[HLS]

Here is the “Official” US list, 156 “Lenders” as of Sept 15th.

http://ml-implode.com/

VERY important to note that NONE of these were actual banks that went under. They were “middle men” originating and underwriting loans and selling them off on Wall Street.
Very few were considered direct lenders, lending their own money. They were working off lines of credit from Wall Street.

I don’t think that ANY of them can be compared to Northern Rock, as the US government wouldn’t consider bailing out any of these private entities.

I don’t miss any of these companies and business can still be done without them, with reasonable underwriting guidelines today.

[HLS]

Rock and Duck you are both right…

I think what ROCK was trying to say was that most people purchase with 30 day locks, so anything that funded/closed in August was possibly locked in July or early August before the jumbo fiasco.

Some of August loans could have been conforming amounts.

Lenders CAN come up with reasons not to fund, but they don’t make any money if they don’t fund it. A lock can actually mean a commitment for that borrower only, so it’s not like they can shift the funds elsewhere.

Funders and underwriters also get paid on actual closed loans. They aren’t looking for reasons to not fund a loan, they just need to be sure that their A is covered.

In July-early August, there were 5 YR fixed jumbos available at 5.75%,, now around 7% on that program.

The September number will be interesting.

There has been and remains no problem with conforming amounts of 417K or below. 30 YR Fixed are well below 6% again, but it isn’t helping those with no equity.

In many cases a 90% loan of 2 years ago is 100% today.
Even some 2005 80% loans are near 100% today.

The current market is a gas gauge that is running out of fuel, on E, sputtering along slowly until the final stop.
Nobody knows exactly how far the needle will go past E.

[HLS]

It’s a nationwide plan… I wondered why the original estimate was only going to help 80,000 people out of 2 million that were in trouble, now it makes sense!!

There are a fair number of reset problems in OH, MI, IN, IL, KY, TN, PA. This plan might help some of them, it isn’t going to help anybody who did 100% financing OR an option ARM and owes more today than the property is worth.

It will help those who had a down payment and got an ARM with a reset that they cannot afford. I believe it’s still a small % of people in trouble.

I’m sure there is still talk about a larger bailout plan, it remains to be seen what will still happen.

AND for the record, it’s an initiative, not iniative 😉

[HLS]

In general, loans that are originated for a purchase are NON-recourse debt. (1st and 2nds)

Loans that are refinances are recourse debt. It DOESN’T matter if no cash is taken out, it’s still a refi.

If your purchase 2nd is a HELOC, it can get tricky.

PLEASE consult a tax professional if you are involved in a Cancellation Of Debt (COD) situation…

Link to details: http://www.irs.gov/faqs/faq4-4.html

[HLS]

Not just California,

There would be 2 separate deeds. If you continue paying on the 1st, but not on the 2nd, it would be up to the 2nd note holder to foreclose, take possession, and they would have to keep up the payments on the 1st, to protect their position, which may not be worth doing.
If they didn’t foreclose, the lien would just remain on the property until something was negotiated “someday”

If the borrower stopped making payments on the 1st and 2nd, the foreclosure would be initiated by the 1st, and the 2nd may end up with nothing.

This does not address 1099 issues regarding debt relief, recourse or non-recourse debt, or the possibility of a deficiency judgment.

[HLS]

4S… In the above example, your blended rate is correct.
The closing costs wouldn’t be much higher to get a 1st and 2nd, and this would probably be the best way to go today.
(1st at $417K & 2nd at $143K)

The key is what you can qualify for. For strong borrowers, 30 YR Fixed Fully Amortized are 6% or below today, with the option to buy down even lower.
A 2nd is available closer to 8%, (also worth considering buying down)
This would bring the blended fixed rate closer to 6.50% for a fixed. A solid jumbo today will be closer to 7%.

Jumbo rates DO NOT keep climbing, they actually came down last week for strong borrowers. Money is available.
Even with a good credit score and 20% down, there are still underwriting isues that pop up, no differently than 60 days ago.

Please understand that it’s impossible for anyone to quote accurate rates without knowing what you actually qualify for.
Rates that are flippantly quoted is what leads to misunderstandings.

When it comes to “closing costs” The only fee that a broker is in control of is their origination/broker fees and what they do with any rebate that comes from the lender.

ALL other costs, Title & Escrow fees, Lender Underwriting and prorations for interest and impound account (if necessary) don’t change by the mortgage originator, it just depends on which title & escrow you use.

Without knowing if seller is contributing to closing costs or exactly what borrower will be paying for, it’s another very easy way to be misled when asking for a quote.

A “Good Faith Estimate” is nothing more than a compliance issue and does not have to be accurate or disclose every cost/fee. Another misconception.

You should also always have the option to pay a higher rate and monthly payment to offset your closing costs IF YOU CHOOSE. That’s how the “no cost loan” works, but not explained as such.

[HLS]

People can see what is going on. Loans are adjusting, they would like to sell, but they see and hear that houses just aren’t selling, so they aren’t bothering to list them.
This wasn’t the situation in 2006.

There are plenty of people who would gladly sell their homes, but cannot afford to at todays price, without a huge loss.

I’m amazed at the number of people who say that they will wait until the market gets better.

The question is, how long can they afford to wait until they list or go into foreclosure.

Some people are bleeding their savings and retirement accounts to continue making their payments but will end up losing their homes anyway, and be near broke when they do.

[HLS]

You seem to have forgotten that they know excatly where to find these “investors” with their monthly income, so they also know where they are to discuss defaults.

Because defaults were never considered when these portfolios were sold, it’s a matter of shock and denial right now to many.

Until they realize that some return is better than no return, it’s going to be messy.

Hedge funds by nature do not need to disclose their losses or net asset value. There are HUGE losses that have not been disclosed, including cities, counties, pension funds,
and bank money market funds that are NOT FDIC insured.

All the talk about the “bailout”…I can’t wait for a meeting of distressed homeowners who want to hold it at Starbucks. After going out for a yuppie dinner, They will drive up in Hummers, wearing designer clothes and jewellery, complaining that they just cannot afford their mortgage payments.

Qualifying for bailout should be easy in my opinion.
A YES answer to any of the below disqualifies you from bailout help.

1)EVER been to Starbucks ?
2)Do you shop at the mall ?
3)Did you car cost over $30K ?
4)Do ALL adults in the home work less than 50 hours a week ?
5)Does your home have cable/satellite TV AND does each person have a cel phone AND do you have a video game player ?

[HLS]

It is specific in each set of loan docs. It can be LIBOR (1 month, 3 month, 6 month or 1 yr, they are all different rates) OR COFI, COSI etc. ALWAYS plus a margin.

The Option Arm loan, which is the WORST loan ever created for the borrower, and the best for the lender, could become the downfall of several lenders.
The higher the margin was, the larger the commission was to the “mortgage pro” selling it, up to 4%, for screwing the borrower. It still exists today.

It’s actually been very surprising to me that the media hasn’t jumped on this yet. Had the market just stayed even, there would still be thousands of people who would owe 15% to 25% more than the house was worth. With the decline, they have negative equity built in added to the market decline.
It was easy to owe 15% more than your loan started at within 3 years.

[HLS]

PROPERTY TAX basis transfer has its restrictions and is not reciprocal between every county. It’s proposition 60 AND 90.
You CAN transfer within the same county when following the rules. Realize that it is the county assessor giving up income for their county.

Here’s the scoop:
http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#2

[HLS]

For an area that is 20-25 years old, it’s disappointing IMO.

My point is that there are other communities that were “created” +/- 20 years ago that are much nicer than Moreno Valley became.

By offering the cheapest housing, you attract ALL kinds, good and bad, and create a fringe area pretty quickly.

Phillips Ranch and Chino Hills were also created previously, and I think to this day that they are nicer family/quality of life areas than Sunnymead. They never offered “cheap”
I remember Orange County before Mission Viejo and Irvine built up. They are far older than Moreno Valley and I still don’t think that they have “nice areas and bad areas”

It’s a poor excuse to say “like every big city” and just except that there is no alternative lifestyle.

Just realize that if you want a larger house at the cheapest sq ft price around, rest assured that you aren’t the only one noticing that.

Into retirement years, I would be looking at a 55+ community with like minded people who want to enjoy their lives, and not take a chance on who the partying loud neighbors might be in a large “cheap” house.

Lake Elsinore was a fringe area 40 years ago, and it’s hard for me to think of it differently, even if they did add a Wal-Mart, Lowe’s, Home Depot and and Outlet Center (that you wouldn’t know existed if you didn’t drive by it)

[HLS]

Cashman, you MUST look beyond the price per sq foot.
It might be the cheapest that you can find, no argument.
There is a REASON why it’s cheap there.

In the 1980’s Moreno Valley/Sunnymead turned cow pastures into “cheap” housing. In addition to the bargain hunters, It attracted a whole bunch of trailer trash and LA gang families BECAUSE it was cheap and turned the area into a depressing place. AND it gets HOT there.

You have no control over how trashy your neighbors will be.

I’d rather pay $200 a ft and buy half the house in a good area, than be hypnotized by $100 a ft pricing.
I’d rather live in a senior mobile home park with a generation that understands respect than “a tempting bargain” in Lake Elsinore.

There are plenty of decent areas to look at. LE wouldn’t be one in my book.

[HLS]

I don’t think that the solution is that the Fed will do whatever it takes.
I think that the problem is that the Fed will do whatever it takes.

They are not looking to protect the individual. They are looking to protect the system from collapse, and ensure that the lending community gets repaid.

They will do whatever it takes to try and make sure that lenders get paid, because they don’t want the system to have to foreclose on an overpriced house that isn’t worth what the borrower owes on it.

They will do whatever they have to to keep people in debt on an overpriced house, and support the false illusion of value.

They need to do whatever it takes to protect the 3% at the bottom to keep the other 97% fooled.

[HLS]

In 2003 Prime was 4% (FED rate was 1%)
30 YR Mortgage rates were 5% (15 YR was 4.75%) at the bottom, and not there for long.

Prime is now 8.25%, a move up of 4.25%, and 30 Mortgage rates are 6%. The 4+ point Prime move equates to a 1 point move in mortgage rates.

EVEN IF prime drops a quarter or half point, it is possible that 30 yr rates will stay the same or rise. It won’t surprise me if FED holds rates (or even raises!)

Profit margins at the major lenders that are left are razor thin. The losses that are buried and unknown need to be compensated for. The business model that many lenders had doesn’t work any more…SO with a cheaper cost of money, they may just get together and increase their margins.

There must be profits to offset normal operating expenses as well as compensate for the huge losses that haven’t been announced yet.

A small move in rates isn’t going to be a bailout.

A major correction of unlimited foreclosures with no intervention and returning to lending standards that require a minimum 10% down payment is what is needed.

Yes, it will be ugly for 5-10 years, and only the strong will survive, but the aftermath will be that civility will be restored.

Let the chips fall where they may and reward the responsible people. The Govt is not concerned about the little guy, they need to protect “the system” from collapsing…We were and still are real close to disaster.

Only a tiny % of homes are up for sale and there is panic. Imagine if 10% of homeowners wanted to sell. There is no market for that many homes. Equity in a home is a false sense of security, that disappears by the billions.

[HLS]

Just another shack by the beach….sounds cheap 😉

http://money.aol.com/forbes/realestate/mostexpensivehomes

If you are an intelligent, educated person who just happens to throw a ball well, make curse words rhyme, wear your pants around your knees, or get paid to make movies for the big screen, this might be just a years salary for you. Since you worked so hard to make that kind of money, it would just be one of many homes that you owned, that you probably just paid cash for.

Value ? Comps ? Worth it ? WHO CARES!!
It’s either more money than brains OR ego (or both)

[Author]

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