Posted on 09/07/2007 5:37:40 AM PDT by Hydroshock
As the housing boom of the early part of this decade unwinds, the U.S. is facing a harsh new reality: Annual home foreclosures may surpass new-home sales from builders.
Nearly 2 million homeowners are expected to lose their houses this year and next as the mortgage mess becomes a painful experience for condo-flipping gamblers and struggling families alike.
The latest data from the Mortgage Bankers Association Thursday showed that the nation's foreclosure situation continues to worsen. A record number of mortgage holders -- 0.65% of all borrowers -- entered the foreclosure process in the second quarter. Loans already in the foreclosure process accounted for 1.4% of all mortgage loans outstanding at the end of the second quarter, slightly lower than the recent high in 2002.
Most of the foreclosure problems are stemming from homeowner payment shock tied to the trillions of dollars in adjustable-rate mortgages that are having their rates reset for the first time in 2007 and 2008.
(Excerpt) Read more at thestreet.com ...
The HARSH REALITY IS THIS SIMPLE: Chairman! Get off your rear end and cut those target rates 100 basis-point TODAY!!! Not Monday--TODAY!!!
Look at teh new employment numbers, it does nto look like we will be getting an inflationary rate cut. Good I say.
The Fed will lower rates no more than 50 basis points. This will be done as purely a cosmetic action to provide the illusion that the Fed cares. The reality is the Fed under both Greenspan and Bernanke was to deflate housing by raising interest rates. After a possible 25-50 basis point drop they will continue to hold rates steady for another year until there is no speculation left in the market. Lowering rates 100 basis points will not save any homeowner who has too much mortgage, nor will it save any contractor with too many spec houses on the market. This boom and bust cycle of housing was a constant during the 1970s.
That 2 million foreclosures number is CRAP. Junk science put out by a liberal anti-lender group. The lazy media have taken it as gospel. It irritates the hell out of me to see that number thrown out over and over again as fact. reminds me of the homeless debate back in the 80s when Mitch Snyder was running around yelling about a million homeless people.
The result of this mafia-like practice by lenders? When a customer in dire financial straits defaults with one lender, the practice of universal default, and the subsequent interest rate increases, can create a vicious cycle which can cause the customer to default everywhere and be forced into bankruptcy or foreclosure.
I want the economy to perform well for everyone too - but how is cutting rates going to change anything? There are so many who borrowed far, far more than they can rationally afford whether rates 1 or 2 or even 0 per cent. Further, prices are trending down down down.
***...and cut those target rates 100 basis-point TODAY...***
And that helps WHO? The flippers who hoped to MAKE money by buying into a housing scheme? And the wealthy South Americans who bought condos in Florida expecting to sell them for double the price in two years?
As for the honest buyers who were talked into thinking they could actually own their own home by unscrupulous loan companies, realators, and banks, the president has already asked for relief for those innocent buyers.
Cutting the rate means anyone who has managed to save money towards buying a home will wait years longer to purchase real estate, and THAT will cause a drug on the real estate market. And consider all the car buyers, and every other purchase which won’t happen if the rates are cut. It would be a downward spiral for the economy.
0.65% of all borrowers?
I’ll take that percentage of default all day long...
BTTT~~~
You old enough to remember the first Bush? The first Clinton?
The media can talk America into recessions and depression. Cutting those rates will thwart such schemes.
***0.65% of all borrowers?
I’ll take that percentage of default all day long...***
Absolutely! And that’s probably an inflated number.
AMERICANS!!! The drive-by media is talking America into a recession in order to get the second Clinton back into power.Cutting rates will keep Americans employed and putting dinner on their tables.
http://seekingalpha.com/article/46390-is-a-perfect-storm-about-to-hit-the-housing-market
http://seekingalpha.com/article/46644-negative-amortization-and-interest-only-the-next-mortgage-bomb
Around .5% is what we've read.
The "subprime crisis" sure has an aroma of smoke'n'mirrors......
***Cutting rates will keep Americans employed and putting dinner on their tables.***
Cutting rates on SAVING (which is what a rate cut will do) will cut the amount Americans have to spend. Cutting rates on CREDIT CARDS will give Americans more money to spend.
You’ll have to excuse me. I have to take my son in for x-rays to see if he has to have knee replacement. Proceed at your will.
Most of the foreclosures are on second or investor homes, not primary residences.
The new reality - you still need to pay your bills and you still need to live within your means - or you stay on welfare.
Who knew people could not afford $500,000 houses working as Convenience store clerks and Walmart employees? /sarcasm
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