Stated Income Disapearing

The bubbliciousness of the toxic mortgages is receding. Hat tip to The Housing Bubble Blog:

“One of mortgage planner Robert French’s clients, who earns about $700,000 a year and has a high credit score, was recently unable to get a stated-income mortgage. These loans became popular during the housing boom because it does not require borrowers to provide a copy of their W-2 tax form to the lender.”

“Stated-income loans, French said, are ‘just disappearing.’” (Boston Globe)

Oh! I wish it would!

Words of Wisdom form Anonymous Poster on Hounsing Panic

Words of wisdom form Anonymous Poster on Hounsing Panic:

"Good God, Americans are so in debt that they can not afford for the nation to get back to normal interest rates, which is around 8%. The interest rates were lowered to the Eisenhowner era for debtors to go on a borrowing party to forget 911 and stimulate the economy. (Seems we may be following the path of Japan, 17 years of real estate declines in a nation where there is no more land.) The present American economy is not stable and looks more like a crack addict having withdraw symptoms, from easily borrowed money. "

Exactly. Do you see the runs on money at Countrywide Financial today? Where is Mozillo? Will he slither into hiding?

CountryWide Financial Is In Panic Mode

"The nation's largest mortgage lender borrowed $11.5 billion from a group of 40 banks to fund new loans, in a move that shows just how deep the lending crisis has become."

"Countrywide Financial Corp. said Thursday it made the move amid a credit crunch that has driven a number of its smaller peers to bankruptcy." (AP News 8/16/07)

Will Countrywide go into bankruptcy like many of its former competitors?

Significant Real Dollar Price Declines Have Already Occured, More Declines Expected

It has now been about two years since peak real prices in most bubble markets. In many bubble markets real dollar (inflation adjusted) prices are down about 5 - 25% from August 2005. For example a 300,000 single family house in suburban Miami that sold for 350,000 in August 2005 just sold for 318,000. Or a 1br condo in suburban Washington, DC that sold for 325,00 in late 2005 was sold for 295K.

"Art Godi, 71, a longtime Stockton real estate agent and the former president of the National Association of Realtors. When the housing market was hot a couple of years ago, Mr. Godi said, house prices here were increasing 20 percent a year. Now, he said, the prices are falling as much as 10 percent to 12 percent a year. " (NYTimes 8/13/07)

Real prices as well as nominal prices will continue to decline in most bubble markets for many more years. Prices declines in the bubble markets are very likely to vary between 20% - 65% in real dollars (inflation adjusted) from peak to bottom (it may take up to 8 years).

I'm Taking a Bloggers Break

Some have noticed that recently, I have not been blogging. I have been very busy with other things. I will be back posting starting August 15th. Thanks.

No, Lance, there still is a housing bubble and most housing markets in bubble metro areas continue to decline.

A Whole New Meaning to Exotic Mortgage

Its Exotic!

Existing Homes Contracts Decline for May

Americans unexpectedly signed the fewest contracts to buy previously owned homes in more than five years in May as buyers waited for lower prices and lenders made it harder to get mortgages.

The index of signed purchase agreements, or pending home resales, dropped 3.5 percent to 97.7 from a revised 101.2 in April, the National Association of Realtors said today in Washington.

Today's report showed that the May reading was the lowest level since September 2001, when the economy was in the midst of the last recession. April pending home resales were revised to a decline of 3.5 percent. (Bloomberg, June 3, 2007)

BubbleSphere Roundup

HousingPanic fights the Real Estate Industial Complex (REIC) and tells them to give up "A quick note to realtors, HP trolls, the NAR, Desperate Homedebtors and everyone fighting the housing crash: Give up. You're wasting your time" Keep fighting the good dight Keith!


Check out my other blog the Lawrence Yun Watch and how Mr. Yun Contradicts himself.

You Tube Video: Goodbye Housing Bubble

Prices Falling In Many Metro Areas

According to Standard and Poor's Case-Schiller home price index, home prices in 10 metropolitan areas declined at the fastest rate in 16 years. The figures reflect home prices during a 12-month period ending in April. "

The report said that home values fell 2.7 percent in April from the same period in the previous year. It is the fourth consecutive decline in the index, since 2001.

Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. said in a Bloomberg news report, "There's no end in sight to price declines in housing until supply and demand get back in line and inventories come down." Adding, "We don't expect the correction to end any time soon.''

The report indicated that price appreciation has been decreasing for 17 straight months, while home prices have doubled since 2000, across the U.S. "No region is immune to weakening price returns," said Robert Shiller, chief economist for MacroMarkets LLC and the co-creator of the index, CBS MarketWatch reports.

Fourteen of twenty metropolitan areas sampled revealed dropping prices in the last year. That list is lead by Detroit, which is 9.3 percent lower, San Diego, lower by 6.7 percent, and Washington, down by 5.7 percent. (All Headline News 6/26/07 )

Chec out Paper Money on Case - Schiller Index who has lovely graphs. :-)