What the Rate Freeze Cheerleaders need to hear…

[kev374]

This is an interesting read on the long term effects of such a plan:

http://www.cnbc.com/id/22150432

IMHO, home prices will continue to decline rapidly with or without the freeze. Freezing rates doesn’t stop the market from declining. Those that NEED to sell set the comps not those that are off the market.

This freeze will ACCELERATE the decline, why? Because lending will become MUCH tighter in effect further reducing the pool of those who qualify to buy. Less people to buy, lower prices go 🙂

[NeetaT]

If you are correct, I will be in low-ball heaven. Of course, it will eat up most of my savings, but none-the-less. If interest rates drive prices, it is a good thing. If a 10% interest rate makes a $500k house a $250k house, then I will pay property tax on $250k. People don’t realize the extent of the property tax burden, because it is absorbed and hidden in the mortgage and thus ignored. I bought my last home with cash and will buy my next home with cash and let me tell you that property tax stings you like a wasp when it is realized.

[NeetaT]

If you are correct, I will be in low-ball heaven. Of course, it will eat up most of my savings, but none-the-less. If interest rates drive prices, it is a good thing. If a 10% interest rate makes a $500k house a $250k house, then I will pay property tax on $250k. People don’t realize the extent of the property tax burden, because it is absorbed and hidden in the mortgage and thus ignored. I bought my last home with cash and will buy my next home with cash and let me tell you that property tax stings you like a wasp when it is realized.

[NeetaT]

If you are correct, I will be in low-ball heaven. Of course, it will eat up most of my savings, but none-the-less. If interest rates drive prices, it is a good thing. If a 10% interest rate makes a $500k house a $250k house, then I will pay property tax on $250k. People don’t realize the extent of the property tax burden, because it is absorbed and hidden in the mortgage and thus ignored. I bought my last home with cash and will buy my next home with cash and let me tell you that property tax stings you like a wasp when it is realized.

[NeetaT]

If you are correct, I will be in low-ball heaven. Of course, it will eat up most of my savings, but none-the-less. If interest rates drive prices, it is a good thing. If a 10% interest rate makes a $500k house a $250k house, then I will pay property tax on $250k. People don’t realize the extent of the property tax burden, because it is absorbed and hidden in the mortgage and thus ignored. I bought my last home with cash and will buy my next home with cash and let me tell you that property tax stings you like a wasp when it is realized.

[NeetaT]

If you are correct, I will be in low-ball heaven. Of course, it will eat up most of my savings, but none-the-less. If interest rates drive prices, it is a good thing. If a 10% interest rate makes a $500k house a $250k house, then I will pay property tax on $250k. People don’t realize the extent of the property tax burden, because it is absorbed and hidden in the mortgage and thus ignored. I bought my last home with cash and will buy my next home with cash and let me tell you that property tax stings you like a wasp when it is realized.

[rocket science]

Some of these points are similar to Rich’s latest write up.But there is another article right next to this one in the LA Times with a Q&A on the process.Cash-strapped borrowers gain time to improve credit, equityhttp://www.latimes.com/business/la-fi-subprimeqa7dec07,1,380708.story?coll=la-headlines-business&ctrack=5&cset=trueOne excerptWho qualifies for the rate freeze?

First, the residence must be owner-occupied. The borrower must be no more than 30 days late on his or her mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated in January 2005 to July 2007 and have an initial reset date of January 2008 to July 2010. Also, the borrower must have less than 3% equity in the home.And then they include an example where the borrower will pay ~$28,300 less per $100K  of loan for the 30 year loan with the freeze, assuming they are paying P&I.  Or in other words the bank gets ~$28,300K LESS per $100K of loan for the 30 year loan.  Are a lot of lenders going to buy into this?And of course we can surely assume they are most likely a large percentage of interest only loans.And the instigators of this apparently didn’t read this article (courtesy of gary_broker, not sure if it has been in another thread) http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold;_ylt=AoYhL5ognSwCfrwaIJ3.KbC7YWsAwhich uses the rental ratio concept analysis to predict that anyone w/o any equity in their house now (see less tna 3% to qualify above) is sure to be way underwater in 5 years when it is time to reset! Bingo! Almost guarantees they all get foreclosed because they can’t refi then w/o equity!

 

And then the third LA Times article in today’s paper right next to the other two is the coup de gras.All this might just be too late……. Mortgage delinquency rate risesThe number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter as borrowers were unable to refinance or sell their homes…http://www.latimes.com/business/la-fi-foreclose7dec07,1,6968753.story?coll=la-headlines-business&ctrack=8&cset=true

rs

[rocket science]

Some of these points are similar to Rich’s latest write up.But there is another article right next to this one in the LA Times with a Q&A on the process.Cash-strapped borrowers gain time to improve credit, equityhttp://www.latimes.com/business/la-fi-subprimeqa7dec07,1,380708.story?coll=la-headlines-business&ctrack=5&cset=trueOne excerptWho qualifies for the rate freeze?

First, the residence must be owner-occupied. The borrower must be no more than 30 days late on his or her mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated in January 2005 to July 2007 and have an initial reset date of January 2008 to July 2010. Also, the borrower must have less than 3% equity in the home.And then they include an example where the borrower will pay ~$28,300 less per $100K  of loan for the 30 year loan with the freeze, assuming they are paying P&I.  Or in other words the bank gets ~$28,300K LESS per $100K of loan for the 30 year loan.  Are a lot of lenders going to buy into this?And of course we can surely assume they are most likely a large percentage of interest only loans.And the instigators of this apparently didn’t read this article (courtesy of gary_broker, not sure if it has been in another thread) http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold;_ylt=AoYhL5ognSwCfrwaIJ3.KbC7YWsAwhich uses the rental ratio concept analysis to predict that anyone w/o any equity in their house now (see less tna 3% to qualify above) is sure to be way underwater in 5 years when it is time to reset! Bingo! Almost guarantees they all get foreclosed because they can’t refi then w/o equity!

 

And then the third LA Times article in today’s paper right next to the other two is the coup de gras.All this might just be too late……. Mortgage delinquency rate risesThe number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter as borrowers were unable to refinance or sell their homes…http://www.latimes.com/business/la-fi-foreclose7dec07,1,6968753.story?coll=la-headlines-business&ctrack=8&cset=true

rs

[rocket science]

Some of these points are similar to Rich’s latest write up.But there is another article right next to this one in the LA Times with a Q&A on the process.Cash-strapped borrowers gain time to improve credit, equityhttp://www.latimes.com/business/la-fi-subprimeqa7dec07,1,380708.story?coll=la-headlines-business&ctrack=5&cset=trueOne excerptWho qualifies for the rate freeze?

First, the residence must be owner-occupied. The borrower must be no more than 30 days late on his or her mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated in January 2005 to July 2007 and have an initial reset date of January 2008 to July 2010. Also, the borrower must have less than 3% equity in the home.And then they include an example where the borrower will pay ~$28,300 less per $100K  of loan for the 30 year loan with the freeze, assuming they are paying P&I.  Or in other words the bank gets ~$28,300K LESS per $100K of loan for the 30 year loan.  Are a lot of lenders going to buy into this?And of course we can surely assume they are most likely a large percentage of interest only loans.And the instigators of this apparently didn’t read this article (courtesy of gary_broker, not sure if it has been in another thread) http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold;_ylt=AoYhL5ognSwCfrwaIJ3.KbC7YWsAwhich uses the rental ratio concept analysis to predict that anyone w/o any equity in their house now (see less tna 3% to qualify above) is sure to be way underwater in 5 years when it is time to reset! Bingo! Almost guarantees they all get foreclosed because they can’t refi then w/o equity!

 

And then the third LA Times article in today’s paper right next to the other two is the coup de gras.All this might just be too late……. Mortgage delinquency rate risesThe number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter as borrowers were unable to refinance or sell their homes…http://www.latimes.com/business/la-fi-foreclose7dec07,1,6968753.story?coll=la-headlines-business&ctrack=8&cset=true

rs

[rocket science]

Some of these points are similar to Rich’s latest write up.But there is another article right next to this one in the LA Times with a Q&A on the process.Cash-strapped borrowers gain time to improve credit, equityhttp://www.latimes.com/business/la-fi-subprimeqa7dec07,1,380708.story?coll=la-headlines-business&ctrack=5&cset=trueOne excerptWho qualifies for the rate freeze?

First, the residence must be owner-occupied. The borrower must be no more than 30 days late on his or her mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated in January 2005 to July 2007 and have an initial reset date of January 2008 to July 2010. Also, the borrower must have less than 3% equity in the home.And then they include an example where the borrower will pay ~$28,300 less per $100K  of loan for the 30 year loan with the freeze, assuming they are paying P&I.  Or in other words the bank gets ~$28,300K LESS per $100K of loan for the 30 year loan.  Are a lot of lenders going to buy into this?And of course we can surely assume they are most likely a large percentage of interest only loans.And the instigators of this apparently didn’t read this article (courtesy of gary_broker, not sure if it has been in another thread) http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold;_ylt=AoYhL5ognSwCfrwaIJ3.KbC7YWsAwhich uses the rental ratio concept analysis to predict that anyone w/o any equity in their house now (see less tna 3% to qualify above) is sure to be way underwater in 5 years when it is time to reset! Bingo! Almost guarantees they all get foreclosed because they can’t refi then w/o equity!

 

And then the third LA Times article in today’s paper right next to the other two is the coup de gras.All this might just be too late……. Mortgage delinquency rate risesThe number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter as borrowers were unable to refinance or sell their homes…http://www.latimes.com/business/la-fi-foreclose7dec07,1,6968753.story?coll=la-headlines-business&ctrack=8&cset=true

rs

[rocket science]

Some of these points are similar to Rich’s latest write up.But there is another article right next to this one in the LA Times with a Q&A on the process.Cash-strapped borrowers gain time to improve credit, equityhttp://www.latimes.com/business/la-fi-subprimeqa7dec07,1,380708.story?coll=la-headlines-business&ctrack=5&cset=trueOne excerptWho qualifies for the rate freeze?

First, the residence must be owner-occupied. The borrower must be no more than 30 days late on his or her mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated in January 2005 to July 2007 and have an initial reset date of January 2008 to July 2010. Also, the borrower must have less than 3% equity in the home.And then they include an example where the borrower will pay ~$28,300 less per $100K  of loan for the 30 year loan with the freeze, assuming they are paying P&I.  Or in other words the bank gets ~$28,300K LESS per $100K of loan for the 30 year loan.  Are a lot of lenders going to buy into this?And of course we can surely assume they are most likely a large percentage of interest only loans.And the instigators of this apparently didn’t read this article (courtesy of gary_broker, not sure if it has been in another thread) http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold;_ylt=AoYhL5ognSwCfrwaIJ3.KbC7YWsAwhich uses the rental ratio concept analysis to predict that anyone w/o any equity in their house now (see less tna 3% to qualify above) is sure to be way underwater in 5 years when it is time to reset! Bingo! Almost guarantees they all get foreclosed because they can’t refi then w/o equity!

 

And then the third LA Times article in today’s paper right next to the other two is the coup de gras.All this might just be too late……. Mortgage delinquency rate risesThe number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter as borrowers were unable to refinance or sell their homes…http://www.latimes.com/business/la-fi-foreclose7dec07,1,6968753.story?coll=la-headlines-business&ctrack=8&cset=true

rs

[cr]

I just wonder what % of the population is actually in support of something like this.

The perma-bulls of housing argue that 98% or more of homeowners are paying on time. If so, then why all this trouble for the irresponsible 2%?

They should make this a vote, not election year propaganda. Alt-A and Prime will make sub-prime problems look like the good ‘ol days.

[cr]

I just wonder what % of the population is actually in support of something like this.

The perma-bulls of housing argue that 98% or more of homeowners are paying on time. If so, then why all this trouble for the irresponsible 2%?

They should make this a vote, not election year propaganda. Alt-A and Prime will make sub-prime problems look like the good ‘ol days.

[cr]

I just wonder what % of the population is actually in support of something like this.

The perma-bulls of housing argue that 98% or more of homeowners are paying on time. If so, then why all this trouble for the irresponsible 2%?

They should make this a vote, not election year propaganda. Alt-A and Prime will make sub-prime problems look like the good ‘ol days.

[cr]

I just wonder what % of the population is actually in support of something like this.

The perma-bulls of housing argue that 98% or more of homeowners are paying on time. If so, then why all this trouble for the irresponsible 2%?

They should make this a vote, not election year propaganda. Alt-A and Prime will make sub-prime problems look like the good ‘ol days.

[Author]

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