On a path to a housing rebound...

NEW -> Contingent Buyer Assistance Program
[quote author="Shooby" date=1214456335]http://money.cnn.com/2008/06/24/news/economy/tully_housing.fortune/index.htm?postversion=2008062509



This guy sounds overly optimistic, don't you think.</blockquote>


There r many Ifs and buts, but nothing wrong with the analysis, and assume nothing goes wrong. Also he analyzed with the existing number of homes in the mkt, what about the home which will come in the mkt when prime loan mkt explodes somewhere in 2010.
 
Ok, this is probably a stupid question but why aren't the alt a's going to explode until 2010? Are the payments so low on the arms taken out in '05 that peiple will just keep paying them until they reset? Or are they hoping that things won't be as bad when the reset comes along and they will be able to fix it then?
 
[quote author="Trooper" date=1214471870]Graph....chart please.</blockquote>


I like charts and all, but I was wondering what the logic is behind the people with bad loans and mortgages for considerably more than the property's value is for waiting until 2010. Is it a dearth of logic or more of a case of burying heads in the sand or is it simply so darn affordable to keep paying on an arm until it resets? It would seem to me that even an interest only loan on mortgages taken out with 2005-2007 prices has got to be quite high. Add in the property tax and it would seem you would walk now if you truly were in over head? Even with the county's generosity, when I saw what Pedro's reduced property tax would have been it was laughable.
 
<a href="http://www.irvinehousingblog.com/forums/viewthread/855/">Here is a great thread too on just how ARM's work</a>



Good stuff G.
 
The graph on resets seems to point to 2008 being far worse than the coming years. It also seems that if you took out an ARM, particularly an option ARM, in 2005 or 2006 for a home that would have otherwise been unaffordable that you know you are in deep trouble today. I guess I'm still not understanding why 2010 or 2011 will be worse than 2008.
 
[quote author="stepping_up" date=1214521365]The graph on resets seems to point to 2008 being far worse than the coming years. It also seems that if you took out an ARM, particularly an option ARM, in 2005 or 2006 for a home that would have otherwise been unaffordable that you know you are in deep trouble today. I guess I'm still not understanding why 2010 or 2011 will be worse than 2008.</blockquote>


2008 is the worst. 2010 or 2011 won't be anything close to 2008.



That's why IMHO, Housing bottoms out late next year or early 2010.



The ball will in the banks court again....will they want to lend is the question and if so how much.



Credit is tight...ask anyone in any industry.
 
Is credit continually getting tighter or has it evened out yet in terms of availability? Also, can you help clarify bottom. I've gotten two impressions for the definition of bottom. One being that when we hit bottom (I guess in terms of inventory) that then prices continue to slide for a period before hitting the floor. The other is bottom for pricing, meaning the floor for prices has been reached.
 
Did someone mention ALT-A? How is that ALT-A doing you ask? <a href="http://www.housingwire.com/2008/06/26/alt-a-performance-gets-much-worse-in-may/">How about much worse</a>...



<em>Problems are continuing to grow sharply among Alt-A borrowers, despite a dearth of pending rate resets, underscoring just how much home price depreciation is affecting borrowers in key housing markets nationwide.



A new report released by Clayton Fixed Income Services, Inc. on Wednesday afternoon found that 60+ day delinquency percentages and roll rates increased in every vintage during May among Alt-A loans, while cure rates have declined only for 2003 and 2007 vintages.



The picture being painted for Alt-A is increasingly beginning to look a whole lot like subprime, as a result, even if peaking resets in the loan class aren?t expected until the middle of next year. In particular, loss severity continues to ratchet upward ? a trend that portends some likely further reassessment of rating models at each of the major credit rating agencies, as they catch up with the data.



Loss severity ? the average amount lost relative to unpaid principal balance ? reached 41.4 percent for all Alt-A first liens in REO during the most recent rolling six month period through May, Clayton said; that was up from a 37.6 percent rolling average one month earlier, and compares to a similar 49 percent loss severity average for subprime first liens liquidated in REO through May.</em>
 
It makes you wonder how many more turds you can throw in the punchbowl before the bulls koolaid is totally displaced by the turds.



Do the bulls continue to party with the turds untill they decide "hey, somebody swapped out the punch"?



<img src="http://sportsmed.starwave.com/i/magazine/new/caddyshack_doody.jpg" alt="" />



-redacted
 
<em>"The graph on resets seems to point to 2008 being far worse than the coming years. It also seems that if you took out an ARM, particularly an option ARM, in 2005 or 2006 for a home that would have otherwise been unaffordable that you know you are in deep trouble today. I guess I?m still not understanding why 2010 or 2011 will be worse than 2008". </em>



I'll try and find the other thread, but I believe it was FreedomCM that told us that originally they ARMS were supposed to reset around 2010 and 2011....but due to the values going underwater, the loans are resetting at a vastly premature pace, hence the reset has gotten moved up a few years.



For details, see the chart and details he posted on June 07 in <a href="http://www.irvinehousingblog.com/forums/viewthread/2295/">this thread</a>
 
[quote author="no_vaseline" date=1214536527]It makes you wonder how many more turds you can throw in the punchbowl before the bears koolaid is totally displaced by the turds.



Do the bears continue to party with the turds untill they decide "hey, somebody swapped out the punch"?



</blockquote>


That is completely gross... yet undenably funny! LMAO!



Some people just don't get it. Oh well, when they crash, I get to laugh at them a little more.



-bix
 
[quote author="no_vaseline" date=1214536527]It makes you wonder how many more turds you can throw in the punchbowl before the bears koolaid is totally displaced by the turds.

</blockquote>


No_vase, is that a typo or are you trying to say the IHB bears are drunk on the koolaid of schadenfreud and missing the brewing financial catastrophe that is brewing that will put us in Hoovervilles just like the homedebtors?
 
[quote author="No_Such_Reality" date=1214551455][quote author="no_vaseline" date=1214536527]It makes you wonder how many more turds you can throw in the punchbowl before the bears koolaid is totally displaced by the turds.

</blockquote>


No_vase, is that a typo or are you trying to say the IHB bears are drunk on the koolaid of schadenfreud and missing the brewing financial catastrophe that is brewing that will put us in Hoovervilles just like the homedebtors?</blockquote>


<img src="http://content.answers.com/main/content/img/webpics/john_belushi.jpg" alt="" />



<blockquote>Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell, no!

</blockquote>
 
[quote author="stepping_up" date=1214530096]Is credit continually getting tighter or has it evened out yet in terms of availability? Also, can you help clarify bottom. I've gotten two impressions for the definition of bottom. One being that when we hit bottom (I guess in terms of inventory) that then prices continue to slide for a period before hitting the floor. The other is bottom for pricing, meaning the floor for prices has been reached.</blockquote>


Hey Step... just pretty much read the business section and keep track of all the Bank writedowns. If Banks (commercial and I-banks) have to keep "fortifying" their balance sheets in this environment...the last thing they will do is extend credit.



Also, I'm using the term bottoming period as in +/- 5% from the very trough
 
I read about the credit crunch, but am just not seeing it personally. Frankly I'm shocked by how much credit has been extended to us on firsts and HELOC lines at B of A and BT transfer offers for life at 1.99 and 2.99 at Capital One and Chase, respectively.
 
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