Rocktex

Three Notes on Housing

My friend David,

Here is a piece of brief quoted from Judy's housing tracker, for your reference:

Home Prices Coming Down In Area
Arthur Broslat of Re/Max Palm Realty in Port Charlotte said there is a sizable local inventory of "relatively new" homes... selling for 40% of what they went for three years ago: "I'm showing a... home in North Port that was selling for $250,000 in 2005. Now, you can get it for $130,000 to $150,000." Jason Painter of Program Realty LLC in Port Charlotte, who specializes in Cape Haze real estate, said home prices there "are off a good 35%." (Sun Herald, Jan. 22nd)

Three Notes on Housing

I love your 3rd note. Exactly what I have perceived and argued with real estate professionals who favor a short-sale approval from banks. Please see my article at:
A Funny World (16): Why ASK Lender's Mercy? Why Don't You Do Lender a Favor? activerain.com/blogsvi...

I believe, I am an optimist who always says "tomorrow will be better" as Annie sang. But to your 2nd note, I am unable to get your point cross. Housing prices go down 30% will be too much for you? Common, give me a break!

The price cut, more than 30% off the peak is here NOW in the most California areas. What do you expect where it shall go from the present point of time? If you anticipate now is the housing bottom and against the public sentiment, yes, you can say it will go North. But I doubt you were.

Certainly, you may have a good reason to say: “you get my idea wrong. I am using the year of 2000 as the base year.” Well, everybody can have different stats just as Zillow.com counts a forced “foreclosure” as a volunteer “sale” and included it into its area sale figures of normal transactions at its website. What can I say?

The Economics of Second Liens

Rich,

Felix is just pointing out a very real real real reality which is getting popular in our society or economy. To me, he has done nothing to imply his position.

15 months ago, I loaned one of my credit cards to my sister-in-law. By using mine, her balance of $17,000 was fully transferred into mine at 3.99% interest. She would pay about $450, instead of almost $1,800 a month to her own. She continued to directly pay my credit card banker and she had appreciated my help until 3 months ago.

Now she is kind of regret to ask help from me when I read her words in between. She wished she could know the "smart" broker ( or the right approach) earlier who negotiated with her credit card creditors for her. She got a good deal to pay 10 cents on a dollar, paid off all the balance remaining on her credit cards and she paid mine off.

I have no idea what's going on for her to easily wipe out all credit debt and have a fresh new start. All I know is, since then, my wife has told me 3 times:
"What kind of world is this? I kept coaching my young sister to save. She should stop over-spending. She and her 3 daughters went to have a professional hair-stylist every week and has all kinds of impulsive purchases. I save my money to have mine and my daughters washing our hairs at home by ourselves. I don’t buy such those fancy, junky computer stuffs for my daughter. See, I didn’t buy my daughter a ipod when their 3 daughters have updated to the newest many times. Now my sister is joking at me and says: I am owing nothing now and you still owe a banker a mortgage. Why you have to save? Why don’t you go out to my hair-stylist as we did. When you have problem, you go to see my programmer. I can‘t stand her bragging her wisdom!"

Great systems we have created nowadays! I have to admit that time is changing and I don’t know most of things or see the logics behind them.

The Economics of Second Liens

Great post!
A guy who really knows the tricks of ABS mechanism!
Thanks for updating my understanding on the current discount rate on junior liens.