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A Second Mortgage Disaster On The Horizon?
Old 12-14-2008, 07:22 PM   #1
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A Second Mortgage Disaster On The Horizon?

Great, I'm sure some of you realized this, I didn't. We've seen the impact of unwinding subprime, now we have a bunch of option ARM's and Alt-A's that will unwind over the next 3 years. So we're less than halfway through the mortgage crisis. Wonderful...

A Second Mortgage Disaster On The Horizon?, New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default - CBS News

The Mortgage Meltdown Video - CBSNews.com
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Old 12-14-2008, 07:53 PM   #2
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Just watched this segment of 60 mins. Pretty scary. If anyone was thinking of buying a home, just wait. Prices will be going lower. It was interesting that the same analyst was saying that now was the time to start buying equities.
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Old 12-14-2008, 08:28 PM   #3
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We have resigned ourselves to the fact that we may not be able to sell our house next year. We were planning to downsize for ER.
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Old 12-14-2008, 09:06 PM   #4
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Hmmm, guess I'll be stayin' in the flat part of TX for a while....
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Old 12-14-2008, 10:06 PM   #5
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It's amazing how far behind the main stream media and others are on this whole thing. The blogosphere has been talking about this for months, nay years even. This one in particular comes to mind: http://www.doctorhousingbubble.com/

I've been hoping that all this train wreck has finally been priced into the markets, but now I'm not so sure.
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Old 12-14-2008, 11:31 PM   #6
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I had heard or read (last week?) a completely unconfirmed speculation that housing prices are likely to fall another 20 percent in 2009. I don't mind selling this house low if we can buy the next one low--the question is, will there be any buyers?
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Old 12-15-2008, 12:30 AM   #7
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Hmmm, guess I'll be stayin' in the flat part of TX for a while....

How brave of you fighting the fire ants,hurricanes,tornado's, and Ebola.
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Old 12-15-2008, 01:21 AM   #8
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I had heard or read (last week?) a completely unconfirmed speculation that housing prices are likely to fall another 20 percent in 2009. I don't mind selling this house low if we can buy the next one low--the question is, will there be any buyers?
Not with the slash and burn rates on bank owned properties.

I wanted to downsize and I may carry two homes for a few years to do it. YUCK!!
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Old 12-15-2008, 08:01 AM   #9
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I wanted to downsize and I may carry two homes for a few years to do it. YUCK!!
Wouldn't that defeat the purpose of 'downsizing'?
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Old 12-15-2008, 08:25 AM   #10
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I'm finally seeing some signs of life in the real estate market in Florida . Yesterday there were a lot more sales than foreclosures in the Sunday paper .
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Old 12-15-2008, 08:29 AM   #11
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Wouldn't that defeat the purpose of 'downsizing'?
Not entirely. We bought our current little house as a second/retirement house in 2006, while we were living in Houston. When I was given the chance to move and work from home, I knew we'd be carrying two houses for a while.

It took us six months and very aggressive pricing to get out from under the house in Houston, but in retrospect I'm glad we were as aggressive on the pricing as we were, because had we done the drip-drip-drip of small price decreases, it would have taken a LOT longer to sell it and probably for quite a bit less money, too.

But yeah, for a while it seemed like "defeating the purpose." But once that other house was sold, our cash flow opened up like never before.
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Old 12-15-2008, 08:37 AM   #12
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I may carry two homes for a few years...
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It took us six months...
I see a big difference between "a few years" and "six months". But maybe that's just me.
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Old 12-15-2008, 08:39 AM   #13
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I bought some body armor...on sale of course.
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Old 12-15-2008, 09:07 AM   #14
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I see a big difference between "a few years" and "six months". But maybe that's just me.
Well, yeah -- but that's largely a function of the housing market, I think. When we sold, it wasn't nearly as bad as it is now. It could have been years in our case, except that we had the luxury to be somewhat aggressive with the pricing in order to unload the thing.

Of course, if we expected it to take "years" to sell, we wouldn't have even tried it.
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Old 12-15-2008, 09:11 AM   #15
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apart from miami, south florida inventory is finally starting to whittle away, still pretty high though, palm beach county has about 33k houses & condos for sale, broward probably similar. down 13% yoy but no idea what a new round of foreclosures would do. our two northern counties might survive it. to the south, the miami-dade condo market is so far in the toilet that it is hard to imagine it flushing further.

oddly, hallandale in broward, just north of miami, did about the best in the state in 2008, i read somewhere that it actually went up in value last quarter. it is also one of our few areas where the population average age is on the decrease (it was mostly older people for as long as i can remember).

haven't decided what to do with my house. if i start a new career maybe i'll keep it. if i vagabond, probably sell and then buy back in within two years to retain save-our-home homesteaded property tax savings which i suspect will be adventageous in the next decade or two as governments recoup recovery losses.

the inherited house will sell at a bargain price to whomever wants a great deal. i've no doubt it will be worth a fortune in 10-20 years, but by then i'm in my 60s-70s so i don't care. also, because i have an as yet undistributed fixed amount tied into the property over and above the split with my brother, any gains realized from this low point in the property value would only divide inequitably. so i figure i'm better off taking my share and buying into the market. i hear stocks are selling cheaply of late.
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Old 12-15-2008, 09:12 AM   #16
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Of course, if we expected it to take "years" to sell, we wouldn't have even tried it.
Bingo.
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Old 12-15-2008, 09:31 AM   #17
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not necessarily bingo. depending on the product, average selling time down here is about 170 days just for the medium priced house, so a year is not unusual. and it's about 2.5 years for some of the mid to higher end stuff. the game's changed.
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Old 12-15-2008, 09:39 AM   #18
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not necessarily bingo. depending on the product, average selling time down here is about 170 days just for the medium priced house, so a year is not unusual. and it's about 2.5 years for some of the mid to higher end stuff. the game's changed.
My bingo reference was directed towards the concept that you could 'downsize' by carrying two homes for a number of years. That doesn't fit any definition of downsizing - at least not one that I understand.
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Old 12-15-2008, 12:34 PM   #19
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Can someone explained to me the definition of Option-ARM? Is that different from Prime ARM?
http://i60.photobucket.com/albums/h2...2/ARMgraph.jpg

I know what Alt-ARM is, but I am confused with Option-ARM (vs. Prime ARM).

Thanks
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Old 12-15-2008, 12:43 PM   #20
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Can someone explained to me the definition of Option-ARM? Is that different from Prime ARM?
http://i60.photobucket.com/albums/h2...2/ARMgraph.jpg

I know what Alt-ARM is, but I am confused with Option-ARM (vs. Prime ARM).

Thanks
Here's a description of an option ARM: Option ARM Loan: Typical Features, Advantages, Pay Option ARMs

The biggest risk appears to be if you elect to pay only the minimum payment in the early years. This payment may allow you to defer interest, so your loan amount can actually increase, leading to much bigger payments later.

Why on earth are these things legal?
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