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May 2, 2008 at 1:26 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #197963May 2, 2008 at 1:26 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #198000
HLS
ParticipantI’m on the same page as you. I don’t call it doom & gloom, I call it reality.
I hope that I am wrong about what could happen to this economy, but I want to be prepared as I can be and then just sit back and watch it unfold if it does happen.
If the average person didn’t live so far beyond their means they would be able to survive, but unfortunately for them many cannot buy groceries or gas until their next paycheck arrives.
There ARE many people with cash on the sidelines, but I think that the number of available homes will exceed the number of buyers in the short-medium term. It’s all relative.
Some realtors are doing well today with that “pent up demand” thingy, but for every house that they buy, there is one less “pent up demander” out there and they aren’t being created like the fed creates money.
I think that there will also be a huge “pent up supply” from the waiting to get even crowd. The MLS inventory numbers don’t tell the true story about what really could be for sale, if only the house was worth more, but there just aren’t enough buyers.
It’s a game of musical chairs in reverse, with thousands of empty chairs and only a few hundred players. Not hard at all to find a seat!
May 2, 2008 at 1:01 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #197861ParticipantJWM,,,
You are one of the few posters here who has consistently seen the big picture(macro) while so many others are only focused on their own neighborhood or street.When the “jumbo conforming” loans were first announced, I tried to tell people that the devil would be in the details, and not to get excited about them.
There was no way that the rates would be the same as the $417K conforming limit, and they aren’t.
My competition was telling people to get their apps in early because there was sure to be a flood of activity when the limits were raised. I was laughing on how easily some people believe what they are told by fools, and ignore reality & facts.
I haven’t seen many that can actually qualify for the new program full doc. Either they haven’t got the equity to refi OR cannot qualify based on debt ratios.
For investment or 2nd homes you need 40% equity, and the debt ratios are lower on these loans than on the old $417K, which makes it harder to qualify.
The program wasn’t designed to save California. Now that the median has dropped, they should lower the jumbo limits.
I cannot imagine how much was spent to roll out the program, but it was just another band-aid and delayed a few people going FC by a few months…Conforming PAR rates today are 5.875%, on April 1st they were 5.375%, it takes more income to qualify for the same loan at the max debt ratio.
The best thing for many people is to do it the “Conseco way” and walk away because it makes sense. but some people don’t want to accept this….yet
May 2, 2008 at 1:01 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #197897ParticipantJWM,,,
You are one of the few posters here who has consistently seen the big picture(macro) while so many others are only focused on their own neighborhood or street.When the “jumbo conforming” loans were first announced, I tried to tell people that the devil would be in the details, and not to get excited about them.
There was no way that the rates would be the same as the $417K conforming limit, and they aren’t.
My competition was telling people to get their apps in early because there was sure to be a flood of activity when the limits were raised. I was laughing on how easily some people believe what they are told by fools, and ignore reality & facts.
I haven’t seen many that can actually qualify for the new program full doc. Either they haven’t got the equity to refi OR cannot qualify based on debt ratios.
For investment or 2nd homes you need 40% equity, and the debt ratios are lower on these loans than on the old $417K, which makes it harder to qualify.
The program wasn’t designed to save California. Now that the median has dropped, they should lower the jumbo limits.
I cannot imagine how much was spent to roll out the program, but it was just another band-aid and delayed a few people going FC by a few months…Conforming PAR rates today are 5.875%, on April 1st they were 5.375%, it takes more income to qualify for the same loan at the max debt ratio.
The best thing for many people is to do it the “Conseco way” and walk away because it makes sense. but some people don’t want to accept this….yet
May 2, 2008 at 1:01 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #197925ParticipantJWM,,,
You are one of the few posters here who has consistently seen the big picture(macro) while so many others are only focused on their own neighborhood or street.When the “jumbo conforming” loans were first announced, I tried to tell people that the devil would be in the details, and not to get excited about them.
There was no way that the rates would be the same as the $417K conforming limit, and they aren’t.
My competition was telling people to get their apps in early because there was sure to be a flood of activity when the limits were raised. I was laughing on how easily some people believe what they are told by fools, and ignore reality & facts.
I haven’t seen many that can actually qualify for the new program full doc. Either they haven’t got the equity to refi OR cannot qualify based on debt ratios.
For investment or 2nd homes you need 40% equity, and the debt ratios are lower on these loans than on the old $417K, which makes it harder to qualify.
The program wasn’t designed to save California. Now that the median has dropped, they should lower the jumbo limits.
I cannot imagine how much was spent to roll out the program, but it was just another band-aid and delayed a few people going FC by a few months…Conforming PAR rates today are 5.875%, on April 1st they were 5.375%, it takes more income to qualify for the same loan at the max debt ratio.
The best thing for many people is to do it the “Conseco way” and walk away because it makes sense. but some people don’t want to accept this….yet
May 2, 2008 at 1:01 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #197947ParticipantJWM,,,
You are one of the few posters here who has consistently seen the big picture(macro) while so many others are only focused on their own neighborhood or street.When the “jumbo conforming” loans were first announced, I tried to tell people that the devil would be in the details, and not to get excited about them.
There was no way that the rates would be the same as the $417K conforming limit, and they aren’t.
My competition was telling people to get their apps in early because there was sure to be a flood of activity when the limits were raised. I was laughing on how easily some people believe what they are told by fools, and ignore reality & facts.
I haven’t seen many that can actually qualify for the new program full doc. Either they haven’t got the equity to refi OR cannot qualify based on debt ratios.
For investment or 2nd homes you need 40% equity, and the debt ratios are lower on these loans than on the old $417K, which makes it harder to qualify.
The program wasn’t designed to save California. Now that the median has dropped, they should lower the jumbo limits.
I cannot imagine how much was spent to roll out the program, but it was just another band-aid and delayed a few people going FC by a few months…Conforming PAR rates today are 5.875%, on April 1st they were 5.375%, it takes more income to qualify for the same loan at the max debt ratio.
The best thing for many people is to do it the “Conseco way” and walk away because it makes sense. but some people don’t want to accept this….yet
May 2, 2008 at 1:01 PM in reply to: Gee, I guess those new conforming limits haven’t really helped much…. #197985ParticipantJWM,,,
You are one of the few posters here who has consistently seen the big picture(macro) while so many others are only focused on their own neighborhood or street.When the “jumbo conforming” loans were first announced, I tried to tell people that the devil would be in the details, and not to get excited about them.
There was no way that the rates would be the same as the $417K conforming limit, and they aren’t.
My competition was telling people to get their apps in early because there was sure to be a flood of activity when the limits were raised. I was laughing on how easily some people believe what they are told by fools, and ignore reality & facts.
I haven’t seen many that can actually qualify for the new program full doc. Either they haven’t got the equity to refi OR cannot qualify based on debt ratios.
For investment or 2nd homes you need 40% equity, and the debt ratios are lower on these loans than on the old $417K, which makes it harder to qualify.
The program wasn’t designed to save California. Now that the median has dropped, they should lower the jumbo limits.
I cannot imagine how much was spent to roll out the program, but it was just another band-aid and delayed a few people going FC by a few months…Conforming PAR rates today are 5.875%, on April 1st they were 5.375%, it takes more income to qualify for the same loan at the max debt ratio.
The best thing for many people is to do it the “Conseco way” and walk away because it makes sense. but some people don’t want to accept this….yet
ParticipantMost people that are in trouble can barely qualify for the loan that they have. With a DTI of 50% +/- it is VERY unlikely that most people can buy another house with their current mortgage debt on their credit report.
Even if they want to lie and claim that it will be a rental, they have no rental income to offset the additional PITI debt, and will have to qualify for ALL of the debt on both houses.
You would have to have substantial full doc income to pull it off. It’s not impossible, but not likely for most.
If the loan gets qualified for by somebody else who doesn’t already have mortgage debt, that’s a different story. Could be a spouse or other family member etc, who isn’t on the current loan. They would still need to qualify.
ParticipantMost people that are in trouble can barely qualify for the loan that they have. With a DTI of 50% +/- it is VERY unlikely that most people can buy another house with their current mortgage debt on their credit report.
Even if they want to lie and claim that it will be a rental, they have no rental income to offset the additional PITI debt, and will have to qualify for ALL of the debt on both houses.
You would have to have substantial full doc income to pull it off. It’s not impossible, but not likely for most.
If the loan gets qualified for by somebody else who doesn’t already have mortgage debt, that’s a different story. Could be a spouse or other family member etc, who isn’t on the current loan. They would still need to qualify.
ParticipantMost people that are in trouble can barely qualify for the loan that they have. With a DTI of 50% +/- it is VERY unlikely that most people can buy another house with their current mortgage debt on their credit report.
Even if they want to lie and claim that it will be a rental, they have no rental income to offset the additional PITI debt, and will have to qualify for ALL of the debt on both houses.
You would have to have substantial full doc income to pull it off. It’s not impossible, but not likely for most.
If the loan gets qualified for by somebody else who doesn’t already have mortgage debt, that’s a different story. Could be a spouse or other family member etc, who isn’t on the current loan. They would still need to qualify.
ParticipantMost people that are in trouble can barely qualify for the loan that they have. With a DTI of 50% +/- it is VERY unlikely that most people can buy another house with their current mortgage debt on their credit report.
Even if they want to lie and claim that it will be a rental, they have no rental income to offset the additional PITI debt, and will have to qualify for ALL of the debt on both houses.
You would have to have substantial full doc income to pull it off. It’s not impossible, but not likely for most.
If the loan gets qualified for by somebody else who doesn’t already have mortgage debt, that’s a different story. Could be a spouse or other family member etc, who isn’t on the current loan. They would still need to qualify.
ParticipantMost people that are in trouble can barely qualify for the loan that they have. With a DTI of 50% +/- it is VERY unlikely that most people can buy another house with their current mortgage debt on their credit report.
Even if they want to lie and claim that it will be a rental, they have no rental income to offset the additional PITI debt, and will have to qualify for ALL of the debt on both houses.
You would have to have substantial full doc income to pull it off. It’s not impossible, but not likely for most.
If the loan gets qualified for by somebody else who doesn’t already have mortgage debt, that’s a different story. Could be a spouse or other family member etc, who isn’t on the current loan. They would still need to qualify.
ParticipantIt’s an empty threat. Nationwide, it’s now NON-recourse debt for anybody who walks that bought OR refinanced their principal residence without taking cash out….
The Mortgage Forgiveness Debt Relief Act of 2007 applies to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.
http://www.irs.gov/individuals/article/0,,id=179414,00.html
Giving them 5 years to recover is a favor.
The punishment would be insisting that they HAVE TO buy again within 12 months !!
5 years is a decent amount of time to repair their credit, save up for a down payment, and then end up buying the house next door for 50% less than they owe on theirs today.
The sooner they come to their senses and walk away, the sooner the 5 year clock starts ticking. Many people should be encouraged by this offer, and not be surprised if it is changed from 5 years to 2 or 3 years in 2010-2011…
The “system” may desperately need those people to soak up some excess inventory around that time.
ParticipantIt’s an empty threat. Nationwide, it’s now NON-recourse debt for anybody who walks that bought OR refinanced their principal residence without taking cash out….
The Mortgage Forgiveness Debt Relief Act of 2007 applies to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.
http://www.irs.gov/individuals/article/0,,id=179414,00.html
Giving them 5 years to recover is a favor.
The punishment would be insisting that they HAVE TO buy again within 12 months !!
5 years is a decent amount of time to repair their credit, save up for a down payment, and then end up buying the house next door for 50% less than they owe on theirs today.
The sooner they come to their senses and walk away, the sooner the 5 year clock starts ticking. Many people should be encouraged by this offer, and not be surprised if it is changed from 5 years to 2 or 3 years in 2010-2011…
The “system” may desperately need those people to soak up some excess inventory around that time.
ParticipantIt’s an empty threat. Nationwide, it’s now NON-recourse debt for anybody who walks that bought OR refinanced their principal residence without taking cash out….
The Mortgage Forgiveness Debt Relief Act of 2007 applies to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.
http://www.irs.gov/individuals/article/0,,id=179414,00.html
Giving them 5 years to recover is a favor.
The punishment would be insisting that they HAVE TO buy again within 12 months !!
5 years is a decent amount of time to repair their credit, save up for a down payment, and then end up buying the house next door for 50% less than they owe on theirs today.
The sooner they come to their senses and walk away, the sooner the 5 year clock starts ticking. Many people should be encouraged by this offer, and not be surprised if it is changed from 5 years to 2 or 3 years in 2010-2011…
The “system” may desperately need those people to soak up some excess inventory around that time.
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