Posted on 01/06/2008 7:33:33 PM PST by AdamSelene235
They don't know it, but taxpayers stand to lose billions as the housing bubble bursts. And in a bipartisan effort to "do something" to save the housing market, President Bush and the Democratic Congress appear set to put taxpayers on the hook for billions more. .... Some saw this coming, including presidential candidate Ron Paul. As far back as 2002, Mr. Paul - whose candidacy I'm not actively supporting - predicted the Federal Reserve would blow up the housing bubble. ....... Another Paul prediction, that Fannie and Freddie will go bust, forcing a taxpayer bailout, remains controversial because few think the housing crash could be that bad. ..... In a recent Securities and Exchange Commission filing, Fannie noted that it backs $2.6 trillion worth of single-family home loans. Underneath this pile of debt, the company has only $42 billion of capital. If the value of mortgages backing Fannie's debt falls a few percentage points, the company's capital could be wiped out. And because of the implicit government guarantee backing Fannie's debt, American taxpayers would be on the hook for whatever debt Fannie couldn't cover.
(Excerpt) Read more at baltimoresun.com ...
Youre all crackpots and nuts and dead toast - nutty dead toast in cracked pots. Or is it cracked nuts in dead pots.
The World Is Coming To An End!! Hurry - man the life boats!!!
Anybody with half a brain knows that "booms" don't last forever. Some got in too late and got burned. Tough noogies.
An op-ed from the Sun? I live in Baltimore. You might just be posting on wrong site.
Those of us that have been sounding the alarm bells have been castigated here ,, and one has been banned ... the astounding amount of leverage is the issue ,, sure a doubling of bad debt is a problem ... but when you have one leveraged set of books being used as colatteral for another leveraged set of books you’ve got to see that the carousel is spinning wildly and the party was allowed (and encouraged by the administration) for WAY too long... I have seen 1 house sell for $100k (30%) below 2005 prices and know of 2 more priced at bigger discounts that aren’t getting nibbles. This is not a slow market ,,, there are plenty of reasonable “ask” quotes but no “bid” quotes to pair with ...
Baltimore Sun op-ed. Florida real estate was ridiculous two years ago. I was there looking.
“The World Is Coming To An End...”
...as we know it.
This means change, renewal
Some saw this coming, including presidential candidate Ron Paul. As far back as 2002, Mr. Paul - whose candidacy I’m not actively supporting - predicted the Federal Reserve would blow up the housing bubble. ....... Another Paul prediction, that Fannie and Freddie will go bust, forcing a taxpayer bailout, remains controversial because few think the housing crash could be that bad. .....
***Well, maybe Ron Paul isn’t as nuts as he’s been made out to be. Just a little bit nuts.
The difference between a visionary and a crackpot is that the visionary turns out to be right. ~Bob Metcalfe, founder of 3Com & one of the inventors of Ethernet
Women and children hardest hit...
Look. Even if *EVERY* subprime mortgage was foreclosed on, that is only a 2.5% of all mortgages in existence. Meaning, 97.5% of all mortgages in the US are *being paid on* and are not in trouble.
So please chill on the alarms because some 100k house out there can’t be sold for a 30% off. Maybe it was complete dump that was originally bought for 50k. So if it’s down 50k from 150k that’s still more than the origianal price (perhaps).
okay....where’s the SKY IS FALLING picture.....sheesh.
The problems aren’t just in subprime, they’re also in alt-A and prime, where people borrowed more than they could afford using stupid mortgages like option ARMS and IO loans.
Lots of people in stupid mortgages went in with much higher than subprime FICO scores.
2008 is going to be very ugly as more of those ARMS reset and people can’t sell and/or can’t refinance because they’re now upside down.
LQ
From the description by Neidermeyer, the $100000 was the discount from the 2005 selling price. This would mean that what was a $333,000 house cannot now be sold for $233,000.
Fannie and Freddie are required by law to only buy conforming mortgages. Either a substantial down payment, or mortgage insurance, is part of the package.
This is why the subprime loans were packaged and sold to suckers.
“Those of us that have been sounding the alarm bells have been castigated here ,, and one has been banned ... the astounding amount of leverage is the issue ,, sure a doubling of bad debt is a problem ... but when you have one leveraged set of books being used as colatteral for another leveraged set of books you’ve got to see that the carousel is spinning wildly and the party was allowed (and encouraged by the administration) for WAY too long”
Not to derail the thread but this is a perfect description of our government finances as well.
I am against a bail-out. If companies and individuals have no consequences for poor financial practices what is to stop them from doing it again?
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