azdiver 0 #26 December 7, 2007 QuoteQuoteso for those of you thinking its just the reckless getting hurt wake up. the reckless ones are getting hurt but others that didnt have control over what the reckless were doing are getting fucked as well. No they aren't. Construction is being completed right now because under the construction loans, they HAVE to finish up. But it's also an industry that has ups and downs - like any other business. Realtors? Yeah, they are facing a hit, but those who are looking into moving REO's are doing all right. The main source that is off kilter is the "property value" loss. Yeah, which means a person wanting to sell their home and buy another realizes no net loss. Those who would sell a large home and buy a smaller one are at a disadvantage. But those seeking similar value, or wanting to buy a larger home, will realize no loss or a long-term gain. The only loss is in refinancing, which ALSO just results in no net money. After all, you gotta pay it back, right? In terms of finance, no, people are NOT getting hurt. They just aren't benefitting as much.construction is beign hurt because there arnt any new homes beign built, no new homes means no work. all the work that is being done right now is finishing up those already started. Ive been in this Industry for 14 yr i know the ups and downs of it, and this is a really bad down due to the sub prime. As for realtors in az there are about 15k of them and their competing against 50k new homes for sale.light travels faster than sound, that's why some people appear to be bright until you hear them speak Quote Share this post Link to post Share on other sites
nathaniel 0 #27 December 7, 2007 Quote Why is it in the market's best interest? Is it EVER in the market's best interest to merely continue inefficiency for five years? Bush didn't announce a bail out or a buy out. The gov't is clearing the path for the market to function naturally. What the gov't is doing is removing regulatory barriers that were preventing lenders and borrowers from voluntarily modifying their existing contracts. Both sides still have to opt in. Since you seem to disagree with this, why should lenders not be allowed to renegotiate with about-to-be-delinquent borrowers? Perhaps you would motivate for total deregulation...since that's pretty much out of the question, it still makes sense that from time to time it is necessary to rejigger arcane regulations when they get in the way of the market healing itself.My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski? Quote Share this post Link to post Share on other sites
lawrocket 3 #28 December 7, 2007 Well, if that's all that's going on, then it's difficult to disagree. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
billvon 2,462 #29 December 7, 2007 > What the gov't is doing is removing regulatory barriers that were >preventing lenders and borrowers from voluntarily modifying their existing >contracts. And freezing interest rates for five years on many ARMs. Quote Share this post Link to post Share on other sites
kelpdiver 2 #30 December 7, 2007 Quote> What the gov't is doing is removing regulatory barriers that were >preventing lenders and borrowers from voluntarily modifying their existing >contracts. And freezing interest rates for five years on many ARMs. Uh, yes. There is nothing that prevents lenders and borrowers from modifying their existing contracts. That's what a re-fi is. Azdiver - yes, lots of people get affected by the collapse. These people lived pretty well during the bubble, now they won't. Maybe it will result in more motivated contractors - my mom has found them to be remarkably nonchalant about completing their projects. (oh, there's a cloud in the sky - I don't think I'll go 12 miles up the mountain to work today) Quote Share this post Link to post Share on other sites
nathaniel 0 #31 December 7, 2007 Quote There is nothing that prevents lenders and borrowers from modifying their existing contracts. Not so. They explain it better than I can. From what I understand, the terms under which the loans were securitized get in the way. Also, re: the "it's only subprime sentiment", another great post that spells out looming problems with 2nd mortgages.My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski? Quote Share this post Link to post Share on other sites
billvon 2,462 #32 December 7, 2007 >There is nothing that prevents lenders and borrowers from modifying >their existing contracts. Actually, there is. Often, the mortgage has been sold several times and is no longer held by the original lender. _Everyone_ has to agree to change the rate - and some of those people in the chain have no desire to do so since they no longer have a financial interest in the mortgage. Quote Share this post Link to post Share on other sites
lawrocket 3 #33 December 7, 2007 So this article - everything, in fact - is talking about high risk commercial paper. Seconds are high risk, hence there is always a higher interest rate. Option ARMS? About the stupidest freaking thing I have seen from a business standpoint. Making offers of negative amortization? Why the hell would one make an agreement to get back less in the short term and make up for it? A giant risk. From the article: "In Northern California, a household income of $90,000 per year could legitimately pay the minimum monthly payment on an Option ARM on a million home for the past several years." No, shit. When the minimum payment doesn't even cover interest, payment is easier. You'd think that they'd notice the ever higher principal balance on the note. But they don't. They'll put it off till tomorrow. All of this comes down to irresponsibility and risks taken by the lenders and borrowers. Fortunately, for most of these people, this has not been a problem because the responsible ones have not experienced these troubles. Problems with second mortgages? Yeah, those are expected, which is why the interest rate is higher. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
azdiver 0 #34 December 7, 2007 QuoteQuote> What the gov't is doing is removing regulatory barriers that were >preventing lenders and borrowers from voluntarily modifying their existing >contracts. And freezing interest rates for five years on many ARMs. Uh, yes. There is nothing that prevents lenders and borrowers from modifying their existing contracts. That's what a re-fi is. Azdiver - yes, lots of people get affected by the collapse. These people lived pretty well during the bubble, now they won't. Maybe it will result in more motivated contractors - my mom has found them to be remarkably nonchalant about completing their projects. (oh, there's a cloud in the sky - I don't think I'll go 12 miles up the mountain to work today) not all that are effected were living pretty well prior to the pop just because prices go up doesnt mean wages went with them, but when money stops coming in wages do stop. your moms problem might be a shity contractor or one that took to much work and could not complete it in the time he said.light travels faster than sound, that's why some people appear to be bright until you hear them speak Quote Share this post Link to post Share on other sites
loumeinhart 0 #35 December 8, 2007 QuoteWhat the gov't is doing is removing regulatory barriers that were preventing lenders and borrowers from voluntarily modifying their existing contracts An agreement between a mortgagee (bank) and mortgagor (borrower) is called a Forbearance Agreement and is usually available on like a one-time basis if you get behind. The lender will divide your delinquent amount $ over a period of time and add it to your monthly payment until you are up to date. Credit cards do the same thing but it's called a re-age. Believe me the lenders/servicers/investors do NOT want to foreclose on collateral. Quote Share this post Link to post Share on other sites
loumeinhart 0 #36 December 8, 2007 Quotewhen Bush & Co. get the banks to let us out of the contract!!! Dude Bush and Co. are located in the UK!! Google it! I don't think they have anything to do with the US Real Estate / Investment Market. Bush & CompanyBush & Company Rehabilitation LLP offer three main services: expert witness quantum reports, immediate needs assessments and case management services and ... www.bushco.co.uk/ - 11k - Cached - Similar pages President Bush cannot nullify an agreement between lender and borrower QuoteBush is doing this is not for the poor, subprime people - he knows that a further crumbling of the mortgage/credit markets will almost certainly result in a rather nasty recession Do you mean all subprime borrowers are "poor" ?? Absolutely NOT. I've seen plenty of 6-figure salaries with a 525 mid score A recession by definition is 2 consecutive quarters of negative growth. Quote Share this post Link to post Share on other sites
kallend 1,666 #37 December 8, 2007 I wonder if the President's brother Neil is involved in this fiasco, like he was in the S&L fiasco of the Reagan years. (Neil Bush was director of Silverado Savings and Loan when the institution collapsed in 1988, costing taxpayers $1.6 billion.). Neil payed $50,000 in an out-of-court settlement. Rob a gas station of $50 and you go to jail, steal $1.6B and you get a slap on the wrist if your name is Bush. Bailouts of irresponsible investors just encourage more bad behavior in the future. The S&L fiasco of the Reagan-Bush years constituted the largest theft in history, with US taxpayers picking up the tab of some $1.6 Trillion.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
joedirt 0 #38 December 8, 2007 Quote President Bush cannot nullify an agreement between lender and borrower Thank you...how do people believe this? No one would EVER get a loan if that were true. Quote Share this post Link to post Share on other sites
itllclear 1 #39 December 9, 2007 QuoteBailouts of irresponsible investors just encourage more bad behavior in the future. Bingo!"Harry, why did you land all the way out there? Nobody else landed out there." "Your statement answered your question." Quote Share this post Link to post Share on other sites
Lefty 0 #40 December 9, 2007 QuoteBailouts of irresponsible investors just encourage more bad behavior in the future. Would bailouts of "less fortunate" investors be acceptable?Provoking a reaction isn't the same thing as saying something meaningful. -Calvin Quote Share this post Link to post Share on other sites
kallend 1,666 #41 December 9, 2007 QuoteQuoteBailouts of irresponsible investors just encourage more bad behavior in the future. Would bailouts of "less fortunate" investors be acceptable? Bailouts of investors in general are a bad thing.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
loumeinhart 0 #42 December 10, 2007 Quote Thank you...how do people believe this? No one would EVER get a loan if that were true. Not sure what you mean... Quote Share this post Link to post Share on other sites
joedirt 0 #43 December 10, 2007 Quote Not sure what you mean... This is what I thought you meant... Meaning if I were a banker, I would seriously consider other business avenues if it were up to the president to lower my interest rates (after the loan is made). There is no easier way to make money legally than to loan your money out with interest. This is tried and true, with thousands of years of history behind it. I suppose congress could pass legislation to do so but that would be counter productive to what all the "Keynesians" over at the FED have been trying to do. They have been staving off recession,(as you've pointed out the technical definition) since 2000. That is why they have lowered interest rates so much and sacrificed the value of the dollar. Maybe they're right, maybe not, I don't think the jury is out yet on that. If they pass laws to decide what the banks MUST do it will seriously tighten liquidity, which is the opposite of what they have been shooting for. Puting money into the economy is the whole point of lowering interest rates. That keeps the economy going and hopefully raises GDP. However I haven't read exactly what this "bailout" is, I'm pretty confident its all voluntary at this point. (I'm a small business owner, not a banker). If its NOT voluntary... then I'll start to worry. Other wise I don't think its gonna make much of an impact, many housing markets have a long ways to fall to meet rent comparisons. If i'm wrong I'm sure there's a banker here, or mortgage guy, cough...cough...(salesmen) who can set me straight. Quote Share this post Link to post Share on other sites
loumeinhart 0 #44 December 10, 2007 QuoteI would seriously consider other business avenues if it were up to the president to lower my interest rates (after the loan is made). makes no sense to me QuoteThere is no easier way to make money legally than to loan your money out with interest. This is tried and true, with thousands of years of history behind it. I suppose congress could pass legislation to do so but that would be counter productive to what all the "Keynesians" over at the FED have been trying to do. still lost: Quote Share this post Link to post Share on other sites
Zipp0 1 #45 December 10, 2007 Quote Do you mean all subprime borrowers are "poor" ?? Absolutely NOT. I've seen plenty of 6-figure salaries with a 525 mid score Uh yeah, OK. 1/2 of 1% of subprime mortgages went to people with 6 figure salaries. Whoop-de-doo. -------------------------- Chuck Norris doesn't do push-ups, he pushes the Earth down. Quote Share this post Link to post Share on other sites
kelpdiver 2 #46 December 10, 2007 QuoteQuote Thank you...how do people believe this? No one would EVER get a loan if that were true. Not sure what you mean... In short, if the Feds force lenders to take a lower rate of return without compensation, then the money supply to the mortgage sector will dry up considerably. This sector has long been known as very solid - you have real property backing up the loans. Now we know part of that is false and if the rate of return is compromised too, people will find other places to invest for fixed income. Quote Share this post Link to post Share on other sites
kelpdiver 2 #47 December 10, 2007 QuoteQuoteBailouts of irresponsible investors just encourage more bad behavior in the future. Would bailouts of "less fortunate" investors be acceptable? How would you define it? Right now, the terms favor the most wreckless of investors and punish those who showed more responsibility. And what do you say to those who just miss the cutoff? Quote Share this post Link to post Share on other sites
tigra 0 #48 December 10, 2007 Actually, it is about as simple as he makes it sound. The message here is stupidity and greed actually do pay off. And if you think freezing interest rates on these ARMs won't have a far reaching impact on the financial market, think again. Quote Share this post Link to post Share on other sites
billvon 2,462 #49 December 11, 2007 >Meaning if I were a banker, I would seriously consider other >business avenues if it were up to the president to lower my interest >rates (after the loan is made). He can (or more accurately the government can.) Such things have been done before. The gasoline price controls of the 1970's were a good example - and also a good example of how such a plan can backfire. Yet even though we now know that the government can control prices, people still sell gasoline. Quote Share this post Link to post Share on other sites
kelpdiver 2 #50 December 11, 2007 Quote>Meaning if I were a banker, I would seriously consider other >business avenues if it were up to the president to lower my interest >rates (after the loan is made). He can (or more accurately the government can.) Such things have been done before. The gasoline price controls of the 1970's were a good example - and also a good example of how such a plan can backfire. Yet even though we now know that the government can control prices, people still sell gasoline. People with oil reserves have fewer options than people with cash. Quote Share this post Link to post Share on other sites
