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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (28740)	3/25/2005 11:02:53 AM
From: John Vosilla	Read Replies (3) \| Respond to of 306849

Another interesting comment from Jonas Max Ferris's website. Nice to see some industry insiders speak the truth. No....he WILL walk. There is no doubt about it. Even a 5-10% decrease in values (and it will be much more than that) will financially ruin millions of people. Many, many, many, people have taken out 90-100% of the value (over inflated by anywhere from 10-50%) their homes to pay for credit card debt, un-needed Hummers and big screen TV's, Vacations, 2nd homes....anything and everything. Its a stinking time bomb that WILL go off. And thats just the Good borrowers! During the last 2-3 yers or so, all thats left in the marketplace (for the most part) are the deadbeats. When I got in the business about 15 years ago..NO was a possible answer when you asked for a mortgage loan. NO....your credit stinks. NO....you have a poor (or no) job history. NO...you dont have a down payment. NO is not part of the equation anymore. The only answer is YES. It should be NO....but its YES...Its stinking insane! These people STILL shouldnt be getting loans....with their mid 500 (terrible)credit scores. But whats happening? The lenders are giving them loans with no money down....many of them are 80/20 arms (thats 100% financing folks) that will adjust (as you said) in a few years. WHen this begins to happen..... God help us. This is a reality. The lenders, Realtors, (Government?) are doing ANYTHING to keep real estate moving. If it stops...the US economy is going to implode. This is no "sky is falling" diatribe either....its been building over the last 5 years....its happening. Very, Very, Very, scary stuff. Wait and see. I'm very close to getting out of the business. When the house of cards begins to fall.....people are going to be looking for someone to blame for their own foolish spending and living beyond their true means. I do not intend to take the fall. By the way...the government is complicit in this. They run FNMA and GNMA who pruchases the bulk of these mortgages. They know that the collateral (the houses) on these loans are puffed up and artificially over-inflated. They have allowed it to happen in order to try to keep the economy moving and keep people feeling good about themselves. The problem is beyond scope....beyond repair....beyond belief. THe only way to fix is it is for prices to retreat...substantially...and when it happens...lots of people will be hurt..... badly. Posted by: BK at March 24, 2005 10:06 PM