Report: 20% of Home Mortgages Were Underwater in December

This information is really scary. This information is already over two months old! Consider what has happened since then to real estate values! We are in very precarious times...

Did they have flood insurance? Thanks, I’ll be here all week. Try the veal, and don’t forget to tip your waitress!

100% of new car puchases are underwater at the moment of purchase and have been since Henry Ford invented the assembly line.

And yet, somehow, we survived.

A lot of the growth in prices was bogus, and this fake growth led to enormous misallocations and malinvestment. The amount of damage done by government distortions within the housing market, compounded by faulty risk analysis and compounded several times over via leveraging, is staggering.

WSJ take on it - note the title...
http://www.freerepublic.com/focus/f-news/2199192/posts

We are on the precipice of an economic disaster that may very well end up equaling the thirties. No wonder Washington is just plain panicking. I don’t think they can throw enough money at this to ride out the storm.

At least now we have a little better understanding of what they are trying to stave off. Literally a total collapse of the economy. The price deflation going on is incredible and that is with huge, unprecedented (to my knowledge) increases in money supply. Look at what is happening in the auto industry as well, and even energy. Demand is falling sharply.

I’m sure Obama is dancing a jig in the whitehouse over this infromation. Could just imagine Rahm’s ear to ear grin when he delivered this little jewel? He must have jumped two stairs at a time to get up to the Oval office.

The world of finance loves metaphors based on water and plumbing.

The price deflation going on is incredible and that is with huge, unprecedented (to my knowledge) increases in money supply. Look at what is happening in the auto industry as well, and even energy. Demand is falling sharply.

I don't believe the money has made it into the system yet. If it ever does. Many are predicting inflation, perhaps hyperinflation, after this cycle of deflation is over. Companies aren't producing as many things because they are overstocked, as witnessed by falling prices. IF the money Obama is printing hits the streets and at the same time, inventories are reduced, we could have inflation.

Just one scenario that's possible.

I feel like such a chump. I could have bought a house 3x more than I could afford, too. Then I’d get bailed out to continue living in it. What a sucker I am.

http://www.instantrimshot.com/

I disagree, I believe they are trying to demolish the economy, the economic plan helps no one, it is designed to drive the final blow

At least now we have a little better understanding of what they are trying to stave off.

Stave off? Someone needs to tell Mr Obama.

3/1/2009 "Obama administration officials had indicated last week that the U.S. was preparing to pledge $900 million in assistance for Gaza"

Yeah, that's going to help......

Little surprise when you consider all the refinancing adverts that bombarded the nation 24x7.

And here's a contributing factor I've heard little about ... remember the death of the non-mortgage interest deduction? How many people rolled their credit cards, their cars, new home furnishings, etc. into a mortgage that made the whole shebang tax deductible again???

Well, compare the roller family to the one next door who kept their lines of credit separate and that second family probably isn't under water on the house.

IOW, how much of this crisis is artificial, what healthy portion is self-imposed, and why should I be doing anything about it???

Some of the worst financial mistakes anyone can make is:

Confusing equity with debt.

Believing that when you take a loan out to buy real estate, you now own it, as oppossed to when you were renting. The bank is the primary owner till you’ve paid off the principle amount or re-sell it to pay off what debt you still owe them. You’ve simply moved from a rent situation, to a rent-to-own situation.

That when an investment has gone up in value, that your net worth has as well. Your net worth hasn’t changed until you realize either a loss or a profit on that investment.

That real estate never goes down in value. All commodity values are cyclical in free market environments based on supply and demand, including real estate.

Yeah ... who is the fool now? You and me, paying taxes to support the extravance of others.

And you still don’t own it after it’s paid off.

The government can seize it, quickly through eminent domain or slowly through tax hikes.

They can restrict its use, lowering its value.

I’m seeing 8.3 million households walking away from their mortgages, leaving the banks to try to sell the houses.

Last Flight 666 to Hell has taken-off (1), no more stopovers, as predicted by End Times Prophet, two weeks ago. (2)

Notes
(1) Last Flight 666 to Hell - no more stopovers
http://chart.bigcharts.com/custom/usatoday-com/marketwatch-ss-ii.img?symb=CRUDE

(2) http://illuminati-overtime.blogspot.com/2009/02/financial-armageddon-attackers-running.html

Check out this slide show at the bottom... Ed Pinto’s slides it's now shown that Freddie and Fannie misrepresented their subprime loans for at least several years.

How Serious Is the Mortgage Problem That Will Confront President Obama?

Published

by

Steve Darden

on 3/4/2009

in Financial Crisis(t)

. 0 Comments

This AEI conference was held January 16, 2009 - seems like a year ago. But the information remains current and very useful — in an arena of opaqueness shrouded in darkness. The stench escaping out of Fannie and Freddie is started to be smelled here in Australia.

Since the mortgage meltdown began in the summer of 2007, many observers have commented that government policy has seemed to lag events. Predictions about the scope of the problems in the housing and mortgage markets, and particularly how they might affect the health of the financial system, have consistently been too optimistic. One of the reasons for this is the difficulty of obtaining accurate information, even for policymakers. Fannie and Freddie, for example, have been making subprime or other nontraditional loans for at least a decade but reporting them as prime loans. These loans total approximately $1.6 trillion. As a result, 44 percent of all loans, or a total of 25 million loans, are outstanding subprime and other nontraditional loans–more than double what anyone understood at the beginning of the mortgage market collapse. Edward Pinto, a former chief credit officer for Fannie Mae, has done an extensive study of the scope of the mortgage problem and will report at this conference on what President Barack Obama will confront when he takes office on January 20.

You can access Ed Pinto’s slides here — you will be rewarded with data you’ve probably not seen elsewhere — unless you work inside Fannie or Freddie.