Homeowner bailout is a lousy idea
#11
Posted 06 December 2007 - 07:29 PM
#12
Posted 06 December 2007 - 07:31 PM
~ Johann Wolfgang Von Goethe ~
#13
Posted 06 December 2007 - 07:32 PM
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
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#14
Posted 06 December 2007 - 07:35 PM
What if mortgage rates just started dropping now and went to the 4's ??? That's what I think can happen.
then i'll re-fi, pay off half my loan, and take a 15-year fixed on the balance .
ed rader
#15
Posted 06 December 2007 - 07:35 PM
#16
Posted 06 December 2007 - 07:37 PM
What if mortgage rates just started dropping now and went to the 4's ??? That's what I think can happen.
If an ARM's holder is lucky, he might pay about the same in 4 years...maybe.
As I said, nobody ever mouthed the word teaser rate. I'm sure a ton of folks were sitting there with loans figuring that if rates went up much, they get a fixed rate, or deal with the modest increase when it showed up. They in no way expected a 2-3% point jump. I'm sure of it.
Mark
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#17
Posted 06 December 2007 - 07:44 PM
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
http://twitter.com/VolumeDynamics http://parler.com/Volumedynamics
#18
Posted 06 December 2007 - 07:49 PM
What if mortgage rates just started dropping now and went to the 4's ??? That's what I think can happen.
If an ARM's holder is lucky, he might pay about the same in 4 years...maybe.
As I said, nobody ever mouthed the word teaser rate. I'm sure a ton of folks were sitting there with loans figuring that if rates went up much, they get a fixed rate, or deal with the modest increase when it showed up. They in no way expected a 2-3% point jump. I'm sure of it.
Mark
Mark -- these people expected their homes to double in price in 2-3 years and to either sell or re-fi at a lower rate. they were panic buying in this area.
the same folks couldn't afford the same home when it cost half as much so you can't tell me that they were suckered.
they knew they couldn't afford the home....especially after the price had doubled.
i'm really surprised at what you are saying.
ed rader
Edited by ed rader, 06 December 2007 - 07:50 PM.
#19
Posted 06 December 2007 - 08:08 PM
#20
Posted 06 December 2007 - 08:20 PM
I will just add what I said on NAV's thread last weekend, I think Adjustable Rate mortgages should be banned. While there are some good uses for them, and if rates are dropping, it could be a boon to the mortgagee, overall, I don't think the average investor understands the gamble he's taking. Everyone who takes out a mortgage on a fixed rate takes the gamble that their ability to pay it will stay the same as it was at the time they took it. To add the added layer of chance with ARMs is, in my opinion, to much. ESPECIALLY with a sub-prime borrower.
The bottom line is, as far as the domestic mortgage crisis goes, all we are going to get are Hobbesian choices.
While the politicians say they won't and may not directly raise taxes to pay for this, to think that tax payers won't be paying for this is naive.
The main show, the one that hasn't really showed up on Main St. yet but, is slipping into town, any town on the planet as we speak, is on the other end of the crisis's spectrum. The ABP plague, CDO's etc. and the havoc on a much larger scale of money and damage that will produce.
Edited by milbank, 06 December 2007 - 08:24 PM.
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe