HELOC with Prime minus 0.76%

[DaCounselor]

“So are you saying that a regular no cash out refi (not a HELOC) of an original loan is also a non – recourse loan???”
__________________________________

I don’t know of a specific ruling in CA that states “a no-cash-out refi of a purchase money loan is a non-recourse loan.” I also have not seen a specific ruling that suggests a no-cash-out refi is automatically a recourse loan. The cases I have seen are not precisely on point but do seem to suggest that a determining factor is cash-out or no-cash-out.

The legislative intent of the governing statutory section – CCP 580b – supports a public policy against deficiency judgments. The section refers to the financing of the “purchase price” – which can be construed to include a no-cash-out refi. That’s what a no-cash-out refi is, after all – financing the purchase price.

[patb]

“I figured that at 25 basis points per raise, it will take them 8 meetings to raise rates from 2% now to 4% and they have 6 meetings a year. This will give me one year and 4 months. Also I think they can’t start raising rates until after the election. So I am safe for at least two years.”

Don’t be a tool.

While the Fed Open Market Committee sets Fed Funds rates, who sets Prime?

Your BANK!!!!!

They can raise Prime overnight by as much as they want.

LIBOR is an index between banks, that changes when the big banks
change rates.

[patb]

“I figured that at 25 basis points per raise, it will take them 8 meetings to raise rates from 2% now to 4% and they have 6 meetings a year. This will give me one year and 4 months. Also I think they can’t start raising rates until after the election. So I am safe for at least two years.”

Don’t be a tool.

While the Fed Open Market Committee sets Fed Funds rates, who sets Prime?

Your BANK!!!!!

They can raise Prime overnight by as much as they want.

LIBOR is an index between banks, that changes when the big banks
change rates.

[patb]

“I figured that at 25 basis points per raise, it will take them 8 meetings to raise rates from 2% now to 4% and they have 6 meetings a year. This will give me one year and 4 months. Also I think they can’t start raising rates until after the election. So I am safe for at least two years.”

Don’t be a tool.

While the Fed Open Market Committee sets Fed Funds rates, who sets Prime?

Your BANK!!!!!

They can raise Prime overnight by as much as they want.

LIBOR is an index between banks, that changes when the big banks
change rates.

[patb]

“I figured that at 25 basis points per raise, it will take them 8 meetings to raise rates from 2% now to 4% and they have 6 meetings a year. This will give me one year and 4 months. Also I think they can’t start raising rates until after the election. So I am safe for at least two years.”

Don’t be a tool.

While the Fed Open Market Committee sets Fed Funds rates, who sets Prime?

Your BANK!!!!!

They can raise Prime overnight by as much as they want.

LIBOR is an index between banks, that changes when the big banks
change rates.

[patb]

“I figured that at 25 basis points per raise, it will take them 8 meetings to raise rates from 2% now to 4% and they have 6 meetings a year. This will give me one year and 4 months. Also I think they can’t start raising rates until after the election. So I am safe for at least two years.”

Don’t be a tool.

While the Fed Open Market Committee sets Fed Funds rates, who sets Prime?

Your BANK!!!!!

They can raise Prime overnight by as much as they want.

LIBOR is an index between banks, that changes when the big banks
change rates.

[cv2]

Thanks, DaCounselor.

In my case, I have money in the bank to pay of this loan if I see fit. I saved enough to buy another house but with the housing bubble, I did not buy and started to focus on paying off debts.

I thought although prime rate is set by WSJ, it is always Fed rate plus 3%. So currently fed fund rate is 2% and prime rate is 5%. Is this 3% margin always the case?

[cv2]

Thanks, DaCounselor.

In my case, I have money in the bank to pay of this loan if I see fit. I saved enough to buy another house but with the housing bubble, I did not buy and started to focus on paying off debts.

I thought although prime rate is set by WSJ, it is always Fed rate plus 3%. So currently fed fund rate is 2% and prime rate is 5%. Is this 3% margin always the case?

[cv2]

Thanks, DaCounselor.

In my case, I have money in the bank to pay of this loan if I see fit. I saved enough to buy another house but with the housing bubble, I did not buy and started to focus on paying off debts.

I thought although prime rate is set by WSJ, it is always Fed rate plus 3%. So currently fed fund rate is 2% and prime rate is 5%. Is this 3% margin always the case?

[cv2]

Thanks, DaCounselor.

In my case, I have money in the bank to pay of this loan if I see fit. I saved enough to buy another house but with the housing bubble, I did not buy and started to focus on paying off debts.

I thought although prime rate is set by WSJ, it is always Fed rate plus 3%. So currently fed fund rate is 2% and prime rate is 5%. Is this 3% margin always the case?

[cv2]

Thanks, DaCounselor.

In my case, I have money in the bank to pay of this loan if I see fit. I saved enough to buy another house but with the housing bubble, I did not buy and started to focus on paying off debts.

I thought although prime rate is set by WSJ, it is always Fed rate plus 3%. So currently fed fund rate is 2% and prime rate is 5%. Is this 3% margin always the case?

[DaCounselor]

If you’re looking at a loan that is indexed to the Prime rate, you may want to identify with specificity who’s Prime rate is being used. Every bank sets their own Prime rate – but for practical purposes I think most big banks offer the same or similar Prime rate. The WSJ publishes a Prime rate that is the rate being offered by the nation’s biggest banks – this is the WSJ Prime and may be the Prime index for alot of loans.

I don’t know of any mandate that Prime must have a +3% margin over the FFR and/or that Prime must move lockstep with the FFR, but that seems to be the case, at least recently. I don’t know about historically. I think you are probably fairly safe operating with the assumption that a +3% margin will remain in place.

For what it’s worth (which ain’t much) I believe we are looking at a low FFR and Prime for the next few years at least. I think there is a 50% probability of the FFR/Prime going down a bit more before going up. There is also an international effort underway to reduce LIBOR down into a tighter position with the FFR.

[DaCounselor]

If you’re looking at a loan that is indexed to the Prime rate, you may want to identify with specificity who’s Prime rate is being used. Every bank sets their own Prime rate – but for practical purposes I think most big banks offer the same or similar Prime rate. The WSJ publishes a Prime rate that is the rate being offered by the nation’s biggest banks – this is the WSJ Prime and may be the Prime index for alot of loans.

I don’t know of any mandate that Prime must have a +3% margin over the FFR and/or that Prime must move lockstep with the FFR, but that seems to be the case, at least recently. I don’t know about historically. I think you are probably fairly safe operating with the assumption that a +3% margin will remain in place.

For what it’s worth (which ain’t much) I believe we are looking at a low FFR and Prime for the next few years at least. I think there is a 50% probability of the FFR/Prime going down a bit more before going up. There is also an international effort underway to reduce LIBOR down into a tighter position with the FFR.

[DaCounselor]

If you’re looking at a loan that is indexed to the Prime rate, you may want to identify with specificity who’s Prime rate is being used. Every bank sets their own Prime rate – but for practical purposes I think most big banks offer the same or similar Prime rate. The WSJ publishes a Prime rate that is the rate being offered by the nation’s biggest banks – this is the WSJ Prime and may be the Prime index for alot of loans.

I don’t know of any mandate that Prime must have a +3% margin over the FFR and/or that Prime must move lockstep with the FFR, but that seems to be the case, at least recently. I don’t know about historically. I think you are probably fairly safe operating with the assumption that a +3% margin will remain in place.

For what it’s worth (which ain’t much) I believe we are looking at a low FFR and Prime for the next few years at least. I think there is a 50% probability of the FFR/Prime going down a bit more before going up. There is also an international effort underway to reduce LIBOR down into a tighter position with the FFR.

[DaCounselor]

If you’re looking at a loan that is indexed to the Prime rate, you may want to identify with specificity who’s Prime rate is being used. Every bank sets their own Prime rate – but for practical purposes I think most big banks offer the same or similar Prime rate. The WSJ publishes a Prime rate that is the rate being offered by the nation’s biggest banks – this is the WSJ Prime and may be the Prime index for alot of loans.

I don’t know of any mandate that Prime must have a +3% margin over the FFR and/or that Prime must move lockstep with the FFR, but that seems to be the case, at least recently. I don’t know about historically. I think you are probably fairly safe operating with the assumption that a +3% margin will remain in place.

For what it’s worth (which ain’t much) I believe we are looking at a low FFR and Prime for the next few years at least. I think there is a 50% probability of the FFR/Prime going down a bit more before going up. There is also an international effort underway to reduce LIBOR down into a tighter position with the FFR.

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