27% of Homes Underwater on Mortgages

[Gadawg73]

I'm putting this in Politics because this situation was manufactured by our government.

Some time ago, I made a comment in a thread that the results of government policies (taxes, entitlement burdens, inflation) have resulted in a massive transfer of virtually all wealth creation by the middle class since WWII to the cronies of the ruling elite.

Nothing exemplifies this con game better than the fact that 27% of homeowners in the U.S. are underwater on their mortgages.

27%.

And why? The government fueled speculative housing inflation on the pretext of making home ownership "affordable". As the proof is in the pudding, 27% of homeowners being underwater proves what an epic fail such social engineering do gooder programs are in terms of their stated purpose.

Of course, the stated purpose is sheep's clothing to transfer income and wealth from those who have earned to the politically connected.

ObamaCare will be even worse if we dont' kill it.

The number of U.S. homes worth less than their outstanding mortgage jumped in the fourth quarter as prices fell and lenders seized fewer properties from delinquent borrowers, according to Zillow Inc.

About 15.7 million homeowners had negative equity, also known as being underwater, at the end of the year, up from 13.9 million in the previous three months, the Seattle-based real estate information company said in a report today. The total represented 27 percent of mortgaged single-family homes, the highest in Zillow data dating to the first quarter of 2009.

Home prices are declining as foreclosed properties sell at discounts and unemployment at 9 percent limits buyer demand. Values will fall as much as 5 percent this year, putting more homeowners underwater, before finding a floor as the economy improves, said Stan Humphries, Zillow’s chief economist.

“These seem like fairly grim numbers,” Humphries said in a telephone interview. “We’re still expecting a bottom in home values later this year. And this, if anything, makes me a bit more confident because I’m seeing very large corrections now, which means the market can start to repair itself.” ...

Home-Price Drop Leaves 27% of U.S. Owners Underwater on Loans, Zillow Says - Bloomberg

If a large developer buys 80 acres, has it zoned for 240 lots and the bank loans him 80K a lot how is that "manufactured by government"?
That scenario is what caused 80-85% of the problem with "over speculation" as that was the root cause and that is where the BIG $$$$$ FORECLOSURES are.
What government employee, law, rule, regulation or policy FORCED ANY AMERICAN to sign loan documents that they would pay their bills?
That is a myth.
Those that lack the ability to hold themselves responsible for their actions blame others for their misfortune.
Conservatives never do that.

 

[WillowTree]

Fannie and Freddie, and the idiots in dc still won't address it.

Think Tanks To Testify On GSE Reform Wed,Obama Proposal By Fri | iMarketNews.com

Won't what?

WASHINGTON (MNI) - The Obama Administration is expected to release a white paper Friday with its proposals to reform the U.S. housing finance system and restructure government-sponsored entities Fannie Mae and Freddie Mac.

The Administration's white paper is expected to include options, rather than specific legislative proposals, on what to do with Fannie and Freddie as well as a plan to draw private capital into the housing market.






thinking ain't doing.

 

[8537]

Fannie and Freddie, and the idiots in dc still won't address it.

Think Tanks To Testify On GSE Reform Wed,Obama Proposal By Fri | iMarketNews.com

Won't what?

WASHINGTON (MNI) - The Obama Administration is expected to release a white paper Friday with its proposals to reform the U.S. housing finance system and restructure government-sponsored entities Fannie Mae and Freddie Mac.

The Administration's white paper is expected to include options, rather than specific legislative proposals, on what to do with Fannie and Freddie as well as a plan to draw private capital into the housing market.






thinking ain't doing.

The administration can't pass legislation. it can only be part of the conversation to draft legislation - including presenting options for reform.

 

[Gadawg73]

The banks were the culprits. Phil Gramm started this with Gramm, Bliley Leach Act.
Freddie and Fannie were small time dumbasses in this. Those bad loans were maybe 10-15% of the entire mess. Those loans weren't the large development and large loans that defaulted.
The big $$ was in development speculation.
And those folks are still LOADED and running.

 

[Gadawg73]

It does for the entity which sold the mortgage to someone else.

that doesn't remove the risk, it doesn't "derisk" anything. it simply exchanged a fixed revenue for a variable one.

B'loney. If a bank packages up a portfolio of mortgages to somebody else, the bank no longer owns them, no longer records them on its balance sheet, no longer collects the payments - all of that passes to somebody else. The risk is removed from the originator and assumed by somebody else.

That is derisking. That's what Fannie Mae and Freddie Mac did in their enabler role in this mess.

So they forced them to do it?

 

[boedicca]

swiss bank and Deutch bank sold their MBS's, in the BILLIONS, to fannie and freddie as triple A securities is what I had read?

I'm sure they did. Fannie Mae and Freddie Mac provided a global derisking service.

 

[boedicca]

B'loney. If a bank packages up a portfolio of mortgages to somebody else, the bank no longer owns them, no longer records them on its balance sheet, no longer collects the payments - all of that passes to somebody else. The risk is removed from the originator and assumed by somebody else.

That is derisking. That's what Fannie Mae and Freddie Mac did in their enabler role in this mess.

The security is not de-risked. The risk has not been removed. The firm has just exchanged that risk for a premium and shifted the risk. Once again: The risk is not removed.

... and FM and FM didn' buy the riskiest securities - those were bought in the private sector b/c FM and FM weren't allowed to buy nonconforming mortgages. That's how FM's share of the subprime market declined as the market itself grew so dramatically between 2002 and 2007.

You don't de-risk a particluar item, you de-risk your postion.

The people who sold were derisked.

The people who bought assumed the risk.

Jeebus, you are dense.

 

[Provocateur]

Frank, Dodd, Clinton, ACORN to name a few.

Set in motion the housing bubble.

 

[uscitizen]

FOXNEWS.COM HOME
Bush Ties Policy to Record Home Ownership
Friday, March 26, 2004


ALBUQUERQUE, N.M. — President Bush on Friday promoted his efforts to help Americans, especially minorities, "realize their dreams" of home ownership as he wooed the large Hispanic population of a state he barely lost four years ago.

"We want more people owning their own home in America," Bush said. His goal is to have 5.5 million minority homeowners in the country by the end of the decade.

Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever." More than 50 percent of minorities owned their own homes in the last three months of 2003 for the first time ever, the president said.

Nationally, more than 75 percent of white Americans owned their own home in last year's fourth quarter.

FOXNews.com - Bush Ties Policy to Record Home Ownership - You Decide 2004

Bush pushes home ownership opportunities for minorities
By Wayne Washington, Globe Staff | March 27, 2004

PHOENIX -- President Bush traveled to two swing states with sizable Hispanic populations yesterday and talked up his proposals to increase home ownership opportunities for minorities.

"Not enough minorities own their own homes," the president said during a stop at a carpenters' training center in Phoenix, which followed a talk about home ownership at the New Mexico State Fairgrounds in Albuquerque. "And it seems to me it makes sense to encourage all to own homes."

In New Mexico and Arizona, Bush gave a modified version of what has become his standard campaign speech, including two topics his administration considers of particular interest to Hispanics: immigration and housing. He announced that the minority home ownership rate edged above 50 percent for the first time at the end of last year, and told audiences that his administration will continue to work to close the "minority home ownership gap," in which the percentage of white homeowners exceeds the percentage of minorities who own their own homes.

White House officials have frequently noted the continuing increase in minority home ownership rates, linking it yesterday with the president's call in June 2002 to increase the number of minority homeowners by 5.5 million by the end of this decade.

Bush pushes home ownership opportunities for minorities - The Boston Globe

Flashback: In 2004 Bush Campaigned For Re-Election On The Backs Of Subprime Mortgages
During the 2004 campaign, President Bush declared his pride in making America what he called “an ownership society.” He promoted expanding home-ownership as the best way to ensure a strong economy, campaigning constantly on the idea:

5/6/04: “Thanks to being the most productive workforce in America, and I might say, thanks to good policies, this economy is strong and it’s getting stronger. … Home sales were the highest ever recently. That’s exciting news for the country.”

8/28/04: See, I love an ownership society. It’s a hopeful society. It’s a society that provides stability in times of change.

8/9/04: If you own your own home, and building equity in your own home, and you’re changing from job to job, it provides great security and relief.

8/6/04: Home ownership is at an all-time high now in America. That’s fantastic news. Isn’t it wonderful to have somebody for the first time be able to say: welcome to my home; I’m glad you’re here at my piece of property.

Of course, what the current enormous crisis — rooted in subprime mortgages — proves is that promoting home ownership without regulatory safeguards is inherently risky. As economist Paul Krugman explained, “orrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.” And that’s just what happened: More homeowners now owe more money than their homes are actually worth, while foreclosure filings in August rose 12 percent from July — and represented a 27 percent increase from Aug. 2007.

Further, the quest for an all-encompassing ownership society led to the policies that have created the crisis. From dramatically low interest rates to ignoring the warnings about predatory lending to quashing state regulations that would have helped prevent such massive Wall Street investment in subprime loans, Bush and his allies built an economy on a house of cards that was bound to collapse.

Today, Bush declared, “There will be ample opportunity to debate the origins of this problem.” That debate will need to focus on his own failed promise of an “ownership society” as an economic panacea.
ThinkProgress » Flashback: In 2004 Bush Campaigned For Re-Election On The Backs Of Subprime Mortgages

 

[boedicca]

Thanks for sharing.

This mess has been one of the true bipartisan efforts in DC.

 

[Provocateur]

Thanks for sharing.

This mess has been one of the true bipartisan efforts in DC.

True. Started during the Clinton administration and not fixed during the Bush administration.

I don't know if you have seen this video, but Peter Schiff predicted this years ago, and was MOCKED by many.

A must-see video.



ETA: If the video doesn't play by clicking above, it is on Youtube called Peter Schiff Was Right

 

[uscitizen]

2006 was a bit late to predict.

I predicted what was coming since around 1990. I saw it as inevitable.
And shiff was a bit optimistic in his prediction.
Just a little bump and adjustment was what he was saying.

 

[boedicca]

Agreed. By 2006, the foundation for much of the damage was already complete.

 

[Provocateur]

2006 was a bit late to predict.

I predicted what was coming since around 1990. I saw it as inevitable.
And shiff was a bit optimistic in his prediction.
Just a little bump and adjustment was what he was saying.

1990? Seems a bit early to me, but I'll trust your psychic abilities.

Him saying the recession would last years doesn't exactly scream optimism to me.

He spent so much time traveling the country trying to get people to listen to his reasoning. His concern was dismissed.

 

[Provocateur]

Agreed . By 2006, the foundation for much of the damage was already complete.

Absolutely.

 

[Provocateur]

What strikes me is that what should have been obvious to economists was not even on their radar.

 

[8537]

What strikes me is that what should have been obvious to economists was not even on their radar.

It was "on the radar" of many economists - just not the talking heads on TV, the paid shills or the most vocal mouthpieces.

The talking heads and mouthpieces had a vested interested in propping up the bubble, but no one seemed to notice or care.

 

[boedicca]

What strikes me is that what should have been obvious to economists was not even on their radar.

There was an active effort to keep a lid on it.

[ame=http://www.youtube.com/watch?v=_MGT_cSi7Rs]Cover Up[/ame]

 

[Provocateur]

What strikes me is that what should have been obvious to economists was not even on their radar.

It was "on the radar" of many economists - just not the talking heads on TV, the paid shills or the most vocal mouthpieces.

The talking heads and mouthpieces had a vested interested in propping up the bubble, but no one seemed to notice or care.

I think that some were just totally clueless. Perhaps some economists believed there was a crisis. Not enough to be heard.

 

[Provocateur]

What strikes me is that what should have been obvious to economists was not even on their radar.

There was an active effort to keep a lid on it.

[ame=http://www.youtube.com/watch?v=_MGT_cSi7Rs]Cover Up[/ame]

Dodd, and especially Frank, are continuing to perpetrate the lie today.