equalizer, did you read my post the other day about the 2 reasons that prevent someone from refinancing today? Many people cannot refinance. I don’t want to repeat the entire post, maybe Search will find it for you. I read an article in USA Today about a lady squeezed out by adjusting ARM payments, and it said she could not refinance for 2 more years, and I didn’t understand why. So I asked my neighbor, a loan officer, and she explained it to me.
Daniel, I think I remember it now. Cagan’s assumptions are based on prices not falling? Prices have already fallen, as others on this forum have reported. Realtors are telling me of big falls, and many houses back at 2004 prices. Did Cagan talk about the effect of foreclosures, and the 2 scenarious under which someone cannot refinance?