[Sandi Egan]

Most of people on this blog are positive that the prices are going down significantly. Irrelevant to your situation, it might be more prudent to sell now, realize loss, and later recoup the loss on account of lower home prices. Don’t take my advise to seriously, though. I don’t own a home and for me it’s all very theoretical.

[Sandi Egan]

I know a former GM exec, he says union guys did not hesitate to act on personal level against managers they didn’t like even in 1990’s. Pouring water in the cushion of your chair to confronting your kids at school, etc. My friend says he was constantly wary about his family.

[Sandi Egan]

Isn’t huge competition in the realtor business affecting the commissions agents are getting? Is it still 6%?

[Sandi Egan]

I think next bubble has to be something hi-tech, something that only Americans can do (at least at the beginning), otherwise there is not point.
Nanothechnology? Real alternative energy? Flying cars? Android robots?

All we need is, take a couple of recent scientific papers, popularize them and create a hype in the media. Money will start to flow in the sector, millions will start working on it… Anything remotely related will skyrocket in price.
After several years there will be some results, not as good as everyone expected, but still pretty nice. At that point the bubble will burst. What happens after that is not our problem: there will be enough blogs discussing it then.

[Sandi Egan]

$13.5B

[Sandi Egan]

OK, I am completely lost here.
Is this raise aiming at boosting home sales, or allowing existing homeowners to refinance out of their toxic mortgages?

[Sandi Egan]

People tend to get irrationally attached to their homes. Even flippers.

[Sandi Egan]

raise the FHA’s loan limit from its current $417,000 to as much as $729,750

I researched this topic in the web a bit, but still don’t understand some things.

1. As far as I know, the FHA’s limit until very recently was $368,000, not $417K.
2. If the bill really talks about FHA (as opposed to GSEs Freddy and Fannie), then it’s not that bad. FHA is not a mortgage company, it’s an insurance company. If you are eligible, you can pay the insurance premium, that would cover your mortgage in case of a default. FHA claims it does not rely on taxpayers’ money for its business, and covers all expenses with the income it generates from insurance payments. Am I correct?
3. If the bill is about raising GSEs’ conforming threshold, will it allocate any additional funding to Freddy and Fannie? Neither this nor any other article I was able to find mentioned that. As far as I know, they have combined budget of $1.4 trillion. If that number is not increased, doesn’t raising the limit mean that GSEs will have an option to finance one expensive house instead of 3 regular ones?

I’d appreciate if somebody could shed some light on this.

[Sandi Egan]

To paraphrase the point of the article:
“It is my professional opinion, that now it’s the time to PANIC”
© Monsters Inc.

[Sandi Egan]

Mostly long time owners with lots of equity who are moving on and willing to do so at these price levels.
Interestingly, these are the kind of people that drive the prices down. I always thought foreclosures will lead the way. I guess these are the only people who can afford to cut the price somewhat.

[Sandi Egan]

I am completely satisfied with SDCCU
Me too. Had online banking for years, pay ALL my bill online, great certificate rates (currently 5.25% 5-month cert) no fees of any kind.
Banks blow.

[Sandi Egan]

The second wave will have the presumed benefit of short-term rate declines precipitated in part by the damage to the economy done by the first wave which we are currently experiencing.
Exactly!
If your 5-year ARM resets to the same interest rate that was there when you were signing, your monthly payment wouldn’t go up at all (except on interest-only ARMs). That’s a marginal case, of course, but today BB made a big step in that direction.

[Sandi Egan]

Do Fed Funds rate correlate with indexes commonly used in Mortages ? They sure do.
I think there are two different concepts here.
FFR directly affects any other short-term rate, including ARM post-reset rates, usually tied to LIBOR. It is much more disconnected from long-term rates.

When translated to the housing market it means:

1. People with resetting ARMs get a huge bailout-like break.
2. People who are on the market for a home will hardly notice any difference (other than generally better mood at lender’s office)

[Sandi Egan]

Bank of America Corp. has lowered its prime-lending rate to 7.75 percent from 8.25 percent, effective Tuesday.
I am as ignorant on these topics as the next guy, but isn’t prime rate the rate at which the bank lends short-term money to credit cards and such rather than mortgage?

[Sandi Egan]

BofA is not a good bank for personal finance anyway. There are plenty of fee-free banks and credit unions.

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