Southern California → This just in: Home Values going down the toliet?

11:15 a.m. April 17, 2007

said by AP Wire: »www.signonsandiego.com/n ··· ges.html :

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WASHINGTON – The heads of Fannie Mae and Freddie Mac said Tuesday the mortgage finance giants are developing new types of loans to help distressed borrowers with high-risk mortgages keep their homes at a time of rising foreclosures.

Many of those borrowers “could avoid foreclosure if they were offered (loans) that allow for affordable mortgage payments,” Bair testified. “Restructuring their loans into more affordable products, especially 30-year fixed-rate mortgages, would bring them back to good standing, allow them to repair their credit histories and dampen the impact that foreclosures may have on the broader housing market.”

Most importantly, Bair added, “people would be able to stay in their homes.”

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Apparently, the gub'ment, via Fannie Mae & Freddie Mac will create the worlds largest welfare program for mortgage holders of $1 Million homes.

I don't see offhand how the numbers can possibly pencil out. If a borrower has a $750K loan, and the rates have triggered from the I/O teaser rate of 1.9% to 6%, and payments go from $2000/Mo, to $4000/Mo+... how in the world can a "program" make that workable for the borrower? They can't lower the rate below the prime, as that is set by market. and if they do...who pays for it...and when? There are diminishing returns on extending out the term...even from 30 to 50 years.

But most of all, I am personally pissed. It's one thing when someone falls on hard times due to no fault of their own or circumstances beyond their control. I Live within my means, yet other bozo's get bailed out (at the end of the day, by TAXPAYERS) when they can't/won't live within their means...as a result of circumstances fully within their control.

i can't tell if it's a way to get the lenders more money/equity through constant refinancing or if it's a way for the lenders to suck more money from public coffers. to me, it's an AWFUL lot like enron/electricity rates going through the roof a couple years ago.

lets assume that we're headed for either an exact enron moment, or maybe a long drawn out/disguised enron moment. what 's the best position to be in when stuff like that hits the fan?

naively, it would seem to be best to be flush with cash (to buy in at the "right" time, presumably), but maybe not. are there other investments that might be lucrative? shorting? i think we all see something coming, the idea is suss it out, cover our asses, and take advantage if possible. there's clearly immense momentum in there somewhere. if you think that's opportunistic, consider that you can do whatever you want with your windfall, should it come about.

You've converted me. Instead of my lavish lifestyle of conspicuous consumption driven by a need to keep up, I will henceforth live within my means.

I'm giving up those condor egg omelets ... right after breakfast tomorrow.

Yeah, but what about the A8?
Whose gonna pry that from your cold dead fingers?

S4, but now that they've started shipping the S8 to the US ...

Somebody wake me when living in a 60+ year old house in a dusty truck yard in Fontana and driving a 1997 Lumina sedan with the paint peeling off becomes conspicuous. And cool.

Audimv sold a A8 L W12..it was shipped to Dubai yesterday...I wonder how is the housing market there.

When Your Fontana Villa/Compound/Estate/Ranch with a view (don't gimmie that "dusty truck yard" routine), is worth low 7 figures. That would be about now I imagine.

The Lumina will be cool in about 5 years. That way you don't stand out amongst us common folk.

That's no routine. This Villa/Compound/Estate/Ranch consists of two large parcels. The south parcel contains the house/garaging/shop/office areas, fruit trees and shipping container storage units. The north parcel is devoted to income generation and is chockablock with 18 wheelers on month to month parking spot rental contracts. Hence: truck yard, dusty, military issue type one (1) ea.

One doesn't live in South Fontana for the beauty and serenity, one lives here to cash in on the exploding intermodal shipping logistics
opportunities.

uh, my bad. So it's really a 40 acre+ "Ponderosa" type spread. Nice.

Back 20 where you "ranch" containers, Peterbilt's, and Kenworths vs. Red Angus, Belgian Blue, and Hereford's. Is the "Big House" up overlooking everything?

Now I'm thinking 8 digit$ minimum. Sweet!

It's barely 2 acres. Start heading down from that figure there Little Joe.

You didn't mention the pool or servants' quarters.