How Low Will California Home Prices Go? (mortgage broker, student loans)

[it's all good]

Originally Posted by Humanoid

If inflation becomes high and homes appreciate below the rate of inflation then inflation will cause the real price (not the nominal) to drop. At first the public will be duped, but after a few years people will realize that the real prices have dropped. This solution is only effective in that it dupes the public in what is going on, but the high inflation will cause other problems in the economy down the road.

I don't understand what you're saying about being "duped." Could you explain? It made sense to me the way justsomeguy explained it, that not that many people would be bailed out, and it would not be the "irresponsible" ones, and that this small percentage of those who would qualify would not keep the prices high, but would just keep those from losing their homes, and the way it was explained is that their interest rates would be reset, but other than that they wouldn't be getting their mortgages paid or anything like that. That makes sense, and seems like a good way to deal with it, at least to me.

I don't know why people talk about the fed cutting rates so much. The fed does not have direct control over interest rates, it can only directly control the money supply. When the fed cuts the fed fund rate its merely sitting a target, and then it uses what it does control (money supply) to try and reach it.

I think that's because there was an obvious and quick correlation between lowering the prime lending rate and home values rising so sharply.

Regardless, increasing the money supply during a period of high inflation can help the short term (1-2 years) while hurting the long term.

Sounds right to me.

[sheri257]

Originally Posted by it's all good

Then you also have good points when you talked about these homeowners getting great discounts to refinance their homes while new homebuyers with better credit are paying higher rates plus hefty down payments. That doesn't seem "just" at all for that to be happening.

Look at some of these foreclosure stories that have been published on the internet ... Are these people who deserve to be bailed out?

OK, don't laugh (too hard) I need some advice. I borrowed $2.5MM ($1MM 1st and $1.5 second ARM) from Countrywide against my house in the 2006 strong California market. The ARM is now $10,500/mo. I had a financial set-back on a business deal and now I can't keep up. The house is worth close to the loan amount but the market is super slow. I'd like to keep the house if possible and I'll be back on my feet again soon, but I need a bridge of some sort until then. 12 months should do it.
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Ok, this is our story: We live in CA. I married my neighbor and we both had houses in our own name of course. I am curerntly renting mine out (and still pay part of the mortgage since I cannot rent it for what my mortgage is). We live in his house and now the interest rate is going adjustable as of 9/1. We already can barely afford this place and honestly, I hate this house and do not want to live in it. We would love to sell it, but we're very upside down in it as many Californians are. We are thinking of walking away from it, yes I know it would ruin my husband's credit for awhile but he doesn't care, his credit's not that good anyway. My credit on the other hand is excellent.

What would happen if we walked away from this house and I bought another one on my credit alone? I am NOT on his title or house in any way, only him. We have an interest only loan--an 80/20. Can someone please tell me what we're up against? I sure would appreciate it!

[it's all good]

Originally Posted by sheri257

Look at some of these foreclosure stories that have been published on the internet ... Are these people who deserve to be bailed out?

OK, don't laugh (too hard) I need some advice. I borrowed $2.5MM ($1MM 1st and $1.5 second ARM) from Countrywide against my house in the 2006 strong California market. The ARM is now $10,500/mo. I had a financial set-back on a business deal and now I can't keep up. The house is worth close to the loan amount but the market is super slow. I'd like to keep the house if possible and I'll be back on my feet again soon, but I need a bridge of some sort until then. 12 months should do it.
__________________________________________________ _______________________________________

Ok, this is our story: We live in CA. I married my neighbor and we both had houses in our own name of course. I am curerntly renting mine out (and still pay part of the mortgage since I cannot rent it for what my mortgage is). We live in his house and now the interest rate is going adjustable as of 9/1. We already can barely afford this place and honestly, I hate this house and do not want to live in it. We would love to sell it, but we're very upside down in it as many Californians are. We are thinking of walking away from it, yes I know it would ruin my husband's credit for awhile but he doesn't care, his credit's not that good anyway. My credit on the other hand is excellent.

What would happen if we walked away from this house and I bought another one on my credit alone? I am NOT on his title or house in any way, only him. We have an interest only loan--an 80/20. Can someone please tell me what we're up against? I sure would appreciate it!

OH MI GOD!!!! The first person is a complete glutton and eejit, the second is just like you said, totally irresponsible!!! No, please don't bail them out!!!

[sheri257]

Originally Posted by it's all good

OH MI GOD!!!! The first person is a complete glutton and eejit, the second is just like you said, totally irresponsible!!! No, please don't bail them out!!!

That's the problem ... how do you set up guidelines so that these morons who are obviously trying to take advantage of the situation don't get bailed out ...

You can't ... as far as I can see.

[goodbyehollywood]

Originally Posted by sheri257

That's the problem ... how do you set up guidelines so that these morons who are obviously trying to take advantage of the situation don't get bailed out ...

You can't ... as far as I can see.

You're right-- you can't! Can you imagine how much manpower that would take to try to police a bailout-- and at what cost? For what effect?

[it's all good]

Originally Posted by sheri257

That's the problem ... how do you set up guidelines so that these morons who are obviously trying to take advantage of the situation don't get bailed out ...

You can't ... as far as I can see.

I don't know, "real" applications this time? Where are the smart people who know how to answer these questions?
: )

[justsomeguy]

Yep, these are all good points.

On second thought, screw a bailout. Let's all just go down in flames and re-build from the ashes!

[sheri257]

Originally Posted by justsomeguy

Yep, these are all good points.

On second thought, screw a bailout. Let's all just go down in flames and re-build from the ashes!

This isn't a war ... I think it's actually a good thing.

The above mentioned debt junkies will go broke, as they should.

And housing prices will get back to fairly reasonable levels so that people who did keep their credit in check will now be able to afford homes.

What's so bad about that? Everybody's been complaining about the cost of living in California. Well ... housing is the primary reason for those costs.

I actually think more affordable housing will be a great thing for this state.

[goodbyehollywood]

Agreed, agreed and agreed! I think we should just let the actions have consequences. The responsible will be rewarded and the irresponsible will learn the meaning of repercussions. For the most part. It isn't really that simple, of course, but it's a step in the right direction.

[it's all good]

Originally Posted by justsomeguy

Yep, these are all good points.

On second thought, screw a bailout. Let's all just go down in flames and re-build from the ashes!

that was a very grumpy answer, LOL. (thanks for the laugh) Why don't you answer the question, I bet you can. I'm serious, not being sarcastic. : ) The question of how will they process these bailout requests, I mean.