Housing Bubble?

[Terrel L. Shields]

To those risktakers, they deserve their profits.

When the government drives prices down artificially via unwarranted demands on banks to call in loans that were underwater but borrowers were making payments in a timely manner, I call foul. REOs would have been less numerous and prices would not have fell as much. Anyone who was occupying their house and making payments could have been given forbearance and delayed any foreclosures as long as those people were not too far behind. I saw several small rural farms sell that had not missed a payment but the property value had fell. It was the bank who lent 90% and despite them not missing a payment they foreclosed as soon as the property values fell by 25% or so. And it was the regulators who made many of these small rural banks foreclose even when they pleaded with them to give these folks time to work things out.

 

[Fernando]

When the government drives prices down artificially via unwarranted demands on banks to call in loans that were underwater but borrowers were making payments in a timely manner, I call foul. REOs would have been less numerous and prices would not have fell as much. Anyone who was occupying their house and making payments could have been given forbearance and delayed any foreclosures as long as those people were not too far behind. I saw several small rural farms sell that had not missed a payment but the property value had fell. It was the bank who lent 90% and despite them not missing a payment they foreclosed as soon as the property values fell by 25% or so. And it was the regulators who made many of these small rural banks foreclose even when they pleaded with them to give these folks time to work things out.

When one get conventional loans from government, government gets to call the shots and play by their rules.

 

[glenn walker]

The biggest bubbles are in the Florida Villages and 55 up Senior Communities as the owners are dying or going into assisted care and the generation below them has no interest in living with geezers and HOA Karen's driving $30,000 golf carts like it's Disneyland.

The same with the Cruise lines that was A younger WW-11 and older baby boomers retirement dream not my daughters generation and so go short on anything that's catering to those groups. Smaller homes and less HOA will drive the markets.

 

[Fernando]

I heard San Francisco will have one third of its population over 60 by 2030.
More and more old people in US and they put more "burden" on nation with long term care, government subsidies and discounts, and hospital care.
Old people take up most of the resources in health care.

 

[Terrel L. Shields]

When one get conventional loans from government, government gets to call the shots and play by their rules

I am talking about non-conforming loas via bank. The FDIC ordered the disposal of these farms at fire sale prices so that the bank "reserves" were not below the required minimum. And neither bank went under nor wouldn't have it was just the decision by the examiners.

 

[Non Sequitur]

I'm still dumbfounded nothing has popped. Whether it's GSE loans, community bank portfolios, commercial or residential MBS loans. I heard the other day regulators have shifted from extend and pretend, to delay and pray, and are now leaning toward permanent forbearance. Crazy. Since the gubmint de facto owns the GSEs I get how they can pretend things are OK, but in the MBS market I'm not sure how they will (long term) manage lack of payments and payment waterfalls when payments do trickle in. At the end of the day without the ability to foreclose how long will MBS investors be able to hold positions before they start folding or running for the door? Or are the regulators hoping the large pension funds will just silently absorb the losses?

I could (and probably am) missing a lot of the nuances, but the real estate debt market is starting to resemble our national debt; There is no appetite to address or fix the problem.

 

[glenn walker]

I'm still dumbfounded nothing has popped. Whether it's GSE loans, community bank portfolios, commercial or residential MBS loans. I heard the other day regulators have shifted from extend and pretend, to delay and pray, and are now leaning toward permanent forbearance. Crazy. Since the gubmint de facto owns the GSEs I get how they can pretend things are OK, but in the MBS market I'm not sure how they will (long term) manage lack of payments and payment waterfalls when payments do trickle in. At the end of the day without the ability to foreclose how long will MBS investors be able to hold positions before they start folding or running for the door? Or are the regulators hoping the large pension funds will just silently absorb the losses?

I could (and probably am) missing a lot of the nuances, but the real estate debt market is starting to resemble our national debt; There is no appetite to address or fix the problem.

There is no debt problem when you own or control a printing press and normal people are raised believing debt has to be paid back. It doesn't.

A big government with Nucleur Weapons can simply wipe debt off the books or just add more Zeros on the end. When the government forecloses it's on it's own debt therefore it's a zero sum game.

That's why it's never going to be paid off and everyone but them worries about it. Until one can get that concept it's hard to wrap ones head about debt.

 

[Digger88]

The headline is misleading since obviously the inventory of spec homes is right around the upper end of the normal range.

The lower end of that range the junk I inspect for Ryan down south in the sticks are barely selling anymore. Pulte up north is doing many more deals prob 10 to 1.