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DaCounselor
ParticipantFSD is right. The Libor spread has been pretty high, but after we get through year-end and in conjunction with the money-drop announced today (which is not likely to be the last) I expect the spread to contract. My wild guess and I don’t think I’m venturing too far out on a limb is that we will see more Fed cuts as we enter ’08. I think we will ease to 3.5 and see a Libor spread contraction and the 6 mo. and 1 yr. Libor both below 4.0.
My 2 top mortgage broker sources maintain that they sold a ton of 3/1 and 5/1 10 yr. IO ARMS in ’04 and ’05 with initial rates in the 5.5-5.75 range, 1 yr Libor index with 2.0-2.25 margins. From the looks of where we are headed, these loan resets may result in minimal if any payment increases. In addition, if they are on the front end of an 80/20 package with (as I’m told) a HELOC 2nd tied to the prime rate plus a 2.0-2.25 margin, well, the payments on the 2nd have been falling since the first Fed cut, and again are likely to fall further as we go forward.
So the question begged is what percentage of the impending resets are on these types of loans, where the payment adjustment will be minimal if any on the 1st and is actually falling on the 2nd? This I do not know.
ParticipantFSD is right. The Libor spread has been pretty high, but after we get through year-end and in conjunction with the money-drop announced today (which is not likely to be the last) I expect the spread to contract. My wild guess and I don’t think I’m venturing too far out on a limb is that we will see more Fed cuts as we enter ’08. I think we will ease to 3.5 and see a Libor spread contraction and the 6 mo. and 1 yr. Libor both below 4.0.
My 2 top mortgage broker sources maintain that they sold a ton of 3/1 and 5/1 10 yr. IO ARMS in ’04 and ’05 with initial rates in the 5.5-5.75 range, 1 yr Libor index with 2.0-2.25 margins. From the looks of where we are headed, these loan resets may result in minimal if any payment increases. In addition, if they are on the front end of an 80/20 package with (as I’m told) a HELOC 2nd tied to the prime rate plus a 2.0-2.25 margin, well, the payments on the 2nd have been falling since the first Fed cut, and again are likely to fall further as we go forward.
So the question begged is what percentage of the impending resets are on these types of loans, where the payment adjustment will be minimal if any on the 1st and is actually falling on the 2nd? This I do not know.
ParticipantFSD is right. The Libor spread has been pretty high, but after we get through year-end and in conjunction with the money-drop announced today (which is not likely to be the last) I expect the spread to contract. My wild guess and I don’t think I’m venturing too far out on a limb is that we will see more Fed cuts as we enter ’08. I think we will ease to 3.5 and see a Libor spread contraction and the 6 mo. and 1 yr. Libor both below 4.0.
My 2 top mortgage broker sources maintain that they sold a ton of 3/1 and 5/1 10 yr. IO ARMS in ’04 and ’05 with initial rates in the 5.5-5.75 range, 1 yr Libor index with 2.0-2.25 margins. From the looks of where we are headed, these loan resets may result in minimal if any payment increases. In addition, if they are on the front end of an 80/20 package with (as I’m told) a HELOC 2nd tied to the prime rate plus a 2.0-2.25 margin, well, the payments on the 2nd have been falling since the first Fed cut, and again are likely to fall further as we go forward.
So the question begged is what percentage of the impending resets are on these types of loans, where the payment adjustment will be minimal if any on the 1st and is actually falling on the 2nd? This I do not know.
ParticipantFSD is right. The Libor spread has been pretty high, but after we get through year-end and in conjunction with the money-drop announced today (which is not likely to be the last) I expect the spread to contract. My wild guess and I don’t think I’m venturing too far out on a limb is that we will see more Fed cuts as we enter ’08. I think we will ease to 3.5 and see a Libor spread contraction and the 6 mo. and 1 yr. Libor both below 4.0.
My 2 top mortgage broker sources maintain that they sold a ton of 3/1 and 5/1 10 yr. IO ARMS in ’04 and ’05 with initial rates in the 5.5-5.75 range, 1 yr Libor index with 2.0-2.25 margins. From the looks of where we are headed, these loan resets may result in minimal if any payment increases. In addition, if they are on the front end of an 80/20 package with (as I’m told) a HELOC 2nd tied to the prime rate plus a 2.0-2.25 margin, well, the payments on the 2nd have been falling since the first Fed cut, and again are likely to fall further as we go forward.
So the question begged is what percentage of the impending resets are on these types of loans, where the payment adjustment will be minimal if any on the 1st and is actually falling on the 2nd? This I do not know.
Participant“Question?
I know on another thread you talked about “refinancing” and changing from a non-recourse to a recourse loan, and most said that wouldn’t be affected in the “freeze.”
Mr. Paulson used the term “refinance” many times in his speech. Do you think this was an error, or do you think the the FB’s will be even more F’d when their loan changes to a recourse loan, after they “refinance” into this fixed rate?
Just wondering.”
___________________________I think there is a general misconception among some that a loan modification will automatically transform a non-recourse loan in a recourse loan. Not the case. In fact, there is an even more widepread misconception that a refi is automatically a recourse loan – which is also not necessarily the case.
In making perhaps the most important financial decision of their lives, people need to understand the ins and outs of what they are getting themselves into and what the law is. Consulting an attorney is mandatory.
Participant“Question?
I know on another thread you talked about “refinancing” and changing from a non-recourse to a recourse loan, and most said that wouldn’t be affected in the “freeze.”
Mr. Paulson used the term “refinance” many times in his speech. Do you think this was an error, or do you think the the FB’s will be even more F’d when their loan changes to a recourse loan, after they “refinance” into this fixed rate?
Just wondering.”
___________________________I think there is a general misconception among some that a loan modification will automatically transform a non-recourse loan in a recourse loan. Not the case. In fact, there is an even more widepread misconception that a refi is automatically a recourse loan – which is also not necessarily the case.
In making perhaps the most important financial decision of their lives, people need to understand the ins and outs of what they are getting themselves into and what the law is. Consulting an attorney is mandatory.
Participant“Question?
I know on another thread you talked about “refinancing” and changing from a non-recourse to a recourse loan, and most said that wouldn’t be affected in the “freeze.”
Mr. Paulson used the term “refinance” many times in his speech. Do you think this was an error, or do you think the the FB’s will be even more F’d when their loan changes to a recourse loan, after they “refinance” into this fixed rate?
Just wondering.”
___________________________I think there is a general misconception among some that a loan modification will automatically transform a non-recourse loan in a recourse loan. Not the case. In fact, there is an even more widepread misconception that a refi is automatically a recourse loan – which is also not necessarily the case.
In making perhaps the most important financial decision of their lives, people need to understand the ins and outs of what they are getting themselves into and what the law is. Consulting an attorney is mandatory.
Participant“Question?
I know on another thread you talked about “refinancing” and changing from a non-recourse to a recourse loan, and most said that wouldn’t be affected in the “freeze.”
Mr. Paulson used the term “refinance” many times in his speech. Do you think this was an error, or do you think the the FB’s will be even more F’d when their loan changes to a recourse loan, after they “refinance” into this fixed rate?
Just wondering.”
___________________________I think there is a general misconception among some that a loan modification will automatically transform a non-recourse loan in a recourse loan. Not the case. In fact, there is an even more widepread misconception that a refi is automatically a recourse loan – which is also not necessarily the case.
In making perhaps the most important financial decision of their lives, people need to understand the ins and outs of what they are getting themselves into and what the law is. Consulting an attorney is mandatory.
Participant“Question?
I know on another thread you talked about “refinancing” and changing from a non-recourse to a recourse loan, and most said that wouldn’t be affected in the “freeze.”
Mr. Paulson used the term “refinance” many times in his speech. Do you think this was an error, or do you think the the FB’s will be even more F’d when their loan changes to a recourse loan, after they “refinance” into this fixed rate?
Just wondering.”
___________________________I think there is a general misconception among some that a loan modification will automatically transform a non-recourse loan in a recourse loan. Not the case. In fact, there is an even more widepread misconception that a refi is automatically a recourse loan – which is also not necessarily the case.
In making perhaps the most important financial decision of their lives, people need to understand the ins and outs of what they are getting themselves into and what the law is. Consulting an attorney is mandatory.
ParticipantStents, particularly the new-fangled drug coated variety, have gotten some bad press over the past few years. I’ve been tuned in because my uncle has one and my girl is in the med device industry. Stent sales are way off and I believe Abbott was looking to score big in the drug-coated stent category. Their new stent just got approved by an FDA panel (but not the by FDA, not yet).
ParticipantStents, particularly the new-fangled drug coated variety, have gotten some bad press over the past few years. I’ve been tuned in because my uncle has one and my girl is in the med device industry. Stent sales are way off and I believe Abbott was looking to score big in the drug-coated stent category. Their new stent just got approved by an FDA panel (but not the by FDA, not yet).
ParticipantStents, particularly the new-fangled drug coated variety, have gotten some bad press over the past few years. I’ve been tuned in because my uncle has one and my girl is in the med device industry. Stent sales are way off and I believe Abbott was looking to score big in the drug-coated stent category. Their new stent just got approved by an FDA panel (but not the by FDA, not yet).
ParticipantStents, particularly the new-fangled drug coated variety, have gotten some bad press over the past few years. I’ve been tuned in because my uncle has one and my girl is in the med device industry. Stent sales are way off and I believe Abbott was looking to score big in the drug-coated stent category. Their new stent just got approved by an FDA panel (but not the by FDA, not yet).
ParticipantStents, particularly the new-fangled drug coated variety, have gotten some bad press over the past few years. I’ve been tuned in because my uncle has one and my girl is in the med device industry. Stent sales are way off and I believe Abbott was looking to score big in the drug-coated stent category. Their new stent just got approved by an FDA panel (but not the by FDA, not yet).
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