$700 billion indicates little equity in houses

[Nick at Noon]

I read that there are about 6.5 million mortgages in trouble. If we
need $700 billion to reimburse the lenders, that means the default
mortgages must be bad for an average of $108,000 each.

I find that hard to believe. The median price of an American house was
about $225,000 a few months ago. It would seem that almost half the amount of the loan has been lost.

If each house is losing about 108K, then there is practically no
equity in them. How did that happen ? That's not a bad loan --
that is a criminal conspiracy between buyer, broker and banker.

And that happened on the local level. Without the local crimes, the Wall Street crimes would have been impossible.

[JuniperLea]

1. Foreclosures cause falling house prices...

I've lost $150k in equity in my home. One exactly like mine sold at $450k just before all those adjustables hit. Now, homes just like mine are going for $300k and less.

This crisis isn't just about the subprime loans, it's about what those loans did to the rest of us.

[Uben]

2. Take that $108K per home

Amortize the mortgage for thirty years at 7%. What do you get?

[SoCalDem]

3. It's not "about" the individual mortgages, it's about all the little boxes of shit

that the wallstreet casinos traded back and forth with each other..and at each "trade" they took another commission..

It's like when you buy a package of porkchops.. the ones on top always look lovely..but the 4 on the bottom are nothing but hunks of bone (to drive the per pound cost up) and blubber..

The Casino-hosts bundled the shitty about-to-fail, and sure-to-fail mortgages , and wrapped them up with shiny paper & glittery bows...and then sold them all over the place..

All it took was for someone to actually open a box and see what shit was in it, for the whole thing to collapse..

the bail out is to refund money to all the people who bought the unopened shit-boxes...not for the actual people living with the shitty mortgages..

[54anickel]

4. Excellent explanation!!!

[GetTheRightVote]

5. On CNN.com Live, amendment offered to help with mortgages issues

and fore closures, concern with; section 109 wording 'encourage' should be changed to 'requirement' of banks and creditors. AS well as the 250 insurance is not high enough for all concerned parties. So there are still many short falls in this bailout. It is not a good bill for the main street people. Rep./Ms. Jackson-Lee.

:grr::grr:

[nosillies]

6. I'll get personal and give you the hard numbers for my house.

Bought it mid-2005 for $295,000. Put $65,000 down on it. That's $230,00 financed. It's sitting vacant, for sale now, since we've had to move to a new area for work. It's listed at $220,000. It's had lots of lookers, but general consensus is it's overpriced ( anything other than a giveaway is overpriced these days because people can't get mortgages). The only other house to sell in our neighborhood in the past year sold for $219,00.

If we were willing to sell at any cost, we'd probably have to list it at around $200,000 to get serious buyer interest. That would be $95,000 less than what we paid, minus our down payment, of course. But many people put little to no money down. $95,000 isn't too far away from $108,000.

We're one of the lucky ones, because our house has only lost about a third of its value. Many houses in our area have lost half their value in the past few years. Of course, that is Florida. I don't think other places are quite as bad.

[Nick at Noon]

7. I appreciate the input

I was really thinking only about how it affected the houses of delinquent mortgage holders and not so much how it would affect those of us who need to sell.

I'm of the opinion the government must do something to stop this hemorrhaging.