Another part of the big scam is that we really have no idea how deep the hole is and even whether it is growing or shrinking. So much for SarbOx. Until convincingly revealed otherwise, I continue to presume man behind curtain, Wizard of Oz. Perhaps a team of BS artists behind the curtain feverishly pulling levers.
This is no tale and when it all blows, the BS artists retreat into their well lined bunkers leaving the masses to suffer. They better have a good Republican Guard out front.
The biggest difference between a jumbo and subprime borrower is that a jumbo borrower has more access to lawyers, delaying the process, modification and multiple bankruptcies.
The biggest uncertainty is that many of these jumbos were tied to libor and 1 year t-bills or other low cost of funds index. As rates move up the payments will force many who are current to not make payments.
The extend and pretend on the upper end will create larger losses for the bank on those properties in the future
Hmm, I thought I was the only Frank posting here, although I notice you’re calling yourself “frank” instead of “Frank” with a capital F.
Perhaps those “strategically” not paying their $5K, 10k, 15K, whatever K mortgages will so STIMULATE the economy with their new found “wealth” and spending, the economy to recover. Is that the plan?
If so, better hurry up with it. Most local governments are not exactly flush. Key, it seems to me, is whether, or not, the above described “strategiests” have continued to pay PROPERTY tax. When local governments move with their liens, the banks’ hands will be forced.
However, given the large spreads banks are currently earning between deposits and loans they will be able to generate more earnings to offset these losses
So, with any significant numbers not paying for 18 months or longer, surely an inflection point for these types of properties is rapidly approaching.
It is simple “denial” caused by peak optimism at the top of a trend that is possibly three orders of magnitude larger than 1929 according to the Elliott Wave Principle.
The poor feel powerless, and when pushed, walk away or cower. Some bankers are probably laughing at how easy a time they’ve had until recently, foreclosing like mad men.
The rich know they can fight, and can call people who could make the banks’ lives miserable. Especially if embarrassing the wrong person in public.
It takes just one, two or more people in the same neighborhood to raise hell by standing up and fighting, and pointing out the evidence, doing the reporting the media “doesn’t have interest” in doing- it’s well worth the effort.
Like you mentioned, at least part of the reason for avoiding forclosure is those higher priced homes are less likely to sell in this market. It is easier for the banks to keep somebody in them maintaining them rather than let them go vacant and having to mow the lawn.
The mark to market phenomena offers a lot of insights: 1. In the neighborhood I’m in, the home values vary as much as a low of $85,000(pre WW II vintage, less than 1200 sq ft.) topping out at around $325,000 (built less than 40 years ago and maxing out at around 2500 sq ft)-all on smallish lots that are anywhere from 1/5 of an acre to just over an acre of land. This is Michigan, Southfield is a suburb of Detroit, we are in the vortex of the economic melt down and have yet to recover from the depression of the so called ‘oil embargo’ of the 1970’s that sent our precious car companies into a permanent tizzy. The whole area is nothing more than a factory town. Around 1990, McMansions – 2-3000 sq ft, 2-4 acre lots and prices starting at around $400,000 going up to $600,000-were built on the periphery of the area, and a stranger sight you will never see than land that was once a farmer’s field to virtually sprout these ungainly mushrooms overnight. These are cities like Waterford and Milford and Brighton-third and fourth tier suburbs that orbit in the outer limits of the faux French Burgundian ticky tacky of the boorish hinterland. These same fakey homes house rksloans.com/installment-loans-ne the elites (or trying to pretend elites) looking down their noses at the inner city. 2. If a Realtor wants to keep their cozy commissions flowing, the real value of the upper end of this whole schmear must be hidden. Currently a home in the $200,000 range- near the bottom end of the top 1/4 value on the block, has been empty for 8 months; no doubt it will remain empty for another 8-10 months, a greater than chance exists that it will remain empty for 4-6 years like other homes that are very close by. If a reality check were to be done, and the home were sold so it could attract a buyer, in my opinion, the value would of that solid $200,000 would have to be marked down to $125,000 ( or less ) taking the whole neighborhood with it. The Realtor is pipe dreaming- “Better to hold on to the hope (illusions) that a living can be made selling homes than to wake up to a cold coffee pot. 3. If that oh so solid $200,000 home needs to be marked down %35 what about those fakey French Bordeaux Bouldvards? They will never budge at any price short of a give away. Why? Go ask the CEO of General Motors LLC while he’s surveying the parking lots, the Detroit River and the whole loverly Downtown Detroit scene from the 43 floor of the Renaissance Towers.