People this is not a joke. The American media through a ceaseless tide of lies and deception perverted by a misuse of data has frightened the timid and created a stampede which could end in the wholesaling of America. Not only is China buying America but so are many other international investment groups - one mortgage note at a time.
One of the problems is that much of the purchase of mortgage backed securities was funded, during the last 1/2 dozen years, by greedy, inexperienced, new money investors. These "nuevo riche" and neuvo wanna be's poured billions of dollars into REIT's and other investment vehicles and were making returns in the mid double digits for many years. When the media attack on the fabric of America began to wear down on these frightened little yellow bellies they started pulling out their investments leaving huge gaps in funds like Bear Stearns and Lehman Brothers to name a couple of the top buyers of subprime mortgage.
Let me repeat: THE ONLY MORTGAGE CRISIS THAT EXISTS TODAY WAS MANUFACTURED, PACKAGED AND SOLD TO AN IGNORANT AND FRIGHTENED PUBLIC BY AN ANTI-CAPITALIST MEDIA WITH AN AGENDA TO BRING DOWN THE LARGEST INDUSTRY IN AMERICA. And again, as I have challenged, I want ONE REPORTER to show us all proof positive that prior to September 11, 2006 ONE REIT lost funds solely because of their exposure to the SUBPRIME MORTGAGE MARKET.
Not going to happen because there are none. They didn't start losing money until the daily pummeling of the media took it's toll and frightened away the little baby investors who were afraid.
There was NEVER a global "real estate bubble". Many areas of America were and ARE still increasing in value like they have for decades. There were a FEW markets where the values were increasing at an unsustainable rate - NEVER the entire country like the media made you believe. The media started on the real estate bubble, moved to the hybrid loan, then to the subprime loan and ripped the major fabric of the American economy right in front of your eyes and there is still a string hanging out of your mouth where you swallowed the hook.
Furthermore let me correct THIS huge mis-assumption: The media would have you believe that every area of the nation has 1 in 600 houses FORECLOSED. This is absolutely NOT TRUE. Firstly and likely the most accurate number is that one out of 699 homes DURING THE LAST 2 YEARS has "entered the foreclosure process". This is HUGELY different from being FORECLOSED. Historically about 1 in 2000 homes ENTER the foreclosure process so we are up and it is sad but again - the media's fault. (See the paragraph about the entitlement mindset below.) The media DOES NOT UNDERSTAND THE FORECLOSURE PROCESS and do not want you to hear the truth.
Here is THE TRUTH about foreclosures as the media would not have you know:
More than 1 in 4 homes that ENTER the foreclosure process are NEVER FORECLOSED.
The FORECLOSURE PROCESS begins with the NOTICE OF DEFAULT which generally triggers activity on the part of the "homeowner". The lender can allow MONTHS for the homeowner to get back on track.
Once a property has entered the foreclosure PROCESS it can still be sold either retail or on a short sale, the lender can request a deed in lieu of foreclosure. The homeowner can refinance OR establish hardship with the lender and ask for FORBEARANCE or DEFERMENT! Lenders do NOT want to foreclose on ANY property!!!
Welfare/Entitlement Mindset
One of the reasons foreclosures are up right now is because there is a bottom level of society who truly believes that the "evil lender" put them in a loan to complicated for them to understand and now someone owes them. They believe that socialists like Hillary Rodham-Clinton will issue checks to pay off their homes and let them live in them for free. (That is NOT going to happen by the way - but it will get some communist votes.) The ONLY excuse for a healthy person not making their mortgage payment is because they do not want to and do not feel obligated to do so. In past times real people with the ethics of a slug would work two or three jobs AND deliver newspapers to meet their obligation. Not now - oh no! Somebody owes them and YOU are going to pay too buddy!
Now the worse news
A couple of weeks ago Novastar - my old partners - sold 1.4billion dollars worth of subprime mortgages. Previously these would have been purchased by Lehman Brothers or Bear Stearns or some other domestic investment fund. But because all the scared money little weak kneed domestic investors didn't think 20% ROI was good enough they had to sell out of the country. They sold to Deutsche-Bank.
It gets better ...
"Bank of China Ltd., the nation's second-largest bank, said it holds almost $9.7 billion of securities backed by U.S. subprime loans, the most of any Asian company."
And who is the newest REIT on the AMEX??? A nice little CHINESE investment group poised to purchase billions of your mortgage notes. The international investment community believes in American capitalism more that this current batch of citizens and our representatives and they WILL dominate this market very quickly unless people like YOU and I keep telling the truth and convincing old money to get back into real estate and stay there.
Why do you think Warren Buffet has even considered buying a chunk of Countrywide? Why do you think Bank of America just bought a chunk of Countrywide? THE CRASH IS NOT BECAUSE OF THE MARKET PERFORMANCE IT'S BECAUSE SO MANY PANSIE INVESTORS PULLED THEIR MONEY OUT AND WENT TO SUCK THEIR THUMBS IN THE CORNER.
I'll stop shouting now but I am TEED OFF!
Comments(6)