Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Fed sees ‘deepened’ housing downturn
November 20th, 2007, 11:59 am · 76 Comments · posted by Jon Lansner/O.C. Register columnist
Fed minutes of their Halloween rate-cutting party say this about housing …
“The housing downturn deepened as sales of new and existing single-family homes continued to fall. Deterioration in nonprime mortgage markets as well as higher mortgage interest rates and tighter lending conditions for prime jumbo loans since earlier in the year appeared to be restraining housing demand. Forward-looking indicators, including an index of pending home sales and adjusted single-family permit issuance, continued to point to a further slowing in housing activity over the near term. Single-family housing starts declined significantly over August and September. Nonetheless, with single-family home sales continuing to sag, inventories of unsold homes remained quite elevated. In the multifamily sector, starts declined sharply in September; however, the third-quarter reading remained within the fairly narrow range observed over the past decade.”
… AND …
“… participants noted that the recent declines in housing activity-while substantial-had largely been anticipated. Nonetheless, the potential for significant further weakening in housing activity and home prices represented a downside risk to the economic outlook. Most participants pointed to the deterioration in non-prime mortgage markets as well as higher interest rates and tighter credit standards for prime nonconforming mortgages as factors that had exacerbated the deterioration in housing markets, and they noted that these developments could further limit the availability of mortgage credit and depress the demand for housing. Some participants also pointed to downside risks to the housing market stemming from the large volume of substantial upward interest-rate resets that were likely on subprime mortgages in coming quarters, which could lead to a faster pace of foreclosures in the near term, thereby intensifying the downward pressure on house prices.”
To read more of the minutes, CLICK HERE
November 20th, 2007 at 12:07 pm
So even the feds can see that housing issues are impacting both prime and non-prime borrowers/home owners.
although the feds are not always right, when analyzing data, they are usually the last to admit to bad news… well at least according to the data out there.
rough road agead, for a while at least.
November 20th, 2007 at 12:26 pm
truthiness wrote: “I am not your lapdog, clemente.
If you want more from me, read the comments from the past 10 days and you will have your answer.”
Nope. Don’t see an answer to my question. I see a lot of bluster and name-calling, but I just don’t see a person that has the guts to make a clear, definitive call. You know, one that can be examined at a later date to see how it pans out.
That’s cool. I just thought you might like the chance to say something substantive.
November 20th, 2007 at 12:32 pm
clemente EXACTLY truthi aint got no huevos she likes
to talk the talk ….but wont walk the walk as noted the
fed is a day late and a dollar short on their call besides
they wont speak the truth even if they did know it….
goldman will though………
http://www.reuters.com/article/ousiv/idUSN1953742020071120
November 20th, 2007 at 12:32 pm
The FED made their call.
Summary of what has been said by so many here on Jon’s blog - for quite some time:)
November 20th, 2007 at 12:39 pm
Hmmmm…it appears Obi Ben Barnake is getting psyhced up for a .75 basis point cut in Dec.
November 20th, 2007 at 12:40 pm
clemente, I think you got lost. Go back to the other place you posted this and read my answer (even though you’re too lazy to get it from the last time I answered two days ago).
rants, clearly you only read your own posts.
November 20th, 2007 at 12:48 pm
I wonder if Ben was dressed up as the Grim Reaper when he made these statements at the FED meeting on Halloween?
November 20th, 2007 at 12:49 pm
poor arthur he thinks more cheap money will help the
problem that was created by cheap money… art
wont be happy untill the fed starts passing out monopoly
money I dont think the rest of the world is quite ready
to play monopoly yet seeing as the dollar just set a new
record LOW today art are you suggesting that we DEBASE
our way out of this mess? better check with GLOBAL INSIGHTS on this and get back to us I’m sure they have
an opinion
November 20th, 2007 at 12:56 pm
Truthiness, Yes I saw your answer. Unfortunately it spawned more questions than it answered. Here’s what I wrote on the last thread.
OK, thanks Truthiness. Let me see if I have this right. “prices are all over the board right now” — so some houses prices are going up, some down and some holding steady — is that it?
“some are at their bottom as we speak” — so, we have reached a bottom for some areas or specific houses?
“Others may bottom at -40% from peak” — but some areas/houses have another 40% to drop.” Could a zero % drop house be right next to a 40% drop house? Just curious.
“As for the median: I think it will bobble up and down for the next 6-12 months - it could drop further semi-permanently” — not quite following that, but let me try: median prices could go up or down or they could go down “semi-permanently”. OK. Could they go up semi-permanently? Could they stay the same semi-permanently? Could they go up and down and stay the same for an indefinite, semi-permanent period of time? Just trying to pin you down here to a semi-clear statement.
November 20th, 2007 at 12:59 pm
clemente, you did it again. Go back to the original thread. What are you hoping to acheive by posting one conversation in two threads?
November 20th, 2007 at 1:01 pm
I sometimes check in on thes blogs after a few hours and am so amused at the way Truthiness gets you all tied in knots. I would wager that she(that is an assumtion on my part)can hold all of you at bay and at the sametime compute the internal rate of return of a fully depreciated equity position in a 20 story office building and not even begin to show the slightest glint of persperation. Truthiness I salute you.
November 20th, 2007 at 1:01 pm
rants, do you agree with the Fed’s actions when they raised rates 17 out of 17 possible opportunities without a single pause? Do you think some of this could have been avoided if their actions were no so extreme on both sides of the pendulum?
November 20th, 2007 at 1:04 pm
Rants,
Room 1408 is ready for you.
November 20th, 2007 at 1:06 pm
Don’t put much stock in any Fed comments: in particular, I recall when Greenspan was still there — with a real estate bubble just as plain as can be — indicating that there was just some local froth, no national bubble.
Now, the spin game is still the same: just talk about hints of deepening housing downturns when the reality is far, far starker. And you will see that i am right about that. But keep drinking the koolaid while you can if self-delusion is your thing. I would say worse things about you fools but Truthy has helped temper my comments — drinks are on him, the 86 at Dave n Busters has been repealed.
November 20th, 2007 at 1:07 pm
And I you, Arthur.
November 20th, 2007 at 1:09 pm
My sincere apology Truthiness.
Here’s my response to you from the previous thread:
Thanks Truthiness. Here’s my forecast:
Sales will continue to go down in 2008.
Prices will continue to go down in 2008.
Foreclosures will continue to go down in 2008.
Standard Pacific will go bankrupt in 2008.
Realtors and mortgage brokers will make less in 2008 than they did in 2007.
November 20th, 2007 at 1:13 pm
Shiny, don’t tell mav. I don’t want to hurt him more than I have.
November 20th, 2007 at 1:14 pm
great answer ART your childish avoidance of my question
speaks volumes
November 20th, 2007 at 1:14 pm
Sorry. My bad.
Foreclosures will continue to go UP in 2008.
November 20th, 2007 at 1:19 pm
Thanks clemente. My thoughts:
Sales will continue to go down in 2008. (I think we are at the floor of volume now)
Prices will continue to go down in 2008. (Very possibly)
Foreclosures will continue to go down in 2008. (This statement surprises me. Due to the sub-primiest areas taking a huge hit, I could see some areas accelerating for awhile)
Standard Pacific will go bankrupt in 2008. (Don’t know enough to comment)
Realtors and mortgage brokers will make less in 2008 than they did in 2007. (Given)
November 20th, 2007 at 1:35 pm
To Rants
Just want to say thanks on all the info u provide(links)
U do keep up with whats going on….
I read all ur links they always very informative…
keep it up a lot of us do read them
November 20th, 2007 at 1:55 pm
http://www.naca.com is offering all struggling/subprime homeowner a 30 year fix at 5.25% with no closing costs. They have a 10 billion dollar commitment. So if you are in an unafforbable loan, contact them immediately. They are a non-profit organization.
RENTERS….it’s also available for first time homeowners. So, find your bargain and lock in a GREAT loan that never adjusts.
Check it out if you don’t believe me
https://www.naca.com/index_main.jsp
November 20th, 2007 at 1:58 pm
Renters
I forgot to mention, http://www.naca.com does not require any down payment either
November 20th, 2007 at 2:21 pm
Yowza! Thanks James. That’s incredible.
November 20th, 2007 at 2:21 pm
Mr. Lansner, spread the word. You could help many families.
November 20th, 2007 at 2:23 pm
Rules of the NACA program
For ppl who want to save their house:
*You cannot own other property, and the property to be refinanced must be owner-occupied.
*You must have a predatory interest rate or unaffordable loan terms.
*You cannot have multiple refinances where you are continually taking money out to pay for your living expenses. This does not include refinances to obtain lower rates or to pay for one-time expenses such as home repairs, medical expenses, or education.
*You must have had your current mortgage for at least 24 months.
For ppl buying a house:
*Current NACA homeowners must have lived in their home for at least three years and have been active participants in the NACA program to be eligible to purchase through the program again.”
*No member of the household can have an ownership interest in any other property
*Occupy the home for as long as you have the mortgage through NACA
And check out the maximum purchase price limits (for OC):
$362,790 (one family home/condo); $464,449 (two family) How many properties here are under that limit?
November 20th, 2007 at 2:26 pm
BTW, I don’t mean to discount the program - it sounds like it could be very helpful to people who qualify. I just worry how many here the standards apply to.
November 20th, 2007 at 2:29 pm
What a great organization that is. Looks like the rules are accomodating, but the max loan is $369k. Still, it will help nationwide, which will in turn help the markets and economy overall. Fantastic. Stand back Arthur: incoming.
November 20th, 2007 at 2:31 pm
Ironic that the architects of bubble now are the people who bring the bad news that their handy work is going to last longer….2008? Try 2011.
James what about their pre-payment penalties?
November 20th, 2007 at 2:37 pm
What a remarkable organization. More power to ‘em. Looks like they know what they’re doing and have been at it a long time. I wouldn’t worry about prepays - I bet a phone call from them takes care of it.
November 20th, 2007 at 2:39 pm
By the way, since the loan has to have at least two years of seasoning, the investors already got a good return. The incremental value of the remainder of their prepayment penalty would be negligible.
November 20th, 2007 at 2:48 pm
I wonder if you can do a concurrent heloc for the remainder of balance above $362,790?
November 20th, 2007 at 2:57 pm
Ahh Truthi, yes a simple call, a wave of the wand some secret incantations and *poof* contractual agreement gone. What about loaning out on a house that has decreased in value, even at the lower end, how are they going to do that? Here is 400k for your house worth 325k, that seems silly and not profitable to me….but hey good luck.
November 20th, 2007 at 3:16 pm
No, you can’t bridge any gap according to the site. Still, it’s great for hundreds of thousands, if not millions, of borrowers. I hope there isn’t a serious objection to it. The lenders and investors made their money (more or less) fair and square. Now that the fixed period is up, they shouldn’t be surprised to be refinanced out of their loan. My one and only question is: who is subsidizing the extra low rate?
November 20th, 2007 at 3:21 pm
Patricio, you have once again revealed both your lack of character and ignorance. Ever heard of credit counseling? They accomplish cram downs a thousand times a day. As I said, the investors already made their profit on the two year stream. Investors don’t count on people remaining in ARMs. And chances are the prepays are up, or close to it. This topic will seperate the men from the boys.
November 20th, 2007 at 3:24 pm
BofA and Citigroup are subsidizing it. I saw this on Bloomberg TV today and thought i would share the news.
November 20th, 2007 at 3:32 pm
I think it is managed risk. I believe that people who qualify have to go to mandatory credit and finacial management classes.
They also have to restructure their finances (no $650.00 per month car leases), and I also believe that they may be asked to put some skin in the game under certain criteria (i.e. they won’t negotiate down principal if the borrower has $200,000.00 sitting in an IRA, 401K, or other investment vehicle)
Their default rate after all off these processes is reeally quite low, and that allows them to bring the interest rate down.
November 20th, 2007 at 3:33 pm
Don’t be so bitter about my analogy to your typical over simplification of a complex issue with sunshine and roses and an “it will work itself out” angle. Sorry, those carefree days are over, banks are not going to just sign off on something anymore, they got their proverbial butts kicked from doing this.
So, you assume much here, and the money involved will not be applicable to 99% of the OC loans and homes, but whatever it might help out Bakersfield and the IE.
November 20th, 2007 at 3:34 pm
Here’s the second of three services they offer (refinance is the first, help with forbearance is the third):
Lender Restructuring:
NACA’s Home Save Department will work with you and the lender to restructure your mortgage(s) with an affordable mortgage payment. This would require either a reduced interest rate and/or reduction in the mortgage amount. It may include locking in the loan at the initial affordable rate prior to a reset. Resets result in a much higher mortgage payment, often pushing the homeowner into foreclosure. Lenders, servicers and investors are now more willing to restructure a loan given the collapse of the subprime market, the responsibilities they have in originating or purchasing the loan, and the significant loss they would incur with a foreclosure. The Underwriting Department is the contact for lenders to discuss your file and to disseminate information to the Mortgage Consultant and yourself. When the lender responds or accepts the restructuring, the Underwriter will coordinate with you and your Mortgage Consultant to complete the lender requirements.
November 20th, 2007 at 3:41 pm
This reminds me of one of those carnival attraction where you get to throw the ball at the target and drop the guy in the water…except here Truthi just hits the target himself about every 15 miutes or so.
November 20th, 2007 at 3:57 pm
Hey, Bakersfield and the IE are in the same country as we are (you know, the one you supposedly love). I will add you to the “boys” category together with Eat it in OC.
November 20th, 2007 at 4:10 pm
it does sound like a great program. Im not sure what the 10 billion committed means. At the 370K max for loans at least for here, the max would be roughly 27,000. So I dont see how it can help millions, let alon 100K. If you drop it down to a 200K loan for the rest of the country than it could help around 50,000 homeowners. Unless of course the amount gets increased some how.
November 20th, 2007 at 4:18 pm
Samson, I think the commitment is ongoing. Also check out Matt’s blog. The Governator just pulled off something too. Funny, one of the comments wrongly accused those borrowers of getting below market rates (at their expense). Figures. I will say one thing about this whole notion: changing an ARM into a fixed is one thing, clipping a mortgage balance is another. I guess it’s the lessor of two evils, but it’s also not exactly fair to shift market value risk onto investors. At the end of the day though, foreclosure losses are an inherent part of mortgage lending, so it’s not all that different.
November 20th, 2007 at 4:26 pm
A better question is it fair to clip morgatge value to keep prices artificially high. So those that lied/bought more than could afford/or just had no busineess buying a home all of the sudden get to stay in a home for less than the original price they paid or under terms not originally agreed to. Is it fair that the people who saved, make a good living will have to pay for it in the long run, buy paying higher prices and be hit with tougher lending standards?
November 20th, 2007 at 4:28 pm
Really…the same Country you don’t say go figure….Jesus you are a twit. Have a nice Thanksgiving and don’t remember to chew and swallow.
November 20th, 2007 at 4:29 pm
It’s also not fair to others who bought more conservatively with a traditional-rate loan who would be paying a higher interest rate while others would get the benefit of a permanent teaser rate for being financially reckless. I saw one story about this in the media, but not too much else. If I were the other owners, I would be pretty mad.
November 20th, 2007 at 4:31 pm
This has been said before, but I got a credit card for no interest for the first year. Can I get that extended for another year, or maybe Ill just pay 3% instead of 15%. That sounds good to me. Or maybe I wont pay it at all.
November 20th, 2007 at 4:37 pm
Sounds like commie stuff to me. Giving money to those who don’t deserve it. In this country, we only give money to people who don’t need it. How’s the water truthi?
November 20th, 2007 at 4:38 pm
Sampson
Why are you not in favor of a program that could potentially help some families stay in their homes instead of being evicted. I thought you had concern the struggling people in this country
November 20th, 2007 at 4:44 pm
I don’t get the “keeping values high” argument. The values are already lower. I guess you just want to see an endless cycle of deterioration?
November 20th, 2007 at 4:45 pm
Arthur Jensen, just for you:
http://online.barrons.com/article/SB119525663089596306.html?mod=googlenews_barrons
Treasure Hunter
Talking with Scott Amero, Co-Chair, Fixed Income Investment Strategy, BlackRock
“Despite the housing industry’s woes, Amero sees no reason to shun the mortgage-securities market, although he might continue to avoid the subprime end of the market and concentrate instead on buying highly rated tranches of securities that have qualified for Fannie Mae or Freddie Mac guarantees. Beyond that, he sees opportunity in so-called jumbo-mortgage pass-throughs: securities backed by mortgages that are too large for Fannie or others to guarantee but where the borrowers have high credit quality. “Those are trading at big discounts, but there is really quite limited credit risk,” he says.”
(On a side note: it’s hilarious that the guy is named “Amero”)
(This story is related to the one above)
http://www.bloomberg.com/apps/news?pid=20601109&sid=a6LfufYrmtxI&refer=home
Greed Trumps Fear as KKR Gets Banks to Arrange CLOs (Update2)
Subprime – Check
Prime – Check
Jumbo - Check
November 20th, 2007 at 4:47 pm
“So those that lied/bought more than could afford/or just had no busineess buying a home all of the sudden get to stay in a home for less than the original price they paid or under terms not originally agreed to”
Samson, you are making assumptions here. If someone had an ARM and always intended to refinance it, and the market vanished overnight, how is that lying and/or not affording it? You know no such thing.
November 20th, 2007 at 4:54 pm
I am concerned about people that truly need help for some families. I dont approve of people being able to stay in homes they should never have been approved for in the first place. Say a family where they were doing fine until the husband was injured at work and cant make enough to cover the loan. Helping a family that bought a 600,000 home on an 80K income or ones that lied and stated they made more than they did, dont deserve to be saved from foreclosure in my opinion. They should get into a smaller home, one they can afford, but of course what is a 600K in the OC should probably be affordable to someone making 80K.
What about families that bought than did a heloc and bought flat screens and SUV’s should they be helped out?
I just think this should be based on true need and just a bailout. There are plenty of needy famlies out there that need great places to live. Im all for agencies like habitat for humanity who require the owners to put in sweat equity in order to buy the home from HFH.
The problem I see is that this only further helps to artificially inflate the values of homes. Which makes available homes less affordable for more people, so while you may help a few that may or may not desreve it, you are hurting even more who may now never have a shot at owning a home.
November 20th, 2007 at 5:05 pm
I see Samson’s point.
Either you can afford the property, or you can’t. When you sign on the dotted line; you are pledging to make the full payment, and pledging that you have the resources to make the payment.
If you go into the agreement needing to to refinance (and needing the markets to comply with your needs), then the fact is that you do not have the resources to pay.
And to me (and others), that smacks of deceit, and borderline fraud.
November 20th, 2007 at 5:08 pm
So two things Truth,
1. I don’t get the “keeping values high” argument. The values are already lower. I guess you just want to see an endless cycle of deterioration?
The values may be lower, but they are still overpriced even back at the 2005 levels. I dont want to see things “deteriorate”. I want to see things get back to a level of a affordability based upon realistic income levels.
2.Samson, you are making assumptions here. If someone had an ARM and always intended to refinance it, and the market vanished overnight, how is that lying and/or not affording it? You know no such thing.
Those people who are having difficulty with ARM are those that purchased a loan they could afford base only on a teaser rate, some where interest only loans, some where negative amor. loans. Those people where buying on margin assuming that the home prices would continue to rise at a pace of 10-15% a year. So they also assumed they would also be able to refi into another ARM or teaser rate. Many used stated income, claiming they made more than they did , or had an income that could barely afford the loan at that introductory terms. Much of this was the fault of REA/Brokers/Appraisers who told these people not to worry you could always refi.
Most of these people should never have purchased in the first place. The market is only responding to the mess made by the lenders/REA/Brokers and yes the homeowners(renters) that bought way beyond their means.
When they went into these loans they should have been able to afford the loan at what the reset amount would be and not take the RISK of assuming they could always refi. The reason they do not deserve to be bailed out is that they too the RISK and gambled with the market and lost out. It is unfortunate, but it is the risk you take. We need to back to more traditional lending standards so that this doesnt happen to millions of furture homeowners like it is happening now.
November 20th, 2007 at 5:10 pm
The trend looks ugly. The non conforming prime loans, fully documented income with loan amounts over 417K hopefully will be available at better rates. This will start to ease the pressure on the dismal markets. It will take some time to right this ship.
Roger Herrick
California Mortgage Broker
http://www. ContactHerrick.com
November 20th, 2007 at 5:11 pm
cdm, all ARMs have a 30 year amortization, but they are by definition short term vehicles. This bias against ARMs is creeping me out. They serve a legitmate purpose, just like short term CD’s. If the argument is the combination of a very short term ARM with a subprime borrower, then you have a point.
November 20th, 2007 at 5:11 pm
Automated Underwriting will help the cause and bring conservative underwiting guidelines into line.
Roger Herrick
California Mortgage Broker
http://www.ContactHerrick.com
November 20th, 2007 at 5:15 pm
Samson, you are making way too many assumptions. This is a national program. How do you know all places are unaffordable? For your information, subprime 30 year rates were always absurdly high and ARM rates were fair (not “teaser” or “low”). The profile you have in your head is not the reality for most. You are cherry picking from the most egregeous things possible.
November 20th, 2007 at 5:17 pm
I dont think an ARM in itself is the problem. If it helps someone get into a home thats great, if they need to lower rate for the first 3 years to pay off other bills thats great too, but they need to be able to pay the loan at what the rate will be in 3 years. I think most traditional loans only allow you to get a loan based on less than 40% of your gross income. That standard should always apply. Maybe a 10 yr. Arm isnt such a bad idea, but having a teaser rate that is far below what the going rate for a 30 yr. loan is, or a neg am loan, or in some case I/O this builds little equity except for what is hopefully acheived through appreciation.
My 457 has taken a big hit the last few months. I took a risk buy putting it into certain mutual funds, do I deserve a bailout do to the losses created by the banking industry?
You can have it both ways, you cant take the risk and than get bailed out when it doesnt work out for you.
November 20th, 2007 at 5:19 pm
I agree that they serve a purpose, IF the buyer can afford the fully amoritized amount (which by the way, was what they pledged to do).
If the buyer can not, then they are fundamentally making a promise that they can not keep.
There is something wrong with that.
November 20th, 2007 at 5:22 pm
Truthi,
Im looking at it from an OC or at least a SO Cal market. I may be making assumptions about some people. Those are the people I dont think should be bailed out. Most of the country isnt unaffordable, I would assume that those people are not having as much of a problem with paying their loans since the loan is based on a much smaller priced home. OC’s median is more than double what the median is for the entire country. So those in middle America are probably less effected. Either way if someone bought something they could not afford do they deserve to be bailed out. You buy a car you cant afford the repo man comes and takes it away. Just a fact of life.
People in this country need to learn to buy within their means, that is how you help to control prices.
November 20th, 2007 at 5:35 pm
cdm, technically you are right about signing on for the whole term. However, few loans (and no ARMs) make it to the end of the term. I hear what you are saying though, it’s just that it doesn’t work that way.
samson, you won’t be affected by this much if it makes you feel any better. Your nation will be helped though. Also, this kind of program is fully underwritten, including income documentation, so the “liars” will not be saved.
November 20th, 2007 at 5:48 pm
I understand that most loans get refinanced some where along their term.
However, there is a big difference between refinancing when convenient, and needing to refinance as part of your purchase strategy.
This is part of the problem that created explosive price growth in the OC, and will lead to most of the foreclosures that willdrag down prices over the next year plus. Buyers assumed that price appreciation and the ability to refinance were entitlements.
November 20th, 2007 at 5:51 pm
I had posted this on the mortgage side:
Definite moral hazard. Also, since the initial rates will be locked in, the cost will go somewhere else, and that will be to other borrowers, including prime.
What I would expect from a modification program:
1) A negative mark on the borrowers credit history (if they made a promise that they can not meet, it should show on their record)
2) A full workout. If they are are having their rate reset, and they have assets in the bank (401k, IRA, other), that is not fair. They also need to curb spending (no Mercedes or Range Rover)
3) A mutual appreciation agreement. In the future, when the market does recover, at sale time the bank will be able to recover that forgiven interest, as well as 1/2 the appreciation. The borrowers do not have to agree with this, but then they donot get the reset.
November 20th, 2007 at 5:59 pm
The more I think about it, the more I come to the conclusion that mutual appreciation agreements should be part of any workout.
The people who are losing the most are investors (by volume the largest of which are pension and mutual funds) who backed the paper. Shouldn’t they see something at the end of this?
Imagine, some one is having trouble making their payment, and has the rate reset. Fifteen years later, they sell at a profit, and having had lower carrying costs than their neighbor who did everything right.
That is unfair.
November 20th, 2007 at 6:03 pm
cdm, this is not a government bailout. You are not subsidizing anything, therefore you don’t get to impose any rules. Where did you get that idea?
November 20th, 2007 at 6:15 pm
Regardless of whether it is public or private, I want to have my opinions out there.
November 20th, 2007 at 7:27 pm
truthiness: Without reading every post, I think what many are stating is that there should be an equitable benefit to all credit holders. That’s not the best business decision which is why it’s not happening. Proponents of these measures want to limit the pain to one sector of investors, not to mention prevent further loss. The other problem is that this is unquestionably a benefit being granted to individuals that purchased at great risk with no planned contingencies. Rewarding the irresponsible is not profitable long term for obvious reasons.
Truthi: look - the first contingency any responsible homebuyer will ensure for themselves is to be able to make the payment at the rate beyond the initial rate, even if it’s an ARM fixed for 5 years. Anything is possible when buying anything, and when purchasing a home, the risks simply must be weighed. No one deserves anything but the right to work and the right to pay the bills they agreed to pay when they signed the dotted line. That is not worse case scenario - having to pay the rate beyond the initial rate. There are much worse scenarios people can plan for.
As for the use of ARM’s - they are great tools for investors, because its about cash flow, leveraging risk and someone else’s money to earn money, and being able to take the loss if need be so I can sleep at night. And you can say that investors like myself have somewhat of a right to be a little upset that so many decided to play a game for which they had no idea what the rules were – thereby changing the rules for everyone. It’s like sitting at the black jack table in Vegas when a novice sits down on third base and spoils the deal.
November 20th, 2007 at 7:37 pm
“the first contingency any responsible homebuyer will ensure for themselves is to be able to make the payment at the rate beyond the initial rate”
I agree with that wholeheartedly. This lesson should be remembered - nothing is guaranteed.
November 20th, 2007 at 8:26 pm
How can you sleep at night with an ARM? That is worse than a land lord who might raise your rent. And anyone thinking about getting a negative amortization loan is retarded.
November 20th, 2007 at 8:52 pm
Some woman on the http://www.naca.com website got a 4.062% 30 year fix mortgage on 06/08/2006. That is lower than what you can get for having perfect credit, showing your income and having amble equity
November 20th, 2007 at 10:45 pm
Blogger, don’t you have a limit on the number of posts we have to read from one person? I count 22 posts from “Truthiness” above. Doesn’t this person have a job or is he/she an out-of-work Realtor?
November 20th, 2007 at 10:51 pm
Truthiness are you a new comer or did you use to have another name.
I cant say that I am super upset about the loan program sense it is voluntary, as long as the government is not sponsoring it I may not like it but I cant piss on it either
November 21st, 2007 at 7:32 am
Awwwww, let’s shoot the messenger. If people wish to converse with me it’s none of your business. Crawl back to your bubble blogs where you can have a mutual stroke session all day long.
November 21st, 2007 at 12:25 pm
Come on now Truthi,
Converse?