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Old 03-24-2008, 05:41 PM
  #211
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Perhaps "collapse" was too strong a word. But certainly, you can't be suggesting that the mortgage market is anywhere near healthy.

Some of the stuff that's happened has been unprecedented. Refinance after refinance with no paper trail, all based on "rising equity" in property values? All good ... until those properties adjust, as they have in many parts of California, Florida, Nevada and Arizona to their true market values.
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Old 03-24-2008, 05:57 PM
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The cycle of real estate boom and "collapse" has been proceeding predictably
for several generations, and will probably continue to fluctuate for many more.
The good news ... each new bottom is a bit higher than the last bottom.

The mortgage market ... the only thing different this time is the foolishness of loaning money against real property when the borrower has no equity investment, nor a proven willingness to repay a loan.

Otherwise, it's just "cycles" as usual ...
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Old 03-24-2008, 06:01 PM
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I sincerely hope you're right. However, your own statement, "the only thing different this time is the foolishness of loaning money against real property when the borrower has no equity investment, nor a proven willingness to repay a loan" begs a question:

Who or what is going to step up and cover those losses? The "only different thing" you mention, and on that we completely agree, is a pretty significant difference, don't you think? Wouldn't you say that (and you seem really well informed) that the number of borrowers with "no equity investment, nor a proven willingness to repay a loan" is higher than it has ever been?

I'm just wondering how all that loss will be absorbed. The "fools" who loaned the money will have to eat it, because the people they loaned it to, as you've correctly pointed out, have no equity investment nor a proven willingness to repay the loans.

It's pretty ugly, any way you look at it.

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Old 03-24-2008, 06:49 PM
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MAYBE BAJA IS FOUNTAINS BIGGEST COMPETITER, BUY BAJA SHUT IT DOWN! MORE FOUNTAIN CUSTOMERS?????
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Old 03-24-2008, 07:06 PM
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Quote:
Originally Posted by 100-Plus View Post
Who or what is going to step up and cover those losses?
In Las Vegas, it's customary for the "gambler" to cover his losses,
and to make it worse, it's not even tax deductible!

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Wouldn't you say that the number of borrowers with "no equity investment, nor a proven willingness to repay a loan" is higher than it has ever been?
Absolutely, the development of "creative financing" was the bait,
and the subprime marketplace bought it, hook, line & sinker.


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I'm just wondering how all that loss will be absorbed?
See item #1 .....
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Old 03-24-2008, 07:14 PM
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Agreed (and laughing). But you still don't see that as, and here comes more dramatic language, an economic catastrophe? I mean, even if the subprime idiots on both sides of this mess get what they deserve, doesn't it drag us down quite a bit as a nation economically?

Or not? Serious question. Your answers have made a lot of sense so far so I'm interested in your take.
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Old 03-24-2008, 07:19 PM
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Baja was owned by Brunswick, doesn't Brunswick also own or hold a big piece of Fountian stock or debt? So from that prospective this is just rearranging deck chairs on the titanic.

Rumour mill up here in the land of beer, cheese and a few weirdoes is that Brunswick laid off it's corporate pilots and is selling it's airplanes.

The merger makes sense in a tough market with excess capacity. I feel sorry for the people in Ohio, but these are difficult times.
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Old 03-24-2008, 07:45 PM
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But you still don't see that as, and here comes more dramatic language, an economic catastrophe?
An economic catastrophe? ... No, but there'll be plenty of pain!

When the washout finally occurs, real estate prices will slowly rise again.
There'll always be a marketplace for conventional mortgages.
And there'll always be buyers for good values in real estate.

For about 95% of homeowners who just "live" in their home,
and have decided not to use their property as a credit card,
the is no housing bubble or subprime mortgage problem ...
there's just the media!

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Old 03-24-2008, 07:54 PM
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So the housing bubble and the subprime mortage problem, the latter of which you've identified as a problem with "plenty of pain" are just media creations? So if the media doesn't report on these problems (like all the unsold high rise condos in Miami, 25,000 at last count with another 25,00 coming) they don't exist? Or are you saying (and I think you are) that they are overhyped as problems?

Now there you have me stumped. But what do I know, I'm just a guy with a conventional, fixed-rate 30-year mortgage in a home that is holding its value, and someone who has never used his house as a credit card. Don't get me wrong. I don't feel sorry for people who did things that were clearly stupid to any fiscally responsible person.

So I will have to disagree with you on the severity of the problem and its effects on our economy. I will also hope you are right and I am wrong.

Last edited by 100-Plus; 03-24-2008 at 07:59 PM.
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Old 03-24-2008, 08:10 PM
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Quote:
Originally Posted by 100-Plus View Post
So the housing bubble and the subprime mortage problem, the latter of which you've identified as a problem with "plenty of pain" are just media creations? So if the media doesn't report on these problems (like all the unsold high rise condos in Miami, 25,000 at last count with another 25,00 coming) they don't exist? Or are you saying (and I think you are) that they are overhyped as problems?

Now there you have me stumped. But what do I know, I'm just a guy with a conventional, fixed-rate 30-year mortgage in a home that is holding its value, and someone who has never used his house as a credit card. Don't get me wrong. I don't feel sorry for people who did things that were clearly stupid to any fiscally responsible person.

So I will have to disagree with you on the severity of the problem and its effects on our economy. I will also hope you are right and I am wrong.
Overbuilding is not really a new phenomenon ...
I bought investment property in Houston in the late 70s

The way I see it, they only overbuilt housing because they felt
they could unload plenty of product with "creative financing".
That's called oversupply ... subprime was only the currency.

Regarding the dependancy and use of equity in our homes,
don't get me wrong, it will definately have a negative effect
on our economy 'cause we've used up our "credit Card" limit.
But that's actually a different issue than the subprime matter
which more directly realates to the value of ones home.

If we keep subprime alive, and keep house values rising,
our credit cards will never, ever have any limit at all!
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