New Homes Set Record: Sales Fell 26% in ’07

DeeJayH · 01-28-08, 10:47 PM

Quote:

Originally Posted by RightinNYC

Or, god forbid, we could blame the irresponsible people who took out loans they couldn't afford in the first place.

you are foolishly assuming that everybody thinks people should take personal responsibility for their actions

my father called me about a lady he knows
she has a mortgage that is going from a 6% teaser rate to 18%
she is an idiot for signing it
and she should lose her house because of it

26 X World Champs · 01-28-08, 10:52 PM

Quote:

Originally Posted by RightinNYC

Champs, before you get too excited talking about how bush ruined home prices, why don't you look at those graphs and think about why they only show 18 months of data. Then go back and look at what the numbers were like for the other 5 years of Bush's term.

(Of course, your post and my response assumes that falling house prices are unquestionably bad, which is a pretty fallacious assumption as it is.)

Your post seems illogical to me? Of course there was an upswing in housing purchases due to the Bush policy of sub-prime loans with no down payment! How could there not be? To claim there were "good" years prior to 2007 and now 2008 would mean that you approve of out of control mortgage lending to anyone who can sign their name!

If you do not vet home buyers of course there will be an increase....in the short term...but look what the end result is now! Not only are there a sick amount of people losing their homes but now our Government has to spend $150 billion to "stimulate" the economy. Isn't this sort of "nanny state" social welfare entitlement programs completely against Conservative and Republican DNA?

If this had happened under Clinton we'd still be hearing about it! You're hypocritically giving Bush a pass because you're a Republican? WOW!

26 X World Champs · 01-28-08, 10:53 PM

Quote:

Originally Posted by DeeJayH

you are foolishly assuming that everybody thinks people should take personal responsibility for their actions

my father called me about a lady he knows
she has a mortgage that is going from a 6% teaser rate to 18%
she is an idiot for signing it
and she should lose her house because of it

Ahhh you're the epitome of the "Compassionate Conservative" just like Bush!

DeeJayH · 01-28-08, 10:58 PM

Stupid is as Stupid does
cant fix stupid....but than you should know that already

if ignorance is no excuse in the law, why is it any different, in your opinion, in mortgages????

edit: compassion is for those who fall on hard times
not idiots who bring hard times upon themselves

26 X World Champs · 01-28-08, 10:59 PM

Quote:

Originally Posted by RightinNYC

Or, god forbid, we could blame the irresponsible people who took out loans they couldn't afford in the first place.

Oh, and about this tidbit:

Incorrect.

The share of subprime mortgages to total originations was 5% in 1994, 9% in 1996, 13% in 1999, and 20% in 2006.

So approximating the numbers for 2000, in just 6 years of Clinton, we saw a 300% increase of the proportion of subprime mortgages. In the following 6 years of Bush, we saw a 33% increase.

How are you claiming that Bush was responsible for this when the explosion of sub-prime lending happened almost entirely under Clinton?

A misleading statistic I believe. Percentages are fine but if the actual number of mortgages has increased dramatically the percentage number doesn't carry as much weight.

13% of 1000 = 130

20% of 10000 = 2000

See? BTW the same article from Wiki that you cited also says this:

Quote:

However, once housing prices started to drop moderately in 2006-2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically. By October 2007, 16% of subprime loans with adjustable rate mortgages (ARM) were 90 days delinquent or in foreclosure proceedings, roughly triple the rate of 2005.

Binary_Digit · 01-28-08, 11:00 PM

Quote:

Originally Posted by 26 X World Champs

Isn't this sort of "nanny state" social welfare entitlement programs completely against Conservative and Republican DNA?

The nanny state would regulate a private industry and the financial decisions of private citizens.

I don't know a whole lot about this, but isn't the mortgage industry a private entity? If so, then why should it be regulated by the Federal gov't in the first place?

26 X World Champs · 01-28-08, 11:07 PM

Quote:

Originally Posted by Binary_Digit

The nanny state would regulate a private industry and the financial decisions of private citizens.

I don't know a whole lot about this, but isn't the mortgage industry a private entity? If so, then why should it be regulated by the Federal gov't in the first place?

Mortgage brokers are unregulated and made enormous profits by brokering loans to people who did not actually have the income to repay the loans. They still received their commissions. Having regulations that protect the consumer is common in many or most industries but is not in housing:

Quote:

Mortgage brokers don't lend their own money. There isn't a direct correlation between loan performance and compensation. They have big financial incentives for selling riskier loans, since they earn higher commissions. [41]

According to a study by Wholesale Access Mortgage Research & Consulting Inc., in 2004 Mortgage brokers originated 68% of all residential loans in the U.S., with subprime and Alt-A loans accounting for 42.7% of brokerages' total production volume. [42]

The chairman of the Mortgage Bankers Association claimed brokers profited from a home loan boom but didn't do enough to examine whether borrowers could repay. [4

Source: 2007 subprime mortgage financial crisis - Wikipedia, the free encyclopedia

RightinNYC · 01-28-08, 11:18 PM

Quote:

Originally Posted by 26 X World Champs

Your post seems illogical to me? Of course there was an upswing in housing purchases due to the Bush policy of sub-prime loans with no down payment! How could there not be? To claim there were "good" years prior to 2007 and now 2008 would mean that you approve of out of control mortgage lending to anyone who can sign their name!

The Bush policy? Link? I'm really curious to see where he proposed this.

Quote:

If you do not vet home buyers of course there will be an increase....in the short term...but look what the end result is now! Not only are there a sick amount of people losing their homes but now our Government has to spend $150 billion to "stimulate" the economy. Isn't this sort of "nanny state" social welfare entitlement programs completely against Conservative and Republican DNA?

Completely, which is why I've opposed it.

Quote:

If this had happened under Clinton we'd still be hearing about it! You're hypocritically giving Bush a pass because you're a Republican? WOW!

It did happen under Clinton (to a great degree) and now you are hearing about it. Funny how that works out.

Quote:

Originally Posted by 26 X World Champs

A misleading statistic I believe. Percentages are fine but if the actual number of mortgages has increased dramatically the percentage number doesn't carry as much weight.

13% of 1000 = 130

20% of 10000 = 2000

C'mon champs, you're smarter than this. Do you actually think the number of total mortgages increased by an order of 10 from 2000-2006? If you really want, I'll dig up the actual numbers to show you that subprime mortgage growth was far more drastic under Clinton than Bush, but I'd prefer not to have to do that.

Quote:

See? BTW the same article from Wiki that you cited also says this:

I don't have the slightest idea what you think that proves. Housing prices dropped from their artificial highs and people who couldn't make their payments defaulted. True statement.

Here's two more true statements:

The majority of people defaulting committed fraud in order to get their loans
The majority of people with subprimes got them under Clinton

26 X World Champs · 01-29-08, 07:15 AM

Quote:

Originally Posted by RightinNYC

, I'll dig up the actual numbers to show you that subprime mortgage growth was far more drastic under Clinton than Bush, but I'd prefer not to have to do that.

I don't have the slightest idea what you think that proves. Housing prices dropped from their artificial highs and people who couldn't make their payments defaulted. True statement.

Here's two more true statements:

The majority of people defaulting committed fraud in order to get their loans
The majority of people with subprimes got them under Clinton

I would like to see the actual number of mortgages and their value Bush v Clinton?

Housing prices dropped to a degree because of the bad lending policy that is causing so many defaults which devalues all the homes in that neighborhood.

Your last two truths I'd appreciate seeing facts on those too, please? Show how in actual numbers more people got loans under Clinton than Bush and also show how they "committed fraud"?

AndrewC · 01-29-08, 09:16 AM

This isn't a subprime problem. All types of mortgages are defaulting.

I have enjoyed reading Mish's Global Economic Trend Analysis. Mish's latest thing is people just walking away from their homes. They can afford the payments, but don't see the point when the value has dropped so drastically.

Mish's Global Economic Trend Analysis: The Business of Walking Away

01-29-08, 09:16 AM	#20
AndrewC Advisor Join Date: Nov 2005 Last Seen: 02-26-10 02:50 PM Posts: 341 Thanks: 29 Thanked 72 Times in 53 Posts	Re: New Homes Set Record: Sales Fell 26% in ’07 This isn't a subprime problem. All types of mortgages are defaulting. I have enjoyed reading Mish's Global Economic Trend Analysis. Mish's latest thing is people just walking away from their homes. They can afford the payments, but don't see the point when the value has dropped so drastically. Mish's Global Economic Trend Analysis: The Business of Walking Away

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