California Loan Modifications update

[Huckleberry]

At least CA mortgage owners aren’t getting principal reductions through their mods…

http://effectivedemand.blogspot.com/2009/06/california-loan-modifications-update.html

[Effective Demand]

Thanks for a link to my site. Due to way losses are accounted for I don’t think en masse principal reductions will ever be in the cards. But without them the loan mod program will just delay the inevitable and make things like worker mobility worse. I don’t think think loan mods were ever the answer but if they were the answer they only make sense with principal reductions.

Anyone in the marketplace on the low end sees how hot the market is, the Fed has created a great market to liquidate into. They wasted a perfect opportunity and instead tried to short circuit the market. Whatever the solution is it should be the one that gets the housing bubble in the past as soon as possible. But every “solution” so far has only served to prolong the problem.

I still can’t imagine what the housing market would look like with 7% rates. I don’t think too many of todays homebuyers have thought that far ahead. But that would make the cost of money increase 35-40% and decrease buyers purchasing power significantly. The multi-trillion dollar question is.. how long can the Fed keep 30 yr rates this low. Sales are only this “good” (they are horrible) because of 5% mortgage rates. Even when jobs start recovering, purchasing power won’t recover.

[Effective Demand]

Thanks for a link to my site. Due to way losses are accounted for I don’t think en masse principal reductions will ever be in the cards. But without them the loan mod program will just delay the inevitable and make things like worker mobility worse. I don’t think think loan mods were ever the answer but if they were the answer they only make sense with principal reductions.

Anyone in the marketplace on the low end sees how hot the market is, the Fed has created a great market to liquidate into. They wasted a perfect opportunity and instead tried to short circuit the market. Whatever the solution is it should be the one that gets the housing bubble in the past as soon as possible. But every “solution” so far has only served to prolong the problem.

I still can’t imagine what the housing market would look like with 7% rates. I don’t think too many of todays homebuyers have thought that far ahead. But that would make the cost of money increase 35-40% and decrease buyers purchasing power significantly. The multi-trillion dollar question is.. how long can the Fed keep 30 yr rates this low. Sales are only this “good” (they are horrible) because of 5% mortgage rates. Even when jobs start recovering, purchasing power won’t recover.

[Effective Demand]

Thanks for a link to my site. Due to way losses are accounted for I don’t think en masse principal reductions will ever be in the cards. But without them the loan mod program will just delay the inevitable and make things like worker mobility worse. I don’t think think loan mods were ever the answer but if they were the answer they only make sense with principal reductions.

Anyone in the marketplace on the low end sees how hot the market is, the Fed has created a great market to liquidate into. They wasted a perfect opportunity and instead tried to short circuit the market. Whatever the solution is it should be the one that gets the housing bubble in the past as soon as possible. But every “solution” so far has only served to prolong the problem.

I still can’t imagine what the housing market would look like with 7% rates. I don’t think too many of todays homebuyers have thought that far ahead. But that would make the cost of money increase 35-40% and decrease buyers purchasing power significantly. The multi-trillion dollar question is.. how long can the Fed keep 30 yr rates this low. Sales are only this “good” (they are horrible) because of 5% mortgage rates. Even when jobs start recovering, purchasing power won’t recover.

[Effective Demand]

Thanks for a link to my site. Due to way losses are accounted for I don’t think en masse principal reductions will ever be in the cards. But without them the loan mod program will just delay the inevitable and make things like worker mobility worse. I don’t think think loan mods were ever the answer but if they were the answer they only make sense with principal reductions.

Anyone in the marketplace on the low end sees how hot the market is, the Fed has created a great market to liquidate into. They wasted a perfect opportunity and instead tried to short circuit the market. Whatever the solution is it should be the one that gets the housing bubble in the past as soon as possible. But every “solution” so far has only served to prolong the problem.

I still can’t imagine what the housing market would look like with 7% rates. I don’t think too many of todays homebuyers have thought that far ahead. But that would make the cost of money increase 35-40% and decrease buyers purchasing power significantly. The multi-trillion dollar question is.. how long can the Fed keep 30 yr rates this low. Sales are only this “good” (they are horrible) because of 5% mortgage rates. Even when jobs start recovering, purchasing power won’t recover.

[Effective Demand]

Thanks for a link to my site. Due to way losses are accounted for I don’t think en masse principal reductions will ever be in the cards. But without them the loan mod program will just delay the inevitable and make things like worker mobility worse. I don’t think think loan mods were ever the answer but if they were the answer they only make sense with principal reductions.

Anyone in the marketplace on the low end sees how hot the market is, the Fed has created a great market to liquidate into. They wasted a perfect opportunity and instead tried to short circuit the market. Whatever the solution is it should be the one that gets the housing bubble in the past as soon as possible. But every “solution” so far has only served to prolong the problem.

I still can’t imagine what the housing market would look like with 7% rates. I don’t think too many of todays homebuyers have thought that far ahead. But that would make the cost of money increase 35-40% and decrease buyers purchasing power significantly. The multi-trillion dollar question is.. how long can the Fed keep 30 yr rates this low. Sales are only this “good” (they are horrible) because of 5% mortgage rates. Even when jobs start recovering, purchasing power won’t recover.

[SD Realtor]

I would have to agree that mortgage rates are the knockout punch. I think that for all the anticipation that we had about unemployment tipping the market over, we have not seen the tsunami that many envisioned. Now as you said, we have 7 or 8% mortgage rates, I do not see many people pulling in 150k a year being able to afford that nice home in LCV or 4S.

At some point, that will happen. That is what will affect things more then anything else.

[SD Realtor]

I would have to agree that mortgage rates are the knockout punch. I think that for all the anticipation that we had about unemployment tipping the market over, we have not seen the tsunami that many envisioned. Now as you said, we have 7 or 8% mortgage rates, I do not see many people pulling in 150k a year being able to afford that nice home in LCV or 4S.

At some point, that will happen. That is what will affect things more then anything else.

[SD Realtor]

I would have to agree that mortgage rates are the knockout punch. I think that for all the anticipation that we had about unemployment tipping the market over, we have not seen the tsunami that many envisioned. Now as you said, we have 7 or 8% mortgage rates, I do not see many people pulling in 150k a year being able to afford that nice home in LCV or 4S.

At some point, that will happen. That is what will affect things more then anything else.

[SD Realtor]

I would have to agree that mortgage rates are the knockout punch. I think that for all the anticipation that we had about unemployment tipping the market over, we have not seen the tsunami that many envisioned. Now as you said, we have 7 or 8% mortgage rates, I do not see many people pulling in 150k a year being able to afford that nice home in LCV or 4S.

At some point, that will happen. That is what will affect things more then anything else.

[SD Realtor]

I would have to agree that mortgage rates are the knockout punch. I think that for all the anticipation that we had about unemployment tipping the market over, we have not seen the tsunami that many envisioned. Now as you said, we have 7 or 8% mortgage rates, I do not see many people pulling in 150k a year being able to afford that nice home in LCV or 4S.

At some point, that will happen. That is what will affect things more then anything else.

[Effective Demand]

I recommend reading the MBS commentary blog over at Mortgage News Daily. It has a play by play of the daily rate movements.

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

Personally I think we have one more multi-month sub-5% spurt in us and then things will come back to 5.5-5.75% then a couple years down the road we get in the 6’s. At these low levels quarter point movements is a large percentage and changes purchasing power significantly.

Any recovery in housing will be muted, both transactional and pricing. Right now the issue with the market is supply, demand isn’t that bad but they can’t really stretch and buy so they are stuck in a narrow range. Either people start making more money (wage inflation) or prices drop and transaction rise. Otherwise we will just stagnate for a long time.

[Effective Demand]

I recommend reading the MBS commentary blog over at Mortgage News Daily. It has a play by play of the daily rate movements.

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

Personally I think we have one more multi-month sub-5% spurt in us and then things will come back to 5.5-5.75% then a couple years down the road we get in the 6’s. At these low levels quarter point movements is a large percentage and changes purchasing power significantly.

Any recovery in housing will be muted, both transactional and pricing. Right now the issue with the market is supply, demand isn’t that bad but they can’t really stretch and buy so they are stuck in a narrow range. Either people start making more money (wage inflation) or prices drop and transaction rise. Otherwise we will just stagnate for a long time.

[Effective Demand]

I recommend reading the MBS commentary blog over at Mortgage News Daily. It has a play by play of the daily rate movements.

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

Personally I think we have one more multi-month sub-5% spurt in us and then things will come back to 5.5-5.75% then a couple years down the road we get in the 6’s. At these low levels quarter point movements is a large percentage and changes purchasing power significantly.

Any recovery in housing will be muted, both transactional and pricing. Right now the issue with the market is supply, demand isn’t that bad but they can’t really stretch and buy so they are stuck in a narrow range. Either people start making more money (wage inflation) or prices drop and transaction rise. Otherwise we will just stagnate for a long time.

[Effective Demand]

I recommend reading the MBS commentary blog over at Mortgage News Daily. It has a play by play of the daily rate movements.

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

Personally I think we have one more multi-month sub-5% spurt in us and then things will come back to 5.5-5.75% then a couple years down the road we get in the 6’s. At these low levels quarter point movements is a large percentage and changes purchasing power significantly.

Any recovery in housing will be muted, both transactional and pricing. Right now the issue with the market is supply, demand isn’t that bad but they can’t really stretch and buy so they are stuck in a narrow range. Either people start making more money (wage inflation) or prices drop and transaction rise. Otherwise we will just stagnate for a long time.

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