Irvine Housing Blog

I had another person yesterday remark that his HELOC was now being frozen by the bank. He knows he is underwater on his house, but at least he can afford his fixed payment (fixed on the first, not sure of the terms of his second and then HELOC). Unfortunately, he is itching to buy another, as he figures we are close to the bottom. I tell him almost daily that I don’t think the bottom is anywhere near.

IR,

You think the price for a mid-range condo will bottom around 450k? No view, no yard, neighbors twelve feet across from your bedroom. Wow…

That seems high to me, no matter how much marble flooring it has. I suspect people that can manage to save 80k and have good paying jobs will expect more.

I would like to see a forecast of the invetory curve based on the scenario of artificially low rates for a decade and cram downs.  The assumption all along has been that rates would spike which would be like throwing gasoline on the reset curves.

The toxic loans have record low payments now due to the artificially low rates.  A projection of high inventory would have to be predicated on the Fed and Obama allowing free market carnage.  Alternatively it would have to be based on record high unemployment and deflation in the face of market manipulation.  I believe the unemployment and deflation scenario is more likely than rates spiking.

It’s good to explore scenarios and be open to all potential scenarios.

http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html

IF your are looking at this as a Rental property (sorry bout the cap, couldn’t help myself), then shouldn’t the GRM be 110 to 120? With a rent of $2500 that would make this property a buy @ $300,000. Of course, the $2500 rent presupposes rents will remain strong in the face of a deep recession.

IF, on the other hand, this is what home looks like for a $100,000 a year earner - how depressing.

The Big Question is what happens when Obama opens the ‘BAD’ bank, which will be announced any day now. The plan, as I understand it for the government to buy up all the toxic waste from the banks and sequester it into a nationalized dump. Of course, they’ll crow how this is only a loan (don’t look behind the curtain folks!) and the Taxpayer will make money on the garbage.

How will these ‘Financial Instruments of Mass Destruction’ be priced, what will the gov. pay for them? The plan, again, is ingenious - they go out to the bank with a price, an offer. As someone astutely pointed out, if any bank accepts the government price, you have to know the offer was too high to begin with.

Once the Banks are freed of toxic waste, they will be free to lend once again. The problem will be to whom. The next step will be to ‘relax’ lending standards… again. Can anyone say, no-doc loans?

This will happen then nationalization.

Wow, what a great country!

So…after the banks become nationalized, the debt is into the trillions, hyperinflation takes hold….if you don’t own a home now (better outright) you REALLY never will?

I just don’t see how the dollar will hold up much longer?  Can’t we just call a force majeure and start over? 

Oh yea..the World Bank wouldn’t want that.  So lets just make more debt.

Why havent we seen firesale prices like they saw in the 90s?
Am I hoping for too much when I think the banks will get to a point where they need the cash rather than cover their costs on the loan?

I’m praying for that day. We’ll truly see price drops at that point.

CNN money had a story a few days ago reporting that banks had only listed 1/3 of their properties, meaning that there is still a larger shadow inventory of foreclosed properties which haven’t hit the market yet.

This is going to be long and drawn out and will affect everyone. As the saying goes, there are two types of people you dont want to sue, those that have nothing to lose and those with unlimited resources.

In this instance, you have both. Banks and financial institutions were in a game of chicken with the U.S. Government and the Fed blinked first. They have already dumped trillions down the rat hole and they wont stop now. There is no incentive for the Banks to function properly, they are already bankrupt. Why should they care?

Do you think any of the Merill Lynch executives declined any of their bonus money for bankrupting their company? Hell no, it was ponied up by you and I the taxpayers. I am sure they all yucked it up at our expense after cashing the checks.

No, this is a scam of epic proportion. The Fed and the banks will do everything in their power to keep Amercians has home debtors, much to the detriment of the country as a whole. Every dollar that goes to debt service is a dollar that cant be used to support an actual working, thriving economy that builds and sells products, not one that just pushes fake money from one account to another.

There are no more markets left to scam.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

There may not be any more markets left to scam, but there are still whole countries.

To me a bottom price for this house is $380K.

I was made aware that Fannie and Freddie are in the works of contracting with various loan orgination companies to rework their loans. I was told they are willing to write down 60% of the principal loan balance to get them off their books.

IR, what are your thoughts on a this?

Larger and solon diverse segments of the universe are discovering that the Cyberspace has an ocean of message, and domicile buyers are action vantage of websites same New Condos Online every day. Beneath are whatsoever essential facts pertaining to the certain event of application on the historical class business..Domicile buyers who victimised the Internet as a key division of the writ grew from 73 proportion in 2004 to 77 percent in 2005. Now substantially over 80% of domestic buyers use the Net as a election way in their domestic see. Several 73 pct of builders surveyed say they somebody a Web parcel; and most builders also use magnitude media business and new location listings on third-party web sites like New Condos Online to touch is critical. However, because the buyers are not needs ripe to get these leads requirement to be properly handled by older and considerably drilled sales representatives.