tag:blogger.com,1999:blog-6492542366661862113.post4265680821617964283..comments2023-10-31T01:32:09.169-07:00Comments on The Housing Time Bomb: BOO: The Insanity Continues!Jeffhttp://www.blogger.com/profile/04450070920047311928noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-6492542366661862113.post-52845292408977160812008-11-01T23:48:00.000-07:002008-11-01T23:48:00.000-07:00ZmonYour welcome!How would the neighborhood know t...Zmon<BR/><BR/>Your welcome!<BR/><BR/>How would the neighborhood know that a loan was modified?<BR/><BR/>Oh thats an easy one. People talk and so do realtors. <BR/><BR/>The foregiveness will be recorded. Buying a house is a 30 year marriage. IF the realtor doesn't know than the appraiser will.<BR/><BR/>Banks won't want to lend 600k for a house when they realize the house next door was modified to 400k. <BR/><BR/>Its a virtual guarantee that everyone will know when a loan was modified.<BR/><BR/>Keep renting Zmon!Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-9464295367698701832008-11-01T23:10:00.000-07:002008-11-01T23:10:00.000-07:00Thanks Jeff. I'm looking, but nowhere close to bu...Thanks Jeff. I'm looking, but nowhere close to buying as I have another year and a half left on my current lease. <BR/><BR/>While I agree with you that all these workouts will be played up in the media and therefore hit the conscience of J6P, I don't think it will play out on such a micro level. I don't think most people go through the trouble or even know how to look up how much of a mortgage people have on their homes. How would you even be alerted that your neighbor got a workout? I'm also wondering if they could somehow structure it so that the loan forgiveness would not need to be recorded -- although I just don't know how possible that would be.ZMonethttps://www.blogger.com/profile/07670008443747072461noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-7090415589961727142008-11-01T16:01:00.000-07:002008-11-01T16:01:00.000-07:00ZmonIt would automatically be reflected in home va...Zmon<BR/><BR/>It would automatically be reflected in home values.<BR/><BR/>Once they start renegotiating these loans, any good realtor is going to be able to access that information.<BR/><BR/>This is a big problem for the banks.<BR/><BR/>Example:<BR/><BR/>Imagine being a neighbor to someone whose loan gets renegotiated down 50-100k. Would you still pay your mortgage at the higher price after the guy next door get bailed out?<BR/><BR/>I wouldn't. The home values in the whole neighborhood all just got clipped by 50-100k if its one of those cookie cutter deleopments.<BR/><BR/>Why would anyone on the block continue to pay? This is the "moral hazard" that lies ahead.<BR/><BR/>This is goign to absolutely cripple the banks and home prices.<BR/><BR/>Sit back and relax if you are looking for a home. This Tsunami of renogiated loans will force housing prices to plummet back to earth.<BR/><BR/>Now is nowhere near the time to buy.<BR/><BR/>This is whyJeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-82776184566246619392008-11-01T15:39:00.000-07:002008-11-01T15:39:00.000-07:00Will these renegotiated loan amounts be reflected ...Will these renegotiated loan amounts be reflected in the value of the house (i.e., somehow be counted as a sale, creating a comp) or will these be stealth? Obviously one would bring prices down more quickly than the other.ZMonethttps://www.blogger.com/profile/07670008443747072461noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-55999468817608513722008-11-01T14:32:00.000-07:002008-11-01T14:32:00.000-07:00WaubayYepI don't see the housing market getting cl...Waubay<BR/><BR/>Yep<BR/><BR/>I don't see the housing market getting cleaned up anytime soon. <BR/><BR/>I agree with you, we have a lot of dark and gloomy days ahead of us. I think most homeowners are going to threaten to walk before this crisis is over.<BR/><BR/>Most of the borrowers of this bubble money do not have the ability to pay it back so the only answer is default.<BR/><BR/>The banks are caught between a rock and a hard place. Thats why I think they will cave and renegotiate the loan amount.<BR/><BR/>This is what happens when the line "moral hazard" is crossed.Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-76120292746060490352008-11-01T14:15:00.000-07:002008-11-01T14:15:00.000-07:00Jeff,It is a sorry state of affairs when being irr...Jeff,<BR/><BR/>It is a sorry state of affairs when being irresponsible makes a weird kind of financial sense.<BR/><BR/>Wonder what is going to happen to these banks when people who can and are currently paying their mortgages realize the points that you laid out.<BR/><BR/>I am sure there are plenty of people who would trade 7 years of bad credit for $100k+. Most would probably do it for $50k or less. Especially when they are in virtually no danger of losing their house.<BR/><BR/>Looks like a deep, dark, bottomless pit for the housing market.waubayhttps://www.blogger.com/profile/04297392525364158255noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-10345930339102162462008-11-01T09:53:00.000-07:002008-11-01T09:53:00.000-07:00AnonGo for it. The last thing they want is to hav...Anon<BR/><BR/>Go for it. <BR/><BR/>The last thing they want is to have go into foreclosure where it will then sit empty until they sell it at a 40-50% loss.<BR/><BR/>Before its sold at foreclosure they run the risk of squatters coming in and destroying the place. The bank also has to pay to maintain the property until its sold.<BR/><BR/>It would be much more sensible for them to simply drop your mortgage by 50-100k and avoid having to go through all of the above. <BR/><BR/>IF your credit rating is under 700 then its a no brainer. Lending standards have gotten so tight that you can't get a loan if you are in the 600's anymore.<BR/><BR/>Thats an automatic walk away in my book. Homeowners will get their credit rating back in 7 years or so. <BR/><BR/>Quality of life is too important in my book. WHy live with the weight of a mortgage payment that takes 50% of your take home pay. <BR/><BR/>The banks are under a tremendous amount of pressure here. Take advantage of it. <BR/><BR/>Good luckJeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-4267901001732511902008-11-01T08:48:00.000-07:002008-11-01T08:48:00.000-07:00And now the government is working on a $600billion...And now the government is working on a $600billion plan to guarantee mortgages and protect them from foreclosure. I am starting to think of only sending half of my mortgage payment and telling my mortgage company(Countrywide) that it is all I can afford. I won't lose my house and maybe I can get 40-50k knocked off my mortgage. My credit rating will take a hit but it may be worth it.Anonymousnoreply@blogger.com