Reading it, I couldn’t help but think that consumers are buying time by relying on the house ATM even MORE as interest rate goes up. Note that the 88% of loans that are higher than the original loan amount by more than 5% – that’s the highest ever since 1999. Also, the “median appreciation” for refinanced loan is also the highest since 1999 — what do you think that it means?
For the appraisers here, do you get pressured to give higher appraiasal value to help the owner to get refinanced? I know that my landlord just refinanced (or tried) lately because an appraiser came.
I’m interested in how you interprete the data. Are consumers/home owners get more cash out now just to buy some time?
This was discussed here before. People used to refinance to get a lower interest rate, but now they are doing so to get more cash out. Some refinance to convert their higher HELOC into a lower 30 year fixed. All this proves that large numbers of people are deep in debt. I mean, who in their right mind would refinance into a *higher* interest rate?
Two days ago you suggested that everybody refinance into a higher interest rate in the thread “Why don’t all exotic loan borrowers refinance now?”
Quote:
“If everyone with a teaser intro rate, an I/O loan, ARM, would apply for a 30 year fixed rate loan, we would not see the massive foreclosures discussed here.
Why doesn’t everyone just refinance?” End quote
ALL teaser rates I/Os and ARM in the last 4 years are considerably below the current 30-year rate.
Maybe SOME of these people are sensible and following your advice (at least the ones that are capable of refinancing at the higher rate). So, sometimes people in their right mind would refinance into a higher rate if it lower’s their risk and exposure to changing rates.
The problem is that these are cash-out refis. People are not refinancing for a lower interest rate or to transfer into a more stable product, but to take out cash.
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