<i>"But, listen guys, they are not after the truly stretched....they are after the guy who just didn't WANT to pay because the value went below the loan balance.....not the guys who CAN'T pay..."</i>
By far the vast majority of walk-away people in this country are those who cannot pay. That's the real crux here. People who walk away from spec houses are an entirely different thing... but that's a minority of the overall housing debacle.
Where do we think all of this consumer liquidity that supported the economy = boosted stock market has come from? Savings? Increased earnings? Nope... refi's possible only thru artificial value inflation of their homes.
The bear market = bull market phase that recently ended was not fueled by trickle down economics, which is a failed concept in itself. Job creation trickled out of the country to third-world locations, and corporate earnings trickled into white collar bank accounts like it always does.
Meanwhile, Joe Average was still being downsized, automated and squeezed from inflation on all ends. Where to turn, where to turn. Ah yes... the home. It's value had increased by xx%. Need money to make ends meet, got vacation and then Christmas shopping ahead.
Did we ever see any ads on how easy = cheap it was to refinance homes and unlock equity there? Those ads ran around the clock for years because it paid very well to do so.
Net result is a disproportionate number of actual homeowners buried to the gills in multiple payments with no equity or worse, upside down. What will they do with no remaining source of ready cash to keep the consumer spending wheels turning?
For those who tout how stupid such people are, save your breath. It was upon the collective backs of their credit cards and equity loan checks that your most recent bull market rode to record heights. Indexes hit all-time highs, bull-party etc solely due to U.S. consumer spending and nothing else. Sure as hell wasn't an influx of job creation in the U.S. for call center services.
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Today there is no remaining source of easy money. Equity lines don't exist. Savings haven't existed for years. Government graft checks hitting mailboxes soon will mostly pay existing debt instead of forward purchases. Where will liquidity come from to boost the housing market? What will happen to retail sales year-end this time around? We'll see.
As for banks filing suits for fraudulent statements of buyers, it'll never happen. The banks were in almot every case compliant if not encouraging for that fraud. They are the ones who failed to prove stats and data on the applications. The buck pauses there first before falling on home buyers.
I worked with two different associates who were mtg brokers that turned to the trading world next. Both of them from different parts of the country told me same exact thing back in 2006: when the notes come due for what was written out there, it will far exceed anyone's estimate of magnitude.
Said another way, most of that paper written by everyone was pure crap. Now it's starting, just starting to come due. When homeowners have nowhere else to turn for extra money as living costs mount, they are faced with impossible choices that must be made. Walking away from a home and living wherever shelter can be found is one of those.
By far the vast majority of walk-away people in this country are those who cannot pay. That's the real crux here. People who walk away from spec houses are an entirely different thing... but that's a minority of the overall housing debacle.
Where do we think all of this consumer liquidity that supported the economy = boosted stock market has come from? Savings? Increased earnings? Nope... refi's possible only thru artificial value inflation of their homes.
The bear market = bull market phase that recently ended was not fueled by trickle down economics, which is a failed concept in itself. Job creation trickled out of the country to third-world locations, and corporate earnings trickled into white collar bank accounts like it always does.
Meanwhile, Joe Average was still being downsized, automated and squeezed from inflation on all ends. Where to turn, where to turn. Ah yes... the home. It's value had increased by xx%. Need money to make ends meet, got vacation and then Christmas shopping ahead.
Did we ever see any ads on how easy = cheap it was to refinance homes and unlock equity there? Those ads ran around the clock for years because it paid very well to do so.
Net result is a disproportionate number of actual homeowners buried to the gills in multiple payments with no equity or worse, upside down. What will they do with no remaining source of ready cash to keep the consumer spending wheels turning?
For those who tout how stupid such people are, save your breath. It was upon the collective backs of their credit cards and equity loan checks that your most recent bull market rode to record heights. Indexes hit all-time highs, bull-party etc solely due to U.S. consumer spending and nothing else. Sure as hell wasn't an influx of job creation in the U.S. for call center services.
*
Today there is no remaining source of easy money. Equity lines don't exist. Savings haven't existed for years. Government graft checks hitting mailboxes soon will mostly pay existing debt instead of forward purchases. Where will liquidity come from to boost the housing market? What will happen to retail sales year-end this time around? We'll see.
As for banks filing suits for fraudulent statements of buyers, it'll never happen. The banks were in almot every case compliant if not encouraging for that fraud. They are the ones who failed to prove stats and data on the applications. The buck pauses there first before falling on home buyers.
I worked with two different associates who were mtg brokers that turned to the trading world next. Both of them from different parts of the country told me same exact thing back in 2006: when the notes come due for what was written out there, it will far exceed anyone's estimate of magnitude.
Said another way, most of that paper written by everyone was pure crap. Now it's starting, just starting to come due. When homeowners have nowhere else to turn for extra money as living costs mount, they are faced with impossible choices that must be made. Walking away from a home and living wherever shelter can be found is one of those.