[SD Realtor]

I would suspect most all hedge funds in this category have shown big losses and will continue to do so. The liquidation of a fund of this size is somewhat surprising but in reality I think it is a prudent move by Bear Stearns. It does show that Bear Stearns thinks the problem is not going away for now. Thus they ran the numbers and believe liquidating the fund is better then keeping it.

The sad part is that when you look at who the investors of these funds are, you will cringe.

The funny (but sad) part about these funds is that these investors trusted the underwriting process… they bought these funds assuming that the underwriting process from which these mortgages were originated would weed out potential defaults… Doh!!!

SD Realtor

[SD Realtor]

See guys, things that have been recommended in this post be everyone, are what people should be doing but they do not when they deal with the builders sales agents.

Also there is not a lender in the world (preferred or not preferred) out there that will lock a loan for some of the lead times that the builders release phases on. Just to get a 60 day lock on a loan is gonna cost you…So that is something that maybe people need to rethink before giving advice on. Also the preferred lenders programs in most cases CAN be beaten by other lenders. However, most people want the incentives and you…. don’t…..get…. them…. if you use an outside lender. You can kick and stomp all you want and the sales lady will smile at you as you walk out the door. However, an astute buyer who will add up the interest will notice that it is better to use the outside lender and forego the incentives because over time there is a crossover.

So the main point is, understand the risk of floating a loan, understand the ramifications of using a preferred lender. To me, the best deals occur when the builders have a property fall out, and they have those quick hit sales that they are trying to sell this one property. These are the best because they can close those deals quickest. Unfortunately many of those types of homes already have a set of upgrades or what have you that cannot be changed. However at least you will not have to float a loan and wait for several months to close escrow.

SD Realtor

[SD Realtor]

See guys, things that have been recommended in this post be everyone, are what people should be doing but they do not when they deal with the builders sales agents.

Also there is not a lender in the world (preferred or not preferred) out there that will lock a loan for some of the lead times that the builders release phases on. Just to get a 60 day lock on a loan is gonna cost you…So that is something that maybe people need to rethink before giving advice on. Also the preferred lenders programs in most cases CAN be beaten by other lenders. However, most people want the incentives and you…. don’t…..get…. them…. if you use an outside lender. You can kick and stomp all you want and the sales lady will smile at you as you walk out the door. However, an astute buyer who will add up the interest will notice that it is better to use the outside lender and forego the incentives because over time there is a crossover.

So the main point is, understand the risk of floating a loan, understand the ramifications of using a preferred lender. To me, the best deals occur when the builders have a property fall out, and they have those quick hit sales that they are trying to sell this one property. These are the best because they can close those deals quickest. Unfortunately many of those types of homes already have a set of upgrades or what have you that cannot be changed. However at least you will not have to float a loan and wait for several months to close escrow.

SD Realtor

[SD Realtor]

Alex as we have commented in many posts like this, it is hard but not impossible to get the deposit back. A 20k deposit is worth spending more money with an attorney to attempt to recoup. Your premise is correct that as long as they meet the numbers for prequalificatin, then they will have a difficult time proving hardship. Even not getting qualified from another lender doesn’t help because it is the preferred lender that the builder is working with. Everyone should recall that even if you purchase a home from a builder and DO NOT use the preferred lender, the builder will still enforce that you need to be qualified by the preferred lender.

The bottom line is the post in this thread that talked about being the squeaky wheel. You need to get around the sales people and get to management. You need to start getting things done in writing and producing documentation so that if necessary, you can build a case for litigation. The purchase contracts used by the builders are iron clad BUT they still do not like to go to court. Now you may need to spend another 1k-2k to attempt to get your money back (this is an estimate for using a RE attorney to take some rudimentary steps) but it may be well worth it in this case. Usually people who take charge and do this get the attention from management.

Be proactive.

SD Realtor

[SD Realtor]

Alex as we have commented in many posts like this, it is hard but not impossible to get the deposit back. A 20k deposit is worth spending more money with an attorney to attempt to recoup. Your premise is correct that as long as they meet the numbers for prequalificatin, then they will have a difficult time proving hardship. Even not getting qualified from another lender doesn’t help because it is the preferred lender that the builder is working with. Everyone should recall that even if you purchase a home from a builder and DO NOT use the preferred lender, the builder will still enforce that you need to be qualified by the preferred lender.

The bottom line is the post in this thread that talked about being the squeaky wheel. You need to get around the sales people and get to management. You need to start getting things done in writing and producing documentation so that if necessary, you can build a case for litigation. The purchase contracts used by the builders are iron clad BUT they still do not like to go to court. Now you may need to spend another 1k-2k to attempt to get your money back (this is an estimate for using a RE attorney to take some rudimentary steps) but it may be well worth it in this case. Usually people who take charge and do this get the attention from management.

Be proactive.

SD Realtor

[SD Realtor]

I definitely was not recommending that either way.

It just seems to me that pondering where the 10 year bond is going is much more important then thinking about what the fed is doing.

SD Realtor

[SD Realtor]

I definitely was not recommending that either way.

It just seems to me that pondering where the 10 year bond is going is much more important then thinking about what the fed is doing.

SD Realtor

[SD Realtor]

Couldn’t agree more with Contraman.

SD Realtor

[SD Realtor]

Couldn’t agree more with Contraman.

SD Realtor

[SD Realtor]

heheheh…now we are getting somewhere as that is a worthwhile question.

[SD Realtor]

heheheh…now we are getting somewhere as that is a worthwhile question.

[SD Realtor]

sdduuuuuude I agree with you.

SD Realtor

[SD Realtor]

sdduuuuuude I agree with you.

SD Realtor

[SD Realtor]

Alex it is a tough dilema. The elasticity of sellers is something we have always talked about before. Sticky, SUPER sticky on the way down. Even though the rates have jumped and in the long run they will move higher, the rate at which sellers start to price lower in order to offset the rate increase is hard to predict. Many posters here want and hope for it to happen fast but the reality is that it may not. The next year or two may be particularly frustrating for wannabe buyers like you and I because the rate increase will not force the price decrease that we want. Eventually it will, maybe 08, 09, 10… who knows. All the usual factors we all talk about like inventory, foreclosures and stuff like that will have bearing.

For the next few months though, don’t expect the near term pricing to catch up to the recent rate spike we have encountered.

All things being equal, if you have downpayment money, then yeah buying a lower priced home at a higher rate makes more sense then buying a higher priced home at a lower rate. Again the caviot to that is that the home needs to be priced low enough to offset the rate hike so that the payment is roughly equal. The win for you is large, more equity instantly, a lower property tax payment, and the chance to refi when the rates go down along with a higher probability that the home will appreciate rather then depreciate.

SD Realtor

[SD Realtor]

Alex it is a tough dilema. The elasticity of sellers is something we have always talked about before. Sticky, SUPER sticky on the way down. Even though the rates have jumped and in the long run they will move higher, the rate at which sellers start to price lower in order to offset the rate increase is hard to predict. Many posters here want and hope for it to happen fast but the reality is that it may not. The next year or two may be particularly frustrating for wannabe buyers like you and I because the rate increase will not force the price decrease that we want. Eventually it will, maybe 08, 09, 10… who knows. All the usual factors we all talk about like inventory, foreclosures and stuff like that will have bearing.

For the next few months though, don’t expect the near term pricing to catch up to the recent rate spike we have encountered.

All things being equal, if you have downpayment money, then yeah buying a lower priced home at a higher rate makes more sense then buying a higher priced home at a lower rate. Again the caviot to that is that the home needs to be priced low enough to offset the rate hike so that the payment is roughly equal. The win for you is large, more equity instantly, a lower property tax payment, and the chance to refi when the rates go down along with a higher probability that the home will appreciate rather then depreciate.

SD Realtor

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