let's see, 73 year's old, widow, payment jumping by orders of magnitude--no problem!

Well, if you could borrow that money at 0% interest, you could pay off a mortgage that size with $98 a month in 298 years.

Maybe this is the banks' path back to profitability.

Hey at least she is paying something

Is this what is meant by "skin in the game"

“The problem is, real estate values went down,”

The scary part is, in my mind I'm hearing him say that with less a tone of "Hoocoodanode?" and more a tone of, "How dare they!"

wow, her 315k loan ramps up to 456k at recast

Got the Pig. From last thread--

"I solved the California budget crisis, just upload this code to the central machine in LA:"

Timmyone, very funny. Needed a laugh this AM thanks.

On Topic: "Much of the increase was due to higher gas prices."

Anyone know what the numbers would be if gas prices were backed out?

Dammit, I'm no good at this free market capitalism stuff.

The day I hear these words coming out of Tim Geithner's mouth is the day I'll be convinced this country is back on the right track.

"This is now a GMAC loan"

Only the taxpayer is dumb enough to take this thing onto their books. Who owned it before?

I found out from experience that people do not like hearing about this stuff. I tried to explain to a friend of mine that has an I/O loan that at some point she would have to pay down the principle. She vehemently disagreed. Ah well, I didn't buy in 2005 so it appears I was priced out forever

30 year rate at 5.74

That tracks the formula at political calcs for TNX of 3.93, which says it should be 5.76.

Nice little tool.

I hope Peter Paul is not schizophrenic. Robbery charges against Peter might be difficult to prove

A back of the envelope calculation notes that approximately 125 Billion of the loans to recast in 2009 are Option Arms or Unsecuritized Arms; in 2010 through 2012, the number appears to jump to approximately 250 billion per annum. Thats a spicy meatball to digest.

Anybody know the percentage of Option Arms and Unsecuritized Arms that took the teaser rate?

Anyone know what the numbers would be if gas prices were backed out?

Why would we want to back them out? I propose that we raise gas prices by another 400%. We really need a bigger green shoot for June and July, don't we? A sale is a sale isn't it? I mean, it does add to velocity, doesn't it? That sale is someone's income, isn't it?

Where the hell is Mary?

Option ARMs and Unsecuritized ARMs that took the teaser rate?

I think it safe to assume that virtually all took the teaser rate. Otherwise they would have been a 30 year

Hey -- Dirk van Dijk is quoted (kinda) in the article! Big ups, Dirk.

Peterpaul - all Option ARMs have a teaser rate, it is an essential component of the product. I'm not sure what you mean by what percentage "took" them?

July 1997: Asian Financial Crisis
September 2001: 9/11.
August 2005: Katrina.
August/September 2009: Bond market crash? California Screaming?

Trust me, this is all very scientific.

Re: the last thread. Retail sales should be way up next month with oil pushing 72.50 this morning.

green shoots or black springs!

Stimulus for Venezuela, Canada and the ME

Stupid is as stupid does

Love,
Forrest Gump

dunno. can't do youtube.

hey don't look now but the WHO has declared a Flu pandemic

Can you imagine the encounter at the border?

“Nothing to declare?”

“Nope.”

“Got cash or other items in excess of $10,000?”

“Ugh, uh.”

“Mind if I have a look in that briefcase?”

“Errrr...”

“Aha! Just as I thought. You’re carrying hundreds of US Treasury bonds in $500 million and $1 billion denominations worth $134.5 billion.”

“Darn! You caught us.”

“What were you planning to do with these?”

“Buy Estonia, Latvia, and Lithuania. Great price!”

Per Itulip/

".....those were the missing US bearer bonds from the theft at the Nakatomi building?"

Thnx, basil....... I go googling "Nakatomi Building theft"..............and get Grand Theft Auto info........I'm fun at parties too.....lol

BSR: the reference was to "Die Hard" where the terrorists rob the Japanese corporation's US bearer bonds.

Here is Arizona many, many people have the Option loans.

Our RE values are already lower by 50%. Lots of empty properties with no for sale signs.

We already see higher end property REOs. just coming on the market. Investors are bailing right and left AND investors are buying very low priced REOs right and left. Thus lowering rents across the board.

The next 2 years will get very interesting.

Jim A. (profile) wrote on Thu, 6/11/2009 - 11:06 am reply Ignore user PLEASE tell me that this is some sort of extreme, asymptotic carzy-loan and is not typical for CA. Because otherwise the mineshaft we're falling down is MUCH deeper than I had anticipated.
Read this:

PROOF: There Are No "Green Shoots" - The Market Ticker 

CR

I would like to report to you the comments of Ken Lewis as abusive and insulting. Take whatever action you deem appropriate.

"PLEASE tell me that this is some sort of extreme, asymptotic carzy-loan and is not typical for CA."

In SoCal these mortgages were very common. I don't know the %s, but they were not uncommon, that is for sure. Especially on higher end properties.

Not so common in NorCal. Much more of a hybrid ARM market there.

The other area where these were common was Florida. SoCal and Florida were the hotspots.

Surprisingly, not as common in AZ and NV, those were much more Alt A states - lots of 80-20s with no doc, etc.

3/8ths teaser is really uncommon. The typical teaser was 1%, plus adds for risk layers. Also atypical was the 145 neg am cap. Most were 115, as high as 125.

Not that the product attributes will make much difference, the payment shock at recast is more than most borrowers will be able (or willing) to bear.

Really, Shirley's loan is basically a reverse mortgage, except they left out the part where she gets to keep living in the home for the rest of her life.

Obama wants to let the bank robbers keep the money they stole. WTF! He wants these same robbers left in charge of our financial system. WTF! And Obama wants us and our children to pay for the fraud. WTF!

Just a family man planning for HIS family's future

She's been in the house for forty five years! Why wasn't it paid off twenty years ago. And what must she have paid for it 45 years ago? A few thousand dollars? A few hundred? Now she wants a bailout. This was the problem with the bailouts from the start. When do you stop. Banks? Quasi sorta banks like GMAC? Insurance companies? Car companies? Next will be CRE? Then maybe California and other states and cities? Just amazing.

The bond market truly tell us that a hyper inflationary depression is on its way completely canceling ANY CHANCE OF RECOVERY to the US economy. Why is that? since the US economy is a consumer based economy, the real estate markets will collapse even more when mortgage rates jump through the roof. What's more humorous is that the media is throwing lies around about "recovery around the corner". There's NO recovery if housing doesn't recover, with higher mortgage rates housing will NOT recover. Ask your friends how easy is to qualify for a loan nowadays LOL. The banks are in horrible position right now, they are NOT lending at all, they are just surviving and they are hoarding as much cash as possible hence they do NOT lend to the consumer. With the consumer being unemployed, without access to loans/credit, with their house upside down and their ARM getting ready to reset in 2011 (get ready for a massive ARM reset in 2011 with HIGHER rates!!! collapse of the housing bubble). I expect a hyper inflationary depression starting in 2011/2012. The KEY part is that China and Russia are going to stop buying toilet paper treasuries from USA. WHY? The deficit quadrupled in 5 months (thanks obama) and to the russians, chinese and other countries it makes NO SENSE how the US will pay back all these money back with interest. I expect the US dollar to plunge and a hyperinflationary depression to begin.

Ok I can breath easier now.

PeterPaul,
If these op/arms were not securitized, this would alow the servicer greater flex during foreclosure, No? No other ties to unwind? A quicker resulution than current morass, no?

Basel Too,
Nakatomi Building!...funny Now I have to go dig that movie out of the library stack. Yippie-Ky-Yeah....

FF1

(Go Chargers)

Our gov will bail out any firm "Too Big to Fail". Small firms can go under. People can file BK, be forclosed, earn lower wages (if they have jobs at all). As long as the price of gas goes up: retail is better. As long as we pour our money into banks, the economy is better.

There seems to be some inverse system now in place. As main street goes down - the market goes up.

"I hope Peter Paul is not schizophrenic. Robbery charges against Peter might be difficult to prove"

Especially when it's Peter that's getting robbed

Why is that the government thinks that it knows best when it come to things like drugs, alcohol prostitution etc and deems these to be against our interests but thinks that it is ok to borrow at 15% plus interest rates.

Credit is addictive and destructive as any of those things. This is not a question of whether lending at "free market" rates makes economic sense but whether anybody should be allowed to borrow at 15% plus. There is no way that somebody is getting of that "high". The Libertarian in me says that we shouldn't be regulating any of those things but if we are can we at least get some consistency in our policies.

When the banking industry says that those kind of policies will choke of credit the answer should be GOOD!!

With all the ( cough cough ) manipulation going on in the metals market, hard to tell....but I am holding strong on metals, but as the saying goes don't put all your eggs in one basket.

In short Obamanomics is where
1) The government champions funds
2) Funds champion corporations
3) Corporations champion markets and industries
4) The people ( American taxpayers ) get the tab

======

I thought that was Reaganomics. 8)

Maybe Peter/Paul can get disability payments from the gov? Bail out money for main street. LOL

Citizen Scotto (profile) wrote on Thu, 6/11/2009 - 8:35 am
I thought that was Reaganomics.

Yes Obamanomics is essentially Reaganomics 2.0 and more lethal because America and Americans are swimming in debt U.S. National Debt Clock : Real Time 

Most Americans had better start making the gradual adjustment that the 'party' since Reagan in the 1980’s where deficits did not matter is over and there will be a leveling of the global playing field.

And I suggest that most should be recalibrating their American dream

Looks like the Wizards of Wall St. have figured out how to ignore retail contribution to the economy and squeeze the remaining life out of everything else.

Adornosghost

Russia's power fell when their economy fell. That was our plan and it worked very well.

China now holds the key to the value of our dollar. Think that might have been the plan?

Does anyone have the link to the FED's Treasury purchases handy? I had to delete the files on my computer today. TIA for any help.

josap,

Credit or not, the history of highly centralized mono-cultures capable of changing policy course quickly is profound--for good or bad. China may be slow to recognize the necessary course change (offload dollars in favor of commodities as one hedge, and non-dollar assets as another hedge)--but when they choose to take that course, lookout. They can move much faster, mobolize resources much faster than anything passing through the convoluted colon of congress and the various special interests that dwell in it like some many polops...

--bh

Yeah, they were from the US Treasury.

Citizen Scotto,

I prefer:

Who Wants to Catch a Knife-Shaped Anvil?

--bh

@Citizen Scotto (profile) wrote on Thu, 6/11/2009 - 8:40 am
km4-
I've just started referring to them all as "Ponzi-nomics," seems to be a good, one-size-fits-all summary.

Yup that works !

Bye for now - have to go to a consulting client!

Doubling down on gold. Its ponzi proof.

I think the American Dream to those non-indigenous folks means not being roused at midnight by the secret police, lined up with a dozen of your village cohorts, and every third of you shot against a wall.

For some of us, the rags or riches will do just fine. And in this country, while poverty and hunger are real, it does not quite match the magnitude of our lower neighbors. not quite.

Just perspective.

--bh

"But real estate always goes up--- This must be a commie plot to deny my dive right to prosperity, supported by the liberal left."

Nah, it's a California tax-and-spend lib plot to destroy Prop 13, the property tax and taxation limits. Easier to talk the public into doing after their property values have dropped halfway back to 1978. -- or more. Then when they buy in -- we CRUSH them with taxes and fund SWEDEN ON THE PACIFIC. Mwahahahahahahah!

Re: American dream - well said, bh

Last night I was sitting on the driveway apron listening to distant thunder, blowing bubbles for my 2-yo to chase and watching my 10-yo ride her scooter back and forth through the stream of water in the gutter. Wife was at a Brownie meeting with the 8-yo.

No worries about neighborhood thugs or secret police. Or where my next meal is coming from.

That's American dream enough for me.

"That's American dream enough for me."

.....add a few cows with calves grazing and I'd TOTALLY agree.....+100

The good days are here; it would be foolish to have different thoughts on that matter:

A foreclosure filing every 13 seconds
A foreclosure filing every 13 seconds - Boston Real Estate - Boston.com

By the end of 2012, we are looking at a total of 9 million more foreclosure filings.

But the rest of us also pay a price, with every foreclosed home dragging down the value of the other homes in the neighborhood.

Over the next three years, that means nearly $2 trillion in property values that will simply vanish, hitting tens of millions of homeowners in the wallet.

Happy days are here again
YouTube -

blackhat (profile) wrote on Thu, 6/11/2009 - 10:54 am

For some of us, the rags or riches will do just fine. And in this country, while poverty and hunger are real, it does not quite match the magnitude of our lower neighbors. not quite.

Agreed. I would be content with my station in life, ceterus paribus. Unfortunately, there are many who are not satisfied, and who are either incapable of or unwilling to produce wealth in the real economy through productive labor, invention, commercial art, or whatever other socially-valuable means are available to support that lifestyle they desire. These people, feeling entitled to a better standard of living, will happily diminish my own comparably-modest lifestyle to augment their own unsustainable one. That's where the problem comes in, particularly when they start using government to do the work of confiscation and redistribution for them.

Black Star Ranch (profile) wrote on Thu, 6/11/2009 - 11:58 am

.....add a few cows with calves grazing and I'd TOTALLY agree.....+100

My spouse wants goats, so I guess I favor the poor man's cow.

WHO has declared a Flu pandemic.
Hu has declared a T-bond pandemic.

Comrade Kristina,

If that "yet" becomes "now" then I feel particularly adjusted to cope. Doesn't mean we all survive, but I can cope.

--bh

My spouse wants goats, so I guess I favor the poor man's cow.

A mountain lion killed my last two, so goats are not a issue now.

I wonder why she did the original refi. Medical bills? Spending spree? Help out the kids? And where were the state banking and real estate regulators? The bloomie story leaves a lot unsaid.

Interesting read below for those that have the ability to sifer:

BBC - Stephanomics: Protectionism wasn't the problem

We are all goats, now!!

"I think it is crazy to assume and bet on things improving anytime soon," he said.

In other words...."It's ON!"

I remember the first rate sheet I saw from Paul Financial.Stated income POA loans for 103% of the purchase price,56% DTI,"Flexible" underwriting in big caps.I thought it was a joke at first.....

Keep thinking the American Dream is not possible. It makes it one less in the way for those who will peruse it. I started in the 70's recession and did very well.

Of course it is possible, for a VERY small percentage of the population. The FACT is roughly 95% of people will remain in the class they were born to for the duration of their lives. Your odds are slighly better than playing the lottery if you were born into the lower class.

I'm back finally. Been sick as a dog. Doctor says we didn't have the swine flu, but whatever it was it kicked the crap out of the whole family. We almost never get sick, so I was not prepared for this. Nothing like sick parents taking care of sick kids in one big miserable two week flu fest. Our youngest hit 104.7 on the mercury too, was not a good experience. Well back in imaginary land I see not much has changed. Dow going to break 9 any day now I guess.....

@ Comrade Kristina-

Hey, hon, how's the refi project going?

Did I hear right that gold was missing from Canada's version of Fort Knox?

Yes liz, this story broke last week, as per usual...in hush hush mode

Mint can't account for missing gold

OT scone

I am getting a mod from my mortgage company (Saxon). Talked to them Monday and got my paperwork yesterday. They are dropping almost 3% of my rate and saving me about 300 bucks per month. It will also lock my ARM for five years, considering the bond action I think I'll take the deal at this point, I fear a reset in August might get ugly.

Black Star Ranch (profile) wrote on Thu, 6/11/2009 - 12:06 pm

.........LOL....we had thought that first - but I had trouble getting worked up over a quart of milk. Good Luck - You'll love it (outside of them eating EVERYTHING in sight)

He absolutely adores them due to childhood experiences. My personal feeling is that, I will be hitting Aly Baba up for biryani recipes when they get too uppity. =)

Tom Stone: I remember the first rate sheet I saw from Paul Financial....
Okay, who was BUYING these loans from him? And judging from the loan in this post it only got worse from there....

wow.

I remember when I was in the mortgage business back when they were doing the Option ARM's. Brokers were selling them left and right b/c the lenders were paying huge commissions (par plus) on the back end. Brokers were making 3-4 points on the back and charging 1-2 on the front in some cases. On a 300,000 loan they would make 12-15k!

I'm not the smartest man by any means but even wrote a strong warning about these loans in an e-newsletter to my clients circa 2005. Most people didn't even know what they were signing, honestly.