In my novice opnion........

[427 S/O]

The way I see it, McCain was right, buy up all the bad mortgages, package them and offer up for bid. There is money out there and investors will pick them up for pennies on the dollar, cleanum' up and sell. That's the fastest way to get the housing mess straightened out and back on track. Of course home values will be readjusted but that's just the way it is.

Last year about this time, my brother and I were in the process of picking up a couple of repo's, we decided to hold off for a while and glad we did, because it just got worst. I would gladly buy in 'now' for pennies on the dollar, if I have the chance.

[cobra de capell]

"novice opnion" big time!

First, banks don't want to discount the mortgage upfront in order to sell them to the government. The result would be that the government would buy high and sell low costing taxpayers trillions. If there were investors lined up to buy bad paper (mortgages) they would have already done so - there are no buyers, unless it's pennies on the dollars (same a you).

Actually, most of the properties out there that are pennies on the dollars are junk and sitting on .10 acre. Also, the downturn in real estate has about 12-18 months to go.

[427 S/O]

Well...That's another opinion...

[427 S/O]

And another thing... I've accepted the 'fact' my home is worth less!, thanks to the 'buy more than I can afford crowd', and the greedy lenders. But, It will all balance out if I decide to sell and buy another house because, the other house will be worth less as well.

[J. T. Toad]

Perry,

CDC's right, just not very nice in the way he responded. What many fail to see is the "historical" application of what has happened in the last 10 years.

http://mysite.verizon.net/vodkajim/housingbubble/

historically speaking, housing is just "correcting" to market demand. Very few were complaining when it was "good," despite the warnings of how bad "good" would get.

This is just what the taxpayer deserves for allowing social engineering to manipulate a "free-market" system.

[427 S/O]

Correct me if I'm wrong, when fed. mac, fan. mae and the investment banks got billions. Was it not for failed mortgages?.

[J. T. Toad]

Originally Posted by 427 S/O

Correct me if I'm wrong, when fed. mac, fan. mae and the investment banks got billions. Was it not for failed mortgages?.

If this question was towards me....

The public was certainly "told" it was for the failed mortgages.

I repeat.

This is just what the taxpayer deserves for allowing social engineering to manipulate a "free-market" system.

[Dan40]

Originally Posted by 427 S/O

Correct me if I'm wrong, when fed. mac, fan. mae and the investment banks got billions. Was it not for failed mortgages?.

Yes, TARP was supposed to be Troubled Asset Relief Program. And the "troubled assets" were clearly defined as mortgages and mortgage related assets,

Didn't that work out well?

$350,000,000,000.00 was flushed down the chute. Now another $350,000,000,000.00 is following into, "Who knows where." To be soon followed by $819,000,000,000.00 of nearly pure PORK.
Government actions may slow or speed the economic recovery, but without a Gov. move of any kind, the economy will EVENTUALLY turn up again.
WHO feels, how much pain, and for how long, is the only change that Gov. maneuvers will effect. And THEY don't know who/how will be affected.
But the Government involvement now, INSURES, WITHOUT QUESTION, that 20 to 25% INFLATION will come with the economic "recovery[?]"

In the middle of 08, our National Debt was around $9 TRILLION. An obscene figure that took over 200 years to "accomplish!"
By the end of 09, 1.5 years, that number is likely to be at OR ABOVE $12 TRILLION!!!!!!!!!!!!!!
A 33% INCREASE IN A YEAR AND A HALF.
Gives us a new description of "insanity" doesn't it?

Dan

[427 S/O]

Condensed from an article by Charlie Martin.



For various reasons, the housing market stopped going up (oil IMO). House values stopped growing and in fact started decreasing. At the same time, interest rates started to go up as the Federal Reserve Bank thought inflation was becoming a danger. So people who had bought these special subprime mortgages saw their variable interest rates go up, and with them the house payments; at the same time, their houses were worth less!.

It got to be hard to refinance them and people started losing their houses to foreclosure. The banks and the other companies that held MBSs weren’t broke but they were “house poor”: lots of assets, no cash.
-----------------------------------------------

So the banks and investors got all or some of their money back, and the buyer was left to suck it up. I still believe it's best for the government to bundle and auction them off, there's a lot of money there and it won't go super cheap...imo.

[J. T. Toad]

Various reasons? LMAO you didn't look at the chart did you?

Consider housing as a commodity (to the lending industry that's all it is), look up the charts... does what has happened in the last 10 years make sense? Does it follow typical "bubble" trends?

On the surface, bundling them up and auction them off is a wonderful idea, happens every 2nd Saturday at the local storage facility for those who skipped on the rental.... IF only it were that simple of a problem. Look at Dan's post, this is far too deep with government meddling. control, and influence.

[cobra de capell]

Originally Posted by 427 S/O

And another thing... I've accepted the 'fact' my home is worth less!, thanks to the 'buy more than I can afford crowd', and the greedy lenders. But, It will all balance out if I decide to sell and buy another house because, the other house will be worth less as well.

Now you're talking....if one has a house, nothing really is lost - it's those that used their house as a piggy bank thinking (or not) that prices could not possibly fall. And, of course, the other set that got into a house with little or nothing down, along with a great teaser rate and has or will adjust to a sky high level. People are basically stupid.

[cobra de capell]

Originally Posted by 427 S/O

Condensed from an article by Charlie Martin.



For various reasons, the housing market stopped going up (oil IMO). House values stopped growing and in fact started decreasing. At the same time, interest rates started to go up as the Federal Reserve Bank thought inflation was becoming a danger. So people who had bought these special subprime mortgages saw their variable interest rates go up, and with them the house payments; at the same time, their houses were worth less!.

It got to be hard to refinance them and people started losing their houses to foreclosure. The banks and the other companies that held MBSs weren’t broke but they were “house poor”: lots of assets, no cash.
-----------------------------------------------

So the banks and investors got all or some of their money back, and the buyer was left to suck it up. I still believe it's best for the government to bundle and auction them off, there's a lot of money there and it won't go super cheap...imo.

Once again, not true (first part) and foolish (second part).

Actually, I'm looking at buying a short sale house - the owner secured a second which covered most of the equity in the house - now, the value of the house is way below the appraisal when the 2nd was granted by the lending bank - therefore, the owner already has practically all equity and the bank is looking to get what it can. This scenario has happened millions of times around America in the last 5-10 years.

If you think that the government can do anything right and without losing a huge bundle, just look at the post office - now they are thinking about going to 5 days a week delivery as that entity is losing billions even with the hikes in the cost of a stamp. Volume is down - perhaps the internet has something to do with it, they cannot seem to figure it all out.

[SP01715]

Originally Posted by cobra de capell

Now you're talking....if one has a house, nothing really is lost - it's those that used their house as a piggy bank thinking (or not) that prices could not possibly fall. And, of course, the other set that got into a house with little or nothing down, along with a great teaser rate and has or will adjust to a sky high level. People are basically stupid.

Ding, Ding, Ding... Could not have said it better.

[Sharroll Celby]

Did the interest rates on the "teaser" rates HAVE to climb so drastically? Why did they not climb to the going rate, now about 6 percent?

I would figure the lenders would rather have SOME of the mortgage being paid back, as opposed to NONE of the mortgage being paid back when people walk away.

[cobra de capell]

Originally Posted by Sharroll Celby

Did the interest rates on the "teaser" rates HAVE to climb so drastically? Why did they not climb to the going rate, now about 6 percent?

I would figure the lenders would rather have SOME of the mortgage being paid back, as opposed to NONE of the mortgage being paid back when people walk away.

They didn't have to, but a deal is a deal - actually, most lenders don't retain the loans that they make, most loans are sold to the secondary market (wall street and entities like Fannie and Freddie who also sell to wall street. The reason that rates went up or go up so fast is the risk level within each loan - some fool out there, actually lots of them figured that people could pay the higher rate, somehow - but, that's not the case (in the millions). Basically, there are huge numbers of greedy bastards out there that were looking forward to the higher yield, but on the other hand a contract is a contract - look to the mortgage brokers as the front line of greedy bastards.

This is such a huge mess - America has not faced anything like this before and may not fully recover for 5 years or more. Unwinding the contracts is not the way to go - just allow the market to work this out with stupid people taking huge hits, but in the end we will still have a capitalist society. Of course BO is working on a socialist society.

[SP01715]

Originally Posted by Sharroll Celby

Did the interest rates on the "teaser" rates HAVE to climb so drastically? Why did they not climb to the going rate, now about 6 percent?

I would figure the lenders would rather have SOME of the mortgage being paid back, as opposed to NONE of the mortgage being paid back when people walk away.

That's the chance they took when getting an ARM. I locked both my houses at 5% for the life of the loan in 02, and I was told by my friend who is a motgage broker that I was stupid. He kept telling me "I can get you 3.5 on an ARM". I told him to get back to me in five years and we would see who was right. I guess you know the answer to that.

The people that gambled with an ARM need to take responsibility for their actions and stop crying. If you got into a risky loan, bought a house you could not afford etc, then you need to lose the house. The market needs to correct on it's own, and forclosures are part of the cure. My.02

Between the stock market and a bad business venture I lost well over a million dollars in the past few years, and I am not looking to the government to bail me out.