Housing Bubble Bursting?

[Brian Cosenza]

Thanks for the replies.

We have about another year's worth of improvements to make on the house and had planned on selling at that time, but looks like we'll probably be here a little longer which is fine.

My biggest cause of anxiety is the money we have invested in our 401k's. I'm not willing to lose 20-30% of it at this point but not too sure where I can move it to that may be safer. I plan on calling our advisors on Monday to see if they can be of any help, but like was mentioned earlier every time I speak with them their suggestion is to move money from one of their funds to another which makes me feel like my options are greatly limited.

I get an extremely ill feeling by the Fed injecting 65 billion in "temporary reserves" into the economy to prevent a collapse. I thinks it's a last ditch effort to keep it afloat so the real players have time to get out.

 

[Workbox]

That was great!

Too bad it didn't do any good. All we have left now is being able to say, "We told you so!".

Maybe true, but it is nice to see the look in there faces when you tell them. Especially when you told them a year or two back.

 

[Pamela Crowley (Florida)]

Myself and a few others here have been sending the petition to Federal and State legislators and regulators and the media ever since the petition was started.

 

[Workbox]

Myself and a few others here have been sending the petition to Federal and State legislators and regulators and the media ever since the petition was started.

Back then they did not understand it or want to understand it, maybe they do now. It's probably like an archaeological find to them.

 

[Randolph Kinney]

The next shoe that will drop

High-risk mortgages turning into toxic mess

Martin is among the hundreds of thousands of borrowers saddled with “option” adjustable rate mortgages, risky loans that dangled bargain-basement introductory payments and also let borrowers defer a portion of interest payments until later years.

Millions of other borrowers are wrestling with another type of adjustable rate mortgage, or ARM, called “interest-only.” These loans allowed borrowers to pay just enough each month to cover the interest owed on the loan, leaving the balance of the outstanding debt unchanged.

While most of the mortgage market worries so far have focused on the huge losses flowing from the subprime home loans made to people with bad credit, the option and interest-only ARMs held by more creditworthy borrowers loom as another calamity in the making.

If the worst fears about these loans materialize, the economic damage would likely extend well beyond the United States because much of the debt has been packaged into securities sold to pension funds, banks and other investors around the world who were hungry for high yields. The fallout could also further depress housing prices, leaving U.S. consumers feeling poorer and less likely to buy the merchandise imported from overseas.

 

[moh malekpour]

Santa Ana street struggles with subprime loans

http://www.msnbc.msn.com/id/20249806/

Some property owners became serial refinancers, using their home as a piggy bank and digging themselves deep in debt.

In 2002, Hugo Guzman Roque and Patricia Noyola took out a $241,000 mortgage to buy the house at 1033, property records show. In 2003, they refinanced with Novastar Financial, in 2004 with Orange-based Argent Mortgage Co., in 2005 with Fremont Savings & Loan and finally in 2006 with People's Choice for $594,000.

Roque and Noyola are now desperate to sell, asking $600,000, down from $660,000 in March.

Take a look at the video

 

[Couch Potato]

http://www.msnbc.msn.com/id/20249806/

Take a look at the video

Undoubtedly the shape of things to come.:new_all_coholic:

 

[Randolph Kinney]

http://www.msnbc.msn.com/id/20249806/

Take a look at the video

Welcome to San Diego county where renting by the room is the norm with the garage converted to living space without permits. The price of homes were propelled by the income received although the lenders turned a blind eye even when the appraiser pointed these things out in the appraisal report.

It will be interesting to see how much of this plays out. When the renters "go home" to where they came from, the mortgage can't be paid.

 

[Randolph Kinney]

Another asset-backed fund halts redemptions

U.S. Stock Declines Deepen On Sentinel Woes

U.S. stock losses accelerated Tuesday after reports Sentinel Management Group sought to halt redemptions to money-market fund holders, exacerbating worries about a liquidity crunch.

"It is problems in the asset-backed commercial paper market that is causing the new concern now - that is the new leg in the drop," said Peter Bookvar, equity strategist at Miller Tabak.

Goldman Sachs Group Inc. (GS) fronted declines among brokerage stocks as investors tallied real and likely losses in the industry battered by a credit crisis and subsequent big losses at hedge funds the firms run.

 

[Austin]

To me the interesting thing about this sub-prime crisis is trying to figure out where the vast sum of wealth end up. In the beginning, is a good title for a book on creation and its ultimate demise for some and resurrection for others depending on the depth of ones level of understanding.

Where did all of the wealth disappear to? In the beginning, there were huge funds available for lending representing accumulated wealth. In the end there is a lot less wealth than there was in the beginning, so lets follow the money trail and see where it ended up.

The first batch went to the sellers of those homes who earned huge profits less Realtor fees, mortgage fees, legal fees, recording fees, taxes, etc. That probably consumed about 20% of the wealth. It gets a little hairy here because some of the sellers who earned the profits on the sale reinvested it into larger houses on which the seller of that property earned a huge profit creating the equity bubble. Builders, developers, bankers, building supply, etc., all trickling through the economy each consuming their proportionate share and spending it accordingly. This created a huge equity bubble which is where I think most of the wealth evaporated into the ether. When the bubble began to deflate this huge sum of paper equity wealth simply disappeared into thin air.

Some if the money was spend on consumer goods accounting for a lot of the wealth, and I am sure s small portion was invested in rational enterprises. The end result is a good time was had by all at the expense of the investors. The end result is what you are seeing. Judgement day came just as promised. He whose name was not written in the lambs book of life was cast into the eternal fire. Gone with the wind as they say. And in closing let me say: "Frankly Scarlet, I don't give a damn."