saw in the news where foreclosures set a new record in the first quarter of 08. up to almost 1% which i guess is really bad. then in looking around to do some more reading on the subject i came across this.
http://www.housingpredictor.com/revealed.html
i read the article and it made perfect sense to me, i can see lots of people in the same boat. the house they own is not worth what they owe on it, and even though their credit rating will take a hit if they get out and save money to get back in later at some point down the road there is a chance they will be money ahead.
i realize i could be wrong about this, but as more and more people figure it out and crunch the numbers, i think more and more will be willing to give it a try. so far for the first quarter of 08 the foreclosure numbers indicate that is what is happening.
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There are some problems with this. I told you before and I still believe that you are advocating a highly unethical procedure. This is what we called gameing the system years ago.
The bank this person is dealing with is also very unethical. If this person had paid an appraiser for a proper appraisal in the first plave, instead he depended on an online appraisal.
It appears on the face of it he might have action against his first bank appraisal.
To me this whole area is not right!
i understand that you think it is not "right", but lots of people are doing it. it is legal. it will continue to happen until property values start heading back up.
i think that most homes purchased after 2004 are worth less than what they were purchased for. lots of forclosures yet to come.
Just because it is legal doesn't make it right.
It is a sign of how everything is ok except what is illegal, a sign of what is wrong.
In watching CNBC to day they had a guest on who claimed that our housing crisis would be over except for $4 oil.
also please note: i am not advocating this or suggesting it in any way.
i am merely offering my understanding of why it is happening, and how that understanding affects my prediction of future events in the economy.
i appreciate other input on the subject in order to better predict what will happen in the economy in the future, for after all this is a business thread and what happens to the value of real estate greatly affects contractors business's
Here is the best explanation of the housing crisis I've found to date:
http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1242
"A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."
Its a 50min audio that opened my eyes. Hope it helps.
-brad
I heard it the first time it was on the radio . The stories would be funny if they were not
about real people! It is worth listening to.
that was fantastic thank you so much. do you know when that show first aired?
after listening to that show my mind is swimming with the possibilties of what will happen because of this.
they said that from the global pool of money that was invested in mortgage securities about one half of it is gone, but they still are not sure exactly how much was lost.
also interesting that the guys narrating the show said it will be like the 70's for several years which is pretty bad except its not quite as bad as the great depression.
great stuff, thanks again
i went back and looked again, it said 5- 09 2008, i guess thats when it first came on. this is just over a month old. again my mind is swimming, where did all the money go? who owns those houses now? whats gonna happen?
Edited 6/5/2008 4:43 pm ET by segundo
You're welcome - I'm glad it helped. Warning! This American Life is highly addictive. Check out Jan 2008 "The Super" when you get a chance (more entertaining than informative). I also liked March 2008 "The Audacity of Gov't" and my personal favorite April 2007 "Habeas Schmabeas".
-brad
more stuff on it from the AP newsline.
nearly 8.5 million homeowners had negative or no equity in their homes at the end of march
estimates are it will increase to 12.2 million or almost one in four by the end of june
bad news for homebuilders
I agree. We went through an earthquake and new homeowners on the street just walked away. They figured why tuff it out. Start fresh somewhere else some other time.
Home ownership isn't for everybody. It's hard at times and more and more people just don't want to tuff anything out.