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Foreclosures and Financing

TheAnk

By TheAnk
in Providence

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TheAnk Hamlet

TheAnk

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Dude, do you GO to the ONA meetings? Do you try to get YOUR voice heard? Start your own neighborhood group; I'm sure there are plenty of people who don't think ONA represents them, either. But honestly if all you're doing is pissing and moaning about how awful they are, and you're not trying to make it better (for you, and your neighbors) then you kind of deserve them as your mouth piece.
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jencoleslaw Town

jencoleslaw

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Valid points, all of them.. See, here's the thing.. Real people work... We have bills, mortgages, child suport, commutes, tenants, sales trips, 3 song stints in the champagne room at Club Fantasies, whatever.. Its a sad reality of life, but if you want to get ahead, you have to have multiple income streams.. Thank your government for constant inflation for that...

So as much as I'd LOVE to do this, I can't, too busy.. Personal choice, sure.. We can call it that.. Excuse? Fine with that too.. My priority is to not have to think about money, I value that over countering some yahoo from the ONA with a grassroots hood association..

So if my whining annoys you, I'm sorry.. I guess my version of Ospina-ing is by vocally (in text) expressing discontention.. That in reality, IS me being heard, is it not?

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TheAnk Hamlet

TheAnk

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Are you all drunk off of the DNC? Do you UPers convene and watch the DNC en masse? Is it an orgy of liberal thought for four days straight? The chatter in here has been silent, so I guess all of the above is true..

I thought I'd check in with some updates from the ge-hetto.. Patrick Ward has been seen handshaking, and hand waving all over the hood.. No baby has been left unkissed.. I bet he has noticed some neighborhood changes (even if he does not know what side of Atwells I live on)..

I've noticed some foreclosure turnover.. Its sneaky.. First a pickup truck will be in a driveway.. Next, boards are off windows.. Then the yard.. And after a few weeks, regular cars.. I think the foreclosure sharks are in the water in full force, preying off the misfortunes of others.. As long as they charge market rent, all is well in slumlordom.. I've noticed nice apts fill quick still.. Rents seem to be down about 10-20%, but not drastic..

House prices are horrific, but the entire market is foreclosures.. As those clear out, demand will rise.. As long as we don't sink FURTHER, which is ver unlikely from here.. Multis only remember..

People seem to have waned themselves off of panic sell mode into either ride it out mode or already in foreclosure mode.. This seems evident by the RAPID reduction in supply recently:

The beginning of the downfall

Date PVD Multi RI Multi 3Fam PVD 3Fam State

09/20/2006 623 1578 282 594

The unquestioned supply peak

Date PVD Multi RI Multi 3Fam PVD 3Fam State

10/29/2007 792 1892 366 700

A drastic reduction in supply

Date PVD Multi RI Multi 3Fam PVD 3Fam State

09/02/2008 638 1567 248 518

Now, I don't think this is a rebound yet, but I feel pretty strongly that the low point, perceptionwise, was October-November of 2007... Supply is, for multis, close to pre bust days.. And since most of that is forecs, supply, really, is close to zero.. But its a paper shell game, because of the same forecs..

People have adjusted from "I gotta get out from under this house" to "f it, I'm riding it out"..

Also of note, of course, is the sailor spending gov of ours:

Masturbation through Politics

Key points:

The bill allows Treasury over the next 18 months to offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies if necessary.

In other words, this is the nationalization of the housing market.. NOW, THAT really is the full faith and credit of the fed government huh.. It is easy to spend OPM (other peeps' money).. Good for past buyers, horrific for all other tax payers.. Which leads to:

Permanently increase "conforming loan" limits

Inexplicable.. The idea of the FHA WAS first time buyers to get in a house (and for saavy slumlords to expoit the "first time buyer" means in the past two years rule, of course).. Now it apparently means our Gov will insure basically all housing.. Yeah, thats rational.. If that wasn't enough,

Increase the Federal Housing Administration's role

in addition to using FHA for ALL houses, the FHA will now also be a refinancer of last resort.. So people who's houses plummet and have a bank in trouble can have their house written down to 90%, the bank pay the 3% down, and its sunny times with a fed guaranteed new loan.. And, my personal favorite..

Give grants to states to buy foreclosed properties.

Yeah, thats nice.. Give the state federal money to buy properties.. Awesome.. Obama is perfect for this country.. What timing.. We will all be in government housing, eating federal food in our Dystopic Utopia in 8 years.. Haven't we learned that communism fails?

In a vacuum, the above things are good.. But we do not operate in a vacuum.. All actions have future inflationary reactions.. So this is a short term (maybe somewhat needed) fix that will have long term inflationary end game..

On the positive, other than the rampant inflation, the destruction of individual property rights as we know them, ethnic cleansing of libertarian thought (yes, we are a dying race), and leading to a society with no free thought or spirit that resembles synchronized swimming in the olympics, this bill is not too bad..

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Pseudo_Work Hamlet

Pseudo_Work

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Are you all drunk off of the DNC? Do you UPers convene and watch the DNC en masse? Is it an orgy of liberal thought for four days straight? The chatter in here has been silent, so I guess all of the above is true..

I thought I'd check in with some updates from the ge-hetto.. Patrick Ward has been seen handshaking, and hand waving all over the hood.. No baby has been left unkissed.. I bet he has noticed some neighborhood changes (even if he does not know what side of Atwells I live on)..

I've noticed some foreclosure turnover.. Its sneaky.. First a pickup truck will be in a driveway.. Next, boards are off windows.. Then the yard.. And after a few weeks, regular cars.. I think the foreclosure sharks are in the water in full force, preying off the misfortunes of others.. As long as they charge market rent, all is well in slumlordom.. I've noticed nice apts fill quick still.. Rents seem to be down about 10-20%, but not drastic..

House prices are horrific, but the entire market is foreclosures.. As those clear out, demand will rise.. As long as we don't sink FURTHER, which is ver unlikely from here.. Multis only remember..

People seem to have waned themselves off of panic sell mode into either ride it out mode or already in foreclosure mode.. This seems evident by the RAPID reduction in supply recently:

The beginning of the downfall

Date PVD Multi RI Multi 3Fam PVD 3Fam State

09/20/2006 623 1578 282 594

The unquestioned supply peak

Date PVD Multi RI Multi 3Fam PVD 3Fam State

10/29/2007 792 1892 366 700

A drastic reduction in supply

Date PVD Multi RI Multi 3Fam PVD 3Fam State

09/02/2008 638 1567 248 518

Now, I don't think this is a rebound yet, but I feel pretty strongly that the low point, perceptionwise, was October-November of 2007... Supply is, for multis, close to pre bust days.. And since most of that is forecs, supply, really, is close to zero.. But its a paper shell game, because of the same forecs..

People have adjusted from "I gotta get out from under this house" to "f it, I'm riding it out"..

Also of note, of course, is the sailor spending gov of ours:

Masturbation through Politics

Key points:

The bill allows Treasury over the next 18 months to offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies if necessary.

In other words, this is the nationalization of the housing market.. NOW, THAT really is the full faith and credit of the fed government huh.. It is easy to spend OPM (other peeps' money).. Good for past buyers, horrific for all other tax payers.. Which leads to:

Permanently increase "conforming loan" limits

Inexplicable.. The idea of the FHA WAS first time buyers to get in a house (and for saavy slumlords to expoit the "first time buyer" means in the past two years rule, of course).. Now it apparently means our Gov will insure basically all housing.. Yeah, thats rational.. If that wasn't enough,

Increase the Federal Housing Administration's role

in addition to using FHA for ALL houses, the FHA will now also be a refinancer of last resort.. So people who's houses plummet and have a bank in trouble can have their house written down to 90%, the bank pay the 3% down, and its sunny times with a fed guaranteed new loan.. And, my personal favorite..

Give grants to states to buy foreclosed properties.

Yeah, thats nice.. Give the state federal money to buy properties.. Awesome.. Obama is perfect for this country.. What timing.. We will all be in government housing, eating federal food in our Dystopic Utopia in 8 years.. Haven't we learned that communism fails?

In a vacuum, the above things are good.. But we do not operate in a vacuum.. All actions have future inflationary reactions.. So this is a short term (maybe somewhat needed) fix that will have long term inflationary end game..

On the positive, other than the rampant inflation, the destruction of individual property rights as we know them, ethnic cleansing of libertarian thought (yes, we are a dying race), and leading to a society with no free thought or spirit that resembles synchronized swimming in the olympics, this bill is not too bad..

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TheAnk Hamlet

TheAnk

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Am I really the first to post on the Fannie/Freddie bailout?

This is the evil side of a semi-social/semi-capital economic structure: the privatization of profit combined with the socialization of risk. Thanks, Reaganomics!

PS. My RNC hangover just won't quit. "Drill, baby, drill."

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frymasterspeck Hamlet

frymasterspeck

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So, now we're gonna buy up all these MBS's (mortgage backed securities) that have driven all the big broker/dealers out of business. Sweet! Let's get that toxic paper off these private entities' balance sheets and onto the national debt where it belongs.

Honestly.

Is there a potential upside to all this? I think so, but it's, um, complicated.

The reason all these brokerages sought protection was that they have to release quarterly reports, and on these reports, they have to set the value of the securities they hold. The legal requirement is known as "mark to market." That is, you don't value securities at the price you paid, you value securities at the price AT WHICH YOU COULD SELL THEM TODAY.

Mark to market is awesome in a bull market. You buy something at $10, but you can put it up to $15 on your next quarterly if the price goes up. 50% profit. Similarly, in a bear market, you lose some money.

The real problem is when a market completely collapses, as happened with the MBS market. The value of these securities is essentially zero - they are un-sell-able to anybody (but the American taxpayer).

But that doesn't mean they're worthless. As the name implies, these securities are backed by the value of mortgages, so, in the end, they are worth far more than the mark-to-market price. If you're a pathetic wonk like me and actually watch this painful Congressional testimony, you'll hear Bernanke and Paulson (Hankie and Bernanke?) talk about the "hold to maturity" value, which is what they want to pay, er, what they want US to pay for these MBS.

The real issue here is one of transparency, which is what the SEC is supposed to keep an eye on. When Fannie, Freddie and others started to package these mortgages into the now-famous tranches, they effectively severed the connection between the underlying asset (mortgages) and the derivative security (MBS). As a result, there is no 'unwinding' possible. We can't just say "Well this tranche includes these 100,000 loans, and of those loans only 1.5% are in default, therefore the hold-to-maturity value is $XX."

That's what a lot of this hemming and hawing in DC is all about - trying to figure out how much is too much to pay for these securities. They want to start "with the easy ones" and figure out a formula that would guide the valuation of "the hard ones."

I say screw The Street. Let's buy these things up at the mark-to-market price, unwind/figure out what's going on inside of them as best we can, and them sell them back to whatever's left of The Street once the dust settles. I do believe that buy-lo-sell-hi is the way they like to play it.

The downside is that the US government will become the world's biggest landlord. I heard someone say that "unwatched real estate has the half-life of a cabbage." And already, a lot of the foreclosures are being vandalized, stripped of all copper and fixtures, and housing drug addicts. What a nice portfolio!

For-realsies finance dudes and dudettes, correct me where I've gone wrong.

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Cotuit Megalopolis

Cotuit

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My question is... If the economy is really in danger of totally taking a 1929 on us, doesn't the rest of the players in the economy not want that to happen? If the feds just sat back and let the pieces fall, would the GEs and Microsofts and Warren Buffets of the world work to block the crash? Isn't it in everyone else's best interest for there not to be a crash? Why not just let the market and the players in the market sort it out themselves?

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frymasterspeck Hamlet

frymasterspeck

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My question is... If the economy is really in danger of totally taking a 1929 on us, doesn't the rest of the players in the economy not want that to happen? If the feds just sat back and let the pieces fall, would the GEs and Microsofts and Warren Buffets of the world work to block the crash? Isn't it in everyone else's best interest for there not to be a crash? Why not just let the market and the players in the market sort it out themselves?
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TheAnk Hamlet

TheAnk

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Ladies and Gentlemen,

Libertarian Ank has been chain smoking non filters in his bunker for the past month.. I peered out of my man cave to see that the government is giving banks 700 billion dollars of our future earnings because they are idiots.. I can't take it..

I have come up with my own plan.. Its a little different. Instead, we give every single person in America, legal or illegal $1,000,000. Theres roughly 300 million americans.. My plan costs less than HALF of this plan.. Let the banks fail, everyone will be millionaires..

I'm certain that our economy will be humming along with 300,000,000 people with $1,000,000 cash in hand..

Its so simple.. Its completely insane and ridiculous, but you know what... It costs half, its half as insane as this RIDICULOUS sh!t going on...

Why hasn't anyone mentioned this? Peculiar, no?? Aren't they giving out 700 billion to HELP US?? No.. Its because the bailout has nothing to do with us people and taxpayers.. Its about two things.. Keeping The Fed in control of the world money supply, and nationalizing housing..

I literally can't take it..

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TheAnk Hamlet

TheAnk

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Let the banks fail.. So what.. the fear of system collapse is widely overrated.. the problem is no one wants to feel pain any more..

You know what, recessions are a part of the business cycle.. Yeah, it sucks.. People lose their houses, their jobs.. But all that is temporary..

You can't have an orgy all the time.. Sometimes you need to go to the doctor, get checked out and make sure you dont have the HIV.. Maybe recharge, rest.. Unfortunately, our government is afraid of the doctor.. So instead of taking a break from unprotected non-stop, all holes not barred sex, they just want the orgy to continue..

Ask Japan how their orgy went..

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basachs Burg

basachs

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Let the banks fail.. So what.. the fear of system collapse is widely overrated.. the problem is no one wants to feel pain any more..

You know what, recessions are a part of the business cycle.. Yeah, it sucks.. People lose their houses, their jobs.. But all that is temporary..

You can't have an orgy all the time.. Sometimes you need to go to the doctor, get checked out and make sure you dont have the HIV.. Maybe recharge, rest.. Unfortunately, our government is afraid of the doctor.. So instead of taking a break from unprotected non-stop, all holes not barred sex, they just want the orgy to continue..

Ask Japan how their orgy went..

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TheAnk Hamlet

TheAnk

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One, exactly pete11.. A lost decade.. And great Clinton glass steagall reference.

Both parties are in the business of status quo.. Which is.. They spend $$ they dont have, ours..

The Fed exists so we can have constant inflation.. Its all Ponzi.. They have an interest rate economy basically.. If you know that with almost absolute certainty there will be inflation, because you control it then you can always make money as long as people constantly borrow.. Thats their problem.. No one lending, no one borrowing..

My 300 billion plan would effectively end The Fed as we know it.. It would destroy banking as it currently exists.. Then a new system would be in place.. But the gov does not want that.. they want to keep the current people in power, in control of the fiat..

So this gov bank bailout plan, in its disgustingness is a last ditch attempt to instill "liquidity" to the financial "system".. In non Fed speak.. This means making the taxpayer pay to allow banks to continue lending and making money off of interest rates..

A little off topic, did you know that banks have a 5% capital reserve? Meaning you deposit cash to a bank.. Maybe they pay interest, maybe they dont. Lets say you deposit $1000. They in turn lend $950 to someone else at a rate.. And if they fail, you lose your money.. They don't.. They get paid to go work for the government after their company gets bought..

The problem with this whole thing is.. One as pete11 said, is the fear tactics.. The other is who is being bailed out.. Really, who cares if AIG goes under.. I don't.. You don't.. The banks do.. You don't hear ONE WORD about regular people.. Because you don't matter.. What matters is global financial domination by the Fed..

In true rant fashion, did you know that we lend $$ through IMF, World Bank, etc to 3rd world countries NOT to help them out? Weird right.. Yeah, it looks nice on the surface, the US is altruistic, lending $$.. Even better, we know they cant pay.. Then when they INEVITABLY cant, we cancel that debt.. We "forgive it".. Fascinating, and great publicity.. I bet that makes all the liberals warm and fuzzy..

Except we issue newer, less attractive terms.. Sort of like if you get a credit card at 9%.. Miss a payment.. Then the card raises the rate to 19%.. Yeah, they know you probably can't pay at 9%, then you most likely cant at 19%.. But they also know that they now own you...

So we know that we own these countries.. Its basically parasitic.. So if this financial system fails, all that fails too.. I love the retarded calls for socialism about this too.. People don't realize how incredibly uneducated about finance and economics that makes people sound.. THIS IS SOCIALISM.. Thats why its failing.. More regulations? Please.. FRE and FNM are GOVERNMENT AGENCIES.. How can you get more regulated than that..

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