Housing Doom Housing Bubble Blog

HousingDoom thanks our source for forwarding us an email of Countrywide’s new guidelines for the trifecta of the housing bust- Miami, Las Vegas and Phoenix.  Of particular note is the fact that they are changing their allowable LTV by 5% for these markets.  [Homebuyers are going to have to carry more risk for falling home prices]  They are also going to work harder to make sure your home is worth what you say it is:

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Our friend Morgan at Blown Mortgage called Friday August 3 The Day the Credit Died.  Anecdotally I have heard from mortgage brokers that this has created difficulties in funding mortgages, but I have not had any hard data.

I never have the patience to wait for the end of the month numbers, so many thanks to M for pulling these numbers for me.  There is a slight bias in using the early numbers, as agents have several days from closing to update the MLS, so when looking at YOY, remember that the drop might be slightly overstated.  Checking in the middle of the month however, I expect that discrepancy to be slight.

Hold on to your hat folks, here’s where the Phoenix market is at in August:
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Many thanks to frequent commenter SteveC, he pointed out that we should make Doomers aware of the following:

Almost every ARM interest rate reset is tied to the BBA LIBOR, the rate at which banks in Great Britain loan to each other. It is similar to the Fed rate here. Rates in Great Britain and the rest of Europe have been on the rise while the geniuses in the Fed keep rates steady.

The BBA LIBOR overnight rate has jumped to 6.475%. If it doesn’t go back down, there’s going to be some serious interest rate increases when all these ARMs reset. OUCH!!

 It was reported yesterday by the British Bankers Association:

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