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Mortgage Crisis Newz

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus
...tell me why I should make my mortgage payments on time when it looks like falling a few months behind would be a benefit?

:disgust1:


Creativity needed to limit foreclosures: Bernanke
By Greg Robb, MarketWatch
Last update: 9:07 a.m. EST March 4, 2008


WASHINGTON (MarketWatch) -- The mortgage and financial-services industry will have to use fresh thinking to reduce preventable foreclosures, said Federal Reserve Board Chairman Ben Bernanke on Tuesday.

A willingness to consider new ideas has been a hallmark of the Bernanke Fed in the months since the financial market turmoil began last summer. For instance, the central bank has begun novel auctions of liquidity to get around the unwillingness of banks to borrow at the Fed's discount window.

In a speech to community bankers in Orlando, Fla., Bernanke urged the banking industry to consider new approaches.

"Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping but more can, and should, be done," Bernanke said. 'Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy.'
— Ben Bernanke

Ultimately, Bernanke said, real relief for the mortgage market requires stabilization and recovery in the nation's housing sector. Economists estimated on Monday that house prices will continue to fall and that perhaps only half of the decline has been realized. Bernanke said delinquencies and foreclosures will continue to rise for a while longer. This will likely add to the inventory of vacant unsold homes -- already at more than 2 million units at the end of 2007, he said. More coverage of the U.S. economy

"This situation calls for a vigorous response," Bernanke said.
"Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy," he added.

One of the difficulties in working out problem loans is a thicket of complications arising from the fact that the loans were bundled into packages, then securitized and sold. These packages differ in the type and scope of workouts permitted by loan servicers.

Bernanke said that holders of the securitized mortgages should permit servicers to write down the mortgage liabilities of borrowers. He said financial firms should consider reducing the principal of the trouble loans and not only lowering the interest rate of the loans.

Permitting the Federal Housing Administration greater latitude to set underwriting standards and risk-based premiums for mortgage refinancing would help more troubled borrowers, he said.

Finally, new capital-raising by Fannie Mae and Freddie Mac would allow the firms to expand the number of new mortgages they securitize.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
29,634
2,348
Portland, OR
I'm still waiting for this time next year. Based on the fact that there are about 25% of the homes in my little town for sale, I am guessing they will remain unsold and more will hit the market. If I time it right (or even get close) I can get my McMansion on the CHEAP!

The house behind me has been for sale for over a year and is on its 3rd real estate firm. It went on the market FSBO to start with.
 

dante

Unabomber
Feb 13, 2004
8,815
8
looking for classic NE singletrack
...tell me why I should make my mortgage payments on time when it looks like falling a few months behind would be a benefit?

:disgust1:
Because the government (and the economy) needs the artificial wealth that was created in the last 5 years from the housing boom. When people's houses are worth more they spend more, they take out HELOC's to buy boats and cars and other crap that they don't need, and they pay higher property taxes b/c their homes are "worth more". You have people in their 50s and 60s who aren't saving (saving BAD, spending GOOD!!) b/c they figure they can just use their house for financing their retirement, and you have young people pouring money into the market by taking on speculative (personal) loans and financing all of the people who are getting out of the market to go off and retire, travel the world, etc. It's basically a gigantic pyramid scheme, and the fed is frantically trying to prop it all up.

but on the flip side, people are going to be P!SSED if the gov'ment bails out a bunch of people. rock, meet hard place.
 

Westy

the teste
Nov 22, 2002
36,621
3,441
Sleazattle
I heard an interesting interview with a woman who runs a business cleaning up homes that have been forclosed. She said often times she would find the owners pets dead from thirst or starvation after just being left in the house when they left. Yep responsibility.
 

BurlyShirley

Rex Grossman Will Rise Again
Jul 4, 2002
19,183
1
TN
I probably am not going to ever be able to sell the house Im in. At least not for profit. Whatever. Could be worse I guess. At least it wont get foreclosed.
 

$tinkle

Expert on blowing
Feb 12, 2003
14,591
5
it's not so much a mortgage crisis as it is a moral crisis. maybe they should fulfill the definition of the word mortgage & kill people who walk away from their homes. how awesome would it be to land a gig as a real estate agent & be required to have a CCW?

'til death do you part'
 

manimal

Ociffer Tackleberry
Feb 27, 2002
7,214
14
Blindly running into cactus
I probably am not going to ever be able to sell the house Im in. At least not for profit. Whatever. Could be worse I guess. At least it wont get foreclosed.
i'm with ya BS, and besides, after all the work i've put into it this past year, i don't think i want to sell it for a long time. where else am i going to find something that big on some land for a sub $1k mortgage :D

i'll just ride this out for 10 years or so and check the market then.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
29,634
2,348
Portland, OR
It's not too much different than the tech stock crap from 2000.

Tech Stocks = People put a ton of stupid money into companies that never delivered.
Sub Prime = Companies put a ton of stupid money into people that never delivered.

I think the housing market will recover quicker, though. Once all the builders stop building stupid homes and stupid people lose their asses, the market will bottom out, then recover. There are plenty of people who have credit and want a house (like me) but don't want to pay $250k for an apartment.

If you look at how outrageous house prices got here, it was bound to crash. People don't make the kind of money they are asking.
 

Toshi

Harbinger of Doom
Oct 23, 2001
27,246
2,117
What we desparately need is deregulation of the entire housing industry, top to bottom.
say what? it was deregulation of the mortgage industry that enabled the powers behind the scene to assemble this particular house of cards.
 

dante

Unabomber
Feb 13, 2004
8,815
8
looking for classic NE singletrack
i'm with ya BS, and besides, after all the work i've put into it this past year, i don't think i want to sell it for a long time. where else am i going to find something that big on some land for a sub $1k mortgage :D

i'll just ride this out for 10 years or so and check the market then.
:shocked: Buying a house to LIVE IN??!? Not just as another stepping stone to fame and fortune, an eternal ATM machine that just keeps spitting out hundred dollar bills and will turn over several thousand percent profit when you sell it to buy an even bigger McMansion?




(hushed voice) Are you a commie?
 

ohio

The Fresno Kid
Nov 26, 2001
6,640
4
SF, CA
God, would I love for the bottom to fall out from under this market. The fact that I, with a good income and good savings, can't buy **** because jackasses are overbidding for houses with money they don't have pisses me off to no end. I know it'll hit the rest of the economy, but this whole country needs a hard lesson in fiscal responsibility.
 

Toshi

Harbinger of Doom
Oct 23, 2001
27,246
2,117
God, would I love for the bottom to fall out from under this market. The fact that I, with a good income and good savings, can't buy **** because jackasses are overbidding for houses with money they don't have pisses me off to no end. I know it'll hit the rest of the economy, but this whole country needs a hard lesson in fiscal responsibility.
personally i'm relishing the prospect of all manner of SUVs on dubs being repossessed as we type :D
 

ohio

The Fresno Kid
Nov 26, 2001
6,640
4
SF, CA
personally i'm relishing the prospect of all manner of SUVs on dubs being repossessed as we type :D
That leaves behind the 82' cutlass cieras with dub-deuce spinners unfortunately. I love it when the wheels cost more than the car...
 

$tinkle

Expert on blowing
Feb 12, 2003
14,591
5
personally i'm relishing the prospect of all manner of SUVs on dubs being repossessed as we type :D
you think with a harsh lesson in fiscal responsibility there's an outside chance they'd also take the opportunity to learn to PARK BETWEEN THE ****ING LINES?

just askin if it's possible
 

dante

Unabomber
Feb 13, 2004
8,815
8
looking for classic NE singletrack
God, would I love for the bottom to fall out from under this market. The fact that I, with a good income and good savings, can't buy **** because jackasses are overbidding for houses with money they don't have pisses me off to no end. I know it'll hit the rest of the economy, but this whole country needs a hard lesson in fiscal responsibility.
well, there's quite a few opportunities out there right now....

:busted:
 

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus

reflux

Turbo Monkey
Mar 18, 2002
4,622
2
G14 Classified
Holy crap! Ive been looking for a new headquarters for my dog fighting business. Those houses are awesome for the price.
I'm thinking that I would remove every inside wall and create Detroit's finest toilet establishment. Picture this, a toilet situated against the rear wall with a 30' projection screen against the inside front wall of the house.

Heaven.
 

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus
Teh Newz said:
The Bush administration is urging lenders to avert foreclosures by modifying mortgage terms amid the worst housing slump in a quarter century. The Federal Reserve has slashed its benchmark interest rate twice this year to try to avert the first recession since 2001. The central bank yesterday said the net worth of U.S. households decreased by $532.9 billion during the fourth quarter as home values fell.
so, if someone, with bad credit, bought a house using a ARM, gambling that the value of the house would increase so they could sell before the rate adjusted UP, but instead lost the gamble, who cares?

why should the gov bail them out and why should the gov bail out the company that lent them the money (gambling the borrowers would pay the high interest once the super-cheap introductry rate expired and knowing the borrowers credit sucked ass)?
 

LordOpie

MOTHER HEN
Oct 17, 2002
21,033
1
Denver
Are you really asking so you can get an answer or are you going to gloss over like normal?

Short answer: bailing them out isn't for their benefit in the govt's eyes, the bail out is for the benefit of the economy as a whole.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
29,634
2,348
Portland, OR
Are you really asking so you can get an answer or are you going to gloss over like normal?

Short answer: bailing them out isn't for their benefit in the govt's eyes, the bail out is for the benefit of the economy as a whole.
Wait, n8 might actually have a point.

It was a 2 sided gamble that lost on both sides. I'm not a fan of the bailout either, but the fact that the large banks lost a lot of money has a bad trickle down.
 

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus
Wait, n8 might actually have a point.

It was a 2 sided gamble that lost on both sides. I'm not a fan of the bailout either, but the fact that the large banks lost a lot of money has a bad trickle down.
why is it a bad thing to have this ripple thru the economy for a couple years on its own? wouldnt the effects be over and done with then and the banks/borrowers learn not to do that instead of artificially propping up the lenders/borrowers thereby teaching them that the gov (taxpayers) will cover their gambling losses..
 

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus
Best time to buy in four years...

http://finance.yahoo.com/real-estate/article/104536/Housing:-Best-Time-to-Buy-in-Four-Years

The biggest gains in affordability occurred in California, Michigan and Florida, which are areas that have also been some of the hardest hit by foreclosures. Those states registered 43 of the 50 biggest price declines.

Bend, Ore. currently tops the overvaluation list. Home prices there were judged to be about 59% higher than their fair-market value. Miami, despite a median home price decline of 5.7% last year, is the most overvalued big city, by 44%.

All the best bargains were found in Louisiana and Texas. Houses in Houma, La. were under valued by 31.2%, according to the report. Dallas was the most undervalued big city, by 30%.