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Finances / Finanzen » uk.finance » Six months to housing hell
| Six months to housing hell [message #377890] |
Fr, 07 April 2006 18:19 |
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MoneyWeek piece on the dire state of the US housing market, now of
bubble proportions in many, mainly coastal, areas, and responsible in
large part for a significant proportion of the US economy. What happens
if/when it bursts and isn't the situation just as dire in the UK ? ....
http://www.moneyweek.com/file/10891/existential-equity-extra ction-and-six-months-to-housing-hell.html
"Six months to housing hell ................
.....Our estimate is it will take about six months for sellers -
particularly speculators who never intended to live in their properties
but whose sole intention was to "flip" them for a profit - to
realize they are toast........................"
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| Re: Six months to housing hell [message #377892 ] |
Fr, 07 April 2006 18:54 |
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"Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
> MoneyWeek piece on the dire state of the US housing market, now of
> bubble proportions in many, mainly coastal, areas, and responsible in
> large part for a significant proportion of the US economy. What happens
> if/when it bursts and isn't the situation just as dire in the UK ? ....
'dire'? Why are lower housing prices 'dire'? I'd have thought they were a
good thing.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377894 ] |
Fr, 07 April 2006 18:56 |
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Tumbleweed wrote:
> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
> > MoneyWeek piece on the dire state of the US housing market, now of
> > bubble proportions in many, mainly coastal, areas, and responsible in
> > large part for a significant proportion of the US economy. What happens
> > if/when it bursts and isn't the situation just as dire in the UK ? ....
>
> 'dire'? Why are lower housing prices 'dire'? I'd have thought they were a
> good thing.
>
Not when Americans have leverged them beyond reason. When you have
borrowed more then your house is worth, I would say you are in a dire
situation.
What was the savings rate in the U.S. last year? Negative .5 percent,
I think. First negative savings rate since the great depression.
Dire indeed.
> --
> Tumbleweed
>
> email replies not necessary but to contact use;
> tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377895 ] |
Fr, 07 April 2006 19:03 |
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In uk.finance Number 9 <idontlikespam2000 [at] hotmail.com> wrote:
> What was the savings rate in the U.S. last year? Negative .5 percent,
> I think. First negative savings rate since the great depression.
Coincidence or K-cycle?
FoFP
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| Re: Six months to housing hell [message #377897 ] |
Fr, 07 April 2006 19:17 |
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"Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
news:49njjjFpma5aU1 [at] individual.net...
>
> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
>> MoneyWeek piece on the dire state of the US housing market, now of
>> bubble proportions in many, mainly coastal, areas, and responsible
>> in
>> large part for a significant proportion of the US economy. What
>> happens
>> if/when it bursts and isn't the situation just as dire in the UK ?
>> ....
>
> 'dire'? Why are lower housing prices 'dire'? I'd have thought they
> were a good thing.
>
> --
> Tumbleweed
>
Not when the house that cost you £250,000 is now worth £200000. Sure
glad I've only got £23,975.87 left to pay on mine...
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| Re: Six months to housing hell [message #377898 ] |
Fr, 07 April 2006 19:26 |
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M Holmes wrote:
> In uk.finance Number 9 <idontlikespam2000 [at] hotmail.com> wrote:
>
> > What was the savings rate in the U.S. last year? Negative .5 percent,
> > I think. First negative savings rate since the great depression.
>
> Coincidence or K-cycle?
>
W-Cycle.
or GOP-Cycle
Take your pick.
> FoFP
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| Re: Six months to housing hell [message #377899 ] |
Fr, 07 April 2006 19:30 |
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"Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
news:1144429010.689154.111500 [at] v46g2000cwv.googlegroups.com...
>
> Tumbleweed wrote:
>> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
>> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
>> > MoneyWeek piece on the dire state of the US housing market, now of
>> > bubble proportions in many, mainly coastal, areas, and responsible in
>> > large part for a significant proportion of the US economy. What happens
>> > if/when it bursts and isn't the situation just as dire in the UK ? ....
>>
>> 'dire'? Why are lower housing prices 'dire'? I'd have thought they were a
>> good thing.
>>
>
> Not when Americans have leverged them beyond reason.
What, all of them? What proportion are 'leveraged beyond reason'?
>When you have
> borrowed more then your house is worth, I would say you are in a dire
> situation.
>
You are in a dire situation when you cant pay it back, which is different.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377900 ] |
Fr, 07 April 2006 19:34 |
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"pencil" <pencil.erasor [at] ntlworld.com> wrote in message
news:v8xZf.18769$g76.1508 [at] newsfe2-gui.ntli.net...
>
> "Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
> news:49njjjFpma5aU1 [at] individual.net...
>>
>> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
>> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
>>> MoneyWeek piece on the dire state of the US housing market, now of
>>> bubble proportions in many, mainly coastal, areas, and responsible in
>>> large part for a significant proportion of the US economy. What happens
>>> if/when it bursts and isn't the situation just as dire in the UK ? ....
>>
>> 'dire'? Why are lower housing prices 'dire'? I'd have thought they were a
>> good thing.
>>
>> --
>> Tumbleweed
>>
>
> Not when the house that cost you £250,000 is now worth £200000. Sure glad
> I've only got £23,975.87 left to pay on mine...
That will be a v small proportion of the people who have bought
houses,assuming there is anywhere that has seen that a 20% drop, which wont
be many areas.
So, for most people, lower prices, should they occur, would be a good thing.
Some people will lose, but that will be more than balanced out by people who
gain. So, a good thing on average.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377902 ] |
Fr, 07 April 2006 19:40 |
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"Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
news:49nluvFpjvogU1 [at] individual.net...
>
> "pencil" <pencil.erasor [at] ntlworld.com> wrote in message
> news:v8xZf.18769$g76.1508 [at] newsfe2-gui.ntli.net...
>>
>> "Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
>> news:49njjjFpma5aU1 [at] individual.net...
>>>
>>> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
>>> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
>>>> MoneyWeek piece on the dire state of the US housing market, now
>>>> of
>>>> bubble proportions in many, mainly coastal, areas, and
>>>> responsible in
>>>> large part for a significant proportion of the US economy. What
>>>> happens
>>>> if/when it bursts and isn't the situation just as dire in the UK
>>>> ? ....
>>>
>>> 'dire'? Why are lower housing prices 'dire'? I'd have thought they
>>> were a good thing.
>>>
>>> --
>>> Tumbleweed
>>>
>>
>> Not when the house that cost you £250,000 is now worth £200000.
>> Sure glad I've only got £23,975.87 left to pay on mine...
>
>
> That will be a v small proportion of the people who have bought
> houses,assuming there is anywhere that has seen that a 20% drop,
> which wont be many areas.
>
> So, for most people, lower prices, should they occur, would be a
> good thing. Some people will lose, but that will be more than
> balanced out by people who gain. So, a good thing on average.
>
> --
> Tumbleweed
>
You omit all those who have borrowed on the 'strength' of the inflated
value of their homes. But of course it all depends on your particular
circumstances - a fall in house prices would suit me because I've
nearly paid for the damned thing and so I'd be able to trade up at no
cost. Those that have succumbed to the remortgaging trap, well,
they'll be f***ed - and I suspect a good number falls into that
category both in us and uk.
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| Re: Six months to housing hell [message #377903 ] |
Fr, 07 April 2006 20:01 |
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"pencil" <pencil.erasor [at] ntlworld.com> wrote in message
news:zuxZf.10929$8o.2410 [at] newsfe6-win.ntli.net...
>
> You omit all those who have borrowed on the 'strength' of the inflated
> value of their homes. But of course it all depends on your particular
> circumstances - a fall in house prices would suit me because I've nearly
> paid for the damned thing and so I'd be able to trade up at no cost. Those
> that have succumbed to the remortgaging trap, well, they'll be f***ed -
> and I suspect a good number falls into that category both in us and uk.
Perhaps you can tell us how many people have remortgaged above 80% of
value(20% that was your figure for the hypothetical house price drop) and
how many of those would be unable to continue paying their mortgage? And
also where the area is that has seen a 20% drop and how many people who ahve
remortgaged or bought above 80%, are in that area?
Your statement is akin to the current panic struck news reports, which seem
to say something like;
"if the dead swan infected some other birds and if they then infected
poultry and if the virus then mutated and if that mutation was deadly to
people and if that mutation also meant the flu was transmissible between
humans and if that meant that lots of people were infected, then lots of
people would be infected"
Or in your case 'if house prices dipped by a percentage which meant that a
very large number of people were in negative equity, and if that was large
enough to cause an economic problem, then we'd have an economic problem".
Unless you can tell us what the numbers are, and the chances it will happen,
its just bird flu scaremongering.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377904 ] |
Fr, 07 April 2006 19:59 |
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Tumbleweed wrote:
> "Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
> news:1144429010.689154.111500 [at] v46g2000cwv.googlegroups.com...
> >
> > Tumbleweed wrote:
> >> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
> >> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
> >> > MoneyWeek piece on the dire state of the US housing market, now of
> >> > bubble proportions in many, mainly coastal, areas, and responsible in
> >> > large part for a significant proportion of the US economy. What happens
> >> > if/when it bursts and isn't the situation just as dire in the UK ? ....
> >>
> >> 'dire'? Why are lower housing prices 'dire'? I'd have thought they were a
> >> good thing.
> >>
> >
> > Not when Americans have leverged them beyond reason.
>
>
> What, all of them? What proportion are 'leveraged beyond reason'?
>
That would require getting an appraisal on every house and then
comparing that to outstanding mortgage balance.
If you are trying to argue that this is not a problem, I would say you
haven't been paying attention to the news. As a nation, we spent more
then we earned, by .5 percent. Much of that spending was done by
borrowing money using a personal residence as collateral.
>
> >When you have
> > borrowed more then your house is worth, I would say you are in a dire
> > situation.
> >
>
> You are in a dire situation when you cant pay it back, which is different.
>
That is sensible. More people are going to be put in this position as
their loan interest rates rise, which mose home equity loans are doing
right now.
You are in a *risky* situation when you owe more than it is worth. I
am sure you will agree with that statement.
> --
> Tumbleweed
>
> email replies not necessary but to contact use;
> tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377905 ] |
Fr, 07 April 2006 19:59 |
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Tumbleweed wrote:
> "Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
> news:1144429010.689154.111500 [at] v46g2000cwv.googlegroups.com...
> >
> > Tumbleweed wrote:
> >> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
> >> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
> >> > MoneyWeek piece on the dire state of the US housing market, now of
> >> > bubble proportions in many, mainly coastal, areas, and responsible in
> >> > large part for a significant proportion of the US economy. What happens
> >> > if/when it bursts and isn't the situation just as dire in the UK ? ....
> >>
> >> 'dire'? Why are lower housing prices 'dire'? I'd have thought they were a
> >> good thing.
> >>
> >
> > Not when Americans have leverged them beyond reason.
>
>
> What, all of them? What proportion are 'leveraged beyond reason'?
>
That would require getting an appraisal on every house and then
comparing that to outstanding mortgage balance.
If you are trying to argue that this is not a problem, I would say you
haven't been paying attention to the news. As a nation, we spent more
then we earned, by .5 percent. Much of that spending was done by
borrowing money using a personal residence as collateral.
>
> >When you have
> > borrowed more then your house is worth, I would say you are in a dire
> > situation.
> >
>
> You are in a dire situation when you cant pay it back, which is different.
>
That is sensible. More people are going to be put in this position as
their loan interest rates rise, which mose home equity loans are doing
right now.
You are in a *risky* situation when you owe more than it is worth. I
am sure you will agree with that statement.
> --
> Tumbleweed
>
> email replies not necessary but to contact use;
> tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377909 ] |
Fr, 07 April 2006 20:25 |
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"Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
news:1144432791.770333.75570 [at] z34g2000cwc.googlegroups.com...
>
> Tumbleweed wrote:
>> "Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
>> news:1144429010.689154.111500 [at] v46g2000cwv.googlegroups.com...
>> >
>> > Tumbleweed wrote:
>> >> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
>> >> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
>> >> > MoneyWeek piece on the dire state of the US housing market, now of
>> >> > bubble proportions in many, mainly coastal, areas, and responsible
>> >> > in
>> >> > large part for a significant proportion of the US economy. What
>> >> > happens
>> >> > if/when it bursts and isn't the situation just as dire in the UK ?
>> >> > ....
>> >>
>> >> 'dire'? Why are lower housing prices 'dire'? I'd have thought they
>> >> were a
>> >> good thing.
>> >>
>> >
>> > Not when Americans have leverged them beyond reason.
>>
>>
>> What, all of them? What proportion are 'leveraged beyond reason'?
>>
>
> That would require getting an appraisal on every house and then
> comparing that to outstanding mortgage balance.
>
I'm trying to argue that you dont know either and therefore cant argue its a
problem. maybe it is, maybe it isnt.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377911 ] |
Fr, 07 April 2006 20:55 |
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Tumbleweed wrote:
> "Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
> news:1144432791.770333.75570 [at] z34g2000cwc.googlegroups.com...
> >
> > Tumbleweed wrote:
> >> "Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
> >> news:1144429010.689154.111500 [at] v46g2000cwv.googlegroups.com...
> >> >
> >> > Tumbleweed wrote:
> >> >> "Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
> >> >> news:1144426797.447874.100340 [at] t31g2000cwb.googlegroups.com...
> >> >> > MoneyWeek piece on the dire state of the US housing market, now of
> >> >> > bubble proportions in many, mainly coastal, areas, and responsible
> >> >> > in
> >> >> > large part for a significant proportion of the US economy. What
> >> >> > happens
> >> >> > if/when it bursts and isn't the situation just as dire in the UK ?
> >> >> > ....
> >> >>
> >> >> 'dire'? Why are lower housing prices 'dire'? I'd have thought they
> >> >> were a
> >> >> good thing.
> >> >>
> >> >
> >> > Not when Americans have leverged them beyond reason.
> >>
> >>
> >> What, all of them? What proportion are 'leveraged beyond reason'?
> >>
> >
> > That would require getting an appraisal on every house and then
> > comparing that to outstanding mortgage balance.
> >
>
> I'm trying to argue that you dont know either and therefore cant argue its a
> problem. maybe it is, maybe it isnt.
>
Fair enough. I sense that it is a problem, based on news reports and
various debt statistics I have seen. I cannot give you the number of
people who have used their houses to extend their debt beyond their
means, only that many people have extended their debt beyond their
means...hence the nagative savings rate.
Maybe it's all with credit cards and all those millions of people
refinancing aren't cashing out and won't have a problem if pricing
falls 20% and variable rate refinance mortgages rise to 8 or 9 or 10
percent.
So, yes, I guess maybe everything is rosy in the housing financing area
of things.
But, I don't think it is.
> --
> Tumbleweed
>
> email replies not necessary but to contact use;
> tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377912 ] |
Fr, 07 April 2006 20:58 |
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pencil wrote:
> "Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
> news:49nluvFpjvogU1 [at] individual.net...
> >
> >
> > That will be a v small proportion of the people who have bought
> > houses,assuming there is anywhere that has seen that a 20% drop,
> > which wont be many areas.
> >
> > So, for most people, lower prices, should they occur, would be a
> > good thing. Some people will lose, but that will be more than
> > balanced out by people who gain. So, a good thing on average.
> >
> > --
> > Tumbleweed
> >
>
> You omit all those who have borrowed on the 'strength' of the inflated
> value of their homes. But of course it all depends on your particular
> circumstances - a fall in house prices would suit me because I've
> nearly paid for the damned thing and so I'd be able to trade up at no
> cost. Those that have succumbed to the remortgaging trap, well,
> they'll be f***ed - and I suspect a good number falls into that
> category both in us and uk.
AFAIK the situation is fundamentally different in the UK than it is in
the US. The mortgage lenders in the US have been not only extremely
aggressive but more than a little creative in digging their own hole.
For years now they have been offering Interest Only loans to people who
can't afford to pay off the principal portion of a traditional home
loan. Recently they have started to offer Negative Amortization loans
where the purchaser of the home pays only a portion of the scheduled
interest every month, the unpaid portion is added to the outstanding
principal. I do not believe that either of these options are available
to borrowers in the UK.
Add to that, the fact that a significant number have "cashed in"
the existing equity on their homes to fund their life styles and you
end up with a population that is more levered now that at any time in
the past.
Loan to Value Ratios (mortgage amount : property value) for these
mortgages are also at an all time high. The higher the LTV is, the more
it costs the bank or thrift to write and hold the mortgage..
If house prices fall the LTV goes up, so too do the costs to the bank,
putting pressure on the banks to raise rates and to discontinue the
more aggressive lending. This will take some of momentum out of the
market.. the higher rate environment and tighter loan restrictions will
further lower prices. If that cycle continues too long at some point
people may be looking at mortgages that are significantly higher than
the current value of their house, even with the new US bankruptcy laws
there are going to be some who simply walk away from their debts.
If enough do that then the S&L meltdown in the eighties will be as
nothing compared to the crash you hear as the thrifts go down..
Will it happen? Impossible to tell, but if it does it will be a real
mess, and the hell will not be restricted to housing. Personally I plan
to be as liquid as possible in any non USD currency for the next couple
of years.
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| Re: Six months to housing hell [message #377913 ] |
Fr, 07 April 2006 21:25 |
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Tumbleweed wrote:
> "pencil" <pencil.erasor [at] ntlworld.com> wrote in message
> news:zuxZf.10929$8o.2410 [at] newsfe6-win.ntli.net...
>
for both of you ...
there is a pretty good report to be found here..
http://www.ofheo.gov/media/pdf/mme2004report.pdf
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| Re: Six months to housing hell [message #377915 ] |
Fr, 07 April 2006 22:03 |
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"Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
news:1144436140.237769.122930 [at] i39g2000cwa.googlegroups.com...
>>
>> I'm trying to argue that you dont know either and therefore cant argue
>> its a
>> problem. maybe it is, maybe it isnt.
>>
>
> Fair enough. I sense that it is a problem, based on news reports and
> various debt statistics I have seen. I cannot give you the number of
> people who have used their houses to extend their debt beyond their
> means, only that many people have extended their debt beyond their
> means...hence the nagative savings rate.
>
> Maybe it's all with credit cards and all those millions of people
> refinancing aren't cashing out and won't have a problem if pricing
> falls 20% and variable rate refinance mortgages rise to 8 or 9 or 10
> percent.
Maybe they wont, though its more likely prices wont fall by 20%, and
mortgages wont rise to 8 or 9%. But if all that happens, sure there will
possibly be a problem.
have you sold your house and moved into rental on the strength of your
convictions?
>
> So, yes, I guess maybe everything is rosy in the housing financing area
> of things.
>
> But, I don't think it is.
>
So, carry on guessing then, but dont't confuse that with knowledge :-)
I'll continue the guessing game, and guess that you have not sold your house
and moved into rental on the strength of your convictions.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377919 ] |
Fr, 07 April 2006 22:22 |
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In uk.finance Tumbleweed <thisaccountneverread [at] yahoo.com> wrote:
>> Maybe it's all with credit cards and all those millions of people
>> refinancing aren't cashing out and won't have a problem if pricing
>> falls 20% and variable rate refinance mortgages rise to 8 or 9 or 10
>> percent.
> Maybe they wont, though its more likely prices wont fall by 20%
Doen by 17% in denver over the past three months according to an article
I read on Prudentbear.
> and
> mortgages wont rise to 8 or 9%.
The US ain't in control of that. The Chinese, Japanese and Hedge Funds
get to decide. That's the price of being in debt.
Note that as predicted, Fannie Mae and Freddie Mac are in trouble and
that's been playing hell with housing finance in the US. There's
evidence other bonds players are picking up the slack, but who's to say
they're any more careful with their finances than Fannie and Freddie.
I'm as reluctant as ever to call timing, but that and the recent
ructions in the bonds markets makes me think the credit cycle is turning
right now. An inverted yeild curve and then the long end swinging back
out has been a most regular marker of turns in great credit bubbles.
Kindleberger noted it as one of the portents in his analysis.
FoFP
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| Re: Six months to housing hell [message #377920 ] |
Fr, 07 April 2006 23:20 |
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Tumbleweed wrote:
> "Number 9" <idontlikespam2000 [at] hotmail.com> wrote in message
> news:1144436140.237769.122930 [at] i39g2000cwa.googlegroups.com...
> >>
> >> I'm trying to argue that you dont know either and therefore cant argue
> >> its a
> >> problem. maybe it is, maybe it isnt.
> >>
> >
> > Fair enough. I sense that it is a problem, based on news reports and
> > various debt statistics I have seen. I cannot give you the number of
> > people who have used their houses to extend their debt beyond their
> > means, only that many people have extended their debt beyond their
> > means...hence the nagative savings rate.
> >
> > Maybe it's all with credit cards and all those millions of people
> > refinancing aren't cashing out and won't have a problem if pricing
> > falls 20% and variable rate refinance mortgages rise to 8 or 9 or 10
> > percent.
>
> Maybe they wont, though its more likely prices wont fall by 20%,
They aare already starting to fall in many places...
> and
> mortgages wont rise to 8 or 9%.
A variable rate, home equity loan? They are already above 7%...
> But if all that happens, sure there will
> possibly be a problem.
> have you sold your house and moved into rental on the strength of your
> convictions?
>
No, I haven't leveraged any of the equity, either, though.
> >
> > So, yes, I guess maybe everything is rosy in the housing financing area
> > of things.
> >
> > But, I don't think it is.
> >
>
> So, carry on guessing then, but dont't confuse that with knowledge :-)
>
My guess is as good as yours ;-)
> I'll continue the guessing game, and guess that you have not sold your house
> and moved into rental on the strength of your convictions.
>
That is a good guess. But, it isn't 1st, mostly fixed rate mortgages
that are going to be a problem for most people. It is going to be the
credit card and 2nd mortgages that really hurt.
I am not sure how to interpret your comments. Are you of the opinion
that everything is humming along fine with regards to debt in America?
> --
> Tumbleweed
>
> email replies not necessary but to contact use;
> tumbleweednews at hotmail dot com
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| Re: Six months to housing hell [message #377922 ] |
Fr, 07 April 2006 22:23 |
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Charles the baby crusher Paisley wrote:
> AFAIK the situation is fundamentally different in the UK than it is in
> the US. The mortgage lenders in the US have been not only extremely
> aggressive but more than a little creative in digging their own hole.
> For years now they have been offering Interest Only loans to people who
> can't afford to pay off the principal portion of a traditional home
> loan. Recently they have started to offer Negative Amortization loans
> where the purchaser of the home pays only a portion of the scheduled
> interest every month, the unpaid portion is added to the outstanding
> principal. I do not believe that either of these options are available
> to borrowers in the UK.
Interest only mortgages are certainly available. They ask you if you have a
repayment vehicle in place, and you are supposed to say yes. But they
don't check to see if you actually pay any money into it.
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| Re: Six months to housing hell [message #377925 ] |
Sa, 08 April 2006 02:12 |
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On 07 Apr 2006, Number 9 wrote:
>
> Tumbleweed wrote:
>> 'dire'? Why are lower housing prices 'dire'? I'd have thought they were
>> a good thing.
>>
>
> Not when Americans have leverged them beyond reason. When you have
> borrowed more then your house is worth, I would say you are in a dire
> situation.
>
At least a couple of people I know have been living on their
previously zooming home equity for a few years.
One person, the last time
they went in to borrow against the equity, almost didn't
get approved. She doesn't think she'll get another loan.
One way to look at it: if you take out a home equity loan
and buy, say, groceries with the money, then you just took
out a 30-year mortgage on those groceries.
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| Re: Six months to housing hell [message #377927 ] |
Sa, 08 April 2006 02:50 |
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Post removed (X-No-Archive: yes)
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| Re: Six months to housing hell [message #377928 ] |
Sa, 08 April 2006 04:05 |
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Post removed (X-No-Archive: yes)
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| Re: Six months to housing hell [message #377946 ] |
Sa, 08 April 2006 13:02 |
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In message <1144429010.689154.111500 [at] v46g2000cwv.googlegroups.com>,
Number 9 <idontlikespam2000 [at] hotmail.com> writes
>. When you have
>borrowed more then your house is worth, I would say you are in a dire
>situation.
No your not. You are fine, just so long as you keep making the payments.
--
John Boyle
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| Re: Six months to housing hell [message #377967 ] |
Sa, 08 April 2006 22:00 |
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idontlikespam2000 [at] hotmail.com wrote:
> Tumbleweed et al wrote:
> > >> >> > MoneyWeek piece on the dire state of the US housing market, now of
> > >> >> > bubble proportions in many, mainly coastal, areas, and responsible
> > >> >> > in
> > >> >> > large part for a significant proportion of the US economy. What
> > >> >> > happens
> > >> >> > if/when it bursts and isn't the situation just as dire in the UK ?
> > >> >> > ....
> > >> >>
> > >> >> 'dire'? Why are lower housing prices 'dire'? I'd have thought they
> > >> >> were a
> > >> >> good thing.
> > >> >>
> > >> >
> > >> > Not when Americans have leverged them beyond reason.
> > >>
> > >>
> > >> What, all of them? What proportion are 'leveraged beyond reason'?
> > >>
> > >
> > > That would require getting an appraisal on every house and then
> > > comparing that to outstanding mortgage balance.
> > >
......
>
> But, I don't think it is.
>
> > --
> > Tumbleweed
If I may chip in on this interesting thread ....
Certainly a very large proportion of Americans do live on credit - I suspect
most of it comprises credit cards and car loans. I don't know how many
of those with mortgages borrow on their property.
A straw in the wind: one finance-related professional remarked to me recently
that I was "very unusual in not having any debts".
Actually I've been keeping a very nervous eye on the housing market here, as I
have just moved into a new built condominium house (paid if full on closing)
and the house I've moved out of is now up for sale. I also bought another
property just over a year ago which is leased and brings in 1000 dollars gross
per month.
So even if the demand for housing does drop and I'm stuck with the empty
house, I can still lease that one too and wait till things pick up.
However, I'm told it is the overpriced real estate in places like California
and maybe the north-east States and Florida that are distorting the figures
and that here, in north Texas, the demand still exceeds the supply.
(Sorry for any typos: damned difficult typing
with fingers crossed ....)
BTW I heard on the radio not long ago that Britons had more debt than
Americans, and from reading this n/group over the last few days I'm beginning
to believe that this may well be true!
PS Lest my Sig line misleads you, I am from Britain.
--
Ian
Ft Worth, Texas, USA
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| Re: Six months to housing hell [message #377998 ] |
So, 09 April 2006 19:42 |
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"Jonathan Bryce" <jonathan [at] localhost.localdomain> wrote in message
news:6auig3-grl.ln1 [at] michelle.jbryce...
> Charles the baby crusher Paisley wrote:
>
> > AFAIK the situation is fundamentally different in the UK than it is in
> > the US. The mortgage lenders in the US have been not only extremely
> > aggressive but more than a little creative in digging their own hole.
> > For years now they have been offering Interest Only loans to people who
> > can't afford to pay off the principal portion of a traditional home
> > loan. Recently they have started to offer Negative Amortization loans
> > where the purchaser of the home pays only a portion of the scheduled
> > interest every month, the unpaid portion is added to the outstanding
> > principal. I do not believe that either of these options are available
> > to borrowers in the UK.
>
> Interest only mortgages are certainly available. They ask you if you have
a
> repayment vehicle in place, and you are supposed to say yes. But they
> don't check to see if you actually pay any money into it.
Also self-certification mortgages where you tell them what you earn (eg £40k
pa for addressing envelopes etc), and 'payment holidays' - if you're a bit
stretched, skip a month or twos payments (by prior arrangement) - don;t
panic, we'll roll the interest up for you... Then there are mortgage offers
over 100% providing you also buy insurance to cover the bit over 90% of the
lender's valuation.
Yes, the UK institutions have been just as 'agressive' (greedy) - situation
is perhaps worse in the US due to interest rates in general going up
steeply.
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