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Home › Forums › Housing › I am shocked. Shocked! Conforming limits going back up.

Viewing 15 posts - 31 through 45 (of 57 total)
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  • November 18, 2011 at 2:43 PM #733227
    urbanrealtor
    Participant

    [quote=Rich Toscano][quote=SK in CV][quote=Rich Toscano]But this actually doesn’t really matter. Even if rates went up but home prices didn’t go down, I’d still be able to offer a lower-than-market rate, which would presumably increase the market price for the home from what it would have been with a non-assumable loan.

    [/quote]

    But, on the other hand, if rates went up and prices did fall, you’re upside down and the value of that assumable loan just disappeared. (Maybe. I have no idea if upside down loans are assumable. I’m guessing that an appraisal is part of the assumption process. Though I’m also assuming that reasonable standards are included in FHA rules. What am I thinking?)[/quote]

    Good point, SK, but on the other hand, having an assumable loan should increase the value of the home from what it otherwise would have been… so maybe you won’t be upside-down after all?[/quote]

    Thats actually a good point.
    A property with a FMV of 200k might sell for $250k if it meant lower payments and no new appraisal. Honestly, its so rare these days that I really don’t know how loan assumptions work.

    November 18, 2011 at 2:45 PM #733228
    Rich Toscano
    Keymaster

    [quote=urbanrealtor]
    Instead, you just need to run faster than the dude next to you (maybe by putting your last bullet in his leg).
    [/quote]

    Ha! Well done… you are truly the master of callbacks.

    I have never bought into the “we’re better than everyone else so everything will be ok” argument. For one, I think we’re a lot less better than most people think (the mkts just haven’t realized it yet). Even if that’s wrong, the zombies are tireless and catch up with everyone eventually. (Which is to say, I don’t believe that our creditors will let us endlessly rack up unsustainable amounts of debt just because other countries also have debt).

    That said, while I feel confident that our debt situation is unsustainable and will come to a bad end at some point, I don’t pretend to know for sure what’s going to happen (as you point out, there is too little prologue). I just think that the prospect of much higher rates is a very good possibility given the circumstances, and I think it’s worth it to try to protect myself against that outcome.

    November 18, 2011 at 2:46 PM #733229
    urbanrealtor
    Participant

    I just talked to a lender and some assumptions require new appraisals.

    Ergo, I don’t really know how much that assumability is worth as a general rule.

    November 18, 2011 at 2:50 PM #733230
    urbanrealtor
    Participant

    [quote=Rich Toscano] I just think that the prospect of much higher rates is a very good possibility given the circumstances, and I think it’s worth it to try to protect myself against that outcome.[/quote]

    So like guns and bags of grain?

    I am assuming that such preparation would be heavy in commodities?

    Or more like foreign currency?

    November 18, 2011 at 2:57 PM #733231
    Rich Toscano
    Keymaster

    Talking about the assumable loan, here…

    November 18, 2011 at 2:59 PM #733232
    urbanrealtor
    Participant

    [quote=Rich Toscano]Talking about the assumable loan, here…[/quote]

    Fine.
    No guns.
    Party pooper.

    November 18, 2011 at 3:19 PM #733233
    sdrealtor
    Participant

    [quote=urbanrealtor]I just talked to a lender and some assumptions require new appraisals.

    Ergo, I don’t really know how much that assumability is worth as a general rule.[/quote]

    Unless its BG’s assumable OPTION ARM loan which always has infinite value. Just ask her.

    November 18, 2011 at 4:09 PM #733243
    AK
    Participant

    This thread on activerain suggests that an appraisal won’t be required, at least by HUD. I’d imagine the lender could set their own requirements:

    http://activerain.com/blogsview/1195842/fha-loan-assumption-process-how-it-works-

    And now for the obligatory “moral hazard” issue … According to HUD it’s possible to assume an FHA mortgage, default, then request a loan modification almost immediately:

    http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/faqassum

    November 18, 2011 at 5:59 PM #733249
    patientrenter
    Participant

    FHA loans: Another few trillion dollars for the Housing-Finance complex. All told, it actually eats more resources than the Military-Industrial complex we are all familiar with.

    November 18, 2011 at 9:45 PM #733252
    urbanrealtor
    Participant

    [quote=sdrealtor][quote=urbanrealtor]I just talked to a lender and some assumptions require new appraisals.

    Ergo, I don’t really know how much that assumability is worth as a general rule.[/quote]

    Unless its BG’s assumable OPTION ARM loan which always has infinite value. Just ask her.[/quote]

    Yeah.
    You hate BG and she’s dumb.
    You’re always right.
    We get it.

    November 19, 2011 at 8:32 AM #733255
    sdrealtor
    Participant

    For the record I dont think BG is dumb. To the contrary she’s pretty bright and never bought into the bubble. She’s just more than a bit loony.

    The dumb ones are well educated real estate licensees who bought into the bubble that should have known better and now sit a few hundred K underwater. I know several of those folks and I’m sure you do too.

    November 19, 2011 at 9:14 AM #733258
    bearishgurl
    Participant

    I didn’t succumb to “cash out” during the “bubble” because I’ve seen this whole RE cycle thing occur twice before in my life (actually 3x but I was in college during the 1st one) and I didn’t buy during those “bubbles” either. I was also fortunate initially get into the RE market BEFORE the long “exorbitant-interest-rate-crash” and also fortunate to buy again near the bottom of “Gen-Dyn-leaving-SD-bust.” I was taught about RE cycles many, many years ago in “RE Principles class.”

    Being “well-educated” in subjects that are not related to RE will NOT HELP an agent or principal in navigating the street and the players on it. A college degree will NOT TEACH you what to do to successfully consummate RE deals. ONLY intimate product knowledge combined with a good RE education and more importantly, experience on the street will enable an agent/principal to get a “lay of the land” enough to know what they are doing. If a new agent is fortunate enough to mentor with or assist a very experienced agent for the first year or so …. all the better.

    edit: Also bought during the “Gulf war crisis malaise” and that turned out to be a good investment as well. IMO, the trick to remaining solvent with above-water properties is to refrain from extracting equity, esp large amts.

    November 19, 2011 at 9:22 AM #733259
    bearishgurl
    Participant

    [quote=sdrealtor]For the record I dont think BG is dumb. To the contrary she’s pretty bright and never bought into the bubble. She’s just more than a bit loony…[/quote]

    For the Piggs Saturday morning viewing pleasure, I present:

    http://oldtoons.blogspot.com/2009/10/dumb-like-fox.html

    November 19, 2011 at 11:30 AM #733261
    urbanrealtor
    Participant

    This sums up my thoughts on this conversation.

    http://www.garfunkelandoates.com/music/clips/18/this-party-took-a-turn-for-the-douche-official/

    Not really but I just like linking to that video.

    November 19, 2011 at 11:57 AM #733262
    bearishgurl
    Participant

    [quote=urbanrealtor]This sums up my thoughts on this conversation.

    http://www.garfunkelandoates.com/music/clips/18/this-party-took-a-turn-for-the-douche-official/

    Not really but I just like linking to that video.[/quote]

    Lol, UR, how did all my kids’ FB “friends” end up in there??

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