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  1. #1 The Second Foreclosure Tsunami Is Coming 
    Super Moderator bijou's Avatar
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    The Second Foreclosure Tsunami Is Coming, And Is About To Kill Any Hopes Of A "Housing Bottom"


    Submitted by Tyler Durden on 04/04/2012 21:00 -0400

    In what appears to be surprising news for some, Reuters has an article titled "Americans brace for next foreclosure wave" whose key premise is that "a painful part two of the [housing] slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures." Thank the robosettlement, where in exchange for a few wrist slaps, contract law was thoroughly trampled by America's attorneys general, but far more importantly to the country's crony capitalist system, the foreclosure pipeline was once again unclogged, and whether one does or does not have a legal title on a given house, the banks are now fully in their right to foreclose on it. What this means also is that America's record shadow housing inventory, which is far greater than any fabricated number the NAR reports on a monthly basis, is about to get unleashed on buyers, shifting the supply curve much further to the right, as up to 9 million new properties slowly but surely appear on the market. And while many will no longer be able to live mortgage free, forcing them to go out and rent (and no longer be able to afford incremental iGizmos), it also means that the prevalent price of homes is about to take another major tumble, making buffoons out of all those who, once again, called for a housing bottom in early 2012. Here's the simply math: there will be no housing bottom until the 9 million excess homes clear. Period. Until then it is a buyer's market, even if said buyer is unable to obtain bank financing, as ultimately it will be the seller who is forced to monetize (or vacate if underwater) their home in a world of ever diminishing cashflows. The fear of the supply onslaught will only make the dumpage that much faster.
    As a reminder, this is what America's recover shadow inventory looked like recently (read more here):

    http://www.zerohedge.com/news/second...housing-bottom
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  2. #2  
    Senior Member Zeus's Avatar
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    What more home on the market then buyers making it a buyers market !

    Well ain't somebody a bloody genius.

    Somebody just blowing smoke trying to Impress somebody with their keen analytically mind. The only people going to be worried or Impressed by that screed are the uninformed.

    The worst is over the housing market will falter a bit more but then will pick up a little bit because of the historically low interest rates but will remain somewhat depressed until the economy picks up.

    As far as people expecting Mortgage rates to get any lower ,well if they are that stupid they don't deserve to buy a home. rates are so low now it's almost like getting free money when you get a mortgage.
    Last edited by Zeus; 04-06-2012 at 07:01 PM.
    The 21st century. The age of Smart phones and Stupid people.

    It is said that branches draw their life from the vine. Each is separate yet all are one as they share one life giving stem . The Bible tells us we are called to a similar union in life, our lives with the life of God. We are incorporated into him; made sharers in his life. Apart from this union we can do nothing.
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  3. #3  
    Senior Member Ranger Rick's Avatar
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    The tsunami is when all those ARM rates adjust back up to 5-6% and you are underwater 100K.
    I dream of the day a chicken can cross the road without it's motives being questioned.

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    Anyone who makes the decision to depend upon the government to take care of their basic needs has essentially doomed himself to a life of bitter disappointment.
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    Senior Member Zeus's Avatar
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    Quote Originally Posted by Ranger Rick View Post
    The tsunami is when all those ARM rates adjust back up to 5-6% and you are underwater 100K.
    Concerning ARM's, They are essentially Fixed rate for usually 3,5,7,or even 10 yrs(the most common is 5yrs) then only adjust annually by a couple points. Also there is always the option to convert to a fixed rate,usually after the first adjustment. A 3 yr or further out projection on what the housing market and/or economy is going to be like is just blowing smoke out your backside.
    Last edited by Zeus; 04-07-2012 at 12:08 AM.
    The 21st century. The age of Smart phones and Stupid people.

    It is said that branches draw their life from the vine. Each is separate yet all are one as they share one life giving stem . The Bible tells us we are called to a similar union in life, our lives with the life of God. We are incorporated into him; made sharers in his life. Apart from this union we can do nothing.
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  5. #5  
    Senior Member Ranger Rick's Avatar
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    Ah, you are not going to be able to convert because you owe 300K and the house is only worth 180K. It adjusts up and your $1300 house payment become $2200.
    I dream of the day a chicken can cross the road without it's motives being questioned.

    Quote Originally Posted by lazyboy97O View Post
    How is a state religion bad, but state medicine good?
    Quote Originally Posted by steamboatpete View Post
    Anyone who makes the decision to depend upon the government to take care of their basic needs has essentially doomed himself to a life of bitter disappointment.
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  6. #6  
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    On the bright side. Once 9 million people get out from under their mortgages, they will be free to move around the country pursuing new jobs and opportunities. Once they realize it's not the end of the world, it will unleash some of the depression or anxiety, freeing up a great deal of human capital. Once they rediscover the joys of renting, "Fix the AC!", "Fix the toilet!", "Oh look honey, a house with a pool and a dock!" then all hell will break loose.

    Looking on the bright side folks.
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  7. #7  
    Senior Member Zeus's Avatar
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    Quote Originally Posted by Ranger Rick View Post
    Ah, you are not going to be able to convert because you owe 300K and the house is only worth 180K. It adjusts up and your $1300 house payment become $2200.
    Better check your math on that,doesn't fit any real life scenario. Your pymnt figures are outside any lifetime caps. How do you know Real estate values will be +/- 50 % lower in ,3 5, 7 ,10 yrs from now ?

    Like i said the only ones buying into the sky is still falling fodder are the uninformed/ill informed. Foreclosures will soon tapper off also because Investors are going to start assuming those mortgages.
    The 21st century. The age of Smart phones and Stupid people.

    It is said that branches draw their life from the vine. Each is separate yet all are one as they share one life giving stem . The Bible tells us we are called to a similar union in life, our lives with the life of God. We are incorporated into him; made sharers in his life. Apart from this union we can do nothing.
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