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DaCounselor
ParticipantCertainly, in the eyes of the law, it’s not fraud. I would not even casually refer to it as fraud. It’s a voluntary breach of contract with respect to the existing home loans, with built-in remedies for the lenders. That’s it as far as I can see.
ParticipantCertainly, in the eyes of the law, it’s not fraud. I would not even casually refer to it as fraud. It’s a voluntary breach of contract with respect to the existing home loans, with built-in remedies for the lenders. That’s it as far as I can see.
ParticipantCertainly, in the eyes of the law, it’s not fraud. I would not even casually refer to it as fraud. It’s a voluntary breach of contract with respect to the existing home loans, with built-in remedies for the lenders. That’s it as far as I can see.
Participant“But why would he take that ARM when he could get a fixed for that rate and lock it in for 30 years?”
_____________________________Because if he went conventional 30 yr fixed he would be paying principal as well, which on a median SD purchase probably would have bumped the monthly payment up by about $500/month. I think alot of the ARMS were interest only.
FSD has a good handle on the reset issue. As for how long LIBOR can remain at historically very low levels, we just had a 4 year run of very low rates earlier this decade. How far will LIBOR drop and how long will it stay low this time around? Who knows?
Participant“But why would he take that ARM when he could get a fixed for that rate and lock it in for 30 years?”
_____________________________Because if he went conventional 30 yr fixed he would be paying principal as well, which on a median SD purchase probably would have bumped the monthly payment up by about $500/month. I think alot of the ARMS were interest only.
FSD has a good handle on the reset issue. As for how long LIBOR can remain at historically very low levels, we just had a 4 year run of very low rates earlier this decade. How far will LIBOR drop and how long will it stay low this time around? Who knows?
Participant“But why would he take that ARM when he could get a fixed for that rate and lock it in for 30 years?”
_____________________________Because if he went conventional 30 yr fixed he would be paying principal as well, which on a median SD purchase probably would have bumped the monthly payment up by about $500/month. I think alot of the ARMS were interest only.
FSD has a good handle on the reset issue. As for how long LIBOR can remain at historically very low levels, we just had a 4 year run of very low rates earlier this decade. How far will LIBOR drop and how long will it stay low this time around? Who knows?
Participant“But why would he take that ARM when he could get a fixed for that rate and lock it in for 30 years?”
_____________________________Because if he went conventional 30 yr fixed he would be paying principal as well, which on a median SD purchase probably would have bumped the monthly payment up by about $500/month. I think alot of the ARMS were interest only.
FSD has a good handle on the reset issue. As for how long LIBOR can remain at historically very low levels, we just had a 4 year run of very low rates earlier this decade. How far will LIBOR drop and how long will it stay low this time around? Who knows?
Participant“But why would he take that ARM when he could get a fixed for that rate and lock it in for 30 years?”
_____________________________Because if he went conventional 30 yr fixed he would be paying principal as well, which on a median SD purchase probably would have bumped the monthly payment up by about $500/month. I think alot of the ARMS were interest only.
FSD has a good handle on the reset issue. As for how long LIBOR can remain at historically very low levels, we just had a 4 year run of very low rates earlier this decade. How far will LIBOR drop and how long will it stay low this time around? Who knows?
ParticipantWhat a difference a few months make. Yesterday’s 6 month USD LIBOR was reported as 3.79. I think this index is very likely to continue to fall as the Fed continues to ease in ’08. I suggest that the so-called “Alt-A” ARMS with margins in the 2-2.5 range will reset in somewhat close proximity to their initial rates, and may later reset again at rates below the initial rate (aka payment decreases instead of increases) These loans do not appear to be in any imminent danger of blowing up, at least not due to massive payment hikes.
ParticipantWhat a difference a few months make. Yesterday’s 6 month USD LIBOR was reported as 3.79. I think this index is very likely to continue to fall as the Fed continues to ease in ’08. I suggest that the so-called “Alt-A” ARMS with margins in the 2-2.5 range will reset in somewhat close proximity to their initial rates, and may later reset again at rates below the initial rate (aka payment decreases instead of increases) These loans do not appear to be in any imminent danger of blowing up, at least not due to massive payment hikes.
ParticipantWhat a difference a few months make. Yesterday’s 6 month USD LIBOR was reported as 3.79. I think this index is very likely to continue to fall as the Fed continues to ease in ’08. I suggest that the so-called “Alt-A” ARMS with margins in the 2-2.5 range will reset in somewhat close proximity to their initial rates, and may later reset again at rates below the initial rate (aka payment decreases instead of increases) These loans do not appear to be in any imminent danger of blowing up, at least not due to massive payment hikes.
ParticipantWhat a difference a few months make. Yesterday’s 6 month USD LIBOR was reported as 3.79. I think this index is very likely to continue to fall as the Fed continues to ease in ’08. I suggest that the so-called “Alt-A” ARMS with margins in the 2-2.5 range will reset in somewhat close proximity to their initial rates, and may later reset again at rates below the initial rate (aka payment decreases instead of increases) These loans do not appear to be in any imminent danger of blowing up, at least not due to massive payment hikes.
ParticipantWhat a difference a few months make. Yesterday’s 6 month USD LIBOR was reported as 3.79. I think this index is very likely to continue to fall as the Fed continues to ease in ’08. I suggest that the so-called “Alt-A” ARMS with margins in the 2-2.5 range will reset in somewhat close proximity to their initial rates, and may later reset again at rates below the initial rate (aka payment decreases instead of increases) These loans do not appear to be in any imminent danger of blowing up, at least not due to massive payment hikes.
ParticipantI would tend to agree with iseedots on this. Addressing psychology, I think there is an overall underlying sentiment on the part of most folks that is pro-homeownership. At this particular point in time that underlying sentiment may be overlaid with a psychology of caution and restraint due to the market conditions, but as prices fall the underlying desire to buy will emerge, at different points in time for different people.
I was around and a homeowner during the last real estate (and overall economic) downturn last decade and the prevailing concern then, in my opinion, was regarding jobs and the economy. I recall no negative sentiment toward real estate in the sense of “real estate is a terrible investment.” In fact, there was a general consensus among smart money folks that SD real estate was a sound investment and that we would see real estate prices rise substantially out of the recession. That being said, I don’t think it is too helpful to look back at those days inasmuch as we have a completely different scenario confronting us in the current market.
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