patrick.net

Even with QE and ZIRP

SFace says

Sorry, your graphics make no sense. It looks pretty but says absolutely nothing. When it says nothing, you know it is wrong. A bunch of confusing, circles, colors and death trap is just visual crap.

He is right, Logan. A picture is worth a thousand words, not a hundred thousand words. Keep it simple.

Strategist says

He is right, Logan. A picture is worth a thousand words, not a hundred thousand words. Keep it simple.

I said it as simple as I can

Math is Math.... the rest is story telling. However, when you hit century lows in housing demand metric. "This means in the 21st century these numbers were the worst on record"

This was my interview on T.V. where I am told to keep it simple

It doesn't get much simple than this video

https://www.youtube.com/watch?v=o9O_FDLPdgA&t=10m35s

Logan Mohtashami says

Nobody so why even have a 40 year amortization loan unless you want to hide the true cost of housing.

The government caught on to this scam and stopped it.

You're basically renting from the bank at that point. What's the problem with that?

tatupu70 says

You're basically renting from the bank at that point. What's the problem with that?

It creates a false sense of cost of shelter, this is why the U.S. government stops this. It allows to the added inflation cost of a home. There wasn't even any debate on this issue either, everyone knew the 40 year was a racket and not even the higher end bankers have brought this back for their wealthy clients.

I don't believe I saw one person fight for this either

Logan Mohtashami says

It creates a false sense of cost of shelter, this is why the U.S. government stops this. It allows to the added inflation cost of a home. There wasn't even any debate on this issue either, everyone knew the 40 year was a racket and not even the higher end bankers have brought this back for their wealthy clients.

I don't know if it's good but I don't see it as bad either. What's the racket? Why would it add to the inflation of a home?

tatupu70 says

I don't know if it's good but I don't see it as bad either. What's the racket? Why would it add to the inflation of a home?

It lowers the cost of a home, allowing more people to buy. It wasn't a very popular loan, except for those who couldn't afford a 30 year loan. As soon as they did the research on it, they killed it.

If you can't own a home with a 30 year amortized loan, probably shouldn't be buying a home

Logan Mohtashami says

It lowers the cost of a home, allowing more people to buy. It wasn't a very popular loan, except for those who couldn't afford a 30 year loan.

And that's bad, why?

Logan Mohtashami says

If you can't own a home with a 30 year amortized loan, probably shouldn't be buying a home

Again--why? People who can't afford homes, rent. How is a 40 year loan worse than renting?

tatupu70 says

Again--why? People who can't afford homes, rent. How is a 40 year loan worse than renting?

Nothing wrong with renting.

Also, the credit quality of 40 year amortization loans were awful. Talking about the bottom of the economic food chain.

Also the debt structure for some of these loans were fixed for short period as well.

It really wasn't a popular loan except for the poorest income and credit quality buyer

That's why not even the banks cared about losing it

bob2356 says

You can't have a yield unless you fill the units.

I did not say it would be a good investment, in Austrian Terms a malivestment. Although a lot of it is healthcare related so it may work out well.

But the smaller commercial is a different story.

bob2356 says

Which leads to the question of who the boomers are going to sell their houses to in order to retire?

Chris Martenson talks about that as well. The City Newspaper ran an article a while back IIRC by Joel Kotkin, in which he stated the real growth for the west will be in Utah & Colorado, as young families can buy there. I guess jobs will be created there as well?

Logan Mohtashami says

Nothing wrong with renting.

Also, the credit quality of 40 year amortization loans were awful. Talking about the bottom of the economic food chain.

Also the debt structure for some of these loans were fixed for short period as well.

It really wasn't a popular loan except for the poorest income and credit quality buyer

That's why not even the banks cared about losing it

Sure--I understand that. Banks probably wouldn't want to make those loans to the folks that would apply. I just don't see why the US government would care.

tatupu70 says

Sure--I understand that. Banks probably wouldn't want to make those loans to the folks that would apply. I just don't see why the US government would care.

Some of those loans were sub prime debt structure nature types of products.

Fixed at a short term rate, then exploding higher. Some were interest only loans for a period of time which also has been banned by QM

So there is more to the story that a simple 40 year amortization loan like a 30 year amortization loan

Speaking of Which this was this posted against on the internet

http://www.housingwire.com/blogs/1-rewired/post/32816-tweets-show-everything-wrong-with-cnbc-housing-optimism

Call it Crazy says

Because they are currently holding the bag on the existing sub-prime loans now!

Whether or not this is true is irrelevant.

tatupu70 says

Whether or not this is true is irrelevant.

Also remember that lawsuits can come against the U.S government and banks from people who got sub standard loan products, in many suits for predatory lending there were 40 year loans giving.

So, the government and banks don't want anything to do with that type of loan. This is why under law you bank can't get legal production if you do a 40 year amortization loan

This is another factor why the U.S government and banks no longer do 40 year amortization loans

Logan Mohtashami says

Also remember that lawsuits can come against the U.S government and banks from people who got sub standard loan products, in many suits for predatory lending there were 40 year loans giving.

So, the government and banks don't want anything to do with that type of loan. This is why under law you bank can't get legal production if you do a 40 year amortization loan

This is another factor why the U.S government and banks no longer do 40 year amortization loans

Is that because of the duration of the loan, or the amortization? I wouldn't think a straight 40 year loan would give rise to any lawsuits or predatory lending lawsuits.

tatupu70 says

Is that because of the duration of the loan, or the amortization? I wouldn't think a straight 40 year loan would give rise to any lawsuits or predatory lending lawsuits.

- Stated income loans
- Fixed for a 5 -10 year period and then amortized for 30 years after

I have never seen a pure 40 year amortization loan, who would really lend out money for 40 years fixed.

Also, 40 year loans had higher rates than traditional mortgages due to the amortization hit on pricing

It just wasn't a happening product. Not even the tight lending group is asking for that loan to come back, it has never been mentioned by any pro housing groups

Call it Crazy says

Does the names Fannie Mae and Freddie Mac ring any bells?

Yep. Still not relevant to the discussion. We're talking about private banks making loans.

never trust realtors

Call it Crazy says

Strategist says

SFace says

Sorry, your graphics make no sense. It looks pretty but says absolutely nothing. When it says nothing, you know it is wrong. A bunch of confusing, circles, colors and death trap is just visual crap.

He is right, Logan. A picture is worth a thousand words, not a hundred thousand words. Keep it simple.

No he's not... If he can't read and understand Logan's chart, maybe he needs a six year old to explain it to him.

I bet even Logan gets confused by his own charts.

tatupu70 says

Logan Mohtashami says

If you can't own a home with a 30 year amortized loan, probably shouldn't be buying a home

Again--why? People who can't afford homes, rent. How is a 40 year loan worse than renting?

Interest only loans are even more like rent. If you plan on moving in 5 years, interest only loans are not bad.

Strategist says

I bet even Logan gets confused by his own charts.

I post about 10-25 charts a day from all areas of economics. The Housing Charts are the easiest ones.

Come to my facebook page, I talk about all economic data her and abroad

https://www.facebook.com/Logan.Mohtashami

Logan Mohtashami says

Strategist says

I bet even Logan gets confused by his own charts.

I post about 10-25 charts a day from all areas of economics. The Housing Charts are the easiest ones.

Come to my facebook page, I talk about all economic data her and abroad

https://www.facebook.com/Logan.Mohtashami

He he he. I just tried, and they want me to log into Facebook. I'm not on Facebook, but i'll make up a name and join.
By the way, I was an economics major, beyond masters. I love graphs, I even dreamt graphs. :) But now I am getting old. :(

If you like economics and historical photos in the evening that is what you see everyday

Logan Mohtashami says

Strategist says

I bet even Logan gets confused by his own charts.

I post about 10-25 charts a day from all areas of economics. The Housing Charts are the easiest ones.

Come to my facebook page, I talk about all economic data her and abroad

https://www.facebook.com/Logan.Mohtashami

You are cool, Logan. :)

Logan Mohtashami says

What, no hot chicks??

My wife would say, how come you a lot Hot real estate female friends

Logan Mohtashami says

If you like economics

You sick bastard...

Logan Mohtashami says

Logan Mohtashami says

What, no hot chicks??

My wife would say, how come you a lot Hot real estate female friends

Just tell her in Farsee..."no one as beautiful as you, Jaan" And then take her to that restaurant off Culver in Irvine that has belly dancing.....Caspian.? Women fall for it every time.

Strategist says

Caspian.

My wife is American and she has been to Caspian more than me and I lived in Irvine since 1989 and have been there just twice in 26 years.

indigenous says

You sick bastard...

and then some

:-)

Logan Mohtashami says

Strategist says

Caspian.

My wife is American and she has been to Caspian more than me and I lived in Irvine since 1989 and have been there just twice in 26 years.

Is the belly dancing good? I want to take my wife there.

Strategist says

Is the belly dancing good?

I couldn't tell ya

Even though apps where down week to week, they were still up YoY only because the bar is so low

Funny you think of belly dancing with the middle east? How things have changed.

‪#‎DTI‬
‪#‎LTI‬
‪#‎PITI‬

Wow what an uplifting graph, thanks O!

Call it Crazy says

Fannie Mae is out with its 2015 housing outlook and things are looking positive… sort of.

Housing is the cost of shelter to your own capacity to own the debt, nothing less, nothing more, none quarter asked and none taken

Outside out of that thesis I stay out of the marketing madness

American Banker is doing an article on me and if they take all my quotes in I put some really glaring facts on that capacity issue