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ParticipantTo anyone who will think that increasing conforming loan limits would be good… think again!
Think of it this way. It makes it easier to get financing at low rates.. which just like the low interest rates and funky financing that got us into this problem in the first place, will drive up the price of houses. Normally you get a lot more house per dollar when you get over about $500K in most markets. This change would move that breakpoint up to about $800K. Basically what is happening here is an attempt to re-inflate the bubble as well as the banks/money managers trying to shove off their bad loans onto Fannie Mae/Freddie Mac (no one wants to pick them up at the price that the banks want to sell them at, and the banks don’t want to write the value down to sell it. Remember Warren Buffets comment that they should mark to market not mark to model.).
http://www.minyanville.com/articles/index.php?a=12869
It seems that many people have an obsession with thinking lower interest rates make a house more affordable. It doesn’t. It is actually makes it more expensive because it increases realizable demand at that price level thereby driving up the price not to mention property taxes and insurance costs. Imagine what house prices would be if interest rates were 15%? A higher interest rate means your down payment goes a lot further. The way to profit from RE is to buy when rates are high, sell or refi to a lower fixed when rates are low.
There is another problem here too. Freddie Mac and Fannie Mae already have a problem on loan loss reserves. Allowing them to pick up loans with a higher face value will not make this better.. it makes it a lot worse. If either of these institutions fails, guess who picks up the tab? The taxpayer. Both of these institutions are guaranteed by the US gov and thereby the taxpayer.
ParticipantTo anyone who will think that increasing conforming loan limits would be good… think again!
Think of it this way. It makes it easier to get financing at low rates.. which just like the low interest rates and funky financing that got us into this problem in the first place, will drive up the price of houses. Normally you get a lot more house per dollar when you get over about $500K in most markets. This change would move that breakpoint up to about $800K. Basically what is happening here is an attempt to re-inflate the bubble as well as the banks/money managers trying to shove off their bad loans onto Fannie Mae/Freddie Mac (no one wants to pick them up at the price that the banks want to sell them at, and the banks don’t want to write the value down to sell it. Remember Warren Buffets comment that they should mark to market not mark to model.).
http://www.minyanville.com/articles/index.php?a=12869
It seems that many people have an obsession with thinking lower interest rates make a house more affordable. It doesn’t. It is actually makes it more expensive because it increases realizable demand at that price level thereby driving up the price not to mention property taxes and insurance costs. Imagine what house prices would be if interest rates were 15%? A higher interest rate means your down payment goes a lot further. The way to profit from RE is to buy when rates are high, sell or refi to a lower fixed when rates are low.
There is another problem here too. Freddie Mac and Fannie Mae already have a problem on loan loss reserves. Allowing them to pick up loans with a higher face value will not make this better.. it makes it a lot worse. If either of these institutions fails, guess who picks up the tab? The taxpayer. Both of these institutions are guaranteed by the US gov and thereby the taxpayer.
ParticipantIf you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.
Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.
ParticipantIf you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.
Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.
ParticipantIf you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.
Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.
ParticipantIf you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.
Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.
ParticipantIf you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.
Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.
ParticipantOk, cut taxes in general and started a war.
It was needed, remember what were were going through on the initial term of his presidency. On the other hand, cutting RE long term capital gains was stupid and only help fuel the speculators. Nothing like being able to hid up to $250,000 by just owning a house for 1 year and selling for more later. Sounds like a flippers mating song…
Starting a war: I go both ways on this. I am more upset as how the war was executed as opposed to the war itself. Typical group grope management wise. If you look into what Saddam was doing to his own people: It had to change. The “shock and awe” stuff was absolutely stupid. The real “shock and awe” would be the US troops waving “hi” behind that Baghdad TV reporter as he was stating that US troops were loosing their will to fight and were no where near the capital.
ParticipantOk, cut taxes in general and started a war.
It was needed, remember what were were going through on the initial term of his presidency. On the other hand, cutting RE long term capital gains was stupid and only help fuel the speculators. Nothing like being able to hid up to $250,000 by just owning a house for 1 year and selling for more later. Sounds like a flippers mating song…
Starting a war: I go both ways on this. I am more upset as how the war was executed as opposed to the war itself. Typical group grope management wise. If you look into what Saddam was doing to his own people: It had to change. The “shock and awe” stuff was absolutely stupid. The real “shock and awe” would be the US troops waving “hi” behind that Baghdad TV reporter as he was stating that US troops were loosing their will to fight and were no where near the capital.
ParticipantOk, cut taxes in general and started a war.
It was needed, remember what were were going through on the initial term of his presidency. On the other hand, cutting RE long term capital gains was stupid and only help fuel the speculators. Nothing like being able to hid up to $250,000 by just owning a house for 1 year and selling for more later. Sounds like a flippers mating song…
Starting a war: I go both ways on this. I am more upset as how the war was executed as opposed to the war itself. Typical group grope management wise. If you look into what Saddam was doing to his own people: It had to change. The “shock and awe” stuff was absolutely stupid. The real “shock and awe” would be the US troops waving “hi” behind that Baghdad TV reporter as he was stating that US troops were loosing their will to fight and were no where near the capital.
ParticipantOk, cut taxes in general and started a war.
It was needed, remember what were were going through on the initial term of his presidency. On the other hand, cutting RE long term capital gains was stupid and only help fuel the speculators. Nothing like being able to hid up to $250,000 by just owning a house for 1 year and selling for more later. Sounds like a flippers mating song…
Starting a war: I go both ways on this. I am more upset as how the war was executed as opposed to the war itself. Typical group grope management wise. If you look into what Saddam was doing to his own people: It had to change. The “shock and awe” stuff was absolutely stupid. The real “shock and awe” would be the US troops waving “hi” behind that Baghdad TV reporter as he was stating that US troops were loosing their will to fight and were no where near the capital.
ParticipantOk, cut taxes in general and started a war.
It was needed, remember what were were going through on the initial term of his presidency. On the other hand, cutting RE long term capital gains was stupid and only help fuel the speculators. Nothing like being able to hid up to $250,000 by just owning a house for 1 year and selling for more later. Sounds like a flippers mating song…
Starting a war: I go both ways on this. I am more upset as how the war was executed as opposed to the war itself. Typical group grope management wise. If you look into what Saddam was doing to his own people: It had to change. The “shock and awe” stuff was absolutely stupid. The real “shock and awe” would be the US troops waving “hi” behind that Baghdad TV reporter as he was stating that US troops were loosing their will to fight and were no where near the capital.
ParticipantReal estates’ version of mind-numbed robots!
I have to agree with you there.. Listening to Thomas Kunz spew crap, droning on and on nearly put me to sleep.. and I still did not want to buy. He does sound a bit worried.
Jim Gillespie Buy for lifestyle?? huh? Then it gets contradicted.. buying for shelter? which is it?
It all come to affordability… and if it is not affordable, then it is not a good time to buy.
ParticipantReal estates’ version of mind-numbed robots!
I have to agree with you there.. Listening to Thomas Kunz spew crap, droning on and on nearly put me to sleep.. and I still did not want to buy. He does sound a bit worried.
Jim Gillespie Buy for lifestyle?? huh? Then it gets contradicted.. buying for shelter? which is it?
It all come to affordability… and if it is not affordable, then it is not a good time to buy.
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