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Strategic default will become standard operating procedure for underwater borrowers, therefore no sane lender takes RE loans onto portfolio on other than strict terms, can you imagine 30% down 7% interest non-conforming?
Which will not be good for the higher end house prices.
Agreed, as I have been saying (and seeing), the delinquent inventory is feeding on itself: high delinquency rates are begetting even higher delinquencies, as borrowers who are current hear about their neighbors who are equally underwater but have stopped paying their mortgage and are living rent-free, going on vacation, buying toys, etc.
"as borrowers who are current hear about their neighbors who are equally underwater but have stopped paying their mortgage and are living rent-free, going on vacation, buying toys, etc."
This is exactly what I was railing about to people a 18 months ago when Bernanke suggested lenders should forgive homeowners' mortgages--but not as a mass cramdown which might actually be an arguable proposition--but only those who are underwater. I knew it would result in people seeing their neighbor not pay and only gain from it. The metric is simple:
1) I pay, you pay: We both keep our stuff.
2) I pay, you don't pay: We still both have our stuff.
3) I don't pay.
This is no endorsement of any 'immorality' of not paying a mortgage; it's just a contract to perform in exchange for a consumable called a house. But the behavior is, of course, utterly predictable.
Here's the link to Bernanke showing how little he understands human nature bysuggesting to ramp up the foreclosures--oops I mean forgive certain homeowners.
ZH: I love the captcha joke. 17-6=11 is wrong. I love that.
Nothing pisses a person off more than seeing their neighbor get away with something. It is a strong motivating force.
A big time feedback loop for sure ghost
Perhaps 'higher end' is just 'overpriced'.
Don't suppose anybody happens to notice that what these two financial sewers get in one month would pay for the National Health Plan for one fucking year!!!! And, in one year a full decade of health care for American. But the sheep believe, with blindfaith, all is for the best and our paradise be OK soon.
30% down, that is exactly what was required just a few short years ago by an S&L or bank with 12% interest I might add.
You say this like it's a bad thing.
The Fed will need to place a call to "Carpets Are Us" if they're going to find a bigger rug to sweep this under.
The US is the rug. Maybe the planet. Dunno.
We should do a content analysis of all your posts and develop a typology of financial denial and denial metaphors. You stay in character rather easily, I'd say. So much fertile material and all...
PS. You posted me a nice post (I think on the Joe or Rosie thread) and I posted you one back!
I did see your applause as well as Miles, standing witness. Thank you kindly for your complement. I've never quite thought about it the way you described but it makes sense that if "you spot it, you got it." Bravo! Once again you do me the honor of offering me the Readers Digest version of your thinking for my easy digestion.
All the world's my stage, MsCreant. I just shovel the shit, I don't produce it. At least not in these quantities. As far as the denial metaphors are concerned, I'd say it's my own personal coping mechanism, little ole me shaking my stick at the hornets nest the masters of the universe continue to weave, occasionally making some contact. To be perfectly honest, it makes me feel good. No better reason than that to do it.
So many smarter people on ZH have a better grasp of the actual Ponzi techniques than I do and can very eloquently describe them for other ZH readers. I see my role as a wannabe chief shit shoveler and I shoulder my self imposed burden with great gusto. Hey, someones' gotta do it so why not me. Besides, I'm most certainly not alone at the wheel.
Surely no one believes this insanity is solely the product of a few good men? It takes a gloriously dysfunctional and ultimately suicidal culture to create the really titanic human disasters. When you boil it all down to its base ingredients, we're all asking the same extraordinarily interesting question.
The search for the answer to that question begins, and I suppose will end, by looking within. I've found that the answers I'm beginning to unearth are exponentially more complex, and more satisfying, than the how questions and bring me personal healing and hope. Thus, it's where I prefer to dwell, if for no other reason than my selfish desire for peace and happiness.
I hear you on the idea that others document the Ponzification well. You on the other hand, are good at spoting the ways the rest of us (not the masters of the universe) stay in denial. Your performance as an observer of cognitive dissonance is where I thought we could do a content analysis. I bet we could chart axes on n-dimensional graphs (maybe even make them hot).
When we were done charting the graph points, with the green as the x axis, perhaps this is what the graph would look like:
Boy, you had me going there for a second. While I didn't really expect a graph of my posts I did figure you might have poached one from somewhere else as an funny example.
So you caught me leaning and when you tugged on my shirt collar, I came tumbling down in a laughing silly mess. I must say though, that does look like my ass stuck up in the air. The head is too buried for me to draw any conclusions. :>)
One other thing to mention - all those "credit enhanced" loans, of which 11%+ are delinquent, are backed by the Mortgage Insurers, who almost universally are a) rated BB or lower (and this week got put on negative watch), and b) are denying claims like crazy in order to survive.
But yet, Fannie or Freddie don't take a valuation haircut on that exposure. (Except for the one MI that is paying claims at 60cents on the dollar, they kinda have to take a haircut on that.)
Wow...the fed has done such a good job here!Kudos are in order!Ummmph....what the heck!I was standing on my head and....oh crap!The bloodthirst is unquenchable!
anybody know what the slope on that is?
It's the Slope of Hope. And Change.
y = mx + b
Where there is slope, there is change.
this is all delusional.....bernanke told us the housing loan crisis would be no more than 200b usd and that it was contained in 2008....and we were assured by jim cramer that the housing crisis ended june 30th....
so all of this graphola is a lagging indicator....
furthermore housing delinquencies can't be this high during a recovery.....the recession has ended and the economy is growing like vigorously....therefore the graph is irrelevant....
reasonable workouts will be made without impact to banks....
Someone junked your joke. Sorry they done that 2 U. I'm laughing!
Who would kick such a fine comedian in the junk. That ain't RIGHT I TELL YA!!
I don't know. From my point of view, it sounds like a reasonable and prudent analysis of our current situation but any talking head on CNBC or Bloomberg.
So much easier to understand now that the hopium is kicking in. Another round for the world Tyler, I've got Ben's "AAA" rated unlimited credit card.
did i get captcha right?
must have if i made the string.
we are so fucked!
Good thing FHA is still rubber stamping loans and we can thank Barney Frank "bad loans are actually good, they keep prices from falling farther. It's policy." WTF? he said it not me.
I'm a pretty damn cynical person, but even I couldn't believe that quote. But yep, it's real, here are the exact words:
"I don't think it's a bad thing that the bad loans occurred. It was an effort to keep prices from falling too fast."
And this guy is one of our most powerful congressman in the financial world...stunning, truly stunning!
barney frank is a pedophile....i don't expect
anything better from him....
This is the same guy who didn't know about the homosexual underaged call guy ring being run out of his home.
The voters in his district are terminally stupid.
In his district? How about the whole state.
yes that would the link between omaha and washington
with tentacles spreading out all along the
They read Atlas and thought Mouch was the hero.
Some of my comrades just make the unfortunate mistake of linking civil liberties to big government. There are also other factors as well, such as the current system working well for Mass, the Democratic party being seen as the "people's party" and the general non-chalant approach to politics promoted by the entrenched academic capture of having the keynesian approach as the standard for economic study.
It is a damn shame, but I wouldn't lose all hope in Massachusetts. It is full of free thinkers who would embrace new ideas if only they gain momentum. The key, IMO, is to present them as new ideas and not as the ones a bunch of grumpy old men penned in the Constitution.
you mean his home at the white house where craig
spence had an unexpected suicide after being
caught giving call boy slaves a tour of the white
house? and where
many kidnapped child sex slaves (mostly boys)
could give detailed accounts of their and daddy
bush's presences at sex parties?
or were you talking about the under age boys
sent to his house via the larry king run pedophile
ring out of omaha from franklin credit union?
or the guy who brought suit against king and
won who testified about how he was paid numerous
times to "service" frank?
the germans claimed they didn't know about the
gas chambers and the americans claim that they
don't know about the slave sex rings.....
I will look into this myself, meanwhile, links please when you make charges like this. I knew about Barney's lover running a gigilo ring out of the house, but none of this. And not underaged boys.
HERE are his exact words:
"I don't think it's a bad thing that the bad Woans occuWWed. It was an effoWt to keep pWices from faWWing too fast."
He belongs in Jail.
“I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”
-- Congressman Barney Frank
Notice he didn't say "falling further", he said "falling too fast". There's a big difference between the two. If prices collapse too quickly the government fears that homeowners will walk away in droves. Is it a good policy? Probably not, but that's no excuse for sloppy quoting.
btw, i am looking at a pool of seriously delinquent agency loans, if Total Delinquencies = 100%, over 2/3rds are 180+.
6 months down, hard coming back from that.
My understanding is that once they're more than 60 days delinquent the default rate is 95%+. The 180 days plus would include properties in the process of foreclosure.
welcome to the new world disorder
Why are the banks not aggressively pursuing judgements and garnishment on the stategic defaulters where allowed by law, which I believe is just about everywhere except for first mortgages in California? Why the hell would anyone pay on a piece of shit house that is 100-500k under water, versus getting a ding on their credit report.
"Why are the banks not aggressively pursuing judgements and garnishment"
Too many lawyer fees, have to pay to upkeep houses/yard, pay local taxes, pay if house needs renovations before selling (often the houses get trashed from neglect or on purpose), pay someone to keep track of all this stuff with the houses..
Need to admit to the loss and write it down and be forced to admit you are insolvent...
"Why the hell would anyone pay on a piece of shit house that is 100-500k under water, versus getting a ding on their credit report."
They were not raised with the ethic of "walk away," it somehow seems like, oh I don't know, theft. Typically a working class ethic, rather than a white collar ethic. Scared of screwing with the system. Not educated about the system.
Well, much like the unemployment number you'll eventually reach a maximum of this stat and it will level-off ('cause you can only lay-off so many people and only so many will default on their mortgage - and yes, "delinquent" == "default" in this environment).
That said, looks like we have plenty of upside on both of those stats before any such "leveling" takes-place.
I think it is going to keep climbing, exceeding 10% by 12/2010.
Not many people voluntarily quit their jobs in this economy, but a hell of a lot of people are voluntarily quitting their mortgages.
I could see that - 10% on the "delinquent" number and upwards of 17% on the "official" BLS unemployment number are certainly possible, particularly in tandem.
Like I said, I think we're potentially a long way from any such leveling-off of these trends.
frank is just doin his part to help unload the trash, before it starts stinking too much
Bank Holding Company in IL goes down:
We'll see if this truly comes to pass. According to Calculated Risk, we can expect to see nine banks shuttered tonight.
Well, whats taking them. 2030 central time and no announcements. 8>(
Nine closed, here's the list:
ghost face , do you exchange email? ich habe eine gross problam.
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