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Housing Bubble Bursting?

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Not only housing but a host of investment vehicles appear to be at record low cap rates with investors discounting the risks to near zero. Now that a few are beginning to realize that risk is real, risk is increasing, they will demand a better return and mortgage backed investments will become the new junk bond..with a too low return.
 
If anyone has mentioned the subject, I must have missed it. Won't this crisis wipe out PMI companies? It seems to me all subprime loans would require PMI insurance and the PMI companies are the ones we should be hearing about more so than the mortgage companies.

Related Subject: I don't do mortgage appraisals and have not done so in almost 20 years for obvious reasons. For the last 5 years my phone wrong at least 5 times a day with calls from some jerk mortgage company, then about 9 months ago all calls stopped completely. Then this week I received two mortgage loan request. I am in Virginia and both calls were from a mortgage company in southern California. Why and how would someone in Virginia wanting to refi be dealing with a mortgage company on the west coast? :shrug: More to the point, why would a mortgage company any where be doing refi's in this environment? They would have to be a total nut & fruit cake-which may be the answer to my question-the lenders are in the land of nuts and fruits-California. :beer:
 
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Why and how would someone in Virginia wanting to refi be dealing with a mortgage company on the west coast?
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Check the ads in your local shopper and on the internet. Poor people have poor ways and they lack a local banker, probably not because they don't trust their local banker, but because their local banker don't trust them....
 
Questions I have about this situation we are in:
  • What idiot would sell PMI insurance in a declining market?
  • What idiot lender would do refi’s in a declining market?
  • What idiot would want to refi in a declining market? That is like volunteering to be a slave. I would mail them the keys and run like hell, go to Florida and rent a condo with a nice pool. I stayed in a condo in NC in June and the condo monthly fee was like $900 to the owner. Two mile drive to a state park with the same amenities.
  • What idiot would be making any kind of mortgage loan in a declining market?
  • What idiot would buy bonds secured by mortgage loans in a declining market? With the exception of Brad Ellis of course.
  • Why would anyone sell in a rising market with something like 10% or higher appreciation when interest rates are 2% on savings?
Answer to all the above: Read the real estate sales transfers in the Sunday paper for a complete list of idiots in your area. I keep a list of their names and addresses so I can sell them lightening rods and then charge them $150 per year to charge them up. For another $125 I will rid their yards of snipes and exorcise the evil spirits lurking the premises.:flowers:
 
Austin, just because it is declining, does not mean it is the end the world. The market will make corrections to satisfy your questions. Am I an idiot, because I am trying to make a living? or an LO/MB trying to also work. Or that HO that is trying to salvage his home loan. Everybody is trying everything possible to stay above water. That is the difference, we must try, that is the market.
 
PMI basically was for the prime borrowers who didn't have 20% down payment. That insurance was for the risk to the lender who was lending to a qualified borrower with no down payment. The sub prime lenders didn't require PMI. They thought, their risk compensation comes from the adjustable rates set up within one or two years when the loans were suppose to increase. The sub prime lending put most PMI out of business because the credit worthy borrowers who could get a prime loan with the PMI, went for sub prime loans.
I think one of the beneficiary of sub prime melt down is going to be the PMI because poeple are scared of sub prime and adjustable loans and are going to go for prime loans and if they don't have the down payment, they are going to buy PMI.
 
And that should trigger a whole new round of appraisal opportunities ...PMI removal!
 
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