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Let Houses Find a Bottom

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moh malekpour

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Elite Member
Joined
May 25, 2002
Professional Status
Certified Residential Appraiser
State
California
http://online.wsj.com/article/SB120407264971695087.html?mod=todays_us_opinion

We have nothing to fear but fear itself, a president once said, and thereupon embarked on a series of ad-libs some of which deepened and prolonged the country's depression.

Any debate about a housing bailout can be put aside -- the bailout is underway, even in advance of specific plans being shopped around Washington by Bank of America to prop up home prices with direct subsidies to homeowners whose debt exceeds the value of their houses. No, the perverse effect won't be a replay of the '30s, or even Japan's decade of stagnation in the '90s, but the latter is your model, with a little inflation thrown in. The goal: avoid foreclosures and slow the fall of home prices to market-clearing levels.

Notice that today's bailout will be the opposite of the misnamed S&L bailout of the '80s. Then, only depositors, whose money was guaranteed under federal law, were bailed out. The federal government closed down thrifts, wiped out their shareholders, seized loan collateral and dumped it back on the market, even at firesale prices.
 

Dan/Fla

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Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Ok I am not a political power broker. The Housing and sub prime market is happening. I believe those of us who have been working in this market, knew it was going to have to happen some day. Few years back I drove into an area and knew the value range without looking it up. Now I have no Idea. Even my house, when I bought it I told my wife it would most likely be worth X in 5 years. I was wrong by almost $50,000. Now I bought in a decent area, but there was NO reason I can see for that massive of an increase. Till this past Christmas when I got know a couple of my neighbors. Who admitted he was in trouble. Thinking I could help he told me his financial situation, with a normal 30 year loan at GOOD interest the payment would be out of his range. He needed a 150K or less home. When he bought his realtor knew a broker who could be creative (his words) to get him into the home. But all good things come to an end and payment went up past what it would have been if he has started with a flat rate. The market will straighten out we all know it will. But with government getting involved is only delaying the inedible.

What happen to the old rule if you can not pay the payments today lower your house and payments and buy the better house later. Isn’t that what most of use did? You get a started house and as you family and income go up so does your house. Sorry we all do not have Paris Hilton’s daddy. If borrower can not buy let the buyer know what they buy with present down payment. If buyer can not afford the rate after adjusts up (within percentage points) No Loan. No no-interest only loans, if they want this; RENT. No bail out for banks and or buyer whom bought to much house to begin with. Does any body understand where the Government gets this money that they use for bailout from me and you. This will only slow the problem and prolongs the business slow down for me and you. If someone else pays for mistake how will they ever learn there are consequences for their actions. Let the market adjust.

Government should not require banks to lower standards because everyone deserves home owner ship. They don’t. Nor does, one desire and bigger and better house than they can afford. The market is adjusting we all know that, and it will continue to adjust. It will adjust very very slowly if the Government GooRoos who have no idea what they are doing, keeping tinkering and only slowing down the market adjustment, This cost all of us business and money. They should in my Opinion back off and see what happens will it hurt; YES, but then the healing can begin. Think about it like having a Big Long Band-Aid along your hairy leg, removing is going to Hurt. Should we pull it very slow, prolonging the pain or fast for intense pain; then it over and the healing begins sooner.
 

Greg Bell

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Jul 7, 2006
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Louisiana
Helicopter Bernanke is testifying right now and just gave that ever so throughly cooked CPI number which is O.K. as long as you do not eat , heat your home or drive a car.This is a dog and pony show with each goofball senator babbling some rather silly "Fixes" for that pesky downturn in home values.They need to prop up those bloated values so we all can eat at a good restaurant.Maybe the bankers should try Mcdonalds...mmmm love those fries..
 

Midwest Guy

Senior Member
Joined
Dec 12, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
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