Because the upswing was WAY to much.........
Ok, perhaps the "correction/credit crisis" just came to an end in the last few months.........and the next few months will be a direct result of the credit crisis.
The point is, we still have 10-20% downward movement in prices on the near horizon.
THE NEXT WAVE WILL BE COMING SOON IF YOU BELIEVE THIS ARTICLE...did not C/P it all to continue visit link...
http://www.chron.com/disp/story.mpl/headline/biz/5961476.html
n the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job and (no) assets."
The nation's struggling housing market, already awash in subprime foreclosures, is getting hit with a second wave of losses, as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for two more years.
"Those loans are going to perform very badly," said Thomas Lawler, a Virginia housing economist. "They¹re heavily concentrated in states where home prices are plummeting," such as California, Florida, Nevada and Arizona.
Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are demanding full documentation of income and assets.
Losses on liar loans could total $100 billion, according to Moody's Economy.com. That's on top of the $400 billion in expected losses from subprime loans. Fannie Mae and Freddie Mac, the nation's largest buyers and backers of mortgages, lost a combined $3.1 billion between April and June.
Half of their credit losses came from sour liar loans, which are officially called Alternative-A loans (Alt-A for short) because they are seen as a step below A-credit, or prime, borrowers.
Many of the lenders that specialized in such loans are defunct ‹ banks such as American Home Mortgage, Bear Stearns and IndyMac Bank. More lenders may follow. The mortgage bankers and brokers who survived were more cautious but acknowledge they too were swept up in the housing hysteria to some extent.
"Everybody drank the Kool-Aid," said David Zugheri, co-founder of Texas-based lender First Houston Mortgage. They knew if they didn't give the borrowers the loans they wanted, the borrower "could go down the street and get that loan somewhere else."
The loans were also immensely profitable for the mortgage industry because they carried higher fees and higher interest rates. A broker who signed up a borrower for a liar loan could reap as much as $15,000 in fees for a $300,000 loan. Traditional lending is far less lucrative, netting brokers $2,000 to $4,000 in fees for a fixed-rate loan.
During the housing boom, liar loans were especially popular among investors seeking to flip properties quickly. They were also commonly paired with "interest-only" features that allowed borrowers to pay just the interest on the debt and none of the principal for the first several years.
Even riskier were "pick-a-payment," or option ARM, loans — adjustable-rate mortgages that gave borrowers the choice to defer some of their interest payments and add them to the principal.
While some borrowers were aware of their risky features and used them to gamble on their home's value or pull out money for vacations, others like Salvatore Fucile insist they were victims of predatory lending.
CONT'....
http://www.chron.com/disp/story.mpl/headline/biz/5961476.html
n the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job and (no) assets."
The nation's struggling housing market, already awash in subprime foreclosures, is getting hit with a second wave of losses, as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for two more years.
"Those loans are going to perform very badly," said Thomas Lawler, a Virginia housing economist. "They¹re heavily concentrated in states where home prices are plummeting," such as California, Florida, Nevada and Arizona.
Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are demanding full documentation of income and assets.
Losses on liar loans could total $100 billion, according to Moody's Economy.com. That's on top of the $400 billion in expected losses from subprime loans. Fannie Mae and Freddie Mac, the nation's largest buyers and backers of mortgages, lost a combined $3.1 billion between April and June.
Half of their credit losses came from sour liar loans, which are officially called Alternative-A loans (Alt-A for short) because they are seen as a step below A-credit, or prime, borrowers.
Many of the lenders that specialized in such loans are defunct ‹ banks such as American Home Mortgage, Bear Stearns and IndyMac Bank. More lenders may follow. The mortgage bankers and brokers who survived were more cautious but acknowledge they too were swept up in the housing hysteria to some extent.
"Everybody drank the Kool-Aid," said David Zugheri, co-founder of Texas-based lender First Houston Mortgage. They knew if they didn't give the borrowers the loans they wanted, the borrower "could go down the street and get that loan somewhere else."
The loans were also immensely profitable for the mortgage industry because they carried higher fees and higher interest rates. A broker who signed up a borrower for a liar loan could reap as much as $15,000 in fees for a $300,000 loan. Traditional lending is far less lucrative, netting brokers $2,000 to $4,000 in fees for a fixed-rate loan.
During the housing boom, liar loans were especially popular among investors seeking to flip properties quickly. They were also commonly paired with "interest-only" features that allowed borrowers to pay just the interest on the debt and none of the principal for the first several years.
Even riskier were "pick-a-payment," or option ARM, loans — adjustable-rate mortgages that gave borrowers the choice to defer some of their interest payments and add them to the principal.
While some borrowers were aware of their risky features and used them to gamble on their home's value or pull out money for vacations, others like Salvatore Fucile insist they were victims of predatory lending.
CONT'....
I will never be happy if my house goes down 30%...but it won't happen. I am sure it will top out at some point, but it happens.
Sell and rent?
I would rather lose 30% of the value on something I own than to donate rent to someone every month. How would that make any sense for anyone?
Nice call.
YAHOO.COM
When Yale professor Robert Shiller stopped by recently to discuss Obama's housing fix, I also asked him about the housing market in general.
Specifically, where are we in this historic price collapse? Finally nearing the bottom?
Not a chance, said professor Shiller--unless the government finds some way to miraculously levitate prices again.
Despite the 25 percent nationwide decline since the 2007 peak, U.S. house prices have still only fallen halfway to fair value. So whatever you think of Obama's plan, don't count on a quick housing-market turnaround.
I hope the housing market completely bottoms out. I could careless how many people lose their homes or have to sell at a heavy loss. I have a 800+ credit score and earn 90k a year, 10 years ago I would have been able to buy a decent house and lived pretty comfortable. Now I have the prospect of paying $2400 in rent for a average house of 1700 square feet.
The way I see it is when the housing market drops to where it should be the banks won't loan money to questionable people and the ones that lost their homes who can now afford a home in the lower market won't qualify because their credit is poor from losing that house in the first place. Then a prime candidate like myself will come in and pick up a dream home with a low mortgage.
It is crazy how a home sold for $160,000 in 1999, then peaked at $750,000 in 2006 is now going for $400,000. The job I am currently at now paid the same in 1999 (although I wasn't employed at my company then) and the economy was a lot stronger then too. If the wages for my position didn't increase 300% in that time frame how could I possibly afford a home in today's market???
The way I see it is when the housing market drops to where it should be the banks won't loan money to questionable people and the ones that lost their homes who can now afford a home in the lower market won't qualify because their credit is poor from losing that house in the first place. Then a prime candidate like myself will come in and pick up a dream home with a low mortgage.
It is crazy how a home sold for $160,000 in 1999, then peaked at $750,000 in 2006 is now going for $400,000. The job I am currently at now paid the same in 1999 (although I wasn't employed at my company then) and the economy was a lot stronger then too. If the wages for my position didn't increase 300% in that time frame how could I possibly afford a home in today's market???
I've been looking for my first house in upstate NY for almost a year. The market never really exploded here to begin w/ like many areas, but prices have barely come down in the last year.
I put an offer in last week on a house w/ "Motivated Sellers". They turned it down and said they wouldn't accept anything lower than what equated to 2% off their asking price.
Problem I'm seeing up here is lack of inventory. People just aren't listing their houses right now.
I put an offer in last week on a house w/ "Motivated Sellers". They turned it down and said they wouldn't accept anything lower than what equated to 2% off their asking price.
Problem I'm seeing up here is lack of inventory. People just aren't listing their houses right now.
