Bernanke Says Economic Outlook Is Worse - Page 2 - Mercedes-Benz Forum

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post #11 of 19 (permalink) Old 02-15-2008, 09:55 AM
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What is the % of mortgages being defaulted on in the states?

And how many times does one have to sign his name on a contract to
get a mortgage loan?

Just blame it on Bush, kiddies!
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post #12 of 19 (permalink) Old 02-15-2008, 10:17 AM Thread Starter
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Originally Posted by Jakarta Expat View Post
Hey bottomfeeder, You are obviously unaware of the drum beating, cheerleading and flag waving Jaybird has been doing for the US economy for the last year+ and anyone appearing with weblinks regarding the sad state of affairs, the subprime mess and the ongoing US debt he just dismissed them by calling them chicken littles.
Perhaps you missed the fact that I started this thread w/ some bad news? Though Bernanky clearly stated that we will not have a recession this year!

Don't believe everything you think
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post #13 of 19 (permalink) Old 02-15-2008, 10:21 AM Thread Starter
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As Bear has already said in another thread, this is just waiting rear it's ugly head in the States and then people are going to be against the wall and up to their neck if they are not already.........


Consumers spent a record sum on credit and debit cards in the final three months of last year as borrowers increasingly used plastic to pay their household expenses. Credit and debit card spending rose to £91.5 billion, up from £86.6 billion in the three months to last September.

The Association of Payment Clearing Services (Apacs), the body that represents lenders and credit card companies, says that £32.4 billion was spent on credit cards between October and December last year, the second-highest sum in history.

Over the same period, £59 billion was spent through debit cards, the highest since their records began in 2000.

Chris Tapp, of Credit Action, the debt charity, said: "Retail figures were down over Christmas, yet credit card debt is still rising.

"This indicates that we are seeing people shifting spending on to credit cards as household expenses mount up.

"This is not good news. People using their credit cards to meet their monthly bills is the first sign of a spiral of debt trouble."

Mr Tapp said that consumers who are using their credit card to cover household expenses should seek help immediately.

Apacs said that repayments of credit card debts, calculated by comparing the total amount of repayments to the total sums lent during the same period, was 96 per cent last year.

This is lower than in 2006, when repayments were at 97 per cent. Repayments in December fell to 86 per cent.

However, cheques are becoming ever more unfashionable. There was a 9.3 per cent decline in the number of cheques used during 2007, Apacs said.

Credit card spend sounds credit crunch alarm - Times Online



But I am sure Oracle of Kansas and his partner in rose collored glasses bottomfeeder can find a cheery side to this story
As I said above, in spite of a weakening economy, the Fed Chair and Treasury Secretary both said yesterday that we will not have a recession!

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post #14 of 19 (permalink) Old 02-15-2008, 10:25 AM Thread Starter
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Exactly, need I wet a finger and check the wind direction?

Should we merge this with the 'no recession in sight' thread?
Actually, that's a good idea! I only started this separate thread because I wanted to acknowledge that all is not well, and I wasn't hiding from that fact. But it probably makes sense to merge them...

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post #15 of 19 (permalink) Old 02-15-2008, 10:25 AM
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As I said above, in spite of a weakening economy, the Fed Chair and Treasury Secretary both said yesterday that we will not have a recession!

Such a trusting soul you are, of course if they have any hope of voting a Republican in to office in November I think they have to keep singing this song...............
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post #16 of 19 (permalink) Old 02-15-2008, 10:46 AM Thread Starter
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What is the % of mortgages being defaulted on in the states?

And how many times does one have to sign his name on a contract to
get a mortgage loan?

Just blame it on Bush, kiddies!
I believe that only 1% or 2% of mortgages are in default in the US. I can tell you exactly how many times one has to sign loan papers to get a mortgage, and it is at least 13 times plus several initials in various places. And the loan officer sits there and explains in painful detail, each and every provision of the loan. I know this because I recently got five new mortgages on properties in my real estate portfolio.

And President Bush wasn't even in the room!

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post #17 of 19 (permalink) Old 02-15-2008, 02:05 PM Thread Starter
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A little good news on the housing front...

Metro home sales up by 15%

Detroit leads gains with almost double amount of closings over same period last year.

Sales of residential and condominium units in Detroit nearly doubled in January, compared with the same month a year ago, and the region overall got a nearly 15 percent bump, according to real estate data firm Realcomp.

The city of Detroit led the gainers, posting a 45.5 percent increase in the month, with 736 closings.

Metro home sales up by 15%

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post #18 of 19 (permalink) Old 02-15-2008, 08:40 PM
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What is the % of mortgages being defaulted on in the states?

And how many times does one have to sign his name on a contract to
get a mortgage loan?

Just blame it on Bush, kiddies!
Here is data from the July 2007 GAO. Cliff's Notes about 1.4% are in default. That number is record high. When you are talking about some things 1% is a very small number. When you are talking about collateralized debt, 1% is significant. And this report does not take into account the previous defaults [remember it is a rolling number] so if 1% defaulted in January they aren't counted in February but their financial impact still affects the sectors.

This report also doesn't count over 60-90 and pre defaults. And it further doesn't count all the rewrites that occurred just prior to the clampdown in June 2007.

Note also this does not break out SubPrime from Prime Mortgages. This means that the higher default rate SubPrimes are being helped statistically in this report by the more credit worthy Prime mortgages.

Quote:
Originally Posted by GAO
Substantial growth in the mortgage market in recent years has helped many Americans become homeowners. However, as of the latest quarterly data available, June 2007, more than 1 million mortgages were in default or foreclosure, an increase of 50 percent compared with June 2005. Defaults and foreclosures on home mortgages can impose significant costs on borrowers, lenders, mortgage investors, and neighborhoods. Additionally, recent increases in defaults and foreclosures have contributed to concern and increased volatility in certain U.S. and global financial markets. These developments have raised questions about the extent and causes of problems in the mortgage market. To provide some insights on these issues, Congress asked GAO to analyze (1) the scope and magnitude of recent default and foreclosure trends, and how these trends compare with historical values, and (2) developments in economic conditions and the primary and secondary mortgage markets associated with these trends.

Overall, the number and percentage of mortgages in default or foreclosure rose sharply from the second quarter of 2005 through the second quarter of 2007 to levels at or near historical highs, but there was significant variation among market segments, loan types, and states. The overall default rate grew by 29 percent, reaching a point at which just over 1 in every 100 mortgages was in default, almost a 28-year high. The foreclosure start rate did reach a 28-year high, rising by 55 percent. The subprime market experienced substantially steeper increases in default and foreclosure start rates than the prime or government-insured markets, accounting for two-thirds or more of the overall increase in the number of loans in default or foreclosure during this time frame. Among types of loans, ARMs experienced relatively steeper growth in default and foreclosure rates, compared with FRMs which experienced no or modest increases. According to mortgage industry researchers and participants, the number and percentage of loans in default and foreclosure are likely to worsen through the end of 2007 and into 2008, due partly to scheduled payment increases for many ARMs. A number of studies and industry data indicate that a combination of economic and market developments contributed to recent increases in default and foreclosure rates. First, the rapid decline in the rate of home price appreciation throughout much of the nation beginning in 2005 may have reduced incentives for borrowers to keep current on their mortgages and made it more difficult for borrowers to refinance or sell their homes to avoid default or foreclosure. Second, in some states with foreclosure rates that were already relatively high in 2005, weak labor market conditions likely contributed to mortgage problems. Third, more aggressive lending practices--an easing of underwriting standards and wider use of certain loan features associated with poorer loan performance--reduced the likelihood that some borrowers would be able to meet their mortgage obligations, particularly in times of economic hardship or limited house price appreciation. Fourth, growth in the market for private label RMBS beginning in 2003 provided liquidity to some brokers and lenders to support these more aggressive lending practices. Investors were attracted to these securities because of their seemingly high risk-adjusted returns. A number of other factors--including incentives that potentially emphasized loan volume over loan quality and growth in the incidence of mortgage fraud--may have contributed to recent default and foreclosure trends, but additional information would be needed to fully assess their impact.
U.S. GAO - Summary

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Last edited by mcbear; 02-15-2008 at 08:45 PM.
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post #19 of 19 (permalink) Old 02-15-2008, 08:44 PM
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Originally Posted by Jayhawk View Post
Metro home sales up by 15%

Detroit leads gains with almost double amount of closings over same period last year.

Sales of residential and condominium units in Detroit nearly doubled in January, compared with the same month a year ago, and the region overall got a nearly 15 percent bump, according to real estate data firm Realcomp.

The city of Detroit led the gainers, posting a 45.5 percent increase in the month, with 736 closings.

Metro home sales up by 15%
Wonder if this has anything to do with the really crappy year they had last year and last quarter which would make any sales look like a spike. Also, their real estate values have dropped so much [as much as 50% in some parts of the city] that there just has to be values there.

Hopefully the trend will continue elsewhere.

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Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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