ArnoldCountry

Home Prices May Be Nearing Bottom, Bank Equities to Follow?

Lumber is cheap because the demand has dropped significantly with building stopped and remodels way down.


On Jan 14 06:18 PM Rhett wrote:

> Hoover, replacement costs are falling. Lumber, for example, is at
> its lowest price in years.

Home Prices May Be Nearing Bottom, Bank Equities to Follow?

You said: "I believe that real estate has gotten cheap enough that drive-by shoppers will increasingly stop in for a look, and when they do, the combination of price and mortgage cost will turn shoppers into buyers."

The only buyers are really investors, this does not make a market. You need mainstream buyers to come forth, but they can't. Unemployment is too high, many of the folks who would buy have lost their homes and have damaged credit, rent is still cheaper than buying, credit requirements are way too stringent and consumer sentiment is running too low. Its like having a great sale and no one is showing up. Which equates into even lower prices in the long run. Its the perfect storm.

More 'Workouts', But Will They Stem Foreclosure Tide? [Housing Tracker]

A loan modification or workout from the lender is the last thing that should be pursued.

First, the lender is not interested in helping the consumer really but interested in securing financial information and craft the workout that extracts the most amount of cash from the consumer that minimizes their currently way under water loan they have. It makes more sense for them to lower the interest rate on their 300k loan on a property that is worth 200k and turn that 100k loss into a performing asset which is not a loss.

Second, if they discover the consumer did not tell the truth at application, even though they do a loan mod, they are required by law to report the consumer with a SAR (suspicious activity report) which could trigger criminal charges down the road for the consumer.

Finally, it fails to address the legal remedies, even solves them in some cases, that the consumer could take against the lender. Lien stripping of jr. loans, rescission issues, unfair business practices, etc.

In effect, while the media and government has been pushing this, going for help to the person who contributed to your woes is like asking for help from the guy that robbed you.

Credit Crisis Review: ARMed for Failure

As the California Supreme Court stated in the case of Wyatt v. Union Mortgage way back in 1979:

"In the context of insurance policies, this court has long recognized that oral misrepresentations made by an agent to a policyholder are actionable, despite the fact that the written policy itself accurately discloses all terms. "[If] the agent of the insurer undertakes to ad-vise [a policyholder], . . . it should be the duty of such representative to make no false or misleading statement in that respect." ( Glickman v. New York Life Ins. Co. (1940) 16 Cal.2d 626, 634 [107 P.2d 252, 131 A.L.R. 1292].)"

These new hybrid option arms that were created were so complex, even though their terms were included in very complex documents, truth is, these products misled the public into believing they could afford homes that they could not. The lenders new that... or at the very least... they SHOULD have known it. Remember the golden rule, "he who has the gold, rules." Well, they did a poor job ruling!

Prime Mortgage Trouble Could Accelerate Bank Failures [Housing Tracker]

To this comment I say: "I absolutely do believe that there will be more principal reductions," Michael Gross, Bank of America

B.S. They will do it here and there so they can so they did it but truth is, they cannot afford the losses. If 50% of the loans made since 2005 have lost 20% of their value (more than that is likely) and then they right that off in a refiance, these guys will collapse. More important, unless they are a portfolio lender, the secondary market with its complex traunches used for the securities will never buy into that kind of loss in which some investors will be 100% under water by the thought. More important, people forget the disparate impact of helping a few by writing down their loan balances and then the rest who were not so fortunate. The lawsuits are coming over these kinds of issues.