Anyone but me paying attention to this ?? things are headed real ugly. All this "creative financing ".. interest only loans, home equity loans ( where the house is worth less than the money that was borrowed) is about to bite us all in the ass bigtime.

I am usually optimistic about these things, but any moron can see that this housing market adjustment is going to really hurt some folks. I think its not even the tip of the iceburg right now. Houses can not go up in value 20 % a year forever, and a bunch of people have borrowed money under the impression that they will.

Ouch!!!!! Gravity can hurt. Back at 10,000 by fall?

Dude, I heard Greenspan is predicting a major depression equivalent to what we saw back in the 20's to ground our economy in the next 5 to 7 years. Bad fuc%in news, folks. My plan is to be debt free when it happens.

The economic "growth" that we've been seeing over the past four or five years has been an illusion...I'm afraid that you are right and that the house of cards has tumbled enough to expose the tip of the iceberg...we'll see how much of it gets exposed before it gets propped back up.

Fish on...

Todd

The problem is lots of folks bought houses that shouldn't have. Folks with shaky credit are now getting to live the true American dream. I heard one ad for a "Vacation Mortgage". No payments for one year. Take that money and use it for a vacation. You've got to be $hit'n me that people actually do those things. What's next, "Your job is your credit mortgage."

Lots of houses on the market and flippers wondering what the hell they got themselves into. The subprime market woes are being to affect folks with good credit. They are set to close deals, then their mortgage company goes tits-up or can't secure funding for the loans.
You're right about the 20% appreciation rates. Unsustainable.
Goldman just had to slap 3 billion into one of their hedge funds to stabilize it. They said it wasn't a rescue, but I call BS on that. Bear Stearns already shut a few of there funds down.
Just my opinion, I think we are looking at least another year to 18 months for this mess to clear up. Then on to the next thing that pops up to give Wall Street problems.
My 401K isn't looking great at this moment.
Brian

You know, the foreign markets have had no faith in us for a long time. Our money is worth dick abroad. Now we waver a bit and it'll fold from the inside out.

I have been a mortgage banker/broker for 12 years and a realtor for 3, interesting times now for sure...the only legitimate loans for the near future are for people who can prove their income and have 5%+ down payments and do not have Jumbo loans. FHA/VA will be good options as well but the days of low down, no doc loans are done...keep a very close eye on what happens to Countrywide Financial, they are what has caused the drop the past two days...when the biggest mortgage lender in the world is on the verge of going under all hell will break loose when/if that happens...I am seriously thinking of moving into commercial banking vs residential...cheers.

I think it will rebound in the fall. For those with the dough these are great times to get even richer.

I do wish Greenspan would stay retired. Every time he opens his mouth lately the market dives.

This problem was based on greed all around. People who shouldn't qualify for a loan took f'd up loans. Mortgage companies shouldn't have been allowed to come up with these interest only or variable rate loans. They shouldn't be able to sell the f'd up loans either. Any fool could see the downside. Next will be the credit card industry. They shouldn't be allowed to grant credit to someone who has no income. It's a no brainer. If they continue to do so then they and they alone should eat the loss.
I really like the people who took home equity loans to play the market. What were you thinking?

Our economy is plagued with short term thinking. It starts with the CEO's and permeates down to all levels. It's get in, get the big bucks for myself and get out. Few seem to see past tomorrow any more and their memory is short term as well.

Well, that sounds completely unreasonable.

I'm still surprised that home prices are holding/have held up as well as they have. In Whatcom County, it has been more of a plateau than a serious drop for most people. There are still POS houses on the market for way too much money. They aren't selling fast but some of them are still being sold. I still think we'll see a significant drop in housing prices because a lot of stuff is still to be worked out.

How would you feel if you got into a 5 year ARM that was interest only? Now, you have a loan for more than your house is worth, you've paid off none of the principle and your payment will increase when your rate gets adjusted? Now, muliply that times hundreds of thousands of homes. Implosion. Add in some record high consumer credit card debt and skyrocketing energy costs. Rome is burning.

Mortgage companies didnt "create" these loans, Wall Street did. The loans were created, presented to brokers to sell as much of as possible and then securitized into large blocks and sold to hedge funds and various other investors worldwide who could not get enough of them...are there crappy lenders out there? sure, most have gone out of business or are on the way out but all the brokers did was go out and sell what the big money investors said they wanted to buy...once the option for all these small/medium and even large ie countrywide, lenders to package and resell these loans disappeared so did the liquidity in many market areas outside of just mortgages...much blame to go around but the basis of the chaos rests in the hands of Wall Street IMO...cheers

With all that being said, We as a nation are still nowhere near Japan's problems with real estate in the late 80's/early 90's.

Everyone panic! Oh no, the stock market is dropping! Cut your losses and run!

buy real estate and stocks...its a great time for those with cash to start looking at buying selectively...I have many investors that have been building up cash and patiently waiting years for exactly this to start happening and now they are going to move into the market again...rates are still VERY good on conventional 30 year fixed mortgages...cheers

No! Panic! Run for the hills! I don't have enough capital to buy and make a killing yet! Prices need to drop more! Flee! Scurry!

the market rallied to close only 13 pts down after being down 340+ earlier in the day...thats some great volatility there baby...

Been a financial planner/investment broker for 27 years. Relax folks. What happens when you feed a baby too fast?.......it pukes, then eats again later. The market had to burp. It'll come back. When? No one knows for sure. But getting out of the market now really isn't a wise move. Getting in the market now? Perhaps, with some money, not everything you got. And be selective.

The credit/mortgage problem is actually a good thing. Just like the mutual fund scandal a few years ago...............it improved the situation in the end. This will too. Now mortgage companies will be a little more selective in their loans instead of giving them to anybody with a pulse.

The market is volatile. Don't play unless you can afford to. Snake's last advice.............diversify. Have some money everywhere.

Summerrun, if they weren't allowed to package and sell the loans they'd be a bit more discrete about lending seeing as how they'd be holding the bag on defaults.

Snake, I agree. In the long run a hard look will be taken all the way down to inflated appraisals, cozy relationships, etc. I'm not selling. To sell now is to accept major losses. I may buy more soon as there are some real good buys out there now.

like in the bank accounts of 4 ex wives?

Mayhem! Rivers running with blood! Locust! Zombie apocalypse! The end is nigh! Sarcasm!

If you're gonna be lookin' to snap up a few foreclosures for rental properties... ya gotta be pretty quick. Developers and larger investment groups always seem to get there first.