Owner: National Bubble URL:http://www.nationalbubble.com Join Date: Wed, 07 Nov 2007 11:32:17 -0600 Rating:0 Site Description: News and commentary about the Real Estate bubble and the greedy people behind it. Analysis of how the housing crash will hurt the U.S. economy. Site statistics:Click here
A costly bet on Real Estate 2007-11-24 11:28:26 From the BaltimoreSun.com
WASHINGTON - Big-name investment banks are taking a financial beating this year, leaving many Americans to ask: Just how did all these Wall Street bankers in their $5,000 John Lobb shoes manage to step in you-know-what?
The answer is simple: They made the same mistakes as the rest of us, just with more zeros attached to them and bigger consequences for the U.S. economy, if not for their own $625 John Lobb wallets.
Those mistakes are why the heads of Merrill Lynch & Co. and Citigroup Inc. have been ousted in recent weeks, why household names such as Bank of America Corp. and Wachovia Corp. are announcing billion-dollar losses and why more trouble is brewing
(more…) Read more:Estate
, Real Estate
Mortgage crisis - No light at the end of the tunnel 2007-11-24 10:57:42 Yahoo Finance has this article.
In the months ahead, millions of other adjustable-rate mortgages like Colombo’s will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.
(more…) Read more:Mortgage
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, tunnel
Want to sell your house? It’s simple. Lower the price!!! 2007-11-22 06:17:52 That’s what John Wasik says in this Bloomberg’s article and I couldn’t agree with him more. Being stubborn hasn’t helped, has it? Forget it, you are NOT going to get for your house what your neighbors got back in late 2005. Just face reality and move on. The good news: if you are buying another house, you’ll get a pretty good deal.
Nov. 19 (Bloomberg) — Raffles, festive balloons, open houses, car giveaways. Will any of these incentives sell houses? Not at the moment.
You don’t have to be particularly creative in a market glutted with homes for sale. The painful reality is that homes are commodities. There are more than 4 million of them sitting out there unsold and more coming on the market every day due to foreclosures. If you really need to sell a house, price
is the one lever that will move a property.
Read the whole article here, it is indeed very interesting. Read more:Lower
Home sales declined in 46 states - Prices fell more than 10% in parts of Florida and California 2007-11-21 12:21:48 Even Realtors had to admit that the housing market is in trouble.
According to AP
WASHINGTON (AP) — Sales of existing homes fell in 46 states during the July-September quarter as the housing market’s slump worsened, a real estate trade group reported Wednesday.
The new third-quarter figures from the National Association of Realtors underscore the severity of the housing market’s slump, which has economists increasingly pessimistic about the economic outlook. Read more:Prices
, Florida
, California
More layoffs in the mortgage industry 2007-11-21 09:14:14 Orange County, California was the epicenter of the subprime mortgages in the days of the housing boom. Now, those same mortgage companies are laying off thousands of employees and the Southern California economy is feeling the pain.
The Orange County Register has an excellent article telling the stories of several mortgage workers who are now looking for jobs in the retail industry
. (more…)
Now Paulson thinks the housing market is getting worse 2007-11-21 08:43:25 I remember not too long ago, U.S. Treasury Secretary Henry Paulson
kept saying that housing was bottoming. Paulson and the entire Bush’s economic team were out on TV talking about how resilient our economy is and how housing had turned the corner. Apparently, he now feels just like the rest of the country and he is finally admitting that housing is going to get much worse in 2008. It seems like his campaign to hide the truth and keep everybody calm has not succeeded and he has decided to face the problem instead of just hiding it.
CNBC reports
U.S. Treasury Secretary Henry Paulson said the number of potential U.S. home-loan defaults “will be significantly bigger” in 2008 than in 2007, the Wall Street Journal’s online edition reported.
“The nature of the problem will be significantly bigger next year because 2006 (mortgages) had lower underwriting standards, no amortization, and no down payments,” Paulson said in an interview with the Wall Street J Read more:housing market
Is Countrywide collapsing? 2007-11-20 15:39:42 It certainly looks that way. According to AP
Shares of Countrywide
Financial Corp., the nation’s largest mortgage lender, sank more than 14 percent Tuesday amid concerns that troubles at government-backed mortgage banks could squeeze mortgage lenders’ access to funding.
The company’s shares fell $1.50, or 14.2 percent, to $9.07 in afternoon trading. At one point, the stock had dropped to a low of $8.21. Over the past 52 weeks, the stock price has ranged between $10.25 and $45.26.
Dollar hits new record low versus the Euro 2007-11-20 14:00:45 Here we go again, the Dollar
keeps falling to the point that many countries are considering moving their reserves into other currencies. The Euro gets most of the headlines but the truth is that the Dollar has depreciated against most currencies in the world.
CNBC reports today.
The dollar fell to record lows against the euro and Swiss franc Tuesday, hit by weak U.S. housing data and speculation that Middle East oil exporters may ditch or revalue their dollar pegs to combat rising inflation.
The low-yielding yen also fell as a rebound in global stocks perked up demand for higher-yielding currencies, while the euro broke above $1.48 and was on track for its best daily gain against the greenback in a year.
“Every day, you can tabulate a small list of what’s ailing the dollar, and speculation about currency pegs and the housing data didn’t help at all,” said Stephen Malyon, senior currency strategist at Scotia Capital in Toronto. Read more:versus
We live in a bubble society 2007-11-20 12:32:03 The housing bubble was just another example of the greedy society we live in. Nobody really cared about building real long-time wealth. It is all about making a quick buck and getting out of the market before things fall apart.
The banks knew that this bubble was going to burst at some point but they didn’t do anything about it until it was too late. Now they are paying the price.
The regulators (ie Federal Reserve) watched the bubble getting bigger and bigger and did nothing about it. Now they are overreacting by giving banks guidelines for lending money and having to bring the dollar down to the floor. (more…)
California homes prices are down more than 10% from a year ago 2007-11-20 12:01:00 Study after study confirms what pretty much everybody knows, the real estate bubble in Calfifornia is bursting big time. Another new report was released yesterday by First American showing that California
is by far, the worst housing market in the country with home prices going down as much as 13.59% in Riverside. As expected, California, Florida, Nevada, and Arizona are the states that are hurting the most.
Here are the top worst five metropolitan areas according to the First American Loan Performance Home Price Index
Riverside-San Bernardino-Ontario, CA
-13.59%
Cape Coral-Fort Myers, FL
-11.49%
Las Vegas-Paradise, NV
-9.80%
Phoenix-Mesa-Scottsdale, AZ
-8.49%
Miami-Fort Lauderdale-Miami Beach, FL
-8.37%
Say “NO” to the subprime bailout 2007-11-30 11:01:41 As you guys probably already know, US Treasury Secretary Henry Paulson is about to broker a deal with financial institutions to put a freeze on subprime mortgages interest resets. The basic idea is to freeze the interest rates of those irresponsible borrowers who took on the teaser rates to buy more house than they could afford and they are now in trouble.
In many cases, some of these borrowers should be prosecuted because they actually lied on their loan applications in order to get a bigger loan than their incomes would justify. Instead, the government is now talking about helping them by bailing them out.
Their argument is that we don’t do something about it, the whole economy will suffer. Well, lower home prices are not necessarily a bad thing. They can bring down inflation and allow many other (more responsible) families to achieve their American Dream. They can also washout those speculators who have artificially increased home prices for all of us and they can teach ho
Collateral damage from foreclosures 2007-11-30 10:13:12 This is a sad story about how homeowners abandoning their houses after being foreclosed on are leaving their pets behind.
News 5 in Phoenix is reporting the following
Delinquent Homeowners Ditching Dogs
PHOENIX — Real estate agents around the Valley said they’re walking into foreclosed homes and finding abandoned pets.
One agent found a pooch named Sophie and another dog dicthed by their last owner.
“They were left in a back yard that was all dirt,” said Carrie Singer, a Phoenix-area real estate agent. “They were drinking water out of a paint bucket.”
The animals were discovered a few days ago at a foreclosed Phoenix home.
A mortgage research company recently said the Phoenix-Mesa metro region has the 15th highest rate of foreclosure activity among the nation’s largest 100 metropolitan areas. Read more:Collateral
“Helicopter Ben” ready to the rescue 2007-11-30 09:21:07 Here we go again, “helicopter Ben” Bernanke is out there talking about pumping more and more money into the economy to save his buddies in Wall Street. It seems he doesn’t care that the Dollar is being trashed and oil prices almost touched 100 dollars last week. It is all about bailing out people who took excessive risks and greedy financial institution that gave them money knowing that the Fed would come to their rescue at some point. Well, unfortunately, I don’t think there is much that Ben Bernanke can do to stop the inevitable: the housing market must correct itself and people and financial institutions will pay a price for their greed.
If that wasn’t enough, US Treasury Secretary Henry Paulson is trying to do something similar to what Arnold Schwarzenegger is trying to do in California asking banks to freeze interest rates for those subprime borrowers who took on those teaser rates. Imagine the kind of message that this is going to send to future borr Read more:Helicopter
, ready
Mortgage rates are not going down even as bond rates collapse 2007-11-28 10:46:13 They conforming loan rates (less than 417K) have come down a little bit over the last few weeks but Jumbo loan rates have not come down.
The short answer is “nobody wants to lend money”. Banks are having a hard time selling their mortgage backed securities to investors and therefore, they must charge higher rates to borrowers. That shows that it doesn’t matter that the Fed is lowering short term rates and that 10 year treasure bonds rates are at the lowest level in 2 years. The reality is that too many investors got burned this year and they are not willing to lend money unless they can get a very good rate for it. Read more:Mortgage
, collapse
Existing home sales down 20% from a year ago - National median home price down 5.1% from a year ago 2007-11-28 09:36:59 The National
Association of Realtors released the October existing home sales numbers and no surprise, the numbers are bad, very bad. But you couldn’t tell that but reading the spin from the Realtors in this news release.
The headline from the Realtors is “Mixed Results For October Existing-Home Sales; Mortgages Improving”. Oh really?
What mixed results are you talking about?. They say: “Single-family existing-home sales were stable in October while the condo sector was down”. Sales were stable from what? From last month? Yes. From a year ago? Not at all. Existing home sales were down 20.7% from a year ago. What is stable about that? Of course, I know that the Realtors are referring to the fact that existing single family home sales were unchanged from last month. Well, you can’t measure this market month to month, specially if there is not that much change. I better measure is comparing it to a year ago and if we look at that, down 20.7% is a horrib Read more:price
Housing bubble burst links of the day 2007-11-27 10:27:09 These are just some of the interesting articles the media publish today about the housing bust.
US Home Prices Plunged 4.5% in Third Quarter
Recession Worries Are On the Rise
O.C. foreclosures rising faster than in ‘90s Read more:Housing
, links
Foreclosures will hit US cities finances 2007-11-27 10:14:18 USA Today published a new report that came out today showing the impact of the mounting foreclosures on the economic situation of US cities.
WASHINGTON — Mounting home foreclosures will have “profound” effects on the economy next year, reducing job growth, bleeding billions of dollars in tax revenues and hitting consumer spending — but shouldn’t push the country into a recession, according to a report Tuesday.
Financial analysis firm Global Insight, in an study for the National Conference of Mayors, predicted at least 1.4 million homes will enter foreclosure next year. That will worsen the already sharp housing downturn, with ripple effects on hiring and spending.
Overall, businesses will create 524,000 fewer jobs next year. Tax receipts will fall by $6.6 billion in ten select states, the report predicts. Nearly 130 cities around the country will face sluggish growth, as economic activity expansion is reduced by more than a third in 65 metro areas alone. Read more:Foreclosures
, finances
Even Realtors say that home prices are going down in 2008 2007-11-27 10:02:25 Very good article in the Los Angeles Times shows you how most experts (including the chief economist for the National Association of Realtors
) believe that home prices will continue to fall in 2008.
No one knows how severe the slump will be, but economists and real estate experts interviewed by The Times, and who were willing to make predictions, said prices could fall 15% to 25% before turning back up.
Most said values would continue falling through at least next year, and some thought the market wouldn’t reverse course until 2010.
That could translate to big declines for home buyers who bought at the peak of the market, which various measures place in late 2006 or early 2007.
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S&P/Case-Schiller index shows 4.5% home price decline in 1 year 2007-11-27 08:48:54
More awful news for the collapsing housing market. S&P released their S&P/Case-Schiller index showing a drop in home price
s of 4.5% in just one year. It is important to remember that this index is a lot more accurate than the median home price released by the Realtors because it accounts for square footage and it compares prices for specific houses over time.
Look at same of the terrible numbers:
Tampa, FL is down 11.1% from a year ago
Miami, FL is down 10% from a year ago
Las Vegas, NV is down 9% from a year ago
Los Angeles, CA is down 7% from a year ago
Bush’s subprime bailout plan will only help a few borrowers 2007-12-07 11:38:46 This bailout plan is just a political move to show that the Bush administration cares about the homeowners problems and is doing something about it. But the truth is that this plan will only help a tiny minority of the subprime borrowers in trouble like AP reports this morning.
One caller to the hot line (1-888-995-HOPE) was told there would be “lots of hoops to jump through” to obtain the five-year freeze. The rate hold goes to the heart of the relief effort for people with subprime mortgages, which are loans offered to borrowers with tarnished credit or low incomes.
Even President Bush acknowledged the plan is “no perfect solution.” Treasury Secretary Henry Paulson said it was not a “silver bullet.”
(more…)
Details on Bush’s subprime bailout plan 2007-12-06 15:26:44 This is what we know so far about this bailout plan:
It will include a five-year freeze on interest rates for borrowers current with their monthly payments.
It excludes anyone more than 30 days late at the time the mortgage would be modified or anyone who has been more than 60 days late at any time within the previous 12 months.
It also only covers borrowers with adjustable rate mortgages (ARMs) resetting beginning in 2008
Pimco Manager opposes Bush’s mortgage bailout 2007-12-06 11:16:24 Thank god there are still some common sense people in Wall Street. Take a look at what Mark Kiesel, a portfolio manager at Pacific Investment Management says in CBNC.com
U.S. home prices may fall as much as 30 percent from the market’s peak and likely won’t trough until 2009 to 2010, according to Mark Kiesel, a portfolio manager at Pacific Investment Management.
“The question is, do we do it over a period of two to three years, or do we do it in 10?” Kiesel said in an interview. “Japan chose 10, and that didn’t work so well.”
“This reeks of moral hazard,” Kiesel said. “This is pure politics as we enter an election year, and it’s not going to help the problem. It’s going to prolong the bubble.”
Homes cannot be used as ATMs anymore 2007-12-06 10:03:40 There is a very well written article by J.W. Elphinstone, an AP Business Writer that talks about how many homeowners started losing their home way before foreclosures spiked and the credit cruch started. The Bush Administration would make you believe that the cause of the high rate of foreclosures is that rates are resetting to higher level and many people cannot afford the new mortgage rates.
The truth, as this article explains, is that during the boom years, many homeowners used their homes as ATMs and extracted every penny they could out of their equity. These homeowners will be in trouble regardless of what interest rate they pay.
According to the AP article
Homeowners started losing hold of their homes years before spiking foreclosures and the housing slump slammed the economy.
Piece by piece, some gave away their homes by tapping equity to take cash out to pay for cars, weddings and vacations. Others never owned one brick. During the country’s most recent housing boom, the Read more:Homes
National Bubble links of the day 2007-12-06 09:37:49 Mortgage foreclosures set a record in Q3
Dems on rate freeze: Not enough
Credit Crunch Super Fund May Be Half Planned Size: WSJ
Clinton Calls for 90-Day Halt to Subprime Foreclosures
Moody’s Sees Global Default Wave Ahead
Bush to Unveil Aid to Homeowners
Florida Investment Pool Reopens After Shutdown
Lenders Agree to Freeze Rates on Some Loans
Chapman economists predict recession for O.C. in 2008 Read more:National
, Bubble
, links
Home foreclosures at an all-time high 2007-12-06 09:25:12 Do you need any more evidence that the housing market is collapsing? Well, here it is….
AP via CNBC reports today
The Mortgage Bankers Association in its quarterly snapshot of the mortgage market released Thursday said that the percentage of all mortgages nationwide that started the foreclosure process jumped to a record high of 0.78 percent during the July-to-September period. That surpassed the previous high of 0.65 percent set in the prior quarter.
(more…)
Home prices might drop 30% in some areas before the housing crash is over 2007-12-06 09:09:11 Moody’s Economy.com released a report that paints a very grim picture of the future of the housing market in the US. This was reported by CNBC this morning.
On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economi
(more…) Read more:areas
, crash
Bush to present his bailout plan this Thursday 2007-12-05 11:43:33 This is the same guy who says Government should not interfere with the market. Well, here you go, Bush is now trying to protect his buddies from big losses if the housing market collapses.
According to AP via CNBC:
President Bush will outline Thursday
a plan to freeze mortgage rates for five years for many U.S. homeowners facing sharp interest-rate resets, an industry source said Wednesday.
The source, who is familiar with details of the plan, said it would cover subprime loans originated between Jan. 1, 2005, and July 31, 2007, with rates that are due to reset between Jan. 1 of next year and June or July of 2010.
Real Estate predictions for 2007 2007-12-04 20:47:21 Yes, this is not a typo. This is what the so called “experts” were predicting about the housing market for this year that is about to end. In particular, pay attention to what the realtor with the very long hair says. It’s hilarious. He predicts home prices to go up by 10% for 2007 when they actually went down nationally by at least 4.7% and they dropped much more in some bubble areas like California and Florida.
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Read more:Estate
, Real Estate
Largest drop in home prices in the last 25 years 2007-12-04 14:46:41 Yes, more bad news for the housing market. Now, it is Freddie Mac’s turn to report the horrible news. I remember Realtors saying “all Real Estate is local”. Well, it looks like this housing crash is national because it is the first time that home prices go down for the whole country since the Great Depression.
According to CNBC
U.S. home prices dropped the most in a quarter century in the three months to the end of September on an annualized basis as inventories, restrictive lending and a credit crunch yanked support from the market, a Freddie Mac index showed.
The Freddie Mac Conventional Mortgage Home Price Index Classic Series fell an annualized 1.3 percent last quarter, compared with appreciation of 0.5 percent in the second quarter, the No. 2 home funding company said in a statement.
Year-over-year, prices rose 1.9 percent, a sharp retreat from the 7.8 percent growth seen a year earlier, it said. Read more:Largest
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