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Housing Rolling Along 2
- Thread starter Covertibility
- Start date
Quote from Adobian:
http://warrenreports.tpmcafe.com/bl...asons_that_the_real_estate_bubble_is_bursting
George Soros said US will be in recession in 2007.
I think it is quite possible that we are entering the early stages of the recession. So much of the economic prosperity has been dependent on the housing market.
Quote from balda:
Sorry but you are wrong. Who needs to afford a house if you can afford a payment. One just have to be alive. Creative mortgage programs will move you in. This time its different.
With all due respect I believe you are wrong. Lenders have been tightening their lending policies due to the increases in default. There are still creative programs though, but they will continue to evaporate as more damage is done to the housing market IMO.
Balda, I think we agree more than disagree. My wife works in the business and we laugh at the "loose" qualifiications the company allows one to purchase a home. On our home we put down over 20% even though they kept tellings us sir you are qualified for more. I said no thanks I don't need that pressure or stress.
My next home purchase, I actually want to downsize and pay cash. Debt free is the way to be. Simple is better atleast for me.
My next home purchase, I actually want to downsize and pay cash. Debt free is the way to be. Simple is better atleast for me.
Quote from balda:
I wish I was wrong. Lenders might be looking more realistically on the PRICE of the property but not on the qualification of the applicant.
They are still advertisting no doc, interest only loans. I guess they still don't care.
A couple of weeks ago when Bernanke was speaking in front of those world bankers one guy from Citicorp asked him his thoughts on why the corporate default rate was so low, considering the large global displacement of funds that had been going on. He was primarily referencing the huge flows to companies in China, India and away from companies in other countries.
That struck me as odd that one of the largest playa's in corporate lending was wondering why their industry's default rate was so low. If the banks don't know what is going on then no one does.
I guess that can mean only one thing and that is that the unexpected is going happen because no one is expecting it.
John
Quote from balda:
Sorry but you are wrong. Who needs to afford a house if you can afford a payment. One just have to be alive. Creative mortgage programs will move you in. This time its different.
This is the car payment plan method. Who cares about what the underlying asset is valued, as long as you can afford the payment you're good to go.
Most of those programs are neg am, balloons, IO, ARMs that will adjust and literally kill the borrower because they are tapped out to afford the current payment and can't afford that once cheap payment when it adjust. That's where the car payment plan similarities end.
Everyone has an opinion about what will happen, I happen to think it's not so rosy the next 2-5 years.
The house next door was on the market for $500K, now leased for 1 year and an option to buy at ~$400K... Hmmmm
Fed Steals Punchbowl, Party Ends, Hangover Starts: Mark Gilbert
June 20 (Bloomberg)
The Federal Reserve has taken away the punchbowl it spent two years pouring absinthe into. The party is over, and the guests are staggering off to endure skull-cracking hangovers. So far, so predictable.
âExcess liquidity leads to mispricing of risk,'â says Nick Parsons, head of the macro research group at Commerzbank AG in London. âRepricing of risk involves deleveraging, and deleveraging is brutal and indiscriminate.'â â¦
The U.S. central bank has raised its overnight rate 16 times, and thereâs more to come.
June 20 (Bloomberg)
The Federal Reserve has taken away the punchbowl it spent two years pouring absinthe into. The party is over, and the guests are staggering off to endure skull-cracking hangovers. So far, so predictable.
âExcess liquidity leads to mispricing of risk,'â says Nick Parsons, head of the macro research group at Commerzbank AG in London. âRepricing of risk involves deleveraging, and deleveraging is brutal and indiscriminate.'â â¦
The U.S. central bank has raised its overnight rate 16 times, and thereâs more to come.
And yet we have the inverted yield curve resembling an owner(Fed) trying to pull a dog(long yields) that is reluctant to move (higher). Markets seems to be saying Fed will overdue it, recession.........
Quote from balda:
Sorry but you are wrong. Who needs to afford a house if you can afford a payment. One just have to be alive. Creative mortgage programs will move you in. This time its different.
I see what you mean, and it is possible to pursue that type of approach with the various sub-prime lenders here in Canada, but at the end of the day you still need to be able to afford your mortgage payments. So affordability is a combination of being able to qualify for a mortgage, as well as being able to afford your monthly payments.