The government (or our creditors should our government implode) will own a lot of houses in the US.

Think of the implications of that.

Unloading MBS: Think Bill Gross! I really detest that man.

but, but, 4 of the 6 categories DECLINED in October sequentially...aren't things getting better?

Correct me if I am wrong but isn't the majority of US manufacturing tied to housing? In fact the home is tied to so many facets of our economy I probably can't name them all.

How is a housing collapse (or commercial realestate) even manageable for our nation?

Will the government own all these properties? Which government is that..China?

"our creditors" Meet your new boss.

I actually heard that 10.7 million number on the radio news this morning and thought the same thing. "Hey, they're 'getting' it." It was followed immediately by the news that existing home sales are UP! UP! UP!

So all is good, you know.

Who are the american citizen who accept to carry such a debt ??

They are screwing their fellow cocitizen with their behaviour as their credit is now backed by the full faith and credit of the US and they well know the loan they take are unaffordable. (They are defaulting at high rate even at the beginning of loans issued at unbelievable DTI ratio )...

I cannot imagine than they find so much people (US citizen as buyers or straw man because the loan will default, regulators, loan officers) to play this kind of game. Housing market is no more a "market" but a "total mess" in my opinion. No one in his right mind would buy in such a market. If you buy you're screwed because you have to compete with funny buyers who have access to funny money...

What is wrong in the US ????
It is total non sense.

They are going to freeze all the market when the scam will blow sky high.

Karl: ¨We are precisely emulating ... Japan ....the Japanese government knelt before the banking interests and allowed them to sweep their bad debt under the carpet.¨

It is WORSE: Japan swept bad debt under carpet, but US shift a lot of the bad debt out of the banks and on to the taxpayers.

Think of the 1300 billion of MBS which the banksters exchange for Treasuries, and more to come.

Recently I read another trick: say a bank has mortgage $ 500.000. Borrower underwater; house would be sold in foreclosure for say $260.000. Bank would lose $240.000, and also they must take book losses on comparable loans.
INSTEAD, bank sells mortgage to servicer (which it owns or has just established for this tricks purpose); servicer approaches borrower: let´s modify mortgage to $ 400.000 with a FHA guarantee (apparantly the maximum FHA guarantee has been elevated recently by Barney Frank et al.). Servicer sell mortgage back to bank.

RESULT: Bank has much smaller loss, and now has an FHA guarantee!!

When all is said and done, ALL the problem mortgages will have been off-loaded to the taxpayers!


Off-topic: BoE just revealed secret loans of 62 billion pounds to 2 banks last year. In return, banks posted 100 billion pound collateral. Loans and a fee have been fully paid back. It was a secret emergency loan, now fully paid back, to prevent bank runs at that time.
I have always questioned why FED did NOT give loans to AIG counterparties at that time. Those loans could have been paid back by now (instead of those billion now ending up in bonuses: think GS: 13 billion from taxpayers via AIG; now more than that in the bonus pool of that ´bank´ alone).

Gen,

Is it a land grab scheme?

I live in Vegas and we now are down to year 2000 home prices (roughly $100/sf). When the second wave hits next year it's gonna get real ugly, especially with homes over $500K...and there are a lot of them. I looked up zillow the other day and people still are listing their houses way too high, as in $200K over an identical house down the street. Insane.

I have been looking for a house now in the western burbs of Chicago. The realtor(s) I have been working with are all happy to work with me because they get to see 'normal' houses. All their client's have been looking at are forclosures. There are just a ton of run down rental properties with high price tags. Its like there were a ton of people just buying houses to rent to people, never did a damn thing to the house, an expect a payout. (IE slumlords) I am close to just quit looking period and buy better 'protection' for my townhouse which I currently reside.

Just to be clear, there are a lot of people for which the following are all true:

1. They owe the feds for their college education.
2. They owe the feds for their their mortgage.
3. They owe the feds taxes on their CFC vehicle.
4. They depend upon the feds for their health care.
5. They depend upon the feds for their retirement.
6. They depend upon the feds for their job.
7. They depend upon the feds for food...*

* the SCOTUS has ruled several times that crops grown strictly for home use and consumption are within the powers of the feds to regulate since the plants could conceivably, regardless of how unlikely, show up and impact interstate commerce.

I figure the FRBNY is doing a billion a day in bucket-repo trades with the primary dealers.

Must be nice to have a printing press.

Quote:

What is wrong in the US ????
It is total non sense.

I live here and I can't figure out how people are this stupid either. But hey the restaurants and malls are still busy in Colorado... for now.

Kab wrote..

I live here and I can't figure out how people are this stupid either. But hey the restaurants and malls are still busy in Colorado... for now.

That they are. My wife and I were in the market for a house last spring and summer, and everything was way too overvalued. Looking at things now, and prices have gone up from there! I can't understand it.

When we were looking for a house, our realtor and our banker (Wells Fargo) both suggested we not put so much down on a house, and instead get a 3.5% down FHA loan, and keep the rest of the money. Use it to make upgrades, buy a new car, whatever...

We're renting a town house, got a CostCo and Sam's membership, and will be stocking up on as much food as will fit. I try to buy a little ammo everytime I go into a store that has some in stock.

Case schiller out today...prices up again second straight quarter. SOMEBODY is buying.

Quote:

SOMEBODY is buying.

That'd be the FED.

I don't understand the ammo thing... seriously, if you have to use that much ammo you're in the wrong place and you're going to be killed anyway.

Lemonaid wrote..

I don't understand the ammo thing... seriously, if you have to use that much ammo you're in the wrong place and you're going to be killed anyway.

Yep. But sometimes in life, when you know you can't win, fighting is still the right thing to do, even if the only point is to buy time and make the biggest mess possible to warn your neighbors what is coming.

And you never know when the ability to shoot Bambi might be worthwhile.

"I actually heard that 10.7 million number on the radio news this morning and thought the same thing. "Hey, they're 'getting' it." It was followed immediately by the news that existing home sales are UP! UP! UP!"

I heard this same crap today, but the markets that were up were Detroit, Minneapolis and some other places in the Midwest. Who cares, the real story is CA,FL, NV where most of the volume is.

Oh and there are a ****load of foreclosures in CA and NV that the lenders are just sitting on.

$8,000 (maximum tax credit) divided by .035 (down payment) = $228,571, i. e. the break even point (excluding closing costs) for becoming a "new" homeowner. The lower the price, the greater the incentive. (unless I am unaware that amount of the tax credit is limited by income) I'm guessing there is a lot of flipping going on in run down areas for tax credits without any intent to be a long term homeowner.

Obama's Administration will fix it using their vast experience. Oh wait, they only have experience being bureaucrats. See graph here:

http://slopeofhope.com/2009/11/lifelong-....

If you want some insight into the Obama policy, take a look at this fascinating analysis of the percentage of time the cabinet members of various administrations have spent in the private sector. Obama's cabinet has the lowest percentage on record. They are, by and large, lifelong bureaucrats. Ayn Rand is, I'm sure, spinning in her grave.

From my area of Florida we are setting all kinds of records for foreclosures.
Last year there were approx 1800.
Through the end of October there were right at 3800.
The county is planning on DOUBLE that for next year,2010.
Then in 2011 back to 3800.
I think we will have 2-3 years at 8-9K+ then it falls off.
My prediction at the beginning of this disaster was fully 20% of the housing stock in Florida would go through foreclosure...with many more short sales added in.

Just my opinion...

Chris

Confused Gen:

Quote:

The gross injustice in our nation today is that over the last twenty years we have increasingly forced borrowers who take out bad loans to not only go bankrupt but be unable to discharge their debt, so long as they are individuals.

Did not the borrowers know that the loan they signed for was beyond their means to service the debt (PI), or was readjusting in several years?

Were the borrowers playing the real estate casino game, thinking they had an advantage over the house (no pun intended) because real estate only goes N. in value?

Plenty of malfeasance to go around. No way am I defending the dozens of other culprits and miscreants, but when is it fitting to say caveat emptor? BTW Gen---to look at the brilliance and volume of your body of work, and nitpick on 1/2 of one sentence---well SHAME on me.

Phev stated:

Quote:

Who are the american citizen who accept to carry such a debt ??

They are screwing their fellow cocitizen with their behaviour as their credit is now backed by the full faith and credit of the US and they well know the loan they take are unaffordable. (They are defaulting at high rate even at the beginning of loans issued at unbelievable DTI ratio )...

Who gets scre***? The 10's of millions of Americans who lived within the boundaries of an internal moral compass, with a common sense of integrity and decency, passed on by generations of forefathers/mothers who said "no that is wrong".

Do we let Mr. Market sort this out? HE** NO!! The cabal of banksters, CONgress people, The Fed, The Treasury, Fanny-Freddy, FHA, etc, decide to have a BAILOUT BALL, ALL EXPENSES PAID (to the tune of trillions of $) at the expense of the above mention CHUMPS, who did not create the problem. The Chumps were outraged, and on a 100:1 ratio let their elected reps know that the TARP, extorted down our throats, was unacceptable, but alas we were screaming in a vacuum.

For all who read this my condolences. Catharsis completed.