Is the High End “Correction” Just Starting ?

[sdnerd]

[quote=arnie]When an arm loan resets does the lender look at LTV ratios when determining the new interest rate? If so, I can’t imagine a lot of people getting more attractive rates if the homeowner has lost a significant amount of equity. Doesn’t a high LTV, by definition, make it a more risky loan?[/quote]

You adjust on an index, + whatever your base is.

[Anonymous]

I agree monthly cost is what a lot of people look at–but how many people who bought in the bubble years (unless they rolled up bubble money) have a mortgage that is at or cheaper than comparable rent unless it is IO or neg-am. A ‘regular’ loan would put you at 2 or 3 times the rent in many cases–for the same living standard. There just weren’t that many millionaires with cash that wanted to live in 4s, Carmel or Scripps, were there?

[Anonymous]

I agree monthly cost is what a lot of people look at–but how many people who bought in the bubble years (unless they rolled up bubble money) have a mortgage that is at or cheaper than comparable rent unless it is IO or neg-am. A ‘regular’ loan would put you at 2 or 3 times the rent in many cases–for the same living standard. There just weren’t that many millionaires with cash that wanted to live in 4s, Carmel or Scripps, were there?

[Anonymous]

I agree monthly cost is what a lot of people look at–but how many people who bought in the bubble years (unless they rolled up bubble money) have a mortgage that is at or cheaper than comparable rent unless it is IO or neg-am. A ‘regular’ loan would put you at 2 or 3 times the rent in many cases–for the same living standard. There just weren’t that many millionaires with cash that wanted to live in 4s, Carmel or Scripps, were there?

[Anonymous]

I agree monthly cost is what a lot of people look at–but how many people who bought in the bubble years (unless they rolled up bubble money) have a mortgage that is at or cheaper than comparable rent unless it is IO or neg-am. A ‘regular’ loan would put you at 2 or 3 times the rent in many cases–for the same living standard. There just weren’t that many millionaires with cash that wanted to live in 4s, Carmel or Scripps, were there?

[Anonymous]

I agree monthly cost is what a lot of people look at–but how many people who bought in the bubble years (unless they rolled up bubble money) have a mortgage that is at or cheaper than comparable rent unless it is IO or neg-am. A ‘regular’ loan would put you at 2 or 3 times the rent in many cases–for the same living standard. There just weren’t that many millionaires with cash that wanted to live in 4s, Carmel or Scripps, were there?

[Username]

[quote=sdnerd][quote=arnie]When an arm loan resets does the lender look at LTV ratios when determining the new interest rate? If so, I can’t imagine a lot of people getting more attractive rates if the homeowner has lost a significant amount of equity. Doesn’t a high LTV, by definition, make it a more risky loan?[/quote]

You adjust on an index, + whatever your base is. [/quote]

When I worked for a broker (a shady broker at that) I was in charge of making sure the paperwork reflected the correct information. The terminology is margin plus index equals fully indexed rate. I was in charge of calling all the lenders who have since gone out of business to verify the margin and for sub prime the average margin was 6% plus LIBOR (London Inter Bank Offer Rate) so even if LIBOR was 0.0% you still go from a 5% to a 6%. I’m sure the margin wasn’t as high on conforming loans. Then again why would a broker go to a conforming lender when there were so many fly by night ones with cool sounding names (BNC, AMC (argent), WMC, D-1, Oak Street, First Franklin, IRES, MILA, Accredited, etc) with hot young female AE’s giving away pens, clocks, mini-basket ball hoops, cell phone lawn chairs (no joke) with their companies logo on it? Plus they wanted to maximize their own paycheck not the well being of their borrower they met one night telemarketing.

I wonder if I’m going to hell for working for them even though I didn’t sell loans?

[Username]

[quote=sdnerd][quote=arnie]When an arm loan resets does the lender look at LTV ratios when determining the new interest rate? If so, I can’t imagine a lot of people getting more attractive rates if the homeowner has lost a significant amount of equity. Doesn’t a high LTV, by definition, make it a more risky loan?[/quote]

You adjust on an index, + whatever your base is. [/quote]

When I worked for a broker (a shady broker at that) I was in charge of making sure the paperwork reflected the correct information. The terminology is margin plus index equals fully indexed rate. I was in charge of calling all the lenders who have since gone out of business to verify the margin and for sub prime the average margin was 6% plus LIBOR (London Inter Bank Offer Rate) so even if LIBOR was 0.0% you still go from a 5% to a 6%. I’m sure the margin wasn’t as high on conforming loans. Then again why would a broker go to a conforming lender when there were so many fly by night ones with cool sounding names (BNC, AMC (argent), WMC, D-1, Oak Street, First Franklin, IRES, MILA, Accredited, etc) with hot young female AE’s giving away pens, clocks, mini-basket ball hoops, cell phone lawn chairs (no joke) with their companies logo on it? Plus they wanted to maximize their own paycheck not the well being of their borrower they met one night telemarketing.

I wonder if I’m going to hell for working for them even though I didn’t sell loans?

[Username]

[quote=sdnerd][quote=arnie]When an arm loan resets does the lender look at LTV ratios when determining the new interest rate? If so, I can’t imagine a lot of people getting more attractive rates if the homeowner has lost a significant amount of equity. Doesn’t a high LTV, by definition, make it a more risky loan?[/quote]

You adjust on an index, + whatever your base is. [/quote]

When I worked for a broker (a shady broker at that) I was in charge of making sure the paperwork reflected the correct information. The terminology is margin plus index equals fully indexed rate. I was in charge of calling all the lenders who have since gone out of business to verify the margin and for sub prime the average margin was 6% plus LIBOR (London Inter Bank Offer Rate) so even if LIBOR was 0.0% you still go from a 5% to a 6%. I’m sure the margin wasn’t as high on conforming loans. Then again why would a broker go to a conforming lender when there were so many fly by night ones with cool sounding names (BNC, AMC (argent), WMC, D-1, Oak Street, First Franklin, IRES, MILA, Accredited, etc) with hot young female AE’s giving away pens, clocks, mini-basket ball hoops, cell phone lawn chairs (no joke) with their companies logo on it? Plus they wanted to maximize their own paycheck not the well being of their borrower they met one night telemarketing.

I wonder if I’m going to hell for working for them even though I didn’t sell loans?

[Username]

[quote=sdnerd][quote=arnie]When an arm loan resets does the lender look at LTV ratios when determining the new interest rate? If so, I can’t imagine a lot of people getting more attractive rates if the homeowner has lost a significant amount of equity. Doesn’t a high LTV, by definition, make it a more risky loan?[/quote]

You adjust on an index, + whatever your base is. [/quote]

When I worked for a broker (a shady broker at that) I was in charge of making sure the paperwork reflected the correct information. The terminology is margin plus index equals fully indexed rate. I was in charge of calling all the lenders who have since gone out of business to verify the margin and for sub prime the average margin was 6% plus LIBOR (London Inter Bank Offer Rate) so even if LIBOR was 0.0% you still go from a 5% to a 6%. I’m sure the margin wasn’t as high on conforming loans. Then again why would a broker go to a conforming lender when there were so many fly by night ones with cool sounding names (BNC, AMC (argent), WMC, D-1, Oak Street, First Franklin, IRES, MILA, Accredited, etc) with hot young female AE’s giving away pens, clocks, mini-basket ball hoops, cell phone lawn chairs (no joke) with their companies logo on it? Plus they wanted to maximize their own paycheck not the well being of their borrower they met one night telemarketing.

I wonder if I’m going to hell for working for them even though I didn’t sell loans?

[Username]

[quote=sdnerd][quote=arnie]When an arm loan resets does the lender look at LTV ratios when determining the new interest rate? If so, I can’t imagine a lot of people getting more attractive rates if the homeowner has lost a significant amount of equity. Doesn’t a high LTV, by definition, make it a more risky loan?[/quote]

You adjust on an index, + whatever your base is. [/quote]

When I worked for a broker (a shady broker at that) I was in charge of making sure the paperwork reflected the correct information. The terminology is margin plus index equals fully indexed rate. I was in charge of calling all the lenders who have since gone out of business to verify the margin and for sub prime the average margin was 6% plus LIBOR (London Inter Bank Offer Rate) so even if LIBOR was 0.0% you still go from a 5% to a 6%. I’m sure the margin wasn’t as high on conforming loans. Then again why would a broker go to a conforming lender when there were so many fly by night ones with cool sounding names (BNC, AMC (argent), WMC, D-1, Oak Street, First Franklin, IRES, MILA, Accredited, etc) with hot young female AE’s giving away pens, clocks, mini-basket ball hoops, cell phone lawn chairs (no joke) with their companies logo on it? Plus they wanted to maximize their own paycheck not the well being of their borrower they met one night telemarketing.

I wonder if I’m going to hell for working for them even though I didn’t sell loans?

[peterb]

Unemployment rising to record levels, homes losing value and getting below mortgage amounts. And we’re only 1 year into this contraction. This is a deadly combination. Even if ARMs reset low now that the rates are quite low, it does little to mitigate job loss and being upside down on your mortgage.

[peterb]

Unemployment rising to record levels, homes losing value and getting below mortgage amounts. And we’re only 1 year into this contraction. This is a deadly combination. Even if ARMs reset low now that the rates are quite low, it does little to mitigate job loss and being upside down on your mortgage.

[peterb]

Unemployment rising to record levels, homes losing value and getting below mortgage amounts. And we’re only 1 year into this contraction. This is a deadly combination. Even if ARMs reset low now that the rates are quite low, it does little to mitigate job loss and being upside down on your mortgage.

[peterb]

Unemployment rising to record levels, homes losing value and getting below mortgage amounts. And we’re only 1 year into this contraction. This is a deadly combination. Even if ARMs reset low now that the rates are quite low, it does little to mitigate job loss and being upside down on your mortgage.

[Author]

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