[IWE] WSJ article on people "underwater" on mortgages.
iwe@warhead.org.uk
iwe@warhead.org.uk
Wed, 08 Oct 2008 08:34:53 -0400
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I saw that in Alaska in 1985. People with good paying jobs were handing their keys to the bank. Feds had to come in, declare all forclosures juidicial. Shut down a bunch of the banks. Made people who were working and who could afford to pay the mortgage to cover any losses if they turned in their keys. Also sent aggressive mortgage marketers to jail. It took about 3 years to settle out. A long time nationwide and they havnt even started yet.
thanks,
Bill
-----Original Message-----
From: D. Scott Katzer <dskatzer@os2bbs.com>
To: iwe@warhead.org.uk <iwe@warhead.org.uk>
Sent: Wed, 8 Oct 2008 8:23 am
Subject: [IWE] WSJ article on people "underwater" on mortgages.
http://online.wsj.com/article/SB122341352084512611.html#project%3DUnderwater0809
(Flash Graph)?
?
"The relentless slide in home prices has left nearly one in six U.S.
homeowners owing more on a mortgage than the home is worth, raising the
possibility of a rise in defaults -- the very misfortune that touched
off the credit crisis last year.?
?
[...]?
?
About 75.5 million U.S. households own the homes they live in. After a
housing slump that has pushed values down 30% in some areas, roughly 12
million households, or 16%, owe more than their homes are worth,
according to Moody's Economy.com.?
?
The comparable figures were roughly 4% under water in 2006 and 6% last
year, says the firm's chief economist, Mark Zandi, who adds that "it is
very possible that there will ultimately be more homeowners under water
in this period than any time in our history."?
?
[...]"?
?
(Via http://calculatedrisk.blogspot.com/ )?
?
McCain was right that something needs to be done about such mortgages
(the $700B plan gives Paulson tools to address that, but it's not clear
that he will). But McCain's take on it was nothing but a gimmick.
Several economists have proposed similar things (one I recall was that
the USA should buy *every* mortgage, and rewrite them to 5% fixed 30
year terms). While it would put a floor under the market, it wouldn't
help overheated areas like Las Vegas too much - homes that cost $500k 2
years ago aren't suddenly going to be worth that again - prices have to
come down because of the oversupply. Ultimately, houses have to be
affordable before things stabilize. Wages haven't risen, so prices have
to come down.?
?
Cheers,?
Scott.?
_______________________________________________?
IWE mailing list?
IWE@warhead.org.uk?
http://lists.warhead.org.uk/mailman/listinfo/iwe?
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<div> I saw that in Alaska in 1985. People with good paying jobs were handing their keys to the bank. Feds had to come in, declare all forclosures juidicial. Shut down a bunch of the banks. Made people who were working and who could afford to pay the mortgage to cover any losses if they turned in their keys. Also sent aggressive mortgage marketers to jail. It took about 3 years to settle out. A long time nationwide and they havnt even started yet.<br>
<font face="Arial, Helvetica, sans-serif">thanks,<br>
Bill<br>
</font></div>
<div> <br>
</div>
<div> <br>
</div>
-----Original Message-----<br>
From: D. Scott Katzer <dskatzer@os2bbs.com><br>
To: iwe@warhead.org.uk <iwe@warhead.org.uk><br>
Sent: Wed, 8 Oct 2008 8:23 am<br>
Subject: [IWE] WSJ article on people "underwater" on mortgages.<br>
<br>
<div id="AOLMsgPart_0_537bb488-f4ce-45f5-9f57-eb8d30851ff3" style="margin: 0px; font-family: Tahoma,Verdana,Arial,Sans-Serif; font-size: 12px; color: rgb(0, 0, 0); background-color: rgb(255, 255, 255);">
<a href="http://online.wsj.com/article/SB122341352084512611.html#project%3DUnderwater0809" target="_blank">http://online.wsj.com/article/SB122341352084512611.html#project%3DUnderwater0809</a>
(Flash Graph) <br>
<br>
"The relentless slide in home prices has left nearly one in six U.S.
homeowners owing more on a mortgage than the home is worth, raising the
possibility of a rise in defaults -- the very misfortune that touched
off the credit crisis last year. <br>
<br>
[...] <br>
<br>
About 75.5 million U.S. households own the homes they live in. After a
housing slump that has pushed values down 30% in some areas, roughly 12
million households, or 16%, owe more than their homes are worth,
according to Moody's Economy.com. <br>
<br>
The comparable figures were roughly 4% under water in 2006 and 6% last
year, says the firm's chief economist, Mark Zandi, who adds that "it is
very possible that there will ultimately be more homeowners under water
in this period than any time in our history." <br>
<br>
[...]" <br>
<br>
(Via <a href="http://calculatedrisk.blogspot.com/" target="_blank">http://calculatedrisk.blogspot.com/</a> ) <br>
<br>
McCain was right that something needs to be done about such mortgages
(the $700B plan gives Paulson tools to address that, but it's not clear
that he will). But McCain's take on it was nothing but a gimmick.
Several economists have proposed similar things (one I recall was that
the USA should buy *every* mortgage, and rewrite them to 5% fixed 30
year terms). While it would put a floor under the market, it wouldn't
help overheated areas like Las Vegas too much - homes that cost $500k 2
years ago aren't suddenly going to be worth that again - prices have to
come down because of the oversupply. Ultimately, houses have to be
affordable before things stabilize. Wages haven't risen, so prices have
to come down. <br>
<br>
Cheers, <br>
Scott. <br>
_______________________________________________ <br>
IWE mailing list <br>
<a href="mailto:IWE@warhead.org.uk">IWE@warhead.org.uk</a> <br>
<a href="http://lists.warhead.org.uk/mailman/listinfo/iwe" target="_blank">http://lists.warhead.org.uk/mailman/listinfo/iwe</a> <br>
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