[sheriff]

Originally Posted by olecapt

Some buyers...but not most, Most lenders but only on some deals, Some RE Agents though not many and virtually all builders have some guilt.

We have a client that crashed. Did not need to....but they kept their mouth shut until past help. We service very few marginal clients. The majority of our buyers pay cash or large down. .

In my limited current experience, it seems the current game is for devolpers to inflate the price by 20%, refund this in the form of a down payment for buyers walking away from ARM'S, lower payment, qualification, and fixed rate are too good for the financially irresponsible to ignore. Thus, the cycle continues. This will only get uglier, as the 2010 timeframe for LV economic stabilization will prove to be a farce.

[olecapt]

Originally Posted by sheriff

In my limited current experience, it seems the current game is for devolpers to inflate the price by 20%, refund this in the form of a down payment for buyers walking away from ARM'S, lower payment, qualification, and fixed rate are too good for the financially irresponsible to ignore. Thus, the cycle continues. This will only get uglier, as the 2010 timeframe for LV economic stabilization will prove to be a farce.

Nope. Don't work that way.

LV will burn through most of its foreclosures by the middle of next year.

[dude66]

So kiddies, who here can pronounce "Macro Economics"??

No? Well let me help you...


Sept. 15, 2008

Your Loan Denied: Main Street Fallout of Wall Street Crisis

The drama on Wall Street is already hitting Main Street U.S.A. in the form of lower stock prices and declining home values. But the situation got even worse over the weekend.

With financial institutions so focused on preserving capital as many fight for survival, "it's going to be much more difficult, if not impossible" for consumer to get a loan now, says Diane Garnick, investment strategist at Invesco.



Your Loan Denied Main Street Fallout of Wall Street Crisis: Tech Ticker, Yahoo! Finance

[olecapt]

Originally Posted by dude66

So kiddies, who here can pronounce "Macro Economics"??

No? Well let me help you...


Sept. 15, 2008

Your Loan Denied: Main Street Fallout of Wall Street Crisis

The drama on Wall Street is already hitting Main Street U.S.A. in the form of lower stock prices and declining home values. But the situation got even worse over the weekend.

With financial institutions so focused on preserving capital as many fight for survival, "it's going to be much more difficult, if not impossible" for consumer to get a loan now, says Diane Garnick, investment strategist at Invesco.



Your Loan Denied Main Street Fallout of Wall Street Crisis: Tech Ticker, Yahoo! Finance

Nothing yet. Some tightening could happen I suppose. But not yet. Then again when this all runs out it may open up a whole lot.

Let us wait until we get to something real rather than hanging crepe paper in advance.

What is your alternative? Put your money in the stock market?

[dude66]

Originally Posted by olecapt

What is your alternative? Put your money in the stock market?

Hah! Never.

Anyway, Meredith Whitney is a respected financial analyst who has been one of the few to correctly predict all the craziness of 2008. She was on CNBC today and gave her analysis of the situation.

Here's a few choice bullet points of what she said (taken from a larger list):


*What this does is exacerbates the credit crunch. Pulls so much liquidity out of the market.

*Futures indicate a 33% peak to trough housing price decline…I think well north of 40-45%.

*So much destruction because of Lehman…very messy credit market next several weeks.

*In the past the market did not impact the economy. But now, market directly impacts the economy and exacerbated certainly by this weekend and what I expect over the next couple of weeks. Now you will see economy impact the market going forward.

*So much of the losses so far have been because on given loans prices have declined so much. There has been a small number of relative portion of given loans defaulted so far. Going forward, there will be a higher frequency of defaults in all states. Unemployment went up 50% from July 2007 to July 2008. The market has yet to appreciate how the economy is going to impact the market. The market is still reigning havoc on the economy.


Many more points she makes here:
Meredith Whitney Scares the Crap out of Everyone

[Positiveone]

Another foreclosure just hit my street today! That makes 4 on my street alone! The middle of next year sounds to soon. I say we wont see any home price increases for 2-3 years. Dont you agree?

Originally Posted by olecapt

Nope. Don't work that way.

LV will burn through most of its foreclosures by the middle of next year.

[jpk]

Originally Posted by Positiveone

Another foreclosure just hit my street today! That makes 4 on my street alone! The middle of next year sounds to soon. I say we wont see any home price increases for 2-3 years. Dont you agree?

He didn't say price increases. He said the repo glut would be gone within a year. I agree. Just look at when the bad mortages were issued and how much time those owners have before their adjustables move and they are foreclosed upon. You land somewhere in '09 for the last bunch.

It will be the start of the turnaround necessary for price increase to then occur. But then you may see prices flat as homeowners who held off selling for over a year put their houses on the market. Rate of decline will probably end, but working off the bottom to start seeing increases might take more patience.

[olecapt]

Originally Posted by jpk

He didn't say price increases. He said the repo glut would be gone within a year. I agree. Just look at when the bad mortages were issued and how much time those owners have before their adjustables move and they are foreclosed upon. You land somewhere in '09 for the last bunch.

It will be the start of the turnaround necessary for price increase to then occur. But then you may see prices flat as homeowners who held off selling for over a year put their houses on the market. Rate of decline will probably end, but working off the bottom to start seeing increases might take more patience.

I do expect a one shot price increase when the REPOs run out...or rather begin to run out. We still have a two tiered market with sharply differing prices. The REPOs are about 70% of the market and are selling about 15% or more below the non-REPOs. As the REPOs fade out the median price starts moving to the non-REPO side. That is a price increase.

The more interesting question is will the volume hold up? And that all depends on where the economy is. If Vegas begin to pull out next year the volume will hold and go up. If not the volume will trail off to half or two thirds where it is now. Still get a price increase in either case...

[GoreeGal]

All this negative stuff is scaring me. I do not know whether to buy now or wait. Plan to be there on a new job and should be around 5 years or so.
I hate throwing money around on rent but would you all suggest the least money I could put down on a home in the event the market craters even more?

I want to buy 275-around 350 and do not want to wake up in 6 months to the value of 150.

[Daddys///M3]

Originally Posted by GoreeGal

All this negative stuff is scaring me. I do not know whether to buy now or wait. Plan to be there on a new job and should be around 5 years or so.
I hate throwing money around on rent but would you all suggest the least money I could put down on a home in the event the market craters even more?

I want to buy 275-around 350 and do not want to wake up in 6 months to the value of 150.

I'm not sure I completely understand the context of your question so I will answer it 2 different ways.

If you are asking what the least amount of money you can put down on a purchase is, that would be an FHA loan with 3% down unless you or your SO (if applicable) were a veteran in which case you could do a 100% loan to value VA loan.

If you were asking if we would suggest that you put the least amount of money down possible, I personally would say that your time frame of 5 years may dictate more down. Of course noone can predict the future and I believe that we are near bottom as far as prices go (just my opinion based on local sales and outstanding mortgage data I have seen, I have not done nor am I capable of doing a full macroeconomic analysis), but if we are not or even if we are and values hold steady, 3% down will likely have you coming out of pocket to sell your home (4%-6% for RE agent commisions and about 1% for seller closing costs). If I was looking to buy and hold for 5 years or less, I would probably put at least 10% down and hope that I could recoup about half of that in that short of a time frame.