• Welcome to AppraisersForum.com, the premier online community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Housing Bubble Bursting?

Status
Not open for further replies.
Pop! goes the ARM bubble - banks are losers

U.S. Foreclosures Almost Doubled in October on Higher Adjustable Mortgages

Bank repossessions increased 35 percent, providing ``evidence that more homeowners who enter foreclosure are losing their homes,'' James Saccacio, chief executive officer of RealtyTrac, said in a statement.

The declines in home sales and prices have raised concerns consumer spending may drop and push the world's biggest economy into recession.
Click to expand...
 
http://calculatedrisk.blogspot.com/2007/11/florida-REO-priced-below-2002-new-home.html


The asking price for this foreclosed property in Cape Coral, Florida is below the price the home sold for new in 2002.



Feb 15, 2002: $122,300 (New)

Mar 15, 2006: $259,600

Oct 23, 2007: Foreclosed.

Current Asking Price: $99,900
 
I watched that Cramer video and learned a new concept: "Economic Incest." Economic Incest came about when the growth of the mortgage companies, who for some reason seem to thrive in the CA climate (if it feels good do it), hire huge numbers of employees and these employees take out mortgages from the mortgage companies for whom they work. Then when the mortgage companies go bust and lay off the employees it reflects the effects of economic inbreeding. It implodes.

I have been around since 1972 so this is not by first rodeo. Every crisis be it economic, moral, political, etc., involves California in some form. They are very progressive people (Liberal) and ignore convention. They will try anything that works or feels good disregarding all precedents and rational principles. Then when the bottom falls they take the biggest hit and want to share their misfortune with the rest of the country like good progressives always do. Then they start a new cycle of methods to get out of the mess they are in.
I remember back in the late 70's going to seminars on wrap around mortgages taught by an authority on the subject; a single mom Realtor from LA. She gave us the legal ins and outs on the underlying law on wrap a rounds.
I came home from the seminar and talked to my lawyer about the legal precedent established by a CA court allowing wrap a rounds. His reply was that Virginia judges look at California legal precedents like they do everything else that comes out of CA-"fruity, flanky and soon to be overturned."
 
Lloyd Bonafide said:
http://calculatedrisk.blogspot.com/2007/11/florida-REO-priced-below-2002-new-home.html


The asking price for this foreclosed property in Cape Coral, Florida is below the price the home sold for new in 2002.

Feb 15, 2002: $122,300 (New)
Mar 15, 2006: $259,600
Oct 23, 2007: Foreclosed.
Current Asking Price: $99,900
Click to expand...
m2: Awh Jeeze.. and I just gave someone advice that if he could buy at 2000-2002 prices he'd have a decent deal.
:( ....back to the drawing board....:(
 
Can You Spell Fraud? F - R - A - U - D

FITCH (Rating Agency) OPENS SOME LOAN FILES - with HIGH FICO SCORES -
Results --> Not Pretty

http://www.fitchratings.com/corporate/reports/report_frame.cfm?rpt_id=356624

Fair Use Outtake below:

Characteristics by percentage of the 45 files reviewed included (loans may appear in more than one finding):​

  • 66% Occupancy fraud (stated owner occupied — never occupied), based on information provided by borrower or field inspector​
  • 51% Property value or condition issues — Materially different from original appraisal, or original appraisal contained conflicting information or items outside of typically accepted parameters​
  • 48% First Time Homebuyer — Some applications indicated no other property, but credit report showed mortgage information​
  • 44% Payment Shock (defined as greater than 100% increase) — Some greater than 200% increase​
  • 44% Questionable stated income or employment — Often in conflict with information on credit report and indicated to be outside “reasonableness” test​
  • 22% Hawk Alert — Fraud alert noted on credit report​
  • 18% Credit Report — Questionable ownership of accounts (name or social security numbers do not match)​
  • 17% Seller Concessions (outside allowed parameters)​
  • 16% Credit Report — Based on “authorized” user accounts​
  • 16% Straw buyer/Flip scheme indicated based on evidence in servicing file​
  • 16% Identity theft indicated​
  • 10% Signature fraud indicated​
  • 6% Non-arms length transaction indicated
 
Riick said:
FITCH (Rating Agency) OPENS SOME LOAN FILES - with HIGH FICO SCORES -
Results --> Not Pretty

http://www.fitchratings.com/corporate/reports/report_frame.cfm?rpt_id=356624

Fair Use Outtake below:

Characteristics by percentage of the 45 files reviewed included (loans may appear in more than one finding):​

  • 66% Occupancy fraud (stated owner occupied — never occupied), based on information provided by borrower or field inspector​
  • 51% Property value or condition issues — Materially different from original appraisal, or original appraisal contained conflicting information or items outside of typically accepted parameters​
  • 48% First Time Homebuyer — Some applications indicated no other property, but credit report showed mortgage information​
  • 44% Payment Shock (defined as greater than 100% increase) — Some greater than 200% increase​
  • 44% Questionable stated income or employment — Often in conflict with information on credit report and indicated to be outside “reasonableness” test​
  • 22% Hawk Alert — Fraud alert noted on credit report​
  • 18% Credit Report — Questionable ownership of accounts (name or social security numbers do not match)​
  • 17% Seller Concessions (outside allowed parameters)​
  • 16% Credit Report — Based on “authorized” user accounts​
  • 16% Straw buyer/Flip scheme indicated based on evidence in servicing file​
  • 16% Identity theft indicated​
  • 10% Signature fraud indicated​
  • 6% Non-arms length transaction indicated
Click to expand...


But other than these problems, I take it that the files were pretty clean? :clapping:

But I think that if Fitch, Moody's and the rest of those gangsters had known about these problems beforehand, they may have cut the bond ratings to AA from AAA.
 
New home sales up for October. .5 point prime interest rate expected next week. Dow closed up 3.6% for the month of November, and oil closed down $8 a barrel this month. The sky is falling, the sky is falling.
 
Mike was that a 1/2 point rate as in .5% ??
I wasn't expecting that kind of prime rate until March of '08

D'you think Bernake can engineer a good negative rate, and high enough so that Bank would pay you to borrow money fromthem?
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com
Back
Top