Archive for the 'Graphs and Charts' Category
The “Alt-A” and “option-ARM” Storm… how bad will it be?
December 31st, 2008 Categories: Graphs and Charts, Mortgage and Loans, Real Estate News, Sacramento Home Buyers, Sacramento RE Stats, Sacramento Real Estate
Wow, could it be true that we’re only half way through this? Whitney Tilson, an investment fund manager who has recently been in the news says that “We had the greatest asset bubble in history and now that bubble is bursting. The single biggest piece of the bubble is the U.S. mortgage market and we’re probably about halfway through the unwinding and bursting of the bubble,” Just go here and watch this…
“Well, the sub-prime is, was approaching $1 trillion, the Alt-A is about $1 trillion. And then you have option ARMs on top of that. That’s probably another $500 billion to $600 billion on top of that,” Tilson says.
I got this screenshot form an article on Elliotwave … it came form the same 60 minutes program that Tilson was featured on. It shows the timing of the resets of both Sub-Prime vs. Alt-A and option ARM resets, and shows that we are actually in a “lul” right now, with the second wave just beginning…. Add that pressure to a local Sacramento economy that is already struggling… scary.
Now, I know that most of these option ARM’s that I had any experience with went to buyers who bought huge, massive TROPHY homes, not the smaller 3 bed two bath, but the massive 3 or 4,000 square foot new construction.
Big homes are going to get cheap, I’m afraid
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Freddie Mac and Fannie Mae: Crumbling Cornerstones
September 6th, 2008 Categories: Graphs and Charts, Mortgage and Loans, Real Estate News, Real Estate Trends
The federal government is poised to take over the two largest Mortgage Giants. Between the two of them they own or guarantee almost half the home loans in the country’s roughly $12 trillion mortgage market. Over the past year, the companies have recorded combined losses of around $14 billion.
Fannie and Freddie were created in the 30’s and 70’s; respectively, to create a secondary mortgage market. Banks and thrifts hold more than $1 trillion in Fannie and Freddie bonds because they are considered as good as cash.
Without the bailout, the Credit Crunch would only get worse, as the mortgage market would have huge liquidity problems; Without buyers like Fannie and Freddie, big mortgage lenders have nowhere to go to sell packaged loans in order to continue to write new loans.
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