Comments on: Housing Crash Part 2? A Massive Second Wave Of Mortgages Reset Starting In 2010

By: Frank

Frank — Wed, 23 Jun 2010 15:15:55 +0000

Housing will not be worth cents on the dollar during hyperinflation, it is hard assets that hold value.

By: SW

SW — Tue, 13 Apr 2010 18:34:59 +0000

Aren’t banks starting to forgive part of the principal of underwater homeowners? Though they couldn’t forgive all, but that’s a start.

By: alan greenspeed

alan greenspeed — Sat, 10 Apr 2010 18:48:15 +0000

Housing will be worth cents on the dollar in the upcoming hyperinflation.

By: John

John — Wed, 10 Mar 2010 14:27:30 +0000

340,000 home mortgages resetting on top of 5+ million homes that are more than 25% underwater. The potential for default on those 5+ million homes is enormous. If I owe $300,000 on a home that is now worth $225,000, even if I could sell my home I have to come up with an additional $80,000+ (closing costs, lawyers, transfer taxes and principle) to get out from under the train wreck. One can rebuild one’s credit in 3 years. It is cheaper in most cases to walk away from the existing loans, or ask the bank to forgive the difference. What the author did not mention is the looming crisis in commercial real estate. 80% of commercial loans are resetting in 2011. Given that rental rates in many areas are depressed, the income produced from such properties and coupled by high vacancy rates are making it impossible for owners to refinance. In many cases, they, too, have negative equity. Add to the mix the fact that the Fed is now monetizing debt since no one wants to buy US treasuries, and the bankruptcy of nation states and individual US states, I don’t see any way to avoid a collapse of the current system. Anecdotally, I am a commercial real estate broker. All of my clients who want to sell are either in serious financial trouble or underwater. The future looks grim.

By: SpyBoy

SpyBoy — Wed, 03 Mar 2010 20:52:27 +0000

Hey Tony,

Speaking of Morons, you could have sold your house for $ 300,000 when you had the chance, rented for a couple of years, and bought a similar house like about now, for the $ 99,000, and been in the roses. Maybe your brother made dumb decisions, be he is not the only one.

By: Joe in JT

Joe in JT — Sat, 20 Feb 2010 02:03:27 +0000

Something doesn’t seem right in this article. It says 340,000 homes across the country are due to reset in 2010. That’s the size of an average, middle of the road city. How is that amount going to cause a major financial disaster for the whole country.?

By: Tony

Tony — Thu, 11 Feb 2010 23:57:26 +0000

My brother bought a condo for $250,000 with interest ony loan. Now that condo is worth 129,000 and sinking. Then he bought a 5 bedroom house for 345,000 and thats sinking. Am I the only one who thinks my brother is a moron? We own a townhouse together thats “paid for” and we were offered 300,000 for it during the peak and now is worth 99,000. He’s in trouble and needs to sell the “paid for” house to try and keeep up with his stupid housing decisions. So I’m F’ed because he’s a moron? I’m not signing or selling. Now we hate each other. Isnt this wonderful!

By: Paul

Paul — Thu, 04 Feb 2010 03:44:21 +0000

About 93% of Option ARM borrowers choose the “interest only” payment out of the different payments they could pay each month. That works for a while until one of two things happened: interest rates reset, or the principal exceeded the original loan value by 10%. At that point, a mandatory new payment would be recalculated.

The average reset will be about $1,000 extra per month. About 80% of Option ARMs are in California. California is non-recourse state. Buyers CAN stop paying their mortgage and live about 14 months rent-free, then move to an apartment and pay half what their mortgage was.

As you can see, California will crash much harder.