House of Cards (60 Minutes piece on current Foreclosures)...

[JoeTruth]

Steve Kroft from 60 Minutes reports on how the U.S. sub-prime mortgage meltdown, in which risky loans drove a housing boom that went bust, is now roiling capital markets worldwide. Apparently, Stockton, CA. is the epicenter and foreclosure capital of the US. Very interesting piece that affects many currently. Pretty sad but not shocking considering what's taken place in the last 2-4 years in the real estate and mortgage industries.

http://www.cbsnews.com/sections/i_vi...ml?id=3756665n

[Knuckledragger]

More Pools for me to skate!

C.K.

[Fired Yo Momma]

I saw that special last night. Here is my thing on this those people had crappy credit and were so happy to get into the house that they did not care and read the small print. Those people were like its not fair for us to pay more on the house every month than what it is worth. Well it sure was fair for house to double in value.

Did you see the FBI agent that interviewd Saddamm Huesain?

[theclayster]

Honestly being in the field and also growing up with my dad who has been in Real Estate for about 30 years tells me if the housing prices wouldn't have sky rocketed like they did and having houses sell for twice as much as they were and let them appreciate normally that there wouldn't be a problem today and the market would be great.

The sub-prime loans didn't help either, made the market worse. People making nothing buying houses that they never should have bought in the first place and now everyone is taking the fall with them

[JoeTruth]

Originally Posted by Fired Yo Momma

Did you see the FBI agent that interviewd Saddamm Huesain?

Yeah, it validated everything I already suspected. Sadam's bluff was called by a gun-slinging cowboy, aka Dubya. What a waste of lives, money and resources. After all that, Bin-Laden is as free as bird in the remote regions of Pakistan and still doing whatever he wants to do along with the new and improved Taliban in Afghanistan. Politics as usual...go figure!

[Devoid169]

Stockton sure is the epicenter. When I was working/living in the San Francisco East Bay area (Oakland side), that area was getting built up big-time, and this was about 5 years ago. All these farms were being bought up and turned into housing tracts. The market in general in that area is just like here - unaffordable. So driving an hour to get to your brand new 100K cheaper home sounded good to a lot of people. For one guy I worked with that bought there, he said the commute was getting worse by the month and ended up selling to move closer. He got lucky - the market was good 3 years ago.....and now? Should be plowed over for farms again IMO. Plus, the crime rate in that area is thru the roof. Also, there are NO jobs in/around Stockton to support a $3500+ a month mortgage - gotta commute at least to Livermore and farther.

[Fired Yo Momma]

I love 60 min I just can't stand that old fossil kook Andy Rooney. The guy is so negative and bitter. If I was CBS I would fire that old hag and put him out to the pasture.

My roomate works in the real estate buisness and I kind of feel sorry for him now he has to sell his home where his sister rents from him. He started one of those overnight loan places now he lost his brokerage license. I told him I hope you saved your money. I remember he was always telling me you need to get a house right now, and I can hook you up. I know that his place was doing all those stated income loans, ha ha what a joke! Yea I work at Mickey Ds and make 150K a year

[ArrrKelly]

As a former Mortgage Underwriter I must say that it was way to easy to get loans done from 2001 to 2006. Rising home prices meant that sketchy loans would be covered and guidelines got retarded. Viscious cycle- home prices increasing meant loose guidelines and low rates-low rates made home prices go up. Now the reverse is happening.

Now all these senators and congressman are pointing fingers at the sub-prime lenders as if they had some conspiracy going on behind their backs. Anyone with half a clue could see this problem coming.

So yea-there are lots of people who got mad financing on very overpriced real estate. They might be financially screwed for a while. It will be interesting to see how lenders treat forclosure "victims" in the future. I'm also curious to see how low rates go this year.

[Pugz]

That was really interesting, now all I need to do is figure out when I should try to buy a house. It seems like a foreclosed home would be a pretty good deal, is there a place where they are listed by area (i.e. Orange county, L.A. County)?

[reflux]

I read a great article online no less than 5 years ago.

The article detailed the housing boom and fall in Japan, and how people didn't see it coming until it all came falling down. Not unlike our problem, one of their big mistakes was the creation of unique and fancy mortgages to allow for normal folks to purchase expensive homes. The 100 year mortgage was one such example.

[OMR]

Real estate is a cyclical market... like the stock market it always continues to recover...especially here in California where people want to live. What's happening right now is that the rich are getting richer. Investors with money are continuing to buy properties, looking to the long term.... buy and hold. Real estate should always be thought of as long term. Unfortunately, people started thinking short term investing. True, it was a house of cards that was destined to fall ... the market will be back. It may take 1-3 years to completely recover, but it will come back. Right now there are a lot of buyers out there that would like to buy but cannot qualify for a loan. History has taught us that this will change as wages catch up with home prices and lenders start to relax their loan requirements. I remember the early 90's RE market when the OC economy went into the toilet... home prices drastically dropped and people thought they would never recover. The market went on to post the highest gains over the last 8 years in history. With the government continuing to subsidize home ownership through tax incentives, we will see a strong market emerging again ... IMHO

[Schecky]

If you ask me, many people in Government saw this coming and all they did was cover themselves.
A prime example would be the revision of bankruptcy law-pushed through by the CC companies.
http://money.cnn.com/2005/10/17/pf/d..._law/index.htm

[el_d00der1n0]

I couldn't believe that one couple with the "I'm not making money anymore" line. I wonder if my mortgage says they'll just forget about everything if my value goes down. Oh well, I'm refi-ing. I'll get them to throw that in.

[JoeTruth]

Originally Posted by OMR

Real estate is a cyclical market... like the stock market it always continues to recover...especially here in California where people want to live. What's happening right now is that the rich are getting richer. Investors with money are continuing to buy properties, looking to the long term.... buy and hold. Real estate should always be thought of as long term. Unfortunately, people started thinking short term investing. True, it was a house of cards that was destined to fall ... the market will be back. It may take 1-3 years to completely recover, but it will come back. Right now there are a lot of buyers out there that would like to buy but cannot qualify for a loan. History has taught us that this will change as wages catch up with home prices and lenders start to relax their loan requirements. I remember the early 90's RE market when the OC economy went into the toilet... home prices drastically dropped and people thought they would never recover. The market went on to post the highest gains over the last 8 years in history. With the government continuing to subsidize home ownership through tax incentives, we will see a strong market emerging again ... IMHO

Yes, everything your saying is accurate and spot-on. In real estate, history seems to be repeating itself every 10-15 years. I wish I had a boat load of money right now so that I can buy all the good deals out there. I'd sit on them for 2-5 years and make more money then god. That's not gonna happen so I'll continue to focus on buying something in about 6-12 months while I keep thanking my luck stars that I sold my house in the summer of 06 (which I bought in 94).

Real estate has always been a better long term investment then stocks and bonds. We're going through a much needed correction is all. I, for one, don't mind it.

[Fired Yo Momma]

What is sad it that it was easier to get a home loan than it was for a auto loan

[Pain Freak]

I knew we were in for problems when some of my guys here at work were getting into homes and they're making less then 35K a year. Very creative financing. Some are in deep trouble right now.

I went the other way. We just bought another home that was in foreclosure. I believe we got a great deal on it. I can have my sons live in it real cheap.

[ODB]

As I see home values drop and inventory continue to grow in my neighborhood, I have to keep reminding myself that we are in our "15-year home"--as in, we ain't budging till the 2020s, when our daughter goes off to college. Things will bounce back; the paper loss is only temporary.

[EMrider]

Originally Posted by OMR

Real estate is a cyclical market... like the stock market it always continues to recover...especially here in California where people want to live. What's happening right now is that the rich are getting richer. Investors with money are continuing to buy properties, looking to the long term.... buy and hold. Real estate should always be thought of as long term. Unfortunately, people started thinking short term investing. True, it was a house of cards that was destined to fall ... the market will be back. It may take 1-3 years to completely recover, but it will come back. Right now there are a lot of buyers out there that would like to buy but cannot qualify for a loan. History has taught us that this will change as wages catch up with home prices and lenders start to relax their loan requirements. I remember the early 90's RE market when the OC economy went into the toilet... home prices drastically dropped and people thought they would never recover. The market went on to post the highest gains over the last 8 years in history. With the government continuing to subsidize home ownership through tax incentives, we will see a strong market emerging again ... IMHO

IMHO, the general outline of this view is correct. Long term demand is accumulating as the market clears and reprices. Greed usually shortens time horizons, and that most often ends badly. Credit cycles come and go, but one aspect of this subprime mess is historically unique. Specifically, many of the borrowers defaulted even though there was no material change in their fundamental economic health. Loans typically default when the borrower suffers some adverse shock that impairs their income. In this case, a majority of subprime credit problems appeared within the first 2-5 payments. In other words, these borrowers were unable to pay even before the ink was dry on their loan docs. The firms responsible for this crappy underwriting have already been wiped out and put into bankruptcy. Now the borrowers are taking a hit as they discover that foreclosure is the only rational option available to them. This makes for dramatic TV, but IMHO this is now a modern financial system should work. Excessive risk taking gets punished and eliminated and those resources are deployed elsewhere in the system. Many who did not over-extend themselves financially will be rewarded with excellent long term buying opportunities. Those people should be celebrated, but the media will always see the glass as half empty.
R

[RustyIron]

Walter Williams has a bit to say on the subject.
http://www.townhall.com/columnists/W...bprime_bailout

[0gravity]

Originally Posted by Fired Yo Momma

I saw that special last night. Here is my thing on this those people had crappy credit and were so happy to get into the house that they did not care and read the small print. Those people were like its not fair for us to pay more on the house every month than what it is worth. Well it sure was fair for house to double in value.
Huesain?

The people with crappy credit and/or weak income relative to the mortgages they were taking out made one mistake by signing onto those loans. But the lenders, who are in the business of knowing their products and who can and can't afford them, made the mistake to lend to them hundreds and thousands of times. The lenders are the most responsible because they knew exactly what they were doing. Most sub-primer borrowers did not. And we know the lenders didn't go out of their way to explain the fine print. State and federal regulators (including the FED) are responsible too because they fanned the flames of the housing boom with cheap easy credit, loose regulation, and almost no oversight or concern. A pox on everyone's houses.