Subprime Resurfaces As Housing-Market Woe

Wall Street Journal:

The U.S. housing market is facing new downward pressure as holders of subprime-mortgage bonds flood the market with foreclosed homes at prices that are much lower than where many banks are willing to sell.

Read the whole story: Wall Street Journal

Comments

[Lu-Miri]

I am a Pro Se defendant , and I have read hundreds of legal web sites , and many, but many of these site's criticize the Loan Modification plan as a scam, with a fraudelant intention. Not to help the homeowner ,but to induce the desperate homeowner to sign new Mortgage paper's, documents ,contracts, and other loan applications.

The " Bank Mortgage Co. " to his advantage is eliminating the original mortgage loan and mortgage paper work ...which may have faulty and incomplete chain of ownership , and more evidence of Fraud that will help the homeowner win in a foreclosure civil suit.......

But if you sign a new Mortgage Notes , contracts,and Mortgage paper's..you are giving the " Banco "
a new and better documented loan & mortgage paper's that will enable them [ Bank ] to foreclose you much more easily.

Basically you're giving them your house on a silver plate and a full proof opportunity to an easy foreclose .

The Wall Street Bankers pretender lenders will have a new [yours ] signature ,and thus a stronger hold of your

home, that fact is detrimental to the troubled homeowner ability to fight against a foreclosure at a later date if you ..the homeowner default. again !

The Banksters will have a new fresh [ your ] signature on their rope ....to hang you with it.

These Loan Modification is in my , and many others opinion.... a FRAUD ....on the homeowners.

Fitzgerald 07-10-09.

[Sundialsvc4]

Banks are selling the homes, at these "prices," to THEMSELVES.

A very lucrative (for them...) rental-property market is coming. There will be the "landed gentry" and millions of "serfs."

Feudalism returns.

[hearmeout]

Did it ever really go away?

Don't confuse mass consumption via debt with actual prosperity! Over the last two decades the U.S. economy has had more smoke and mirrors than Transformers 2 (but at least its been more entertaining).

[outnow]

I see large numbers of bank-owned properties and short sales. Other mortgage bond holders are now dumping properties, too. My banker said that properties that were selling for 400,000 - even $450,000 were quietly being sold to "investors" at a price of $150,000. These are brand new 5-bedroom homes!

Southern California real estate may be moving but "REOs" and other properties are moving at rock bottom prices.

If the financial system bases its net worth on real estate as the foundation of the economy, things look bad for several more years at least. Things may never be back to the good old days.

[independentrepublicrat]

It seems that banks are willing to sell properties to investors at 20-50% discount but they don't want to sell to the general public at 10-15% discount or even work with people on shortsales or loan modifications. I have read countless stories and reports on the web about how banks are saying they want to help those in crisis but their actions indicate otherwise. I feel sorry for people in this tough situation.

[JoeBlough]

"The good old days" - were when a single income family could buy a home. If prices drop another 50%, we could still get there.

[sheilaofmiami]

I need to scream

IT WILL BE 10 YEARS BEFORE WE HAVE A DECENT ECONOMY. PANIC ENSUES AS THOSE IN CONTROL CONTINUE TO DO THE SAME BAD BEHAVIORS THEY DID THAT GOT US HERE.

THE REAL ESTATE MARKET IS IN THE CRAPPER, AND GOING DOWN DOWN DOWN.

I am privy to information on the commercial real estate market that I cannot repeat, but we are in trouble, and we are not stabilizing like the talking heads say, we are in even bigger trouble than we realize.....

I am keeping my boys in school as long as I can afford it.

[KillTheMessenger]

You shouldn't have built all those "see-through" buildings....

:-)

[jsgaetano]

Well, duh.

Nobody brought back the regulation which was preventing predatory lending, selling off fraudulent loans, insuring those bad loans, then bundling them as AAA rated securities.

So... why is anyone surprised the bailed out banks are just going back to business as usual? If legislators are going to STILL believe in "industry self regulation" and other conservative stupidity, these guys are just going to keep stealing money.

Legislators are going to have to... GASP!... write legislation to fix this. Arguing for deregulation has always been like a bricklayer saying we should be living in mud huts.

[ErnestineBass]

...a mason pilfering bricks from the foundation to construct the chimney.

[MIKEBC]

Funny how you rightwing conservatives were now worried about spending when dummy bush was lying us into Iraq.

[jazzman]

Well isn't this the supply side dream? Too many houses on the market lowers prices and makes it affordable to Americans who have seen their wages decline over the past 30 years. This was actually the promise Friedman made when he talked America into his theory of tax breaks for the rich to generate jobs. He said that wages might be lower but so would prices and therefore the standard of living would be the same.

Actually, if housing rules had stayed the same as they were before the bubble subprime scam and if we had had universal health care instead of privatized health care extortion rackets, the supply siders might have been proved correct.

However, most economists forget to factor in human factors like avarice, cheating, corruption, and gaming the system that often derail their perfectly thought out theories that they write on black boards in Universities and become the ideologies of fresh faced graduates who haven't lived in the real world enough to know that the complexity of human behavior can't be captured in an economic model.

[cdnnewsjunky]

I have to agree that human behaviour is the "monkey wrench" when it comes to ecomomic models. Actually, it seems to be the "monkey wrench" in just about everything.

[Samalabear]

Especially in America where the prevailing sentiment seems to be "I've got mine, so screw the rest of you." I'm sure everybody's has read comments here like that. "I have excellent insurance, why should I pay for someone else?"

Check out Norway. It might not be everybody's cup of tea, but to me this sounds like freedom, where people aren't trying to knife everyone in the back, as they are in America. We could learn something from Norway. And, yes, I understand that Norway has a homogeneous population and closed borders, but we could still learn a lesson from them. To me the Norwegians sound a lot freer than Americans. Think about your life. Unless you're very well off, do you feel free? Are you free to go out and pursue your dreams? It is a well-known fact that people who make a living at something they love are healthier and live better lives. How many of us can do that? And even if we make a living doing something we love, how tenuous is it? After all, if you get really sick you'll lose it all probably sooner than later, and we'll have some fine, upstanding American in comment section saying, "Well, that's too bad, I guess he made the wrong decision." Really, think about. Here's the article:

http://www.commondreams.org/view/2009/07/08-2

Genuinely kind and generous Americans are in the minority.

[ICanHasDemocracy]

Send all these sub-prime lenders to China, they love junk capitalism there.

[oktober]

This will continue to happen as long as we allow it. There is no fear in any brokers, bankers, or speculators anyomore, they've all been handed a blank check, a get-out-of-debt free card, and not one rally, not one organized event to express our disgust and frustrations with the whole mess.

We're become passifists and they will continue to walk all over us until lives are threatened. Remember when all those CEOs and higher ups 'returned' their parachutes this past year?

The machine will keep turning until a monkey wrench is thrown in and not a moment earlier. So far, Americans have sat back and oiled the machine, nothing more.

[instagladiator]

So very true. When your last POTUS "stole" the 2000 election, I sold my properties, closed all bank accounts, savings, etc., and "got the H outta Dodge." I'm much the better for my decision yet, it amazes me that the majority of Americans are unable to see "the writing on the wall"? It's there, and has been there for years, if only one would open their eyes? There is only one alternative left to "take back your country", but, this will never happen because of the petty childish D&R differences and people unable to unite for a common purpose.

[cdnnewsjunky]

Wow, I must of seen the term "monkey wrench" subconciously when I replied to jazzman above. It was only when I later scrolled down, I saw your post. It was either subconcious or one of those Twilight Zone things.

[oktober]

I probably wouldn't have even noticed, but our points still stand. ;-)

[joecoolconservative]

This is great free market news. My wife and I are waiting to buy a house until all the ARM resets occur and further push down the price of housing. The housing market will continue to decline as a record number of ARMs are resetting in 2010 and 2011. The best time to buy will be early 2011 timeframe. Expect another 25% decrease in the cost of housing.

[cdnnewsjunky]

Great news? Your countries wealth is evaporating and you think it's great news? Why do Republicans hate America so much?

[joecoolconservative]

It's called reality. Deal with it.

[rbchilds]

How is this a political thing? Get real. The difference here is the banks are trying to hold on to the sub-prime loans in the hope to maximize profits, whereas the mortgage broker funds which hold sub-prime loans are dumping them to preserve or protect themselves from further declines in assets. Basically this is two different philosophies and how to handle it. Banks received TARP funds for protection, mortgage funds did not.

[MIKEBC]

Republicans gave us an economy based on a bubble and maxed out credit cards.

[hearmeout]

This isn't about Republicans or Democrats, it's about a bubble that both parties and lots of citizens bought into - and Joe's right about having to deal with it. What's wrong with someone waiting for the market to finish tanking before they purchase a property, and what makes them any different than someone purchasing a home in 2005 in the hopes that its value would double as all the hype was glibly promising? Both were motivated by financial security; one got screwed while the other is going to seize what might (or might not) turn out to be a genuine opportunity. And yes, that's life.

And by the way, when your country's wealth is based upon ridiculously over-priced assets - dot com companies "valued" at more than blue chips, cheaply constructed Mcmansions, etc. - there's not really much to evaporate anyway, is there? We might as well bottle thin air and slap a price tag on it. Next!

[JoeBlough]

It was just paper wealth. Not real value.

[drkazmd65]

Well - great for you (no sarcasm intended),... sucks for a lot of the rest of us.

May you find the affordable house of your dreams come 2011. I have mine already and am happy that I was smart enough to actually be able to afford the payments on a fixed rate.

Just don't gloat to your future neighbors too much about it when you do buy,... they might be a bit touchy about the subject.

[ManwithaParachute]

"This is great free market news. My wife and I are waiting to buy a house until all the ARM resets occur and further push down the price of housing."

I said basically the same thing 3 years ago. I dug deeper into the data and instead of relocating to Georgia we stayed in the Midwest. Relocating to Georgia back then we would have lost our down payment in a flash and would be underwater with our last breath. Here, we have been building equity in spite of being down one income. Whatever this house is worth now matters very little as I plan on dieing here. Much happens between now and then as is the case for everyone. Maybe it will be worth less than today and my kids will get nothing out of it. No one can predict the future but you can prepare for the forecast. I chose not to listen to the forecast by those who would profit off my mistakes and so far it has paid off. The folks who took out ARM loans had their reasons and many have lost that bet. The bursting bubble of the moment is commercial real estate. I fear it will be far worse. I am not sure how the bankruptcy laws handle commercial real estate companies.

If you are old enough, you lived through the 70's and the 80's downturns. People get through this crap again and again.

[KillTheMessenger]

Yep. Go for it.

[SangZe]

More of the Great Obama Failure in acation.

[GlenRast]

More GOPBS in action.

[instagladiator]

It is a not a failure. This is "another" successful move. You have to remember, the POTUS is merely "doing what he's told".

[JoeBlough]

More like Bush/Cheney Legacy.

[breakingpoint]

toldjas. but if you're going to down size and move in or back with the folks now's the time, and If you have any extra cash turn it into gold, August and November are going to be brutal.

[drkazmd65]

Yep,... Got my free investment money set in energy producer stocks, alternative energy stocks & selected mining stocks. The last 2 quarters 2009 are going to be rough for most of us. But eventually the world economy will recover and these areas will rebound.

If you got the cash - my guess is late this summer and late fall will be good times to buy (very selectively) more in these areas - as long as you have a 2-3 year minimum window on expecting a stable return.

Hang on though folks,... it is going to be a 'fun' ride in the meantime.

[nogimmicks]

Obama/Geithner wasted a trillion on the bankers and introduced no essential legislation that would prevent the crooks from repeating the same con in the future. Good job.

[Trustandalwaysverify]

yes........... and While Bush was in office, after Mr. Obama was elected, he requested that Mr. Obama worked with Paulson, and Gaithner of the New York Fed and Bernanke to decide what Obama wanted to do and how Obama wanted to proceed. It was done under the administration of Bush, but it was directed by the Obama people.

In Tarp, the secretary of the treasury was given the authority to act at the behest of the president.
They did not have to go back to congress and no other legislation was needed.

Does anybody remember that Bernanke sat in front of the Senate Banking comitee and he was asked who did you give these 2T dollars to and he said... I do not have to tell you....(with nicer words of course)

In other words, Obama, the Secretary of the Treasury, and the head of the Fed are all conected at the hip, and they are guided by the president.

As this subprime mess continues, it is obviously the responsability of the President.

And in 6 months, nothing of what the president has done to fix this little part of the problem has worked.

If he can not handle this, Why will I trust he can handle healthcare?

[lochnessmonster]

I think Reagan took three years to reduce the unemployment rates in the 80s...give Obama a break! If you have all the answers, why aren't you POTUS????? Where is your brilliant healthcare plan?

[clutchkill]

So instead you trust the insurace companies?lol All he needs to do is get single payer through and it will manage itself.

[instagladiator]

Correction: They are all guided by the Fed. Always has been this way.

[2tango]

The Banks are Stalling the economy, right now we a " MOON-WALKING ECONOMY"

THANKS TO TIM GEATHNER, AND SUMMERS, THE TWO CENTRIST(TILTING TO THE RIGH) BANKS SUPPORTERS.

[cmaukonen]

As long we keep pouring money into the Wall Street charlatans and pimps who keep pricing everything outrageously for their own greed, this enconomy will remain in the dumpster.