[quote=SD Realtor]What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.
Also I am quite skeptical of the ability of the banks to track owner occupancy as well.
I guess we will see![/quote]
IMHO, this is exactly why the private mortgage market doesn’t exist. With all the money printing going on — and the insecurities regarding fiat currencies — only a fool would accept fixed rates for 30 years at sub-6%, and this is for borrowers who’ve already shown a propensity for default/financial distress. Is it any wonder we (the taxpayers) are backing up all this nonsense?
BTW, as an uber-bear, I’ve always conceded that there was a possibility my thesis (deflation) would turn out wrong. There has always been a very good argument on both sides of the inflation/deflation debate (I’ve always believed there would be a currency crisis, just that there would be a period of major deflation just before it — much more deflation than what we saw in 2008). We all just have to take a gamble and choose sides; they’ve left us no choice.
