March 27, 2007

MELTDOWN MELTDOWN MELTDOWN MELTDOWN MELTDOWN MELTDOWN


Has housing just gone China Syndrome?

24 comments:

Anonymous said...

Why, yes it has

Shakster said...

Yep ,and The Mass Media is in "Cover YOUR BUT MODE".They know they have been caught,but don't worry,most of the country could give an EFF.That's the real reason why it happened.

Anonymous said...

When are they going to start setting houses on fire?

Dali Lama Ding Dong said...

Oh looky this, my Countrywide short(ticker: CFC) is in the money again!
Why did I sit on my short position while the stock rose last week? The honest answer? I just can't support a company and its people who have profited from this housing bubble.
Ah...now I truly understand the rewards of ethical investing!

tmaioli said...

You could say it "jumped the Shark"


Jumping the shark is a metaphor that was originally used to denote the tipping point at which a TV series is deemed to have passed its peak, or has introduced plot twists that are illogical in terms of everything that has preceded them. Once a show has "jumped the shark," fans sense a noticeable decline in quality or feel the show has undergone too many changes to retain its original charm.

tmaioli said...

Suspension of disbelief too


http://en.wikipedia.org/wiki/
Suspension_of_disbelief

Jayman1957 said...

All traces of Housing Bubble denial will be gone sometime this summer

Anonymous said...

Housing will have to be absolutely hated before it regains favor as a good investment. And before that happens the rental market will have to find a bottom.

Westside Bubble said...

Also see the lead story on today's "Marketplace" radio.

Lost Cause said...

I'll bring the marshmellows.

Hard assets said...

This last 2 weeks we have seen new chapter opened in the "crash" story. It looks like the crash has turned quantum on us, and it is accelerating into a "melt down".

Anonymous said...

US mortgage crisis forces homeowners to take refuge in their cars
The Scotsman ^ | 24-Mar-07 | SUE ZEIDLER

Posted on 03/27/2007 10:55:10 PM PDT by Lorianne

THEY are victims of the United States' growing mortgage crisis - low-paid workers whose homes have been repossessed amid rising interest rates, a stagnant property market and a lax lending regime.

But in Los Angeles, where having a car is as essential as owning a home, many are sleeping in their vehicles to ensure a roof over their head.

Campaigners for the homeless expect more to hole up in their cars as they lose homes due to the problems that have dogged "subprime mortgages" - those granted to low-earners with little capital of their own.

The trend comes despite the fact that sleeping in a car is illegal in the Los Angeles area.

"The subprime meltdown is the kind of situation that pushes people into cars. It's a very common story," said Ruth Hollman, of Self-Help And Recovery Exchange, a group that helps homeless people.

Advocates hope Los Angeles will adopt programmes in place in cities such as Eugene, Oregon, and Santa Barbara, California, that enable people to live in cars while receiving services they need to get back on track.

"It's an old saying in social services that most people are one to six paychecks away from being homeless. But if you can't make your mortgage, it's more like a month or two," said William Wise, of the relief agency St Vincent de Paul of Eugene, which works to find overnight parking spots for homeless people.

Without such spots, people forced to sleep in their cars fear being towed and ticketed by police, as well as being attacked by thugs and facing public scorn.

Emily Love, 61, was sleeping in her car in Marina Del Rey, California, when two youths smashed her windscreen with a shopping trolley. A week later, she was back in the car.

After her car was attacked, the former teacher sat staring at the shattered glass. "I don't like to talk to the cops. They don't like people sleeping in their cars," she said in her car crammed with her possessions, including two cats.

Government figures say there are about 754,000 homeless people in the US, about 300,000 more than available beds in shelters and transitional housing.

Many of the temporarily homeless get into deeper trouble because they try to keep it quiet and do not seek help.

Philip Mangano, of the US Interagency Council on Homelessness, said he strongly opposed programmes that sanction living in cars.

"It's a national tragedy that we are resorting to these plans. It doesn't measure up to the promise of America," he said.

Mr Mangano has been working with cities to develop ten-year plans to end vagrancy through a new business- oriented approach that has cut homelessness in cities such as San Francisco and Philadelphia.

The number of people living in cars is hard to calculate, but Ruth Hollman said a recent estimate of 1,000 in Los Angeles was far below the actual figure. She said some people living in their cars pay gym memberships so they can shower, and attend training courses or have jobs. "One man I know goes to college and people there don't even know he's homeless," she said.

The Thinker said...

Yesterday a lot of us were discussing how desperate sellers are unable to lower their asking price enough to get their house sold because they simply owe too much on the home and they need to cover their lien because they don't have the available funds to cover the shortfall.

We were also discussing how builders cant lower prices on new construction because they would have to revalue all of their unsold homes and that would result in a massive write-off that would tank their stock.

Therefore, housing prices are inflexible. So lets not say things have crashed just yet, because prices are still way too high. However, under enough pressure, inflexible items tend to snap. There will be a massive devaluation of housing some time in the future, but we aren't quite there yet.

Richard said...

Thinker

You are the dumbest poster on this site (besides most all ANONs).

Your door has been burnt to ashes and you are still in denial.

NewsFlash!!

The housing market has crashed...Peak Oil is here...and you more than likely will be dead in under 5 years because of starvation.

Cheers "thinker".

Anonymous said...

To bad hanoi jane is such a liberal wackjob......she was pretty Hot in her day!

Corey said...

Bernanke to congress: Housing issue "substantial." More at http://infohype.blogspot.com

Anonymous said...

I'd tap it.

Lost Cause said...

Today March 28 is the anniversary of the Three Mile Island accident near meltdown.

Anonymous said...

"So lets not say things have crashed just yet, because prices are still way too high."

People don't understand that prices are still too high because FBs and flippers don't have a choice. If they lower the price to reasonable levels, they would be still screwed. So since they are willing to walk out of their properties in either case, they keep the prices high enough in hopes to come out clean if another idiot buys them out.

But that it's not going to happen. Therefore, they will all drop the keys and walk out of their homes and leased fancy cars, sooner or later. Some of them are just saving money by living cost free until the sheriff kicks them out of the house. That's why the prices are still high.

Anonymous said...

People don't understand that prices are still too high because FBs and flippers don't have a choice. If they lower the price to reasonable levels, they would be still screwed. So since they are willing to walk out of their properties in either case, they keep the prices high enough in hopes to come out clean if another idiot buys them out.

Uhh huhh. But you renters have been saying this for over a year now. The crash is always just around the corber. Excuse after excuse that it hasn't happened yet.

Foreclosures are swift. Get behind 2 months and by the end of the 3rd month you lose your house.

Prices haven't fallen because the vast majority of people don't need to sell. A lot of people would like to sell and so there is a lot of inventory out there. But of those people with homes on the market the vast majority won't sell at a discount. Remember the foreclosure rate is less than 0.5% which means 99.5% of homeowners can ride this out without having to lower asking price.

Anonymous said...

"Some of them are just saving money by living cost free until the sheriff kicks them out of the house. That's why the prices are still high."


I know of three households in my neighborhood that are soon to be forclosed on...

In one case, a man lost his job in December and his wife's job was cut from full-time to part-time. They lost over 60% of their monthly income. Unable to pay the mortgage, they stopped paying all the bills and are accumulating cash. The man told me he is going to stay untill they kick him out; then he will just go out and look for the cheapest rental he can find.

The other two households suffered ARM resets that they can't handle and are doing much the same thing.

Conclusion: All 3 of these houses will take many many months to be forclosed on, then make their way back on the market. By the time they hit the market -- I expect they will be worth no more than 70% of what the current owners paid for them a few years ago.

Cheers!

Anonymous said...

But that it's not going to happen. Therefore, they will all drop the keys and walk out of their homes and leased fancy cars, sooner or later. Some of them are just saving money by living cost free until the sheriff kicks them out of the house. That's why the prices are still high.

All good theories, fella, but it's extremely over-simplistic to try and place all owners into a generic category of why prices are still high.

For one, the sub-prime issue is still recent news to many owners, and many buyers are not even aware that the lending industry is having issues (remember all the MSM articles downplaying the issue?). The NAR and state ARs are all downplaying any issues, and most people don't scour housing panic blogs looking to be on the cutting edge.

Also, many buyers have enjoyed the build-up in passive equity over a few years, and hence are not going to reach the 'break-even' point for a few years (depending on when they bought).

I know everyone (including me, a first-time buyer who decided to sit it out on the side-lines after realizing that something incredibly fishy was going on around 2004....) would like to see a quick market correction to "normal" prices, I really don't think that's going to happen anytime soon (within the next 2-4 years)....

Those of you looking to buy in the near future will need to actually SEEK OUT a seller, making your best case to them for why they need to sell to you NOW at a dramatically-reduced price. If they balk, don't waste your time; look for another.

Just be sure to get your financing arranged now, as you don't want to waste time arranging financing, etc.

Only problem is what happens if YOU miscalculated market timing, and then find that the meltdown will effect YOUR equity, as your house continues to slide in worth!?

So regardless of where you are in this (buyer or seller), it's all about your tolerance for risk, and how much you're willing to pay...

mr schaden said...

Don't forget banks are also artificially keeping their REO prices high to prop up the market. I've seen many REO's priced well above the comps.

Anonymous said...

These borrowers who really can't afford to kept up with the mortgage should talk to the lender and see if the lender can do something for them . Some people might qualify for a short sale , others might be able to get the bank to rewrite the loan to a payment that they can live with .Every situation is different .

Maybe the gov. should build more homeless shelter or rent some of these vacant condos for displaced people . If a borrower still has a job than maybe they can get a cheap rental in a house or with a friend until they can get back on their feet again .

Since alot of these borrowers didn't have any money invested in these homes ,in alot of cases moving from the house is just like going to a rental . Maybe some people could rent trailer space for a while or something like that .

People make mistakes in life .
Having alot of people out on the streets or sleeping in cars is not going to be good .