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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (139073)	2/7/2018 8:29:58 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 218074

Jay - Many people definitely got hurt but not in the share markets Jay. I don't think you appreciate how many people were over-leveraged to real estate in the post-9/11 real estate bubble. As you've noted recently in Hong Kong people were offered mortgages for far more than their home(s) were worth. General Motors through their Ditech home loan subsidiary offered easy "no-qualify" loans for 125% of the appraised value of your home - and many larger lenders like Countrywide, IndyMac copied them. Around 2006 home prices reversed, later in some places, falling by 50% in locations like Las Vegas and Florida and at least 25% to 35% in other locations. A 125% mortgage with a value stepped-down to 50% to 70% of previous appraised value obviously wipes out all the home owner's equity and greatly reduced their incentive to keep making mortgage payments. By 2008 the collapse of the post-9/11 real estate bubble wiped-out many of the major lenders so Bush and Paulson had to ride to the rescue bailing out GM and GE BOTH because of their home lending subsidiaries. Of course the collapse of the real estate markets globally also collapsed the share markets globally, with the Dow falling to 7,850 but most people were hurt in losing their homes and rental properties to foreclosure. Prior to this time one of the busiest "investment" boards on SI was the "The Residential Real Estate Crash" board where I posted primarily. I have to confess to being 8 years early in seeing a collapse, and I never foresaw the mischief of a real estate bubble to celebrate the 9/11 terrorist attacks. We never saw a real estate bubble after Pearl Harbor. When Obama was elected they passed loan "work-out packages" to try to stem the foreclosures which would have wiped-out more banks, and it incidentally helped some homeowners stay in their over-indebted homes. We experienced a very abbreviated version of the 1930s after 2006. In this period of aftermath many retire people who relied on CDs and other interest devices saw their income vanish.