[maslozhir]

Originally Posted by Dave_n_Tenn

PS roof's don't lick... they leak.

oops
Thanks , I'll fix it

[nychiefsfan]

Originally Posted by SKB

Welcome back Chief!! I certainly have missed your thoughts on the credit bubble crash!!

This board has been very quiet since you left with very few people posting on this very touchy subject.
I have not been posting much as we finally moved to SF and have found a nice rental in Royal Palm Beach.
I have a wonderful bit to post on why lowering the interest rates will NOT help anything but the speed of the crash of the dollar.

Fed Rate Cut Will Not Solve Problems in Housing
Published Sep 19, 2007 | RSS Feed | Text Size
In a panic-induced move, the Fed made the decision yesterday to cut the target for the fed funds rate by 50 basis points. The action was meant to forestall the adverse effects of the current credit crunch and housing downturn, but will in fact do very little to save housing.
Fed's Target Rate: 4.75 Percent
After keeping rates steady since June of 2006, the Fed made the aggressive (and downright silly) decision to slash the 5.25 percent fed funds rate by 50 basis points.

Prime Lending Rate: 7.75 Percent
In response to the Fed rate cut, many major banks dropped the prime rate from 8.25 to 7.75 percent on certain consumer loans and home equity lines of credit (HELOCs).

New Mortgage Rate: ???
Who knows? The Fed's key rate is merely a short-term target rate. Just because policymakers cut this rate, it doesn't mean lenders will follow suit and lower mortgage rates on 30-year fixed rate mortgage loans. Last week, the average mortgage rate was 6.31 percent. What it will be next week is anyone's guess.

Winners: Banks, Real Estate Agents, and Builders
Let's assess the true beneficiary of this rate cut: Wall Street and the financial institutions that bet the house on subprime/ARM loans.

Wall Street has been rallying around a fed cut for awhile now. When the Fed's move was announced yesterday, the Dow Jones industrial average soared, posting the biggest one day point gain in over four years.

'It was everything the market had been begging for for weeks -- and more,' said Richard A. Weiss, chief investment officer at City National Bank in Los Angeles.

Investors and banks are certainly in a begging position at this point. Surging defaults have shaken the security of everyone who has a stake in the subprime market. Investors and banks alike have been backing off.

In a statement, the Fed admitted the cut was intended to get lenders to ease the credit-freeze and begin lending again, as tight restrictions have 'the potential to intensify the housing correction and to restrain economic growth more generally'.

But banks and investors weren't the only ones rejoicing at the news yesterday. Agents and builders were also buoyed. Lower rates mean the possibility of more buyers. In an interview with Bloomberg, the CEO of mega-giant homebuilder Toll Brothers joyfully proclaimed that 'Our boy has righted the ship'.

It is obvious why builders, agents, banks, and investors are happy right now with Fed chairman Ben Bernanke and his 'boy wonder' antics, but it is important to remember that not everyone is a winner when the Fed makes a rate cut.

Losers: Savers, Mortgage Borrowers, and the U.S. Dollar (In Other Words, Everyone Else)
Responsible savers will see a negative impact on interest earnings as a result of the Fed rate cut. Short-term CDs will no longer pay off like they once did.

A slashed rate could have a negative effect on borrowers from a long-term standpoint as well. Long-term mortgage rates (like those for 30-year fixed rate loans) are not set by the Fed, but rather the marketplace itself. When investors worry about inflation (which is what the Fed should be worrying about) long-term interest rates go up.

If investors are concerned the rate cut will increase inflation pressures in the near future (which they are) long-term interest rates could go up and put the housing market in an even worse bind.

There is also a chance that banks won't even pass the short-term savings on to borrowers. The rate cut gives banks the opportunity to play catch-up. Greedy lenders and other lenders who are trying to rebuild their financial standing will probably not be in a hurry to lower interest rates.

If there was a big loser in all of this though, it would have to be the U.S. dollar. The dollar fell to a record low against the euro, and tumbled in comparison to several other currencies when the Fed made the announcement.

In short, the Fed's decision was irresponsible. Bernanke has shown that he is no better than Greenspan. If our policymakers continue to follow this path, you can kiss the value of your hard-earned money goodbye.

(To see a brief summary of how the collapse of the dollar will affect the U.S. in coming years, check out our recent interview with DollarCollapse.com.)

awesome post!

[nychiefsfan]

Originally Posted by Sunandsand

I do not think it is crazy to think that eventually Florida housing prices could drop even below what they were in 1999 when the inflation of housing began.

The realtors, the people who used their homes as ATM machines and the people who bought during the bubble will beg to differ

The prices HAVE to drop to a point where people can afford to buy homes, period.

[nychiefsfan]

Housing Even Hairier

Did you expect anything different? Today's latest housing numbers show a situation that's going from worse to ... um ... let's just call it worser.

Today, the Census Bureau reported that September 2007 privately owned housing completions were an incredible 31.1% below the September 2006 rate. Looking forward, housing starts dropped 30.8% below the prior-year rate. Analysts who've been calling the bottom of the housing bust -- such as Citigroup's (NYSE: C) now-notorious Steven Kim -- are likely to look silly for a long time to come.

In the abstract, the reduction in starts should be the beginning of a good thing, a signal that builders are finally scaling back and no longer dumping so much inventory on an already-glutted market. Oversupply in the face of slacking demand has forced the likes of D.R. Horton (NYSE: DHI), Ryland Group (NYSE: RYL), Toll Brothers (NYSE: TOL), and others into major price reductions, including auctions.

But the key questions are: How much more will they fall, and which of these builders will survive long enough to benefit down the road? We've got months of inventory to work through, and years worth of stunted growth ahead. But the builders -- those poor chaps have got bills to pay, and without starts and sales and completions to produce cash, debt holders are going to be itching to get their money, or, in its absence, a pound or two of corporate flesh.

Worse yet, there's little point in appealing to the benevolent government printing press. Inflation is clearly on the prowl, as the latest consumer price index numbers show. Even these wishful-thinking figures (which tend to exclude or skew real-world expenses in ways that are difficult to measure or politically inconvenient to report) peg year-to-date inflation at a 3.6% annual rate, meaning Helicopter Ben Bernanke and the Federal Reserve risk igniting prices well beyond their, or anyone's, "comfort zone" if they decide, once again, to try and bail out Wall Street and the desperate real estate industry with another dose of cheap money.

As I noted yesterday, there's no free lunch out there. When you suffer through the "creation" of billions of dollars worth of bubble-equity "wealth," there's no way to save it when the lending game on which it was built stops running. It may be time for certain segments of America's economy to stop crying, quit the blame game, and take their lumps. Capitalism is supposed to be self-cleansing. Let the scrubbing begin.

Housing Even Hairier

[nychiefsfan]

Here's a little more from the village idiot:

Nationwide, existing-home sales this year will be the fifth-highest in history, said Lawrence Yun, National Association of Realtors senior economist.

"Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year -- a lot of people are, in fact, buying homes," Yun said.

Expert: Local economy thriving : Corpus Christi Local Business | Caller-Times |

[MyHomeIsInOcala]

Originally Posted by maslozhir

Banks don't want sell them . I made offers on two foreclosed propertyes .
I offered them 30% less of what they ask . They never replyed , never
contr-offered . Both houses vacant , in terrible shape , ac not working , roof leaks .
Need a lot of money to make them liveable . I don't know what they think ...
where is the catch ???

Banks do not "know" the exact condition of the home, they only go by what they are told by the realtor and the condition reports they receive during interior bpo's.

Banks will also listen to RE agents and IF they are told the home will sell for $X, they will look for an offer to be closer than 30%... So maybe in your case, the agents are more of a problem than the REO company. I always received a Yes, NO or Counter offer. I worked with about 12 different REO companies, never once did they just "ignore" an offer.

If the offer was very low, they wanted to know why. Maybe you should write a letter of explanation to submit with your offers (they REALY do help).

[maslozhir]

Originally Posted by Dave_n_Tenn

$5k less than asking price sounds reasonable.....

Reasonable The bank should've jump
on this offer due to market condition

Originally Posted by Dave_n_Tenn

There is more to buying a home than just making a ridiculously low offer. 30%- appears to be, especially from the banks perspective. I think most would agree...

To pay the bank the price they ask - a cave man can do it .
Tell me , why then so many noise about making money on
foreclosed homes ? How you gona make money on it ,
if you pay what they ask ? I don't get it ...

[maslozhir]

Originally Posted by MyHomeIsInOcala

Banks do not "know" the exact condition of the home, they only go by what they are told by the realtor and the condition reports they receive during interior bpo's.

Banks will also listen to RE agents and IF they are told the home will sell for $X, they will look for an offer to be closer than 30%... So maybe in your case, the agents are more of a problem than the REO company. I always received a Yes, NO or Counter offer. I worked with about 12 different REO companies, never once did they just "ignore" an offer.

If the offer was very low, they wanted to know why. Maybe you should write a letter of explanation to submit with your offers (they REALY do help).

Thanks for advice . I don't want to fight for those homes . I'm in drivers sit right now . I'll shop around and keep making a lowball offers .

I'll sit and wait in ambush ... and prey wiil come along

[Dave_n_Tenn]

masolzhir sad: I don't get it ...

I agree. You not getting it. Read MyHomeIsInOcala post. Then read it again.

Data....... supports an offer, not what we "feel". BPO's are a big part of what the banks will take. Find a good forclosure agent, you'll save a bunch.

[maslozhir]

Originally Posted by Dave_n_Tenn

I agree. You not getting it. Read MyHomeIsInOcala post. Then read it again.

Data....... supports an offer, not what we "feel". BPO's are a big part of what the banks will take. Find a good forclosure agent, you'll save a bunch.

Would you please tell me what BPO stands for ?
(sorry it's my second language )