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 Housing/Mortgage Crisis

Created by:
Philip Rosenberg, Licensed Real Estate Broker,  AZ

Date: August 28, 2007, Number of Replies: 3


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Once I get beyond Countrywide and whether or not they will declare bankruptcy, I begin thinking about the larger picture. I wonder how many homes STOCKHOLDERS of lenders will allow them to hold before they say, Whoa...10% (or 20% or 30%) of our wealth is in real estate. That's not what we planned when we bought your stock. We thought you were going to have interest bearing instruments (mortgages) to feed the profits we need".

I'm over simplifying but what happens when (soon) lender's portfolios are too laden with real estate that stock holders begin to rebel (sell)?

I personally think from a non-financial background that there must be some point of "critical mass" where the lenders of the world say, "No more real estate in our portfolio"!.

Does the government step in? Do all of our home's values go back to 2001 values and we begin again?

I'm curious what the larger real estate community thinks will end the housing inventory glut. It's far too late to play the blame game. Now is the time to be thinking about the "end game", and how we as persons of the industry can influence it. Ideas as to where you think this will end, and why, and what we may be able to do about it are welcome.

I persoannly think that in 2-3 months, we will hit some critical mass point and something will have to give. I'm hoping that the Fed can help to control this thing simply becasue I have little faith in politicians being very intelligent as a group. Curious what's on YOUR mind...
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Date: August 29, 2007

The mortgage crisis is history repeating itself.
 
Go back to your history books...look up THE GREAT DEPRESSION of the early 1930's. Thousand of farmers and small shop keepers lost their homes and farms as the banks called in their mortgage notes.
 
One of the reasons FDR (Franklin Roosevelt) won the election was that he promised big changes. The New Deal. And, one of the first things he did was declare a moratorium for 100 days on mortgages. It gave more time for people to find another lender or gather family money to help. However, as many, many people were out of work, it still wasn't enough to save them. In those days, you owed the bank...and if they called your note...you were sunk.
 
So, yes, I do expect that we're at the beginning of an extended crisis.
 
Cordially,

Eileen Landau, ABR, CRS, e-Pro
Realty Executives, Realtors
Naperville, Il 60540
Over 800 homes sold!
630-961-2600 & 630-961-2700
www.MoveUPtoNaperville.blogspot.com
www.MoveUPtoNaperville.com
www.EileenLandau.com



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Robert King Licensed Real Estate Broker,  Saint Petersburg,  FL

Date: August 30, 2007

 
Eileen Landau has landed on a most informative history lesson that all of us need to understand:
 
"One of the reasons FDR (Franklin Roosevelt) won the election was that he promised big changes. The New Deal. And, one of the first things he did was declare a moratorium for 100 days on mortgages. It gave more time for people to find another lender or gather family money to help. However, as many, many people were out of work, it still wasn't enough to save them. In those days, you owed the bank...and if they called your note...you were sunk.
 
So, yes, I do expect that we're at the beginning of an extended crisis."
 
This is the reason we have Social Security also, better known as the New Deal.  It was a great idea through the 50s but it isn't worth the paper it's printed on now.  So when that generation passed the next generation had become accustom to the new socialist form of government control.  After WWII wars were considered conflicts and lines in the sand or retreat was the play of the day.  Civil Rights followed then population control and supply side econmomics.  Now we have Middle Eastern problems and Gobal Nonsense to deal with.  Mean while after 911 the Real Estate Market takes off like an unending investment as if it were an Enron deal.  I've been saying since 03 that when this market turns it's going to be a bottomless pit with no relief other than a MORATORIUM to bail out the sellers and lenders who happened to fall in to risk management issues!!!!!  The Hebrews used to have a time called Jubilee, don't know if that would work in today's society but we have certainly passed the 50 year mark.  Something has got to give at some point.  The dollar devalues daily as billions of $$$ are pumped into the system creating that old enemy INFLATION devaluing the $$$ more and more.  Now we have refugees in the millions plus all the Illegals, petroleum prices are limitless and a cash cow for the government, so don't expect any relief on their watch (31 cents of every gallon pumped) all to pay for the entitlements and short falls from redistribution from the rich to the poor.  And it all happens so the rich can get it back from the poor through discount pricing and coupons and other slick money savings.  It's kind of a built in protection so the rich get richer and the poor get poorer.  Is that fair?  I don't think so.  But are you ready for more government intrusion such as regulation and more taxation and more inflation?  That's why the Pilgrims came to this Country in the first place and why the Indians lost the battle.  Our Country the USA was founded on the principal that land and private property is for the individual.  Unfortunately we have all become slaves to the lender who is rich.  Now the lender is willing to short sell, WHY????  They want the Land or they want their Money.
 
Robert King   
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Tom Hathaway Licensed Real Estate Broker,  TN

Date: August 30, 2007

Robert King,
I don't know how much of what you write will reallyl happen, but I am concerned that you are right on the point with most of it.  Who knows, this time next year the Mexican government may be showing us how to build a fence.
Tom Hathaway



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