Tuesday, January 29, 2008

Here's Some Hope

His agents are telling owners who need to sell within the next five years to put it on the market now because prices are projected to fall further. For buyers, though, interest rates are the lowest in years, and there's a 15-month supply of homes to choose from.

This from a USA Today article.

Hope? Sell now or be priced out forever?

Friday, December 7, 2007

Who's Benefit?

Foreclosure is to no one’s benefit. I’ve heard estimates that mortgage investors lose 40-50 percent on their investment if it goes into foreclosure.

Because everyone loses in foreclosure, the industry – lenders and investors – already has a process for working with struggling borrowers to avoid foreclosure whenever there is a better option for everyone.
- Hank Paulson 12/07/07

Let's make this clear. If foreclosure were to no one's benefit, it wouldn't exist! Paulson is covering for his special interests. Listen to his whole song and dance here. What Paulson is saying without saying it is "In the current housing market foreclosure doesn't help the lenders."

Thursday, December 6, 2007

Hope Now Needs a Theme Song

A little patience from the soon to be loyal 16 daily visitors is appreciated. This blog is only 20 hours old and your convivial but curmudgeonly host picked a bad time to start a new project. Mrs. Dawg has a honeydew list longer than my tail. One of the purposes of No Hope Now is to heap ridicule on idea and people behind this half-baked bailout plan. Of course there will be solid data and plenty of real world examples but just those would prove boring for a blog. In that spirit we need a "Theme Song" for our internet neighbors over at Hope Now. If it is any consolation No Hope Now already has more content and more comments than Hope Now does. And unlike Hope Now, No Hope Now does make promises it isn't ready to document. But enough about that, time for a bit of humor. Let's just concede the obvious popular and classics; "We've Only Just Begun," "We Didn't Start The Fire," "1930s Breakdown," and try for a little subtlety. I'll go first:
The Monkees by Tommy Boyce and Bobby Hart - The Monkees Lyrics

Here we come
Walking down the street
We get the funniest looks from
Everyone we meet.

Hey, hey we're the Monkees,
and people say we monkey around.
But we're too busy singing,
to put anybody down.

We go wherever we want to,
Do what we like to do.
We don't have time to get restless,
There's always something new.

Hey, hey we're the Monkees,
and people say we monkey around.
But we're too busy singing,
to put anybody down.

We're just trying to be friendly,
Come watch us sing and play.
We're the young generation,
And we got something to say.

Hey, hey we're the Monkees,
You never know where we'll be found.
So you'd better get ready,
We may be comin to your town.

Hey, hey we're the Monkees,
and people say we monkey around.
But we're too busy singing,
to put anybody down.

Wednesday, December 5, 2007

So Many Questions

We are starting to see many questions about this "MLEC for Dummies" scheme being repeated. One answer to always keep in mind: nothing can stop a recoupling of wages and housing prices. Gov't can do little more than create distortions; buying time and increasing severity for instance, or picking winners to the woe of everyone else.

Let's do a thought experiment.
Say you are the investor and you've got 100 borrowers paying a 7% teaser rate. You anticipate the sweet passive income jumping to 10%. Now you aren't stupid. Some of those FBs are toast but how many? 100 FBs paying 7% is the same as 70 people paying 10% right? Normally meaning before Aug 2007 the other 30 would re-fi and pay you off. Even now those 30 are supposedly doing any number of short sales, re-fis and foreclosures. All of of which return some if not all your principal. Not as good as the old days but still good returns and over the time frames you projected. Would you trade that last bad scenario for what the nice people from the government are proposing?

Welcome to No Hope Now

Don't worry about the title... or the subject matter... or the fact that your convivial host is a curmudgeonly cynic of the highest order. This is an upbeat and happy place. Heck, anyplace where you can vent on the inequities and stupidity of public policy is by definition a celebration of democracy. The title is not "No Hope, now" but rather No "Hope Now" referring to the ill conceived and highly dangerous government bailout plan for lender and debtors. Since the powers that be are not interested in what people have to say about this plan I started this blog.

Oh, yes I also own nohopenow.com and nohopenow.org I wonder if...

Consumer Credit Counseling Service of Atlanta
Homeownership Preservation Foundation
Housing Partnership Network
NeighborWorks America
Servicers/Lenders/Mortgage Market Participants
AIG / American General Financial Services, Inc.
Aurora Loan Services, Lehman Brothers
Carrington Mortgage Services
IndyMac Bank
Litton Loan Servicing
Morgan Stanley Home Loans
Ocwen Loan Servicing
Wilshir Credit Corporation, Merrill Lynch Home Loans
American Securitization Forum
Fannie Mae
Freddie Mac
Trade Associations
American Bankers Association
America’s Community Bankers
American Financial Services Association
American Securitization Forum
Consumer Bankers Association
Consumer Mortgage Coalition
The Financial Services Roundtable
The Housing Policy Council
Mortgage Bankers Association
Securities Industry and Financial Markets Association

...paid more than $17 for hopenow.com? That is what they cost me.
You have to believe these special interest groups are circling the wagons with this scheme.
The Gross National Debt