Comments on: California Foreclosures: Foreclosures and Charting the REO Trend. Lord of the Mortgages. http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/ How I Learned to Love Southern California and Forget the Housing Bubble Thu, 09 Feb 2012 03:22:22 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Crusader http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23057 Crusader Thu, 28 Aug 2008 20:50:13 +0000 http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23057 Keep the popcorn popping! Keep the popcorn popping!

]]> By: Eric Ogunbase http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23006 Eric Ogunbase Wed, 27 Aug 2008 21:43:25 +0000 http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23006 This is going to hit the taxpayer hard. Because regardless of who you put in office (Obama or McCain), both are bailout minded. McCain will bail out the banks, Obama will bail out the "homebuyers". It's lose-lose. This is going to hit the taxpayer hard. Because regardless of who you put in office (Obama or McCain), both are bailout minded. McCain will bail out the banks, Obama will bail out the “homebuyers”. It’s lose-lose.

]]> By: exit http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23004 exit Wed, 27 Aug 2008 21:14:42 +0000 http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23004 @Aaron - Hadn't visited MIM in a while - good look. Fed / Treasury IM is next? I'm not convinced that 09 is the date for blow up of the POA wave. IMO one of the drivers behind the lower Fed discount rate was to drive down the unprecedented runup in the LIBOR, along with it the MAT and COFI indices which underpin the POA. This lowering pushed the effective fully indexed rate of those toxic loans down from the mid 8's into the mid 5's. Had rates remained at the level they were in early 2007, at the fully indexed rate of 8.5, the POA wave would have hit by now, with resets on IMB (which had 110% caps) cresting first, followed by some CFC and WAMU at 115%, then the remainder at 125% (Downey, First Fed, CFC, EMC, etc.) These waves would be hitting now, some 3-1/4 years after loan inception (loans originated in 2004 and 2005). By pushing the indices lower, the Fed / Treasury / FDIC effectively pushed the reset date back to pretty close to 5 years from origination, except for those loans which were pushed very close to the max LTV reset prior to August 2007. However - I do agree that should the wave start to crescendo in 2009, the "synergy" of negative psychology may impel the nearly capped out to abadon their properties in advance of the reset occurring. Either way, it won't be pretty. @Aaron -

Hadn’t visited MIM in a while – good look. Fed / Treasury IM is next?

I’m not convinced that 09 is the date for blow up of the POA wave. IMO one of the drivers behind the lower Fed discount rate was to drive down the unprecedented runup in the LIBOR, along with it the MAT and COFI indices which underpin the POA. This lowering pushed the effective fully indexed rate of those toxic loans down from the mid 8′s into the mid 5′s. Had rates remained at the level they were in early 2007, at the fully indexed rate of 8.5, the POA wave would have hit by now, with resets on IMB (which had 110% caps) cresting first, followed by some CFC and WAMU at 115%, then the remainder at 125% (Downey, First Fed, CFC, EMC, etc.) These waves would be hitting now, some 3-1/4 years after loan inception (loans originated in 2004 and 2005).

By pushing the indices lower, the Fed / Treasury / FDIC effectively pushed the reset date back to pretty close to 5 years from origination, except for those loans which were pushed very close to the max LTV reset prior to August 2007.

However – I do agree that should the wave start to crescendo in 2009, the “synergy” of negative psychology may impel the nearly capped out to abadon their properties in advance of the reset occurring.

Either way, it won’t be pretty.

]]> By: Landflip http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23002 Landflip Wed, 27 Aug 2008 19:23:36 +0000 http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-23002 I think I read the "cliff notes" to Lord of the Flies. However, I do agree that the banks got too loose with their lending and were not staying on top of the potential problem. Not to mention those that thought they could just borrow and hopefully afford to pay it back. Sometimes I wonder what these folks were thinking or if they were just caught up in greed. The people that are going to suffer for this are the ones that were smart with their money and did not go buy a house they could not afford! I think I read the “cliff notes” to Lord of the Flies. However, I do agree that the banks got too loose with their lending and were not staying on top of the potential problem. Not to mention those that thought they could just borrow and hopefully afford to pay it back. Sometimes I wonder what these folks were thinking or if they were just caught up in greed.

The people that are going to suffer for this are the ones that were smart with their money and did not go buy a house they could not afford!

]]> By: Jon T. http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-22995 Jon T. Wed, 27 Aug 2008 18:14:08 +0000 http://www.doctorhousingbubble.com/california-foreclosures-foreclosures-and-charting-the-reo-trend-lord-of-the-mortgages/#comment-22995 Fantastic and simple explanation of basic economics here. Boiled down to its simplest and most easy to understand explanation, home sales are going up because banks are dumping properties on the market with extremely deep price cuts. It requires only a loose grasp of basic economics to conclude that this will further undermine the value of housing and the equity people have in their homes. This will in turn force more homes into bank possession, which will in turn lead to banks cutting prices even further to unload their inventory. This is a classic race to the bottom. As long as banks are undercutting homeowner resale prices, the deflationary spiral in housing values will continue. It is only when the inflow of houses back to the balance sheets of banks abates that the bottom will be reached. When will that happen? Simple, when the REO properties are being listed at the same price as homeowner resales. At that point the undercutting of homeowner resale prices resulting from inventory dumping of the banks will subside because they won't be creating any more inventory on their own balance sheets through the very process of inventory dumping. Whew! We are not anywhere near the end of this process. The race to the bottom is indeed underway. There is no govenrment program, no bailout, no bill that can stop this. The wonderful thing is that the end game here is affordable housing and a more balanced economy. Unfortunately this road we are all on is going to be a rough ride for many homeowners and the economy at large. Everyone make sure you're buckled up! Maybe the next time around, whoever is in charge of navigation will actually look at a map before we embark on our journey rather than opting for the shortcut someone heard about last night at sometime around 2 am at the bar. Fantastic and simple explanation of basic economics here. Boiled down to its simplest and most easy to understand explanation, home sales are going up because banks are dumping properties on the market with extremely deep price cuts. It requires only a loose grasp of basic economics to conclude that this will further undermine the value of housing and the equity people have in their homes. This will in turn force more homes into bank possession, which will in turn lead to banks cutting prices even further to unload their inventory. This is a classic race to the bottom. As long as banks are undercutting homeowner resale prices, the deflationary spiral in housing values will continue. It is only when the inflow of houses back to the balance sheets of banks abates that the bottom will be reached. When will that happen? Simple, when the REO properties are being listed at the same price as homeowner resales. At that point the undercutting of homeowner resale prices resulting from inventory dumping of the banks will subside because they won’t be creating any more inventory on their own balance sheets through the very process of inventory dumping. Whew! We are not anywhere near the end of this process. The race to the bottom is indeed underway. There is no govenrment program, no bailout, no bill that can stop this. The wonderful thing is that the end game here is affordable housing and a more balanced economy. Unfortunately this road we are all on is going to be a rough ride for many homeowners and the economy at large. Everyone make sure you’re buckled up! Maybe the next time around, whoever is in charge of navigation will actually look at a map before we embark on our journey rather than opting for the shortcut someone heard about last night at sometime around 2 am at the bar.

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