First of the Alt-As to falter...

[Porsche-O-Phile]

The more I think about it the better those shorts are sounding. I may join you in that very soon.

The implications for new lending are sobering. If these people have no market to resell their Alt-A or other loans, what incentive do they really have to write them? Nobody (it seems) wants to actually hold paper these days; it's all hot potatoes (subprime for sure, Alt-A more and more. . .)

Wait until bullets start flying in Iran. Then the fun really starts. Seems like my only decision is whether to bet more on the housing market collapse (including Alt-A) or on oil futures going through the roof.

[M.D. Holloway]

Buy Gold

[turbo6bar]

I haven't checked Countrwide's latest ratesheet, but bloggers say rates have definitely moved up in the past few weeks, and we're not talking 1/8 point jumps. These are 1/2 to 3/4 rate hikes across the board.

The rosy spring selling season is starting to smell a little fishy.

I'm gonna sit out this one. 28-day treasuries and sit back with a cup o' lemonade. You guys have fun.

[turbo6bar]

Originally posted by Wayne at Pelican Parts
This seems so obvious to me, I'm shocked that the banking stocks haven't already tanked...

-Wayne

That's one of the reasons I'm not short CFC and others. If it is so obvious, why isn't the market punishing these stocks? I'm confused.

[stevepaa]

Where are all the capitalists telling us how good competition is for the market and consumers? Seems we are all going to suffer because free enterprise was not regulated well enough.

Sometimes regualtions do serve a purpose.

[on-ramp]

So what's the point?

Do people feel better about themselves when others are struggling to pay their mortgages and defaulting and foreclosing?

Should we blame at least part of this on the lending companies that dished out " creative financing" to individuals who probably could't afford the house in the first place? This was done in the ridiculous housing boom. So now the wall is caving in and lenders are filing for bankruptcy. What a surprise. It's up to the individual to be careful what they sign. But also part of the responsibility is to the lenders who handed out millions (if not billions) of dollars to high-risk borrows.

[the]

This doesn't really have anything to do with competition or more regulation of free enterprise, imo.

It has to do with fraud.

If there were NO regulations, but also no fraud, this would not have happened. Remember, there are banks involved here funding these loans. No lending source can go throwing money around with no or bad due diligence forever. Those that behave foolishly like that would go under, and those that are careful, and exercise proper due dilgence before funding loans, would flourish.

The home lending market would work just fine with either the current level of regulation, as long as the outright fraud was taken out, or even less regulation.

[red-beard]

I'd like to invest in the Spock market...

[widebody911]

Originally posted by stevepaa
Where are all the capitalists telling us how good competition is for the market and consumers?

You commie pinko liberal!

[red-beard]

We had to go "No Doc"/Stated Income when we moved to Houston, because my wife's busniess had been operating less than 2 years. That was the real purpose for these loans.

For someone to state income they do not have, or are hiding from the IRS, maybe something as simple as a form that GOES TO the IRS when you make a stated income. This should be an audit flag if what you are stating and what you are telling the IRS are 2 different things.

[red-beard]

Originally posted by red-beard
We had to go "No Doc"/Stated Income when we moved to Houston, because my wife's busniess had been operating less than 2 years. That was the real purpose for these loans.

For someone to state income they do not have, or are hiding from the IRS, maybe something as simple as a form that GOES TO the IRS when you make a stated income. This should be an audit flag if what you are stating and what you are telling the IRS are 2 different things.

Not that I'm really for _ANY_ increase in the gov't fingers in my pie...

[Porsche-O-Phile]

Originally posted by Wayne at Pelican Parts
Not entirely. But if you constantly tell your little brother not to stick his tongue on the flagpole, and then he goes and does it, there is an element to human nature that says "I told you so."

Sure, there's a whole crowd of semi-bitter people here on Pelican who saw many people buy homes they couldn't afford and drive up the prices for the rest of the world. So, now that reality is coming back, it's natural to want to say "see, I told you so."

Make no mistake, I am indeed one of the semi-bitter people. More like semi-frustrated. I've seen people buy houses that I felt I could not afford without putting my family at financial risk. It's tough when my wife's friends are all buying houses, and we're renting. However, in the long run, it's the smart thing to do, as adding a huge mortgage (like $7K/mo FOR 30 YEARS if we had bought the place we're renting right now) is not my idea of being financially responsible.

I'm certainly not happy that people will be losing their houses. However, I'm happier now that I see reality finally beginning to sneak back into the mortgage / housing market. Heck, I've been blabbing about this coming for almost 3 years now - I was starting to look foolish

-Wayne

+1,000. I guess I'm one of the "semi-bitters" too (would "bittering hops in the wort of life" be a more positive analogy?)

Life is hard on stupid people. I find it difficult to muster up much sympathy for such individuals.

[EdT82SC]

Originally posted by red-beard
We had to go "No Doc"/Stated Income when we moved to Houston, because my wife's busniess had been operating less than 2 years.

I was in the same boat in 1999 when I bought my house. I left a regular job, and started consulting in 1998 making more money then I had ever made before. But when I went to buy a house a year later with only 1099 income I had to go sub-prime. I could even prove that Jan-Sep 1999 my income was higher then all of 1998, but for a sub prime loan with 20% down they didn't care. A year later when I had two years as a consultant I re-financed for a lower rate.

[on-ramp]

in the end it comes down to how much of a financial risk are you willing to take with your house.

When my wife and I purchased our home 3 years ago, our lender was approving us for up to a 600K loan. However, we didn't borrow that much. We borrowed only 400K and found a decent home we could be happy in and enjoy. Sure we could have maxed out at 600K, but the mortgage would've been a bit high..
After all, they are other things to enjoy than working to pay the mortgage every month... other things like spending $ on the p-car.

We stuck to rule that our mortgage should not be more than 33% of our annual income. This rule used to work. These days it seems people have borrowed and pay 40%, 50%, or more of their income... this is too risky. so most of their money is going to pay for their house. and most of the money is interest.. sad to have your hands tied up like that. but nobody forced you to sign on the dotted line.

[red-beard]

Originally posted by EdT82SC
A year later when I had two years as a consultant I re-financed for a lower rate.

And that is exactly what we did...TODAY!

And we took out enough to also build our pool.