More Disturbing Housing Market Data - GoFuckYourself.com

JOHNNY_BUTTHOLES · 08-21-2006, 08:02 PM

more than half of Washington Mutual's ARM borrowers can't even pay their vig these days.

"The answer, at least from banks, is already clear: Float the loans. The following figures are from Washington Mutual's
annual report: At the end of 2003, 1% of WaMu's option ARMS were in negative amortization (payments were not covering
interest charges, so the shortfall was added to principal). At the end of 2004, the percentage jumped to 21%. At the end
of 2005, the percentage jumped again to 47%. By value of the loans, the percentage was 55%."

from a Barron's article.

more stats:

"Some more numbers:

-- 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000

-- 43% of first-time home buyers in 2005 put no money down

-- 15.2% of 2005 buyers owe at least 10% more than their home is worth

-- 10% of all home owners with mortgages have no equity in their homes

-- $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007."

Hunter_ST · 08-21-2006, 08:12 PM

need to find a way to make $$$ off those suckers...

Shoehorn! · 08-21-2006, 08:15 PM

Time to buy.

JOHNNY_BUTTHOLES · 08-21-2006, 08:17 PM

Quote:

Originally Posted by Shoehorn!

Time to buy.

not yet. this is just getting started.

kin3tic · 08-21-2006, 09:26 PM

Yup, people who bought within the last 6 months are fucked if they need to sell their house anytime in the next few years. On the other hand, this is great for buyers :-)

tony286 · 08-21-2006, 09:28 PM

wait the economy is great lol

kin3tic · 08-21-2006, 09:29 PM

Also, foreclosures are going to be crazy as more people owe more than their house is worth and walk away from it..

Bigfuck · 08-21-2006, 09:57 PM

I'm saving and waiting. when I buy a house I want to pay in cash

zEn84 · 08-21-2006, 10:31 PM

Just wait, the market WILL correct itself. Its going to happen, how much? I dunno, but prices here in Vancouver are crazy, obviously driven by the Olympics. Interesting fact my financial advisor told me; If you look at every place thats had the olympics, about 2-3 years before it happens, the real estate market has always crashed or gone down prior to the games. Great example, Sydney's market is STILL recovering.. For now, i'll keep renting, there will be plenty of selections on places in the not to near future ;) Thank god for all those no down payment mortgages..

Alky · 08-21-2006, 10:34 PM

Quote:

Originally Posted by Bigfuck

I'm saving and waiting. when I buy a house I want to pay in cash

why? 3055404

stickyfingerz · 08-21-2006, 10:36 PM

Quote:

Originally Posted by JOHNNY_BUTTHOLES

more than half of Washington Mutual's ARM borrowers can't even pay their vig these days.

"The answer, at least from banks, is already clear: Float the loans. The following figures are from Washington Mutual's
annual report: At the end of 2003, 1% of WaMu's option ARMS were in negative amortization (payments were not covering
interest charges, so the shortfall was added to principal). At the end of 2004, the percentage jumped to 21%. At the end
of 2005, the percentage jumped again to 47%. By value of the loans, the percentage was 55%."

from a Barron's article.

more stats:

"Some more numbers:

-- 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000

-- 43% of first-time home buyers in 2005 put no money down

-- 15.2% of 2005 buyers owe at least 10% more than their home is worth

-- 10% of all home owners with mortgages have no equity in their homes

-- $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007."

Bought our house is 2004.

Not interest only loan.
Put down 20,000.00
House is worth alot more than we paid.
Have 65,000.00 in equity on it already since we bought in the right area at the right time.

woj · 08-21-2006, 10:38 PM

Quote:

Originally Posted by Alky

why? 3055404

so he can brag on gfy that he bought his house with cash, anyone that has a clue knows that buying a house with cash 99% of the time is a bad idea...

kin3tic · 08-21-2006, 10:44 PM

If you owned your house outright it seems like you would have a lot to lose if someone decided to sue your ass for all you have..

JOHNNY_BUTTHOLES · 08-21-2006, 10:50 PM

Quote:

Originally Posted by woj

so he can brag on gfy that he bought his house with cash, anyone that has a clue knows that buying a house with cash 99% of the time is a bad idea...

if you have an investment making a higher return with your money than you are paying in mortgage interest, absolutely a bad idea to pay cash for a house.

Lester Burnham · 08-21-2006, 10:58 PM

Another tip: Buy in da 'hood where the neighborhoods are going through gentrification. In South Seattle you can get great deals in the supposed ghetto (Seattle's ghetto is like Beverly Hills compared to other big city ghettos). I just bought a house with a full view of lake washington for under $300K (insane for Seattle). Sure, some of my neighbors are shady. But every month more young professionals are moving in. I'm already eyeing two empty lots in my neighborhood which have views.

Webby · 08-21-2006, 11:02 PM

Quote:

Originally Posted by JOHNNY_BUTTHOLES

not yet. this is just getting started.

Sure is - doubt we have seen anything yet - and it's not just the US that will be feeling a pinch - a few other countries are already overblown on real estate and the cracks are showing.

Webby · 08-21-2006, 11:08 PM

Quote:

Originally Posted by kin3tic

If you owned your house outright it seems like you would have a lot to lose if someone decided to sue your ass for all you have..

True.. in a "conventional market" with a suing culture there is risk. Outside it's called a corp structure where the corp owns the asset and never trades and has little chance of ever being sued - course, you own the corp

It's a fairly common practice in several other countries.

studiocritic · 08-21-2006, 11:16 PM

Quote:

Originally Posted by Webby

True.. in a "conventional market" with a suing culture there is risk. Outside it's called a corp structure where the corp owns the asset and never trades and has little chance of ever being sued - course, you own the corp

It's a fairly common practice in several other countries.

It's a fairly common practice in THIS country.

Webby · 08-21-2006, 11:21 PM

Quote:

Originally Posted by studiocritic

It's a fairly common practice in THIS country.

Problem there - tho you got to know better, - is that if there is litigation and a claim, a court will want transparency in assets. If that is required, basically shares in a capital holding corp are assets, - and hence can be "attacked".

May be wrong man - but is fairly common situation in most "western countries" and sure is in the EU.

PS.. Unless there is some form of trust involved - harder to claim against a trust, but still possible.

Webby · 08-21-2006, 11:34 PM

Mmm... Better explain... The legal system in some countries will not permit disclosure of beneficial owners/shareholders of a corp - they are basically against privacy laws and no public record of ownership exists. There are also some other laws which come into play.. bottom line, no person can "attack" a corp where they have no evidence of ownership - a judge would not listen to claims of that nature.

The result is.. folks have any relevant assets in corps.. stuff like homes and even cars. If a vehicle in involved in an accident and a massive claim is awarded in court - and eg. the insurer is not willing to settle the level of claim - the most that can be lost is the vehicle value. (Vehicles obviously are on a registry and the ownership declared)

L-Pink · 08-21-2006, 11:48 PM

In the US on closely held corporations, the suing party may "pierce the corporate veil" and go after the shareholders/owners.

Properly insure yourself, most cases are settled out of court and the insurance pays.

I have host liquor libility insurance for one mill and a personal umbrella insurance policy for 2 mill that goes on top of my other policies. Their costs are small if added to basic policies.

Bozena X · 08-21-2006, 11:50 PM

It is payday for the bankruptcy business!!!!!

spunkmaster · 08-21-2006, 11:53 PM

What isn't being told is 98% of these people can refi with a new ARM at
two points higher ($few hundred extra per month) or refi with a 30 or 40 year fixed for maybe $600 more per month.

The question is are they smart enough to do this before it's too late ?

Webby · 08-21-2006, 11:56 PM

Quote:

Originally Posted by L-Pink

In the US on closely held corporations, the suing party may "pierce the corporate veil" and go after the shareholders/owners.

Properly insure yourself, most cases are settled out of court and the insurance pays.

Agree - there is significance to your words - "closely held corporation"

p1mpdogg · 08-21-2006, 11:58 PM

i paid 450k for a place in cali that is 1500 sq ft that is currently a rental. its now worth 630k in less than 3 years.

i love america

L-Pink · 08-22-2006, 12:04 AM

Quote:

Originally Posted by p1mpdogg

i paid 450k for a place in cali that is 1500 sq ft that is currently a rental. its now worth 630k in less than 3 years.

i love america

I'll bet you are a pain in the ass landlord

08-21-2006, 08:02 PM	#1
JOHNNY_BUTTHOLES Confirmed User Join Date: Jun 2006 Posts: 146	More Disturbing Housing Market Data more than half of Washington Mutual's ARM borrowers can't even pay their vig these days. "The answer, at least from banks, is already clear: Float the loans. The following figures are from Washington Mutual's annual report: At the end of 2003, 1% of WaMu's option ARMS were in negative amortization (payments were not covering interest charges, so the shortfall was added to principal). At the end of 2004, the percentage jumped to 21%. At the end of 2005, the percentage jumped again to 47%. By value of the loans, the percentage was 55%." from a Barron's article. more stats: "Some more numbers: -- 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000 -- 43% of first-time home buyers in 2005 put no money down -- 15.2% of 2005 buyers owe at least 10% more than their home is worth -- 10% of all home owners with mortgages have no equity in their homes -- $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007." __________________

08-21-2006, 08:12 PM	#2
Hunter_ST Confirmed User Join Date: Feb 2003 Location: Getting messy... Posts: 763	need to find a way to make $$$ off those suckers... __________________ Splosh Cash Wet and Messy Fetish Program I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they've always worked for me.

08-21-2006, 08:15 PM	#3
Shoehorn! Die With Your Boots On Join Date: Oct 2003 Location: Hawaii Posts: 22,872	Time to buy. __________________

08-21-2006, 09:57 PM	#8
Bigfuck Confirmed User Join Date: Mar 2004 Location: In a fucking big house Posts: 4,961	I'm saving and waiting. when I buy a house I want to pay in cash __________________

08-21-2006, 11:34 PM	#20
Webby Too lazy to set a custom title Join Date: Oct 2002 Location: Far far away - as possible Posts: 14,956	Mmm... Better explain... The legal system in some countries will not permit disclosure of beneficial owners/shareholders of a corp - they are basically against privacy laws and no public record of ownership exists. There are also some other laws which come into play.. bottom line, no person can "attack" a corp where they have no evidence of ownership - a judge would not listen to claims of that nature. The result is.. folks have any relevant assets in corps.. stuff like homes and even cars. If a vehicle in involved in an accident and a massive claim is awarded in court - and eg. the insurer is not willing to settle the level of claim - the most that can be lost is the vehicle value. (Vehicles obviously are on a registry and the ownership declared) __________________ XXX TLD's - Another mosquito to swat.

08-21-2006, 09:26 PM	#5
kin3tic Registered User Join Date: Aug 2006 Posts: 60	Yup, people who bought within the last 6 months are fucked if they need to sell their house anytime in the next few years. On the other hand, this is great for buyers :-)

08-21-2006, 09:28 PM	#6
tony286 lurker Industry Role: Join Date: Aug 2002 Location: atlanta Posts: 57,021	wait the economy is great lol

08-21-2006, 09:29 PM	#7
kin3tic Registered User Join Date: Aug 2006 Posts: 60	Also, foreclosures are going to be crazy as more people owe more than their house is worth and walk away from it..

08-21-2006, 10:31 PM	#9
zEn84 Confirmed User Join Date: May 2004 Location: BC Posts: 484	Just wait, the market WILL correct itself. Its going to happen, how much? I dunno, but prices here in Vancouver are crazy, obviously driven by the Olympics. Interesting fact my financial advisor told me; If you look at every place thats had the olympics, about 2-3 years before it happens, the real estate market has always crashed or gone down prior to the games. Great example, Sydney's market is STILL recovering.. For now, i'll keep renting, there will be plenty of selections on places in the not to near future ;) Thank god for all those no down payment mortgages..

08-21-2006, 10:44 PM	#13
kin3tic Registered User Join Date: Aug 2006 Posts: 60	If you owned your house outright it seems like you would have a lot to lose if someone decided to sue your ass for all you have..

08-21-2006, 10:58 PM	#15
Lester Burnham Confirmed User Join Date: Aug 2006 Location: You can take me out the ghetto, but not the ghetto out of me Posts: 540	Another tip: Buy in da 'hood where the neighborhoods are going through gentrification. In South Seattle you can get great deals in the supposed ghetto (Seattle's ghetto is like Beverly Hills compared to other big city ghettos). I just bought a house with a full view of lake washington for under $300K (insane for Seattle). Sure, some of my neighbors are shady. But every month more young professionals are moving in. I'm already eyeing two empty lots in my neighborhood which have views.

08-21-2006, 11:48 PM	#21
L-Pink working on my tan Industry Role: Join Date: Mar 2005 Location: Florida/Kentucky Posts: 39,151	In the US on closely held corporations, the suing party may "pierce the corporate veil" and go after the shareholders/owners. Properly insure yourself, most cases are settled out of court and the insurance pays. I have host liquor libility insurance for one mill and a personal umbrella insurance policy for 2 mill that goes on top of my other policies. Their costs are small if added to basic policies.

08-21-2006, 11:50 PM	#22
Bozena X Confirmed User Join Date: Jul 2006 Location: West Cost Posts: 1,139	It is payday for the bankruptcy business!!!!!

08-21-2006, 11:53 PM	#23
spunkmaster Confirmed User Join Date: Jan 2004 Posts: 2,052	What isn't being told is 98% of these people can refi with a new ARM at two points higher ($few hundred extra per month) or refi with a 30 or 40 year fixed for maybe $600 more per month. The question is are they smart enough to do this before it's too late ? __________________

08-21-2006, 11:58 PM	#25
p1mpdogg Too lazy to set a custom title Join Date: Nov 2002 Posts: 16,714	i paid 450k for a place in cali that is 1500 sq ft that is currently a rental. its now worth 630k in less than 3 years. i love america __________________ A fast fortune is easy to earn! Just go with a winner!