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Mango

SoWal Insider
Apr 7, 2006
9,709
1,360
New York/ Santa Rosa Beach
SHELLY said:
The operative word in the statement was NINA "or" Liar's Loans--I explained NINA after the statement and I'm pretty sure a goodly amount of the viewing audience know what liar's loans are ;-) . I also know that both have been used during the RE boom a wee too much for comfort and in some cases stretched beyond the limits of intention and the law.

What law are you referring too? :roll:
and FYI- a good many loans came on my desk as full doc loans, but when uploaded to FNMA or Freddie Mac (government agencies :eek: ) for a feedback response- if the credit scores were good, they put down a decent DP and had good employment history, the only thing the Bank would require is an appraisal, contract and then verified the person worked at closing. They didn't ask for paystubs, 401k or copy of savings acct. etc.

I think it is a bit presumptuous for you to imply that everyone on this thread or Board knows what a "liar loan" is. :bang:

Of course there was misuse of this loan, and the stupid LO's or Bankers that took these loans in repeatedly do get investigated, fined and even incarcerated by the FBI.

and once again, we are back discussing the real estate services industry. :pissed:

Everyone is entitled to their opinions, let's try not to be vicious folks.
 

Bob

SoWal Insider
Nov 16, 2004
10,364
1,391
O'Wal
Mango, Shelly paints with a big brush. Based on her statements about "interest", she may be NINA.
 

redfisher

Beach Fanatic
Sep 11, 2005
374
37
spinDrAtl said:
Personal responsibility is a b*tch, ain't it. Fraud aside, some folks just make bad decisions.


Finally, all this talk over I/O's, losses, overextensions...Where is the individuals responsibility to take control over his own actions...If your in a "malaise", its because you choose to be there...

By the way, I love I/O's....
 

spinDrAtl

Beach Fanatic
Jul 11, 2005
367
2
Sometimes when there is a term or acronym used followed by "or" and another possibly unknown term, it could be misconstrued as implying "also known as", which I guess I did on the NINA or Liar's Loans statement.

There is nothing wrong with any of these types of loans when used responsibly - i/o, option arms, nina's, stated income, etc. People with 720 or 800 credit scores that can qualify for these types of loans did not get credit scores like that by being stupid.

I've got an interest only loan on an investment property right now. I got the property at auction a couple years back, took some equity out of a second home that had appreciated considerably with a no closing cost equity line. Total loan to value on that property is around 33% now. This allowed me to pay cash for the new property, avoiding a bunch of closing costs on that one. Yes, the rate has gone up some, but the interest only payment is lower than any fixed rate I could/can get and the low payment allows this property to cash flow while it appreciates (which it has already). I'm not going to own this newer property for 15 years so I don't care about paying the principal - I'm concerned about positive cash flow.

Again, personal responsibility is a key issue. Just because someone will let you sign a contract doesn't mean you should do it.
 

bdc63

Beach Fanatic
Jun 12, 2006
303
22
Md for now, but dreaming of SoWal
GDP numbers released Friday ...


gdppicthd.GIF


July 28, 2006

GDP growth slows, housing continues to weaken

by EPI economist L. Josh Bivens

Economic growth slowed to 2.5% in the second quarter of 2006, down from 5.6% in the previous quarter, according to data released today on gross domestic product (GDP) from the Bureau of Economic Analysis (BEA).

The deceleration in GDP was broad-based. Personal consumption expenditures grew 2.5% in the latest quarter, following a 4.8% growth rate in the previous quarter. Private investment growth fell to 1.7% following the previous quarter's 7.8% growth. Export growth slowed to 3.3% from the previous quarter's 14.0%, and growth in federal government expenditures actually declined 3.4% compared to 8.8% growth in the previous quarter.

Residential investment contracted for the third straight quarter, and by a large 6.3%. This is the first three-quarter span of residential investment decline, and, the largest quarterly decline since 1995. There seem to be strong signs that the housing sector in the U.S. economy will no longer be providing a big boost to the aggregate economy in the near future. The figure below shows the growth rate of residential investment and its share in GDP in recent years, pointing to a sharp slowdown in this sector's contribution to growth. A key question about the economic outlook for the next year will be the degree to which other sectors can take up this slack.

gdppict20060728.gif


Net exports (exports minus imports) contributed slightly to growth this quarter. Export growth was only 3.3%, but import growth was almost flat (rising only 0.2%). The result was a 0.33% contribution to GDP growth this quarter. While small, this is a good sign: net exports will surely have to take up some of the slack generated by a declining housing market referenced above.

The 1.6% growth in domestic demand (i.e., final sales to domestic purchasers) was a marked slowdown relative to the 5.4% reported for the previous quarter. Real disposable personal income grew less than 1% (on an annualized basis) in this quarter. Despite the slowdown in domestic demand, the savings rate of U.S. households continued to be negative (-1.5%)?marking the fifth straight quarter of negative household savings rates.

Core annualized inflation (i.e., inflation in market-based personal consumption expenditures minus food and energy prices) spiked upwards to 2.7% for the quarter, compared to 1.6% the previous quarter. While this spike may spur some to argue for interest rate hikes by the Federal Reserve to stem this inflationary pressure, the slow growth rate reported in this quarter argues otherwise. GDP in the second quarter essentially grew only as fast as productivity, which is a recipe for anemic job and wage growth in the future.

On this score, today's GDP report also includes annual revisions that show labor income growth was slower between 2003 and 2005 than previously estimated, and another government release today?the Employment Compensation Index?shows year-over-year declines in inflation-adjusted wages of 1.2%. All in all, recent labor market trends (the rapid deceleration of job growth in the last quarter) should be weighed at least as heavily as the inflation number in this report by monetary policy makers.

Today's BEA report shows signs that the economy is undergoing a transition from an economy based on strong domestic demand and a booming housing market to one that will have to rely more on net export growth in the near future. This adjustment will also require strong growth in wages and salaries to support consumption while also allowing some household savings. Though showing some encouraging signs, this report does not allay all concerns that the adjustment over the medium-term will be painless
 

Mango

SoWal Insider
Apr 7, 2006
9,709
1,360
New York/ Santa Rosa Beach
Good article :clap_1: Thanks for sharing. Another reason why the Feds may not tighten again at the next meeting. I also own a headhunting firm with my sister and we specialize in manufacturing, (this business is up when mortgages are down, so they balance) We have had job orders and placements increase dramatically in the past 6 months.
 

SHELLY

SoWal Insider
Jun 13, 2005
5,770
802
Mango said:
Good article :clap_1: Thanks for sharing. Another reason why the Feds may not tighten again at the next meeting.

I wouldn't pop those champagne corks just yet.... :cool:
 

Mango

SoWal Insider
Apr 7, 2006
9,709
1,360
New York/ Santa Rosa Beach
:dunno: Simply noted that it was a good article. I didn't say it was positive.
But we do pop champagne corks with our manufacturing executives who are placed in well paying jobs they are happy with and the commissions do not stink either! :lol:
 

bdc63

Beach Fanatic
Jun 12, 2006
303
22
Md for now, but dreaming of SoWal
Personal Income and Spending data released yesterday ...

PI prior 0.4,now 0.6
PS prior 0.6, now 0.4

from msn money:

The worrisome inflation numbers

The government's numbers on personal spending and the price component in the Institute of Supply Management's manufacturing survey put traders "in a foul mood," CNBC's Bob Pisani reported. The year-over-year rise in one of the Fed's favorite inflation gauges pushed the probability of an interest rate hike next week higher before the bell.

The core PCE index -- personal consumption expenditures excluding food and energy prices -- rose 0.2% in June, the Commerce Department reported. The rise was in line with economists' expectations, but compared with last year, the core PCE index is up 2.4%. That's the largest rise since April 1996.

The probability of a quarter-point interest rate hike, based on fed funds futures contracts trading on the Chicago Board of Trade, rose to 40% from below 30% at Thursday's close.

And shortly after the opening bell, the ISM said the prices-paid component of its manufacturing activity index rose to 78.5 in July from 76.5 in June. Economists surveyed by Bloomberg had predicted a drop to 75.2.
 
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