Paulson, Bernanke Push Plan to Cleanse Balance Sheets (Update3)

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Anonymous_IHB

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I wonder if the fact that an election is coming soon actually helps get bipartisan support for this (ex. people are hurting, there is a plan on the table - if any politician or party X were to drag feet on or kill the plan and the economic hurt gets much worse - guess who gets the political heat & doesn't get re-elected).



http://www.bloomberg.com/apps/news?pid=20601087&sid=auI5M5F3uYmE&refer=home
 
My questions is obvious, in light of yet another financial bombshell today, how is this going to affect:



1) IHB?s prediction of the bottom? Is it going to come sooner?

2) Is this overall bad or good news for those that have been waiting for the last 9+ years to buy?

3) Is this good news or bad news for the housing bears here?

4) What is going to happen to the foreclosure market? If banks are going to get write off those inventories, how is the government going to sell those homes?



I guess time will tell, as more information comes out today.
 
[quote author="roundcorners" date=1221866439]My questions is obvious, in light of yet another financial bombshell today, how is this going to affect:



1) IHB?s prediction of the bottom? Is it going to come sooner?

2) Is this overall bad or good news for those that have been waiting for the last 9+ years to buy?

3) Is this good news or bad news for the housing bears here?

4) What is going to happen to the foreclosure market? If banks are going to get write off those inventories, how is the government going to sell those homes?



I guess time will tell, as more information comes out today.</blockquote>


Bad news for those waiting to buy. The government is going to slow/stall foreclosures. The bottom will come later as an artifical bottom will be created by all the government intervention in our free markets. Many of the companies remaining that made the loans to shaky borrowers are going to be absovled of the consequences of these bad decisions. Everything possible is being done to prop up housing prices and our economy, which if left to head where they should naturally, would make much better buying opportunities for those that have waited. If mortgage rates stay this artifically low, I'll be buying in the Spring/Summer. Screw it, I'm not going to wait for many years for a real bottom to come once the subsidies are removed. My family needs a pseudo-permanent home before that...
 
[quote author="roundcorners" date=1221866439]My questions is obvious, in light of yet another financial bombshell today, how is this going to affect:



1) IHB?s prediction of the bottom? Is it going to come sooner?

2) Is this overall bad or good news for those that have been waiting for the last 9+ years to buy?

3) Is this good news or bad news for the housing bears here?

4) What is going to happen to the foreclosure market? If banks are going to get write off those inventories, how is the government going to sell those homes?



I guess time will tell, as more information comes out today.</blockquote>


Here's what I think...



1) Bottom.... 2010-12 regardless. It won't be until 2020 and beyond until homes begin to appreciate again because it takes the market about 20 years to forget any major crisis.

2) If you've been waiting 9 years...that's your problem. If you had the equity to purchase a home in 1999-2001..why didn't you?

3) Both...good because the easy money days are gone....bad, if the financial system were to collapse then home prices would probably drop another 50-75% easy.

4) Foreclosures will still happen...the second part...wait and see.
 
[quote author="optimusprime" date=1221866878][quote author="roundcorners" date=1221866439]My questions is obvious, in light of yet another financial bombshell today, how is this going to affect:



1) IHB?s prediction of the bottom? Is it going to come sooner?

2) Is this overall bad or good news for those that have been waiting for the last 9+ years to buy?

3) Is this good news or bad news for the housing bears here?

4) What is going to happen to the foreclosure market? If banks are going to get write off those inventories, how is the government going to sell those homes?



I guess time will tell, as more information comes out today.</blockquote>


Here's what I think...



1) Bottom.... 2010-12 regardless. It won't be until 2020 and beyond until homes begin to appreciate again because it takes the market about 20 years to forget any major crisis.

2) If you've been waiting 9 years...that's your problem. If you had the equity to purchase a home in 1999-2001..why didn't you?

3) Both...good because the easy money days are gone....bad, if the financial system were to collapse then home prices would probably drop another 50-75% easy.

4) Foreclosures will still happen...the second part...wait and see.</blockquote>


Man, if I could have bought back pre-bubble and didn't, I'd be kickin' myself so hard now... Some who have been waiting might just get passed by a higher bottom and wage inflation helping to catching up to home prices as the government props up everything.
 
[quote author="ipoplaya" date=1221868195][quote author="optimusprime" date=1221866878][quote author="roundcorners" date=1221866439]My questions is obvious, in light of yet another financial bombshell today, how is this going to affect:



1) IHB?s prediction of the bottom? Is it going to come sooner?

2) Is this overall bad or good news for those that have been waiting for the last 9+ years to buy?

3) Is this good news or bad news for the housing bears here?

4) What is going to happen to the foreclosure market? If banks are going to get write off those inventories, how is the government going to sell those homes?



I guess time will tell, as more information comes out today.</blockquote>


Here's what I think...



1) Bottom.... 2010-12 regardless. It won't be until 2020 and beyond until homes begin to appreciate again because it takes the market about 20 years to forget any major crisis.

2) If you've been waiting 9 years...that's your problem. If you had the equity to purchase a home in 1999-2001..why didn't you?

3) Both...good because the easy money days are gone....bad, if the financial system were to collapse then home prices would probably drop another 50-75% easy.

4) Foreclosures will still happen...the second part...wait and see.</blockquote>


Man, if I could have bought back pre-bubble and didn't, I'd be kickin' myself so hard now... Some who have been waiting might just get passed by a higher bottom and wage inflation helping to catching up to home prices as the government props up everything.</blockquote>




Well, alright, I haven't been waiting 9+ years, but I have been tracking RE that long... But this just goes to show that the people that have been waiting are getting burned again; and the people who bought and walked away are the winners. The banks get absolved, the people who sold (sitting on cash) will probably be able to buy again, and the irresponsible people who got foreclosed on will no doubt find some way to ruin it for everyone with their greed again.
 
This is really going to screw the pooch down the road. This is a short term solution to make the Republicans look good because of the election. If we did not have an election they would not be falling over themsleves trying to help. Look the sea of bad loans will continue for the next 4 years or more as the next wave of alt a and option arms come due. They can not refinace as they are all underwater. And the loan modifications that are being used now will start to hit in about 5 years as they are fixed at a low rate and adjust back up in 5 years. And i do not see prices rising at that point so that will be the next wave of loan modifications to hit forclosures in 2012 if they don't start falling apart on thier own because of recession, higher unemployment and higher interest rates. Which if the feds start raising rates they will in effect start to raise forclosures as a equity lines and adjustables are base on this. There is little good news unless the government stops overspending and undertaxing.
 
[quote author="OCCOBRA" date=1221877915]This is really going to screw the pooch down the road. This is a short term solution to make the Republicans look good because of the election. If we did not have an election they would not be falling over themsleves trying to help. Look the sea of bad loans will continue for the next 4 years or more as the next wave of alt a and option arms come due. They can not refinace as they are all underwater. And the loan modifications that are being used now will start to hit in about 5 years as they are fixed at a low rate and adjust back up in 5 years. And i do not see prices rising at that point so that will be the next wave of loan modifications to hit forclosures in 2012 if they don't start falling apart on thier own because of recession, higher unemployment and higher interest rates. Which if the feds start raising rates they will in effect start to raise forclosures as a equity lines and adjustables are base on this. There is little good news unless the government stops overspending and undertaxing.</blockquote>


Why do you think it matters to the government if those loans are underwater? They'll loosen up underwriting guidelines for those homeowners and/or incentivize the lenders even more heavily to do work-outs with them no matter how negative equity they are. Tax payers dollars ultimately will pay for these underwater Alt-A borrowers to stay in their homes.



I'd rather they just drive a Brinks truck or two around Woodbury and hand out cash to those homeowners vs. this crap. It's essentially the same difference...
 
[quote author="ipoplaya" date=1221878572][quote author="OCCOBRA" date=1221877915]This is really going to screw the pooch down the road. This is a short term solution to make the Republicans look good because of the election. If we did not have an election they would not be falling over themsleves trying to help. Look the sea of bad loans will continue for the next 4 years or more as the next wave of alt a and option arms come due. They can not refinace as they are all underwater. And the loan modifications that are being used now will start to hit in about 5 years as they are fixed at a low rate and adjust back up in 5 years. And i do not see prices rising at that point so that will be the next wave of loan modifications to hit forclosures in 2012 if they don't start falling apart on thier own because of recession, higher unemployment and higher interest rates. Which if the feds start raising rates they will in effect start to raise forclosures as a equity lines and adjustables are base on this. There is little good news unless the government stops overspending and undertaxing.</blockquote>


Why do you think it matters to the government if those loans are underwater? They'll loosen up underwriting guidelines for those homeowners and/or incentivize the lenders even more heavily to do work-outs with them no matter how negative equity they are. Tax payers dollars ultimately will pay for these underwater Alt-A borrowers to stay in their homes.



I'd rather they just drive a Brinks truck or two around Woodbury and hand out cash to those homeowners vs. this crap. It's essentially the same difference...</blockquote>


Brinks truck? I thought they used helicopters.
 
[quote author="upperlowerclass" date=1221883895][quote author="ipoplaya" date=1221878572][quote author="OCCOBRA" date=1221877915]This is really going to screw the pooch down the road. This is a short term solution to make the Republicans look good because of the election. If we did not have an election they would not be falling over themsleves trying to help. Look the sea of bad loans will continue for the next 4 years or more as the next wave of alt a and option arms come due. They can not refinace as they are all underwater. And the loan modifications that are being used now will start to hit in about 5 years as they are fixed at a low rate and adjust back up in 5 years. And i do not see prices rising at that point so that will be the next wave of loan modifications to hit forclosures in 2012 if they don't start falling apart on thier own because of recession, higher unemployment and higher interest rates. Which if the feds start raising rates they will in effect start to raise forclosures as a equity lines and adjustables are base on this. There is little good news unless the government stops overspending and undertaxing.</blockquote>


Why do you think it matters to the government if those loans are underwater? They'll loosen up underwriting guidelines for those homeowners and/or incentivize the lenders even more heavily to do work-outs with them no matter how negative equity they are. Tax payers dollars ultimately will pay for these underwater Alt-A borrowers to stay in their homes.



I'd rather they just drive a Brinks truck or two around Woodbury and hand out cash to those homeowners vs. this crap. It's essentially the same difference...</blockquote>


Brinks truck? I thought they used helicopters.</blockquote>


There isn't enough space between homes in WB for the aerial cash drops to work properly :)
 
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