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Old 01-06-2009, 01:51 PM
 
1,831 posts, read 4,716,264 times
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Quote:
Originally Posted by cohdane View Post
Hope I'm not being massively redundant here, but I'll take a chance since I've only posted this on Real Estate Forum. This interactive map by the New York Fed will let you (roughly) track Alt A conditions in your zip code. Pay special attention to the "6 month change" tab, which lets you see where the trend is:

http://www.newyorkfed.org/mortgagemaps/

Hope it's useful.
Great stuff ... thanks!
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Old 01-06-2009, 02:01 PM
 
1,831 posts, read 4,716,264 times
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Quote:
Originally Posted by Humanoid View Post
You shouldn't be seeing much of it yet, the loans are just starting to recast in large numbers this year. The original reset figures can be seen here:

Calculated Risk: IMF: Mortgage Reset Chart

But the option pay ARMs (the worst of them) will recast sooner then original estimated as most are negative amortizing. Option pay ARMs recast when loan to value reaches 110% (115%) regardless of how much time has past.
Yeah, I've seen that chart before. Looks like most of the Alt-A resets are in 2011. A lot can happen between now and then ... not the least of which is the economy improving.
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Old 01-06-2009, 02:13 PM
 
Location: Los Angeles Area
3,306 posts, read 3,340,761 times
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Quote:
Originally Posted by sheri257 View Post
Yeah, I've seen that chart before. Looks like most of the Alt-A resets are in 2011. A lot can happen between now and then ... not the least of which is the economy improving.
Like I said, the recasts are happening faster with the pay option ARMS because so many people are paying the minimum payment which increase the loan to value faster than initially projected.

Sure a lot can happen now and then, but what is going to allow people that can only afford the minimum payment to afford the fully amortizing payment? It will be around 40~50% more in most cases. There is only one thing that can save the day - real estate returning to peak values. But the probability of that is next to zero within the next decade.

This housing bubble took 7~8 years to grow, its going to take many years to collapse.

Also, in fairness to the more "general picture". The vast majority of the pay option ARMs were originated in California and similar areas, so the defaults in this category of loan should only heavily effect California and similar areas. Even in terms of bubble areas, they were used the most in California. So, this issue in some sense is rather California centric.
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Old 01-06-2009, 03:10 PM
 
Location: Humboldt Park, Chicago
2,686 posts, read 6,849,716 times
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Default ARM resets

People are also forgetting going from interest only to P&I. Even if the interest rate adjustment is minimal with today's low rates, people will have to start paying principal down, something they haven't been doing if they have been going interest only, like many have. People suddenly being forced to pay P&I may be too much for some people, who never planned on staying in their house long enough to pay P&I.

2009 is going to be a declining year as will much of 2010. It is now entirely possible that all of 2010 may be a declining year, but I hope not. I am ready to buy another place and would rather not wait until 2011/2012 to do so, but I would rather wait than lose money.

Humanoid,

You make valid points, but you have only known me for 1 year, not 2, as I originally started posting in Feb 07.

With so many people making minimum payments, when are most of the ARMs now set to reset? Just wondering. Surely, it is late 2010, not 2011.
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Old 01-06-2009, 03:22 PM
 
Location: Los Angeles Area
3,306 posts, read 3,340,761 times
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Quote:
Originally Posted by Humboldt1 View Post
You make valid points, but you have only known me for 1 year, not 2, as I originally started posting in Feb 07.
I never said I knew you for 2 years only that I was talking about rents declining for 2 years, rather that last year (2008) I recall you discounting the idea that rents would drop.

Quote:
Originally Posted by Humboldt1 View Post
With so many people making minimum payments, when are most of the ARMs now set to reset? Just wondering. Surely, it is late 2010, not 2011.
More recent estimates have the majority in late 2009 and early 2010.

But there should be significant activity in 2011 and of course, many of the defaults in 2011 won't get on the market until 2012.
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Old 01-06-2009, 03:35 PM
 
Location: Hope, AR
1,505 posts, read 2,765,035 times
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Humanoid, is the LA housing market starting to recover at all?

Quote:
Originally Posted by Humanoid View Post
I never said I knew you for 2 years only that I was talking about rents declining for 2 years, rather that last year (2008) I recall you discounting the idea that rents would drop.


More recent estimates have the majority in late 2009 and early 2010.

But there should be significant activity in 2011 and of course, many of the defaults in 2011 won't get on the market until 2012.
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Old 01-06-2009, 06:13 PM
 
3,720 posts, read 4,458,376 times
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Quote:
Originally Posted by cohdane View Post
And so it begins....just saw this newly adjusted listing in my neighborhood, hopefully a sign of more to come:

9/25/2008 Sold $535,000
11/7/2008 Listed $579,000
1/6/2008 Reduced $539,000

This guy will not be making any money. With any luck, other flippers are taking notice.
Are those dates right?
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Old 01-06-2009, 06:26 PM
Status: "happy again, no longer catless! t...." (set 29 days ago)
 
Location: Cushing OK
14,440 posts, read 16,791,082 times
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Quote:
Originally Posted by Bill Keegan View Post
Of course, all that demand drives up the rental cost. At some point, all those people renting rooms & sharing apartments get tired of that, and try to find a house. At first, it will be easy enough, with rent prices having gone up, to find a place to buy at roughly the same, or not much more than, the monthly rent cost. Increasing demand for homes. Driving up prices.
It might be slow, it might take time, but the cycle is the cycle. At some point, it bottoms, and starts to climb. It's BETTER to get in just BEFORE the bottom, as you will have more choices and be in it sooner, but it's tough to predict that bottom, so it's EASIER to get in just AFTER the bottom.
Believe me, renting a room is the last option. Sleeping on mom's couch may be better depending on how you get along with mom. Those who rent rooms and split apartments are doing that because thats all they can afford. No matter how much rates drop, they will never be buying a house unless they suddenly get a hot lottery ticket.

I got out of my apartment after the rent was raised 125 dollars across the board because there are so many forclosures that they can get a lot higher rent. The place was emptying fast when I moved to a state where the cost of living is less than half. ( And the apartment was inspected and found unfit for section 8 and the rest are going too, karma in action )

The people moving away are not moving to other apartments in Riverside. They are going out of the area or splitting with someone else, moving in with family. Down the road they won't be homebuyers unless its somewhere way far away and out of state. (none of which will help the economy where they left).
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Old 01-06-2009, 07:57 PM
 
Location: Chino, CA
1,458 posts, read 2,905,668 times
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Quote:
Originally Posted by Humanoid View Post
Like I said, the recasts are happening faster with the pay option ARMS because so many people are paying the minimum payment which increase the loan to value faster than initially projected.

Sure a lot can happen now and then, but what is going to allow people that can only afford the minimum payment to afford the fully amortizing payment? It will be around 40~50% more in most cases. There is only one thing that can save the day - real estate returning to peak values. But the probability of that is next to zero within the next decade.

This housing bubble took 7~8 years to grow, its going to take many years to collapse.

Also, in fairness to the more "general picture". The vast majority of the pay option ARMs were originated in California and similar areas, so the defaults in this category of loan should only heavily effect California and similar areas. Even in terms of bubble areas, they were used the most in California. So, this issue in some sense is rather California centric.
Yes, all of this really suxs for people who just want to live life and get on with their lives. If the rise took 7-8 years... then that pretty much means anybody who bought in the last 7-8 years will eventually be underwater or have values lower than their mortgages. Isn't the average tenure of homeowners around 7-8 years? So, doesn't that mean that "most" people with homes are probably going to be under water?

Furthermore, for those who want to get that "deal", and have been waiting 7-8 years til peak 2006/2007... you still probably have until 2011-2012 until we potentially (predicted) get out of this mess.

So, a total of ~11-12 years of waiting time from 2000 to 2011/2012 so that you can buy a house that breaks even in Real terms. Or, put it into someone's life terms... the difference between having a house at age 30 or age 41/42.... or going to a four year college almost three times or the duration of getting a doctorate...

I'm just commenting on the time lost... really suxs for anyone who wanted or wants a home.

-chuck22b

Last edited by chuck22b; 01-06-2009 at 08:52 PM..
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Old 01-06-2009, 08:49 PM
 
Location: Earth Wanderer, longing for the stars.
12,411 posts, read 16,004,292 times
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Quote:
Originally Posted by Stac2007 View Post
I don't know why anyone would want to buy now. Here in the suburbs of New York it is no secret that baby boomers are retiring and want to sell their home so the can live out their last days in Florida. On my block alone they own the majority of home built in the 1980's. With many Xers and Yers moving to where they can live the competition is pretty tough. Homes have been inflated for years and since Boomers are tired of paying New York taxes the younger generations has them by the throat. They may have purchased their homes for $105k in the 1980's and thought they can sell them for $600k a year of two ago but that is now a dream. With Wall Street giving out pink slips along with other jobs losses, their homes will be priced back under $250k. Besides there are home foreclosures all over Rockland County and banks are not giving out mortgages because the younger generations simply doesn't earn the salaries needed to buy them at such a ridiculous price. Doesn’t life stick when you’re greedy.
I am not sure where the greed comes in. People invest. They must if they want enough to retire on. Just socking it away in the bank will not work unless you make a huge salary.
Some investments turn on you.
You seemed to state a bunch of facts and I'm confused.
Are greedy people those who invest in anything?
Or are they the ones who invest in real estate?

This downturn is hitting everyone, not just whomever is 'greedy'.
To bail the country out, we are printing mucho bills, which means all of our dollars will be devalued - savings, salaries, etc.
This means anything we purchase that is imported or depends on imported parts, if the country of origin is not devaluing their currency, will eventually be inflated.

The only greed I know in this situation is what caused it, the repeal of laws that had been put into place at the end of the Great Depression in order to prevent another. So it was Congress, tanking to business interests again. What did Congress get out of doing this? Why, as Congress was doing it, did we not hear of it on the news?

Can we blame business to want everything their way? I don't think so. That's why Congress and oversight committees and regulatory bodies are in our government.

No, this was a failure of government and I cannot figure out why they yanked those laws. What was in it for Congress? What did no one say 'NO'?
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