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alstry (35.70)

You BETTER SELL your home NOW!!!!!!!!!!!!!....maybe????

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May 14, 2009 – Comments (13)

WASHINGTON (MarketWatch) -- The Obama administration on Thursday announced new actions to head off home foreclosures, including protections against home price declines as well as incentives to pursue sales instead of foreclosures.

One of the steps Geithner and Donovan announced is aimed at encouraging the quick private sale or voluntary transfer of property when a modification is not possible.

http://www.marketwatch.com/story/us-takes-more-action-to-head-off-foreclosures

Basically if you don't qualifiy for a loan remodification because you are unemployed or your house is too underwater.....you can simply hand back the keys to the bank or the bank will be incentivized to accept a short sale and the borrower can walk away with little impact on their credit score.

With millions of job losses ahead....and tens of millions already unemployed/underemployed.....and millions of homes underwater....we could be looking at an incredible number of homes that will qualify to be given back to the bank or incentivized for a short sale.

Can you imagine what will happen to home prices when this inventory hits the market????

My guess is that this will get LOTS of media attention in the next few weeks.

Alstrynomics is all about breaking important news first!!!!

You are always prepared when Alstry is here........

Millions of additional job losses and millions of additoinal homes potentially hitting the market for sale in a relatively compressed period of time.....welcome to Concentric Contraction.

13 Comments – Post Your Own

#1) On May 14, 2009 at 8:21 PM, chk999 (99.98) wrote:

Other than being unable to make the payments, why on earth would anyone sell now? (Ignoring those who are forced to move for work or family reasons.)

Just because the valuation on real property is currently upside down means exactly nothing if you can carry the payments. Most people don't buy homes as investments.

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#2) On May 14, 2009 at 8:22 PM, alstry (35.70) wrote:

Think of the potential stimulous this might have on the economy if millions of homeowners are relieved of the burden of making HUGE monthly mortgage payments????

The only problem is that it will likely have very depressing implications on home values across America.

But if the value of GM bondholders can get wiped out by government behavior....why should home values suffer as well as a result of government intervention?

Next could be 401Ks and IRAs as Deej so astutely pointed out that Social Security is basically insolvent.  You think 401Ks are more secure than senior GM bonds....????

I guess Guantonmo prisoners thought, under Obama....a Constitutional Law Professor, they were going to at least be charged while incarcerated.  Once you start violating the Constitution our founding fathers created and millions died defending.....it becomes a very slippery slope on how much violating you do.....

With millions of homes potentially coming to market and millions more losing their jobs....you can't say Alstry didn't say....PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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#3) On May 14, 2009 at 8:32 PM, alstry (35.70) wrote:

chk,

notice the word "maybe"

If you are happy in your home and don't plan on moving and are secure in your job or don't really have a mortgage to concern yourself with and the monthly maintenance and taxes are within your budget and you will not need the proceeds of a home sale in the foreseeable future.....than all should be fine.

But if you want to avoid a potential 50% or more additonal depreciation in the value of your home....you MIGHT want to consider selling NOW before a flood of inventory potentially hits the market and millions more potentially lose their jobs.

It is all about preparation.

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#4) On May 14, 2009 at 9:46 PM, jddubya (< 20) wrote:

Tsk, tsk, for shame, for shame...

Also notice that you failed to include this:

"Separately, the two Cabinet secretaries unveiled incentives intended to offer protection against declines in home prices. Such incentives, they said, will encourage lenders to modify loans in areas where price declines have been most severe. "

You know that most people trust that when someone blogs about an article, that the blog will at least convey a general representation of the points made in the article, rather than just picking and choosing snippets from which to sensationalize the blog.  This style of blogging is why you're losing the interest of many frequenters of the mf blogs. 

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#5) On May 14, 2009 at 9:56 PM, alstry (35.70) wrote:

jd,

Your quote applies to employed people....unemployed people don't qualify for such programs....there a tens of millions of unemployed/underemployed and millions more likely to be unemployed in upcoming months.

Trust Alstry when he says that millions of homes will potentially be given back to the banks as few understand the implications of the program like those at the Institute of Alstrynomics......

my guess is that the mainstream media will pick up on this and inform you in the future...

and quite frankly.......Alstry would rather be accurate than popular.

Remember this when Alstry was warning about the potential for the biggest potential economic downturn since The Great Depression:

WASHINGTON — Federal Reserve Chairman Ben Bernanke on Thursday said the U.S. central bank does not expect the USA to sink into recession, but the economy will be sluggish, perhaps requiring aggressive interest-rate action.

http://www.usatoday.com/news/washington/2008-01-16-stimulus-plan_N.htm?POE=click-refer

Alstrynomics is all about being right.

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#6) On May 14, 2009 at 10:07 PM, Seano67 (55.52) wrote:

Alstry, you're the best.

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#7) On May 14, 2009 at 10:13 PM, jddubya (< 20) wrote:

lol, I'm just sayin'...

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#8) On May 15, 2009 at 1:23 AM, alstry (35.70) wrote:

jd,

As you know, Alstynomics likes to present the facts clearly and not in a misleading fashion.

Here is a different source on the same issue

The initiatives announced Thursday are aimed at ineligible homeowners. For borrowers who are unemployed or owe significantly more than their homes are worth, there are generally two options to avoid foreclosure.

With the lender's permission, the homeowner can sell the property for less than the value of the loan, this is known as a short sale. Or, the homeowner can sign the property title over to the lender in what is known as a deed in lieu of foreclosure.

http://www.bigbuilderonline.com/industry-news.asp?sectionID=363&articleID=967136

In addition to being right....Alstrynomics is all about being fair.

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#9) On May 15, 2009 at 2:02 AM, smartSheep (99.87) wrote:

Alstry,

   I'm still unsure of what's going on.  In your last link, it says

"He's going from a monthly payment of about $2,300 to about $1,275. After a three-month trial period, it should be final in mid-June. "

 

Does this mean the government is buying off some of his loan, forcing the bank to erase part of the debt, or just allowing someone to refinance at the now lower interest rates when they usually wouldn't qualify ( being out of a job, or what not )?

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#10) On May 15, 2009 at 2:11 AM, AminaD (< 20) wrote:

How do you effectively sell a house? Bathroom updating is important in trying to sell your home, or you could try some bathroom updating just to perk the place up a bit for yourself.  However, if you're selling a house, you have to bear in mind that you're going to be doing a little home staging.  How the bathroom looks is one of the things that sell homes, so bathroom staging is crucial.  A few simple upgrades and renovations, like new shower doors or fixtures, can cost less than online cash advance to put in.  If you're trying to move real estate, a well placed installment loan can help you with bathroom updating and selling your house.  

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#11) On May 15, 2009 at 7:42 AM, alstry (35.70) wrote:

smart,

sorry...it was a bit confusing....

I was responding to JD on an earlier post about what initiatives were announced yesterday for future enactment.  The article included discussions on past initiatives and yesterday's.

I as just clarifying a point with jd.

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#12) On May 15, 2009 at 10:44 AM, jddubya (< 20) wrote:

Thanks for the additional link.  Obviously we need to take any media stories with a thousand grains of salt.

So here's what I'm thinking, since there really is little information on these new initiatives:

The banks are going to be receiving incentives to allow for the short sales and the "deed in lieu of foreclosure" thing.  These incentives will make the banks nearly whole for the money that they could've/should've/would've lost.  These incentives will slow the drop in resale prices for these properties.   BUT... as you mention, the sheer number of properties up for resale will force prices down.

Overall the banks may lose less money, but if I were one of the homeowners "taking advantage" of these new programs, I could give a rats @ss about the banks being helped out when I'm still going to lose my home either way.  The media will make a big deal out of this, but again, they will focus on the so called up side.  We're doomed (somehow I just now convinced myself of that).

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#13) On May 17, 2009 at 5:16 PM, lastupendas (< 20) wrote:

Thanks Alstry, finally someone talks sense, check out this article for technicals:

 http://www.thedailycrux.com/content/1790/Jeff_Clark

Happy trading,...(not investing)!!!

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