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The upcoming housing bailout
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prozacrefugee
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PostPosted: Tue Aug 21, 2007 1:32 pm    Post subject: The upcoming housing bailout Reply with quote

Looks like rather than a smart solution (like this http://tpmcafe.com/blog/coffeehouse/2007/aug/19/own_to_rent_the_way_to_save_subprime_borrowers ) that helps both homeowners and hedge funds and stabalizes the market instead the government is likely to just buy the subprime debt through Fannie Mae, bailing out predatory lenders and leaving the homeowners to get evicted. Combine this with the recent bankruptcy law and it could be real bad for the people and the market.

Shay's Rebellion anyone?
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Angel Bobby Peru
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PostPosted: Tue Aug 21, 2007 4:56 pm    Post subject: Reply with quote

that coupled with spying on its own citizens, being labeled antipatriotic for being a real patriot, putting up a wall on our border, ratting out its own intelligence officers, illegally invading sovereign nations, sponsoring S. American coups, forcing its citizens into submission via fear and abandoning the constitution, privatizing everything under the sun, torturing captives, the increase in public video surveillance, fucking over the poor here, fucking over the poor across the globe, polluting our lakes and rivers, destroying our forests, drilling in the wildlife reserve, ignoring global warming, the push for individualism, a humiliatingly high percentage of children living below the poverty line, the education system in shambles, the coddling of and cowing to the pharmaceutical industry at the expense of the health of the population, the abuse of power and contempt of congress and the law by the president and vice president, election fraud, the handling of katrina, ignorance of treaty obligations, and a few hundred other things I can't think of right now, should warrant a rebellion 100,000 times that of Shay's.

what a fucking embarrassment this country has become.
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Kenkajin 2.0
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PostPosted: Tue Aug 21, 2007 5:09 pm    Post subject: Reply with quote

It's all the illegal immigrants fault! Them and the gheys! Them and the gheys and the democrats! Them and the gheys and the democrats and the hollywood producers!
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dahuka
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PostPosted: Fri Aug 24, 2007 4:46 pm    Post subject: Reply with quote

the first three posts in this thread sum up the last 20 years of politics in this country better than any history book could
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voiceofTruth
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PostPosted: Sat Aug 25, 2007 10:26 am    Post subject: Reply with quote

New Home sales are up in July, this is not going to need federal help.
What type of message does a fed bailout send to other sectors of the economy? People need to go back to %20 down, proper credit lending.
All these arms and %5 down products are BS. Also overspeculation from a development standpoint can be blamed. Major market correction, then back to business as usual.FYI

Greenpoint, williamsburg market is untouchable, largest appreciation of property over the last year in the country.
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prozacrefugee
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PostPosted: Sat Aug 25, 2007 11:12 pm    Post subject: Reply with quote

voiceofTruth wrote:
New Home sales are up in July, this is not going to need federal help.
What type of message does a fed bailout send to other sectors of the economy? People need to go back to %20 down, proper credit lending.
All these arms and %5 down products are BS. Also overspeculation from a development standpoint can be blamed. Major market correction, then back to business as usual.FYI

Greenpoint, williamsburg market is untouchable, largest appreciation of property over the last year in the country.


How's your Yahoo stock doing?

There is going to be a major market correction, which is long overdue. And the brunt of that should be paid by the same predatory lenders that created the situation as well as by the homeowners believing the market would never go down. However credit bailouts remove the burden from the lenders, without offering any similar protection to borrowers.
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aguchi
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PostPosted: Tue Aug 28, 2007 10:51 am    Post subject: Reply with quote

voiceofTruth wrote:
New Home sales are up in July, this is not going to need federal help.
What type of message does a fed bailout send to other sectors of the economy? People need to go back to %20 down, proper credit lending.
All these arms and %5 down products are BS. Also overspeculation from a development standpoint can be blamed. Major market correction, then back to business as usual.FYI

Greenpoint, williamsburg market is untouchable, largest appreciation of property over the last year in the country.



ARMS and lower down payments are not BS. They serve a legitimate purpose. If you are only planning on living in a place for 3 to 5 years, what is the point of tying up cash in a 20% down payment and a 30 year fixed? None, it doesn't make sense. The interest is so front loaded that you are better off with the lower rate the ARM provides, putting less out of your pocket and maybe even an interest only loan. Yes, there are certain risk factors that increase but that should be offset by proper underwriting and documentation on the part of the lender. That's where the real problem is. The buyer needs to understand what type of loan they are getting, what the real risks are and what will happen in 3-5 years when the ARM adjusts. Unfortunately, shady lenders were basically fudging everything to make the deals work and convinced unsophisticated buyers they could afford the home when they knew damn well they couldn't. These types of loan products have been historically reserved for those with high credit scores and documented assets. When you give a no doc, interest only ARM with 100% financing to someone with a sub 600 credit score, unstable employment and who's never bought a home before, you're asking for trouble. There's also a lot of mortgage fraud that's been happening with these same lenders. In the last month nearly two dozen lenders have either gone out of business or announced they are on the verge. Good riddance! Most of these lenders never even held onto paper. These loans were originated and then immediately packaged and sold in secondary market investment portfolios. That makes for a high motivation to close as many loans as possible no matter how fraudulent they may be, and pass the hidden risk onto investors. That's not lending, it's playing the system.

I sell real estate and the 20% down payment rarely happens, even when people can afford it. Most people would rather take the slightly higher monthly payment and keep the extra $15k-$80k in the bank. The only way I generally see 20% or higher down payment is when there are proceeds being rolled over from a previous sale or from professional investors/developers. I rarely come across a 1st time buyer who can plop 20% down on a place, and even if they can, they usually choose not to. Really, what's riskier: emptying your savings to get 20% down, or putting 5% down and paying slightly more per month and keeping say $50k in your savings account? If disaster strikes (sickness, layoff,) I'd rather have the cash than the equity. You won't be able to refinance if you are out of work!
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jaydee
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PostPosted: Tue Aug 28, 2007 11:35 am    Post subject: Reply with quote

voiceofTruth wrote:
In the last month nearly two dozen lenders have either gone out of business or announced they are on the verge.



45000+ mortage brokers are already out of work
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voiceofTruth
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PostPosted: Tue Aug 28, 2007 2:52 pm    Post subject: Reply with quote

Quote:
Yes, there are certain risk factors that increase but that should be offset by proper underwriting and documentation on the part of the lender. That's where the real problem is.



I agree completley, the lenders have been out of control. Have you heard of the this new 60 year fixed product? Lol. The problem lies with the thousands of companies like countywide who have sold off almost all of their product on the secondary. As far as Equity verses down payment, I am a firm believer as an invester that having a smaller monthly is always better, make sure you have 1 year worth of Monthlys and taxes factored in to the initial purchase price. This is a problem of American society living off credit cards and beyond their means.


A Basic Tenant of Thomas Jefferson is very appropriate


" Never spend before you have earned it".
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A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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Angel Bobby Peru
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PostPosted: Tue Aug 28, 2007 3:16 pm    Post subject: Reply with quote

aguchi wrote:

ARMS and lower down payments are not BS. They serve a legitimate purpose. If you are only planning on living in a place for 3 to 5 years, what is the point of tying up cash in a 20% down payment and a 30 year fixed? None, it doesn't make sense. The interest is so front loaded that you are better off with the lower rate the ARM provides, putting less out of your pocket and maybe even an interest only loan. Yes, there are certain risk factors that increase but that should be offset by proper underwriting and documentation on the part of the lender. That's where the real problem is. The buyer needs to understand what type of loan they are getting, what the real risks are and what will happen in 3-5 years when the ARM adjusts. Unfortunately, shady lenders were basically fudging everything to make the deals work and convinced unsophisticated buyers they could afford the home when they knew damn well they couldn't. These types of loan products have been historically reserved for those with high credit scores and documented assets. When you give a no doc, interest only ARM with 100% financing to someone with a sub 600 credit score, unstable employment and who's never bought a home before, you're asking for trouble. There's also a lot of mortgage fraud that's been happening with these same lenders. In the last month nearly two dozen lenders have either gone out of business or announced they are on the verge. Good riddance! Most of these lenders never even held onto paper. These loans were originated and then immediately packaged and sold in secondary market investment portfolios. That makes for a high motivation to close as many loans as possible no matter how fraudulent they may be, and pass the hidden risk onto investors. That's not lending, it's playing the system.

I sell real estate and the 20% down payment rarely happens, even when people can afford it. Most people would rather take the slightly higher monthly payment and keep the extra $15k-$80k in the bank. The only way I generally see 20% or higher down payment is when there are proceeds being rolled over from a previous sale or from professional investors/developers. I rarely come across a 1st time buyer who can plop 20% down on a place, and even if they can, they usually choose not to. Really, what's riskier: emptying your savings to get 20% down, or putting 5% down and paying slightly more per month and keeping say $50k in your savings account? If disaster strikes (sickness, layoff,) I'd rather have the cash than the equity. You won't be able to refinance if you are out of work!



Link

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prozacrefugee
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PostPosted: Wed Aug 29, 2007 4:47 pm    Post subject: Reply with quote

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-19190323.htm

Quote:

NEW YORK (AP) - U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's (NYSE:MHP) began its nationwide housing index in 1987, the group said Tuesday.

The decline in home prices around the nation shows no evidence of a market recovery anytime soon.
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voiceofTruth
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PostPosted: Wed Aug 29, 2007 10:45 pm    Post subject: Reply with quote

New homes and development sales were up considerably in July, I dont know about the rest of the country but alot of foriegn investors using the current edge of the euro and pound in NYC real estate. Like I said people nationwide are going to have to live within their mortgage means. How about all the people who a contractually bound to purchases and had pre-qual letters that are now NOT recieving funding from the likes of Countrywide, ect. Its both a lender and overzealous buyer problem.
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A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
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prozacrefugee
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PostPosted: Thu Aug 30, 2007 10:55 am    Post subject: Reply with quote

voiceofTruth wrote:
New homes and development sales were up considerably in July, I dont know about the rest of the country but alot of foriegn investors using the current edge of the euro and pound in NYC real estate.


Source?

According to the Post new home sales did ride 2% in July - after falling 4% in June, hardly up considerably. Meanwhile . . .

Quote:
The July figures do not reflect the deepening credit crunch that rocked global financial markets this month, making it more difficult to borrow money. Data released last week that showed a rise in sales of new homes was skewed for the same reason, said experts who track the industry.

"I don't take solace in any of the July numbers because they were put to bed before the market froze in August," said Mark Zandi, chief economist for Moody's Economy.com. "We have to wait until September or October to fully understand the scope of the fallout."


Quote:

The report on existing homes is thought to be more comprehensive because existing homes make up 85 percent of the housing market. The report [on new homes] is considered a lagging indicator because it captures closed transactions negotiated mostly in May and June.

[/quote]
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voiceofTruth
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PostPosted: Thu Aug 30, 2007 1:56 pm    Post subject: Reply with quote

double post sorry
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A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson


Last edited by voiceofTruth on Thu Aug 30, 2007 2:03 pm; edited 1 time in total
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voiceofTruth
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PostPosted: Thu Aug 30, 2007 1:59 pm    Post subject: Reply with quote

Quote:
ug. 30 (Bloomberg) -- Surging exports and business spending propelled U.S. growth to the fastest pace in more than a year before turmoil in the credit markets forced the Federal Reserve to warn of a bleaker outlook.

Gross domestic product rose at a 4 percent annual rate in the second quarter, the Commerce Department said in Washington, up from an initial estimate of 3.4 percent. The median forecast of economists polled by Bloomberg News was 4.1 percent.

The figures may be the peak of the expansion for this year as the cost of borrowing increased in August and the Fed said that risks to growth ``increased appreciably.''


We all know what is sketchy, we all know what was going on. Now I ll explain why a current boom is about to happen in the fourth quarter.

Quote:
Home Prices

Prices for previously owned single-family homes rose an average of 3.2 percent from a year earlier, the smallest gain since 1997, the Office of Federal Housing Enterprise, said today in Washington. Prices gained 0.08 percent from the first quarter, the slowest since a decline in the final three months of 1994.

About 14 percent of banks raised standards for mortgages to their most creditworthy borrowers and 56 percent made it more difficult for people with limited or tainted records to get loans, according to a Federal Reserve survey of senior loan officers in mid-July.

In highlighting risks to growth, policy makers reversed their stance from their last meeting on Aug. 7 that inflation was the biggest risk to the economic expansion.

Traders and economists expect the Fed to lower its benchmark overnight lending rate between banks at or before policy makers next meet on Sept. 18. Chairman Ben S. Bernanke will discuss housing and monetary policy tomorrow, when he addresses the Kansas City Fed's annual symposium in Jackson Hole, Wyoming.



Rates will be lowered considerably, spurring a buyers maket of low prices for credit worthy people who were waiting for rates to come down. Yes people selling are going to get powned right now but hey you pay to play, Its all gains in the end. Just might be only 100,000 instead of 250,000. People who bought the wrong new developments might lose their shirts.
Markets correcting itself this is the bottom.
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A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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