The era of cheap money is over (news item)

[dead_reggin_storage_fashi]

Foreclosures were already through the roof. Now, there are going to be lots of displaced Americans. Many financed 120% of the value of their homes and have ARM's. Once they are foreclosed, they won't find any credit in today's economy. We will have lots of big empty houses.

they are the ones who signed the paperwork and they are ones who also sign the pre payment form and the also the loan will neg amt if they just make that payment

yes they all signed it and it is so big and bold and easy to read about what type of loan they are in.

it is mostly the borrower's fault. just like smoking..they should know what they are getting into.

IT IS THE BIGGEST INVESTMENT YOU WILL EVER MAKE READ AND DO RESEARCH.

NOPE NOT IN AMERICA

 

[bran987]

use the diff in payment and if you want you can always apply it to the loan. invest it elsewhere etc.

If you do for an IO if you do pay down the princ. balance your payment is based on what you owe not the org. princ. balance like a 30 yr fixed etc

it is a progressive mortgage in the sense if you pay it down your payment goes down and at the same time gives you more flexability with your cash flow. You can always get an IO and pay the balance down if you want.

An IO will always price out better (lower rate) you can get a 10/1 IO with decent credit scores and decent CLTV in the high 5s with a half a discount point if you look. Who keeps their loan for more then 10 years? rare as hell. The average is the a home owner refi's every 3-4 years

Just get a 10/1 IO non conf LIBOR 5-2-5 (allows for a pre payment penalty if you choose) just hold onto the loan for 3 years etc (conf loans you cannot get a prepayment penalty) the ppp you can get the rate down quite low without basically any discount points


build up equity? yes but if you build up on your equity and NEED TO USE IT AGAIN (cash our refi or home equity)

you will pay closing costs and interest on money you have already paid on...... think about it


get an IO and pay the balance if you or invest money else where etc


NEG AMT loans can be dangerous

countrywide offers the pay adv loan

5/1 LIBOR

30 yr fixed
15 yr fixed
IO
and....
Neg amt payment

rate is fixed for 5 years...

other banks and brokers offer the pay option arm (rate changes all the time etc) and the C.F.C. loan is fixed for 5 years.
countrywide is coming out with a 50 year loan and a 10/i payment adv loan soon

lmao

 

[dead_reggin_storage_fashi]

lmao

lol at lmao?>

 

[Razorguns]

in orange county, mortgage companies are laying off people. that shoudl say something.

houses are still selling, but investors aren't going to pay bucketloads so mortgage companies can lend as much as people want. making money on a mortgage with a high interest rate goes out the window when the principal person can't pay the monthly mortgage.

but people knew this would happen - but investors kept buying mortgages in bulk, and lenders kept lending. now it's 'market correction' time baby.

the era of mortgage companies getting $1 billion from wall st to lend out mortgages blindly to anyone who asks is way over. when mortgages become a bad investment, restrictions get tightened. restrictions get tightened, pool of qualified buyers shrink. pool shrinks, demand falls. demand falls, prices of houses fall.

ta da.

 

[Jon79]

hi

 

[gonelifting]

When's the bottom? THAT'S what I want to know.

I need to sell my house in one or two years. Someone tell the fed.

 

[bran987]

lol at lmao?>

no it's a great point of view I love to hear peoples' opinions I was just remember when I used to take a long time to post investment stuff on EF and it was funny to me when I got home from a party last night

 

[heatherrae]

they are the ones who signed the paperwork and they are ones who also sign the pre payment form and the also the loan will neg amt if they just make that payment

yes they all signed it and it is so big and bold and easy to read about what type of loan they are in.

it is mostly the borrower's fault. just like smoking..they should know what they are getting into.

IT IS THE BIGGEST INVESTMENT YOU WILL EVER MAKE READ AND DO RESEARCH.

NOPE NOT IN AMERICA

Not sure why you are bitching at me. I was just pointing out the facts.

 

[dead_reggin_storage_fashi]

in orange county, mortgage companies are laying off people. that shoudl say something.

houses are still selling, but investors aren't going to pay bucketloads so mortgage companies can lend as much as people want. making money on a mortgage with a high interest rate goes out the window when the principal person can't pay the monthly mortgage.

but people knew this would happen - but investors kept buying mortgages in bulk, and lenders kept lending. now it's 'market correction' time baby.

the era of mortgage companies getting $1 billion from wall st to lend out mortgages blindly to anyone who asks is way over. when mortgages become a bad investment, restrictions get tightened. restrictions get tightened, pool of qualified buyers shrink. pool shrinks, demand falls. demand falls, prices of houses fall.

ta da.

I find it funny when someone has a home and they think the bank just actually lended them the money for their mortgage. Aint so. It is one big ass long line of events

Joe lunch bucket gets home loan through ABC broker firm. ABC gets their financing from lets say ? M&I bank and then M&I bank sells the loan off the countrywide home loans. Countrywide now services the loan and the loan is gathered with other loans that similar (conf, non-conf FHA, gov VA etc) and they are sold as mortgage backed securities on the market under freddie, fannie and ginnie etc. investors buy shares and down to the core end of it some investor really actually has a share in your home. (prob. some slope head)

Yes you still pay countrywide every month as they do service your loan but they didnt just lend out $230k out of a big bank account they have. They get their money from the Fed and investors

sometimes FRS (fix rate seconds) are asset back'd vs mortgage back'd sec.

 

[Razorguns]

yep. to consumers, this is also known as the secondary market.

their mortgage is sold all over the place. the system breaks down if the bottom of the totem pole doesn't make their mortgage payment.

unf. lenders have been greedy and handing out mortgages to everyone; even if their chances of become mr deadbeat foreclosure is pretty high.

don't worry - uncle sam will bail out these lenders just like the bailed out airlines after 9/11.