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(former)FormerSanDiegan.
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July 31, 2007 at 6:05 PM #9661July 31, 2007 at 6:27 PM #69042
HereWeGo
ParticipantThe refinance may come at some pain to the lender, but that’s almost certainly the solution that will eventually be required. If the borrowers stop servicing their debt en masse, that will soon be seen as the worst case scenario for the lenders.
July 31, 2007 at 6:27 PM #69112ParticipantThe refinance may come at some pain to the lender, but that’s almost certainly the solution that will eventually be required. If the borrowers stop servicing their debt en masse, that will soon be seen as the worst case scenario for the lenders.
July 31, 2007 at 7:59 PM #69056patientrenter
ParticipantWhere are loan mods?
HLS, where does a loan modification fit in your classification scheme? Is that included under Option 2? If it is, then why would the lender apply the same standards they’d use for a new loan? Lenders as a group may make a macro bet that loan mods are cheaper than selling everything into a slump.
Patient renter in OC
July 31, 2007 at 7:59 PM #69127ParticipantWhere are loan mods?
HLS, where does a loan modification fit in your classification scheme? Is that included under Option 2? If it is, then why would the lender apply the same standards they’d use for a new loan? Lenders as a group may make a macro bet that loan mods are cheaper than selling everything into a slump.
Patient renter in OC
July 31, 2007 at 8:08 PM #69058ParticipantThat’s what I intended to imply, pr. I just don’t see how the banks ultimately have any choice in the matter.
It’s a twist on an old saying: if you owe the bank 400K, and you default, then you have a problem. But if one million “yous” owe the bank 400K a piece, and they default, the banks have a very big problem.
July 31, 2007 at 8:08 PM #69129ParticipantThat’s what I intended to imply, pr. I just don’t see how the banks ultimately have any choice in the matter.
It’s a twist on an old saying: if you owe the bank 400K, and you default, then you have a problem. But if one million “yous” owe the bank 400K a piece, and they default, the banks have a very big problem.
July 31, 2007 at 8:53 PM #69070kaycee
ParticipantPerhaps my situation is different. My ARM is set to reset in May/June of next year. But buy my calculations, that is only a $300 increase on my $300,000 loan. Granted that is almost a 20% increase, but it is still not 1K a month. Wouldn’t there be an awful lot of people out there like me for whom this will not be a cataclysmic event?
July 31, 2007 at 8:53 PM #69141ParticipantPerhaps my situation is different. My ARM is set to reset in May/June of next year. But buy my calculations, that is only a $300 increase on my $300,000 loan. Granted that is almost a 20% increase, but it is still not 1K a month. Wouldn’t there be an awful lot of people out there like me for whom this will not be a cataclysmic event?
July 31, 2007 at 9:01 PM #69076HLS
ParticipantThis is what’s on the table today. Who knows what tomorrow will bring. Loan mods at the moment are thus:
“You cannot pay $2,000 a month and are $4,000 behind, why don’t you pay us $3,000 a month for the next 4 months and get caught up”
That’s loan mod today. Can’t afford to pay $2K, so the answer is $3K,, makes sense right ??
In addition, they whack your credit score and you are pretty much screwed no matter what, and still owe late charges.
Modifications are not reducing what is owed. You think that they are reducing principal on mods ?? Not that I know of….
I’m sure that you know, the worst loans were sold off on Wall Street, who knows where the paper actually is.
The servicing companies just do their jobs.There will be major defualts but It may not be players that are well known. This is years away from being over.
July 31, 2007 at 9:01 PM #69147ParticipantThis is what’s on the table today. Who knows what tomorrow will bring. Loan mods at the moment are thus:
“You cannot pay $2,000 a month and are $4,000 behind, why don’t you pay us $3,000 a month for the next 4 months and get caught up”
That’s loan mod today. Can’t afford to pay $2K, so the answer is $3K,, makes sense right ??
In addition, they whack your credit score and you are pretty much screwed no matter what, and still owe late charges.
Modifications are not reducing what is owed. You think that they are reducing principal on mods ?? Not that I know of….
I’m sure that you know, the worst loans were sold off on Wall Street, who knows where the paper actually is.
The servicing companies just do their jobs.There will be major defualts but It may not be players that are well known. This is years away from being over.
July 31, 2007 at 9:07 PM #69078ParticipantKaycee,,,
Not sure exactly what loan you have, but I would guess that your payment is going up more like $500 a month, if your loan is $300k and your margin is rising 2 pts.
If $300 is a 20% increase, $500 is over 30%.The tradeoff is that you have saved $$ since inception.
If you plan on staying in the property after next May, you are gambling on the future. As long as you understand that, it’s OK.
Depending on a number of factors, If you plan on a refi,what is available to you today may not be available to you next year.
July 31, 2007 at 9:07 PM #69149ParticipantKaycee,,,
Not sure exactly what loan you have, but I would guess that your payment is going up more like $500 a month, if your loan is $300k and your margin is rising 2 pts.
If $300 is a 20% increase, $500 is over 30%.The tradeoff is that you have saved $$ since inception.
If you plan on staying in the property after next May, you are gambling on the future. As long as you understand that, it’s OK.
Depending on a number of factors, If you plan on a refi,what is available to you today may not be available to you next year.
July 31, 2007 at 9:41 PM #69163ParticipantSorry HLS I guess I should have been more specific. My mortgage (originally about $322K now down to about $300K) is at 4.125% My P& I is about $1,650. My ARM should reset to just over 6%. I figured that to be about $300 more a month.
The “PLAN” was to sell after 4 years (we’re military and figured we’d get orders in 3 ended up being 4) House has been on the market over a year now. Highly annoying but another story.
Anyway, I am perfectly capable of paying an additional $300 a month on the house. If I was actually living in it I wouldn’t even blink. Obviously, I can’t refi now since it isn’t my primary anymore. But still 6% isn’t a bad rate either. I don’t see it as a crisis. But then, I didn’t use the ARM to qualify into a house I couldn’t afford. But I’m sure that I’m the majority, who simply saw the teaser rate as a way to save some money on the front end.
July 31, 2007 at 9:41 PM #69092ParticipantSorry HLS I guess I should have been more specific. My mortgage (originally about $322K now down to about $300K) is at 4.125% My P& I is about $1,650. My ARM should reset to just over 6%. I figured that to be about $300 more a month.
The “PLAN” was to sell after 4 years (we’re military and figured we’d get orders in 3 ended up being 4) House has been on the market over a year now. Highly annoying but another story.
Anyway, I am perfectly capable of paying an additional $300 a month on the house. If I was actually living in it I wouldn’t even blink. Obviously, I can’t refi now since it isn’t my primary anymore. But still 6% isn’t a bad rate either. I don’t see it as a crisis. But then, I didn’t use the ARM to qualify into a house I couldn’t afford. But I’m sure that I’m the majority, who simply saw the teaser rate as a way to save some money on the front end.
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