[bayview6]

Originally Posted by eventusstultorummagister

Maybe no housing rebound for a generation: Shiller | Reuters

"I worry that we might not see a really major turnaround in our lifetimes," Shiller said.

Anything is possible but it is just a question of supply and demand. With new home construction at low levels, current inventory of existing houses determines prices. The real critical factor is the 20% down requirement. If that is reduced then the housing market could rebound quickly.

[SportyandMisty]

Originally Posted by eventusstultorummagister

^^^
Corporate brainwashing.

The banks used their toxic loans to raise capital at the expense of the traditional homeowner...

When mortgage originators such as commercial banks sold loans, they did not raise capital. All that happened is one form of asset (loan portfolio) was exchanged for another type of asset (cash).

The only time banks actually raise capital is by issuing new stock or debt.

Bear Sterns, prior to going bankrupt, was warned to raise capital -- but didn't really do so. Jimmy Cayne, the CEO, concocted a stupid scheme whereby Bear Sterns would raise capital by selling a huge block of newly issued stock to a Chinese bank (I forgot which one). HOWEVER, at the same time, the Chinese bank would raise capital by selling a huge block of newly issued stock to Bear Sterns, thereby negating the capital increase of both.

In his excellent book House of Cards: A Tale of Hubris and Wretched Excess on Wall Street , William Cohan explains the above in detail - a great read (I read it as a book-on-CD while commuting).

In the depths of the banking crisis, when the Wall Street Investment Banks were on the brink, the US Treasury told their CEOs they no longer got a vote: the USA was going to inject capital into each and every one of them regardless of their need by purchasing preferred stock in them -- thereby guaranteeing the survival of the banking industry.

Most of those banks no longer have the taxpayer's money in them to shore up their capital -- and the taxpayers made a profit on the transaction (I think Citi is the lone exception, but I could be wrong).

[eventusstultorummagister]

"The only time banks actually raise capital is by issuing new stock or debt."

Incorrect.

EXAMPLE: The sale of bonds collateralized by the cash flows of principal and interest payments from an underlying pool of single family residential mortgages (aka Mortgage-Backed Securities).

The sale reduces the banks debt spread (on the balance sheets) and as a result raises capital without issuing "new" debt.

On a side, here's an article which compares the Occupy Movement to the French Revolution (it ends with a quote by Bill Hicks, my all-time favorite comedian after George Carlin):

http://brages07.hubpages.com/hub/The...ccupy-Movement

[eventusstultorummagister]

The beginning of the end of the bank crisis has arrived.

Home Owners Across the Nation Sue All Bank Servicers and Their Offshore Havens; Spire Law Officially Announces Filing of Landmark Lawsuit - MarketWatch

"All United States home owners may have the right to bring a lawsuit of this kind if they paid money to a national bank servicer during the years 2003 through 2009."

[WestieJeff]

Definitely no 20% down requirement. Hardly anyone I know is putting 20% down. FHA is 3% down and you can do conventional with 10% down, granted you'll be paying PMI.

The main lending standard that has tightened up is needing verifiable income.

Originally Posted by bayview6

Anything is possible but it is just a question of supply and demand. With new home construction at low levels, current inventory of existing houses determines prices. The real critical factor is the 20% down requirement. If that is reduced then the housing market could rebound quickly.

[eventusstultorummagister]

Originally Posted by WestieJeff

Definitely no 20% down requirement. Hardly anyone I know is putting 20% down. FHA is 3% down and you can do conventional with 10% down, granted you'll be paying PMI.

The main lending standard that has tightened up is needing verifiable income.

FHA loans with low FICO and debt-to-income ratio of 40%, get ready for the next wave (of defaults...)

surfs up dude!!!

[AlphaBeta]

My brother is buying a new house in Henderson and the builder told us there is a backlog to building the houses because in the last couple of months, they went from selling 15 homes per month to 40. Now they are short of construction workers.

[eventusstultorummagister]

Originally Posted by AlphaBeta

My brother is buying a new house in Henderson and the builder told us there is a backlog to building the houses because in the last couple of months, they went from selling 15 homes per month to 40. Now they are short of construction workers.

Buying a new house is like buying a new car nowadays...
it will be worth a lot less in a year from now.

[AlphaBeta]

Originally Posted by eventusstultorummagister

Buying a new house is like buying a new car nowadays...
it will be worth a lot less in a year from now.

Bad analogy - in good times or bad, buying a new car depreciates once you drive it off the lot (well, unless you're buying some kind of collector car, but how many of you are doing that?).

I buy cars because I enjoy them, not because I expect to make money off of them when I sell them. To some people, they want to live in a nice and new house at a reasonable (to them) price. Maybe they will live there forever. If so, who cares if the house appreciates or not? It's not like they are going to sell it and take the $$$ with them!

[eventusstultorummagister]

"We're starting to see some appreciation, but there's a demand issue from foreclosures being held up. There's still a huge glut of foreclosures to come."

Builder makes $7.5 million bet on housing recovery - Business - ReviewJournal.com

The circumstances that are driving the market are tenuous and eerily familiar to the 2010 surge that was driven by the federal home buyer tax credit," he said. After that, the market saw five quarters of declining new home sales, prices and land values.