Tuesday, December 18, 2007

Bubble Sphere Roundup

Fed Shrugged as Subprime Crisis Spread reports the New York Times. Despite Greenspan's many recent public appearances where he attempts to absolve himself of wrongdoing during the bubble years, he did indeed did act irresponsibly. This blogger surely blames Alan 'Cheap Easy money' Greenspan.

Housing Construction Hits 16-Year Low (AP). This is not population adjusted. Yikes!

Treasury Secretary Henry Paulson wants to temporarily allow Fannie Mae and Freddie Mac to purchase so-called jumbo loans, which exceed $417,000. I'm against this idea. These two irresponsible relatives already have taken too much risk.

Remarks Prepared (pdf) for Pat V. Combs 2007 NAR President REALTORS® Conference & Expo General Session November 14, 2007 Las Vegas, NV. Here is snippet "The future is daunting, and there are no guarantees. While others in our industry may be scared of the future and the challenges that lie ahead, I know 1.3 million Realtors who are determined to succeed – no matter what. That’s all the inspiration I need in ANY market. " Yuck! Does success depend on assisting millions of Americans in commiting finacial suicide by buying more house then they could afford?


  1. I assume everyone saw the new Federal guidelines for mortgages?

    1. No loans without income verification.
    2. No loans without a reasonable chance of *income* paying the loans. A strict prohibition on using home appreciation as a means of paying back the loan. (Note: Its ok to tighten requirements in a declining market.)
    3. Strict limits on pre-pay penalties.

    All good stuff. :) All how it should be. I'm curious as to what this will do to the sales rate.

    1.3 million Realtors... The most optimistic outlook is 5.7 million homes sold in 2008 (by the NAR). Most other predictions are closer to 4.0 million sales or 3 per Realtor (tm).

    As to Freddie and Fannie doing Jumbos... I'm beginning to accept that will happen. It should be left to the free market... Cest la vie. But do recall they both increase down payment requirements in January. (IIRC the 17th...) Only by 5%, but that's sensible.

    Got popcorn?

  2. I got this in the mail today. 50 years!

    "I've attempted to contact you regarding your loan request, but unfortunately I have been unable to reach you.

    WCS Lending is exited to introduce a new 50-year fixed rate mortgage. This program allows homeowners to reduce their monthly payments, while still paying down the principal balance.

    We also have an Option ARM program...with a 5-year fixed minimum interest payment as low as 1%. Each month you select one of four monthly payment options. Either reduce your monthly expenses, or use the aggressive payment alternatives to pay off your mortgage.

    Please feel free to contact me at anytime, so we may discuss your loan options in detail. My cell phone is always on should it be more convenient for you to call in the evening hours or on the weekend."

  3. ``We're getting very little pushback on this right now because I think given what's happened, everybody understands how important it is,'' Paulson said.

    Reviewing Regulations

    Ofheo Director James Lockhart last week said the regulator will begin considering the removal of a 30 percent excess reserve capital rule when the companies release 2007 results in February as a way of giving them freer rein for making loans.

    The Treasury chief rejected suggestions made by former Fed Chairman Alan Greenspan favoring the use of government money to rescue Americans at risk of losing their homes. Paulson earlier this month helped negotiate a freeze on the interest rates of some subprime borrowers.