WaltB

Banks Are Unwilling to Solve REO Problems

Bill Bost is completely correct. The huge oversupply of homes and the foreclosures to come are a far worse threat than 100 percent financing to credit worthy buyers. Homes need to be made more affordable by lower rates not lower prices. In the last 2 years, here in mid Florida $450,000 homes are now $250,000 and even qualitied owners are ready to dump their loser homes back to the banks that destroyed their investment, personal balance sheets and net worth by indiscriminate dumping. Homes were never intended trade wildly like stocks.

Why should a new buyer step up in a declining market? Why join the pain? Buyers need a major incentive and that is easy financing for QUALIFIED buyers. Try 2 percent for 5 years and no or little money down. We have millions of homes that need to sell now and only an extreme measure will cause the extreme number of sales we need. (Tighter lending practices can later be adopted after we have saved the ship from sinking.)

In the Depression home prices dropped by 80 percent in many areas. We are already down 40-50 percent. Further adjustments to price to rent parity could destroy the nation. Banks need to agressively lower rates on foreclosures and refinance their current borrowers on the same basis.

What's in Store for 2009? Gold, Metals and Other Markets

The S & P is not exactly "pegged" when you give a range of 50 percent, 800 to 1,200. But, I'm glad you do not think it is going lower.

Case-Shiller Index: Decline in Housing Prices Continues

The answer is simple, perhaps too simple. Qualified home buyers need to be given an incentive to step up in a declining market. FHA, Fannie should be making 3 percent mortgages and thus creating a big demand from qualified renters. (The Feds are borrowing for less than 3 percent today on ten year money.) These new sales will clean up the supply including the upcoming foreclosures. Prices will stop declining and may go back up some. Also, let underwater homeowners refinance at 3 percent for the full amount of the original loan, so they may decide to stay in the home rather than dumping it back on the bank.
Our leaders have addressed everything but the real problem, sinking home prices. Instead, they elect to work from the top down instead of the bottom up. The ship is sinking from the bottom. Fix mainstreet first. Wallstreet will also be fixed.

10 Stupid Moves That Created This Mess

Mortgage rates are still too high to stem the horrible decline in home prices. Home prices dropping is the root of this recession/depression. The government could make rates 3 percent (for the first 10 years of the loan) next week if they wanted. And they/we pay less than 10 percent for 10- year money at this time. This is a simple no cost way to get a base in on home prices before homes drop another 30 percent.

Are Short Sellers to Blame for the Financial Crisis?

Excessive shorting of weak financials is like tripping the elderly. Financial shorting may have been legal but is it moral? Because of the well known interconnectedness of the financials and cross agreements, when you short one out of business you are doing it to us all. We learned that this week. So, find some other industry to short.

Excessive shorting of financials could finish us all off and take down the global economy. Even the banks and brokerages that the short seller keeps his funds won’t be able to pay up.

We need to restore the uptick rule right now to insure the game stays fair. And, perhaps, we need a double uptick rule for financials.