz,
I was visiting and entertaineing friends.
Jas
Kidnaping homeless people again Jas?
--
SORRY...
Trickle UP Poverty and not Trickle Down Poverty.
Jas
An Apologist For Taxation's Status Quo
"entertaineing friends"
Conjugal visits @ the Big House?
Biege book anecdotals:
the book is so beige, its charcoal grey.
Powder Blue. Its all for you. 349 online seems elevated. Whose on harmonica?
Guys who crash planes into mountains don't get to do the review of what went wrong!
The two and a half million dollar 'ambassador's residence' around here finally sold for somewhat less. It has a large ballroom with a 'Juliet balcony' for the musicians. Anyone want a gig and can play Viennese waltzes on the tuba?
Lost & Confused...all bondholders are in the process of re-negotiation re: possible bankruptcy. You might get something or you might get a piece of equity of the new GM after BK -- if the govt doesn't take it all. The bigger issue is you might get nothing or less than whole which seems like a lot of risk.
Here is a nearly $1MM loss, sold for 3.6 on 11/2005, sold for 2.8 on 1/2009. Interestingly, back on sale for 3.3, obviously a flip.
483 E Alexander Palm Rd Boca Raton FL 33432
The actual $1MM losses are hard to find since many have not taken place yet, or are sitting on the books of servicers who are hoping the market turns around.
If GM fails the goose is cooked. Something will be worked out.
nova (member) wrote on Wed, 04/15/2009 - 6:56pm.
dryfly,
Current Auctions | Motley's Auction Group
:: ::
Pretty cool - toys for big boys. A used Bobcat would be the best - my neighbor has a 1950s vintage John Deere - with a bucket loader attachment but he's scared to put a scratch on it [collector]. I'd like something I could push some dirt around with.
I predicted DOW 6000 by September at work the other day (non-financial scientific)
Everyone laughed, since the market was going up up
Then it started to drop and I showed them some CR posts.
They are not laughing anymore
Market action at the end of the day was incredible. I'm missing the rumor...
yesterday's action brought a lot of uber-bears out from hibernation. today was cover your shorts and take profits.
Given the IP/CU numbers today, how could anyone think the recession is over? Over 30% of capacity sitting idle! 80% CU is normal, 85% a boom, 75% a serious recession. Under 70% is a medical condition best treated with Prozac
70% CU isn't a huge problem once the 'capacity' is paid for and depreciated... then you can afford to have a chunk of idle capacity sitting around 'just in case'. But levered up and running @ 70% is bad... levered up and worn out from cycle after cycle of sale-levered-resale is a disaster. A lot of US capacity fits that description to a tee. And Prozac doesn't fix that disease...
edited
dryfly,
We had a CASE variant of the bobcat on our farm. Handy as all hell; fun, too!
If GM fails the goose is cooked. Something will be worked out.
Hope you like goose...
As CR's noted previously, excess capacity means no need for capital investment.
We had a CASE variant of the bobcat on our farm. Handy as all hell; fun, too!
If you are handy with them - buy one used and rent out your services to your neighbors. Another doomer way to make some cash - be doing a lot of gardens at first then defensive 'berms' and barricades later. Might be a big hit in So Cal.
TJ and The Bear (member) wrote on Wed, 04/15/2009 - 5:47pm.
As CR's noted previously, excess capacity means no need for capital investment.
It also means deflation in existing products and if the government doesn't screw it up eventual innovation. I don't doubt the former and let's face it, the government seems determined to prevent the latter.
Futures just rocketed up. Obama's mortgage plan. JPM to get $3bil, WFC $2.5bil. They get paid to lose money. I'm not short financials, but reits and the russell will follow. I'm 65% cash and only about 10% short, but this market makes no sense at all. Something will trigger a 10% down day. It's just the what and the when, as far as I'm concerned.
Story on CNN Money. No tech abilities to link.
OT, but...
Emptywheel » Obama’s Signing Statement Disappears Whistleblowers
You see, the President who has promised transparency, apparently doesn't want transparency to Congress when an executive agency f**ks up.
"Trickle down" seems appropriate for the times. The gov't is peeing on your leg and telling you its raining.
Here is recent discussion about a new "National Pension" I poster earlier about.
At Representative Miller’s hearing in February, participants discussed potential changes to retirement law, including a proposal by Munnell to create a new tier of retirement savings on top of Social Security and 401(k) plans.
Decade of Losses Forces Investors in Their 30s to Start All Over - Bloomberg.com
New tax and eventual nationalization of all corporate and public pensions. IMO
New tax and eventual nationalization of all corporate and public pensions. IMO
Don't cry for me Argentina.
dryfly,
for collectors, the auctions have had some nice stuff and very good prices. It is probably like real estate - still will drop - but collecting is really more of a nutcase thing anyway.
We'll see median house prices go up since there will actually be sales in the high end neighborhoods -- foreclosues & reo.
Some of the worst permabulls on Jon Lansner's blog (CA OC Register) are acknowledging that the current small rises in median prices in that area are meaningless while the sales are dominated by FC/REO.
I THINK they might be preparing their talking point in the expectation of another leg down, but it's truly remarkable (in the light of their previous strident "it can't happen here" chorus) that they're letting even a little reality into their posts.
Obama launches mortgage modification program - Apr. 15, 2009
"Only loans where the cost of the foreclosure would be higher than the cost of modification would qualify. Also, Treasury will not provide subsidies to reduce rates to levels below 2%."
-you cannot compete with the largest pony.
-dont fade the pony.
-pony rulez.
"Mortgage delinquencies hit a new high in March ... according to a report released Tuesday."
There be "green shoots" in lots more front lawns now.
That's a good thing, right?
OK, will someone reassure this responsible renter (waiting homebuyer) that this 9.9 billion that he administration just gave wells fargo et al to re work mortgages is not,NOT reworking it, say a 700K house down to an affordable 150K payment plan and writing off the rest with the 9.9 bb incentive???????
Yahoo! 404 - Page Not Found
This alls smells so fishy and stinking worse, something tells me tanta would say up to 5% this wouldnt help them, which makes me think more of my taxpayer money is going down black holes, while i patientkly wait for the nice houses /subdivisions to get rid of all the folks that shouldnt be there anyway , and reset the prices to upper 4's where they should be....
Earle Grey anyone?
Fiduciary Doodie,
I have a WFC first mortgage. My primary residence has declined $600-$700k from the peak to your theoretical $700-$900k. I haven't heard a word.
Let's be crystal. This isn't about mortgage relief. This isn't about realigning debt service with asset valuation. This is about keeping people paying as much as possible as long as possible and hoping exogenous conditions improve. Anybody ascribing any greater plan than "hold on and kick the can" is dreaming.
Makes you wonder if these "higher priced" areas are labeld as "higher priced" because of the amount owed on the property?
My landlord just got a NOD in the mail but I refused it. I guess I got 90-120 days to close my Tempe RE deal. The timing couldn't be any better.
"Makes you wonder if these "higher priced" areas are labeld as "higher priced" because of the amount owed on the property? "
Cynic.
We are so excellently doomed! We must alway pursue excellence.
"Would anyone say that GM bonds maturing in 2033, 8.375% going for 19 cents on the dollar of face amount, yielding 91% a good deal? As a long term investment/long shot, is this worth considering?"
Do your homework - analyze the restructured reality, the possible conversion of debt to equity, the discounted future cash flows of any possible entities that emerge, the management, the future of the car market, etc. Then, make an informed decision. Not too tough, is it?
Has reptillian been reading Aristotle?
"Has reptillian been reading Aristotle? "
I thought he was quoting "Bill and Ted"
The law firm handling Lehman billed $55.1 million for the quarter.
Warning: anecdotal evidence:) I think this teabagging thing has some legs; driving through town in my farmtown suburb of PDX there was a group of probably 50 demonstrators. A pretty good turnout considering the size of the town.
Bond Girl (member) wrote on Wed, 04/15/2009 - 6:37pm.
Has reptillian been reading Aristotle?
No, "Toy Story":
Woody: Hey, Buzz! You're flying!
Buzz: This isn't flying. This is falling with style!
"70% CU isn't a huge problem once the 'capacity' is paid for and depreciated... then you can afford to have a chunk of idle capacity sitting around 'just in case'. But levered up and running @ 70% is bad... levered up and worn out from cycle after cycle of sale-levered-resale is a disaster. A lot of US capacity fits that description to a tee. And Prozac doesn't fix that disease..."
dryfly,
You summed up the situation exactly...an excellent analysis of our predicament.
RE teabagging thingy. We had over 2,500 show up in Boise, Idaho. That surprised me that that many people knew about it here, being a red state and all ....
Rob Dawg,
My landlord has been ringing me and emailing me 4-5 times a day for the last 4 days. They found their dream home in great falls VA..... the house i rent in MD was once priced by them in 700's bought and built in 98 for 289. Friday his wife said she wanted 560, ii said homes in the hood here comp are not even moving for 425...their counter offer was to take 490K where i get a loan for 440 or what ever the appraisal comes in at, and they would loan me the difference to 490K.... I told them why would i want to pay 20% more on a house than it appraises for? their response, "cause we love the house and we want 560K and are willing to negfotiate".....all these years and they still dont get it???????????????
I dont know but hope your loss is on paper, nothing expended nothing lost.....
And i assume that kicking the can down the road still keeps the unqualified in homes for longer, just someone else paying for them? Maybe i missed your point...
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Small town here had 300+ for our Tea Party. Usually they are to lazy to show up little own speak up. I was surprised at the amount of cars driving by honking! It was a good balance and not a political party bash either.
For the record Bill of Bill & Ted's Excellent Adventure actually says;
''We are about to fail most egregiously."
Fiduciary Doodie (member) wrote on Wed, 04/15/2009 - 6:47pm.
Rob Dawg,
My landlord ....all these years and they still dont get it???????????????
And people think we are at the bottom. Not.
I dont know but hope your loss is on paper, nothing expended nothing lost.....
And i assume that kicking the can down the road still keeps the unqualified in homes for longer, just someone else paying for them? Maybe i missed your point...
yours in crisis,
Sleep tight. I'm cheaper than "mp," more frugal than Blackstar and near the price negotiator that dryfly epitomizes. I live in a mansion for what people "down the hill" pay for apartments. I sold all except personal use real estate in '05-'06.
Kicking the can is a metaphor for the banks finally knowing they are screwed and just trying to delay the inevitable. Banks live on cash flow. All is about preserving cash flow.
Dawg,
OK I understood you............. yeah, they try and convince me to do something stupid, illegal and rush because the market is improving so much.... the are trying to sell a car on craigslist to a used car salesman...LOL
Tim waiting for 2012 wrote on Wed, 04/15/2009 - 6:02pm.
New tax and eventual nationalization of all corporate and public pensions. IMO
100% agree. At some point, they are going to pull an "Argentina", and nationalizie all 401k accounts.
Representative Grayson from Florida surprisingly seems to be paying attention to the Goldman/Wells Fargo shell game:
http://www.huffingtonpost.com/rep-alan-grayson/on-goldman-sachs-ditching_b_187314.html
What I did not understand until last year is how little power Congress has over the Executive branch. My pop, an amateur history buff, says that is the way it has been forever. I guess I should listen to him a little more closely.
Citizen Clyde, I doubt that the barons of Congress are really out of the loop. Don't forget that Congressmen have to get re-elected, which requires them to get people on opposite sides of an issue to believe the Congressman is on their side. If the Executive takes action that pisses off Congress, there's a hearing. That gets results (except in cases where it's for show, to keep the voters on the losing side convinced their Congressman is fighting for them.)
Things never happen twice the same way.
The next phase of the crash will happen, but it won't necessarily be an SRS or SKF play anymore.
Think: What kind of crash will make the US financial or REIT stocks go nowhere, but still have a general crash nonetheless?
Answer: Currency crash or govt default.
When usd is half of today's value, SRS and SKF can be exactly where they are today, or even lower, and yet the market, by anyone's measure, would be considered to have crashed.
Careful what you measure against when you short.
Thank God the rich are suffering too. I was beginning to see class bias in this downturn.
Now if we can only figure out how to tuck it to that class of freeloaders called Children.
What's that? We are?
And i assume that kicking the can down the road still keeps the unqualified in homes for longer, just someone else paying for them? Maybe i missed your point...
yours in crisis,
Doodie
Careful, the govt has an endless bag of tricks to kick cans down. In fact, that's what govts are most efficient at doing. You'll be betting against their specialty to expect otherwise.
The Jap govt has kicked their can 24 years, and still kicking. Their housing decline is also just as long. Waiting to buy could take your entire lifetime.
When they taught me that "the market can stay irrational longer than you can stay solvent", I didn't realize there's also the related clause that a govt assisted irrational market can stay longer than I remain alive.
In other words, we're screwed, renter, owner or ex-owners.
A previous post thought that most of the option ARMS were down in SoCal. From memory (someone correct me if I am wrong) back in 2007 more than 50% of the Bay area mortgages were Option ARMs. Also, I have a friend that is only making partial mortgage payments on a >$2m house for the last six months. So far no NOD.
Defaults in higher priced areas is probably a sign of upward mobility.
Could they be the greens shoots Ben is seeing ?
Here come the McBandos.
The high priced areas that the some odd 1 million legal immigrants per year bought into over the past decade, pushing up demand and prices for US Citizens. I personally know of a Russian immigrant woman (non-Citizen) who purchased 4 homes before the peak, refinanced them cashing out nearly 1 million, and then she walked away from all 4 mortgages. Is this what an economic war looks like?