Sub-prime loan crime

Remember all those headlines about billionaire hedge fund dudes just months ago? Yeah well the clever ones have cashed out and the wannabes are left holding the can, as always. Meanwhile the Texas teacher retirement funds. . . well sod them.

Arseholes!

Greed and fear, no truer words said.

[quote]Experts were wrong on subprime loans
Bob Ivry
August 13, 2007

THE Federal Reserve Chairman, Ben Bernanke, was wrong.

So were the US Treasury Secretary, Henry Paulson, and the chief executive officer of Merrill Lynch & Co, Stanley O’Neal.

The subprime mortgage industry’s problems were contained, they all said. It turns out that the turmoil was contagious.

The $2 trillion market for mortgages not backed by government-sponsored agencies is at a standstill. That is just the beginning. Other types of mortgages are suffering. So are firms and banks that package the debt for investors. The ripples were felt in Europe and Asia, where central banks offered cash to banks amid a credit crunch. And some corporations, from countertop makers to railways, are blaming the mortgage meltdown and housing slump for earnings that fell short of analysts’ estimates.

Even a mobile-phone company, Dallas-based MetroPCS Communications Inc, says it is feeling the pinch from customers facing foreclosure. And experts such as William Ford, former president of the Federal Reserve Bank of Atlanta, say the chance of a recession is growing.

“Housing created a lot of ancillary economic activity and jobs, and now we are in the reverse process,” says Paul Kasriel, chief economist at Northern Trust Corp in Chicago and a former Fed economist.[/quote]

HG

This is a huge problem right now. Lenders put people into homes that they really couldn’t afford. Then again, those people who bought out of their price range have nobody to blame but themselves…they should have researched better into what they were getting into. I am very much against a federal bailout. Home owners made the decision and they have to live with it.

In my area, foreclosures are up like 68% if I remember correctly.

I have a fixed mortgage…whew.

[quote=“Durins Bane”]This is a huge problem right now. Lenders put people into homes that they really couldn’t afford. Then again, those people who bought out of their price range have nobody to blame but themselves…they should have researched better into what they were getting into. I am very much against a federal bailout. Home owners made the decision and they have to live with it.

In my area, foreclosures are up like 68% if I remember correctly.

I have a fixed mortgage…whew.[/quote]
Have to agree with you here DB. Don’t buy what you can’t afford. It’s a good lesson.

That might be true for Joe consumer, but these hedge funds that are falling over now were obligated to buy debt. Of course it really is only someone else’s money when these funds start to die.

HG

Yeah but lot of it is not people who bought out of their price range. Most of it are lower class income people who re-mortgaged or poor first home buyer - this is why it has a huge impact on places like Cleveland and Newark.

Not like US banks would do anything predatory, right? Nice banks like PNC that do things like allow people to open zero balance bank accounts with the highest overdrawal fees allowed by law, and then issue them a ‘check’ card that looks like an ATM card, but operated like a check so you can overdraw…cute…

Remember…it all starts with the people most at risk and then spreads…look closer at lower grade prime loans…I think you’ll see that the default rates on that are growing as well.

The news is getting worse. Foreclosures are outpacing So. Cal. lenders selling reprocessed homes. Lenders will be cutting prices in order to trim down their stock and so individual sellers will have to do so also.

Small down payment + little or no equity in the home spells rough times ahead for those who chose that path.

My sister bought a home for $600,000 and put in a $100,000 back yard and she recently had her home appraised. Down a $100,000. Ouch. Mine was appraised recently and was up $150,000 from my buying price. Go figure :s …though I’m sure it has to do with my putting money into the beast. I also stayed away from subdivisions…which I think are a poor investment. If you buy a house/property, I suggest either a farmstead or in an established neighborhood. If I have time this week I’ll try to put up some pictures of what I am talking about.

Great time to invest in property if you have enough for a large downpayment and the means to keep a mortgage.

(Note: Please don’t take the following comment the wrong way. It is just hard core economic fact) I predict there is going to be a “white flight” out of California. That will further lower the value of homes. I hear quite a few people talking of moving to the midwest because of the changing demographics of California. But that is another topic for another time (and one I don’t care to participate in).

So you’re saying there’s blood in the water?

Patience young jedi…wait a good 2yrs when things really get strapped.

Cash rich in slow economy, good is.

So you’re saying there’s blood in the water?[/quote]

Yep! That’s what I’m a thinkin’. It’s just a question of when and where. :ponder:

So you’re saying there’s blood in the water?[/quote]

Yep! That’s what I’m a thinkin’. It’s just a question of when and where. :ponder:[/quote]

LA, Boston for sure…but upstate or central NY? Noooooooooooooooooooooooo? :raspberry:

So you’re saying there’s blood in the water?[/quote]

Yep! That’s what I’m a thinkin’. It’s just a question of when and where. :ponder:[/quote]

LA, Boston for sure…but upstate or central NY? Noooooooooooooooooooooooo? :raspberry:[/quote]

Look for growth…and of course, value.

I’d stay away from LA. Home prices there are insane.

[quote=“jdsmith”][quote=“Durins Bane”]This is a huge problem right now. Lenders put people into homes that they really couldn’t afford. Then again, those people who bought out of their price range have nobody to blame but themselves…they should have researched better into what they were getting into. I am very much against a federal bailout. Home owners made the decision and they have to live with it.

In my area, foreclosures are up like 68% if I remember correctly.

I have a fixed mortgage…whew.[/quote]
Have to agree with you here DB. Don’t buy what you can’t afford. It’s a good lesson.[/quote]

If people in the US were to follow this philosophy the economy would stop in it’s tracks… :smiling_imp: ahhh credit… gimme more.

As far as buying now, I think the bubble is just starting to pop (if not pop then a slow leak), and prices are not likely to increase for 5yrs. For instance those that bought into the subprime market in late '06 will not even switch to the standard rate for another 12~18mths.

Over the weekend was watching a real interesting report on CNBC which charted the US property climb against the Japanese bubble that burst (and took 10yrs to recover), in the report they suggested prices likely to depreciate upto 50%, I don’t subscribe to that but I do think a 20% drop and flat prices for many yrs to come.

God$#@! F*%& P*&% of Turd Su&^%# Rat faced Moth*& Fu%^#&g piece of sh*.

A page of brilliant analysis flushed right down the shitter. What the FUCK happened?

Needless to say I am/was a bit pissed off that it was not entered. I need a drink and a smoke.

This kind of shit makes me want to go out and play with myself in my front yard.

No wonder people are moving away from you. :laughing:

Certainly doesn’t help the property value. Are you sure the depressed values are not just a local phenomenon?

I’m looking to buy a house back in Maine. Values are 2-4x what they were in say, the mid-90’s. Back then people were taking just about whatever you would offer. Since a lot of these are second or vacation homes, all we need is a rectraction in disposeable income for the prices to start drop. I’m guessing 2yrs to hit bottom. 3yrs and there is a chance for fire sales stuff.

So basically it’s all good for anyone not in the property market as yet, with stable and strong income flow out to the next few years. I figured I’d missed this cycle around a year ago. Time to get the deposit together, methinks. Hopefully the unwinding of these crap loans isn’t going to bring down the economic environment too badly.

Not sure where I’d buy. It’s possible the commodity cycle will ease making Australia a little more attractive, but frankly I don’t think I’d want to live there again. Thailand has appeal, except for the cycles of political insanity which add way too much anxiety to investing there.

HG

Subprime mortgage affected the world’s stockmarket.
That made many countries ’ central banks had to do something.
In Asia,we have no the problem of subprime mortgage .
So the impact seemed weaker littlt by little.
Have we passed throgh "the worst "yet?

Well, billions of dollars were just injected into markets worldwide…is it over? No way.

Wow,that’s a really bad news eh.:noway:

No. These bad loans have made their way through the whole financial system, most often through investment funds. It will take time for these to completely unwind. There is no guarantee Asia is immune at this point.

HG