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Old 09-13-2008, 08:39 AM
 
Location: Great State of Texas
86,067 posts, read 78,718,555 times
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Excellent article on the various facets of the Alt-A mortgage, how it got out of hand and abused and what we may be facing.


Bloomberg.com: Exclusive
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Old 09-13-2008, 09:25 AM
 
Location: America
6,993 posts, read 16,329,150 times
Reputation: 2083
^^

Alt-A is the real game. Sub Prime was just the national anthem in this 9 ending game of baseball we are in.
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Old 09-13-2008, 10:01 AM
 
Location: Backwoods of Maine
7,344 posts, read 9,372,729 times
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Quote:
Originally Posted by Wild Style View Post
^^

Alt-A is the real game. Sub Prime was just the national anthem in this 9 ending game of baseball we are in.
Funny, I was thinking that, too!

1st Inning: Alt-A
2nd Inning: Prime
3rd Inning: Seconds and HELOCs
4th Inning: Auto loans
5th Inning: School loans
6th Inning: Personal loans
7th Inning: Credit cards
8th Inning: Bank-to-bank
9th Inning: Fed-to-bank
OT: Joe and Jane Consumer

Oh - and add commercial in there somewhere! Ain't we got fun!
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Old 09-13-2008, 10:50 AM
 
Location: Great State of Texas
86,067 posts, read 78,718,555 times
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From what I have read commercial lags residential by 12-18 months but I don't know if commercial lending got as funky or creative as residential so we'll just have to wait and see.
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Old 09-13-2008, 11:02 AM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,474 posts, read 14,840,176 times
Reputation: 6381
I'm counting on it................


//www.city-data.com/forum/seatt...al-estate.html

Quote:
Originally Posted by Tony1790 View Post
Here's my example.

I owned (past tense) 12 homes in the Puget Sound region until spring 2007, I bought them in 2005/2006. I was getting enough in rent to cover my mortgages and have a little left over only because I was using option arm loans and paying less than interest only. Say the full payment was $1400, and interest only was $1100, then you had the option of paying $700, guess which one I did, $700. I was only getting $900-$1200 on the houses in monthly rent.

My goal, riding the wave up in equity prices. I dumped all the houses in 2006/2007 and made a few hundred thousand before the bubble burst....talk about a nervous puppy, I knew the bubble was bursting, but I was able to sell 12 houses in a 6 month time period. Guess which kind of loan most of the mom and pop "investors" that bought my homes used?? You guessed it, Option Arms......there is NO WAY that they are cash flowing without that deal, but their payments will adjust upwards, while the home values have already plummeted since they bought. It's going to be ugly for the 2006/2007 buyers.

Take care out there......btw, I now live in TN where I own 34 acres of land, a home, pool, barns with views and I paid cash with my Seattle area money, but I'm now property rich and cash poor. So I'm living a modest lifestyle, but I'm debt free, so that's fine with me. Plus there is NO TRAFFIC here!!! Worth the money if you ask me!! I hate traffic!!!

Sorry, I rambled.....the moral to the story that I was trying to allude to is that many, many buyers bought NEGATIVE cash flow properties with the idea that the prices would only go up.....now what????

Tony

p.s. To sellers, I have 2 words......Short Sale!!! Do it now while you still can, it ain't pretty out there in property land...ask Fannie and Freddie.
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Old 09-13-2008, 11:04 AM
 
Location: Hope, AR
1,505 posts, read 2,939,231 times
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Who will bail out the bailers?
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Old 09-13-2008, 12:11 PM
 
9,638 posts, read 25,541,843 times
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Who will bail out the bailers?

You and me and the rest of the taxpayers. They're doing corporate welfare, corporate socialism, privatizing the profits and socializing the losses.
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Old 09-13-2008, 12:47 PM
 
Location: America
6,993 posts, read 16,329,150 times
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Quote:
Originally Posted by HappyTexan View Post
From what I have read commercial lags residential by 12-18 months but I don't know if commercial lending got as funky or creative as residential so we'll just have to wait and see.
I have not researched this myself but I did read a few articles claiming Commercial RE is just as bad as RRE
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Old 09-13-2008, 05:30 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,474 posts, read 14,840,176 times
Reputation: 6381
I bet 1/2+ of a trillion could buy a lot of cheeseburgers.

Wow.
********************
(From the article...)

About 3 million U.S. borrowers have Alt-A mortgages totaling $1 trillion...

Almost all stated-income loans exaggerated the borrower's actual income by 5 percent or more, and more than half increased the amount by more than 50 percent, according to a study cited by Mortgage Asset Research Institute in its 2006 report to the Washington-based Mortgage Bankers Association.
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Old 09-13-2008, 10:15 PM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 22,953,731 times
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Quote:
Originally Posted by HappyTexan View Post
Excellent article on the various facets of the Alt-A mortgage, how it got out of hand and abused and what we may be facing.


Bloomberg.com: Exclusive
Cash is available from the Fed to fix this!
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