What will be the results of the housing fallout?

[Furious1Auto]

I think that the cause of new car sales slowing is simply, everything cost so damn much! we were discussing this here! LINK Will the unlucky ones who will lose their homes be the first people to ever roll over negative equity in to their next house? Even if it is much cheaper and they have filed bankruptcy they will still carry a 30% liability. If they refuse to pay they could be subject to wage garnishments. In the past people leaned on equity ton catch them, but what will be their saving grace when the market is flooded and the cost of housing goes down and they haven't built equity as a result! If this scenario plays out than even if their next house is dirt cheap it could bare a hefty note!

Edited August 17, 2007 by Furious1Auto

[chassisgrunt]

I think that the cause of new car sales slowing is simply, everything cost so damn much! we were discussing this here! LINK Will the unlucky ones who will lose their homes be the first people to ever roll over negative equity in to their next house? Even if it is much cheaper and they have filed bankruptcy they will still carry a 30% liability. If the refuse to pay could be subject to wage garnishments. In the past people leaned on equity ton catch them, but what will be their saving grace when the market is flooded and the cost of housing goes down and they haven't built equity as a result! If this scenario plays out than even if their next house is dirt cheap it could bare a hefty note!

 

for several years now most americans have been spending money they didn't have, and were never going to have. people are in way over their head with their houses, with their cars, and just about everything else. i am NOT a pessimist by nature. but i think this is going to be bad.

[Roadrunner]

for several years now most americans have been spending money they didn't have, and were never going to have. people are in way over their head with their houses, with their cars, and just about everything else. i am NOT a pessimist by nature. but i think this is going to be bad.

 

+1 for someone who understands.

 

Americans got themselves into risky financial situations (ARM mortgages) without understanding the consequences -- deal with it!

 

Now all these mortgage companies are going down the hole -- anyone remember 1987? -- and the economy is reacting due to it.

[tbldbxorntnap]

+1 for someone who understands.

 

Americans got themselves into risky financial situations (ARM mortgages) without understanding the consequences -- deal with it!

 

Now all these mortgage companies are going down the hole -- anyone remember 1987? -- and the economy is reacting due to it.

I do the S&L bailout ,Though what kills me is the house's people are buying I live in Va.Beach and new house's are going in $400K range up, big house's, yet no yard's I'm still baffled that people would buy a big expensive house knowing that your neighbor's house Is only ten feet away from your's. my question is this standard practice in the other parts of the country?

Edited August 17, 2007 by tbldbxorntnap

[bigredogre]

when they try to sell you a mortgage with the line of take a vacation ,and pay off your credit card debt.

and are willing to give you 120% of your new houses worth.

come on of course there is abuse and defualt built right in this system.

where did all those profits go on these sub-prime loans right back to shareholders and top execs pay.

then as usuall those who set up this policy take the money and run.

that is not to excuse people who had a hope and a dream of owing better,bigger house.

but let the buyere beware, you dont take and a debt that you only hope to pay off in the future.

this is the real reason that the bankrupty laws got changed so the public could get screwed in both ends.

[FANTASTICFORD]

for several years now most americans have been spending money they didn't have, and were never going to have. people are in way over their head with their houses, with their cars, and just about everything else. i am NOT a pessimist by nature. but i think this is going to be bad.

ME TOO!!! I believe so many people was signing their names to mortgages they didn't understand and purchasing homes they could not afford. The home builders was selling houses way over price and everyone was in on it, from the home inspectors to the mortgage lenders. It's their turn to get screwed, there is no need to complain about foreclosures now. They had a excessive desire for more and more money, it's call GREED.

[Calvin@LAP]

The same hedge fund investors and mortgage brockers that sold home buyers on "creative financing" are the ones asking the government for a bailout.

 

The moral of this story is....There is no magic way to make money. If you make money off of ARM's and interest only loans etc...you are cheating people. It's the buyers fault as well.

 

If you have one of these ARM or interest only loans, you should be refinancing today with a fully ammoratorizing, conventional loan.

[tbldbxorntnap]

The same hedge fund investors and mortgage brokers that sold home buyers on "creative financing" are the ones asking the government for a bailout.

 

The moral of this story is....There is no magic way to make money. If you make money off of Arm's and interest only loans etc...you are cheating people. It's the buyers fault as well.

 

If you have one of these ARM or interest only loans, you should be refinancing today with a fully amortizing, conventional loan.

I think a lot of new home buyers and other's as well chose " Arm's" as a way to get their new or other home's because the house payments were low and at the time they were gambling with the thought that the rate's wouldn't go so drastically up, well they did now it's time to pay the piper and many are stuck or filing bankruptcy.

[sprinter]

I think a lot of new home buyers and other's as well chose " Arm's" as a way to get their new or other home's because the house payments were low and at the time they were gambling with the thought that the rate's wouldn't go so drastically up, well they did now it's time to pay the piper and many are stuck or filing bankruptcy.

 

 

A lot of people have the grand illusion that the price/value of homes will always increase. Look at the shows on TV that have spun off the idea, "FLIP THAT HOUSE". There are going to be a lot of coming losers who were playing that game. Real estate like any other investments has it ups and downs. Combine ignorant consumers with low government prime rates and you have the making of a disaster.

[Furious1Auto]

A lot of people have the grand illusion that the price/value of homes will always increase. Look at the shows on TV that have spun off the idea, "FLIP THAT HOUSE". There are going to be a lot of coming losers who were playing that game. Real estate like any other investments has it ups and downs. Combine ignorant consumers with low government prime rates and you have the making of a disaster.

Well the one major factor in the future pricing in this country, wages! Being that the average household cannot support these over priced houses, the asking prices will have to come down to price them back on to the market! I wouldn't buy a damn house until they cost $40,000 like they did in the late 70's and early 80's Let the bean counters take the hit, and the consumer pay a fair price!

Edited August 17, 2007 by Furious1Auto

[NickF1011]

I wonder if my new neighbors across the street will be foreclosed on? I mean after all, they spent over $400,000 for their unit and they have two brand new Fusions (one black, one silver) in the driveway. My guess is no.

 

Completely random side note -- they are Asian. I find it rare to see Asians driving American cars, especially Fords. Just an observation...nothing racist.

[Furious1Auto]

I wonder if my new neighbors across the street will be foreclosed on? I mean after all, they spent over $400,000 for their unit and they have two brand new Fusions (one black, one silver) in the driveway. My guess is no.

 

Completely random side note -- they are Asian. I find it rare to see Asians driving American cars, especially Fords. Just an observation...nothing racist.

Not everyone will be foreclosed on, that would depend on their agreements and their debt to income ratio! Many in this country take on, or have taken on more debt than the can afford in the past! Once prices have fallen and people have become nearly liquid again, then stability will return to the market place! Consider it a huge widespread lesson in humility and living within ones means, the shame is many will lose nearly everything in order to learn their lesson. On the other hand conservatives like me will prosper from the loss of people with no self control! Some will lose everything at their own hand because they didn't have foresight, and others could potentially become very wealthy because of their stupidity! As for your neighbors driving Fusions I hope they like them, I've had very good luck with mine! It's encouraging that they bought American!

[sprinter]

This housing bubble is causing problems around the world. It is having a major impact on the stock market because way too many investments contained these real estate funds that have disappeared and is getting worse as time goes on. Banks around the world have created and dumped over 500 billion dollars into the market just within the last few days. They are desperately trying to avoid another meltdown which will turn into a major recession. Today the Fed lowered the rate, a move they said they would not do two days ago unless a calamity occurs.

http://www.mercurynews.com/businessheadlines/ci_6646973

 

“Many economists maintain that the economy has not yet shown sufficient damage from the recent market turmoil for the Fed to justify a rate cut. Indeed, one Fed policy-maker, William Poole, president of the Federal Reserve Bank of St. Louis, publicly opposed any rate cut before the Sept. 18 meeting of the policy-making committee.

"There's no need for the Federal Reserve, unless there is some sort of calamity taking place, to make a decision before the next scheduled meeting, Sept. 18," Poole said in a Bloomberg Television interview on Wednesday. He added that he did not see "any impact as yet on the real economy."

 

Things are not looking good folks. And if things really end up in the crapper, how many people will Ford keep? Who is going to buy the trucks and cars? We will all take the hit for the bad decisions that the Fed made by lowering interest rates and encouraging unqualified people to take out these loans. So unless you have your home paid off, you could face foreclosure too. Take a little look into the causes of the great depression and see how similar things are today.

 

http://www.learninghaven.com/articles/caus...depression.html

http://americanhistory.about.com/od/greatd...tdepression.htm

http://encarta.msn.com/encyclopedia_761584...ted_States.html

http://www.mackinac.org/article.aspx?ID=4013

http://us.history.wisc.edu/hist102/lectures/lecture18.html

[Furious1Auto]

This housing bubble is causing problems around the world. It is having a major impact on the stock market because way too many investments contained these real estate funds that have disappeared and is getting worse as time goes on. Banks around the world have created and dumped over 500 billion dollars into the market just within the last few days. They are desperately trying to avoid another meltdown which will turn into a major recession. Today the Fed lowered the rate, a move they said they would not do two days ago unless a calamity occurs.

http://www.mercurynews.com/businessheadlines/ci_6646973

Things are not looking good folks. And if things really end up in the crapper, how many people will Ford keep? Who is going to buy the trucks and cars? We will all take the hit for the bad decisions that the Fed made by lowering interest rates and encouraging unqualified people to take out these loans. So unless you have your home paid off, you could face foreclosure too. Take a little look into the causes of the great depression and see how similar things are today.

 

http://www.learninghaven.com/articles/caus...depression.html

http://americanhistory.about.com/od/greatd...tdepression.htm

http://encarta.msn.com/encyclopedia_761584...ted_States.html

http://www.mackinac.org/article.aspx?ID=4013

http://us.history.wisc.edu/hist102/lectures/lecture18.html

I didn't even have to check you links, I know hat your saying is true! What ended the depressions was unionism, and organizing. That won't save us this time. Their are to many anti union laws, and right to work states. Also if we don't play ball the companies will outsource! And if no one in this country is buying goods anymore due to lack of resources, then these companies will no longer sell to he U.S. selling their in markets that are healthy! If we don't stop this gloalization madness we at some point could seriously become a third world country!

[tbldbxorntnap]

I didn't even have to check you links, I know hat your saying is true! What ended the depressions was unionism, and organizing. That won't save us this time. Their are to many anti union laws, and right to work states. Also if we don't play ball the companies will outsource! And if no one in this country is buying goods anymore due to lack of resources, then these companies will no longer sell to he U.S. selling their in markets that are healthy! If we don't stop this gloalization madness we at some point could seriously become a third world country!

We already are becoming a third world country,in example we have massive amount of goods coming from China and other Asian countries to our stores here in the U.S. most of are Seafood is imported from Asia or south America, the Japanese and the Saudis have been buying local and national; real estate for years now, and in the health care industry we're importing nurse's from the Philippines and more foreign doctors are operating in our health care than ever before.

[Bored of Pisteon]

for several years now most americans have been spending money they didn't have, and were never going to have. people are in way over their head with their houses, with their cars, and just about everything else. i am NOT a pessimist by nature. but i think this is going to be bad.

 

You can also thank your union and the company for driving this mantra of making a lot of money into people's heads too!

[mrballsonya]

I wonder if my new neighbors across the street will be foreclosed on? I mean after all, they spent over $400,000 for their unit and they have two brand new Fusions (one black, one silver) in the driveway. My guess is no.

 

Completely random side note -- they are Asian. I find it rare to see Asians driving American cars, especially Fords. Just an observation...nothing racist.

 

They must work for FORD. :shades:

 

I don't think I've ever seen someone of Asian descent drive a Domestic. Trying to not be racist here, Asians/ Japanese seem to be much more loyal to the Imports. You guys all know how shitty the cars that we build are.

[Furious1Auto]

They must work for FORD. :shades:

 

I don't think I've ever seen someone of Asian descent drive a Domestic. Trying to not be racist here, Asians/ Japanese seem to be much more loyal to the Imports. You guys all know how shitty the cars that we build are.

I wish that their was the same loyalty with Americans, it would seem that when the subject comes up that Americans think to their own short comings and actually buy in the the notion that Asian's are superior! It's funny because they're also stereo typed as having little Johnson's. No, no d-ck autoworker is superior to me! Buy American be American, we have big d-cks and a Bush with Balls! (George that is)

Edited August 19, 2007 by Furious1Auto

[Nixon4pres]

2 thoughts on this subject. Number one, anyone that would take out an ARM when mortgage rates were running 5% for a fixed rate 30 year would have to be either an idiot or just plain stupid, I mean where exactly did they think the ARM was going to adjust to? cant get much better than 5% or so ya know. Secondly the housing market is going to tank eventually, not so much now but everyone forgets that the baby boomers are retiring and soon after will be dying, this alone is going to flood the housing market.

[ptsweeper]

I have a hard time feeling sorry for people that took out interest only loans or 125% LTV second mortgages. I don't have any sympathy for the people who lent them the money. That's why you justified charging the high interest rates.

 

As for the housing market, it is a temporary drop in pricing, either due to regional economic circumstances (MI, OH) or due to irrational exuberence (CA, NV, FLA, any coastline) and overbuilding. The population of this country continues to increase by 3 million or so each year, so demand will catch up with supply some day. I would expect 3-5 years for pricing to return to last years levels. It will take 5-10 years for MI and OH to return. If you don't need to move or are moving to another house in the same community, it won't hurt you one bit. If you are forced to move, you are stuck.

[Extreme4x4]

The mortgage industry brought this all on themselves. This is from someone who was a mortgage loan officer for 7 years............ primarily with subprime loans. I got out 1.5 years ago, as I did not like where the industry was heading, and got sick of having to educate consumers due to the huge volumes of piss poor loan officers out there.

 

I was never the wealthy loan officer, as I barely made a living. What I did do, though, was sleep good at night.............. knowing that I had completely educated my customers, so they could actually make an educated decision. This is so rare in the industry, as to be frightening.

 

Why are we where we are at??? You can blame the consumers............... and even I blame them a small bit. However, the mortgage industry had a moral obligation to make sure that their customers did not get in over their heads. They had a moral obligation to completely educate them on what they were signing............... and what the ramifications were. They had a moral obligation to not JUST think of their profit/comm, and to actually care about their clients. They failed on all fronts.

 

The average American is not a mortgage loan officer. They do not understand this system, and they do not know about how people are qualified. They go to their local bank, or mortgage company, present the loan officer with the facts, and ask what they can afford to buy. This is where the faith was broken. Using voodoo loans, and creative finance, the loan officers were able to tell the buyers that they could buy $__________ house. When the clients found the house of their dreams, and were sitting down with this huge stack of paperwork............... of which they understood none of................. the greedy loan officer glosses over the fine print. The client leaves with keys in hand............. thrilled. The loan officer gets a huge commission check, and is very pleased also.

 

Then reality hits, and we have today.

 

Coming from the industry, and seeing how loan officers operated, this does not surprise me one bit. The consumers went to the "experts" to know how much house to buy. They relied on them to explain what was happening................ and what could happen. All that happened is that the greedy loan officers made a shitload of money by selling a higher dollar mortgage.............. with back-end points attached. The loan officer made a bundle, the bank made a bundle (by selling the crappy mortgage on the secondary market), and the client gets screwed.

 

The proof of this, is that the primary markets are taking a big hit on losses also, not just subprime.

 

I may have a subprime mortgage, due to the fallout from 9/11. However, I have tons of equity, no matter what the market does, a margin low enough that my payment will probably never go up (5-year fixed), and am paying everything that caused my bad credit (due to living off of credit for a year when our business had no business after 9/11) off. I should have it all paid within 2 years. I'm not patting myself on the back, just being realistic.

 

Lack of fiscal restraint is also a big problem. Using your house as an ATM is a huge problem. Buying things, like cars, with your equity, is just plain stupid. However, noone has ever explained this, in simple terms, to these borrowers. They have just been plain old set up for failure.

[ptsweeper]

Good post. Paying high interest on your credit cards is bad, but putting them on a home equity line of credit is a worse idea. The only thing that I can see putting on a home equity line of credit are items that will add value to your house or will severely subtract from the house value if not done (roof, windows, etc.).

 

Paying for your vacation, car, or steak dinner over 20 years is never a good idea.

[Furious1Auto]

I have a hard time feeling sorry for people that took out interest only loans or 125% LTV second mortgages. I don't have any sympathy for the people who lent them the money. That's why you justified charging the high interest rates.

 

As for the housing market, it is a temporary drop in pricing, either due to regional economic circumstances (MI, OH) or due to irrational exuberence (CA, NV, FLA, any coastline) and overbuilding. The population of this country continues to increase by 3 million or so each year, so demand will catch up with supply some day. I would expect 3-5 years for pricing to return to last years levels. It will take 5-10 years for MI and OH to return. If you don't need to move or are moving to another house in the same community, it won't hurt you one bit. If you are forced to move, you are stuck.

Their is no doubt in my mind that their are people whiling to move into these vacant houses, just not at these prices! Get real a house that costs $150,000 now cost $80,000 in 1980. Wages have not increased much since then with the exception of select industries. Now how long can we sustain that trend! Your house is not worth more just because you say it is so, it is only worth what someone is whiling to pay for it! I never really thought of the impact baby boomers would have on the housing market though! You would hate dealing with me as a buyer, because I don't care about your opinion or that of twelve appraisers. I would tell you what your house & or property is worth to me, then it is just a matter of how bad you want to get rid of it!

Edited August 20, 2007 by Furious1Auto

[fmccap]

Get real a house that costs $150,000 now cost $80,000 in 1980. Wages have not increased much since then with the exception of select industries.

I believe it is because of teaser rates and low approval ratings. My house was 99,500 in Dec. 1998. Now they say 170,000. Now if I could only find a sucker to buy it. Then my only problem would be finding a good priced home that was not overvalued. Basically an artificial rise in house prices being the result of easy and unsustainable credit.

Edited August 20, 2007 by fmccap

[Extreme4x4]

Many people said that I should sell my house, as the market is so high, and I have so much equity in my home (am sitting at about 50-55% LTV, currently). I would tell them, "why should I sell my house at an inflated price, so that I would have to go out and buy someone elses house at an inflated price." "What would I gain here??"

 

Besides, I like my low payment. Not too many people have payments under $1000 anymore. Especially here in AZ.

 

Furious, homes do appreciate. In some areas they appreciate much faster than in others. This is usually due to the areas desirability as a place to live. I could walk into every $300K home in my area, and tell them that their home is only worth $150K to me. After I got laughed at, or threatened with bodily harm, I would go home with no prospects. Nobody cares what I think............... they care what the market will bear.

 

In my area, home prices really are not falling. Home sales have certainly slowed, but prices have not gone down much................ they just haven't gone up either.