http://www.bloodhoundrealty.com/BloodhoundBlog/?p=1786

I love graphs.

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I found an article that explained the issue but forget where it is, google can be your friend here. The media has absolutely no clue about what is going on, a local disc jockey morning talk show host was talking about the "predatory lending ect ect" and went as far as naming one of the most unethical grindhouse mortgage brokers I can think of.

The sub-prime crisis is not really a crisis, 20% are losing their homes ---- thats bad but what about the other 80% that own a home which would not be owning anything otherwise?

The problem we are having is margin calls on conforming and non conforming notes due falling real estate values.

The people that are going to get in the ass are mortgages over the $417,000 fannie freddie lending limit despite good credit lower ltv's ect, many of them use the ARM programs and refi every few yearstoleverage their money.........guess what happens now? the money that they had @ 6% is going to adjust to 11% or they refi @ 8.5%. I warned my clients repeatedly and most of them took my advice and are in good low rate i/o's but the people that didn't are screwed because I'm the only one that they can borrow from due to diverified programs....

http://www.marketwatch.com/news/story/luminent-slumps-75-after-being/story.aspx?guid=%7B581AE629-0512-4374-81E7-4906FBA48B5B%7D

http://news.google.com/news?q=mortgage+crisis&ie=utf-8&oe=utf-8&rls=org.mozilla:en-USfficial&client=firefox-a&um=1&sa=N&tab=wn

Six Questions Consumers Are Asking About The Mortgage Market
August 10, 2007: 04:13 PM EST

It has been an eventful couple of weeks for the mortgage industry, and it is easy to see why more than a few consumers watching at home could be confused, wondering what the developments mean for their own finances.
As a result, they are asking their brokers and lenders questions they have never asked before, said Matt Vernon, retail sales executive for Bank of America (BAC).
Thanks to a number of mortgage lenders going bankrupt in recent weeks, a common query these days is simply: "Are you still out there financing loans?" Vernon said.
As uncertainty brews in the secondary-mortgage market, consumers also are becoming students on how the process of financing a home-loan works.
"Many of my clients are reading the news but not understanding how it directly relates to them personally," said Dan Green, a certified mortgage planner specialist in Chicago and author of the blog "The Mortgage Reports."
Consequently, Green has been spending more time with his clients discussing the history of mortgage lending and explaining why Freddie Mac (FRE) and Fannie Mae (FNM) exist.
Below are some of the mortgage questions on consumers' minds these days, based on interviews with industry professionals, and postings on Web logs and online discussions.
Will I still be able to get a mortgage?
One of the widest held misconceptions Alex Stenback has been hearing is the assumption that the current problems will have a negative impact across the entire mortgage spectrum. Stenback is a mortgage banker in Minneapolis and St. Paul, Minn., and author of the blog "Behind the Mortgage."
So far, borrowers with decent credit histories and the ability to document their income - "the majority of the home-buying public" - aren't being shut out from getting a loan, he said.
"Home-loan applications are still being accepted, and home loans are still being approved. The difference is that there are fewer choices," Green said in an email interview.
What is getting harder to come by is Alt-A mortgages, which often don't require income documentation. And jumbo loans - those that exceed the $417,000 conforming limit and thus can't be purchased by Freddie Mac and Fannie Mae - are getting more expensive.
"Credit cycles boom and bust over time. As soon as Wall Street figures out the current risk-reward model, (more) mortgage products will be available again," Green said.
Can I still get a no-down payment loan?
People tend to incorrectly group no-down payment mortgages together with subprime loans, Stenback said. But there are still programs that can get prime borrowers into mortgages with little or no money down to begin with, he added.
"The perception is you need money down and have to wait until you save more," he said. "It's not the case. It may be a good idea, but you don't have to."
However, no-down payment loans are now requiring "strong credit, verifiable W- 2 income and healthy assets in reserve," Green said. "Homeowners whose tax returns include large write-offs - including small business owners and 1099 employees - will have a much harder time qualifying for 100% financing."
My mortgage lender declared bankruptcy. What do I do?
Don't fret - and plan to keep making payments, said David Podgursky, a Florida-based mortgage broker and author of the "The Mortgage Go To Guy" blog.
"In fact, get ready to make your September payment as scheduled. Just keep your eyes open for your letter regarding who will be servicing your loan from now on," he wrote on his blog.
For borrowers who had loans in process at a company that is facing bankruptcy, it is important to get a new loan application started right away with another firm, Green said.
Should I be concerned if I currently have a subprime mortgage?
The above question was posed by a Denver-based real-estate agent on a Trulia.com discussion board. The consensus from the several real-estate professionals answering the question was a qualified "no."
Podgursky chimed in with this comment: "Subprime loans are not the end of the world...unless you are at the end of the term and the new adjusted payment will hurt you financially."
The holders of subprime adjustable-rate mortgages need to be aware of when the initial, lower rate on the loan will expire. By looking ahead - preferably a year in advance of the reset date - borrowers can improve their credit and consider their options so that they aren't saddled with monthly payments they can't afford, Podgursky said in telephone interview.
My certificate of deposit is from a lender that has made subprime loans. Is my money safe?
It's as safe as any other financial investment insured by the government.
Certificates of deposit are covered by FDIC insurance, as Daniel Weidman, first vice president of corporate communications for Countrywide Financial Corp. (CFC), pointed out. (Read more about FDIC coverage limits at the Countrywide Web site.)
"But from time to time, our customers inquire about this and other elements of their savings program, whether it's a CD, money market or online savings account," he said in an email.
Is now a good time to buy a home?
Every local real-estate market is unique, so the answer to that question will vary.
However, many areas throughout the country are buyer's markets, where those on the buyer's side of the table have the upper hand in negotiations, Vernon said.
The key theme, he said, is that while it may be a different mortgage landscape, it still can be a good market in which to buy - as long as people are buying for the right reasons and are paired with loans that ensure they will be able to keep the home in the future.

my parents are about to work out a mortgage for the house we are in now... with the rich relatives giving them the down payment... they totally need to not be screwed over

you know who to call.

howitzer or hatty.. I dont know who to call... autoway? dan marino?

Call Jeff. He seems to know what he is doing, I'm looking forward to doing business with him.

Anyway Jeff does that $417k limit very by region? Because the average sales price in my city last year was like $430k. $500k-$1M loans are pretty commen, lots of 30 year fixed. No one seems to have a problem.

So far knock on wood all my clients have been able to get good funding.

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http://www.fanniemae.com/aboutfm/loanlimits.jhtml

Jumbo's went in the pisser on Thursday, its short term though they will be back in line in the next couple months. 7 year ARM pricing is still acceptable but 30 your fixed jumbo pricing is plain silly. My core market is Jumbo loans and I'm sort of a super hero right now for squaring them away last month, some asked me to do it, others I did it myself and told them I already did it when they called in panic mode, I can't count how many cases of beer, wine and dinners I have been promised.

Interesting. Any thoughts on when this will all settle down? I'm thinking next year with the market starting to pick up a bit in 2009.

Inventory in my city is slightly down, we have 361 active residential listings. I'd still like to see that number in the mid 200's. But it was creeping up to 400, and now has reversed.

__________________
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1969 280SE
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2007 Tiara 3200

All of our talking heads say 2 months-2 years realistically Jumbos not in high risk states will be back to normal next month.

Number of listings going down that is best case scenario for you guys thats what bidding wars are made of............now thats FUN!

Bidding wars still take place if the house is priced right. My buyers just called me and are hot to see a house that just came on the market, on July 25. Its priced right and I told them they better put an offer on it if they want it. I expect it to be under contract in the next 2 weeks, if not sooner.

Whats driving the inventory up, are the homeowners that think its 2004. They are asking crazy prices and its not uncommen to see homes that have been for sale for 18 months.

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Donald Trump - Bah Humbug! Buy, Buy, Buy!

Posted on Aug 10th, 2007


Jack Miller submits: Donald Trump was just on CNBC saying that he longs for the days of Alan Greenspan. He believes that Ben Bernanke has held short rates too high too long. He went on to say that Ben should hold an emergency meeting of the FOMC to cut interest rates. He believes that the coming recession could be one of the worst in a long time.
The President of the Federal Reserve Bank of Richmond wrote a nice rebuttal to Trump's tirade. It was published as the President's message in the "RegionalFocus," spring of 2007. The summary point of the article was, "Monetary policy works best when it allows the real economy to respond appropriately to economic fundamentals, rather than attempts to insulate the economy from shocks by tolerating swings in inflation."
Ben could have lowered rates to "fix" the sub-prime problem. This would have been like castrating a dog to prevent breeding. Ben has injected reserves into the system so that those who are running scared can hoard all the cash they want at relatively low market returns. Neither the fed funds rate nor the discount rate was changed. In a few more months, Ben will be getting high praise for standing firm in order to bring inflation expectations to very attractive levels.
In the meantime, "talking heads" will continue to make "much to do about nothing."
I like optimistic people. A few of my favorite optimistic friends are Don Hayes, Brian Wesbury, Jerry Bowyer and James Pethokowkis. This morning Don Hayes wrote that the "common sense" of the talking heads is "short term thinking common sense." Their "wise" council during turbulent times is to "raise cash, get defensive, and stress quality." He notes that he learned a lesson in 1974 when long term common sense was to BUY, BUY, BUY, while others were using short term common sense.
Jerry Bowyer wrote yesterday about the "sub-prime mess." He notes that of the 44 million mortgages in America, 14% are sub-prime. Of those, 13% are currently at least one payment behind, however, the large majority of the late payers are still paying and many are working with lenders to restructure payments. The bottom line is that there are about 250,000 mortgages that are moving to foreclosure. The total value of these loans is about $7 billion. If these houses are worth 30% less than what is owed, the total money lost will be in the neighborhood of $2B. Americans have net worth of $53 trillion dollars. The "total hit" will be in the neighborhood of .003% of value. Oh, my! Lions and tigers and bears!
The good news is that the baby gets thrown out with the bath water during times like these. This is good news because smart investors can pick up babies on the cheap during times like these.
IS THE PRICE PRESSURE COMING OFF THE OIL MARKET? What if the current weakness in oil were to persist? Based on current market prices, the price of gasoline will be down to $2.50 within a week or two. Based on current jet fuel prices, Continental Airlines, Inc. (CAL) will save about $360 million dollars on fuel over the next year (about $3.24 per diluted share). Is the "roll over" or "rotation" finally here?
Over the past 21 days, the XAL (airline index) has fallen 8.99%. During the same time the XOI, oil index, has fallen 13.24%, the XBD, broker dealer index, has fallen 14.16% and the BKS, bank stock index, has fallen 7.88%. This sure looks like a classical mid cycle rotation, but as always, we will not know for sure until after it is well underway. If Big Ben had "chickened out" and cut rates, then I would have to say that the price of commodities might take off again. However, Ben has been as solid as a rock. He has fed the markets enough cash to allow the markets to work. He has not driven down the price of money, thus he has avoided stoking inflation and he is thus setting us up for a very strong second half cycle.
The second half of the business cycle is the time of small business expansion. The first half of the cycle is all about recovery from the worst of the prior downturn. During the second half, those businesses that have done well during the recovery will borrow to expand. Business lending is the mother's milk of profits for the average bank. During the past few years, the big investment banks (broker dealers) have had a fun ride. In recent days, they have been routed. Again, the entire index is off 14.16% during the past 21 days. Take advantage of the turbulent markets to add money to your accounts. It is time to do some BUYING!
Market Psychology
A major reason to buy now is because market psychology indicators are screaming BUY, BUY, BUY. I will not go over the indicators in detail, but they show that emotional, trend traders who typically have a lot of short term fun at major turns are as "tilted" as they have been in a long while. These traders make money for a while and then lose their collective shirts when the new trend takes off.
Brian Wesbury wrote a nice piece for the Wall Street Journal yesterday. In it, he pointed out that while the overwhelming majority of professional forecasters see no recession soon, the majority of Americans believe we are already in a recession. Indeed, the public is fed such a rich diet of gloom and doom by the media that they hold a negative bias about the state of the world. Even a majority of the 64% who say they have personally never been better off, say that the world is falling apart.
Brian makes the excellent point that even the shows that "present the fair and balanced" point of view, tend to always have a "bull" and a "bear" debate. The more appropriate debate should often be how to make money now, versus am I going to win or lose. Market investors who stick to the task at hand consistently make money.
Making money this week, month or year is far more doubtful than making money this decade. We are living through exciting times.
James Pethokowkis is correct that there is a risk that we will be pulled off course by vote-hungry politicians. Yesterday, I enjoyed his comments about the "broken window fallacy" trap that Hillary Clinton is willing to lead us into. In this case, Hillary wants to spend a lot of money to "fix" global warming. She talks about a "win-win" scenario. Ironically, she recently voted against the trade deal with Columbia that would have provided a "win-win-win." In her version of a win-win, she would tax Americans directly and indirectly to reduce global warming. She thinks that all the government spending to fix the problem would create lots of jobs and she is correct on this point. The problem is that the jobs thus created would not be equal to the jobs created if the free market were allowed to "fix" the same problem.
HOW MANY TIMES DO WE NEED TO LEARN THE LESSON THAT GOVERNMENT IS NOT AN EFFICIENT CREATOR OF JOBS!
Big Businesses and Politicians
Soon, politicians will attempt to pass laws to "fix" the energy "crisis." The most common "democrat" solution is a cap and trade system for pollution. This is nothing more than another opportunity for big business to win special favors by spending big bucks to lobby politicians.
If we seriously want to curtail energy use, a tax increase on fuel usage should be passed. It should be offset by an equal tax credit for health care or reduced income taxes. NO MORE BIG GOVERNMENT. WE ALREADY HAVE DEMOCRAT AND REPUBLICAN BRIDGES TO NOWHERE!
Got to run. Bye, buy, buy . . . .

I have a sense that your data is flawed and the source is biased.

If a company like AHM can be taken out within eight weeks due to subprime mortgages, all the BS that you throw up to show that the problem is "miniscule" is exactly that............bull$hit.

The problem is larger than either of you realize.

AHM went down because of margin calls NOT loan performance they went bankrupt because they could not fund NEW loans because of MARGIN calls due a DECLINING RE portfolio. Impac made its margin calls Countrywide made its calls and does more ALT-A than all of the above.

Why don't you try reading some of the stuff yourself? Not that it will matter but give it a whirl or (and I know you won't) provide any information to support your position.

The point is that if a company like AHM can to out so fast........and so easily...........you ought to reserve judgment as to how big this thing is going to get.........

I don't really care how AHM went out........if it can go that fast........others can follow for the same reasons.