Mortgage Meltdown, More Pain To Come

re: Mortgage Meltdown, More Pain To Come

ltr08 — Tue, 30 Jun 2009 14:40:12 GMT

Thank you...these graphs are exceptional information...I'm a corporate recruiter...we have seen a huge drop...but this month showed significant improvement. ( triple previous months sales)..leading some to think we are almost out of the woods...

re: Mortgage Meltdown, More Pain To Come

Michael Cromwell — Tue, 30 Jun 2009 00:52:03 GMT

Thanks Ben. I understand keeping the losses off their bs:) It's funny how the lenders' loss mitigation departments pick up steam @ quarter's end. I'm kind of at a loss to how they will be able to trickle in order to stabilize once the dam breaks. I truly see big problems here in FL, especially w/in the jumbo market. Eventually, the overall financial damage an underwater house is causing, or has the potential to cause, will erode the sense of obligation to pay ones debt. There were a ton of Option Arms originated on these properties.

re: Mortgage Meltdown, More Pain To Come

Ben Kevan — Mon, 29 Jun 2009 23:27:01 GMT

Michael, Banks are holding many losses off their balance sheets, which is slated to change on reporting periods after November 15th. With the suspension of M2M they would much rather keep these non performing assets on their off book sheets at a higher value then their current market valuation.. They'll trickle the houses, and stabilize prices

re: Mortgage Meltdown, More Pain To Come

Charles Motley — Mon, 29 Jun 2009 23:16:32 GMT

tic toc , tic toc, tic toc, scary stuff!

re: Mortgage Meltdown, More Pain To Come

Jim Ventura — Mon, 29 Jun 2009 22:31:32 GMT

I've said for a long time, prices need to come back to near 2000-2001 levels - then we'll be at bottom. These charts support somewhere near that number. Problem is, rents are supporting a higher level than that (mostly because people are afraid to buy even at these historic low rates/prices) - which I call "absolute value" (maybe an incorrect term, or used by others differently) meaning that when it costs the same to own as to rent when all things are considered, prices have reached absolute value, and people should buy, which ultimately will cause prices to rise as inventories subside. Therefore, if prices are still too high, rents need to come down, since it is near those values now... and that is evident here in Orange County, CA where all large apartment complexes are now offering two months free rent, irritating the current tenants, then therefore... etc. etc. - all of this stops falling when income and confidence in income becomes secure - more to fall, simply put.

re: Mortgage Meltdown, More Pain To Come

Michael Cromwell — Mon, 29 Jun 2009 21:32:31 GMT

Isn't it true that, for accounting purposes, the banks are allowed to "book" the neg-am as profit? Very informative blog. Thanks!

re: Mortgage Meltdown, More Pain To Come

Emmett Dempsey — Mon, 29 Jun 2009 20:59:47 GMT

Wow very eye opening information. I think there are some positives for those of us in the field. I know anectdotally, I am seeing more prime Alt-A borrowers calling me to get into a fixed rate. If rates stay low, this may be a boon to us in the mortgage business, since we can get them into a similar or even better situation. The Option ARMs...well that's another story. In my entire mortgage career I have NEVER refinanced someone out of an Option ARM....even to an interest only. You can tell them the sky is falling on this loan, their balance went up $20,000, the dangers of staying in the loan and everything. The borrowers love that low payment and can't see the forest through the trees. These defaults will be very ugly when the chickens come home to roost.