Moving next door

[Anonymous]

No way this guy gets an owner occupied loan. Maybe 6 months ago. He could get a non-owner occupied loan but he won’t be able to get out of it once he defaults on his current place. A broker might try to get it done, but it ain’t happening.

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[DaCounselor]

“Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.”
_____________________________

Current lending standards inevitably dovetail into past loans, don’t they? This is probably an oversimplification, but if all lenders stuck their available credit in a lockbox and froze the market, the result may exacerbate already falling values, thus putting their existing portfolio at greater risk. By continuing to loan money (although clearly not as easily), they act to protect their existing loans. The rub is that they need to avoid making more loans that are likely to go sour and therefore just piling on to their existing shaky loans on the books.

[DaCounselor]

“Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.”
_____________________________

Current lending standards inevitably dovetail into past loans, don’t they? This is probably an oversimplification, but if all lenders stuck their available credit in a lockbox and froze the market, the result may exacerbate already falling values, thus putting their existing portfolio at greater risk. By continuing to loan money (although clearly not as easily), they act to protect their existing loans. The rub is that they need to avoid making more loans that are likely to go sour and therefore just piling on to their existing shaky loans on the books.

[DaCounselor]

“Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.”
_____________________________

Current lending standards inevitably dovetail into past loans, don’t they? This is probably an oversimplification, but if all lenders stuck their available credit in a lockbox and froze the market, the result may exacerbate already falling values, thus putting their existing portfolio at greater risk. By continuing to loan money (although clearly not as easily), they act to protect their existing loans. The rub is that they need to avoid making more loans that are likely to go sour and therefore just piling on to their existing shaky loans on the books.

[DaCounselor]

“Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.”
_____________________________

Current lending standards inevitably dovetail into past loans, don’t they? This is probably an oversimplification, but if all lenders stuck their available credit in a lockbox and froze the market, the result may exacerbate already falling values, thus putting their existing portfolio at greater risk. By continuing to loan money (although clearly not as easily), they act to protect their existing loans. The rub is that they need to avoid making more loans that are likely to go sour and therefore just piling on to their existing shaky loans on the books.

[DaCounselor]

“Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.”
_____________________________

Current lending standards inevitably dovetail into past loans, don’t they? This is probably an oversimplification, but if all lenders stuck their available credit in a lockbox and froze the market, the result may exacerbate already falling values, thus putting their existing portfolio at greater risk. By continuing to loan money (although clearly not as easily), they act to protect their existing loans. The rub is that they need to avoid making more loans that are likely to go sour and therefore just piling on to their existing shaky loans on the books.

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

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