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Three Ads That Summarize The Current State Of The Subprime Housing Market
If 2014 was the year that saw the return of No Income, No Job, No Assets (NINJA), and Stated Income, Stated Assets (SISA, or "plug in random numbers") mortgage loan applications, then the current three recent ads shown below, courtesy of KGBinvestor, demonstrate just how further down the subprime rabbit hole we have fallen in 2015.
One can only imagine what happens in 2016.
Consider:
- No seasoning is now pretty much standard for all prior bankruptcies
- Loans are issued up to 80% LTV, and in some cases up to 97% for conventional loans
- FICO scores of 500 only need 10% down; FICO scores of 580 (subprime) - only 3.5% down
- Tax returns aren't needed
- Got caught fabricating your tax returns (4506-T) - no problem there either.
In short: every little trick mortgage lenders had during the first subprime bubble is now back.
And here are three ads showing how subprime is not only back, it's as bad as it ever was.
h/t @KGBInvestor
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My landlord bought my house cash 9k, I've already payed it off and aint even mad. Not everybody can be a landlord.
Got a dick hanging below that fantastic rack?!?
Really gonna need a safe space after tonight. I am so deeply offended with all these tits and asses and cock talk.
"Somebody uses a set of giant greasy tits for an avatar, and everyone loses their mind...."
- The Joker
It's never been a better time to get a NINJA loan ... BECAUSE this time is different!
It's too much,,,anything more than a handful and a mouthful is wasted.
;-D
That second advertiser is in my city!
Yes.
You wouldn't by chance go to Yale?
Your avatar is too much of a good thing. Thing. Thing. Thing. Thing.
It's the avatar that keeps on giving.
Not really. I got bored watching it after the first few hours.
That avatar is the Mayor of Sacramento after he drank the city's tapwater for a year, jus sayin....................
best ZH avatar ever............
http://www.zerohedge.com/users/pamela-anderson
lol
Those Ads are spooky. Btw i love your avatar.
Well, they don't mention the rate. I'd give people a NINJA loan too... at 25% vig. And of course a heafty fee. Those docs don't prep themselves.
Yeah, umm, real estate, uhhhh, that avatar.....I can't stop.....fixated....stare....gggggggggllllllllgglglll,,,,,
Super NINJA!
I think I will liquedate my rental property investments starting tomorrow.
I thought the same thing last week. So I called my agent. She's sold 10 houses in 9 months where I have my properties. It's 'booming' she tells me. Lots and lots of people looking for true starter homes under 150k. Neighbohood is all being bought up by young couples, people, etc. I should have them up in a week. I"ll cash out on the top this time. Might not make the exact top of this bubble (my guess, another 6-8 months), but who cares at this point. It's all funny money at this point.
I am in the market for a home in one of the hottest markets in the country. Frankly, it is insane. The problem as a ZH reader is that you know markets are manipulated and eventually they crash. However, you do not know the timing and well, it is part of life. I do not want to be the guy who buys in summer of 2008. However, this may be 2004, 2006 or who knows?
I see little downside to your choice other than missed opportunity. I talked to someone who was talking about the last bubble. They said at peak their home was worth $450k over their purchase price. They sold after the crash and lost over $100k. So, if the sold early and made say, $300k they might argue post hoc they missed the peak but that would be infinitely preferable to the loss.
it STILL amazes how fast we went back to this shit...like dogs to vomit....
and yet if mr yellin goes to negative rates we aint seen nuthin'
Jumbo mortgages all around!
Thanks ZH!
This dovetails with your other article where Goldman believes the economy is heating up.
There isn't a word in the language that accurately describes the comedy.
I'm all in for the NINJA loans with the $1 million cap.
Love the foreign national and H1B mortgage loans as well.
I have an 825 credit score at was turned down for loan because I didn't accept the $175 a month PMI with my 15% down. Sorry, didn't have another $10k cash to get to 20%. I'm not paying $175 a month towards nothing. PMI is bullshit.
Guess I should go buy $10k worth of furniture and never make a payment. Drop my score a few hundred points. Probably won't have a problem getting a loan.
Buy that furniture at your nearest W.T. Grant store. They've been racking up some very impressive sales lately owing to their policy of giving store credit cards to anyone who walks in the door.
Oh wait, they went bankrupt in 1976 because most of their new customers didn't pay for the shit they'd bought, and Ben Bernanke wasn't around to bail them out.
If the appraisers are friendly and the bank / mortgage broker is creative, get an equity line at closing and draw from it to bring you up to 80%. You'll pay a slightly higher % on the 2nd but will avoid PMI. Generally this works best if both mortgages come from the same place so one doesn't have to worry about being subordinate.
Boom without end.
If you want to LOL
Chech out this nugget.
http://youtu.be/bUwu5CiESbc
This time it's different...again.
Houses! Fucking houses! I don't like houses and I don't like people who live in houses. They're often unintelligent and lack imagination. Don't think so? Just look around. Will they never learn? Fuck a bunch of houses.
Living in a rental eh? Never know what the next day will bring. Rent could go up. Owner could go into foreclosure. Rental next door may be rented to a peeping tom or disagreeable weirdos. Renters are notorious for damaging a home. Revenge comes in many forms.
Holding the mtge and a piece of my own land has been the most gratifying thing I have done and well worth it. I write off 5 grand a year in taxes/ins approximately. When I sell it in the new few months, I'll have gained back my down payment. They call this an investment. That a few rich psychopaths have decided to dick around with the world economy to ensure their loser offspring will retain the power is what is behind the jacking around the value of assets, they are peeling off the gains at every dump/pump. Owning 51% of the shares along with their fraudulent business partners who cannot earn an honest dime makes this possible.
In a time when dicks were not allowed to rise to the fucking top, housing is where you raise the kids, create a sound community, grow old and sell it to move into the last stop before the grave.
Home ownership is great, renting is bad, now is a great time to buy, blah blah blah - straight from the NAR handbook.
When you "own" your home you still can have a weirdo/criminal neighbor, but instead of breaking your lease and paying a month's rent to do so, you have to sell your illiquid "asset" (possibly in a down market and will be when bubble 2.0 pops) and shave 6% off to pay your realtard.
What's worse than living in a rental? How about owning a house and the house next door is owned by peeping a tom or disagreeable weirdos.Maybe they have dogs that bark 23 hours a day. Maybe they keep their trash in their instead of taking it to the curb?
How easy is it move when this happens? If you are renting, you give notice and go. If you own, you are 50% likely to be upside down in your mortgage and can't move. It's all about timing, but that can't be controlled by the individual .It's all luck,
It's not all luck, but you might have to look at the thing before actually buying it you know. There is property without neighbours available too.
You are right about giving notice and go, it's a different thing of course, I'm just saying if you're smart you seldom need to get lucky.
@bunnyswanson-No, not living in a rental,eh. There you go making baseless assumptions. For starters, don't assume that everyone is as dumb and unimaginative as you seem to be.
Giving loans up to 1 million to people with bad credit.
What could possibly go wrong?
I went to a couple open houses this weekend. I met a nice realator on a pricey home at the tip top of my range. I explained that I did not want to be the guy who buys in 2008. Only now have home prices exceeded that era from what I can see on Zillow and the likes.
I told her that realators have only two predictions. 1. Prices are going up, buy now! 2. Prices are about to go up, buy now! I asked how many realators she knew back in 2007, 8 said, "Be careful. Prices are high and may crash.". The answer is none. So, I told her the price projections are worthless and they always miss, even on the upside.
She actually agreed and we had a much better discussion on value and hedging a downturn if one was going to buy.
I talked to a few others over the last few weeks and actually, I think the older rational ones are a little worried, too. There job is to sell homes, but they do not want a bubble no matter how fun on the upside.
BTW, how many real estate agents are there in America? I think they must outnumber baristas.
Not sure why your bothering to consider buying. Perhaps your not buying in 2008, but you might be buying in 2006 or 2007. Layoff announcements are going up. Student Loan bubble is getting ready to pop and the Shale bubble popped nearly a year ago.
IF your buying in a urban region, there is no point. Job security is gone and you better be prepared to become nomac, moving every year or two to find a replacement job. Even if you have rock solid job that isnt' going away in 5 or ten years. Who are you going to sell to in 5 to 10 years? retireing boomers, Milleniual buried in student loans with no real jobs avail.
If your building a homestead (ie some place safe an rural and need time to build you preps, OK, otherwise rent).
Britains getting like this too, ridiculous home prices, but the job you get near home today may be gone tomorrow. ridiculous rents , forced up by the cost of buying are the main reason Osborne has to pay back more in tax credits than workers gross pay, his underlying issue is housing costs
I just wonder if these couple stuff can work for with matching hoodies for couples and other similar things.
I must say that king and queen shirts stuff can be good for some couples.
"Acheive Your American Dream"
*Facepalm*
Apparently we can't even spell the concept properly, nevermind do it.
I actually believe that most sentient adults know well enough this was the cause of the last crash, but no one really cares. People suffer now with bankruptcies, underwater mortgage debt, but still won't adjust properly. Did Obama just make it all seem normal?
Don't worry, it is a tiny problem. Likely to be contained. The Federal Reserve will take the appropriate measures.
So with FICO800 I get 20% down as a payout?
I wonder how many workers tired of paying absurdly high rents will buy a home with zero down payment, then never make a payment, yet stay for... years? Worked before.
(and the 4 AM drunk thinks ...)
"That's a great idea!"
yes, but how did it work? last time this worked it was thanks to a sophisticated setup consisting in locust-like "mortgage originators" that opened, bundled mortgages (aka securitization), sold them (and closed) to investment banks that sliced, diced and did lots of further sophisticated financial wizardry on them, peppered the whole with unsustainable bets (aka derivatives) to make them look good and...
... sold as much as possible of it to the Rest Of The World
so my question is: will the Rest Of The World buy again this super sophisticated stuff that is based on the American Dream Gone Mad of everybody owning a home?
The promise of something for nothing never loses its appeal.
I live in a rental apartment. Can't imagine buying again.
I think of it as HAAS (housing as a service).
Also, I own real estate which I let out to businesses.
With rental I can choose to upgrade, downgrade, sidegrade with a months notice. I can move country at will. I have now been a renter for as long as I was a mortgage holder (not owner) and during that time as a renter have lived in three different countries with an average duration of rental of about 3 years. Now, at my age, a mortgage would never be likely to be better for me in cash flow terms than rental, even discounting the flexibility rental gives me.
My real estate investments subsidise my life and are fixed in one location. My life moves around. ;)
Don't forget to factor in that the rental income on your business property is taxable. Those tax payments you wouldn't have if you owned your home instead of the equivalent commercial property funding your rent. Also, the loan on that commercial property comes at a higher interest rate than a home loan.
Another key consideration is level of real estate prices compared to rent prices. If property valuations are lower than equivalent present value of rent streams, you are paying the difference every month by renting.
Nevertheless, it sounds like you value flexibility dearly, so paying for it is worth it to you.
You don't seem to be aware of depreciation, which is a huge writeoff for landlords. You get a huge tax writeoff every year for a depreciating property, when it is going up in value. Income property is the way to go. And that income that gets taxed? It is called sheltered income because you pay taxes on only part of it.
Thanks for raising that good point. But it just complicates the story without changing the conclusion.
The depreciation is limited to the building and is for a 39 year period. It also adjusts your basis downward so you have capital gains to pay upon that same amount come sale time. Sure, deferred capital gains taxes are lower than current year income taxes. But any taxes are still more than 0 taxes. You pay 0 taxes on your housing expense when you buy a home and live in it.
There are two decisions here that should be separately analyzed. Rent vs. buy. Income property vs. other investment. Dustyfin's choice is not necessarily a slam dunk. For each of these two decisions, a spreadsheet should be constructed weighing all the current parameters to indicate which are the best choices.
Because Blackrock needs another million homes in their portfolio
An old book that some folks still read says something about a dog returning to its vomit.
(something literal to balance the rack)
The Gods of the Copybook Headings:
https://en.wikipedia.org/wiki/The_Gods_of_the_Copybook_Headings
;-D
Take a look at Martin Armstrongs chart for real estate. Nothing but down for the next 15 years. Of course there will be pockets where that is not true, if one is willing to gamble and I'm sure many will. Between the upkeep and the property taxes, I am telling my 30 somethng kids, rent for now.
Nothing happens for no reason.
Do we not think this "motivation" to not own anything but fiat, stocks bonds, etc, rather than anything real is not deliberate?
Herded as sheep we are.
And no, I have no solutions other than to suggest that those choices most easily made offering the least immediate pain, will ultimately prove out to be the worst. It requires sacrifice to play the long game, something most are not inclined to do.
youtube.com/watch?v=qGRrsyzWRRQ
these mortage co.'s all have a tbtf life-raft at their home office.
Chase Bank, destroying lives, communities and countries, one house at a time.
http://www.consumeraffairs.com/finance/chase_mortgage.html
1630 Complaints Consumers Reports
I believe addresses mean a lot at this juncture. Whether it has to do with districts and political connections, or statistics, I do not know, but there seems to be a concerted effort into trapping people into losing their homes, sometimes. A few others go through the procedure smoothly while others end up in foreclosure after a simple refinance or modification, even with good credit, good payment history, and job.