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I don't do banking with them but I analyze PIPE transactions and hear a lot about banks getting screwed big time. These are some interesting times that we are facing.
 

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Discussion Starter #4
I just got back from a bike ride around my neighborhood and I've seen couple of big houses on sale. Couple of foreclosures been on sale for +6mos. When will people learn you can't flip houses anymore that is 2006.
 

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slightly off topic, but these numbers amazed me when i read it on bloomberg. had the gov't had to take over freddie and fannie, as it was widely speculated would be the case (jim cramer is an ass clown by the way), they would have assumed over $5 TRILLION of debt obligations and over 23% of america's outstanding mortgages. think about that people. that's incredible. a quarter of the country's mortgages would have been owned by the gov't. AND..... due to those astounding figures, S&P would have lowed the credit worthiness of America.... as in the freaking government's ability to borrow money!!!! what would that have meant for the interest rates on treasury bills/bonds? would we be seeing 6-8% from the gov't on 2-10 year notes while the fed funds rate is at 2%? that's insane to even consider!! but what would that have done to the world economy? i don't even know where to begin to be afraid!!! that scenario scares the shit out of me folks. this situation is beyond bad. we are in deep here.

ok. i'll stop now.
 

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hmm...I had heard about Indymac cutting staff by like 60% ...... I wonder how this effects me since I don't really bank with them but I do have my mortgage through Indymac.

If they go under, do I get my house free and clear? :koolaid:

J
 

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Discussion Starter #7
[quote author=Zoomin J link=topic=117395.msg2459389#msg2459389 date=1215921365]
hmm...I had heard about Indymac cutting staff by like 60% ...... I wonder how this effects me since I don't really bank with them but I do have my mortgage through Indymac.

If they go under, do I get my house free and clear? :koolaid:

J
[/quote]

Dang that would be neat if you don't have to pay woohoo.
 

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[quote author=Zoomin J link=topic=117395.msg2460463#msg2460463 date=1215984886]
I somehow think that's not going to happen.....but it would make my day if it did!

J
[/quote]

LOL, if you're current on your mortgage, you're one of their best assets. You're gonna have to keep on payin' like the rest of us suckers :) (Although mine's paid for)
 

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[quote author=phan95 link=topic=117395.msg2459093#msg2459093 date=1215909651]
I just got back from a bike ride around my neighborhood and I've seen couple of big houses on sale. Couple of foreclosures been on sale for +6mos. When will people learn you can't flip houses anymore that is 2006.
[/quote]

Most of them I am sure are not flips. Most people who have gotten screwed are not people attempting to flip homes. Most people took out mortgage for properties they could neve realistically afford. To many banks were willing to under write loans to people who made 30k a year for a house that cost $400,000 and 0 down payment. Cause heck, the person could afford the 2% teaser rate mortgage, until it reset 2 years later. Most of the people in trouble are in trouble because they were total idiots and decided on an ARM product and on an ARM product that they couldn't then afford the interest rate on once it reset. Of course the banks are just as bad. You don't have druggies if no one is pushing the drugs.

As for the world falling down, the US gov't would not take over freddie and fannie, prop them up maybe. Neither company is in imminent danger of collapsing either. Bad straights sure, but not ready to collapse. Also if you looked at the US balance sheets, we already have quite a bit of debt on the books. $5 trillion in debt obligations is different then you owing $5 trillion in debt (it just means that people owe you a total of $5 trillion).
-Matt
 

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Damn, they were underwriting $400K loans for $30K salaries?? That's just messed up..... also makes me wish we'd gone house hunting for Sept 1 instead of extending our lease, because we now make considerably more than that combined. Oh well, I guess it's okay since the wife will hopefully be in school full time next May and then I'll be paying all the bills :shock:
 

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Not necessarily Freddie and Fannie, but there are quite a few cases of banks doing just that. One of the stories on the local news was about a poor woman and her husband who worked at local groceries stores who were getting forclosed on. The news article didn't talk about it much other then emphasising who sad it is that this is happening to two hard working individuals with families. They glossed over the fact that they bought the home 2 years ago for about $400k and they both work as cashiers (total...maybe $40k a year in income). Their ARM reset and they went from paying a mortgage that was barely managable to something that was up around twice their monthly take home pay. With that little income I would be hesitant to extend a $200k mortgage let alone double that.
-Matt
 

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Yeah, seriously...and as for the people themselves, what would possibly make you think you could afford a $400K house on (probably less than) $40K combined salary? I mean, we make around double that and we wouldn't even go for anything over $200K! Of course in Boston, that means we'd be living in Dorchester or Mattapan--NO, thank you.
 
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