On Wed, 30 Jan 2008 17:07:17 -0000, wrote:

On Wed, 30 Jan 2008 16:01:54 +0000, Short Wave Sportfishing wrote:


Then you can put the insurance companies back into the game by putting
rules in place that brings the mortagage lending practices back to what
worked before - verification of income and ability to pay based on
monthly/yearly income and expenses.

Regulation? Damn, how un-Republican of you. ;-)

Not so much regulation as policy. There will always be situations
that don't fit the local market conditions, or non-classic buyers who
have considerations other than those I mentioned, which local bankers
and underwriters can evaluate properly.

What you say makes a lot of sense, but this subprime fiasco seems
more like Tulip Mania than a classic bubble. I mean, what were they
thinking, or not?

With respect to tulips, the analogy isn't exactly "perfect" in the
sense that there are some arguments about the true cause of the Tulip
Mania Bubble by some fairly competent historians.

However, as popularly explained, the housing bubble is exactly like
the Tulip Mania Bubble which is the classic case. Prices will go up
forever - ergo, you can't lose money because you will always make
money.

While true over time, it's generally not true over the short term (say
5 years as opposed to 13 years). For instance properties I've owned
until recently that appreciated in terms of real market value (as
opposed to fair market value) 90% since a point in 2001 - one house
that I still have was bought at $132K and was bank appraised last week
at $234,000 (fair value $219k) and I have an offer of $230k.

That's what most people were counting on with the low ARMs - get in
low and sell high.

Only it didn't work that way. :)

Did you here about the French trader that lost $7 billion? Somebody at
Societe Generale was asleep.

And entirely believable oddly enough. Certainly the trader's
supervisors were asleep at the switch, but one single trader can, and
has done before, bought into futures trades on their own and ruined
financial institutions.

What I find interesting is how Soc Gen unwound the trades - that was
total incompetance.

"Short Wave Sportfishing" wrote in message
...
On Wed, 30 Jan 2008 17:07:17 -0000, wrote:

On Wed, 30 Jan 2008 16:01:54 +0000, Short Wave Sportfishing wrote:


Then you can put the insurance companies back into the game by putting
rules in place that brings the mortagage lending practices back to what
worked before - verification of income and ability to pay based on
monthly/yearly income and expenses.

Regulation? Damn, how un-Republican of you. ;-)

Not so much regulation as policy. There will always be situations
that don't fit the local market conditions, or non-classic buyers who
have considerations other than those I mentioned, which local bankers
and underwriters can evaluate properly.

What you say makes a lot of sense, but this subprime fiasco seems
more like Tulip Mania than a classic bubble. I mean, what were they
thinking, or not?

With respect to tulips, the analogy isn't exactly "perfect" in the
sense that there are some arguments about the true cause of the Tulip
Mania Bubble by some fairly competent historians.

However, as popularly explained, the housing bubble is exactly like
the Tulip Mania Bubble which is the classic case. Prices will go up
forever - ergo, you can't lose money because you will always make
money.

While true over time, it's generally not true over the short term (say
5 years as opposed to 13 years). For instance properties I've owned
until recently that appreciated in terms of real market value (as
opposed to fair market value) 90% since a point in 2001 - one house
that I still have was bought at $132K and was bank appraised last week
at $234,000 (fair value $219k) and I have an offer of $230k.

That's what most people were counting on with the low ARMs - get in
low and sell high.

Only it didn't work that way. :)

Did you here about the French trader that lost $7 billion? Somebody at
Societe Generale was asleep.

And entirely believable oddly enough. Certainly the trader's
supervisors were asleep at the switch, but one single trader can, and
has done before, bought into futures trades on their own and ruined
financial institutions.

What I find interesting is how Soc Gen unwound the trades - that was
total incompetance.


Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+ houses.

On Wed, 30 Jan 2008 13:19:11 -0800, "Calif Bill"
wrote:

Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+ houses.

Proves the point doesn't it.

Calif Bill wrote:
"Short Wave Sportfishing" wrote in message
...
On Wed, 30 Jan 2008 17:07:17 -0000, wrote:

On Wed, 30 Jan 2008 16:01:54 +0000, Short Wave Sportfishing wrote:


Then you can put the insurance companies back into the game by putting
rules in place that brings the mortagage lending practices back to what
worked before - verification of income and ability to pay based on
monthly/yearly income and expenses.
Regulation? Damn, how un-Republican of you. ;-)
Not so much regulation as policy. There will always be situations
that don't fit the local market conditions, or non-classic buyers who
have considerations other than those I mentioned, which local bankers
and underwriters can evaluate properly.

What you say makes a lot of sense, but this subprime fiasco seems
more like Tulip Mania than a classic bubble. I mean, what were they
thinking, or not?
With respect to tulips, the analogy isn't exactly "perfect" in the
sense that there are some arguments about the true cause of the Tulip
Mania Bubble by some fairly competent historians.

However, as popularly explained, the housing bubble is exactly like
the Tulip Mania Bubble which is the classic case. Prices will go up
forever - ergo, you can't lose money because you will always make
money.

While true over time, it's generally not true over the short term (say
5 years as opposed to 13 years). For instance properties I've owned
until recently that appreciated in terms of real market value (as
opposed to fair market value) 90% since a point in 2001 - one house
that I still have was bought at $132K and was bank appraised last week
at $234,000 (fair value $219k) and I have an offer of $230k.

That's what most people were counting on with the low ARMs - get in
low and sell high.

Only it didn't work that way. :)

Did you here about the French trader that lost $7 billion? Somebody at
Societe Generale was asleep.
And entirely believable oddly enough. Certainly the trader's
supervisors were asleep at the switch, but one single trader can, and
has done before, bought into futures trades on their own and ruined
financial institutions.

What I find interesting is how Soc Gen unwound the trades - that was
total incompetance.


Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+ houses.




Good. They ought to be stuck, but good.

"HK" wrote in message
...
Calif Bill wrote:
"Short Wave Sportfishing" wrote in message
...
On Wed, 30 Jan 2008 17:07:17 -0000, wrote:

On Wed, 30 Jan 2008 16:01:54 +0000, Short Wave Sportfishing wrote:


Then you can put the insurance companies back into the game by putting
rules in place that brings the mortagage lending practices back to
what
worked before - verification of income and ability to pay based on
monthly/yearly income and expenses.
Regulation? Damn, how un-Republican of you. ;-)
Not so much regulation as policy. There will always be situations
that don't fit the local market conditions, or non-classic buyers who
have considerations other than those I mentioned, which local bankers
and underwriters can evaluate properly.

What you say makes a lot of sense, but this subprime fiasco seems
more like Tulip Mania than a classic bubble. I mean, what were they
thinking, or not?
With respect to tulips, the analogy isn't exactly "perfect" in the
sense that there are some arguments about the true cause of the Tulip
Mania Bubble by some fairly competent historians.

However, as popularly explained, the housing bubble is exactly like
the Tulip Mania Bubble which is the classic case. Prices will go up
forever - ergo, you can't lose money because you will always make
money.

While true over time, it's generally not true over the short term (say
5 years as opposed to 13 years). For instance properties I've owned
until recently that appreciated in terms of real market value (as
opposed to fair market value) 90% since a point in 2001 - one house
that I still have was bought at $132K and was bank appraised last week
at $234,000 (fair value $219k) and I have an offer of $230k.

That's what most people were counting on with the low ARMs - get in
low and sell high.

Only it didn't work that way. :)

Did you here about the French trader that lost $7 billion? Somebody at
Societe Generale was asleep.
And entirely believable oddly enough. Certainly the trader's
supervisors were asleep at the switch, but one single trader can, and
has done before, bought into futures trades on their own and ruined
financial institutions.

What I find interesting is how Soc Gen unwound the trades - that was
total incompetance.


Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+
houses.


Good. They ought to be stuck, but good.

Just an example of the fallacy of the boom. Sort of like the dot.bomb boom.
And they will be saved by the loan programs that are being proposed by both
parties.

Calif Bill wrote:
"HK" wrote in message
...
Calif Bill wrote:
"Short Wave Sportfishing" wrote in message
...
On Wed, 30 Jan 2008 17:07:17 -0000, wrote:

On Wed, 30 Jan 2008 16:01:54 +0000, Short Wave Sportfishing wrote:


Then you can put the insurance companies back into the game by putting
rules in place that brings the mortagage lending practices back to
what
worked before - verification of income and ability to pay based on
monthly/yearly income and expenses.
Regulation? Damn, how un-Republican of you. ;-)
Not so much regulation as policy. There will always be situations
that don't fit the local market conditions, or non-classic buyers who
have considerations other than those I mentioned, which local bankers
and underwriters can evaluate properly.

What you say makes a lot of sense, but this subprime fiasco seems
more like Tulip Mania than a classic bubble. I mean, what were they
thinking, or not?
With respect to tulips, the analogy isn't exactly "perfect" in the
sense that there are some arguments about the true cause of the Tulip
Mania Bubble by some fairly competent historians.

However, as popularly explained, the housing bubble is exactly like
the Tulip Mania Bubble which is the classic case. Prices will go up
forever - ergo, you can't lose money because you will always make
money.

While true over time, it's generally not true over the short term (say
5 years as opposed to 13 years). For instance properties I've owned
until recently that appreciated in terms of real market value (as
opposed to fair market value) 90% since a point in 2001 - one house
that I still have was bought at $132K and was bank appraised last week
at $234,000 (fair value $219k) and I have an offer of $230k.

That's what most people were counting on with the low ARMs - get in
low and sell high.

Only it didn't work that way. :)

Did you here about the French trader that lost $7 billion? Somebody at
Societe Generale was asleep.
And entirely believable oddly enough. Certainly the trader's
supervisors were asleep at the switch, but one single trader can, and
has done before, bought into futures trades on their own and ruined
financial institutions.

What I find interesting is how Soc Gen unwound the trades - that was
total incompetance.

Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+
houses.

Good. They ought to be stuck, but good.

Just an example of the fallacy of the boom. Sort of like the dot.bomb boom.
And they will be saved by the loan programs that are being proposed by both
parties.




If there is any "saving" to be done, it ought to be for individual
families losing the house in which they live.

wrote:
On Wed, 30 Jan 2008 16:20:56 -0500, HK wrote:

Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+ houses.



Good. They ought to be stuck, but good.

the problem is that a lot of them really don't have much money in the
game and they just walked away leaving that long list of banks holding
useless paper and a house they can't sell. The 60 minutes piece
pointed out these loans were consolidated so many times it is hard to
figure out exactly who actually does own any given house in
forclosure. As I said before, big builders were getting huge blocks of
money from fund operators and they lent it out through their in house
mortgage company. The fund holds all the paper but the individual
investors have a hard time sorting them out when the fund fails.


Sure it is a problem, but the multi-house buying speculators should pay
a penalty in addition losing the little bit of money they "invested" in
hopes of using borrowed money to make a killing. Perhaps that penalty
will merely be being forced into personal bankruptcy.

On Thu, 31 Jan 2008 06:27:41 -0500, HK wrote:

wrote:
On Wed, 30 Jan 2008 16:20:56 -0500, HK wrote:

Lots of those upside down loans, at least out here, were speculators.
Counting on a 20% / year growth. A few out here are stuck with 5+ houses.



Good. They ought to be stuck, but good.

the problem is that a lot of them really don't have much money in the
game and they just walked away leaving that long list of banks holding
useless paper and a house they can't sell. The 60 minutes piece
pointed out these loans were consolidated so many times it is hard to
figure out exactly who actually does own any given house in
forclosure. As I said before, big builders were getting huge blocks of
money from fund operators and they lent it out through their in house
mortgage company. The fund holds all the paper but the individual
investors have a hard time sorting them out when the fund fails.


Sure it is a problem, but the multi-house buying speculators should pay
a penalty in addition losing the little bit of money they "invested" in
hopes of using borrowed money to make a killing. Perhaps that penalty
will merely be being forced into personal bankruptcy.

Harry, should everyone *except* the homeowner who got himself into the
situation pay a penalty?
--
John H

wrote:
On Thu, 31 Jan 2008 06:27:41 -0500, HK wrote:

Good. They ought to be stuck, but good.
the problem is that a lot of them really don't have much money in the
game and they just walked away leaving that long list of banks holding
useless paper and a house they can't sell. The 60 minutes piece
pointed out these loans were consolidated so many times it is hard to
figure out exactly who actually does own any given house in
forclosure. As I said before, big builders were getting huge blocks of
money from fund operators and they lent it out through their in house
mortgage company. The fund holds all the paper but the individual
investors have a hard time sorting them out when the fund fails.

Sure it is a problem, but the multi-house buying speculators should pay
a penalty in addition losing the little bit of money they "invested" in
hopes of using borrowed money to make a killing. Perhaps that penalty
will merely be being forced into personal bankruptcy.

I imagine that is where a lot of them are heading but if they were
smart enough to pay off one of the houses Florida law will let them
keep it.


Don't they actually have to be living in the house, or can you
"homestead" an investment house in Florida?

"HK" wrote in message
...

Don't they actually have to be living in the house, or can you "homestead"
an investment house in Florida?


The last I knew you could homestead your primary residence only.

Eisboch