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Old 10-25-2010, 02:25 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 21,039,425 times
Reputation: 2661

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Quote:
Originally Posted by aneftp View Post
I seriously doubt mortgage principal reductions is in the works for primary homes in bankruptcy. You will see all the major private lenders jack up the interest rates or Uncle Sam will furnish all the home loans if this were to happen.

Too politically hot to touch the principal reductions for primary homes (yes I know secondary homes mortgages can be reduced).

Remember we still have 80-85% of people still paying their mortgages on time. We have 30% of people who own their homes outright. The masses will make it next to impossible (politically) to get mortgage principal reduction done for primary homes in BK.

Or else, either they tie mortgages in like Student loans (next to impossible to discharge short of death or permanent injury) or everyone will need to put down 20% or more like they do in other countries.
I think you will see tremendous lender opposition to principal reduction. I don't think you will see any one else resisting it. The mean old and dishonest lender still gets pretty good traction.

Note the problem in places like Las Vegas. We simple have another 100,000 or more homes that have non-viable mortgages. In time even those opposed to walking on moral grounds will be forced to accept that they have no way out. And note that the tax forgiveness goes away...so if they don't act they will end up in a vastly worse economic position.

I think it makes little difference what they chose to do in the future. The problem is with us in the present. And it needs to be resolved. Left alone it will cripple the housing industry for year and years.
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Old 10-25-2010, 03:42 PM
 
Location: Barrington
20,019 posts, read 14,400,856 times
Reputation: 6205
Quote:
Originally Posted by aneftp View Post


......Or else, either they tie mortgages in like Student loans (next to impossible to discharge short of death or permanent injury) or everyone will need to put down 20% or more like they do in other countries.

I am fond of consequences and I like this.
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Old 10-25-2010, 03:50 PM
 
Location: Union County
5,130 posts, read 4,979,435 times
Reputation: 3751
Quote:
Originally Posted by middle-aged mom View Post
I am fond of consequences and I like this.
I, too, am fond of consequences - yet, I get the feeling we're talking about 2 very different things. You're looking for debt slavery in the vein of the ivory tower looking down as a lord on your peasants... I'm talking about consequences on the corrupt system from the very top.
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Old 10-25-2010, 03:51 PM
 
Location: Barrington
20,019 posts, read 14,400,856 times
Reputation: 6205
Quote:
Originally Posted by olecapt View Post

They left the secondary buyers in Las Vegas and then in Phoenix holding the bag.

The speculators were only a small percentage but they blew the normal behaviour right out the window. And they made and kept a lot of money.
Sounds like some of the speculators were able to time the market well. I don't see how it's their fault that subsequent buyers chose to engage in the mania.The culture seems to have lost the ability to 'do without".
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Old 10-25-2010, 03:58 PM
 
Location: Barrington
20,019 posts, read 14,400,856 times
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Quote:
Originally Posted by MikeyKid View Post
I, too, am fond of consequences - yet, I get the feeling we're talking about 2 very different things. You're looking for debt slavery in the vein of the ivory tower looking down as a lord on your peasants... I'm talking about consequences on the corrupt system from the very top.
Slavery implies a lack of choice. Committing to a mortgage is a choice. When that commitment is made on the basis that home values will increase at double digit rates thereafter, is magical thinking.
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Old 10-25-2010, 04:00 PM
 
Location: Albuquerque
5,553 posts, read 9,548,734 times
Reputation: 2462
Quote:
Originally Posted by aneftp
... we still have 80-85% of people still paying their mortgages on time.
What makes you say that?
Are up to 20% of people not paying their mortgages on time?

I seriously doubt that even up to 10% of mortgagors are not paying on time.
I seriously doubt that the percentage is even 5%.


Quote:
Originally Posted by middle-aged mom
Sounds like some of the speculators were able to time the market well.
I really doubt that.

If a speculator made $100k on a no-work-flip then what did
they do with that money? Invest it in bonds? I don't think so.

They flipped two the next time and kept doing it till they crashed.

The only people who timed it right are those who were not looking
to make a killing and just bought another house for the same reason
people always have; downsize/upsize/new job/etc./etc./etc.

Likewise, most of the people in an underwater house right friggin' now
were just doing the same thing; downsizing/upsizing/new job/etc./etc./etc.

People that talk like they knew the market was going to crater are just delusional or liars.

Quote:
Originally Posted by middle-aged mom
When that commitment is made on the basis that home values
will increase at double digit rates thereafter, is magical thinking.
Why do you keep dredging up this logic?

Just what percent of the people still living in their underwater house do
you think bought it for that and what percent were just doing the
downsizing/upsizing/new job/etc./etc./etc. thing?

Say it; what percent were irresponsible jerks that deserve it?
Based on this continual blame game posting, I'd guess you'd say 90%.
( This should probably be a poll. The results would be interesting. )

Homebuyers were not speculating on real estate, in general. Houses went down in value
because the market was driven too high by the people who DID get bailed out.

I invest in the stock market and look for price-points and expect to lose money some of the
time. People buying their home to live in, do NOT have any reason ( at least they didn't )
to expect it to go down in value. There are not supposed to be price-points for your house.

Acting like they "should have known better" is really really arrogant --
spoken like the banker who just got their $million(s) bonus(es).

Last edited by mortimer; 10-25-2010 at 04:37 PM..
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Old 10-25-2010, 04:28 PM
 
772 posts, read 634,390 times
Reputation: 1710
Quote:
Originally Posted by mortimer View Post
If a speculator made $100k on a no-work-flip then what did
they do with that money? Invest it in bonds? I don't think so.

They flipped two the next time and kept doing it till they crashed.
You are dead on accurate.

I can give you about 50 names of people I know. And they are all in foreclosure and bankruptcy. Everyone who flipped a home when the market was high suddenly thought they were a real estate genius. And not a single one of them stopped.

However, we really are not talking about the vast majority of US Citizens here. It ran rampant in Vegas, Phoenix, California, and Florida. And therefore you will not see principal reductions in the future, as the vast majority of the US won't bail them out at the tax payers expense.

You have to let stupid people fail or you will have an entire country of stupid people.
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Old 10-25-2010, 04:53 PM
 
134 posts, read 270,911 times
Reputation: 65
Quote:
Originally Posted by mortimer View Post
What makes you say that?
Are up to 20% of people not paying their mortgages on time?

I seriously doubt that even up to 10% of mortgagors are not paying on time.
I seriously doubt that the percentage is even 5%.
Not sure how you define people not paying their mortgages on time but if we can "trust" the figures from the Mortgate Bankers Association...

Delinquencies and Foreclosure Starts Decrease in Latest MBA National Delinquency Survey
WASHINGTON, D.C. (August 26, 2010) ó The delinquency rate for mortgage loans on one-to-four-unit residential properties dropped to a seasonally adjusted rate of 9.85 percent of all loans outstanding as of the end of the second quarter of 2010, a decrease of 21 basis points from the first quarter of 2010, and an increase of 61 basis points from one year ago, according to the Mortgage Bankers Associationís (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased two basis points to 9.40 percent this quarter from 9.38 percent last quarter.
The percentage of loans on which foreclosure actions were started during the second quarter was 1.11 percent, down 12 basis points from last quarter and down 25 basis points from one year ago.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 4.57 percent, a decrease of six basis points from the first quarter of 2010, but an increase of 27 basis points from one year ago.
The combined percentage of loans in foreclosure or at least one payment past due was 13.97 percent on a non-seasonally adjusted basis, a four basis point decline from 14.01 percent last quarter.
The seriously delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 9.11 percent, a decrease of 43 basis points from last quarter, but an increase of 114 basis points from the second quarter of last year.
....................
Foreclosures and Late-Stage Delinquencies Drop
Looking at the big picture, MBA reports that as of the end of the second quarter, 13.97 percent of the nationís mortgages were at least one payment past due or in foreclosure.
............
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Old 10-25-2010, 05:17 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 21,039,425 times
Reputation: 2661
Quote:
Originally Posted by HonestOne1 View Post
You are dead on accurate.

I can give you about 50 names of people I know. And they are all in foreclosure and bankruptcy. Everyone who flipped a home when the market was high suddenly thought they were a real estate genius. And not a single one of them stopped.

However, we really are not talking about the vast majority of US Citizens here. It ran rampant in Vegas, Phoenix, California, and Florida. And therefore you will not see principal reductions in the future, as the vast majority of the US won't bail them out at the tax payers expense.

You have to let stupid people fail or you will have an entire country of stupid people.
Actually you could watch it happen. In August of 2004 the pricing of new homes ran right into a wall. That was the point at which the speculators stopped buying and began getting rid of their holdings. A year later resale pricing was still at about the same level though volume had gone to hell. That period was when ownership went from speculators to locals. It went on into 2006 and 2007 but the volumes kept dropping. There was minor price declines but nothing of significance. By then I figure the market was 90% local...both owner occupants and investors. And then they got creamed.

And no everyone did not get even one flip in. Many got stuck with the first home they bought up.

Note that over half of these people were not stupid...they just needed a home. There was some overbuying but more driven by overprice than by over need. The market did not differentialte between those simply making a normal RE transaction and those speculating.
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Old 10-25-2010, 06:09 PM
 
Location: Union County
5,130 posts, read 4,979,435 times
Reputation: 3751
Quote:
Originally Posted by middle-aged mom View Post
Slavery implies a lack of choice. Committing to a mortgage is a choice. When that commitment is made on the basis that home values will increase at double digit rates thereafter, is magical thinking.
That's being far too simplistic... Most of the people you're referring to were guided by "professionals" who basically told them "this is the market value". The "choice" was either bid up the house or walk away - enter emotion and the entire top down ideology that homeownership was THE choice. At the time, heck even TO THIS DAY, there's people who look upon renters and insist that they're "throwing money away". Stating that renters are "foolish" or far worse. With all the factors, this is not something that any reasonable person would call a choice.

Now - liar no doc loans / HELOC ATM machines are a different animal... But even part of that is the downward spiral that is debt. Nobody had any logical reason to think the bubble couldn't stop inflating - people TODAY are already looking for the next bubble and constantly looking for signs that the market has bottomed.

If you can offer a way of determining who are the ones who "deserved it", I'd begin to listen. Even then, the ones who just got flat out lucky via timing are benefiting for no better reason then the ones who are way underwater. Bad timing.

I'm frankly disgusted by those that will punish the middle class at the expense of bailing out the boomers and bankers. Those people made far worse greed driven decisions then the people you look to punish. It's OK, though - one gets the feeling that the chickens will come home to roost no matter how the Ponzi scheme attempts to hold on.
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