Bubble Blog Acronyms and Definitions

Piece of Sh!t, Piece of Crap. Used commonly to describe a sh!tshack property.

Came in from MARINPOS blog. After you mortgage your life away it is all you will afford to eat. Mac N Cheese (blue box maybe) will be sunday supper.

Housing Bubble Glossary

There have often been requests for defining acronyms and RE jargon that not all readers are familiar with. There have also been quite a few gems made up along the way by bloggers. Here are some of the most frequently requested or re-used terms, along with their anti-spin translations. Perhaps you have a few of your own? Discuss, enjoy…
HARM

“Homedebtor” (a.k.a. “recent homebuyer”): Perpetual debtor/serf who will probably never own the home outright, thanks to cyclical refinancing (used to fund conspicuous consumption) and property taxes.

“FB/AFB” (“Another F@cked Borrower”): Colorful synonym for homedebtor, coined by “SoCalMtgGuy”.

“Serial Refinancer”: A Homedebtor/FB who is as addicted to mortgage refinancing, as a street addict is to crack. This type of FB typically refinances several times a year, almost always for the purpose of “liberating” more equity gains to purchase such life essentials as European vacations, plasma TVs, HumVees, and bling.

“Jealous Bitter Renter/JBR”: Originally a term used by housing bulls to disparage bearish non-homedebtors. Has since been co-opted by bears and is now used ironically. Technical definition: Someone who pays a homedebtor for the right to live in his home, at a huge discount and with no downside risk of falling property prices, rising property taxes or maintenance nightmares.

“Sheeple/Sheople”: Derogatory term for the vast, clueless, herd-following mass of homedebtors, who are unaware of the Bubble’s existence, believe what MSM tells them, and have no idea of the ass-pounding they’re about to receive.

“I/O” (Interest-Only): Exotic mortgage loan product designed to attract more homedebtors by keeping initial payments marginally lower, while ensuring the homedebtor never builds any equity (except by perpetual appreciation).

“Neg-Am” (Negative Amortization, a.k.a. “Option ARMS”): Exotic mortgage loan product even more toxic than an I/O, in that the homedebtor falls even further into debt each month. Ending up upside-down is virtually guaranteed unless prices appreciate very quickly.

“No-Doc” (aka “Stated Income”, “NINA”): Exotic mortgage loan product designed to get around federal/state lending requirements with regard to LTV ratio and borrower credit-worthiness, by allowing the borrower to declare “stated income/assets” without proof.

“Stated-Outcome” (aka “Liar-Loan”): A No-Doc loan where the lender deliberately inflates the buyer’s income to whatever level is needed to “qualify” them for the loan amount.

“NINA” (No Income, No Assets): See “No-Doc” and “Stated Outcome”.

“NAAVLP™” (Negative Amortization Anal-Voodoo Loan Product): Term coined by the legendary Surfer-X to satirically encapsulate all exotic loans varieties (above). He is a Patrick.net “old-timer” who’s acerbic, anti-Boomer rants added much color to the early threads.

“ARM” (Adjustable-Rate Mortgage): Designed to keep the lender covered while interest rates shoot back up. Often used in conjunction with the “exotic” loan products above.

“MEW” (Mortgage Equity Withdrawal): Any form of additional debt/leverage on top of your original mortgage, using your house as collateral. Typically refers to cash-out refinancing, HELOCs and home equity loans (second mortgages), the use of which has skyrocketed in recent years. Designed to bury homedebtors even deeper and further fuel spending on frivolous bling and other nonessential consumption. Also see “Serial Refinancer” and “Equity Liberation”.

“Liberated Equity”: An Orwellian industry-friendly euphemsim for MEW originally coined by CAR Vice President and Chief Economist, Leslie Appleton-Young.

“Monopoly Money” (aka “funny money”): The anti-spin term for MEW or NAAVLP-derived debt. Used to counter RE industry Orwellian terminology like “liberated equity”.

“Appreciation”: Debt & speculation-fueled inflation of real estate prices.

“CPI”: Government price index that only tracks goods and services that consumers don’t actually use or need, such as Chinese-made plastic lawn furniture.

“Credit Score”: Easily manipulated number allowing lenders to underwrite “exotic” loans to anyone with a pulse. Scratch “with a pulse” –made to ANYONE, period.

“Real Estate Appraiser”: A person who lies for a fee.

“Unemployed Real Estate Appraiser”: A person who refuses to lie for a fee.

“Realtor™” (aka “Realt-Whore”): On either coast, a person who just recently used to be an Internet VC “entrepreneur” or a tech stock day-trader.

“Speculator/Flipper”: See “Realtor™”. Popular variants include “Specuvestor” and “Investulator”, coined by OC Renter and Marinite.

“Heli-Ben” (aka “B52-Ben”, “Helicopter Ben”): Nickname for incoming Fed chief Benjamin Bernanke. Specifically lampoons a speech where he said the Fed could, as a last resort, drop cash from helicopters in order to fight deflation.

“MIRAGE” (Moneyed Immigrants, Rich Ancestors, Generous Expatriates): Acronym coined by HARM to lampoon the bulls’ argument that housing demand is being supported by cash-rich immigrants, wealthy parents and transplants from other states.

“ILLUSION” (Irrational Lending Lax Underwriting Speculative Investing Ownership Nonsense) Acronym coined by Dipanjan to describe what bears believe is really driving housing demand.

“CHUMPS” (Cunning Hard-eyed Ultra-savvy Market ProfessionalS): Acronym coined by HARM to lampoon the bulls’ argument that most recent buyers who used exotic loan products are market-savvy professionals who fully understand the downside risks and are financially prepared for them.

“Chewbacca” (short for “Chewbacca defense”): A legal strategy first used by the fictionalized Johnny Cochran during a South Park episode. A favorite of Praetorian’s, it refers to any argument based on non-sequiturs and/or circular logic for the purpose of confusing one’s opponent into submission.

http://www.southparkstudios.com/media/video/214/sp214_chewbacca.mov

“Pergraniteel™”: Pergo fake wood floors, granite countertops, and steel appliances. Coined by SJ_Jim, an amalgamation of today’s most popular home “improvements”, which supposedly allows sellers to command a 200% premium above what they paid for the place.

“ASSHOLES” (Arrogant Self-Serving Highly Over-Leveraged Egotistical Speculators): Not-so-subtle acronym coined by motorcityjim. Self explanatory.

http://patrick.net/wp/?p=63

Home Equity Line of Credit:

A preapproved line of credit that a homeowner with equity can get. Often issued where a checkbook is all that is needed to access the equity loan.

What can I say. It is a person or couple who has taken out a loan on a property that is highly overpriced. The term was coined by SoCalMtgGuy


Another FB

Mortgage Equity Withdrawal:

The simplest definition is the additional wealth a homeowner has when they borrow from the equity in their home for purchases. Calculated Risk explains it in some detail in his blog on Friday, December 09, 2005 and what it means for the economy.

Calculated Risk

I felt there was a need to make this blog so that a person going to a housing or bubble blog could have a handy reference site for acronyms or terms that are thrown around casually on blogs. I am open to suggestions or contributions of terms I will undoubtedly be missing. Thanks in advance for the help!

Metro