HousingPANIC Stupid Question of the Day

Seriously folks, did you think you'd ever see runs on banks in your lifetime?

I didn't.

But here we are. And away we go.

Get ready to see some real serious sh*t.

Think it's bad now? You should see the wave of mortgage resets that's about to come crashing on to US shores

The Herald Tribune had a great piece on the wave of payment shock loans resetting in the next couple of years. We're just getting started folks. When this is all over, we'll be shocked at how far home prices dropped, and how many families lost their homes.

You owe it to yourself to read the article. And get ready.

Mortgage renewals set to prick U.S. property bubble

The mortgage meltdown has arrived at something of a turning point.

So far, the loans that have gone bad were among the worst of the worst. Some were based on outright fraud, either by the lender or the borrower. In many cases, buyers were never going to be able to make their monthly payments and were instead banking on a rapid appreciation in home values.

The peak month for the resetting of mortgages will come this October, according to Credit Suisse, when more than $50 billion in mortgages will switch to a new rate for the first time. The level will remain above $30 billion a month through September 2008. In all, the interest rates on about $1 trillion worth of mortgages, or 12 percent of the U.S. total, will reset for the first time this year or next. A couple of years ago, by comparison, only a marginal amount of mortgage debt - a few billion dollars a month - was resetting each month.

So all the carnage in the mortgage market thus far has come even before the bulk of mortgages have reset. "The worst is not over in the subprime mortgage market," analysts at JPMorgan recently wrote to the firm's clients. "The reason for our pessimism is that loans originated in late 2005 and all of 2006, the period that saw peak origination volumes and sharply decreased underwriting quality, are only starting to reset in large numbers."

It isn't hard to figure out what will happen when buyers who were already stretching to afford a house are faced with suddenly higher payments. Many will manage. They will cut back on spending, or refinance their mortgage and get a new one they can afford.

Others, like the buyer I interviewed two years ago, probably planned on selling their homes after a few years all along. For them, the artificially low initial rate was a no-lose proposition.

But there are also likely to be a shocking number of people who lose their homes.

Ladies and Gentlemen I've found our new Casey Serin. A 24-year old kid with $300,000 in unsecured debt: Introducing "Debt Kid"

Hundreds of years from now when they study this brief period of debt stupidity (2001 - 2007), they might find Debt Kid (along with HousingPANIC of course).

Enjoy.

Or on second thought, be afraid. Be very afraid.

DebtKid.com
my journey to repay over 300K in unsecured debt…I am 24.

I got myself into 300K+ of unsecured debt. I recently avoided foreclosure by short selling my home. I've been trying to build my business income up. This while trying to deal with being over 300K in debt and now living in my office. Let's just say my life ain't boring.

A few things I need to decide this week:

#1. Should I consolidate my office into a “home office”? I’ve been in this building for over 2 years now. My office space is a good deal, but with only 2 full time employees (myself included) and one part-timer, shouldn’t I work from home? I’m looking at a place tomorrow that would be larger than my current office (yet also provide a “real” place to live. ahh….a real mattress!).

#2. Can I file Chapter 7 Bankruptcy? We are getting to crunch time now on the BK filing. If I’m going to do it (I have to at this point, it’s the only thing that makes sense all around) I need to get it all figured out this week. I made more progress on the paperwork today, but it’s difficult finding time when my employees are not around (and I have a friend visiting from out of town! yikes…)

#3. Can I win the contest at DCC? (go here to vote for me, please leave a comment too!) If I can win that contest I may just have enough money to get a place I’m looking at that could hold both myself and my business! (for only $200 more. IE, with no business lease @ $800/month this place would only cost me 1K/month, and allow a place for my business and personal life!). Obviously I’m hoping I can win this contest!

#4. Will I ever be back to my “old self”? I don’t think so. I don’t think I want to be. As I slowly shed every piece of my former life (big house, lots of crap, fake relationships, fancy office?), I’m feeling more and more genuine and real and honest…and it’s wonderful.

#5. Will I ever make it out of this hole? I don’t know. I’m still so right on the edge right now….

What do you think?