US mortgage crisis goes into meltdown

Quote from otcstockfund:

hasn't the premium increased by like 600k over the past few wks?
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yep.....

close to that.. it was around 800k early in feb


800k to "insure" per 10M mtge debt against default...

This has the makings of a crisis... I just hope some "LTCM Genius" didn't think to leverage himself to the hilt and start selling the index thinking Kudlow's spewing would be true forever and we will all live happily ever after...

The show's getting started folks, time to pull out the popcorn and watch the show :)

I'm not a johnny come lately to this, I was extremely skeptical when I lived in Chicago before moving to NY. In chicago, all these "Mortgage Brokers" started popping up... It was the talk of cocktail parties... "oooo you're a mortgage broker! oooo ahhh woooow"... I just feel happy that my predictions are finally coming to fruition :)
 
I do have some pity remaining in my heart... I'll donate $1 to my laid-off mortgage broker acquaintance who constantly bullied me in high school....

:D

ONE DOLLAR WINTHORPE!
 
Quote from ChiBondKing:

I do have some pity remaining in my heart... I'll donate $1 to my laid-off mortgage broker acquaintance who constantly bullied me in high school....

:D

ONE DOLLAR WINTHORPE!
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No doubt. I was lucky enough to get into a friendly "guy's poker night" sitting across from a couple of know-it-all real estate types whom two years ago I suggested to get out and maybe even short this RE pig. Neither one did of course (way too smart). Anyways I just slaughtered them at the table. They just got slobbery drunk and whined the whole time. I should have called the CHP and reported them as drunk drivers on the way out the door but instead felt a wave of compassion and did as you suggested....


"Here's your dollar Winthorp"



BWAHAHAHAHA
 
So it appears there will be falling home prices due to excess inventory. When would be a good time to buy? A few years from now? I guess nobody really knows the answer but I would appreciate a few educated guesses.
 
Quote from Pathus:

So it appears there will be falling home prices due to excess inventory. When would be a good time to buy? A few years from now? I guess nobody really knows the answer but I would appreciate a few educated guesses.
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When you walk by a realty office and you see one depressed, suicidal looking person sitting there looking like a security guard and you realize that real estate has not been in the news for years.

It will likely be a few years yet, the bottom happens about every 11 years. Cash will be king at that point, interest rates might be pretty high, or you can borrow to buy and refinance a few years later when rates come down.
 
maxpi,

I always appreciate your informative posts. I do not mean to put you on the spot, but I wanted to know something that I cannot find research about. Yes I actually read outside of ET...:)

Here is my question:

First, I think that it is agreed that sliding scale mortgages have increased. Variable rate schemes seem to follow CURRENT interest rates. Before fixed interest rate paper was bought and sold and servicing rights retained...bla bla bla...this secondary market was where mortgage paper was speculated upon. But again, I digress..the fact is there is more variable paper out there...

ok...

How does the above affect the 3-7-11 year cycle? (notice I added a three there...excuse me for presuming your answer)

Michael B.
 
Quote from ElectricSavant:

the smart money buys when the prices are at the lows before the interest rates even start falling
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those guys were cruisin my hood at the absolute lowest price point. I was getting to know them because the real estate cycle has just always fascinated me. They were typically driving old cars they repaired themselves, wearing jeans, and had no use for conventional wisdom, they were the wolves checking out the territory and they made a killing, my neighborhood has very volatile housing prices and they bought at the low of the cycle, probably margined a good bit.

The happiest rental owner I know of is a real estate attorney, he can handle any/all problems and is not on a shoestring. I'd rather trade futures any day.
 
maxpi......I like your insight on the timeline of these real estate cycles.

However, in the past wasn't it simply the price of the actual real estate that was fluctuating due to simple supply and demand? In today's market you've got people who have used their homes like an ATM and this has to have some kind of effect on the economy as a whole. Whether it causes the cycle to last longer or be more severe, this has to account for something.

What are your or anyone else's thoughts?
 
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