Less than 20% fall in home prices will destroy the banking system?

[volente_00]

Quote from blast19:

It's not a matter of how many loans were "written" last year or last two years...it's a matter of the loans given, the value of the house at the time of sale, the value now, the location, etc. Look at where the most homes were sold in the last two years and their prices then and now...have fun!

That is my point. Only the last to buy will get burned. One thing to look at too though is the appraisals on these houses have been blown up in order to get people in them as well. I'm not saying things won't get ugly, but you are not going to see what you saw in the lates 80's.

 

[SethArb]

I have another question ...

why is it the commercial R.E. sector is still holding up
in some of the big cities

also ... who is left holding the bag after all the new
highrises are built , if there is not sufficient demand
( enough occupants either commercial or residential ) ?

 

[volente_00]

Quote from SethArb:

I have another question ...

why is it the commercial R.E. sector is still holding up
in some of the big cities

also ... who is left holding the bag after all the new
highrises are built , if there is not sufficient demand
( enough occupants either commercial or residential ) ?

The highrises are going to get filled with renters on the mass exodus from homes !

 

[blast19]

Quote from volente_00:

That is my point. Only the last to buy will get burned. One thing to look at too though is the appraisals on these houses have been blown up in order to get people in them as well. I'm not saying things won't get ugly, but you are not going to see what you saw in the lates 80's.

That's what you're blinding yourself to for some reason..and I don't understand why?

Two years worth of loans at the peak of a bubble is a fucking lot. It's a lot of overpriced houses being sold with creative financing that literally 50-60% of people shouldn't have qualified for in the first place...when those ARMs re-adjust those people will be in bad loans in overpriced homes in crap areas that they can't afford.

Wait....do you even know what an ARM is? It seems more and more like you probably don't.

 

[NanoTick]

Quote from dividend:

1 in 3 don't know what kind of mortgage they have.


http://biz.yahoo.com/brn/070326/21330.html?.v=1&.pf=loans

In the survey conducted by Gfk Roper, homeowners with mortgages were asked what type of mortgage they had. A stunning 34 percent of the homeowners had no idea.

Ha Ha Ha... Just like 70% of the people think they are in the top 10%.

 

[2ez]

Quote from volente_00:

Down in Texas, rentals bring around 1% of their value monthly. I have a buddy out in San Diego and he pays $3500 rent on a house that is appraised at 350k. I don't have any friends renting in the east so maybe someone can chime in what rent is running out there. I think that the subprime issue is overblown. Most people put something down on their house, 3 to 5 % plus closing costs. People hate to sell anything for a loss, don't believe me ? Go ask all of the folks that held from the crash of 2000. If all these people walk, they still have to rent and from what I have seen for most renting is going to cost nearly as much as their mortgage. I am sure there are some cases where people did interest only or crazy arms but I think that is a minority when you look at the whole picture of outstanding mortgages. The corrections in RE will be in specific areas and not a nationwide epidemic.

You sound like a realtor. What are you going to say next……God is not making any more land; therefore, the housing market will always be stable ?


The correction will have residual effects all over.

 

[volente_00]

Quote from blast19:

That's what you're blinding yourself to for some reason..and I don't understand why?

Two years worth of loans at the peak of a bubble is a fucking lot. It's a lot of overpriced houses being sold with creative financing that literally 50-60% of people shouldn't have qualified for in the first place...when those ARMs re-adjust those people will be in bad loans in overpriced homes in crap areas that they can't afford.

Wait....do you even know what an ARM is? It seems more and more like you probably don't.

Too bad the peak was 2 years ago. So the majority of these homeowners are in houses that were bought from mid 2005 and back and are sitting on equity even on a 20% decline.

http://finance.yahoo.com/q/bc?s=TOL&t=5y


http://finance.yahoo.com/q/bc?s=DHI&t=5y



http://finance.yahoo.com/q/bc?s=PHM&t=5y

Have you ever heard of refinance into a fixed 15 or 30 ?

That was one of the reasons ARM were created so people could have time in order to lock in a better fixed rate but still close on the house.

 

[blast19]

Quote from volente_00:

Too bad the peak was 2 years ago. So the majority of these homeowners are in houses that were bought from mid 2005 and back and are sitting on equity even on a 20% decline.

http://finance.yahoo.com/q/bc?s=TOL&t=5y


http://finance.yahoo.com/q/bc?s=DHI&t=5y



http://finance.yahoo.com/q/bc?s=PHM&t=5y

Have you ever heard of refinance into a fixed 15 or 30 ?

That was one of the reasons ARM were created so people could have time in order to lock in a better fixed rate but still close on the house.

You just made my point...haha. The prices have done nothing but settle or go down since THE PEAK! That means everyone who has purchased since the PEAK(Do you know the definition) has a home valued at less than they paid! That means that their equity is probably less than what they paid in the first place!

Refinance? When, where? Refinance on a house you can't afford and that is worth less now than previously? Yes, I'm sure the lenders would be brilliant to do that since they were smart enough to issue millions of "liar loans" for the past few years.

Do you get it now!??!? If you don't get it now I can't carry on...you're going to make me lose my mind and jump out the window.

 

[blast19]

....and stock charts have very little to do with the reality of a PEAK. They actually make my case more so...do you see how many homes they were building in the last 2 years? Approximately half of the loans to buy those houses were Alt-A loans given to people who shouldn't have been given loans in the first place. Add negative equity on many, piggybacks, declining value, etc. and you have a major crisis.

Are you playing stupid?

 

[ssternlight]

One thing I haven't seen discussed is the impact of the new bankruptcy law on foreclosures. I'm not sure you can "walk away" any more....you still might be evicted for non-payment though.