Sshhh! The Show is Starting
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"The nation's troubled housing and mortgage markets will decline even further before they rebound, a prominent mortgage executive told a gathering of real estate agents at Cal State San Marcos on Friday."
"Robert A. Camerota, Sr., senior vice president and manager of GMAC's Mortgage group in Coast Mesa, sketched a bleak forecast for the housing industry: falling home prices, increased foreclosures, more failed mortgage companies and increased revelations of mortgage fraud."
'"We're all going to be struggling, struggling more than we are today," he said. "We're headed halfway down the mountain, and we've got a ways to go."'
"Camerota's company, GMAC, is one of the nation's largest subprime mortgage lenders. The increasing failure of the company's borrowers to repay subprime mortgages has cost the company more than $1 billion already and could cause General Motors, part-owner of GMAC, to take a major financial hit, according to an article distributed Friday by Dow Jones Newswires."
"Camerota said that guidelines proposed Friday by federal regulators to tighten mortgage lending requirements and reduce problems in the "subprime" mortgage market were necessary. But, he added, they would dramatically decrease the number of new mortgage loans issued, as well as mortgages refinanced."
"He also predicted more subprime mortgage lenders would fold. He noted that New Century Financial Corp. of Irvine, one of the nation's largest, was laying off hundreds of workers on Friday. The company disclosed Friday that a federal prosecutor and the New York Stock Exchange are investigating the trading of its stock."
"Revelations of mortgage fraud, the use of bogus income and tax documents by borrowers to obtain large loans, will increase, Camerota predicted. He said that, contrary to what some legislators propose, no new laws are need to combat mortgage fraud."
Instead, he said, "We need to go to the attorneys general and the district attorneys. We don't need more laws. We need more enforcement."
"Realtors in attendance noted that the booming real estate market of recent years created a "perfect storm" for problems now surfacing: low interest rates, rising property values and lenient lending standards led to buyers taking on larger homes and bigger mortgages than they could afford."
"One Realtor said that buyers contributed to the problem, by wanting to "keep up with the Joneses," and to buy their dream homes: "Our clients were saying, 'Supersize Me!' "'
posted by Athena @ 2:42 PM
6 Comments:
"One Realtor said that buyers contributed to the problem, by wanting to "keep up with the Joneses," and to buy their dream homes: "Our clients were saying, 'Supersize Me!' "'
If traditional lending standards had stayed in place, buyers would not have been able to say "Supersize me!", snap their fingers, and close on their "dream house" 30 days later.
The fact that there have been NO standards in place has meant people have been able to temporarily live way beyond their means.
Everyone on the housing blogs has known this day of reckoning would come. I think 2007 is the year.
Tighter lending standards and the subprime disaster means fewer buyers just in time for the key Spring selling season. Last year's foreclosures should start to hit the market this year also.
Not to mention it was these easy marks of dumb people supersizing their debt loads that drew parsitical personalities to the Real Estate industry in the first place.
Those who want something for nothing, and think that someone is going to make the easy money, why not them.
I was raised too old fashioned, which means I likely won't ever see easy money, but will keep my own sense of personal integrity.
Buckets of money can't buy integrity if you have sold it, or worse if you've never had it in the first place.
So I am not going to nod my head at these parasites that are now rearing up on their hind legs and pointing their fingers at the buyers.
e"Those who want something for nothing, and think that someone is going to make the easy money, why not them."
Amen. I was lucky enough to own a house in Marin from 1996-2004. Friends looked at the "money I had made" from that house and decided that home ownership was smart bet, EVEN after I told them many, many times that I thought the factors that were in place were on their way out...silly dot com money floating around....crazy low interest rates...and the fact that I lucked out and bought BEFORE the boom....of course they are all mortgaged to the gills now on declining assets. They just couldn't stand the "easy money" being made elsewhere.
And I never thought that owning a house was easy money! I worked a lot, never had nice vacations, etc. Left with a chunk of change, but those eight years were lean and mean while I owned.
The realtor who said people were demanding to be screwed is telling the truth.I have encountered this as a loan broker,and simply told them i did not do that kind of business,and usually told them they should have no problem finding someone willing to commit fraud,or sell them drugs.I angered some folks with my attitude.camerota is not saying anything that any half bright person who spent a couple of hours doing basic research didn't know two years ago.we are going to see a credit squeeze this year that will hit the history books,BOJ raising the rate to .5% doesn't sound like much,but it was the death knell of the carry trade.Alt-A loans are beginning to stink,and there ain't no prime,not when you go by credit score alone.Wamu is going to be burned toast,and i really would not want to be the person who had to justify buying golden west...sales of cheap vodka and depends are expected to skyrocket.
I heard an amazing thing while sitting on the porch of the Swiss the other day with our dog. Seems that a guy was pitching super hard on his cell phone. I mean he was selling!
I heard his entire resume, all of it real estate, his wife was wearing some sort of poncho type thingy trimmed with fur, you get the type. Seems oour chatty little neighbor was out looking for another job, not RE related. The times they are a changin'.
pitching himself for a job while sitting in front of the Swiss with his poncho wearing wife? ;-D He is about to get a wakeup call and the dream of his so called charmed life will be over. Good luck to him there. I keep getting resumes from people who left development to become mortgage brokers or real estate agents during the boom. Hint for y'all.. if you were any good in the first place you wouldn't have left it.
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