Current Update on the LV Real Estate Market -- Part II (Las Vegas: low cost, shop)
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no other loans (equity, etc) can be attached to the house.. once you even qualify, you have to wait in order to get another loan...
also, if you sell the home, you will share the profits with the fha (the complete profits, not just the writedown)... so if you owed $300k, its written down to 200k, and you sell in 5 years for 400k, you are not 200k ahead, you have to pay back the 300k plus share at 50% (5yrs) the 100k profit, so you only netted 50k not 100k... whereas if you were able to keep making your payments and you sold for 400k in 5yrs, you were ahead 100k...capeesh??
Yep, all signs point to the "housing bill" being a massive bailout for buddies of congressmen. It's these private banks that have gotten de facto government backing because of years of greasing congress with lobbying dollars. Fannie and Freddie are the single biggest lobbyists in Washinton DC. Do you think congress wants to lose all the kickbacks (I mean, lobbying dollars) they've been getting all these years? This legislation is being touted by congress and the press as relief for struggling homeowners, but it seems to just contain provisions to socialize the Fannie, Feddie, and Countrywide debts and give money directly to city governments to encourage them to socialize real estate in their area.
Angelo Mozillo is a scumbag and seems to have his hands all over the creation of the Countrywide as well as Fannie and Freddie fiascos. He ran all of those companies at one time or another and has good friends in congress to protect him from any losses (other than his shame, because he has none left).
As far as I can tell, this bill makes it harder for folks to qualify to buy homes in the future. It doesn't help the little guys, unless there is something I missed.
Exactly. If already hurting sales fall by another 40% (the approximate amount of current closings coming directly from FHA loans with seller funded down payment asisstance) then we will undoubtedly see volume go through the roof. I am also very concerned with the socialization of real estate on the local level, as well as backstopping FNMA and FHLMC over 8 times what was deemed necessary ($800b allowed vs. $100b needed) and raising the national debt to accomplish this. Very disturbing precedents being set here.
Quote:
Originally Posted by desertsun41
This govt does not know best. I know you were being sarcastic there. Govt is there to help themselves and whoever donates to them such as the Bill written by BOA execs as you said.
Sounds like you dont have much confidence in this new FHA loan. What I know so far it seems that it could help some by saving their credit but if.......IF prices ever go up, we would give any gained equity back to the big bad govt. I guess that's better then walking away and ruining ones credit for 5 years. Most of us dont expect to ever walk away with a profit on our homes if we purchased post 2005 anyway so maybe it will work for some but as you said earlier, not many.
I meant that the government believes that it know best. As far as my confidence in this new bill, I haven't had much confidence in any proposal that the government has put forth since the foreclosure mess began, especially after hearing alot of Senators comments on the mortgage industry. The fact is that the majority of politicians do NOT understand how mortgages work. A loan officer acquaintance of mine in AZ wrote his senator after hearing about this bill. The senator's reply was that something must be done to stop the glut of subprime loans being written with the assistance of DPA's. Of course my colleague wrote back that subprime is nonexistant, but when it was it went up to 100% LTV without income verification on borrowers with sub 600 FICOs, whereas FHA requires income documentation and has much lower qualifying debt ratios than alot of Alt-A and even some A paper product. He never heard back from that senator, who did vote yes if I'm not mistaken.
This bill, simply put, will help less than 300,000 homeowners according to estimations, while eliminating over 500,000 new homebuyers a year from the market. I think the math is pretty basic.
no other loans (equity, etc) can be attached to the house.. once you even qualify, you have to wait in order to get another loan...
also, if you sell the home, you will share the profits with the fha (the complete profits, not just the writedown)... so if you owed $300k, its written down to 200k, and you sell in 5 years for 400k, you are not 200k ahead, you have to pay back the 300k plus share at 50% (5yrs) the 100k profit, so you only netted 50k not 100k... whereas if you were able to keep making your payments and you sold for 400k in 5yrs, you were ahead 100k...capeesh??
thats the way i read it..
How the hell do they expect borrowers to pay off existing equity loans if these same people cant even make a monthly payment? Come on now, most equity loans are for tens of thousands of dollars. Or is that the twisted plan? No wonder why few will be able to take advantage of this FHA loan.
It was not clear if one can consolidate their 2 loans and refy into one new FHA loan.
LOL...I just love how they bash Bush. Granted I am not a big fan of him, but he did everything he could to not allow this. Finally caves to get the country off his AZZ, and now you blame him!! It's the whole entire mess of them.
Oh, and if Obama gets in everyone will think that it's the Clinton times again with jobs, jobs, jobs, and booming economy, etc... Clinton opened up things and was there for the internet, Dot Coms, etc... Sorry to say, every that wants a computer, has a fricken computer.
This economy is going to take a long time to correct. The housing will take a long time to correct.
Either way, at least no Bush or Clinton in the White House. Maybe we can start to get back to being a respected partner in the World Economy instead of looking like a bully for the past 8 years, and having someone cheat on their wife, lie before congress, etc... the 8 years before that. At least we can put that behind us!
LOL...I just love how they bash Bush. Granted I am not a big fan of him, but he did everything he could to not allow this. Finally caves to get the country off his AZZ, and now you blame him!! It's the whole entire mess of them.
Oh, and if Obama gets in everyone will think that it's the Clinton times again with jobs, jobs, jobs, and booming economy, etc... Clinton opened up things and was there for the internet, Dot Coms, etc... Sorry to say, every that wants a computer, has a fricken computer.
This economy is going to take a long time to correct. The housing will take a long time to correct.
Either way, at least no Bush or Clinton in the White House. Maybe we can start to get back to being a respected partner in the World Economy instead of looking like a bully for the past 8 years, and having someone cheat on their wife, lie before congress, etc... the 8 years before that. At least we can put that behind us!
Bush the Dictator "The Decider" has done nothing either way. What little he attempts to do is an attempt to save face before he sneaks out the back door in Jan.
Your hero O'Salami will do nothing different but to support Africa rather then Iraq. He's nothing but a closet smoker and a closet muslim white man who refuses to acknowledge his own mothers race. Some family man huh. Im not sure where else you were going in your writing but I do indeed agree with you that the economy and housing are going to take a long time to correct. Much longer then many predict.
Some Sheep also believe the very day he steps into office he will flip a big red switch and the economy will begin to rock and roll. Yea right !
Whomever the next President is will inherit an economy on the slow mend. They will take credit for the correction that will inevitably come despite the fact that they will almost certainly have had nothing to do with it.
The only think that the next President can do to directly influence the economy is demand a balanced budget to shore up our monetary system and the dollar. Maybe they can make things worse by jacking up taxes or blowing even more money with a big new entitlement. Everything else is out of their control.
"The reality is that you cannot fight with drugs and tricks [i.e. government intervention] the laws of gravity: the worst financial crisis since the Great Depression, the biggest housing bust since the Great Depression, the coming biggest systemic banking crisis in the last 50 years, the worst U.S. recession since the stagflations of the 1970s, the biggest liquidity and credit crunch in decades. Over time these fundamental factors - a crisis of credit and insolvency for over-leveraged and insolvent households, financial institutions, mortgage lenders, homebuilders, municipalities and even a good fat tail of the corporate sector - cannot be rescued with liquidity actions. A severe recession and financial and banking crisis is unavoidable."
Also saw this from a very sharp financial blog regarding the housing bailout. This guy called the whole mess we're in now well over a year ago and everything he's been saying has come to pass...
"This is not over, and this bill will not "fix it". It will in fact make it much worse, because once the market realizes that despite spending $1.3 trillion dollars (the total blown thus far) that has not managed to stop the bleeding the bond and equity markets will suddenly "get it."
Don't be long equities when it happens.
Do not be in debt, period.
Do not have more than $100,000 in any bank. ANY bank.
Pray for our nation, if you're the praying sort....."
Bush has done NOTHING for this country and is a total waste... oh wait he did do something, he moved daylight savings back..... and incidentally he was not going to sign this housing bill, but he would have been humiliated if he wouldn't have given in.... Hey i'm not saying Obama is the saviour, but this country is in so deep because of the idiots in the white house, that it will take many many years to recover. We need to stop worrying about everybody else and fix our own problems.
"The reality is that you cannot fight with drugs and tricks [i.e. government intervention] the laws of gravity: the worst financial crisis since the Great Depression, the biggest housing bust since the Great Depression, the coming biggest systemic banking crisis in the last 50 years, the worst U.S. recession since the stagflations of the 1970s, the biggest liquidity and credit crunch in decades. Over time these fundamental factors - a crisis of credit and insolvency for over-leveraged and insolvent households, financial institutions, mortgage lenders, homebuilders, municipalities and even a good fat tail of the corporate sector - cannot be rescued with liquidity actions. A severe recession and financial and banking crisis is unavoidable."
Also saw this from a very sharp financial blog regarding the housing bailout. This guy called the whole mess we're in now well over a year ago and everything he's been saying has come to pass...
"This is not over, and this bill will not "fix it". It will in fact make it much worse, because once the market realizes that despite spending $1.3 trillion dollars (the total blown thus far) that has not managed to stop the bleeding the bond and equity markets will suddenly "get it."
Don't be long equities when it happens.
Do not be in debt, period.
Do not have more than $100,000 in any bank. ANY bank.
Pray for our nation, if you're the praying sort....."
More doom and gloom. Gets old after a while and certainly is not specific to Las Vegas which likely will be the first one to start out of the morass.
We been there and are getting close to climbing out. Rest of the country will be a year or so behind.
And, so far, we can live with it. Could get worse and really get hard. But not so far.
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Of course my colleague wrote back that subprime is nonexistant, but when it was it went up to 100% LTV without income verification on borrowers with sub 600 FICOs, whereas FHA requires income documentation and has much lower qualifying debt ratios than alot of Alt-A and even some A paper product. He never heard back from that senator, who did vote yes if I'm not mistaken.
