More subprime lending trouble

i would say a few months ago ignorant,not that we're much wiser now,but alot of bad news has come out,and we just dont know how much more.
but iagree with you Howitzer hands have got burned,and the elemrent of risk is factored in,but theres still risk of downside on current prices and that risk is too great for me in the current climate.
i see this morning the fed seems willing to drop interest rates "if the need required".......where will this leave us long term?
 
Howitzer said:
If the market isn't rational now what was it a few months back when all you could hear were the choruses of "The only way is up, badubah." Sounds to me like a lot of people have got caught with their hands in the cookie jar and have got burnt. The market is MORE rational now that it has priced in an element of risk to share prices for the first time in years.
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If you are right and it is simply a case of a correction and a repricing of risk, then the recent credit crunch and liquidty crisis is a completely irrational reaction so we can't be operating in a rational market. As I said though I have invested in the past couple of weeks so I do agree with you to a certain extent.
 
The other night on RTE main evening news they did a story on how the Mayor of New York is suing various gun-shop owners in rural areas of the state.

Excuse me? Was that the Irish news I tuned into ?

From an Irish standpoint there is a much more interesting and relevant legal battle brewing in the US that they could have covered.

The US housing market in its three phase business cycle of "Boom, Bust and Recriminations" is now entering the recriminations stage.

The targets will be mortgage brokers who got people into loans they never should have been in. (Appraisers who puffed up house values may also come under scrutiny).

Overly exuberant brokers and loan officers told clients not to worry about concerns like their ARMs resetting; they could always refinance and, anyway, interest rates were bound to fall.

With credit much tighter today, the refinance option is off the table for many. And, as prices have fallen in many places, it's more difficult to sell a home for the amount owed.

"They can't refinance it, they can't sell it, and they can't afford it," said Paul Hancock, a Florida attorney specializing in mortgage brokering and real estate law.
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http://biz.yahoo.com/cnnm/070821/081607_here_come_the_judgements.html?.v=5&.pf=loans

How the cases will play out is in doubt but there's one thing for sure: There'll be a lot of work for attorneys over the next few months.
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Remix said:
The US housing market in its three phase business cycle of "Boom, Bust and Recriminations" is now entering the recriminations stage.
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Yup, amazing how all this fraud only emerges after the bubble bursts. This allows people to fail to acknowledge their own greed and/or stupidity by blaming "predatory lending" for them buying more overpriced home than they could reasonably afford.

I do wonder if we are close to the opportunities phase, although I'd like to see some homebuilders go bust before I could say so with any certainty.
 
On the lender front, they will be claiming buyer responsibility (/stupidity).

On the borrower front, they will be claiming a variety of dodgy practices and misleading information.

Let the litigation begin ;-)

Another interesting development in this phase is big investments banks going after loan originators to force them to buy back some of the worst loans from that came out of their securitisation departments.

Be interesting to see how that goes as many banks (Irish included) thought they were ridding themselves of the risk by selling them on.
 
Remix said:
Another interesting development in this phase is big investments banks going after loan originators to force them to buy back some of the worst loans from that came out of their securitisation departments.

Be interesting to see how that goes as many banks (Irish included) thought they were ridding themselves of the risk by selling them on.
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This isn't new. Originators always had to buy back loans that they sold to investment banks that defaulted early or where there was underwriting errors. The problem is the volume is increasing and originators don't have the money!

Shouldn't be a problem for Irish Banks. Different structures and different market.
 
Rumours of a discount rate cut in the US - expectations from BSC and GS for cut at Sept 18th meeting. This follows todays' poor jobs report
 
Sunny said:
Yeah I know. This fence is quiet comfortable!
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Is it likely that Ireland could find itself in subprime trouble? If so are any cracks starting to show? or what signs should we all look for?
 
Though there's a myth that repossessions/evictions cannot - no not ever! - happen in Ireland that's probably based on pre-globalisation notions of ownership. Here in the UK though any suggestion of problems in the property world are played down there appears to be a growing issue. I live in a large, prosperous market town 60 miles north of London. There were 22 repossessions last month alone.
 
Marie said:
Though there's a myth that repossessions/evictions cannot - no not ever! - happen in Ireland that's probably based on pre-globalisation notions of ownership. Here in the UK though any suggestion of problems in the property world are played down there appears to be a growing issue. I live in a large, prosperous market town 60 miles north of London. There were 22 repossessions last month alone.
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The main lenders in Ireland have always shown a reluctance to reposeess houses unlike their UK counterparts but the sub prime lenders that are now operating here have shown that they are more willing to take action. I don't have the figures but I read a while ago that applications to the courts for repossessions are climbing every month. And still theses guys aren't regulated!!
 
I found it very interesting to read all the threads in this post,and the predictions of where we're going and how we'll stand in a few months time,and now to see where the markets actually are,and it still aint over,interesting to see what all you posters think of the situation now,and what you think the future holds.
 
The more I read I get the feeling that something from left of field is going to hit like a hammer, we're all watching in one direction. The rental market here is about to suffer. As soon as work starts on the Olympic village and stadiums in London and on the soccer stadiums in Poland and Ukraine for the Euro 2012 finals, 1000's of workers are going to ship up out of here. With those tenants leaving and with still new apartments coming on the market rents will start to fall. Forget about how low the dollar can go, how about the rent on an apartment in Dublin?
 
i was at a party in late august,there was a taxi driver there and he was telling us that alot of eastern europeans where flying to holland as there was a lot of building going out there,as they had been let go when the builders holiday came up here,he said he was never so buisy
 
Im not sure whether yob is having a bit of a joke about talking to the taxi driver who told them ....etc etc becuase i usually switch off when a story starts like that but i have to say that i have just read this thread today and i have to take my cap off to yob especially in relation to his prediction on one stock.(Bank Of Ireland). Without further discussing a particular share whats your feelings on the medium-long term of irish banking shares considering that they have dropped by almost 50%? I dont really see any concrete reason for this given that they are still raking it in and have little or no involvment with US sub prime sector. A relative wants to buy 25k of shares in one of these banks as he is confident that they have reached the bottom of the cycle. I have lost complete confidence in irish shares for the moment so find it difficult to lead them in any direction or advise them.
 
well first of all,like you money man i take these stories in a light hearted way,but also excepting that people are moving on,and we already have thousands of empty properties,as was mentioned in the census. i wouldn't like the responsability of telling people what to do with there money.
all i will say is wheres the growth,yes you can say there raking it in,but aren't they just coming out with the numbers they did last year,one must remember that the banking sector is run on a very small profit margin,so to make the numbers they have,prior to melt down,you need volume,i dont see it.
ask yourself this,when do you expect prices to reach february 's high again,not for a long time i would perdict.but i'm afraid i dont have a crystal ball,so i dont really know.have a look at the thread "70k to invest,equity property or neither"
 
Subprime rate freeze expected to be announced in the US on Thursday, proposal seems to be that the teaser rates on subprime mortgages will remain in place for 5 years!!!
 
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