The appraisals are another nail in the coffin. A neighbor bought a house for $1.5mm only to see his appraisal go for $2.2mm the same year. Merrill wrote him a $2mm mort like they were handing out free car wash coupons.
it is not interest only that is the problem with the mortgage market it is the margin and index that they where written most treasury loans are an margin of 2.5/2.00 with index of 5.125 don't see any issue with those loans, however SUBPRIME has margin of 6.5 / 7.5 % with index of 6.342 Hello anyone home but the talking heads say ohhh it is the interest only loans that is the problem. What a crock of shit I am in the mortgage biz and I get soooo maddd when i hear the bullshit spewed out of there mouths SUBPRIME LOANS made so much money for the industry but they where NEVER meant to be a long term loan but for the ones that did not refi it was there own fault now they can't get out of them because there is no product available, very sad you would not want your mortgage going from 1700 to 2500 in 6 months no wonder they are defaulting
Wow, you really are stretching to be a doomsayer. It means that only about 1.2 out of 100 homes are in foreclosure. during the best of times, the number is still 0.8 per 100. So the liberal media can say "look, a 50% increase in foreclosures!" and scare people - but the real number is still jack-shit small. So this means there CURRENTLY is no real estate meltdown. Rather a normal market cycle. Your 15% of homes for sale in foreclosure number is the misleading one, especially in the most expensive part of CA because: 1) It is a reflection that there are really not that many homes for sale to begin with - this is why the prices there are so stupidly high (no supply to meet demand) and homeowners know it so they are keeping their homes long-term - so naturally only people getting forced out by life circumstance changes or bad planning/overleverage have their home on the market. A better viewpoint is that 1 in 6.5 Californians bought a house they cannot afford to keep through adverse times in their life. Where else in the world is "keep up with the Joneses" more prevalent? 2) That area of the country ALWAYS has a higher foreclosure rate in proportion to the excess in the pricing and volatility of the market there - once again, it is an outlier. But the thing that made really me laugh is when you said the media is "sugar-coating" it. Quite the opposite is true - they are exaggerating it and will do so until if/when a Democrat is President again.
Don't you think its more likely that they will do so as long as it sells paper, minutes, adverts etc. Blood on the streets sells ... then moralizing about other media overselling blood sells ... etc etc. So they'll sell "its ok" for a month or so and then sell "doom" a while later. Thats entertainment. A serious question though. Its interesting to argue the meaning of statistics but can anyone tell us what the statistics were like at the tipping point of prior "crashes?"
everyone forgets that wall street will commoditize anything so that it can be indexed and then arb'd look at the S&P, and everything else.... so W$S packaged crap loans and sold them as alt-a in $1 MM buckets to sucker secondaries who then sold them to pension funds who wrote the offsetting f"g derivatives to this stuff?? Field Marshall Bernanke......Sir?
The last time I saw Calif foreclosure numbers was some months ago. The foreclosure % had skyrocketed. But when you looked at the actuals, it wasn't that bad. The total % of homes in foreclosure was still 1/2 of the all-time high. In fact it was still lower than the historical average. I imagine things are worse now, but I doubt it's that much worse than the state's mean. Really, there's a lot of room before I would call this a real-estate meltdown (at least for Calif).
The trend is still increasing in a bad way. IMHO, never a good idea to get the state numbers as RE is ALWAYS a local issue. What happens in Santa Monica doesn't generally mean squat to Palm Springs or La Quinta Homes that would have sold in my neighborhood during 2005 for 500K don't get an offer at 375-400K. They stay on the market forever, price reductions, incentives... blah blah blah. Even with a 20-25% markdown from peak prices, no go! I'd call that the beginning of a serious meltdown. Pool of buyers shrinking, long times on market, nobody going to open houses. Don't forget arms/IO's resetting and people not being able to afford the new rate, just the teaser period, which they could barley afford... there are 1000's of those here in the Coachella Valley... Yep it's all gravy.
what ? there's nothing wrong with standing in the middle of the hwy . everything is wonderful i live in a glass house . bgp