Subprime Fallout Hitting Denver Area Hard

[Bronco_Beerslug]

Since I trade the markets every day I hear tons of opinions on to what degree the Subprime farce is going to hit our economy and most agree the worst is yet to come.

----------------------------------------------------------
Subprime bust forces families from homes (http://news.yahoo.com/s/ap/20070324/ap_on_bi_ge/house_of_cards_3)
By ADAM GELLER, AP National Writer

THORNTON, Colo. - The lights are still on inside Foreclosure No. A200642668 — so while there's time, have a look around.

Here's the living room, still covered in the worn blue shag Angela Sneary always intended to replace with the sheen of hardwood. And downstairs, through a curtain of plastic beads, is the basement where husband Tim was going to knock out a wall and put in a foosball table.

Step this way and the Snearys point out the places where they never could find the cash to hang a ceiling fan, install a hot tub, replace the siding ... a long list of abandoned ambitions that seem almost too big to squeeze into the modest four-bedroom tri-level.

Owning a home is all about finding humor in unfinished projects. But in the house set back from a bend at 11030 Eudora Circle, the Snearys never had the luxury.

They ran out of money first. Then, they ran out of time. Soon, they'll almost certainly be out of a home.


http://d.yimg.com/us.yimg.com/p/rids/20070322/i/r2033426810.jpg?x=380&y=258&sig=1VQBCu9rCf3sA85IVAcUoA--
Marc Charney, president of CharneyRealEstate.com, hangs a sign on a house in the Boston suburb of Dedham, Massachusetts March 15, 2007. Housing analysts predict between one million and three million U.S. homes will be foreclosed upon in 2007. To match feature USA-SUBPRIME/COUNSELORS. REUTERS/Brian Snyder/Files (UNITED STATES)


Buying a home is the American dream and a record number of Americans — nearly 70 percent — are living it.

Many families, though, likely never would have become owners if not for the tremendous growth over the past decade of a new kind of mortgage business called subprime lending. It long seemed like a winning proposition for all parties. Now the costs are becoming apparent — and they are very unsettling.

Subprime lenders peddle new kinds of mortgages, often requiring no money down and made at "teaser" interest rates that soon rise. They target marginal borrowers with weak credit or questionable incomes who previously might not have gotten a loan at all.

By last year, subprime loans made up 20 percent of the market for new mortgages.

But as the housing market cools, thousands of subprime borrowers are struggling to keep their homes. A number of subprime lenders, saddled by failed loans and a shortage of cash, have folded or staggered. In some particularly hard-hit neighborhoods in Denver's suburbs — one of a few metropolitan areas where the problem is especially grave — home after home sits dark.

Clearly, this isn't how the American dream is supposed to play out, but who's to blame?

The experience of families like the Snearys show how the squeeze created by questionable lending can quickly be compounded by family economic crises, a lack of planning and knowledge, and the rapid shifts in a real estate market that once seemed unstoppable.

"You were set up to fail," one real estate agent told them.

It's a sobering thought for anybody who shares the American dream. After all, it hits so close to home.

CONT.

[Spider]

I heard somewhere that the average American family is 3 paychecks away from being homeless

[TheDave]

This is a problem that is going to hit every area hard... It will be interesting to see what is done about this.

[Dudeskey]

What will be done? Not much for the people who have to walk away from their homes. Lenders will definitely start tightening up on underwriting subprime mortgages in the future... not necessarily a bad thing there when you look at some of those intrest rates...

[yavoon]

u mean the adjustable rate loans? caveat emptor raped a lot of ppl there.

[enjolras]

What will be done? Not much for the people who have to walk away from their homes. Lenders will definitely start tightening up on underwriting subprime mortgages in the future... not necessarily a bad thing there when you look at some of those intrest rates...

Nor should anything be done... our economy can (and will) absorb this temporary correction in housing. At the individual level these people made bad decisions and they certainly shouldn't be protected by a government safety net.

[broncocalijohn]

I have been telling everyone in the last 3 years (that wanted to here the truth) that the government should have stopped these loans years ago. Putting someone, that is irresponsible to keep their credit score up to par, in a home can be questionable. Then add the sub prime loan where they do not have to put the normal 10% down with shotty credit and no money saved is absolutly wrong. Wow, now there is someone who deserves a $400000 home! These companies made millions for themselves and the loan officers were getting bank. Now, we have Fremont and New Century (located here in OC, CA) are in trouble to survive and laying off hundreds of employees. With the market softening, these $1400 loans will or is now $4000 a month loans. These people will need to sell and downsize. Too many homes on the market and watch how the sellers cant make their payments (surprise!). This will cause FORECLOSURES! The only good thing out of this is to hedge your property that you already own and get ready to buy some cheap property in the near future. I have my eyes in 2009. This is when I calculate that I will be very wealthy buying inexpensive homes. CLOSEOUT SALE! Save your money because there is a great buying opportunity in the near future.

[Bronco_Beerslug]

Nor should anything be done... our economy can (and will) absorb this temporary correction in housing. At the individual level these people made bad decisions and they certainly shouldn't be protected by a government safety net.

That is COMPLETELY erroneous in many of the loans these companies fed consumers!!

[defenseman]

That is COMPLETELY erroneous in many of the loans these companies fed consumers!!

Explain please. Many folks I personally know live beyond their means. In various areas I might add. I'm sure some these defaults are due to exactly that. that said, I am interested in why you believe that they are not responsible for their own situation. Simple mathematics with debits and credits I'm guessing may have prevented some of the foreclosure issues...dman

[Spider]

Explain please. Many folks I personally know live beyond their means. In various areas I might add. I'm sure some these defaults are due to exactly that. that said, I am interested in why you believe that they are not responsible for their own situation. Simple mathematics with debits and credits I'm guessing may have prevented some of the foreclosure issues...dman

here is what I was told , or at least what I understood , when I was getting ready to buy a house a few months back ..........
if you are late on 1 payment , they can jump your interest rate up to 32% even on monies already paid .......

[baja]

I have been telling everyone in the last 3 years (that wanted to here the truth) that the government should have stopped these loans years ago. Putting someone, that is irresponsible to keep their credit score up to par, in a home can be questionable. Then add the sub prime loan where they do not have to put the normal 10% down with shotty credit and no money saved is absolutly wrong. Wow, now there is someone who deserves a $400000 home! These companies made millions for themselves and the loan officers were getting bank. Now, we have Fremont and New Century (located here in OC, CA) are in trouble to survive and laying off hundreds of employees. With the market softening, these $1400 loans will or is now $4000 a month loans. These people will need to sell and downsize. Too many homes on the market and watch how the sellers cant make their payments (surprise!). This will cause FORECLOSURES! The only good thing out of this is to hedge your property that you already own and get ready to buy some cheap property in the near future. I have my eyes in 2009. This is when I calculate that I will be very wealthy buying inexpensive homes. CLOSEOUT SALE! Save your money because there is a great buying opportunity in the near future.

I hear this all the time and what is so funny to me is that you greedy sick F'ers sitting in the bushes waiting and planning to make money off of a neighbor's grief will in fact wake up one morning and find all those dollars you saved are declared nearly worthless. Ah the poetic justice of it all..

[defenseman]

here is what I was told , or at least what I understood , when I was getting ready to buy a house a few months back ..........
if you are late on 1 payment , they can jump your interest rate up to 32% even on monies already paid .......

ANYONE who signs a contract with that sort of clause is a freaking moron. And, in short, the agencies which employ these methods are in fact praying on the average americans stupidity. In addition, ANYONE who signs a contract of this nature, and goes into foreclosure, well it's their problem. Freaking stupid people out there...dman

*IF you have to have a house, SAVE enough money for a quality down payment and do it right way. It's as simple as that. These people remind of today's teenagers, they want it "now" and always ask "What's in it for me?"

[Bronco_Beerslug]

Explain please. Many folks I personally know live beyond their means. In various areas I might add. I'm sure some these defaults are due to exactly that. that said, I am interested in why you believe that they are not responsible for their own situation. Simple mathematics with debits and credits I'm guessing may have prevented some of the foreclosure issues...dmanRead my post again. Some of these loans were made WITHOUT income verification, employment history, etc... The companies that made these type loans knew exactly what they were doing (putting people into homes that didn't qualify).

[Spider]

ANYONE who signs a contract with that sort of clause is a freaking moron. And, in short, the agencies which employ these methods are in fact praying on the average americans stupidity. In addition, ANYONE who signs a contract of this nature, and goes into foreclosure, well it's their problem. Freaking stupid people out there...dman

*IF you have to have a house, SAVE enough money for a quality down payment and do it right way. It's as simple as that. These people remind of today's teenagers, they want it "now" and always ask "What's in it for me?"

LOL , you really think the contract is worded that way so you can pick it up ?
wordsmithing ......... alot of people dont know what they are getting into .....same way with Credit cards , did you know credit card companies can do the same thing ?

[defenseman]

Read my post again. Some of these loans were made WITHOUT income verification, employment history, etc... The companies that made these type loans knew exactly what they were doing (putting people into homes that didn't qualify).

If that is in fact the case, the state or govt ethics divisions need to get involved. Apparently, some very greedy real estate folks are making it bad for the industry. Come to think of it, my wifey did loans for a bit in littleton, she was apalled about half the time on who they gave loans to, she mentioned there is little to know quality control, just the drive to make a buck. She left after she had her fill of it........dman

[TailgateNut]

The majority of americans are smart enough to read between the lines, and to know what their budget can absorb, but for those who aren't smart enough, a dream can and will become a nightmare very quickly.

AAH yes, the wonderful ARM, the convienient "interest only" mortgages.

This can't be blamed on only the homebuyer, you need to include the "vultures" in the equation.

You have brokers who falsified income information to secure financing for buyers who could have never qualified for a loan.

You had banks and investors who didn't take the time to research the "actual" value of the homes and the credit info of the borrowers.

You have buyers who either did not educated themselves regarding adjustable interest rates and penalty clauses, and/or did not look at their own financial situation.

[defenseman]

LOL , you really think the contract is worded that way so you can pick it up ?
wordsmithing ......... alot of people dont know what they are getting into .....same way with Credit cards , did you know credit card companies can do the same thing ?

They signed it. Their freaking problem. In short, sign nothing unless you know exactly what it says. I used to drive real estate agencies nuts at signings. I read EVERYTHING and requested the firms legal beagle to be present AT the signing. He or she clarified it all, duly witnessed. They freaking hated me every time, however there was NO DOUBT left as to what the document said prior to signing....dman

[ak1971]

Since I trade the markets every day I hear tons of opinions on to what degree the Subprime farce is going to hit our economy and most agree the worst is yet to come.

----------------------------------------------------------
Subprime bust forces families from homes (http://news.yahoo.com/s/ap/20070324/ap_on_bi_ge/house_of_cards_3)
By ADAM GELLER, AP National Writer

THORNTON, Colo. - The lights are still on inside Foreclosure No. A200642668 — so while there's time, have a look around.

Here's the living room, still covered in the worn blue shag Angela Sneary always intended to replace with the sheen of hardwood. And downstairs, through a curtain of plastic beads, is the basement where husband Tim was going to knock out a wall and put in a foosball table.

Step this way and the Snearys point out the places where they never could find the cash to hang a ceiling fan, install a hot tub, replace the siding ... a long list of abandoned ambitions that seem almost too big to squeeze into the modest four-bedroom tri-level.

Owning a home is all about finding humor in unfinished projects. But in the house set back from a bend at 11030 Eudora Circle, the Snearys never had the luxury.

They ran out of money first. Then, they ran out of time. Soon, they'll almost certainly be out of a home.


http://d.yimg.com/us.yimg.com/p/rids/20070322/i/r2033426810.jpg?x=380&y=258&sig=1VQBCu9rCf3sA85IVAcUoA--
Marc Charney, president of CharneyRealEstate.com, hangs a sign on a house in the Boston suburb of Dedham, Massachusetts March 15, 2007. Housing analysts predict between one million and three million U.S. homes will be foreclosed upon in 2007. To match feature USA-SUBPRIME/COUNSELORS. REUTERS/Brian Snyder/Files (UNITED STATES)


Buying a home is the American dream and a record number of Americans — nearly 70 percent — are living it.

Many families, though, likely never would have become owners if not for the tremendous growth over the past decade of a new kind of mortgage business called subprime lending. It long seemed like a winning proposition for all parties. Now the costs are becoming apparent — and they are very unsettling.

Subprime lenders peddle new kinds of mortgages, often requiring no money down and made at "teaser" interest rates that soon rise. They target marginal borrowers with weak credit or questionable incomes who previously might not have gotten a loan at all.

By last year, subprime loans made up 20 percent of the market for new mortgages.

But as the housing market cools, thousands of subprime borrowers are struggling to keep their homes. A number of subprime lenders, saddled by failed loans and a shortage of cash, have folded or staggered. In some particularly hard-hit neighborhoods in Denver's suburbs — one of a few metropolitan areas where the problem is especially grave — home after home sits dark.

Clearly, this isn't how the American dream is supposed to play out, but who's to blame?

The experience of families like the Snearys show how the squeeze created by questionable lending can quickly be compounded by family economic crises, a lack of planning and knowledge, and the rapid shifts in a real estate market that once seemed unstoppable.

"You were set up to fail," one real estate agent told them.

It's a sobering thought for anybody who shares the American dream. After all, it hits so close to home.

CONT.

Why did you cut out the part that they needed a $1200 payment and decided a payment of $1600 would be okay?
This is the fault of everyone involved. (consumer, broker, lender)

Ok, if the loan product didnt exist, then these people wouldnt be in this predicament right? Well what about the millions that are able to pay thier bills who wouldnt have a home if these products didnt exist.


Subprime loans account for less than 20% of all mortgages out of that less than 7% are in foreclosure status. Dont get me wrong, there are a lot of crappy going ons in the mortgage business (but there are in every industry)

Are things bad in the subprime world? Yes. Is it the end of the world for mortgages and subprimers? No




On the securities side..my personal opinion, is that this is a big hustle by a lot of the big brokerage houses. Things started going bad, and the brokerage houses decided this is the perfect storm. The pull the lines of companies such as NEW, etc and say how bad the product is. Then they continue offering the product under different originators (so it still is profitable)


disclaimer...I do work for one of these EVIL companies ;D

[TailgateNut]

They signed it. Their freaking problem. In short, sign nothing unless you know exactly what it says. I used to drive real estate agencies nuts at signings. I read EVERYTHING and requested the firms legal beagle to be present AT the signing. He or she clarified it all, duly witnessed. They freaking hated me every time, however there was NO DOUBT left as to what the document said prior to signing....dman


..not everyone has once before signed away their life as you and I have. Granted, this is what everyone should do, but that's not the reality, is it!
Many under-educated people buy homes.

[defenseman]

The majority of americans are smart enough to read between the lines, and to know what their budget can absorb, but for those who aren't smart enough, a dream can and will become a nightmare very quickly.

AAH yes, the wonderful ARM, the convienient "interest only" mortgages.

This can't be blamed on only the homebuyer, you need to include the "vultures" in the equation.

You have brokers who falsified income information to secure financing for buyers who could have never qualified for a loan.

You had banks and investors who didn't take the time to research the "actual" value of the homes and the credit info of the borrowers.

You have buyers who either did not educated themselves regarding adjustable interest rates and penalty clauses, and/or did not look at their own financial situation.


VERY GOOD snapshot of the "ethical" issues which are presenting impaling the entire real estate industry. They are in need of a major overhaul. However, I am going to 'hang' additional blame on the fools who not only live over their means but in addition do not read what they are signing. They are freaking idiots. In addition however, i do plan on supplementing my position in real estate. I'm sure there is going to be alot of nice property out there to be had at an extremely good price. I'll be investing for sure. No reason not to...dman

[defenseman]

..not everyone has once before signed away their life as you and I have. Granted, this is what everyone should do, but that's not the reality, is it!
Many under-educated people buy homes.

that is , EXACTLY the way you have to look at it. Very sound advice...dman

[Spider]

They signed it. Their freaking problem. In short, sign nothing unless you know exactly what it says. I used to drive real estate agencies nuts at signings. I read EVERYTHING and requested the firms legal beagle to be present AT the signing. He or she clarified it all, duly witnessed. They freaking hated me every time, however there was NO DOUBT left as to what the document said prior to signing....dman
I see , so if something where to happen where you was late on a credit card payment , and they went up to 26% intrest rate on the monies you have already paid , you wouldnt have a problem with this ........... you would be perfectly ok with this

[ak1971]

I see , so if something where to happen where you was late on a credit card payment , and they went up to 26% intrest rate on the monies you have already paid , you wouldnt have a problem with this ........... you would be perfectly ok with this

I'd be okay with this. Its in the agreement you signed.

[defenseman]

I see , so if something where to happen where you was late on a credit card payment , and they went up to 26% intrest rate on the monies you have already paid , you wouldnt have a problem with this ........... you would be perfectly ok with this

You NEVER charge, what you can't pay. I NEVER carry a balance month to month. Simple rule, if followed, will ensure you stay out of trouble..dman

[Spider]

You NEVER charge, what you can't pay. I NEVER carry a balance month to month. Simple rule, if followed, will ensure you stay out of trouble..dman

LOL i dont even have a credit card ...... I pay cash .........preaching to the choir here , but I have 6 kids me and the wife , a modest 3 bedroom house ....... I need to find a bigger place I have a father in law that is a millionaire that wants to help , I tell him the same thing I tell everyone else , I got myself into this situation , I will get myself out ............ I know damn well as soon as I accept his help , he will start meddling , reminding me that i NEEDED HIS HELP........ no thanks I will earn my own way

[Garcia Bronco]

While it's unfortunate people are getting forclosed on....nobody put a gun to their head. Tough breaks....hopefully they won't make the same mistake again.

[TheDave]

If that is in fact the case, the state or govt ethics divisions need to get involved. Apparently, some very greedy real estate folks are making it bad for the industry. Come to think of it, my wifey did loans for a bit in littleton, she was apalled about half the time on who they gave loans to, she mentioned there is little to know quality control, just the drive to make a buck. She left after she had her fill of it........dman

Non-income verification loans have been the norm in the sub prime market since the mid 90's. The difference now is that what use to require 680+ fico scores suddenly fell to 600... even 580 in some cases.

Everything in that industry is based on statistics and speculation. The average homeowner refinances his home every 20 months. Therefor these companies figured on the continueation of the housing market. As long as prices continued to go up these products would continue to turn over. As usual the 1st ones to do it didn't get hurt. It's the companies that continued to do this kind of thing through 2006 (almost all of them) and are now the ones goin under. Currently 47 nationwide companies have imploded and another 20 are on the list... this is something we are all going to have to keep our eye on.

[Garcia Bronco]

LOL i dont even have a credit card ...... I pay cash .........preaching to the choir here , but I have 6 kids me and the wife , a modest 3 bedroom house ....... I need to find a bigger place I have a father in law that is a millionaire that wants to help , I tell him the same thing I tell everyone else , I got myself into this situation , I will get myself out ............ I know damn well as soon as I accept his help , he will start meddling , reminding me that i NEEDED HIS HELP........ no thanks I will earn my own way


That's the right way to do it.

[Garcia Bronco]

I see , so if something where to happen where you was late on a credit card payment , and they went up to 26% intrest rate on the monies you have already paid , you wouldnt have a problem with this ........... you would be perfectly ok with this

All you do is go get another card...transfer the balance and close out the old one. But there is nothing stopping the CC card from doing exactly what you stated and it's legal.

[spdirty]

man Ive scratched and clawed in this ****hole apartment. Couldve gotten a house last June but didnt cuz my credit sucked. Paid off all my charge-offs, got it to the high 600's, got 15 k for the down, now Im lookin at my dream houe in Bailey, probably moving in in early June.

Not doing anything but a fixed rate. Screw the ARM. 2 of my friends are in deep poop with their ARMs now costing em around 50% of their monthly income. Gotta do this the right way, or no way.

[spdirty]

LOL i dont even have a credit card ...... I pay cash .........preaching to the choir here , but I have 6 kids me and the wife , a modest 3 bedroom house ....... I need to find a bigger place I have a father in law that is a millionaire that wants to help , I tell him the same thing I tell everyone else , I got myself into this situation , I will get myself out ............ I know damn well as soon as I accept his help , he will start meddling , reminding me that i NEEDED HIS HELP........ no thanks I will earn my own way

man...thats exactly how my grandfather is...millionaire, and uses his money to control people. My sister is in deep with em, and they try to control her every move, hell, they even try to tell her that if she goes to church, they'll consider forgiving her debt. Just makes me sick...Another weird thing, my grandfather dies first, my sister and I get everything...my grandmother dies first, it gets split 5 ways betweet our cousins and aunt.

Just pisses me off, the situation they've caused. Added to that,there are people in the 'family' who kiss their asses just waitin for em to die.

My whole life, the only thing Ive gotten from em is gifts...never asked em for a damn thing. Another funny thing, Ive fallen out of favor with em cuz the wife is a JW, lol. They can take their money and shove it up their ass, as far as Im concerned.

[ak1971]

Non-income verification loans have been the norm in the sub prime market since the mid 90's. The difference now is that what use to require 680+ fico scores suddenly fell to 600... even 580 in some cases.

Everything in that industry is based on statistics and speculation. The average homeowner refinances his home every 20 months. Therefor these companies figured on the continueation of the housing market. As long as prices continued to go up these products would continue to turn over. As usual the 1st ones to do it didn't get hurt. It's the companies that continued to do this kind of thing through 2006 (almost all of them) and are now the ones goin under. Currently 47 nationwide companies have imploded and another 20 are on the list... this is something we are all going to have to keep our eye on.

No doubt. Most subprime companies product line has come full circle, and is now back to what is was in 2000-2001.

[W*GS]

You NEVER charge, what you can't pay. I NEVER carry a balance month to month. Simple rule, if followed, will ensure you stay out of trouble..dman

Bingo. We do the same - never a balance, ever.

[Bronco_Beerslug]

Bingo. We do the same - never a balance, ever.You can actually increase your FICO scores by carrying small balances.

[TheDave]

No doubt. Most subprime companies product line has come full circle, and is now back to what is was in 2000-2001.

Lets just hope it doesn't go back to what it was pre-94'...

Stated - max LTV 80%, 0x30, 640 mid... not alot of stated loans going to get done in that range

[alkemical]

Fed accused of subprime ‘perfect storm’ (http://www.ft.com/cms/s/8b229154-d8a2-11db-a759-000b5df10621.html)

Fed accused of subprime ‘perfect storm’
By Eoin Callan, Edward Luce and Krishna Guha in Washington

Published: March 22 2007 18:50 | Last updated: March 23 2007 00:33

The Federal Reserve helped create a “perfect storm” in the US subprime mortgage market that could expose up to 2.2m more Americans to the threat of home foreclosure, Chris Dodd, chairman of the Senate Banking committee, said on Thursday.

Mr Dodd, who is also a Democratic Party candidate for the 2008 presidential nomination, alleged the Fed had failed in its oversight role when the growth in high-risk “adjustable rate mortgages (ARM)” to risky borrowers was exploding.

While questioning leading mortgage lenders and federal banking regulators, Mr Dodd also promised legislation to crack down on predatory lending in the US mortgage market, where a rising level of repayment delinquency has caused global market jitters during the past month.

Mr Dodd said that US regulators had relaxed guidelines on mortgage lending at precisely the point in 2004 and 2005 when the riskiest ARM loans – which impose initially light monthly payments that escalate quickly at a later date – were increasing most rapidly. That also coincided with the start of the Fed’s consecutive 17-stage rise in rates.

“Despite those warning signals the leadership of the Federal Reserve seemed to encourage the development and use of ARMs that, today, are defaulting and going into foreclosure at record rates,” he said.

Mr Dodd, who was supported by Richard Shelby, the senior Republican on the committee, also expressed frustration at the fact the Fed had so far failed to issue promised guidance to tighten controls on the $1,200bn subprime mortgage market.

An estimated 1m subprime borrowers will have their rates adjusted sharply upwards this year and another 800,000 next. Roger Cole, a senior Fed official, said the guidance would come out by May at the earliest. But he conceded that the Fed could have done more.

Thursday’s hearing could mark the start of a backlash against leading subprime mortgage lenders. Senior executives from four of the leading lenders – HSBC, Countrywide, WMC Mortgage, First Franklin – testified. Of those invited, only New Century, the largest subprime lender, declined to send a witness.

Mr Dodd said the lenders had engaged in “unconscionable and deceptive” practices. But he also admitted that it would be hard to pass a stricter law.

The Center for Responsive Politics, a watchdog, said New Century more than doubled its Washington lobbying efforts between 2004 and 2005 and contributed $342,000 in campaign funds to candidates in last year’s mid-term congressional elections.

Mr Dodd said lenders had engaged in “unconscionable and deceptive” practices.

[ak1971]

Lets just hope it doesn't go back to what it was pre-94'...

Stated - max LTV 80%, 0x30, 640 mid... not alot of stated loans going to get done in that range

Too much money to be made to go back to that, the whole game has changed.

We've scrapped all of our 100% product, but its just a matter of time before its back in some form. I am actually still very bullish on the subprime markets...its shaking out a ton of trash..hopefully I wont be thrown out with the bathwater.

[ak1971]

I posted this earlier...and think its pretty funny in light of the government screaming about all these loans...

this is from Alan Greenspan October 2004

American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."

[TheDave]

Too much money to be made to go back to that, the whole game has changed.

We've scrapped all of our 100% product, but its just a matter of time before its back in some form. I am actually still very bullish on the subprime markets...its shaking out a ton of trash..hopefully I wont be thrown out with the bathwater.

Eventually we will be right back to what we saw the last couple of years.... Just a matter of how long "eventually" is.

Right now were are all going to have to hold on while inventory levels climb. Hopefully since new construction is down 20%-30% we wont spill over the "maintainable" levels of homes on the market. as long as that doesn't happen we shouldn't see a major correction of home prices. Gonna be a rough couple of quarters, after that we should be OK.

[TheDave]

Thursday’s hearing could mark the start of a backlash against leading subprime mortgage lenders. Senior executives from four of the leading lenders – HSBC, Countrywide, WMC Mortgage, First Franklin – testified. Of those invited, only New Century, the largest subprime lender, declined to send a witness.

Gee... Theres a shock.

[alkemical]

http://www.informationliberation.com/?id=21133

‘IMF to urge depreciation in dollar’

BERLIN: The International Monetary Fund will say further depreciation by the U.S. dollar is needed to help correct global imbalances in its latest World Economic Outlook (WEO), Germany’s Sueddeutsche Zeitung said on Saturday.

Quoting from a draft of the WEO, the paper said the Washington-based fund argued “extraordinarily aggressively” for a correction in exchange rates, above all so as to reduce the massive U.S. current account deficit.

The dollar, which slid to a 2-year low against the euro last week, should continue to depreciate in the mid-term, while the yen, the Chinese yuan and currencies of oil-exporting countries in the Middle East should all appreciate, the draft WEO said.

The WEO, which is due to be published in mid-April, will add that there is no great need for further interest rate increases by the European Central Bank, according to the paper.

Thanks to solid growth in the 13-nation euro zone, the ECB would not create problems by raising its main lending rate to about 4.0 percent from 3.75 percent at present, the IMF said.

[ak1971]

Gee... Theres a shock.

no ****...it blows my mind that they survived as long as they did.

[baja]

All you do is go get another card...transfer the balance and close out the old one. But there is nothing stopping the CC card from doing exactly what you stated and it's legal.

If one card raises your interest rate all of your card issuers will within a matter of days follow suit.

A few years ago I was carrying a high balance on one of my cards they raised my interest rate form 5.9% to 29.99% and within a matter of days all my cards were raised to the 29.99% rate. I called and was told I should have read the fine print. Now mind I have never missed and payment or was I ever late. In my case I paid the card in question and canceled it along with about five other cards. This is usury in my book, they used to convict mobsters for this very same thing.

[broncocalijohn]

I hear this all the time and what is so funny to me is that you greedy sick F'ers sitting in the bushes waiting and planning to make money off of a neighbor's grief will in fact wake up one morning and find all those dollars you saved are declared nearly worthless. Ah the poetic justice of it all..


Greedy? What is greedy about making money in the greatest country to do just that? I didnt shove these horrible loans on them. I didnt ruin their credit for them. I dont wait in any bush. I work my A$$ off just like normal and watch and study the market. I have been studying the problems with these loans and what will be forcasted. THey arent my neighbor and if they are, do you want me to bail them out after making a horrible decision(s) before, during and after their purchase of their house? The only poetic justice is the loan officers and underwriters who got rich of these people then are out on their A$$ looking for another job. THis is America, you can stay in Baja and save whatever you want down there. BTW: Neigbor's grief will be somewhere else, maybe renting. Do you really think they give a rat's ass who buys the house once it is in foreclosure of preforeclosure where they are happy whoever saves them? Puhleeaze!

[baja]

Greedy? What is greedy about making money in the greatest country to do just that? I didnt shove these horrible loans on them. I didnt ruin their credit for them. I dont wait in any bush. I work my A$$ off just like normal and watch and study the market. I have been studying the problems with these loans and what will be forcasted. THey arent my neighbor and if they are, do you want me to bail them out after making a horrible decision(s) before, during and after their purchase of their house? The only poetic justice is the loan officers and underwriters who got rich of these people then are out on their A$$ looking for another job. THis is America, you can stay in Baja and save whatever you want down there. BTW: Neigbor's grief will be somewhere else, maybe renting. Do you really think they give a rat's ass who buys the house once it is in foreclosure of preforeclosure where they are happy whoever saves them? Puhleeaze!

You just don't get it son but before it is all over you will.

You, with your attitude, is the problem.

[yavoon]

You just don't get it son but before it is all over you will.

You, with your attitude, is the problem.

before it is all over?

[baja]

before it is all over?

I am referring to the depth of the pending economic fall out but I'm sure you knew that.

[Dudeskey]

Nor should anything be done... our economy can (and will) absorb this temporary correction in housing. At the individual level these people made bad decisions and they certainly shouldn't be protected by a government safety net.

I agree actually, nobody forced them to sign the contract... The unfortunate side is a lot of these people aren't educated on these things and wind up shooting from the hip.

[alkemical]

I agree actually, nobody forced them to sign the contract... The unfortunate side is a lot of these people aren't educated on these things and wind up shooting from the hip.

I've gotten bit by "credit" - bad decisions - but i didn't really "get it" until the cards got pulled on me.

Now i understand how the system works a whole lot better. The goal is to not OWE anybody money, save for maybe a mortgage (why is death in the root of that word anyway?).

I used to be a typical american. Credit cards charged, a fat $250/mo car payment, spend spend spend.

Then i lost it all - and am still paying for it - But what are you gonna do ya know - suck it up and pay for it. I spent it, so i need to repay it - but i wished that i would have known the rules a bit better.

So now i'm a cash-money-only operator.

The way to beat the game, is to not owe anybody anything and own all you can in straight cash purchases. At least that's how i win.

[ak1971]

I've gotten bit by "credit" - bad decisions - but i didn't really "get it" until the cards got pulled on me.

Now i understand how the system works a whole lot better. The goal is to not OWE anybody money, save for maybe a mortgage (why is death in the root of that word anyway?).

I used to be a typical american. Credit cards charged, a fat $250/mo car payment, spend spend spend.

Then i lost it all - and am still paying for it - But what are you gonna do ya know - suck it up and pay for it. I spent it, so i need to repay it - but i wished that i would have known the rules a bit better.

So now i'm a cash-money-only operator.

The way to beat the game, is to not owe anybody anything and own all you can in straight cash purchases. At least that's how i win.

This is true..dump all your money into your investments and only pay for your extravagances with the profit from those investments

[alkemical]

Oh i don't really invest either. I think that sometimes is like a suckers bet.

[yavoon]

I am referring to the depth of the pending economic fall out but I'm sure you knew that.

no, I didnt. though it seemed like that or whenever he was gna die. I get the same thing from religious nuts who are talking about the end of days.

[baja]

I've gotten bit by "credit" - bad decisions - but i didn't really "get it" until the cards got pulled on me.

Now i understand how the system works a whole lot better. The goal is to not OWE anybody money, save for maybe a<b> mortgage (why is death in the root of that word anyway?).</b>

I used to be a typical american. Credit cards charged, a fat $250/mo car payment, spend spend spend.

Then i lost it all - and am still paying for it - But what are you gonna do ya know - suck it up and pay for it. I spent it, so i need to repay it - but i wished that i would have known the rules a bit better.

So now i'm a cash-money-only operator.

The way to beat the game, is to not owe anybody anything and own all you can in straight cash purchases. At least that's how i win.

That's funny I never made that connection.

It's true though, it is the death of you freedom!

[baja]

no, I didnt. though it seemed like that or whenever he was gna die. I get the same thing from religious nuts who are talking about the end of days.

You have been reading my posts for a couple of years do I seem like that type of poster to you?

[yavoon]

You have been reading my posts for a couple of years do I seem like that type of poster to you?

hiding away in mexico taunting americans about some catastrophic disaster caused by their own moral lackings?

no, not at all

;)

[Dudeskey]

I've gotten bit by "credit" - bad decisions - but i didn't really "get it" until the cards got pulled on me.



It took my wife getting pregnant & losing time @ work due to complications... Wound up going chapter 7 when the bottom began to fall out... fortunately that was before the laws got changed, so I managed to hold on to the house for a while before eventually selling that... Fortunately I came out ahead there.

[baja]

hiding away in mexico taunting americans about some catastrophic disaster caused by their own moral lackings?

no, not at all

;)

Fixed it for ya

Living the good life doing only what I want, owing nothing to anyone, answering only to my own moral convictions yet caring enough to warn my fellow Americans of an impending storm and offering a way to protect them and loved ones from the misery of the inevitable.

[yavoon]

Fixed it for ya

Living the good life doing only what I want, owing nothing to anyone, answering only to my own moral convictions yet caring enough to warn my fellow Americans of an impending storm and offering a way to protect them and loved ones from the misery of the inevitable.

its ok, I like u a lot more than religious nuts neway:). but secluding urself away waiting for the rapture is what it still sounds like to me!

sorry!

;)

[baja]

Ya right, I've been here for 25 years is this thing ever going to happen.


TWENTY FIVE YEARS WITHOUT A BIG MAC such suffering

[broncocalijohn]

I've gotten bit by "credit" - bad decisions - but i didn't really "get it" until the cards got pulled on me.

Now i understand how the system works a whole lot better. The goal is to not OWE anybody money, save for maybe a mortgage (why is death in the root of that word anyway?).

I used to be a typical american. Credit cards charged, a fat $250/mo car payment, spend spend spend.

Then i lost it all - and am still paying for it - But what are you gonna do ya know - suck it up and pay for it. I spent it, so i need to repay it - but i wished that i would have known the rules a bit better.

So now i'm a cash-money-only operator.

The way to beat the game, is to not owe anybody anything and own all you can in straight cash purchases. At least that's how i win.

AMEN! Some credit isnt bad like cars and homes but discipline is the best ingredient to have less worries in a money hungry world (at least on this side of the planet). I am not sure what Baja is crying about but putting down 20% on a house is the best remedy for a possible future problem.

[alkemical]

AMEN! Some credit isnt bad like cars and homes but discipline is the best ingredient to have less worries in a money hungry world (at least on this side of the planet). I am not sure what Baja is crying about but putting down 20% on a house is the best remedy for a possible future problem.

A car loan is among the worst investments you can make. It depreciates while you have interest on the loan, horrible horrible decision.

[defenseman]

A car loan is among the worst investments you can make. It depreciates while you have interest on the loan, horrible horrible decision.

Agreed. Last time I actually got a car loan was in the early eighties. The rest were bought cash on the barrel...dman

[alkemical]

Exactly dman, i won't buy a vehicle over $7k

[alkemical]

U.S. could withstand effects of debt sale: Bernanke (http://www.thestar.com/Business/article/196263)

Washington–Federal Reserve Board chairman Ben Bernanke says U.S. markets could probably withstand the effects of a sell-off of treasury bills by foreign investors.

"Because foreign holdings of U.S. treasury securities represent only a small part of total U.S. credit-market debt outstanding, U.S. credit markets should be able to absorb without great difficulty any shift in foreign allocations," Bernanke said in a March 16 letter responding to Republican Senator Richard Shelby of Alabama.

International investors, including central banks, own about half of the $4.3 trillion (U.S.) of marketable treasuries outstanding, according to U.S. Treasury Department figures.

Senator Hillary Clinton of New York, a Democratic candidate for president, said last month the level of debt owned by foreign investors was "a problem" that posed risks to the economy.

Bernanke said the "substantial accumulation" of reserves by China isn't a problem for the U.S. or its monetary policy. He also said it's "reasonable" to judge that China's currency is "undervalued" against the U.S. dollar at current exchange rates.

[baja]

What else is he going to say....

That through reckless spending the US has put itself in a position where it's economy if vulnerable to the whims of foreign countries some of which really do not like us very much.

[alkemical]

hehehe, no doubt baja.

[ak1971]

anyone want to read up on the market forces at play here,

here is a pretty good report

http://www.hudson.org/files/publications/Mason_RosnerFeb15Event.pdf.

[smalltowngrll]

I've always been a believer that first time home buyers with anything but perfect credit should be required to go through some sort of personal financial class.

One thing I've discovered is that quite a lot of people really don't know how to set a household budget which would include savings and monitor their own finances. I've taught many friends and single mothers the realities of credit and running your household like you would run a business. When things are tight, there are places and ways to save money and ways to stretch your dollar to make it work best for you. Sad to say that so many don't really understand how their personal finances truly work. They take their check, cash it and spend it (bills, grocery, whatever) and really have no idea how much is truly spent in a single month on certain things. Skipping that morning latte can save you as much as $60 - $80 a month. That's a weeks worth of groceries for many.

Anyway...just my thoughts. I do believe that everyone should have the option of owning their own home, but it's just a shame that some never truly learn how to manage finances sufficiently in order to make owning a home a reality.

[baja]

http://gono.com/adart/signs%20of%20time/miscellaneous/m16.jpg

[Bronco Bob]

http://gono.com/adart/signs%20of%20time/miscellaneous/m16.jpg

I tried stretching my dollars. But they kept tearing down the middle. ROFL!

[broncocalijohn]

A car loan is among the worst investments you can make. It depreciates while you have interest on the loan, horrible horrible decision.

I agree with most of what you say but I am one who budgets it very low payments (less months, the better). I would never take a loan where the loan is longer than how long you will keep the car. I always got a five year loan but most of the time I double the payments. My car cost about 13k in 2001. I didnt have that much in cash to commit but the payments were very low. A $9,000 loan isnt much for most budgets. $50,000 loan for a car is nuts. I always say to buy a classic if you just want people to look. It rarely will go down in value. A 1992 Corvette is now no big deal. 1 1962 Vette will always be a classic.

[alkemical]

Only if you deem it "worth it" - i personally find it stupid.

[Play2win]

So, if I was to have a small condo to sell, is now the right time (even though its a "buyer's market") or should I wait a couple of years?

[Meck77]

What else is he going to say....

That through reckless spending the US has put itself in a position where it's economy if vulnerable to the whims of foreign countries some of which really do not like us very much.

Meanwhile Mexico is the benchmark of stability and democracy of the world. Hilarious!

Mexico's economy is so rock solid and self sufficient that no country could EVER possibly influence their economy. I mean think about it Mexico has cornered the worlds Tortilla market. They could paralyze burrito production world wide if they wanted to.

[alkemical]

Meanwhile Mexico is the benchmark of stability and democracy of the world. Hilarious!

Mexico's economy is so rock solid and self sufficient that no country could EVER possibly influence their economy. I mean think about it Mexico has cornered the worlds Tortilla market. They could paralyze burrito production world wide if they wanted to.

And chocolate production, and alot of GM/Ford car production, lots of clothing and other goods as well....

[Meck77]

So, if I was to have a small condo to sell, is now the right time (even though its a "buyer's market") or should I wait a couple of years?

It all depends on your set of circumstances DS49. Obviously if you can sell and get what you need out of the property that is one thing. If you can't then it's better to wait or rent the unit out IMO if it will cash flow. There is no cost to you to try and sell other than some inconvenience.

Another sceario is if you can improve your position and upgrade into a home you prefer moving cash from one home to another isn't a bad thing if you buy the second one at the right price even though you didn't max out on the sale of your primary.


There is also the philosophy to double down and buy another property while prices are low. That's what the big boys are doing.

Without knowing your personal set of circumstances that's the best I can answer your question.

[alkemical]

Also meck - if you'd like i have a thread on the Fed & Inflation - if you'd care to give me your input - i'd be appreciative.

[Meck77]

And chocolate production, and alot of GM/Ford car production, lots of clothing and other goods as well....

When is the last time you've taken a road trip thru Mexico? I drove from AZ to Mazatlan about 5 years ago. It was something like a 15 hour drive thru some of the poorest conditions I'd ever seen and I've been to plenty of 3rd world countries.

Hey I love Mexico but the Mexico Americans see is only a small fraction of what is really going on there. It's so great down there that people that live there spend 40 hours a week posting on American football messageboards.;D

[alkemical]

When is the last time you've taken a road trip thru Mexico? I drove from AZ to Mazatlan about 5 years ago. It was something like a 15 hour drive thru some of the poorest conditions I'd ever seen and I've been to plenty of 3rd world countries.

Hey I love Mexico but the Mexico Americans see is only a small fraction of what is really going on there. It's so great down there that people that live there spend 40 hours a week posting on American football messageboards.;D


Yet you don't dispute what i've said.....

[Play2win]

It all depends on your set of circumstances DS49. Obviously if you can sell and get what you need out of the property that is one thing. If you can't then it's better to wait or rent the unit out IMO if it will cash flow. There is no cost to you to try and sell other than some inconvenience.

Another sceario is if you can improve your position and upgrade into a home you prefer moving cash from one home to another isn't a bad thing if you buy the second one at the right price even though you didn't max out on the sale of your primary.


There is also the philosophy to double down and buy another property while prices are low. That's what the big boys are doing.

Without knowing your personal set of circumstances that's the best I can answer your question.

Thanks, and, yes, I know its a hard question because everybody does have different circumstances. I was just seeing if anybody had any thoughts/feeling about whats going on. I appreciate your feedback.

Thanks!! ;D :thumbsup:

[Play2win]

It all depends on your set of circumstances DS49. Obviously if you can sell and get what you need out of the property that is one thing. If you can't then it's better to wait or rent the unit out IMO if it will cash flow. There is no cost to you to try and sell other than some inconvenience.


Also the unit is all paid for (no mortage or loan payments), but it is in Florida, which is a whole another can of worms...

[Meck77]

Also the unit is all paid for (no mortage or loan payments), but it is in Florida, which is a whole another can of worms...

ah ok. Paid for! Good for you man. Alot of "investors" are stuck with their condos right now that is for sure. Plenty of those get rich quick guys got stuck with their pants down on all those "pre-construction" pricing deals. It was good while it lasted!

I was just there last week. That market has gotten real soft (atleast where I was visiting).

Rates are great though! You might want to consider shifting some of that money out of there and putting it to good use elsewhere. Just a thought but it's hard to beat paid for! That's the best kinda real estate!

[Meck77]

Yet you don't dispute what i've said.....

uh ok. Yeah they make chocolate and assemble cars while we tell them to. That is until the AMERICAN automakers close up shop down there. Oh I forgot Mexico is in control of their own destiny according to Baja. lmfao

Hey Baja why is it that you are hiding down in Mexico anyway? Nevermind I don't expect you to answer that question. It isn't fare.

[alkemical]

uh ok. Yeah they make chocolate and assemble cars while we tell them to. That is until the AMERICAN automakers close up shop down there. Oh I forgot Mexico is in control of their own destiny according to Baja. lmfao

Hey Baja why is it that you are hiding down in Mexico anyway? Nevermind I don't expect you to answer that question. It isn't fare.



No they make those products because it's more profitable. If we all worked at mexican wages, we'd have those jobs too.

[baja]

Meanwhile Mexico is the benchmark of stability and democracy of the world. Hilarious!

Mexico's economy is so rock solid and self sufficient that no country could EVER possibly influence their economy. I mean think about it Mexico has cornered the worlds Tortilla market. They could paralyze burrito production world wide if they wanted to.

Cute, Dont get your point thought. We are talking about the US ecomony last i looked. i live in Mexico but i have also lived in other countries of the world, Guys like you Alec and Mock crack me up, you think just because i have an Mexican address that somehow i repesent everything Mexican. For all your fended worldlyness Meck you sure think like a hick.

[baja]

When is the last time you've taken a road trip thru Mexico? I drove from AZ to Mazatlan about 5 years ago. It was something like a 15 hour drive thru some of the poorest conditions I'd ever seen and I've been to plenty of 3rd world countries.

Hey I love Mexico but the Mexico Americans see is only a small fraction of what is really going on there. It's so great down there that people that live there spend 40 hours a week posting on American football messageboards.;D

So you drove in Northern Mexico one time 5 years ago, how very impressive what an authority on Mexico you must be. What you dont know about Mexico could not fit into one of Spiders trailers.

By the way the countries that can take down the US aconomy are China and japan.

What i enjoy the most is the suprise the smug guys like meck are in for. Oh the whining that will prevail soon.

[baja]

uh ok. Yeah they make chocolate and assemble cars while we tell them to. That is until the AMERICAN automakers close up shop down there. Oh I forgot Mexico is in control of their own destiny according to Baja. lmfao

Hey Baja why is it that you are hiding down in Mexico anyway? Nevermind I don't expect you to answer that question. It isn't fare.

WHEN DID I EVER SAY MEXICO IS IN CONTROL OF ANYTHING