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JoshMclean

Beach Fanatic
Jan 15, 2007
995
128
Santa Rosa Beach
I would have to check those prices in 2005 Shelly. Obviously people in that price range have been needing to be able to get into a home and now they can. The $500,000+ range is not moving too well. Obviously most people are trying to time the market and don't think it's bottomed yet. Gotta run. I will touch on it again when I get back.
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
I would have to check those prices in 2005 Shelly. Obviously people in that price range have been needing to be able to get into a home and now they can. The $500,000+ range is not moving too well. Obviously most people are trying to time the market and don't think it's bottomed yet. Gotta run. I will touch on it again when I get back.

Your posts suggests that those homes priced below $500K, are outperforming those price greater than $500K. However, during the last six months of sales of single family detached homes in SoWal, not including the area from Sandestin to Okaloosa County, 43% of the 77 sales were priced less than $500K. The remaining 57% of the homes sold in that area sold for more than $500. I do note that the $300K-350K range has been one of the hotter ranges for sales price, but to get a true feel, we need to look at the whole picture.
 

Mango

SoWal Insider
Apr 7, 2006
9,712
1,360
New York/ Santa Rosa Beach
The way I heard Cramer explain it yesterday Buffett would pick up the Muni's only--the U.S. taxpayers would be stuck with the toxic mortgage crap.
.

I wasn't including the mortgage backed securities firms or Banks, just discussing a possible scenario if mortgage insurance companies like MGIC keeled over. The MBS and Banks need to take their licks. BTW, what a lot of people don't know is that Banks profited substantially off of mortgage insurers peeling off more than 40% off premiums without any recourse.

I was suggesting a Mango plan IF say MGIC folded, because if they did, you know the rest are all in line. Use part of the $145 billion or so from economic stimulus plan to buy mortgage insurers, then resell shares as a federally backed security like mortgage bonds. Of course, like I said, I don't suspect MGIC to fold, but we can't go back to the depression era ways of 50% down payment and 5 year loans if this did happen. There wouldn't be a home market at all.

Cramer likes Trump, no wonder I keep calling him Kramer. Must be thinking of Seinfeld because I don't take him seriously. At least he entertains me with his loony pro Wall Street rants. :D
 
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SHELLY

SoWal Insider
Jun 13, 2005
5,775
802
Use part of the $145 billion or so from economic stimulus plan to buy mortgage insurers, then resell shares as a federally backed security like mortgage bonds. :D

I don't agree with US Taxpayers buying out shareholders of these homeowers mortgage insurance companies.

I don't get it, the US taxpayers would essentially be buying a big bunch of RISK....what "shares" are they going to sell? The revenue stream from the homeowers insurance premium? And if the homeower defaults, that means that the taxpayer not only (1) paid out for the company; but also must (2) pay out to the holders of the defaulted mortgage insurance bond; (3) pay the lender for the missed payments. :blink: Fannie & Freddie have their own shareholders...let them deal with it themselves.

Let the company go bankrupt, let the shareholders take it in the shorts; and sell off any assets to Abu Dhabi for 2 fils on the dollar.



.
 
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Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
Insurance... that brings up another good subject. When someone defaults on their payments, they are likely to also cancel their insurance for that property. Does the lender then buy insurance for the home until they can get if off their books? That could be dangerous if they don't, and hurricane season is harsh.
 

Mango

SoWal Insider
Apr 7, 2006
9,712
1,360
New York/ Santa Rosa Beach
I don't agree with US Taxpayers buying out shareholders of these homeowers mortgage insurance companies.

I don't get it, the US taxpayers would essentially be buying a big bunch of RISK....what "shares" are they going to sell? The revenue stream from the homeowers insurance premium? And if the homeower defaults, that means that the taxpayer not only (1) paid out for the company; but also must (2) pay out to the holders of the defaulted mortgage insurance bond; (3) pay the lender for the missed payments. :blink: Fannie & Freddie have their own shareholders...let them deal with it themselves.

Let the company go bankrupt, let the shareholders take it in the shorts; and sell off any assets to Abu Dhabi for 2 fils on the dollar.
.

OK, but then who would insure mortgages? Were not investors who bought shares of the enterprises taking risks? or when you buy a bond, there is a risk of losing yield due to inflation etc. Fannie and freddie would in essence then have to set up their own self insured programs if mortgage insurers failed.
Yes, they have their own shareholders, but remember, they are also government sponsored. They're neither fish nor fowl. You buy risk when you buy one of the enterprises, however people feel since the agencies have special priviledges, that that risk is limited figuring the govt. would intervene. Serious consequences domestically and globally could arise if these agencies start taking it in the pants too deeply. They account for a majority of the loans purchased. They were designed to encourage home ownership and it is part of their charter.

If the Office of Federal Housing Enterprise Oversight (OFHEO) established 14 years ago to ensure taxpayers would never have to pick up the tab in the event of failure at Fannie Mae or Freddie Mac, did their jobs, they would have intervened prior to this fiasco and restricted some of the risk Fannie was taking, ie, buying subprime mortgages, doing these risky ALT-A loans. Freddie is poised to handle a 10 yr. meltdown, but Fannie isn't.

The housing sector could be crushed without these agencies and add to an already economic mess. Agencies or mortgage insurers go south, believe me the government is going to have to intervene someway, somehow and who is going to pay? taxpayers one way or another.

You asked for comments above regarding MGIC. My ascertations may be wrong, but you got it. Be careful what you ask for. :lol:
 
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Mango

SoWal Insider
Apr 7, 2006
9,712
1,360
New York/ Santa Rosa Beach
Insurance... that brings up another good subject. When someone defaults on their payments, they are likely to also cancel their insurance for that property. Does the lender then buy insurance for the home until they can get if off their books? That could be dangerous if they don't, and hurricane season is harsh.

Yes they do at a hefty premium too I might add. :shock:
That's for a private home. Condos and townhomes that buy commercial policies have their HOA get stuck with covering defaulted dues.
 
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SHELLY

SoWal Insider
Jun 13, 2005
5,775
802
The housing sector could be crushed without these agencies and add to an already economic mess. Agencies or mortgage insurers go south, believe me the government is going to have to intervene someway, somehow and who is going to pay? taxpayers one way or another.

The mortgage industry plunged the knife in with their "magic" 80/20 piggybacks, which abolished the need (and resulting revenues) for traditional mortgage insurance companies.......and the non-existent underwriting standards of the lenders twisted the knife--and now they're both surprised and concerned that the agency is bleeding out??
:dunno:


But all these problems with credit and mortgage and insurance will be fixed by this Spring's RE Blowout....right?


.
 
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Mango

SoWal Insider
Apr 7, 2006
9,712
1,360
New York/ Santa Rosa Beach
The mortgage industry plunged the knife in with their "magic" 80/20 piggybacks, which abolished the need (and resulting revenues) for traditional mortgage insurance companies.......and the non-existent underwriting standards of the lenders twisted the knife--and now they're both surprised and concerned that the agency is bleeding out??
:dunno:
But all these problems with credit and mortgage and insurance will be fixed by this Spring's RE Blowout....right?.
YES! :lie:

Fannie and Freddie got greedy. I remember when they did not charge a premium for a 1st mortgage that had a piggyback up to 90%. Eventually they wanted these revenues to offset risk, and charged premiums for combos, ie: 75% first/ 15 seconds etc.; Statistics show that if someone starts to deteriorate financially, they may stop payments on the equity line first vs. the first mortgage.

Then with low HELOC rates in place, people wanted piggys in lieu of MI because 1) MI WAS not tax deductible, 2) getting MI removed at a later point could prove to be difficult. Banks could ask that the LTV be 75% for removal vs. not being required to purchase it if you put 20% down. Further, quite a few LO's didn't utilize some of the MI programs that were available like refundable policies because they didn't grasp it. Instead they did straight monthly premiums with no initial outlay of cash.
People were betting their houses would appreciate significantly enough, and MI companies have caveats that you can not remove it for a certain time period regardless of LTV.

***Now more than ever MI is making a comeback and finally going to be tax deductible up to 100K in earnings with it lessoning gradually to 0 deduction up to 110K income (insert it's about dang time smilie)
Homeowners will not be subject to payment swings vs. a HELOC.
http://www.privatemi.com/news/media/20070417.cfm
 
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