Housing Bubble Bursting?

[Workbox]

A Hispanic owned Pizzia chain (Pizza Patron)takes Pesos, They started this about a year ago and their business has done well. Signs of the times.

 

[Greg Bell]

^^^^
GREG....
This reads so true that I'm having a problem deciphering;
Which part is the satire .. McDonald's or Taco Bell ???

Why are McDonald's burgers worth more than Taco Bell Taco's.There you go , the government is setting an arbitrary exchange rate.

 

[Randolph Kinney]

The slow squeeze of mortgage insurance availability

PMI to stop insuring mortgages with high loan-to-value ratios

SAN FRANCISCO (MarketWatch) -- PMI Group Inc. will stop insuring mortgages with high loan-to-value ratios next month as the company adjusts to the U.S. housing crisis, according to a regulatory filing by the company on Monday.

PMI and rivals like MGIC, Genworth Financial and Radian Group have been hit hard by the mortgage crisis. These companies sell insurance that pays out if borrowers fail to meet their mortgage payments. Falling house prices and rising delinquencies and foreclosures have triggered more claims and losses.

In response, some mortgage insurers have tightened the guidelines on which types of home loans they underwrite.

In its filing on Monday, PMI, one of the largest mortgage insurers, said in the filing that on March 1 it will stop covering home loans with loan-to-value ratios of more than 97%.

After warning of higher losses in January, MGIC said it had stopped underwriting home loans that are packaged up by Wall Street investment banks and sold as mortgage-backed securities.

I suspect that LTV greater than 95% will become the new default limit and 90% if the loan is in a declining market for getting mortgage insurance. You need skin in the game. That's what is showing up on these defaults.

 

[Riick]

...I suspect that LTV greater than 95% will become the new default limit and 90% if the loan is in a declining market for getting mortgage insurance. You need skin in the game. That's what is showing up on these defaults.

^^^^ Absolutely!
In psych terms, what you have to pay a LOT for is worth something, whether it's a lot of time, a lot of effort, or a lot of $$.
If you have no investment - as in no down payment - it won't really be Worth much to you.

AFAIC.. Take us back to the days of 80% LTV, and LTV up to 90% max.
When you loan over 90% of the purchase, there's not enough "skin";
at worst the defaulting buyer gets a case of Road Rash.
---- :new_tomato: ----

 

[Caligirl]

We call them dog houses because no one is home during the day except the dog. They are either too busy working or too busy playing leaving the dog all alone at home.

I suppose if they choose to walk away, the dog goes with the house. :laugh:

Actually, Randolph these idiots lock the animals up inside the house and leave them to starve to death.

http://news.yahoo.com/s/afp/20080125/ts_alt_afp/uspropertyfinanceanimals

What kind of person behaves this way.

 

[Randolph Kinney]

Actually, Randolph these idiots lock the animals up inside the house and leave them to starve to death.

http://news.yahoo.com/s/afp/20080125/ts_alt_afp/uspropertyfinanceanimals

What kind of person behaves this way.

Yikes Caligirl!

I was cracking wise and not thinking about the family pets. I do know the houses are vacant most of the time and you are right, it mostly means the pets are uncared for.

 

[Randolph Kinney]

IndyMac declines 13% in after hours trading - earnings report tomorrow

After Hours: Brooks, Vertex, Indymac lead decliners in evening session

Indymac declined 13% to $6.60. The mortgage lender is scheduled to report quarterly results on Tuesday morning. The company is expected to lose $1.57 a share, according to the average estimate of seven analysts in a Thomson Financial survey.

It would appear that someone knows something about IndyMac before the rest of the market does.

The stock trading pattern in the last 10 days is very unusual.

 

[Caligirl]

Yikes Caligirl!

I was cracking wise and not thinking about the family pets. I do know the houses are vacant most of the time and you are right, it mostly means the pets are uncared for.

I am sure you didn't realize this Randolph. What these people are doing is revolting. I can't bring myself to read the entire article.

 

[moh malekpour]

Americans Selling Homes See Prices Go Below Mortgage

http://www.bloomberg.com/apps/news?pid=20601109&sid=atrbI3FEV3.I&refer=home

By the end of this year as many as 15 million U.S. households may owe more on their mortgages than their homes are worth, according to an estimate from Jan Hatzius, chief U.S. economist of New York-based Goldman Sachs Group Inc. That may fuel an increase in foreclosures, erode prices, and increase mortgage bond losses, he said in a Feb. 1 report.

``If borrowers who are underwater go into foreclosure, the properties are likely to be sold at discount prices and will further depress the price of housing,'' said Robert Engle, a Nobel laureate in economics who teaches at New York University's Stern School of Business in Manhattan. ``It becomes a spiral.''

Thirty-nine percent of people who purchased a home two years ago already owe more than they can sell it for, according to a Feb. 12 report from Zillow.com, a real estate data service. Only 3.2 percent who bought five years ago are in that situation, the report said.

 

[MARK JOLLIFF]

I thought by now the economy and stock markets would be in much worse shape. Housing is an obvious disaster and the markets are down a bit but I'm really starting to wonder if things are going to get anywhere near as bad as some people predict. Take housing out of the equation and it seems like things are a little slow but not anywhere near disaster status.