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December 15, 2008 at 4:34 PM #316319December 16, 2008 at 12:24 AM #315941
patb
Participant[quote=FormerSanDiegan][quote=esmith][quote=peterb]Someone needs to go out on a limb here and call for a market bounce in early 2009!! [/quote]
O
– There was a study by First American Loan Performance that found that a “double-digit percentage” of all option ARMs in San Diego area were 60 days delinquent as of October 2007. What’s the delinquency rate today? No one knows for sure.
– How many option ARMs were there in San Diego to begin with? We had 22 thousand defaults in the county in 2007 and 31 thousand thus far in 2008. How many non-delinquent ARMs are left?
– Is it possible that the impending Alt-A tsunami might turn out to be a fizzle?[/quote]
The other point that folks who are afraid of the reset monster forget is to consider what the rate will be at reset.
Your typical alt-A 5/1 ARM that originated in 2005 at 5.5- 5.75%, is tied to 12-month Libor with a margin of 2.25%.
Currently the 12-month LIBOR is under 2.5%.
This means that these loans, if resetting today would reset at or below their original rate. Perhaps as low as 4.75% !!!
Don’t get me wrong, The option ARMs are toast already because of negative amortizaiton. The Alt-A interest only or “traditional” ARMs are not nearly as deadly.
[/quote]All the non conventional mortgages are dead meat.
it’s just a matter of time
December 16, 2008 at 12:24 AM #316298Participant[quote=FormerSanDiegan][quote=esmith][quote=peterb]Someone needs to go out on a limb here and call for a market bounce in early 2009!! [/quote]
O
– There was a study by First American Loan Performance that found that a “double-digit percentage” of all option ARMs in San Diego area were 60 days delinquent as of October 2007. What’s the delinquency rate today? No one knows for sure.
– How many option ARMs were there in San Diego to begin with? We had 22 thousand defaults in the county in 2007 and 31 thousand thus far in 2008. How many non-delinquent ARMs are left?
– Is it possible that the impending Alt-A tsunami might turn out to be a fizzle?[/quote]
The other point that folks who are afraid of the reset monster forget is to consider what the rate will be at reset.
Your typical alt-A 5/1 ARM that originated in 2005 at 5.5- 5.75%, is tied to 12-month Libor with a margin of 2.25%.
Currently the 12-month LIBOR is under 2.5%.
This means that these loans, if resetting today would reset at or below their original rate. Perhaps as low as 4.75% !!!
Don’t get me wrong, The option ARMs are toast already because of negative amortizaiton. The Alt-A interest only or “traditional” ARMs are not nearly as deadly.
[/quote]All the non conventional mortgages are dead meat.
it’s just a matter of time
December 16, 2008 at 12:24 AM #316337Participant[quote=FormerSanDiegan][quote=esmith][quote=peterb]Someone needs to go out on a limb here and call for a market bounce in early 2009!! [/quote]
O
– There was a study by First American Loan Performance that found that a “double-digit percentage” of all option ARMs in San Diego area were 60 days delinquent as of October 2007. What’s the delinquency rate today? No one knows for sure.
– How many option ARMs were there in San Diego to begin with? We had 22 thousand defaults in the county in 2007 and 31 thousand thus far in 2008. How many non-delinquent ARMs are left?
– Is it possible that the impending Alt-A tsunami might turn out to be a fizzle?[/quote]
The other point that folks who are afraid of the reset monster forget is to consider what the rate will be at reset.
Your typical alt-A 5/1 ARM that originated in 2005 at 5.5- 5.75%, is tied to 12-month Libor with a margin of 2.25%.
Currently the 12-month LIBOR is under 2.5%.
This means that these loans, if resetting today would reset at or below their original rate. Perhaps as low as 4.75% !!!
Don’t get me wrong, The option ARMs are toast already because of negative amortizaiton. The Alt-A interest only or “traditional” ARMs are not nearly as deadly.
[/quote]All the non conventional mortgages are dead meat.
it’s just a matter of time
December 16, 2008 at 12:24 AM #316359Participant[quote=FormerSanDiegan][quote=esmith][quote=peterb]Someone needs to go out on a limb here and call for a market bounce in early 2009!! [/quote]
O
– There was a study by First American Loan Performance that found that a “double-digit percentage” of all option ARMs in San Diego area were 60 days delinquent as of October 2007. What’s the delinquency rate today? No one knows for sure.
– How many option ARMs were there in San Diego to begin with? We had 22 thousand defaults in the county in 2007 and 31 thousand thus far in 2008. How many non-delinquent ARMs are left?
– Is it possible that the impending Alt-A tsunami might turn out to be a fizzle?[/quote]
The other point that folks who are afraid of the reset monster forget is to consider what the rate will be at reset.
Your typical alt-A 5/1 ARM that originated in 2005 at 5.5- 5.75%, is tied to 12-month Libor with a margin of 2.25%.
Currently the 12-month LIBOR is under 2.5%.
This means that these loans, if resetting today would reset at or below their original rate. Perhaps as low as 4.75% !!!
Don’t get me wrong, The option ARMs are toast already because of negative amortizaiton. The Alt-A interest only or “traditional” ARMs are not nearly as deadly.
[/quote]All the non conventional mortgages are dead meat.
it’s just a matter of time
December 16, 2008 at 12:24 AM #316432Participant[quote=FormerSanDiegan][quote=esmith][quote=peterb]Someone needs to go out on a limb here and call for a market bounce in early 2009!! [/quote]
O
– There was a study by First American Loan Performance that found that a “double-digit percentage” of all option ARMs in San Diego area were 60 days delinquent as of October 2007. What’s the delinquency rate today? No one knows for sure.
– How many option ARMs were there in San Diego to begin with? We had 22 thousand defaults in the county in 2007 and 31 thousand thus far in 2008. How many non-delinquent ARMs are left?
– Is it possible that the impending Alt-A tsunami might turn out to be a fizzle?[/quote]
The other point that folks who are afraid of the reset monster forget is to consider what the rate will be at reset.
Your typical alt-A 5/1 ARM that originated in 2005 at 5.5- 5.75%, is tied to 12-month Libor with a margin of 2.25%.
Currently the 12-month LIBOR is under 2.5%.
This means that these loans, if resetting today would reset at or below their original rate. Perhaps as low as 4.75% !!!
Don’t get me wrong, The option ARMs are toast already because of negative amortizaiton. The Alt-A interest only or “traditional” ARMs are not nearly as deadly.
[/quote]All the non conventional mortgages are dead meat.
it’s just a matter of time
December 16, 2008 at 8:04 AM #315956(former)FormerSanDiegan
ParticipantDWCAP is on the right track.
It’s not the resets that. It’s negative equity and affordability (income versus payments) that kills.People get too hung up on the second wave of resets simply because the first wave was the trigger to the market’s downfall. That’s yesterday’s news.
December 16, 2008 at 8:04 AM #316313ParticipantDWCAP is on the right track.
It’s not the resets that. It’s negative equity and affordability (income versus payments) that kills.People get too hung up on the second wave of resets simply because the first wave was the trigger to the market’s downfall. That’s yesterday’s news.
December 16, 2008 at 8:04 AM #316353ParticipantDWCAP is on the right track.
It’s not the resets that. It’s negative equity and affordability (income versus payments) that kills.People get too hung up on the second wave of resets simply because the first wave was the trigger to the market’s downfall. That’s yesterday’s news.
December 16, 2008 at 8:04 AM #316374ParticipantDWCAP is on the right track.
It’s not the resets that. It’s negative equity and affordability (income versus payments) that kills.People get too hung up on the second wave of resets simply because the first wave was the trigger to the market’s downfall. That’s yesterday’s news.
December 16, 2008 at 8:04 AM #316448ParticipantDWCAP is on the right track.
It’s not the resets that. It’s negative equity and affordability (income versus payments) that kills.People get too hung up on the second wave of resets simply because the first wave was the trigger to the market’s downfall. That’s yesterday’s news.
December 16, 2008 at 8:12 AM #315961Participant[quote=patb]
All the non conventional mortgages are dead meat.
it’s just a matter of time[/quote]
Define non-conventional.
If you mean anything that is an ARM (as opposed to fixed rate) you are wrong.
Until last year I had an adjustable rate loan that was interest only for 5 years on a rental property in San Diego (oooh, SCARY !).
Unfortunately, since I am conservative (from an investment point-of-view) I made the mistake of refinancing into a fixed rate loan last year at 6.25%. If I had kept my “dead meat” loan my reset would have been below 5.25%. I’m pretty sure I would have been OK paying a couple hundred per month less on my loan. In the long run I guess that’s the insurance I am paying to keep my fixed rate.
December 16, 2008 at 8:12 AM #316318Participant[quote=patb]
All the non conventional mortgages are dead meat.
it’s just a matter of time[/quote]
Define non-conventional.
If you mean anything that is an ARM (as opposed to fixed rate) you are wrong.
Until last year I had an adjustable rate loan that was interest only for 5 years on a rental property in San Diego (oooh, SCARY !).
Unfortunately, since I am conservative (from an investment point-of-view) I made the mistake of refinancing into a fixed rate loan last year at 6.25%. If I had kept my “dead meat” loan my reset would have been below 5.25%. I’m pretty sure I would have been OK paying a couple hundred per month less on my loan. In the long run I guess that’s the insurance I am paying to keep my fixed rate.
December 16, 2008 at 8:12 AM #316358Participant[quote=patb]
All the non conventional mortgages are dead meat.
it’s just a matter of time[/quote]
Define non-conventional.
If you mean anything that is an ARM (as opposed to fixed rate) you are wrong.
Until last year I had an adjustable rate loan that was interest only for 5 years on a rental property in San Diego (oooh, SCARY !).
Unfortunately, since I am conservative (from an investment point-of-view) I made the mistake of refinancing into a fixed rate loan last year at 6.25%. If I had kept my “dead meat” loan my reset would have been below 5.25%. I’m pretty sure I would have been OK paying a couple hundred per month less on my loan. In the long run I guess that’s the insurance I am paying to keep my fixed rate.
December 16, 2008 at 8:12 AM #316378Participant[quote=patb]
All the non conventional mortgages are dead meat.
it’s just a matter of time[/quote]
Define non-conventional.
If you mean anything that is an ARM (as opposed to fixed rate) you are wrong.
Until last year I had an adjustable rate loan that was interest only for 5 years on a rental property in San Diego (oooh, SCARY !).
Unfortunately, since I am conservative (from an investment point-of-view) I made the mistake of refinancing into a fixed rate loan last year at 6.25%. If I had kept my “dead meat” loan my reset would have been below 5.25%. I’m pretty sure I would have been OK paying a couple hundred per month less on my loan. In the long run I guess that’s the insurance I am paying to keep my fixed rate.
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