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A Financial Meltdown on Wall Street - Will it affect you & real estate?

downward arrow

Can it be any worse out there? If you haven't heard, as the credit crisis continues, there are tens of thousands of jobs being lost just on Wall Street alone. And with a few mergers in the near future, there will be more jobs lost.

Is consumer confidence down? You betcha !! The Dow Jones is down over 500 points just today, the most since 9/11 in 2001. This is because of fear of a deepening of a year long credit rout caused by hundreds of billions of dollars from write downs and losses worldwide. Mortgage rates are dropping like crazy, which is good. But without jobs and less money flowing through the economy, this will hurt everyone, especially the real estate market.

fear

I have spoken to several respected people in the industry in the last week and most of them all have some major fears. I had the chance to speak to our own Brian Brady today, who told me his fears. He made some excellent points and what our economy will be going through in the near future. And I could hear the fear in his voice. But I basically told him that I try not to think about it. That might sound shocking and possibly irresponsible. I should care, right? The matter of fact, I do care, a lot. Hence why I love my job and why I am so passionate helping people to achieve the American Dream. But my thinking is that even though this could really affect our business, mortgages and real estate, that if the economy goes into the tank, we'll all be in the poor house. That might sound harsh, but it's the facts.

My complaint and argument about all of this is the misleading media and those on Wall Street or those so-called financial analysts. Many people have been saying that we could be nearing a recession. My reaction to that? "Horse feathers" !!! For those that know me, I have been saying that we have been in a slight recession for over 2 1/2 years. Do you know what recession even means? From Wikipedia, (NBER) defines it more broadly as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."^[ a recession occurs when real gross domestic product (GDP) growth is negative for two or more consecutive quarters. Gee, 2 or more consecutive quarters. We have seen some major price changes in the last year, covering more than a few months or even a few quarters. Who controls these numbers? Why do we keep hearing that we might be heading towards a recession, when in my honest opinion, we are in one.

squirrel saving nuts

Irrelevant to my opinions, the bottom line is that it will continue to get worse before it gets better. Many of us should be saving our money, stashing out 'nuts', and not just for a rainy day. But for emergencies... This has been a big argument of mine in the past, to why we have so many foreclosures. It starts with the job losses or reduction in family income. But also from not saving and just spending like money grows on trees.

What I am telling you not to do is to not to not buy a house. If you can afford a home, this is one of the best times to buy. A home should be considered a long term investment. Another reason why this all became a mess. We either used our homes as ATM machines or used those types of mortgage programs that allowed us to fudge our income so we could keep up with the Joneses.

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Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 09/16/2008 12:50 AM

Comments (69)

Mortgage Mess in the Mortgage / Finance Channel

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Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: A Financial Meltdown on Wall Street - Will it affect you & real estate?

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69 Comments on A Financial Meltdown on Wall Street - Will it affect you & real estate?

SEP

2008

Hi Jeff. I was watching CNBC all day today. Exciting times indeed. It will be fascinating watching it the next few years.

Great post,

Ken

This is part of our econonic cycle. Things will probably decline a bit more -- if only as a result of the panic that today's news will instill. When people panic, they overreact -- if we overreact the worst possible scenario becomes a self-fulfilling prophecy. ~ Evelyn

Now is the time to buy low and later sell high! Its against human nature but later you will be glad you did.

Great post Jeff!! It will take a while to determine whether or not it effects our biz. But be sure that the business will drop a bit until people are sure what the heck is going on. First we have the buy out of Fannie and Freddie and now this. Most of the consumers don't know what to think

KEN...... . I haven't turned the tv on all day. But yes, interesting and scary. Just that so many companies need to be bailed out. Yet at whose expense!!! And yes, the next 2 years will be interesting.

EVELYN....... I agree and disagree. Our market does have cycles, but not this bad. Yes, we have bounced back after a bad cycle per se. But this is beyong anything that we have experienced since the 'Great Depression'. And yes, there will be new panic on the streets. But we can't put our heads down and feel bad. As I mentioned, if you can afford a house, this should not hold you back.

BETTY or husband..... . I agree... but that is also part of the problem that helped with this mess. We allowed for over appreciation.. we could have controlled this a little... thanks for your input.

CHARLIE....... . I agree, many don't know what to think. But this shouldn't stop them. If we could predict the worst, we wouldn't be in these messes. And in my opinion, it will affect our business. It just depends on how you position yourself in today's market. And thanks for that polite compliment.

You are right it shouldn't stop them from refinancing or buying but the media is what they listen to. It's time that they heard from the realy experts in the financial industry. US!!!!!!!!!!!!!

But MSNBC and CNN have "US" figured out I guess lol........ What they don't want to show are the positives in so many markets talked to an agent yesterday and they told me that forclosure rates have double in the past year. I knew right then and there they were hooked by the news, and I quickly ran to my car and grabbed my stats and said yup we have double from 1% to 2% :)

Jeff - great passion and great information. My wife and I watched CNN yesterday when they were talking about Lehman Brothers and AIG. Very interesting times we are living in. I agree that the recession has been in full effect for quite some time (some areas more than others). We use to hear about things in the news and it would effect the market, but nothing what we have witnessed over the past year or so. Seems there is something every other day. Again, very interesting times.

Jeff, very good post. I have been watching the massacre all day. I agree with you that the majority of Americans have an issue with saving for a rainy day.

Fear, indeed. That's why I've been raising money for a private mortgage fund. Wall Street can meltdown but I'll always be in business. :) If there's anything I've learned it's to recognize opportunity- I'm ready.

I was mostly sad for my old co-workers, at Merrill- they're stuck working for a bank, now.

Jeff - love the new photo - will go comment on that post in a little bit - I have a few buyers scared to death - others are taking full advantage of this -

Jeff- I don't have the answers to the mess we're in, so while I keep an interested eye on the developments, I try not to be consumed by them. The scary part is how confused the people who are supposed to be in control look. We seem to be in uncharted waters...we're taking on water...and our buckets are filled with holes! Where's Dear Liza, maybe she knows what to do;-)

I believe that we've been in a recession for awhile. Remember how they determine GDP growth. They reduce it by the inflation rate. If they use a low inflation number, the GDP doesn't get reduced very much. The inflation I see in my life is much more than what the official numbers say it is.

Go to shadowstats.com to see how they have manipulated the numbers over the past 20 years.

CHARLIE..... . I agree, so many people hear from the media.... and they take this news as the truth, in many cases. That is why we as professionals, need to keep talking about this.

In regards to foeclosures... that is so true... that 'doubled' comment has more people scared. But it was a low number previously anyhow. But it is bad out there, but not that bad. I think it just comes down to job safety. And it looks like the DPA's will stay around, still helping good credit people to buy at least.

JOHN....... . I think there are many that agree that we have been in a recession of some type for several years. But not by true definition. The economy as a whole is in bad shape. We just need better education out there and more professionals. And in regards to the professionals out there, to stand up and take the time to educate. Thanks for the kind words.

TIM & PAM....... . there is a huge issue in regards to teaching. I wonder how early many schools teach the importance of money? Thanks for the polite compliment.

BRIAN...... . trust me, I have fear at times... but as I mentioned to you today, I am not really fearful now. And I like the fact that there aren't many mortgage programs out there.

In regards to you raising private money for subprime? Interesting and I wish you luck with it. Hence why I love FHA and what you can do with it. Hence why I still say that 30% of the subprime loans made since 2002, should have gone FHA.

In regards to your friends on Wall Street, I truly feel form them. Especially working for a bank now. But more so for those that have lost jobs or will lose jobs.

THESA...... . I am sure that there are many buyers scared to death. And if they are qualified, that's a shame. Values down and rates still lower and just dropped? ouch....

MATT....... . you hit the nail on the head. Those that are in control, having confused looks. And that even scares me more, because of an election looming in the background. Will some vote just for change? That could hurt us even more. Just my opinion.

In regards to the answers to the mess? Maybe in another post. But I have mentioned some things in the past.

TIM........ . It's good to see others agree that we have been in a recession and not just use the textbook definitions. I am confused to why some financial analysts don't even attack this and cross the line. Unless I am wrong about this... but again, I have been saying this for over 2 years. In regards to that link with the stats, thanks for sharing that. I'll check that out later. thanks

Hi Jeff - I caught my first glimpse of all this on AOL News. The times they are a-changing. Will be interested to see how all this follows through.

Jeff, when did you start running for political office? Are you going to be the next NJ US Senator? Hey, I do not know what Brian said but I unless the "Gods" can create some stability, we are in for a real war, one the president (who ever wins the election) can't get us out of.

SEP

2008

And that's it Jeff...spending money like there's no tomorrow....save save save..... sounds good to me!

KAREN...... . yes, times are changing and yes, it will be interesting on how it all works out. My goal is just to stay ahead of all of this... one step ahead. That would be FHA mortgages and educating people.

AJ...... . never.... lol Being a politician would not be my cup of tea, even though we play that role at times within our industry. And I agree, the challenges that we are facing probably won't be fixed by either one that gets elected as president. I see it taking more than a fill term. In which could even make the next president elect look very bad.

SALLY...... . hey, I can be a spender at times, I am human. But these are the days to save the most. And to invest in real estate, because of the markets and because of the rates.

Excellent post, Jeff.

A home should be considered a long term investment.

Seems to me far too many folks need to hear this again and again. This country has survived a great deal and though there will be bumps in the road for a while, we'll survive this as well...

Times are tough but things will pick up. Thanks for the post.

Jeff, first I wanted to thank you for all that you have been doing in regards to the DPA program and educating others.

I've been watching everything that is going on with much interest and always look for the "bright side". The bright side to all of this financial turmoil? I think people are going to learn from the past and we won't have this history repeated. People will think of their homes once again as a place to raise their families and as a long term investment. We probably won't see the fast highs again and that would be a good thing. (What goes up...etc etc )

Thanks much for the informative post.

If we let the negative media affect our thinking we will run for the hills and never sell another home! We need to get the word out that this is a great time to buy a home, because homes have never been more affordable and especially first time buyers should take advantage of this market. Investors are buying, and people who have thought about buying a second vacation home can use this market to their advantage too!

I agree as 1 out of 7 application I take has little or no money saved in a long term format. Spend, spend ,spend is the todays American way!

Jeff, heck yea we are in a recession at least in MI. It matters not how they make the numbers say what they want them to say. Ask anyone on the street, the job losses, the GNP, it's all there. The problem is we have an uneducated electorate, that would rather watch Britney than read about it.

Jeff,

Great post. It's a scary time. My manager has been saying real estate market is fine but yesterday at the office meeting, he finally said we will be affected by these events and we'll just have to see what happens in the next two months

Hey Jeff!!

HOW 'BOUT THEM COWBOYS!!!!!!!

Oh, and great blog too. So here is your Star!!

by technical terms we are not in a recession but don't try to tell me that people are not feeling the squeeze from every angle. If it walks & talks like a duck its a duck.

Jeff: Great thoughts. Yes, it might get a little choppy for the next year or so. It's ironic that our industry will probably start recovering first. In the mean time, there's always business to be had. I've got to get back to work as there are several in the pipe! Have a great day!

Paul

I have to agree that now is the time to be a conservative spender. Unfortunately, that won't get our economy booming. Maybe this is what our generation needs to be exposed to in order to understand why we should have some money in reserve.

Oh Jeff, my favorite mortgage blogger;;;;VERY well said. These are scary times, but I for one refuse to get scared by all of this. I have been told more than once, however, that I walk around with my head in the clouds:) I have always tried my best to watch my money anyway, so my life will continue on as though nothing has changed. I'm very thankful for all of my "stashed nuts" right now, that's for sure! So my stocks may NEVER recover at this point. Do I dare admit I bought Countrywide a few years ago...okay, maybe I"ll deny that!

I saw your new picture and it threw me off! Me like!

Thanks, Jeff!

Enjoyed reading your post.

It is scary....

Yes, your home is a sound long term investment in most markets.

Jeff,

Thanks for the post. I have been saying the same thing and it seems like it has been for as long. Real estate was carrying the economy for a long time. The economy had tanked sometime ago, now that the real estate boom has bust, we are now feeling the full affect.

Look at Burris up there, spreading that propaganda.

If we aren't in a recession, my name is Jeff Belonger and I am the FHA Expert around these parts.

As far as the post, I agree that for folks in the position to do so... it is a wonderful time to buy a home.

This is good stuff. I think a lot of this is because of the self-fulfilling prophecy. Media seems to run our country as individuals fail to just think for themselves. Needless to day, I think a lot of the fallout is because of this. People who think for themselves will see that this is a great market to move and buy a home. And this is a wake up call for all of us to quit spending and start saving. If that were to occur for one or two years, we'd have the strongest economy in the world.

Jeff, I am glad you posted this. We have been getting reality doses now for some time and for whatever reason there are still many that live in some sort of denial that we are having problems. The statistics are deafening and yes it is going to get worse, before we see any signs of recovery. For heavens sake, we have not even seen the ARM resets yet. That could make the subprime stuff look like childs play and the fact that you pointed out the obvious, mounting gas increases, food prices getting ever higher, increased job losses, etc. simply points to a much larger environment of write-downs and losses. Don't be surprised if we see those numbers in the trillions range. That only means larger capital needs for a banking and financial industry that cannot get money right now and is already on the ropes. Less money means higher capitalization requirements and expenditure cuts, and that means more job losses and so on and so on. Our system is in turmoil. So yes, to all those that are reading this, welcome to the party. The water is warm, get on in.

Tha answer, buckle up and be prepared to live a little more frugaly. Afterall, it is the presciption that we needed 5 years ago that would have kept us out of this mees in the first place. I am truly concerned. It is not going to be easy for anyone.

However, let m say this. We are a resilient community, we are smart, innovative and hard working. Historically, we have been worse off and we have made it through togher times than this. I know we will be okay. We just have to band together to make it throught this. We all need each other now more than ever!

Hey Jeff~ I had to to a double take because the new picture threw me off too! It looks great! I try not to think too much about the economy because it is depressing. We all should be careful with our money no matter what the economy is like! Right now, buying is the best it has ever been... so buyers that are ready, willing and able should move forward!

Thanks.......... I am either extremely positive or a bit wacko or a combination thereof; but, I have always seen a positive in any market that I have been in since 1982. To me the worse the buyer market, the greater the opportunity to expand your market base. It is a bit tough to swallow, as listings take longer to sell, but when all has cleared up, you will have increased your market share. For me, down markets have always been a base to expand my business for the good markets.

The good markets are great, but it is much harder to expand your base because you are so busy. i.e. it is always a win situation in any market. At this point we are expanding our marketing dramatically as we always do in a slow market.....while everyone else is cutting back.

Jeff- The recession is coming, the recession is coming.... one if by land two if by sea. I have a smile on my face, can you see it?

Opportunity knocks in these turbulent times for those optimistic long term investors!

Jeff. Times are bad. We will have to wait and see what happens. Royal..

up down up down up down.................

Go Skins!

JESSE & KATHY...... . there were so many that entered the market from 2003 to 2005 that didn't know much about rental properties. Or others thinking... let's buy a house, knowing that the market is soaring, sell it & amke more money, and buy bigger. I had a co-worker living in NJ, bought new construction in Florida, so values climb.... got greedy and then the market dropped like crazy. He took a loss instead of a profit.

JOHN P. ....... . I have been in business since 1992. The market does rebound, get better. As a few have mentioned, market yourself for market share. Because when it does come back strong, you will even get more business. But yes, it's bad out there. But many of us are doing better than previous years, because the professionals are left in the industry. And for us, less order takers that had no business to be in this industry or know what to do.

KRIS...... . first off, my pleasure and thanks for your support.

You stated this... "People will think of their homes once again as a place to raise their families and as a long term investment." I think many families thought of this to begin with. I think we had many that tried to make a quick buck as an investment. And on top of that, the loan officers and lenders that just flat out lied or mislead borrowers. More and more stories are coming out now.

And you also said.... "I think people are going to learn from the past and we won't have this history repeated." Gee, I sure hope so...... if we don't, I don't think we would be able to withstand something like this again in the next 10 to 15 years. Sure, we might recover in 3 years... but it will still be shaky in the next 5 years, at least in my opinion.

WILL....... . my pleasure and thanks for stopping by.

CAREN....... . you are exactly right. We do need to get the word out and not the media take over with bad press or misleading stats that might favor their argument. There are also positive numbers out there. But I also believe in showing that it is bad out there, but with the good. To urge consumers to become educated in the whole process and to speak to professionals, not wannabees.

LAURA...... . well, when it comes to housing, I don't have as much as a problem, as long as they are truly qualified for a mortgage. Sure, in renting, there is less risk. But life is a risk in general. Even the strongest of jobs could collapse at any time. So we just need to think positive and move forward. Invest wisely... if you don't know, ask, don't assume. thanks

MISSY...... . in Michigan, correct me if I am wrong, but it's been bad up there for the last 2 1/2 yrs, possibly the last 3. Loss of jobs and declining income, which doesn't keep up with the higher prices in the economy. And that is one thing that I can't stand with the media and these financial tv shows. I am no true expert in this field, but I think we needed to throw those definitions that I mentioned above, out the window. We needed experts to step up to the plate and mention what they feel and not what others wanted to hear. Just my opinion.

I wrote a post back in January....

Active Rain 2007 Year in Review -- Mortgages -- by Jeff Belonger

And this is what I stated in that post... "In my opinion, we have been in a slight recession in the last 3 or so years. Spending in general seemed good at times because home values grew at such record amounts, that the average consumer was able to use their home as an ATM machine to either pull cash out of their house that was spent frivolously or to use that money to buy a bigger home."

Again, my point? We need to share are true opinions, with facts, and not what the public wants to hear.... just to curb fears in the market place. I think this has added to the problem in some cases.

ROSALINDA....... . kind of sad... I know as a manager, you want to be positive to your troops. But what about giving the bad news and having a plan, a market plan.... trying to combat what might happen. To gather ideas in a down market... everyone working together. That's how I would have approached it as your manager a year ago, not now. It might be to late for several and for others, it might take a while to catch up. Being pro-active and re-active is so key in any industry and in any market. Just my opinion... And thanks for the polite compliment.

TOM B. ....... . Philadelphia Eagles

Dallas who? Be honest with me, weren't you scared many times over? Didn't you express this on the phone?

In any case, thanks for stopping by and for the support.... and for the compliment.

MICHAEL...... . hence why I decided to write this. We need to step away from the definitions. Most of the reason why so many financial analysts didn't mention recession is because they are trying to reinforce positive energy and ideas. They don't want fear to set into our economy. Gee, just mention it, don't be afraid of the word. Are they truly experts? False experts? Merely trying to make everyone feel good?... when the writing is on the wall... right?

PAUL....... . yes, there will always be business out there, in any market. This is my opinion. And what I love about a market like this is that it weeds out the so-called crooks, those that mislead. The crop of the cream will rise to the top in this market. I know I am doing better than last year. It comes down to a niche and a market plan. Thanks for the polite comment.

PATRICK...... . no, it won't get our economy booming.... but then again, it will. Think about it... buying a home sparks the economy in several areas. People need to buy things for their new home. Sometimes new furniture, new appliances.... might need to fix the house up... repair the home, hence why home supplies could sell well. We can still save and buy, but it comes with planning and education. Just my opinion... thanks

Great realistic post...It's nice to see posts that support my market opinion, which is similiar to yours. We are in a resesion and we haven't hit bottom...there's a long way to go. Thanks for the great information.

SEP

2008

JEFF

No doubt things willget worse before they better. It is sort of like the yo-yo effect except at the moment our Yo-Yo is stuck "walking the dog!" All it will take is a little tug on the string to get it moving again.

You are right- be prepared for the worst and expect to have to wait a while before it can get better.

Great post Jeff. It's a reminder that we need to turn off the "spin doctors" that have been center stage in US politics for several years and begin looking at the facts. It appears you have done just that and have stated what others have tried to smooth over. Had our leaders taken a hard look at the "state of affairs" they would have had an opportunity to be proactive and make the hard decisions when they were needed to avoid the financial mess we're in.

Jeff, nice post, I would like to make some comments though. If we continue to rely on the government to bail us out, and most would agree that it shouldn't be doing it, then we also have to believe that government loans are not the answer either. Minimum downpayment or DPA means that the customer gets in with low personal investment. The same happens to the homeowner when there is a downturn in the economy. They miss payments and are in default. The untold story is that FHA will sit on property for years so it won't show on the books as a foreclosure. We need to get back to at least the 80s where you needed 10% down. Or we need to enact legislation that forces banks to use the same underwriting for personal loans and credit cards as they do for homes. That way, consumers would not be able to have massive personal debt on top of the mortgage and other expensives. A total restructuring is needed in the banking industry.

BETH....... . favorite? hhhhmmmm.... I'll be the judge of that, because I have eyes and can read. ;o) Seriously, thanks for the kind words. And yes, these are scary times. It's good that you have some nuts stored away. Maybe you can lend me a few nuts. Wait, I can get those from on here. Wait, what nuts are we talking about... lol In regards to stocks and such... those are long term investments also, up until you are about 5 years away from retiring. thanks for the feedback.

LINDA ....... . my pleasure... and yes, the home should be looked at as a long term investment. Thanks for the compliments.

WILLIAM....... . it's funny, yet kind of sad that we can see this, but that many of the financial analysts can't see this or that they just don't mention it. It kills me that they go by these so-called definitions, yet the writing has been on the wall for several years.

JASON S. ........ . yea, that Tom Burris character... lol Yes, it's a great time to buy. Those sitting on the fence, waiting for prices to come down some more, should be shot. Well, pushed off the fence... they need to be educated and not complete risk takers.

LARRY........ . yes, that damn media that seems to make people think in the wrong direction. Hey, it's one thing to be cautious. But what about getting the right education from the right people. Those in the real estate market. As I mentioned to Jason, there are still many people sitting on the fence, waiting for home prices to drop more. aaaarrrggghhh... in many markets, this has stabilized now.

Geez Jeff. If it wasn't for you, I wouldn't have a clue about what was going on half the time. Thanks for posting so many details about what goes on that affect the mortgage industry and rates.

The media has to go and make things huger than than already are. Buying will be a good investment, and rates are good. If you have money It is a good time to buy. But we are all going to have to watch our pennies

SEP

2008

Jeff,

Unfortunately this volatility will continue at least for a while longer. When big investment houses that have endured trying times for 150 years can't handle this it's serious. That's what totally unwise investment decisions can do to you.

SEP

2008

Hopefully the rally will help today. My daughter's college fund has definitely taken a beating.

PS. I had no idea you went to WVU! Go Mountaineers!

Great post Jeff. An associate of mine left a piece of paper on my desk with a man in business attire rolling up his sleeves. The quote above says "Tough Times Don't Last... But, Tough Salespeople Do!!! I hope this inspires anyone who reads it as much as it did me.

I agree that we are in for some rough times ahead. The financial industry is struggling like it never has before, and that is reflective in every other industry. Other retail industries have seen consumer spending dwindling, and there have been many bankruptcies as a result. The scary part is that these are not just the mom and pop businesses, but huge businesses that impact the entire united states economy that are going under. We will just have to wait and see how long this is going to continue, and what it will take to get us out of this rut.

SEP

2008

This is beyond a scary fix! The fix is at our expense. I was listening to a CNBC tonight and it was interesting how inflationary this is going to be. The government has taken on a crap load of debt that l be next to impossible to pay off.

BO....... . the porblem that I have with what you said is.... is it denial or just those that are in front of the media, trying to keep people from panicing? Trying to keep fear out of the market place? It really makes you wonder, as you stated, that the statistics are in front of us.

In regards to your buckle up statement, I wrote about that several weeks ago. And yes, it will still get worse before it gets better. And yes, we need each other more than ever. Thanks for the indepth comments.

VICKI....... . yes, we do need to be careful, but at the same time, not careful to where we don't pull the trigger on buying. It is a great time to buy and if you can do it, buy. Anyone can lose a job at any time. You can't think about that. I know it's easier said than done. In regards to the pic... thanks for the compiment.

TIM...... . I would agree, in a down market, a bad market, I have done better most of the time. I have been able to expand my market share, because the bad market knocked out many that lie or bait and switch. Thanks for your input and feedback.

LORI....... . cute.... not only can I see it, but I have been seeing it for the last 3 to almost 4 years now.

HOPE....... . I agree and I think opportunity knocks for many of us in this market... especially for those in real estate and in the mortgage industry. Not to brag, but myself and many others that I have spoken to have done better this year than last year. That's some good news for some of us.

ROYAL....... . yes, as mentioned by many of us, times are bad. And yes, it will be a wait and see. The question, for how long? I think a little longer than what some have been predicting.

LEWIS....... . is that you bobbing for apples? And no, go Eagles.... maybe I will see you in DC for that game.

Hi Jeff: You are right. The foreclosures are not just for the low incomes, but we have seen the ones who own Million dollar homes who used the equity to buy luxury items that match their luxury homes but not their income. They are in trouble also!

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2008

Great post a lot of good information. The media just keeps scaring people from buying. I keep hearing the housing market is going to drop more so people are waiting for the market to hit bottom. When is that going to be, 2010? Scary Scary Scary..

If you can afford a home, this is one of the best times to buy

Hi Jeff,

You're absolutely right! I wish we could have bought two houses that recently sold in our area.

Here's an interesting side note: Several of my clients have reported an increasing number of their buyers are paying 100% cash right now. People who saved up their money are taking advantage of the opportunities.

Respectfully,

Bruce

SEP

2008

I don't see things getting better until after the elections (the voting and the most likely to ensue Court battles). Once the new President takes office, things should start to level off and I think by mid year, things will improve.

Right now, I see many FHA refis in the future.

WOW! Property values could get crushed in the next few weeks, maybe even days.... I have written a blog and have commented on others like Jeff's post here and I am amazed with comments from people in the industry who really think this crisis is no big deal.

Tomorrow could be worse than today - anyone??

It has already affected some lenders who used to provide silent seconds and in an instant that program is gone due to market conditions.

SEP

2008

The bailout will only delay the recovery. Letting things alone will be painful but the market will correct itself. It will be painful but we will recover.

Look at the good side of this, oil prices are down. If we don't control oil prices and rid ourselves of our oil dependency, the financial market bailout won't matter anyway.

If the news media would stop painting doom and gloom and if the politicians would stop blaming the other side, we could find our way to recovery much quicker!

True recovery, not a bailout temporary recovery, is the fastest way to recover.

TARA...... . my pleasure and yes, it's nice to see people on the same page as yourself, that agree with our current market conditions.

ALLISON...... . a little tug on the string? In my opinion, I think that string is more like the rope or chain used when tying down large boats in the harbor. What kills me are those that say things are shaping up now. Sure, some people are busier than before, but it doesn't mean that the market has corrected itself. Thanks for your feedback.

JON....... .you hit the nail on the head.... be proactive and take the precautions that were needed. In my opinion, people don't want to look like the bad guy and give the bad news now... or to suggest options for the worst now, until it's really, really bad... as in the case of what's happening now. Sad, but so true. Gee, just like how some loan officers treat their clients... wait until the last minute with the bad news or suggestions. Imagine that. And thanks for the compliment.

DALE aka Home Reality Group...... . I agree with some of what you are saying. But I don't believe that we need to get back to the true 10% down or even the 20% down. Buying homes sparks the economy in many ways... and in some ways that aren't thought about. It's not so much making home buying more difficult, but making suire that we have checks and balances in place. That the borrowers are qualified. The 100% subprime loan with 50% debt to income ratios was just a mistake waiting to happen.

In regards to HUD sitting on foreclosures for years? So they don't so right away? I am not an expert in that or not sure where you got that information. It comes down to the indepenedant companies that do these types of reports. Who is on top of their game basically when it comes to accurate stats. And thanks for the polite compliment.

LISA...... . my pleasure.... there are plenty of people on AR that write about this stuff. Maybe not a post like this, but I have seen many on the potential bailout. The issue in some cases is what information is valid and how much of it is opinion. thanks

KATHY....... . ditto... I agree... especially now more than ever... with lower prices and rates still low. The problem is that some are waiting for lower, which in my opinion, they aren't serious buyers or investors then. But the consumer has a larger fear of the market now and yes, the media doesn't always help. thanks

ESKO....... . I agree, this will continue longer... but how long. I just wrote this the other day.

Stop pointing the finger !!!!! We screwed up !!!!

We need to be more educated on what is being told and why. The finger pointing and not wanting to help, just because someone is of a different belief or politcal view is just stupid and crazy. Just my .02

TRACY....... . the rally was good... thanks... but because of the bailout not being approved, the DPA's are now put on the back burner.... and yes, I went to WVU... they are sucking at football this year. thanks

Thanks, Jeff. Your sobering thoughts are always appreciated. The more we wake up and realize that it's going to be a long, hard row to hoe, the better off we'll all be. Have a great day!

Question PlZ?

WE have went from applying for a home loan - to a closing with the wrong address on it - now waiting for underwritting again.

Now it's sept 30th and it's 2 pm and not done by 5 we lose or down payment assistance.

any advise?

S & P Simpson pam_steven@yahoo.com

Pam, wow! How did that happen? Good luck in finding that resolved by the close of business. Let us know how that works out! Good luck!

To everyone else, I will reply back to you later...

To Steven & Pam.... please call me on my cell phone if you can... 609-440-5133 But my opinion on this, without knowing all of the facts.... you don't need to go into underwriting again. It would sound like a closing issue. The address would have been on the appraisal, the agreement of sale, and the title. I have another theory behind this, hence why I would like you to call me. I also sent you an e-mail.

thanks, jeff

OCT

2008

Jeff, do you have lenders doing the short refi's that were part of the July bill? All of mine are saying "no" to this product.

Dee

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