The House Trap

[scaredyclassic]

it always seems like there should be a way to nimbly duck for cover under an awning. i’ve done that before in my life. not figuratively, I mean literally. Avoided getting wet in giant rainstorms. it’s really very pleasant to stand under an awning, watching heavy rains.

[masayako]

My wife & I both have a very well funded saving account, paid off both cars, zero debt and very stable jobs with decent income.

Can I afford an Interest Only loan?
Definitely not!

These are greedy people making ignorant decisions. They deserve to pay for their own mistakes.

If people these(ie., professors and lawyers) can fuck it up so bad, imagine the SIZE of this problem. More foreclosures WILL come and price WILL come down even more.

Mark my words.

[masayako]

My wife & I both have a very well funded saving account, paid off both cars, zero debt and very stable jobs with decent income.

Can I afford an Interest Only loan?
Definitely not!

These are greedy people making ignorant decisions. They deserve to pay for their own mistakes.

If people these(ie., professors and lawyers) can fuck it up so bad, imagine the SIZE of this problem. More foreclosures WILL come and price WILL come down even more.

Mark my words.

[masayako]

My wife & I both have a very well funded saving account, paid off both cars, zero debt and very stable jobs with decent income.

Can I afford an Interest Only loan?
Definitely not!

These are greedy people making ignorant decisions. They deserve to pay for their own mistakes.

If people these(ie., professors and lawyers) can fuck it up so bad, imagine the SIZE of this problem. More foreclosures WILL come and price WILL come down even more.

Mark my words.

[masayako]

My wife & I both have a very well funded saving account, paid off both cars, zero debt and very stable jobs with decent income.

Can I afford an Interest Only loan?
Definitely not!

These are greedy people making ignorant decisions. They deserve to pay for their own mistakes.

If people these(ie., professors and lawyers) can fuck it up so bad, imagine the SIZE of this problem. More foreclosures WILL come and price WILL come down even more.

Mark my words.

[masayako]

My wife & I both have a very well funded saving account, paid off both cars, zero debt and very stable jobs with decent income.

Can I afford an Interest Only loan?
Definitely not!

These are greedy people making ignorant decisions. They deserve to pay for their own mistakes.

If people these(ie., professors and lawyers) can fuck it up so bad, imagine the SIZE of this problem. More foreclosures WILL come and price WILL come down even more.

Mark my words.

[patb]

it struck me there is only one class of buyer who will use an I/O loan
effectively. Someone who by nature will have a very serious
increase in their income soon. Recent graduates from med school,
People starting new small businesses (Franchises), people
in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for
flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?

The logic was “Property is skyrocketing, get an I/O now, then
when you have 80% equity re-fi”. Gee, why not get a 5/25 ARM
pay on an amortization schedule and then in 5 years look at re-fi.

I/O’s combined payment risk with interest risk.

I’m hanging out here in DC, because 50% of all sales in 2005 were
non-traditionals and when those I/O’s go amortizing they will
all go into default within 90 days.

[patb]

it struck me there is only one class of buyer who will use an I/O loan
effectively. Someone who by nature will have a very serious
increase in their income soon. Recent graduates from med school,
People starting new small businesses (Franchises), people
in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for
flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?

The logic was “Property is skyrocketing, get an I/O now, then
when you have 80% equity re-fi”. Gee, why not get a 5/25 ARM
pay on an amortization schedule and then in 5 years look at re-fi.

I/O’s combined payment risk with interest risk.

I’m hanging out here in DC, because 50% of all sales in 2005 were
non-traditionals and when those I/O’s go amortizing they will
all go into default within 90 days.

[patb]

it struck me there is only one class of buyer who will use an I/O loan
effectively. Someone who by nature will have a very serious
increase in their income soon. Recent graduates from med school,
People starting new small businesses (Franchises), people
in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for
flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?

The logic was “Property is skyrocketing, get an I/O now, then
when you have 80% equity re-fi”. Gee, why not get a 5/25 ARM
pay on an amortization schedule and then in 5 years look at re-fi.

I/O’s combined payment risk with interest risk.

I’m hanging out here in DC, because 50% of all sales in 2005 were
non-traditionals and when those I/O’s go amortizing they will
all go into default within 90 days.

[patb]

it struck me there is only one class of buyer who will use an I/O loan
effectively. Someone who by nature will have a very serious
increase in their income soon. Recent graduates from med school,
People starting new small businesses (Franchises), people
in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for
flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?

The logic was “Property is skyrocketing, get an I/O now, then
when you have 80% equity re-fi”. Gee, why not get a 5/25 ARM
pay on an amortization schedule and then in 5 years look at re-fi.

I/O’s combined payment risk with interest risk.

I’m hanging out here in DC, because 50% of all sales in 2005 were
non-traditionals and when those I/O’s go amortizing they will
all go into default within 90 days.

[patb]

it struck me there is only one class of buyer who will use an I/O loan
effectively. Someone who by nature will have a very serious
increase in their income soon. Recent graduates from med school,
People starting new small businesses (Franchises), people
in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for
flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?

The logic was “Property is skyrocketing, get an I/O now, then
when you have 80% equity re-fi”. Gee, why not get a 5/25 ARM
pay on an amortization schedule and then in 5 years look at re-fi.

I/O’s combined payment risk with interest risk.

I’m hanging out here in DC, because 50% of all sales in 2005 were
non-traditionals and when those I/O’s go amortizing they will
all go into default within 90 days.

[jpinpb]

I read the article and that’s all fine and dandy. Yes, lots of people who won’t be able to make their payments. What does that mean for the real estate market? I see plenty of NODs, but banks not foreclosing on all of them. The ones that get foreclosed upon, a few get listed and some just sit empty, and one gets occupied by a banker throwing parties Great Gatsby style.

I just want to know what’s going to happen. Are people just going to live there for free forever? Are the banks going to just hold on to them for years while they sit empty? Or is everyone just waiting for inflation to kick in and then houses will go back to peak prices. And will it go to peak prices and beyond even? Some of these buyers just bought to flip, you know.

[jpinpb]

I read the article and that’s all fine and dandy. Yes, lots of people who won’t be able to make their payments. What does that mean for the real estate market? I see plenty of NODs, but banks not foreclosing on all of them. The ones that get foreclosed upon, a few get listed and some just sit empty, and one gets occupied by a banker throwing parties Great Gatsby style.

I just want to know what’s going to happen. Are people just going to live there for free forever? Are the banks going to just hold on to them for years while they sit empty? Or is everyone just waiting for inflation to kick in and then houses will go back to peak prices. And will it go to peak prices and beyond even? Some of these buyers just bought to flip, you know.

[jpinpb]

I read the article and that’s all fine and dandy. Yes, lots of people who won’t be able to make their payments. What does that mean for the real estate market? I see plenty of NODs, but banks not foreclosing on all of them. The ones that get foreclosed upon, a few get listed and some just sit empty, and one gets occupied by a banker throwing parties Great Gatsby style.

I just want to know what’s going to happen. Are people just going to live there for free forever? Are the banks going to just hold on to them for years while they sit empty? Or is everyone just waiting for inflation to kick in and then houses will go back to peak prices. And will it go to peak prices and beyond even? Some of these buyers just bought to flip, you know.

[jpinpb]

I read the article and that’s all fine and dandy. Yes, lots of people who won’t be able to make their payments. What does that mean for the real estate market? I see plenty of NODs, but banks not foreclosing on all of them. The ones that get foreclosed upon, a few get listed and some just sit empty, and one gets occupied by a banker throwing parties Great Gatsby style.

I just want to know what’s going to happen. Are people just going to live there for free forever? Are the banks going to just hold on to them for years while they sit empty? Or is everyone just waiting for inflation to kick in and then houses will go back to peak prices. And will it go to peak prices and beyond even? Some of these buyers just bought to flip, you know.

[Author]

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