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AuthorPosts
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February 7, 2008 at 8:07 AM #11738
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February 7, 2008 at 11:07 AM #149258
patientlywaiting
ParticipantI believe the option ARMs is how middle class families were buying $500,000 to $800,000 house in San Diego.
Time will tell.
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February 7, 2008 at 11:07 AM #149517Participant
I believe the option ARMs is how middle class families were buying $500,000 to $800,000 house in San Diego.
Time will tell.
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February 7, 2008 at 11:07 AM #149534Participant
I believe the option ARMs is how middle class families were buying $500,000 to $800,000 house in San Diego.
Time will tell.
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February 7, 2008 at 11:07 AM #149545Participant
I believe the option ARMs is how middle class families were buying $500,000 to $800,000 house in San Diego.
Time will tell.
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February 7, 2008 at 11:07 AM #149618Participant
I believe the option ARMs is how middle class families were buying $500,000 to $800,000 house in San Diego.
Time will tell.
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February 7, 2008 at 12:37 PM #149331
PCinSD
Guest“About $460 billion of adjustable-rate mortgages are scheduled to reset this year, with the next spike in resets coming in 2011, when $420 billion in mortgages will adjust to new interest rates for the first time, according to New York-based analysts at Citigroup Inc.”
That prediction concerns me the most. Some here have suggested that 2010/2011 may be the time to buy. This could throw a wrench in that theory.
pabloesqobar
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February 7, 2008 at 12:43 PM #149341
kewp
ParticipantI think the idea is that those folks will toss the keys or refinance before the 2011 deadline, once its clear how toxic the loan product is.
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February 7, 2008 at 12:59 PM #149352
drunkle
Participantmiddle to end of 2009. figure, the impacts of the job losses and slow economy now will be felt in the rental market a year from now; the newly unemployed will hang on, try to find a new job, take a pay cut, whatever and float for 3 to 6 months. after that, more foreclosures and increased vacancies. land lords will hold out on their asking rent for at least that long if not a full year. as rentals go down, the rent vs own equation changes driving sales volume and price down even further.
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February 7, 2008 at 12:59 PM #149607Participant
middle to end of 2009. figure, the impacts of the job losses and slow economy now will be felt in the rental market a year from now; the newly unemployed will hang on, try to find a new job, take a pay cut, whatever and float for 3 to 6 months. after that, more foreclosures and increased vacancies. land lords will hold out on their asking rent for at least that long if not a full year. as rentals go down, the rent vs own equation changes driving sales volume and price down even further.
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February 7, 2008 at 12:59 PM #149621Participant
middle to end of 2009. figure, the impacts of the job losses and slow economy now will be felt in the rental market a year from now; the newly unemployed will hang on, try to find a new job, take a pay cut, whatever and float for 3 to 6 months. after that, more foreclosures and increased vacancies. land lords will hold out on their asking rent for at least that long if not a full year. as rentals go down, the rent vs own equation changes driving sales volume and price down even further.
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February 7, 2008 at 12:59 PM #149635Participant
middle to end of 2009. figure, the impacts of the job losses and slow economy now will be felt in the rental market a year from now; the newly unemployed will hang on, try to find a new job, take a pay cut, whatever and float for 3 to 6 months. after that, more foreclosures and increased vacancies. land lords will hold out on their asking rent for at least that long if not a full year. as rentals go down, the rent vs own equation changes driving sales volume and price down even further.
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February 7, 2008 at 12:59 PM #149708Participant
middle to end of 2009. figure, the impacts of the job losses and slow economy now will be felt in the rental market a year from now; the newly unemployed will hang on, try to find a new job, take a pay cut, whatever and float for 3 to 6 months. after that, more foreclosures and increased vacancies. land lords will hold out on their asking rent for at least that long if not a full year. as rentals go down, the rent vs own equation changes driving sales volume and price down even further.
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February 7, 2008 at 12:43 PM #149598Participant
I think the idea is that those folks will toss the keys or refinance before the 2011 deadline, once its clear how toxic the loan product is.
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February 7, 2008 at 12:43 PM #149613Participant
I think the idea is that those folks will toss the keys or refinance before the 2011 deadline, once its clear how toxic the loan product is.
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February 7, 2008 at 12:43 PM #149629Participant
I think the idea is that those folks will toss the keys or refinance before the 2011 deadline, once its clear how toxic the loan product is.
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February 7, 2008 at 12:43 PM #149698Participant
I think the idea is that those folks will toss the keys or refinance before the 2011 deadline, once its clear how toxic the loan product is.
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February 7, 2008 at 2:51 PM #149417
SD Realtor
Participantkewp great line on the 401ks draining themselves…
I honestly do not think anyone will use the 401k money as an IV to keep the home they are in. Remember that you don’t just get to keep the money, it is essentially borrowing from the 401k so you have to pay it back and with interest. You may as well use your visa to do it. I think more people would just keep the 401k and lose the house.
Pabloescobar you make a very valid point. One which I conveniently ignored in all my thoughts about a 2010-2011 bottom. One of the reasons I have always thought about a bottom in that timeframe is based on previous cycles that were about 6 years in length. However the root causes behind depreciation cycles differ and thus the length of the cycle should be commensurate with the cure, not really with anything else. If indeed there is a huge overhang of ARM resets come 2011 and many of those are still indeed there when we actually get to 2011, then it is indeed LOGICAL to imply another wave of inventory and thus price pressure in that timeframe.
Speculation that people will lose homes before then or refinance out of the loans before then is just that speculation.
As with all my other posts regarding playing the guessing game of where the bottom will be, unemployment is the huge wildcard. If we get engineers, biotech guys, and lots of 6 figure salaried people looking for jobs or accepting lower paying jobs, then yeah we will see many of those homes going back to the bank before 2011… 460 billion is alot of lettuce man.
SD Realtor
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February 7, 2008 at 3:29 PM #149443
Eugene
ParticipantAs I mentioned before, I expect low-tier bottom in 2008/2009, high-tier bottom in 2010/2011.
baby boomers retiring over the next decade (as has been noted by astute observers)
Consider these scenarios
– San Diego baby boomer selling his house and switching to renting
– San Diego baby boomer selling his house and moving to Oklahoma
– Oklahoma baby boomer selling his house and moving to San DiegoWhich one makes most sense?
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February 7, 2008 at 3:29 PM #149699Participant
As I mentioned before, I expect low-tier bottom in 2008/2009, high-tier bottom in 2010/2011.
baby boomers retiring over the next decade (as has been noted by astute observers)
Consider these scenarios
– San Diego baby boomer selling his house and switching to renting
– San Diego baby boomer selling his house and moving to Oklahoma
– Oklahoma baby boomer selling his house and moving to San DiegoWhich one makes most sense?
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February 7, 2008 at 3:29 PM #149710Participant
As I mentioned before, I expect low-tier bottom in 2008/2009, high-tier bottom in 2010/2011.
baby boomers retiring over the next decade (as has been noted by astute observers)
Consider these scenarios
– San Diego baby boomer selling his house and switching to renting
– San Diego baby boomer selling his house and moving to Oklahoma
– Oklahoma baby boomer selling his house and moving to San DiegoWhich one makes most sense?
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February 7, 2008 at 3:29 PM #149726Participant
As I mentioned before, I expect low-tier bottom in 2008/2009, high-tier bottom in 2010/2011.
baby boomers retiring over the next decade (as has been noted by astute observers)
Consider these scenarios
– San Diego baby boomer selling his house and switching to renting
– San Diego baby boomer selling his house and moving to Oklahoma
– Oklahoma baby boomer selling his house and moving to San DiegoWhich one makes most sense?
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February 7, 2008 at 3:29 PM #149799Participant
As I mentioned before, I expect low-tier bottom in 2008/2009, high-tier bottom in 2010/2011.
baby boomers retiring over the next decade (as has been noted by astute observers)
Consider these scenarios
– San Diego baby boomer selling his house and switching to renting
– San Diego baby boomer selling his house and moving to Oklahoma
– Oklahoma baby boomer selling his house and moving to San DiegoWhich one makes most sense?
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February 7, 2008 at 2:51 PM #149674Participant
kewp great line on the 401ks draining themselves…
I honestly do not think anyone will use the 401k money as an IV to keep the home they are in. Remember that you don’t just get to keep the money, it is essentially borrowing from the 401k so you have to pay it back and with interest. You may as well use your visa to do it. I think more people would just keep the 401k and lose the house.
Pabloescobar you make a very valid point. One which I conveniently ignored in all my thoughts about a 2010-2011 bottom. One of the reasons I have always thought about a bottom in that timeframe is based on previous cycles that were about 6 years in length. However the root causes behind depreciation cycles differ and thus the length of the cycle should be commensurate with the cure, not really with anything else. If indeed there is a huge overhang of ARM resets come 2011 and many of those are still indeed there when we actually get to 2011, then it is indeed LOGICAL to imply another wave of inventory and thus price pressure in that timeframe.
Speculation that people will lose homes before then or refinance out of the loans before then is just that speculation.
As with all my other posts regarding playing the guessing game of where the bottom will be, unemployment is the huge wildcard. If we get engineers, biotech guys, and lots of 6 figure salaried people looking for jobs or accepting lower paying jobs, then yeah we will see many of those homes going back to the bank before 2011… 460 billion is alot of lettuce man.
SD Realtor
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February 7, 2008 at 2:51 PM #149686Participant
kewp great line on the 401ks draining themselves…
I honestly do not think anyone will use the 401k money as an IV to keep the home they are in. Remember that you don’t just get to keep the money, it is essentially borrowing from the 401k so you have to pay it back and with interest. You may as well use your visa to do it. I think more people would just keep the 401k and lose the house.
Pabloescobar you make a very valid point. One which I conveniently ignored in all my thoughts about a 2010-2011 bottom. One of the reasons I have always thought about a bottom in that timeframe is based on previous cycles that were about 6 years in length. However the root causes behind depreciation cycles differ and thus the length of the cycle should be commensurate with the cure, not really with anything else. If indeed there is a huge overhang of ARM resets come 2011 and many of those are still indeed there when we actually get to 2011, then it is indeed LOGICAL to imply another wave of inventory and thus price pressure in that timeframe.
Speculation that people will lose homes before then or refinance out of the loans before then is just that speculation.
As with all my other posts regarding playing the guessing game of where the bottom will be, unemployment is the huge wildcard. If we get engineers, biotech guys, and lots of 6 figure salaried people looking for jobs or accepting lower paying jobs, then yeah we will see many of those homes going back to the bank before 2011… 460 billion is alot of lettuce man.
SD Realtor
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February 7, 2008 at 2:51 PM #149701Participant
kewp great line on the 401ks draining themselves…
I honestly do not think anyone will use the 401k money as an IV to keep the home they are in. Remember that you don’t just get to keep the money, it is essentially borrowing from the 401k so you have to pay it back and with interest. You may as well use your visa to do it. I think more people would just keep the 401k and lose the house.
Pabloescobar you make a very valid point. One which I conveniently ignored in all my thoughts about a 2010-2011 bottom. One of the reasons I have always thought about a bottom in that timeframe is based on previous cycles that were about 6 years in length. However the root causes behind depreciation cycles differ and thus the length of the cycle should be commensurate with the cure, not really with anything else. If indeed there is a huge overhang of ARM resets come 2011 and many of those are still indeed there when we actually get to 2011, then it is indeed LOGICAL to imply another wave of inventory and thus price pressure in that timeframe.
Speculation that people will lose homes before then or refinance out of the loans before then is just that speculation.
As with all my other posts regarding playing the guessing game of where the bottom will be, unemployment is the huge wildcard. If we get engineers, biotech guys, and lots of 6 figure salaried people looking for jobs or accepting lower paying jobs, then yeah we will see many of those homes going back to the bank before 2011… 460 billion is alot of lettuce man.
SD Realtor
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February 7, 2008 at 2:51 PM #149773Participant
kewp great line on the 401ks draining themselves…
I honestly do not think anyone will use the 401k money as an IV to keep the home they are in. Remember that you don’t just get to keep the money, it is essentially borrowing from the 401k so you have to pay it back and with interest. You may as well use your visa to do it. I think more people would just keep the 401k and lose the house.
Pabloescobar you make a very valid point. One which I conveniently ignored in all my thoughts about a 2010-2011 bottom. One of the reasons I have always thought about a bottom in that timeframe is based on previous cycles that were about 6 years in length. However the root causes behind depreciation cycles differ and thus the length of the cycle should be commensurate with the cure, not really with anything else. If indeed there is a huge overhang of ARM resets come 2011 and many of those are still indeed there when we actually get to 2011, then it is indeed LOGICAL to imply another wave of inventory and thus price pressure in that timeframe.
Speculation that people will lose homes before then or refinance out of the loans before then is just that speculation.
As with all my other posts regarding playing the guessing game of where the bottom will be, unemployment is the huge wildcard. If we get engineers, biotech guys, and lots of 6 figure salaried people looking for jobs or accepting lower paying jobs, then yeah we will see many of those homes going back to the bank before 2011… 460 billion is alot of lettuce man.
SD Realtor
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February 7, 2008 at 12:37 PM #149588Guest
“About $460 billion of adjustable-rate mortgages are scheduled to reset this year, with the next spike in resets coming in 2011, when $420 billion in mortgages will adjust to new interest rates for the first time, according to New York-based analysts at Citigroup Inc.”
That prediction concerns me the most. Some here have suggested that 2010/2011 may be the time to buy. This could throw a wrench in that theory.
pabloesqobar
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February 7, 2008 at 12:37 PM #149603Guest
“About $460 billion of adjustable-rate mortgages are scheduled to reset this year, with the next spike in resets coming in 2011, when $420 billion in mortgages will adjust to new interest rates for the first time, according to New York-based analysts at Citigroup Inc.”
That prediction concerns me the most. Some here have suggested that 2010/2011 may be the time to buy. This could throw a wrench in that theory.
pabloesqobar
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February 7, 2008 at 12:37 PM #149619Guest
“About $460 billion of adjustable-rate mortgages are scheduled to reset this year, with the next spike in resets coming in 2011, when $420 billion in mortgages will adjust to new interest rates for the first time, according to New York-based analysts at Citigroup Inc.”
That prediction concerns me the most. Some here have suggested that 2010/2011 may be the time to buy. This could throw a wrench in that theory.
pabloesqobar
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February 7, 2008 at 12:37 PM #149689Guest
“About $460 billion of adjustable-rate mortgages are scheduled to reset this year, with the next spike in resets coming in 2011, when $420 billion in mortgages will adjust to new interest rates for the first time, according to New York-based analysts at Citigroup Inc.”
That prediction concerns me the most. Some here have suggested that 2010/2011 may be the time to buy. This could throw a wrench in that theory.
pabloesqobar
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February 7, 2008 at 2:15 PM #149372
SHILOH
Participantwith the next spike in resets coming in 2011
After this coming 2008 reset, since we are entering a credit/housing bust-driven recession…
could those scheduled 2011 resets also end up in forclosure before that? If we continue to lose inflated payscale jobs… If this market begins to recover around 2009 —how many more ARM forclosures will be dumped into the market…Last night the local Boston TV news did a somewhat balanced short piece on the glut of inventory “out there” in Boston metro — staying on the market for extended time…but a “great time to buy” if you don’t have a house to sell..and even better by this Spring, if you are a “qualified” buyer.
The above inferences combined with the baby boomers retiring over the next decade (as has been noted by astute observers) would seem to indicate a drop in either demand or ability to buy.
Who is going to buy all that inventory.
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February 7, 2008 at 2:19 PM #149381
nostradamus
ParticipantI tend to think that with the current housing situation, many of the people struggling with option-arm loans won’t make it to 2011. If they do manage to squeak by, the 2011 arm reset will knock ’em over. This is barring any kind of government intervention.
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February 7, 2008 at 2:22 PM #149391
blahblahblah
ParticipantDo you think people will drain their 401Ks to keep afloat in hopes that the housing market will bounce back? I’m worried that that will drag things out even longer…
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February 7, 2008 at 2:26 PM #149396Participant
I think the 401Ks are doing a fine job draining themselves!
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February 7, 2008 at 2:26 PM #149654Participant
I think the 401Ks are doing a fine job draining themselves!
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February 7, 2008 at 2:26 PM #149666Participant
I think the 401Ks are doing a fine job draining themselves!
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February 7, 2008 at 2:26 PM #149680Participant
I think the 401Ks are doing a fine job draining themselves!
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February 7, 2008 at 2:26 PM #149753Participant
I think the 401Ks are doing a fine job draining themselves!
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February 7, 2008 at 2:22 PM #149646Participant
Do you think people will drain their 401Ks to keep afloat in hopes that the housing market will bounce back? I’m worried that that will drag things out even longer…
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February 7, 2008 at 2:22 PM #149662Participant
Do you think people will drain their 401Ks to keep afloat in hopes that the housing market will bounce back? I’m worried that that will drag things out even longer…
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February 7, 2008 at 2:22 PM #149679Participant
Do you think people will drain their 401Ks to keep afloat in hopes that the housing market will bounce back? I’m worried that that will drag things out even longer…
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February 7, 2008 at 2:22 PM #149748Participant
Do you think people will drain their 401Ks to keep afloat in hopes that the housing market will bounce back? I’m worried that that will drag things out even longer…
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February 7, 2008 at 2:19 PM #149638Participant
I tend to think that with the current housing situation, many of the people struggling with option-arm loans won’t make it to 2011. If they do manage to squeak by, the 2011 arm reset will knock ’em over. This is barring any kind of government intervention.
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February 7, 2008 at 2:19 PM #149652Participant
I tend to think that with the current housing situation, many of the people struggling with option-arm loans won’t make it to 2011. If they do manage to squeak by, the 2011 arm reset will knock ’em over. This is barring any kind of government intervention.
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February 7, 2008 at 2:19 PM #149667Participant
I tend to think that with the current housing situation, many of the people struggling with option-arm loans won’t make it to 2011. If they do manage to squeak by, the 2011 arm reset will knock ’em over. This is barring any kind of government intervention.
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February 7, 2008 at 2:19 PM #149737Participant
I tend to think that with the current housing situation, many of the people struggling with option-arm loans won’t make it to 2011. If they do manage to squeak by, the 2011 arm reset will knock ’em over. This is barring any kind of government intervention.
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February 7, 2008 at 2:15 PM #149625Participant
with the next spike in resets coming in 2011
After this coming 2008 reset, since we are entering a credit/housing bust-driven recession…
could those scheduled 2011 resets also end up in forclosure before that? If we continue to lose inflated payscale jobs… If this market begins to recover around 2009 —how many more ARM forclosures will be dumped into the market…Last night the local Boston TV news did a somewhat balanced short piece on the glut of inventory “out there” in Boston metro — staying on the market for extended time…but a “great time to buy” if you don’t have a house to sell..and even better by this Spring, if you are a “qualified” buyer.
The above inferences combined with the baby boomers retiring over the next decade (as has been noted by astute observers) would seem to indicate a drop in either demand or ability to buy.
Who is going to buy all that inventory.
-
February 7, 2008 at 2:15 PM #149640Participant
with the next spike in resets coming in 2011
After this coming 2008 reset, since we are entering a credit/housing bust-driven recession…
could those scheduled 2011 resets also end up in forclosure before that? If we continue to lose inflated payscale jobs… If this market begins to recover around 2009 —how many more ARM forclosures will be dumped into the market…Last night the local Boston TV news did a somewhat balanced short piece on the glut of inventory “out there” in Boston metro — staying on the market for extended time…but a “great time to buy” if you don’t have a house to sell..and even better by this Spring, if you are a “qualified” buyer.
The above inferences combined with the baby boomers retiring over the next decade (as has been noted by astute observers) would seem to indicate a drop in either demand or ability to buy.
Who is going to buy all that inventory.
-
February 7, 2008 at 2:15 PM #149659Participant
with the next spike in resets coming in 2011
After this coming 2008 reset, since we are entering a credit/housing bust-driven recession…
could those scheduled 2011 resets also end up in forclosure before that? If we continue to lose inflated payscale jobs… If this market begins to recover around 2009 —how many more ARM forclosures will be dumped into the market…Last night the local Boston TV news did a somewhat balanced short piece on the glut of inventory “out there” in Boston metro — staying on the market for extended time…but a “great time to buy” if you don’t have a house to sell..and even better by this Spring, if you are a “qualified” buyer.
The above inferences combined with the baby boomers retiring over the next decade (as has been noted by astute observers) would seem to indicate a drop in either demand or ability to buy.
Who is going to buy all that inventory.
-
February 7, 2008 at 2:15 PM #149727Participant
with the next spike in resets coming in 2011
After this coming 2008 reset, since we are entering a credit/housing bust-driven recession…
could those scheduled 2011 resets also end up in forclosure before that? If we continue to lose inflated payscale jobs… If this market begins to recover around 2009 —how many more ARM forclosures will be dumped into the market…Last night the local Boston TV news did a somewhat balanced short piece on the glut of inventory “out there” in Boston metro — staying on the market for extended time…but a “great time to buy” if you don’t have a house to sell..and even better by this Spring, if you are a “qualified” buyer.
The above inferences combined with the baby boomers retiring over the next decade (as has been noted by astute observers) would seem to indicate a drop in either demand or ability to buy.
Who is going to buy all that inventory.
-
February 7, 2008 at 4:31 PM #149463Guest
Kewp: Regarding tossing the keys or refinancing before the 2011 deadline: I could be wrong, but most of these individuals obtained initial payments that they could afford. There is no reason why they wouldn’t (or shouldn’t) milk the affordability portion of the toxic loan as long as they can before tossing in the keys. Given the plain terms of the contract, they may as well hold out until it is no longer affordable – i.e., when the rates adjust, before walking away. I think the majority of foreclosures are from people that can’t afford their mortgage rather than people that make a sound business decision to walk away from a depreciating asset. That’s purely a guess on my part, tho. As far as refinancing, the above-cited article speaks to that as well: “The problem is, you can refinance an option ARM to a 30- year conventional loan at a 5.5 percent interest rate, and you’re still looking at your payment going up 150 percent,” Laperriere said. “That’s pretty ugly.” If that’s the case, it would appear that refinancing may be of little help to those not able to meet the impending increased monthly payments.
SD Realtor: I agree. We can only speculate as to what those who hold mortgages that adjust in 2011 will do. Unfortunately, this particular “cycle” is unprecedented and frankly a matter of first impression for this Country. We don’t have historical norms that we can rely on to make predictions. However, we can make logical predictions based on factors other than historical real estate cycles that could prove to be accurate.
For now, I’m socking it away and just waiting for some indication that I won’t be making a huge mistake when I decide to buy. That doesn’t appear to be anytime in the near future. In the meantime, it gives me pleasure to make my monthly rental payment. By the way, I told my property manager that I’d pay 6 months in advance for a reduction and was turned down. He said they usually only accept that offer from new renters that don’t have a history of timely payments with them.
pabloesqobar
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February 8, 2008 at 9:51 AM #149767Participant
Only few will be able to refinance once the recession hits and job losses start to percolate through the economy.
Prime ARMs defaults and credit card defaults will be the next two crisis.
Refinancing: Only for the privileged few
Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for.
By Les Christie, CNNMoney.com staff writer
February 8 2008: 10:58 AM EST
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?postversion=2008020810-
February 8, 2008 at 10:24 AM #149797
cr
ParticipantI heard the other day there are somewhere in the neighborhood of 5 times as many ARM’s (probably in the “prime” category) set to reset than have so far.
Anyone in/validate that, preferably with numbers? I’ve seen the Credit Suisse Chart, but that thing’s getting old, and I wouldn’t be surprised if a lot of the recent refi’s are adjustable too.
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February 8, 2008 at 10:24 AM #150054Participant
I heard the other day there are somewhere in the neighborhood of 5 times as many ARM’s (probably in the “prime” category) set to reset than have so far.
Anyone in/validate that, preferably with numbers? I’ve seen the Credit Suisse Chart, but that thing’s getting old, and I wouldn’t be surprised if a lot of the recent refi’s are adjustable too.
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February 8, 2008 at 10:24 AM #150066Participant
I heard the other day there are somewhere in the neighborhood of 5 times as many ARM’s (probably in the “prime” category) set to reset than have so far.
Anyone in/validate that, preferably with numbers? I’ve seen the Credit Suisse Chart, but that thing’s getting old, and I wouldn’t be surprised if a lot of the recent refi’s are adjustable too.
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February 8, 2008 at 10:24 AM #150083Participant
I heard the other day there are somewhere in the neighborhood of 5 times as many ARM’s (probably in the “prime” category) set to reset than have so far.
Anyone in/validate that, preferably with numbers? I’ve seen the Credit Suisse Chart, but that thing’s getting old, and I wouldn’t be surprised if a lot of the recent refi’s are adjustable too.
-
February 8, 2008 at 10:24 AM #150154Participant
I heard the other day there are somewhere in the neighborhood of 5 times as many ARM’s (probably in the “prime” category) set to reset than have so far.
Anyone in/validate that, preferably with numbers? I’ve seen the Credit Suisse Chart, but that thing’s getting old, and I wouldn’t be surprised if a lot of the recent refi’s are adjustable too.
-
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February 8, 2008 at 9:51 AM #150022Participant
Only few will be able to refinance once the recession hits and job losses start to percolate through the economy.
Prime ARMs defaults and credit card defaults will be the next two crisis.
Refinancing: Only for the privileged few
Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for.
By Les Christie, CNNMoney.com staff writer
February 8 2008: 10:58 AM EST
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?postversion=2008020810 -
February 8, 2008 at 9:51 AM #150035Participant
Only few will be able to refinance once the recession hits and job losses start to percolate through the economy.
Prime ARMs defaults and credit card defaults will be the next two crisis.
Refinancing: Only for the privileged few
Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for.
By Les Christie, CNNMoney.com staff writer
February 8 2008: 10:58 AM EST
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?postversion=2008020810 -
February 8, 2008 at 9:51 AM #150052Participant
Only few will be able to refinance once the recession hits and job losses start to percolate through the economy.
Prime ARMs defaults and credit card defaults will be the next two crisis.
Refinancing: Only for the privileged few
Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for.
By Les Christie, CNNMoney.com staff writer
February 8 2008: 10:58 AM EST
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?postversion=2008020810 -
February 8, 2008 at 9:51 AM #150124Participant
Only few will be able to refinance once the recession hits and job losses start to percolate through the economy.
Prime ARMs defaults and credit card defaults will be the next two crisis.
Refinancing: Only for the privileged few
Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for.
By Les Christie, CNNMoney.com staff writer
February 8 2008: 10:58 AM EST
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?postversion=2008020810 -
February 8, 2008 at 12:21 PM #149910Participant
pabloesqobar,
I think you are right. I’ll bet that folks will just sit tight until their payments reset, then just stop paying and wait for the sheriff to kick them out.
Heck, if enough people do this and the banks go under, could they keep the property for free? Would they have to pay property taxes?
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February 8, 2008 at 1:19 PM #149936
Anonymous
GuestThe option ARM loans are going to make sub prime loans look like child’s play. Almost no one in one of those loans stands a chance at keeping their home. Between the neg am. portion added to the initial loan balance, depreciation and a payment that increases over 2x when the loan resets, these folks are SCREWED. As a former wholesale mortgage AE, I don’t recall ever being able to help a borrower get out of the option ARM. If they were lucky enough to have enough equity, the deal died as soon as the borrower heard what their new payment would be. Most people could only afford the minimum payment. That’s how the $300k homes in Chula Vista turned into $1m homes. I chose not to work for a lender that offered the option ARM because it is guaranteed to turn the home owner into a home renter. I didn’t want to go to bed knowing that it would only be a matter of time before the borrower loses their home.
Go to google and type in “map of misery”. It is not pretty for SoCal.
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February 8, 2008 at 1:19 PM #150193Guest
The option ARM loans are going to make sub prime loans look like child’s play. Almost no one in one of those loans stands a chance at keeping their home. Between the neg am. portion added to the initial loan balance, depreciation and a payment that increases over 2x when the loan resets, these folks are SCREWED. As a former wholesale mortgage AE, I don’t recall ever being able to help a borrower get out of the option ARM. If they were lucky enough to have enough equity, the deal died as soon as the borrower heard what their new payment would be. Most people could only afford the minimum payment. That’s how the $300k homes in Chula Vista turned into $1m homes. I chose not to work for a lender that offered the option ARM because it is guaranteed to turn the home owner into a home renter. I didn’t want to go to bed knowing that it would only be a matter of time before the borrower loses their home.
Go to google and type in “map of misery”. It is not pretty for SoCal.
-
February 8, 2008 at 1:19 PM #150206Guest
The option ARM loans are going to make sub prime loans look like child’s play. Almost no one in one of those loans stands a chance at keeping their home. Between the neg am. portion added to the initial loan balance, depreciation and a payment that increases over 2x when the loan resets, these folks are SCREWED. As a former wholesale mortgage AE, I don’t recall ever being able to help a borrower get out of the option ARM. If they were lucky enough to have enough equity, the deal died as soon as the borrower heard what their new payment would be. Most people could only afford the minimum payment. That’s how the $300k homes in Chula Vista turned into $1m homes. I chose not to work for a lender that offered the option ARM because it is guaranteed to turn the home owner into a home renter. I didn’t want to go to bed knowing that it would only be a matter of time before the borrower loses their home.
Go to google and type in “map of misery”. It is not pretty for SoCal.
-
February 8, 2008 at 1:19 PM #150220Guest
The option ARM loans are going to make sub prime loans look like child’s play. Almost no one in one of those loans stands a chance at keeping their home. Between the neg am. portion added to the initial loan balance, depreciation and a payment that increases over 2x when the loan resets, these folks are SCREWED. As a former wholesale mortgage AE, I don’t recall ever being able to help a borrower get out of the option ARM. If they were lucky enough to have enough equity, the deal died as soon as the borrower heard what their new payment would be. Most people could only afford the minimum payment. That’s how the $300k homes in Chula Vista turned into $1m homes. I chose not to work for a lender that offered the option ARM because it is guaranteed to turn the home owner into a home renter. I didn’t want to go to bed knowing that it would only be a matter of time before the borrower loses their home.
Go to google and type in “map of misery”. It is not pretty for SoCal.
-
February 8, 2008 at 1:19 PM #150290Guest
The option ARM loans are going to make sub prime loans look like child’s play. Almost no one in one of those loans stands a chance at keeping their home. Between the neg am. portion added to the initial loan balance, depreciation and a payment that increases over 2x when the loan resets, these folks are SCREWED. As a former wholesale mortgage AE, I don’t recall ever being able to help a borrower get out of the option ARM. If they were lucky enough to have enough equity, the deal died as soon as the borrower heard what their new payment would be. Most people could only afford the minimum payment. That’s how the $300k homes in Chula Vista turned into $1m homes. I chose not to work for a lender that offered the option ARM because it is guaranteed to turn the home owner into a home renter. I didn’t want to go to bed knowing that it would only be a matter of time before the borrower loses their home.
Go to google and type in “map of misery”. It is not pretty for SoCal.
-
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February 8, 2008 at 12:21 PM #150168Participant
pabloesqobar,
I think you are right. I’ll bet that folks will just sit tight until their payments reset, then just stop paying and wait for the sheriff to kick them out.
Heck, if enough people do this and the banks go under, could they keep the property for free? Would they have to pay property taxes?
-
February 8, 2008 at 12:21 PM #150180Participant
pabloesqobar,
I think you are right. I’ll bet that folks will just sit tight until their payments reset, then just stop paying and wait for the sheriff to kick them out.
Heck, if enough people do this and the banks go under, could they keep the property for free? Would they have to pay property taxes?
-
February 8, 2008 at 12:21 PM #150195Participant
pabloesqobar,
I think you are right. I’ll bet that folks will just sit tight until their payments reset, then just stop paying and wait for the sheriff to kick them out.
Heck, if enough people do this and the banks go under, could they keep the property for free? Would they have to pay property taxes?
-
February 8, 2008 at 12:21 PM #150269Participant
pabloesqobar,
I think you are right. I’ll bet that folks will just sit tight until their payments reset, then just stop paying and wait for the sheriff to kick them out.
Heck, if enough people do this and the banks go under, could they keep the property for free? Would they have to pay property taxes?
-
-
February 7, 2008 at 4:31 PM #149718Guest
Kewp: Regarding tossing the keys or refinancing before the 2011 deadline: I could be wrong, but most of these individuals obtained initial payments that they could afford. There is no reason why they wouldn’t (or shouldn’t) milk the affordability portion of the toxic loan as long as they can before tossing in the keys. Given the plain terms of the contract, they may as well hold out until it is no longer affordable – i.e., when the rates adjust, before walking away. I think the majority of foreclosures are from people that can’t afford their mortgage rather than people that make a sound business decision to walk away from a depreciating asset. That’s purely a guess on my part, tho. As far as refinancing, the above-cited article speaks to that as well: “The problem is, you can refinance an option ARM to a 30- year conventional loan at a 5.5 percent interest rate, and you’re still looking at your payment going up 150 percent,” Laperriere said. “That’s pretty ugly.” If that’s the case, it would appear that refinancing may be of little help to those not able to meet the impending increased monthly payments.
SD Realtor: I agree. We can only speculate as to what those who hold mortgages that adjust in 2011 will do. Unfortunately, this particular “cycle” is unprecedented and frankly a matter of first impression for this Country. We don’t have historical norms that we can rely on to make predictions. However, we can make logical predictions based on factors other than historical real estate cycles that could prove to be accurate.
For now, I’m socking it away and just waiting for some indication that I won’t be making a huge mistake when I decide to buy. That doesn’t appear to be anytime in the near future. In the meantime, it gives me pleasure to make my monthly rental payment. By the way, I told my property manager that I’d pay 6 months in advance for a reduction and was turned down. He said they usually only accept that offer from new renters that don’t have a history of timely payments with them.
pabloesqobar
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February 7, 2008 at 4:31 PM #149730Guest
Kewp: Regarding tossing the keys or refinancing before the 2011 deadline: I could be wrong, but most of these individuals obtained initial payments that they could afford. There is no reason why they wouldn’t (or shouldn’t) milk the affordability portion of the toxic loan as long as they can before tossing in the keys. Given the plain terms of the contract, they may as well hold out until it is no longer affordable – i.e., when the rates adjust, before walking away. I think the majority of foreclosures are from people that can’t afford their mortgage rather than people that make a sound business decision to walk away from a depreciating asset. That’s purely a guess on my part, tho. As far as refinancing, the above-cited article speaks to that as well: “The problem is, you can refinance an option ARM to a 30- year conventional loan at a 5.5 percent interest rate, and you’re still looking at your payment going up 150 percent,” Laperriere said. “That’s pretty ugly.” If that’s the case, it would appear that refinancing may be of little help to those not able to meet the impending increased monthly payments.
SD Realtor: I agree. We can only speculate as to what those who hold mortgages that adjust in 2011 will do. Unfortunately, this particular “cycle” is unprecedented and frankly a matter of first impression for this Country. We don’t have historical norms that we can rely on to make predictions. However, we can make logical predictions based on factors other than historical real estate cycles that could prove to be accurate.
For now, I’m socking it away and just waiting for some indication that I won’t be making a huge mistake when I decide to buy. That doesn’t appear to be anytime in the near future. In the meantime, it gives me pleasure to make my monthly rental payment. By the way, I told my property manager that I’d pay 6 months in advance for a reduction and was turned down. He said they usually only accept that offer from new renters that don’t have a history of timely payments with them.
pabloesqobar
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February 7, 2008 at 4:31 PM #149747Guest
Kewp: Regarding tossing the keys or refinancing before the 2011 deadline: I could be wrong, but most of these individuals obtained initial payments that they could afford. There is no reason why they wouldn’t (or shouldn’t) milk the affordability portion of the toxic loan as long as they can before tossing in the keys. Given the plain terms of the contract, they may as well hold out until it is no longer affordable – i.e., when the rates adjust, before walking away. I think the majority of foreclosures are from people that can’t afford their mortgage rather than people that make a sound business decision to walk away from a depreciating asset. That’s purely a guess on my part, tho. As far as refinancing, the above-cited article speaks to that as well: “The problem is, you can refinance an option ARM to a 30- year conventional loan at a 5.5 percent interest rate, and you’re still looking at your payment going up 150 percent,” Laperriere said. “That’s pretty ugly.” If that’s the case, it would appear that refinancing may be of little help to those not able to meet the impending increased monthly payments.
SD Realtor: I agree. We can only speculate as to what those who hold mortgages that adjust in 2011 will do. Unfortunately, this particular “cycle” is unprecedented and frankly a matter of first impression for this Country. We don’t have historical norms that we can rely on to make predictions. However, we can make logical predictions based on factors other than historical real estate cycles that could prove to be accurate.
For now, I’m socking it away and just waiting for some indication that I won’t be making a huge mistake when I decide to buy. That doesn’t appear to be anytime in the near future. In the meantime, it gives me pleasure to make my monthly rental payment. By the way, I told my property manager that I’d pay 6 months in advance for a reduction and was turned down. He said they usually only accept that offer from new renters that don’t have a history of timely payments with them.
pabloesqobar
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February 7, 2008 at 4:31 PM #149819Guest
Kewp: Regarding tossing the keys or refinancing before the 2011 deadline: I could be wrong, but most of these individuals obtained initial payments that they could afford. There is no reason why they wouldn’t (or shouldn’t) milk the affordability portion of the toxic loan as long as they can before tossing in the keys. Given the plain terms of the contract, they may as well hold out until it is no longer affordable – i.e., when the rates adjust, before walking away. I think the majority of foreclosures are from people that can’t afford their mortgage rather than people that make a sound business decision to walk away from a depreciating asset. That’s purely a guess on my part, tho. As far as refinancing, the above-cited article speaks to that as well: “The problem is, you can refinance an option ARM to a 30- year conventional loan at a 5.5 percent interest rate, and you’re still looking at your payment going up 150 percent,” Laperriere said. “That’s pretty ugly.” If that’s the case, it would appear that refinancing may be of little help to those not able to meet the impending increased monthly payments.
SD Realtor: I agree. We can only speculate as to what those who hold mortgages that adjust in 2011 will do. Unfortunately, this particular “cycle” is unprecedented and frankly a matter of first impression for this Country. We don’t have historical norms that we can rely on to make predictions. However, we can make logical predictions based on factors other than historical real estate cycles that could prove to be accurate.
For now, I’m socking it away and just waiting for some indication that I won’t be making a huge mistake when I decide to buy. That doesn’t appear to be anytime in the near future. In the meantime, it gives me pleasure to make my monthly rental payment. By the way, I told my property manager that I’d pay 6 months in advance for a reduction and was turned down. He said they usually only accept that offer from new renters that don’t have a history of timely payments with them.
pabloesqobar
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