Posted on 12/15/2008 10:35:10 AM PST by Lorianne
When it comes to bailouts of American business, Barney Frank and the Congress may be just getting started. Nearly two trillion tax dollars have been shoveled into the hole that Wall Street dug and people wonder where the bottom is.
As correspondent Scott Pelley reports, it turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. In the executive suites of Wall Street and Washington, you're beginning to hear alarm about a new wave of mortgages with strange names that are about to become all too familiar. If you thought sub-primes were insanely reckless wait until you hear what's coming.
(Excerpt) Read more at cbsnews.com ...
The British economy is facing the worst recession in its history, Tessa Jowell has admitted.
By Robert Winnett, Deputy Political Editor
Last Updated: 7:01PM GMT 15 Dec 2008
Tessa Jowell, the Olympics Minister, said the forthcoming downturn was expected to be "deeper than any that we have known".
The admission is the most pessimistic forecast so far issued by a Government minister. It raises the spectre of a recession lasting throughout 2009 and part of 2010 - worse than the recessions of the early 1990s and 1980s.
Alistair Darling, the Chancellor, has insisted that the British economy will begin recovering next summer. However, his prediction is now regarded as over-optimistic by many independent experts.
The Conservatives described Miss Jowell's comments as a "stunning admission" of the Government's true position on the scale of the economic downturn. The remarks suggest that the Government are considering the prospect of Britain facing a 1930s-style depression rather than a traditional recession.
[snip]
C-ARM BIO DP
Capped ARM Bailout Interest Only Delayed Payments
In my immediate area, they have been converting detached garages into a small two room living area. Most have a laundry so gas and water, hot and cold, is already there. They are suffering and it is sad, but I'm sure that they are possible relatives and have to combine income to just survive.
Except that is not, and never was their only options. We are primarily dealing with Sovereign Wealth funds from those states, and that means we are dealing more or less directly with their governments. Governments which do more than throw shoes at us.
The Pacific Rim governments for example have industrial ambitions of supplanting the U.S., and eroding our own capabilities...in straight out "win-lose" terms.
Those policies have not changed.
If they were looking for value, they could have bought industrial products from the U.S. at firesale prices. Cars, planes, trains, etc. But that is 180-degrees from their trade creed, which imposes a five-to-one trade deficit on the U.S. A deficit which they would preserve at all costs. They would sooner burn that money that see the U.S. industrial base helped by their buying U.S. product in any semblance of economic equilibrium.
By buying US securities, which are still evaporating before their eyes, they do increase US indebtedness to them. So that when they stop subsidizing the US spend-thrift government...they will be especially powerful relative to us when that rug is pulled out from under our feet.
But if they can afford the current payment (or a restructured payment) and intend to stay put, the value always comes back and exceeds the purchase price. It is only a matter of time; it can be just a few years or it can take a decade or more.
Interesting comparison. Since the worst thing foreclosure can lead to is a bad mark on your credit rating that "only" lasts for ten years, then maybe everyone out there should be making some sort of calculation.
If you can't get back to square one within ten years, then cut your losses, take the credit hit, and wait out the ten years in a cheaper apartment.
Our community hasn’t taken much of a hit yet. Tax bills are averaged from the previous 3 years, so they won’t be decreasing in our town this coming year.
1) A lot of the homes that were purchased near the top end of the bubble were never occupied: speculators buying multiple investment properties that they didn't have time to flip.
2) People who can no longer afford their homes are not moving into rental homes: they are moving into smaller apartments, or sharing with roommates, or moving back in with family.
Even if we eliminated homelessness there is probably an oversupply of places to live. We lost some illegals over the past couple years that were filling up some of the places as well.
Those governments have absolutely NO leverage with us at all. They are in the same position as a bank whose largest business checking customer also has the bank’s largest mortgage. If this company (i.e., the U.S.) “goes out of business,” the bank is screwed on two fronts.
I don't see anyone going out and bulldozing newly-built homes to the ground, so I suspect there are plenty of prospective buyers out there at the right price.
It certainly does suck, but it may create a buying opportunity for you. Open a new savings account and escrow the rent money you would have been paying. The bank usually buys back its own property at the auction. Then they assign a broker to inspect and give an opinion of value, and get an appraisal as well. They always ask the broker to determine if the non-owning occupant is interested in purchasing the property.
Go to your bank or a mortgage banker for a qualification and preapproval now, so you are set to go when the opportunity arises.
In some areas, they maybe damaged beyond repair or devalued 80 to 90%. I don't know how wide spread it is, but I've heard of whole subdivisions being foreclosed and stripped out in the Southwest..
“We’re renting right now while we watch what is happening to the market. Just yesterday we found a notice posted on the door that the owner has defaulted and the property will be sold at auction in March. That sucks.”
I wonder what the landlord was doing with your rent. I was almost in the same boat. My landlord owed 15 homes. The bank took away all but three, and my house is still his. But he told nobody and my neighbor got the notice. It’s BS.
Other than Asia and the like are in it just as deep as we are and are even more likely to tank further that we do.
and a third.
That's always a question in times like these...do I do the smart thing, or the right thing?
It is certainly not a 1 to 1 ratio for occupying houses.
In my area, there have been lots of lay-offs and plant closures,
and there are few prospects for any new jobs.
The company I work for is laying off staff at an alarming rate.
The demand for homes has decreased, and there are many families
that are beginning to “double up”.
My 60 year old brother is moving in with our elderly mother.
My 25 year old son, his wife, and my grandkids have moved in with me.
If you want to move to find work somewhere else,
you can not sell your existing home
because there are no buyers anywhere in sight.
There are many homes in my area that just stand empty.
The prudent guys in the '20's who got out before the crash, had a saying: "when you start getting hot stock tips from the kid operating the elevator, it's time to get out." Maybe when some nitwit acupuncturist starts to think she's a real estate magnate, it's a sign that the bubble is about to burst.
Of course we used to have a bunch of boomers around here who insisted that a housing bubble was impossible. Haven't heard much out of them lately...wonder where they all went.
One kind of transaction is the city buying distressed vacant properties from the bank and tearing them down. Going on in midwest cities with federal help. Most such properties are magnets for thieves who steal anything from the aluminum siding to the doors off the doorways, not to mention the copper wiring and plumbing of course. Ironically, the recession has so depressed the value of scrap metal that the crime wave is easing off...
http://www.housingwire.com/2008/12/15/fitch-alt-a-mortgages-deteriorating-more-rapidly-than-expected/
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