26 replies to this topic

[BearItch]

But...not quite as shocking anymore, huh?
It's more like: this is expected at this point.

Oh yeah... this is BOOOLISH.

Do I smell Bear Bait? You bet !

[thespookyone]

"Do I smell Bear Bait? You bet ! " Maybe a crappy retail sales report in the morning will help you bait up that hook as well-who needs consumers?

[OEXCHAOS]

How's that? Most of the banks that I have spoken with seem to have pretty stringent lending standards, even on stated income, and the like.

Home Equity loans. Last in line to get money back. Many people borrowed HEL to buy second and third homes. They will lose all.

Why? Did they lose their jobs? Do they have to sell? Did the banks throw margin calls in there somehow? If so, who's pricing the homes?

So many questions. So many assumptions.

The US banking system is being pressured and the weak spots are having problems. The strong spots are going to benefit, not collapse. You can trust me on that.

M

[Knight09]

Why? Did they lose their jobs? Do they have to sell? Did the banks throw margin calls in there somehow? If so, who's pricing the homes?

So many questions. So many assumptions.

The US banking system is being pressured and the weak spots are having problems. The strong spots are going to benefit, not collapse. You can trust me on that.

M

Mark,

I won't say "lose it all" but I will say they are definitely hurting. I live in a suburb of Washington, D.C. and for most of the people I know it's a function of personal cash flow.

If they bought a house in 2002-2004 time frame with a 3-5yr ARM, they are now seeing that adjust and the last couple of examples I know their payment went up $700 - 900/month plus their withholding for personal property taxes went up another $280 month. (After all the local govs have to get theirs)

Now add to that the extra $200 month they are paying to put gas in the SUV and more for the monthly grocery bill (after all those teenage boys eat alot!) and in most cases they are seeing their monthly "nut" increase at least $1500-$2000 month. Most definitely, salaries have not went up that much.

Now some are refinancing, but in some areas property values have fallen by 20-25% (for instance, a community I watch closely I checked on this morning. A typical TH that was selling for $400-420K last year in now being listed at $311-335K.) So, if they didn't have a substantial downpayment or have taken a HEW they are underwater. And well, the refi options are slim to none.

So anyway, in the meantime the 401K/IRA contributions get cut, the charitable contribution go away and the credit card balances continue to tick up each month.

That's just the all too common story that I'm hearing, FWIW.

--Scott

[OEXCHAOS]

I hear the stories, too. No doubt, many folks are getting a nasty pinch and some won't make it. But the presumption was that the smaller banks were going under due to HEL's. I'm just not seeing evidence of that. BUT, I am suspecting that banks that hold their own paper can do "work-outs" with folks who have resets coming and who are in trouble. It's in everyone's best interests. I suspect that the Fed and Treasury will be "encouraging" such moves, in fact. There's always another side of the story and it behooves us to look for it. Mark

[SemiBizz]

I think we're on the verge of seeing a bank/fund/institution a day going belly-up... Strange things are happening here WFC had "computer" problems and effectively depositors were locked out of their accounts for almost a full day.

[MaryAM]

Check out the situation on Indiana and Ohio - more foreclosures than you can imagine - AND those left holding houses are being taxed out of their homes because the property taxes are being shifted to the remaning folks - some property tax bills going up 100%. There have been mass demonstrations in Indianapolis and none of this is reported by the media. They must be nuts - thats Klan country and those people carry guns. One town has declared bankruptcy and will no doubt default on its borrowings. The banks holding houses don't pay property taxes. Now the pressing question - where are all those people moving to? There must be a mass migration taking place that no one is talking about. My sister, who lives in Indiana, tells me that multiple families of illegals are moving into abandoned homes and the towns are doing nothing. My cousin who lives there tells me the local hospital has one floor dedicated to TB - all illegals - kept for three weeks and told that they must come back for antibiotica and x-rays but never show up again. Sure makes me want to get into an elevator in an office building after a cleaning crew has come in for the evening. Even here in Connecticut, my town has around 800 homes in pre-foreclosure or foreclosure or up for auction. Our property taxes are out of control. I have suggestedd that we form a property owners union - open only to people who own property that are NOT EMPLOYED BY ANY FORM OF GOVERNMENT. We are not represented in the union negotiations at all. If it gets much worse I may just sell out to the first 10 illegals who can give me $20,000 each and I am off to find 10 acres in Maine with chickens and a shot gun. Mary Anne