Rise in Late Pays Not Worrisome (Housing Bubble)

From Realty Times--

I hope the journalists didn't fall for all this "relax and go to sleep" talk. Geez--the press is already asleep.

Rise in Late Pays Not Worrisome
by Lew Sichelman

A group of the nation's real estate reporters went back to school last week in Charlotte, N.C., where a top housing economist explained, among other things, why they shouldn't panic when delinquency and foreclosure rates move higher, as they inevitably will.

"There's no question" that late payments will rise, Doug Duncan, chief economist at the Mortgage Bankers Association, told the journalists. "But it's not going to be a disaster." It won't be that big a deal when the repossessions rise, either, Duncan said at the National Association of Real Estate Editors annual conference at the Marriott Hotel, adding that the percentage change in the foreclosure rate is a far more important indicator than the absolute number.

"The number of foreclosures is absolutely going to go up," he said. "But the percentage could fall." Equally as important, the housing economist added, is that the mortgage market "has already priced in" the fact that take-backs "have to go higher."

<snip>

"If there's a weakening in employment, it will lead you to (weakening) house prices," he said. "That's the market 'normalizing,' but it's not a price bubble, it's an employment problem."

Published: May 3, 2006



http://realtytimes.com/rtcpages/20060503_latepay.htm

Thanks, Stephen.

it's SOARING!

:rofl: :rofl:

It's not a war of choice, itza war on TERRA!!!!

will smell as non-sweet!

would sound and smell like a FAAAAHT in the bathtub, eh?

as watching your house get repossessed!"

...we all got a piece of the pie...YOU WISH SUCKER MOFO, !!!!

and there will always be a group of ignorant suckers out there just longing to believe it.

I am sure that 9/10 of the journalists will not stop to think about the fact that mortgage sellers make no money when people stop buying and refinancing real estate.

He doesn't want the press going doom and gloom on his livelihood. The suckers buying at the top of the market might dry up!

what someone of "authority" spews, because they're too f-ing lazy to think for themselves, or actually do some research....

everything is OK, OK, OK, Not worrisome, OK, OK, you are feeling very sleepy, everything is OK, OK....

-snip-
Duncan said that given that over half the mortgages on the books today are less than three years old, and the probability that a loan will go delinquent is highest in the third through the fifth year, it's "almost guaranteed" that the rate of late payments will rise in the coming months.

He also pointed out that the shift to adjustable rate mortgages that followed the end of the recent refi boom is another portend of rising delinquency rates.
-snip-

I also like this reassurance:

-snip-
Beyond that, he also pointed out, half of the 15 to 18 percent of owners with adjustable rate loans are high-income borrowers who "always have ARMs" and have the wherewithal to withstand any payment shock that lies ahead.

---
So hey, it's only the suckers who got in the game late, who were given mortgages their incomes shouldn't have qualified them for at terms that set them up to fail, who are going to lose everything. They should have known better than to believe the bankers, eh? Suckers!

... I believe in "buyer beware", that is, a lot of folks who ARMed or nothing-downed themselves into a hole have nobody but themselves to blame.

On the other hand, there ought to be a law against industry insiders saying absolute rubbish like this :(

Hey - Lyndon La Douche, you can't have an employment bubble when employment was already down and if anything is actually improving.

Gee - I wonder if I could get paid for spouting this sort of horse-puckey!

"Foreclosures are not a problem. The rising number of foreclosures will actually ATTRACT BUYERS and since when this happens there won't be enough distressed properties to go around, many of these buyers will wind up buying a marketplace property. It's all good!"

Because generally houses are not investments - they are places to live. People will sell all of their other assets before they sell their house, because people have to live somewhere even if it is overpriced.

Housing prices should moderate and even drop, but it will be a time-consuming and gradual drop. Maybe 40-50% value loss, but over the course of 10-12 years. That is only a few percent per year. Some years might even be up years.

I was caught in the New England housing bubble of 1980. It took less than a year to develop (when engineering research and weapons procurement funding was cut from the federal budget and Digital went belly up), and ten years for housing to recover.

you're right, houses are not seen primarily as investments, but in the most recent run-up of prices, they certainly were viewed as such, and were bid up the same as some dot-com stock was in 1999. When the foreclosures take place, and then hit the market, watch for the bottom to drop out rapidly. My prediction is that it takes place in the late autumn of this year. Perhaps in time for the election, but that's wishful thinking.

"We think 40 percent of the people who are buying homes are merely speculators," said David Olson,

"It would be good for prices to burst, because sooner or later no one will be able to afford a house."

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-05-03T211204Z_01_N03431248_RTRIDST_0_FINANCIAL-MORTGAGES-UPDATE-1.XML

it's a massive PR campaign to deter people from panicking. Which, in my area, they already are...I've reduced the price of my home 25K in 3 wks to get this bastard to sell, otherwise I'm stuck with a house in a place that I don't want to be, that is rapidly losing its value.

But GW Hoover & Faux "news" claim our economy is "booming". Nevermind the massive unemployment (percentage a lot higher than the no. they give out) & near impossibility to get a job. :eyes:

He's erected a Someone Else's Problem(SEP) field around the issue and it magically disappeared!

So long and thanks for all the fish...

repossessed home sales prices on neighboring homeowners, and the rise of "negative equity". Then the Fannie May and bank bailouts, which will hurt all taxpayers, and drive down the dollar even further.

Kind of a vicious cycle is emerging.

"WHAT EVAH"!!!!

They MUST be smoking crack.

In the apartment complex, which is all condos where I rent, the big money speculators are bailing out. Now small time speculators are coming in, doing a quick renovation, then jacking up the rents. The present management is not saying much, for fear folk may leave before getting the boot, thus depriving the speculators rent income.

I just found out at the beginning of the week when a realtor brought some sharks by. I hope the speculators are the first immigrants into the new Hoovervilles when the bubble bursts. So now I'm flat hunting. Crikey, I didn't realize how good my rent was. Everything is dear now.

No indication about how they intend to deal with those
forclosed and relocated souls in their nice neat little forecast.

I guess that's not their problem.

their numbers. 'Tis why I hate them so.

Drats! Another home lost to Ditech!