MSM NEWSFLASH: Mortgage adjustment will bring pain. There are billions of dollars of ARMs getting ready to reset. People will be screwed. Who could have possibly predicted that? Not me.
It also turns out that people are raiding their 401(k) accounts to make the mortgage payments. Nice. Hey but whatever it takes to be a home "owner". God forbid you rent and actually use your retirement money for you you, retirement. No, you need that overpriced shitbox that costs $800K so you can impress your equally strapped neighbors. That's what happens when you listen to corrupt real estae industry reps like the NAR.
Nice to see the MSM is finally coming to the party. A little late but hey you made and effort, you put in an appearance. Now that you're here, how about doing your job and actually reporting instead of acting like paid schills for the real estate industry.
I love this quote
"I don't know if there's anything much [borrowers] can do," said Keith Gumbinger of HSH Associates, a publisher of mortgage related information. "Hopefully, they've been prudent about preparing for it, building a nest egg or refinancing the loan."
HA HA HA HA!! Hopefully they've been prudent? Old Keith is either a moron or, well a moron. In case you haven't noticed Keith, there is no such thing as living prudent in 2007 America. Prudent means you only have $18,000 in credit card debt instead of $22,000.
The MSM and the likes of Keith still, after 2 years, don't get it. People who took out ninja loans did so because that was their only choice. Which is why they are ***SUB*** prime. Do you know what sub means? It means below. As in below prime. As in not credit worthy. As in THEY ARE NOT PRUDENT WITH THEIR MONEY. If they had been prudent to begin with they would not have needed a ninja loan. They would have taken out a fixed loan, you know, the way prudent people do. However they did not qualify for that and had to resort to the ninja loan instead.
I have no data on this, but I would put up serious money on a wager that said 95% of all ARM holders have less than $1000 in liquid assets. They spend every penny on the Hummer/Yukon/Denali. They borrow up to they eyeballs to buy the Gucci purses. These people are about as prudent as George W. Bush's immigration policy.
Japan's housing crash took 15 years. It was slow and painful. The reason it took 15 years was because nobody wanted to admit what happened. Government schemes tried to prop up a market that was not sustainable. Japan had 0% interest rates for a while and still the asset bubble deflated. I was hoping the US crash would be faster. What we need is a NASDAQ style correction. 70% drop and capitulation in a year. Lick your wounds and move on to the next thing. Instead we have all these schemes to refinance, bailout, re-adjust mortgages. All in a hope to prop up a market that is not sustainable None of these schemes will do nothing but delay the pain. Just let the market correct on its own. Remember that thing called capitalism? Remember that quaint old concept of risk/reward? Unfortunately the likes of Hillary, Bush, Pelosi and Reid don't. The new paradigm is now socialize the risks and privatize the rewards and it is total bullshit.