These saving figures are averages. I don't think that the typical household is SAVING more. But the profligate are sure finding out the they can BORROW less.
Conforming jumbo rates are all over the place. Shopping around can get you .5-.75 over conforming rates. The drop in the Jumbo Conforming limit will hurt the CA market a lot.
The single largest obstalce to refi's of jumbo is the closing costs. Anybody have 20-30K on hand, and if you do, why are you refi-ing verses hoarding the cash for tough times. Sure you save 1K a month but seriously, maybe your not employeed in 1 month.
Anyway, happy holidays and great job and thank you. May next year be filled good news.
I'm in the process of doing a refi at the moment in a house with excellent equity, a 790 credit score and everything else an underwriter would want to see and smile about. We're talking about a relatively small sum, too: about $109,000.
"No cost" refis on a 30 year are ranging from 5.3 - 5.75 and 15 years are between 5.125 - 5.5 from what I've seen.
First, jumbo rates should be higher than conforming rates. The narrow spreads over the last 5 years or so were anomalies.
Second, the number of homes in California that could be purchased with a conforming loan increase in number each day. This is a self correcting problem over time.
You have two mutually exlusive terms there. A conforming loan amount is within Fannie and Freddie loan limits. A jumbo loan is, by definition, a loan which is greater than the limit.
Of course, we also have LFKAJ, which was coined by our beloved Tanta.
The other thing that's interesting is that these reports are all stating APPLICATIONS for refis/new mortgages, but they're of course not the final product.
Questions to ask:
1) How many people are turned away flat out?
2) How many people receive substantially high rates/more restrictive terms?
I'm trying to refi now. They've asked for an appraisel, two years tax returns, four weeks paystubs and two months bank statements...so far. I'm refinancing a 130K loan FWIW.
I think the answer is as soon as you remove all of the lottery winners and independantly wealthy people who wanted a tax deduction from the mix, then answer to #1 is all and #2 is most.
"The single largest obstalce to refi's of jumbo is the closing costs. Anybody have 20-30K on hand, and if you do, why are you refi-ing verses hoarding the cash for tough times. Sure you save 1K a month but seriously, maybe your not employeed in 1 month."
When I refinance a jumbo mortage I rolled all closing costs into the loan in lieu of a slightly higher rate. This was a while ago though, so things may have changed recently.
On topic, I knew there would be an appraisal, but was surprised that it is going to be a walk-through appraisal this Friday. When I took out a home equity loan in September to perform some repairs to the roof/garage/siding the bank (same as for the refi) only did a drive-by.
They should have the final details to me by Monday, I'll be curious to see how things wind up.
From previous thread:
" Speed writes:
Denninger redeemed himself this morning with an excellent analysis of why the current stimulus plan (Keynes) will either fall flat or merely postpone the inevitable collapse of the economy.
Speed | 12.24.08 - 1:12 pm | # "
I wonder if his description of zero velocity money could be modeled with the differential equation used to describe the motion of a pendulum?
When a pendulum is at the peak of its arc, its velocity is zero, but its potential to do work is at its greatest. Conversely, when the velocity is at the greatest, the pendulum is at the bottom of its arc and its potential is at a minimum.
If saving was modeled as potential, and spending as high velocity, one might be able to use phasor math to predict the effect if increased saving. However, these models imply a fixed amount of "energy", though the energy can be changed from potential to kinetic, corresponding to savings versus spending.
Has anyone seen such an analysis?
Comrade Terry: Conforming Jumbo and LFKAJ are the same thing.
It denotes loans about the conforming loan limit and below the high cost conforming loan limit.
Conforming jumbo is a term coined by Freddie Mac & Fannie Mae to describe those new loans and those two terms which were mutually exclusive before are no longer.
We are using the descriptive term conforming jumbo mortgages to distinguish Freddie Mac-eligible jumbo mortgages from other jumbo mortgages that are ineligible for purchase by Freddie Mac and from eligible conventional, conforming mortgages
Conversely, when I got the original mortgage two years ago, I was asked where I worked and for the phone number. Comrade Kristina | 12.24.08 - 1:39 pm | #
Heh..... when I moved in 2006, I called up Wells, who had my mortgage in NJ. I was concerned about how to swing the move.... because of external factors, we were defintely going to carry two mortgages for a while. Even though we had perfect credit, savings out the wazoo, god job, etc, etc, I was sure I was going to have to take a bridge loan (or other 10%+ product).
"Oh no... (click click click on the computer.... twenty seconds go by)......... we'll definitely approve you to carry a 2nd full mortgage (which would put my DTI way into the 50s).... NO PROBLEM!!!!"
Market rate, no points.......
If only I'd been smart enough then to rent. (Not really an option though, when you have tons of stuff, and six cats).
Conforming jumbo is a term coined by Freddie Mac & Fannie Mae to describe those new loans and those two terms which were mutually exclusive before are no longer. ® | 12.24.08 - 1:42 pm | #
Okay, thanks for the edumacation. I'm glad I got out of the biz four years ago, and still think the old fashioned way!
Bless your soul! Your cats, or your bride's? Comrade Terry | 12.24.08 - 1:52 pm | #
I grew up with cats.... My family always had an average of 4..... went as high as 9 once (thank god I was in college then....)
Currently, the mix is: Three she brought, and three we added (I had two of my own when we first met, one passed while we were dating, another passed after we were married).
We even did our part to help the economy last year... the two youngest are Scottish Folds (price? don't ask, don't tell). We've both always had pound kitties all our lives, so spare me the lectures. We know, we know.
"Even though we had perfect credit, savings out the wazoo, god job, etc, etc, I was sure I was going to have to take a bridge loan (or other 10%+ product)."
Nah, I'm not a hoarder just have a hard time not helping where I can. My husband complains about the cats and then I explain to him "If it weren't for my propensity for taking in strays, your ass would be out on the front stoop still too..."
In No. VA it is a Jumbo or no gumbo.
Unless you have a nice down payment.
Wells Fargo, our mortgage holder for 20 plus years, wanted 30% down. This was for a Jumbo that we had them do a prequalify on. No missed payments, had 20% down, and a 750 plus FICA.
To buy a house here, in a good area, at %20 down equals out, with closing, to close to 200k cash. Last time I looked for No. VA on ZipReality there was 27 pages of houses over 1M for sale here.
My old boss just split his mortgage (took out 2 separate loans) to buy his house back in '03. \t xxxxx xxxxx | 12.24.08 - 2:01 pm | #
ahhh I dont think you can do that. not with prime paper. Thats a huge second loan (someone needs to be first in line) and I can only image the rate would be high.
..................
CK,
My wife takes in foster dogs. Nothing quite like having 3 pitbulls running thru a two bedroom apt, pure chaos!
Anyway she says the same thing. I've got a roof over my head for one reason!
"nades writes:
....
ahhh I dont think you can do that. not with prime paper. Thats a huge second loan (someone needs to be first in line) and I can only image the rate would be high."
This was in '02 or '03. I don't know if it was prime or what. I just recall that he told me that he took out 2 loans; one for 300k, and one for 30k, and this was presumably to get a lower interest rate vs. a jumbo rate. I'd never heard of jumbo rates before that.
I missunderstood. I thought you were talking about two 279K loans or what ever the max was. A big one and a little second could pencil i'm sure....
nades | Homepage | 12.24.08 - 2:12 pm | # "
I like the pendulum idea - might be worth fooling with. The trouble, of course, is that at any given time, the Fed can push on the pendulum or increase its weight. Worse still, mob mentality could cause it to reverse at any time during the swing. If only it were a simple model -
Service sector unemployment levels have to be impacting the credit models based on two income households sooner or later, with unemployment claims running close to 600K a week.
Thought for awhile that the two income household from a DTI credit point of view has not reflected unemployment risks. Another credit model about to be broken?
" Speed writes:
I like the pendulum idea - might be worth fooling with. The trouble, of course, is that at any given time, the Fed can push on the pendulum or increase its weight. Worse still, mob mentality could cause it to reverse at any time during the swing. If only it were a simple model -
I think crowd control models are more applicable.
Speed | 12.24.08 - 2:18 pm | # "
I think there are two trickier issues to deal with:
1) Unlike a pendulum, I think this is a nonlinear system, in that inflationary/deflationary expectations provide some positive feedback to the system, changing where and how the shift from velocity to savings (and vice versa) occurs.
2) It's possible that the "energy" in the system can change, but I'm not sure.
For a pendulum, changing the weight (actually the mass) of the pendulum will affect the frequency at which it swings but not its oevrall behavior.
House price at peak, 460,000, South Florida, half off ==$230.
So "value" say $200,000 to 240 at bottom.
You won't be too far underwater to ever recover. I wouldn't walk.
Leaving in half an hour. Mom had to have pacemaker put in, prolly not as a result of mugging. They have her there, may as well squeeze the max out.
Non-cynically, she did need it.
But when do say stop? Slippery slope.
Everywhere we went today to get some last minute stuff was very very very busy.
Shoppers waiting until merchants totally despair?
And back on topic, these so call rates and stuff mean nothing in South Florida, because there are NO loans being made to anybody, except hard equity and FHA.
Are they really making loans in Cali and elsewhere, or is it an illusion?
I can't say I'm underwater $50k but around 1/3 of that. Takes some stamina to fight the tape but the real economy evidence supports it so I am right there with you on it, and I'm adding at these levels. It would be worse if I hadn't traded it on the way down during the convulsions.
Be careful with your '08 tax position. Ultras paid some pretty hefty CapGains out of equity reflected in the share drops yesterday.
Another red herring. Mort rates are artifically low and should march higher when priorities shift to supporting employment, and forms of govt assistance.
Kristina: I used to be a landlord and I, if I could, would always take people with pets over people with kids..cleaner, quieter and less damage..less garbage...
Cats will be the new squirrels in 2011, when squirrels become scarce. There will be recipes posted. Just watch. They already are in Asian populated areas. Not kidding.
$7.08 Trillion in wealth has vaporized in the past year. Figure 2008 Q4 to be as bad as Q3. If so, roughly $10 Trillion in household wealth will be vaporized in little over a year. And looking ahead, there is no reason to believe the stock market, the housing market, or the economy will show signs of recovery anytime soon.
Destruction of wealth has clearly affected consumer spending as discussed in Consumer Demand For Nearly Everything Plunges.
It's important to keep the above in mind before getting hyperinflationary ideas about Obama's Expanding Recovery Plan now aiming to create 3 million jobs. Obama needs to create 3 to 4 million new jobs just to counterbalance another 3 to 4 million layoffs that I foresee for 2009. I doubt Obama can do that quickly, if indeed at all.
Cats will be the new squirrels in 2011, when squirrels become scarce. There will be recipes posted. Just watch. They already are in Asian populated areas. Not kidding. bearly | 12.24.08 - 2:47 pm | #
The big problem with refi in a declining market is the LTV requirement require a pay down of principle on the existing loan
Assume:
Purchase Price = 500K in 2007
Assume 20% down (100K)
Equals 400K loan circa 2007
Assume that price has fallen only 10%
Chances are they will only offer you $360K loan, not the 400 owed as they will take into account the declining appraisal.
You'll need to bring $40k to the table in addition to all the other fees.
So to get the lower rate, not only do you have to pay the fees, but you also have to bring $40K to pay off the principle/equity you lost between the purchase and current price.
This a big reason none of this will have much affect on the foreclosure rates. The borrower in trouble certainly isn't going to bring 40K to the table if they already can't afford the loan.
Re meat for GDII, I prefer guinea pig. They are quiet, docile, easily raised in an indoor environment, and were/ are domestic animals in South America. Rabbit is next best. Both are easier to hide from nosy neighbors than chicken.
I live rural...chickens all the way! dont have to feed them for the most part...they go thru the garden, livestock pens looking for bugs/dropped grain...and sleep in the barn rafters...sometimes they hide thier eggs, tho..breed like rats..now if someone knows a way to remove the rooster voice box so i can sleep in the morning..
Being xmas time I am feeling a little hopeful for the future. I was reading about the Marshall plan and looking at the pictures of damage done to Europe. They recovered from nearly complete destruction, millions of deaths, lingering hatred and anger between nations and recovered.
We will recover from overspending. Yes the nation will change but the majority of Americans will persevere and come out the other side of this learning many valuable lessons and a clearer perspective for what really matters.
I also peruse the linked site when I need to remember the many times "the end is nigh" has been foretold. We are still here and kickin'.
Too the many experiencing hardship, I wish all the best for you and yours and hope the new year brings positive changes. Good luck and happy holidays to everyone.
My wife and I used the money we would have bought each other gifts with this year and gave it to our local food bank. The reason food banks prefer cash is the money you would spend on donated food would buy three times the amount of food from their wholesalers.
You probably didn't see this in the newspapers, but real wages rose at an incredible 14.8 percent annual rate over the last three months. The basic story is straightforward, while nominal wages have continued to grow at a modest 3.2 percent annual rate, prices have plummeted, hugely increasing the value of the paychecks of those workers lucky enough to still have a job.
This pattern is not likely to continue. Price declines will almost certainly slow, and rising unemployment will dampen nominal wage growth, but the nature of this wage gain presents an extremely important economics lesson.
Put simply, real wages rose because house prices and stock prices crashed. The collapse of the housing bubble destroyed more than $6 trillion of housing bubble wealth, while the plunge in the stock market eliminated more than $8 trillion in stock wealth.
This means that more than $14 trillion of paper wealth (@$46,000 per person) has been destroyed in the last couple of years. This paper wealth gave its owners command over the goods and services the economy produces.
The elimination of this wealth has the same impact on those of us not directly affected as the elimination of $14 trillion of counterfeit money. The economy still has the potential to produce the same amount of goods and services, but the owners of housing and stock have much less claim over this output. That means more for the rest of us.
The more for the rest of us part of the story shows up in the form of lower prices for a wide range of goods and services. The most obvious item on this list is oil, as weakened demand, combined with speculation on both sides, has pushed the price of oil below $40 a barrel from its peak near $150 a barrel. This has allowed drivers to buy gas for less than $2 a gallon, as opposed to the $4 plus prices faced earlier during the summer.
It is not just energy prices that are falling. New car prices have fallen at a 6.9 percent annual rate over the last quarter, while used car prices have plunged at a 22.9 percent annual rate. There is an enormous glut of cars on the market right now and sellers are forced to slash prices to reduce their inventories.
There is a similar story with hotel prices, where a large number of empty rooms are forcing price reductions. Hotel prices fell at a 7.1 percent annual rate over the quarter.
In short, the loss of a massive amount of wealth by stockholders and homeowners has produced real dividends for those who had little wealth in stock or housing. Of course, the resulting falloff in consumption from these stockholders and homeowners is throwing the economy into a severe recession, which will threaten the jobs of almost everyone.
" lawyerliz writes:
Weren't they bred to be meat by
the South American Indians? I think I heard on NPR, that you can buy it canned and stuff in certain places.
lawyerliz | 12.24.08 - 2:56 pm | # "
Why not chinchilla instead? Then you get a bit of salable fur to go with your burger.
Phil Glau: Streamline refinances (property value not considered, no cash out allowed, Rate & Term) can help the market. FHA does them now, Fannie/Freddie have streamlines but they take property value into consideration. Fannie/Freddie are considering dropping the prop value requirement. They are on the hook for the loan anyways, if a refi can make the borrower stronger it will help them.
We've got two cats that are 13 lbs of fat each, a cross between Main-Coon and Persian. Loud, big and lazy. I swear they're starting to look kind of tasty. I've been warning them if they don't shut up in the early morning they may end up as a Christmas BBQ.
OT, but quite interesting article on PE and the destruction of Mervyn's, as it sheds light on Cerberus and Chrysler. Also shows you where Eddie Lampert's Sears is probably headed.
I think I'd prefer eating people over cats...I like cats better as companions therefore they have more value to me...People tend to be little more than nuisances...I'm eyeing up a plump neighbor for when the hard times hit
" Elvis writes:
I always eat cat on Chinese New Year. Why is everybody making such a big deal about eat cats? They taste great with a wine sauce.
Elvis | 12.24.08 - 3:47 pm | # "
A milk sauce will help tenderize the tough old tom cats.
Left NOVA Wed. with cranky old tortoise shell pound kitty. 2,395 miles later dragging a 7 x 14 Wells Cargo trailer we arrived at our new home. Cranky Kitty kept trying to climb back into the Jeep - more bouncing , more bouncing. Oh, well - we are a long way from GD II down here.
Feliz Navidad and Happy New Year All
Major hit for Seattle.
JPMorgan Chase is notifying landlords it will pull out of all the downtown Seattle office space rented by Washington Mutual by the end of March. The New York bank is laying off 80 percent of WaMu's Seattle work force and consolidating the 800 remaining office workers into the WaMu Center headquarters building it owns downtown. ... WaMu leased about 700,000 square feet in Seattle, according to brokers and building owners.
It's not the ride to the top of the roller coaster that scares folks, it's the ride down
amen. People don't get that "rates" are overrated. There were very high rates in the mid-80's from the early 80's fallout yet the economy still recovered. It wasn't like the 80's were a overly good time for the economy either. Poverty was very high and crime rates soared. Yet, the recovery continued to about mid-1996 when the economy finally got back to the 79 peak and soared further.
Ditto on 'gas prices'. When deflation has become embedded into the system, much like inflation did in 69, it is tough to get it out. The REAL reason rates stayed low in the 00's was of this looming deflation becoming embedded.
Eventually, gas will be given away free if the idiots don't start getting it.
It's not just jumbo rates. Try looking at refis on rental property. Even small loans, with low LTV are quoted at 7.5% or higher. Only owner-occupied financing is benefiting from the much publicized rate drops.
A housing recovery must start at the low end with starter homes. The sellers can then move up.
Conforming loan limits are well above what is needed for the starter home buyer, and for the middle of the market almost everywhere.
Home prises are down substantially, and morgtgage rates are at historic lows. Affordability has rarely (if ever) been better. However, buyer psychology remains negative.
And I thought "Jumbo Spread" was some kind of elephant porn.
These saving figures are averages. I don't think that the typical household is SAVING more. But the profligate are sure finding out the they can BORROW less.
Conforming jumbo rates are all over the place. Shopping around can get you .5-.75 over conforming rates. The drop in the Jumbo Conforming limit will hurt the CA market a lot.
CR,
The single largest obstalce to refi's of jumbo is the closing costs. Anybody have 20-30K on hand, and if you do, why are you refi-ing verses hoarding the cash for tough times. Sure you save 1K a month but seriously, maybe your not employeed in 1 month.
Anyway, happy holidays and great job and thank you. May next year be filled good news.
--bh
filled with good news...
sorry, grammar is like uncouth swai
I'm in the process of doing a refi at the moment in a house with excellent equity, a 790 credit score and everything else an underwriter would want to see and smile about. We're talking about a relatively small sum, too: about $109,000.
"No cost" refis on a 30 year are ranging from 5.3 - 5.75 and 15 years are between 5.125 - 5.5 from what I've seen.
5.25 is what I am seeing right now...last week these were at 4.50...
When will people realize that they can drop the rate as low as needed, there needs to be more qualified borrowers in order to succeed.
First, jumbo rates should be higher than conforming rates. The narrow spreads over the last 5 years or so were anomalies.
Second, the number of homes in California that could be purchased with a conforming loan increase in number each day. This is a self correcting problem over time.
Happy Holidays to all.
Conforming jumbo
® | 12.24.08 - 1:24 pm | #
You have two mutually exlusive terms there. A conforming loan amount is within Fannie and Freddie loan limits. A jumbo loan is, by definition, a loan which is greater than the limit.
Of course, we also have LFKAJ, which was coined by our beloved Tanta.
How come no one is talking about how the risk isnt being reflected in the rates?
Maybe because the only buyers are the USG?
........
RGE - China is set up for a big fall
The great fall of China. What other export oriented country with high savings and little debt got pummeled in the 1930's? Their turn now.
oh, and the second biggest obstacle to refi is most institutions will require at least one, or two appraisals (FHA).
So guess what, in this market how does a bank refi on a declining asset?
Forget it. Move on. Over the Cliff. Give Wile. E. Coyote the finger when you pass him.
The other thing that's interesting is that these reports are all stating APPLICATIONS for refis/new mortgages, but they're of course not the final product.
Questions to ask:
1) How many people are turned away flat out?
2) How many people receive substantially high rates/more restrictive terms?
I'm trying to refi now. They've asked for an appraisel, two years tax returns, four weeks paystubs and two months bank statements...so far. I'm refinancing a 130K loan FWIW.
The qualifying field is incredibly narrow right now. Add in Fannie/Freddie LLPAs and the rates change dramatically.
I'm sure that, as we speak, those dilligent gnomes at treasury are working on Operation Jumbo Drop.
travis,
I think the answer is as soon as you remove all of the lottery winners and independantly wealthy people who wanted a tax deduction from the mix, then answer to #1 is all and #2 is most.
"The single largest obstalce to refi's of jumbo is the closing costs. Anybody have 20-30K on hand, and if you do, why are you refi-ing verses hoarding the cash for tough times. Sure you save 1K a month but seriously, maybe your not employeed in 1 month."
When I refinance a jumbo mortage I rolled all closing costs into the loan in lieu of a slightly higher rate. This was a while ago though, so things may have changed recently.
Isn't the problem that
Comrade K- that "used" to be the normal documentation and will be again, I expect.
Alright all, happy holidays and take care. See you all in my mad max gear next year.
bh
blackhat -
Ha! Well put.
On topic, I knew there would be an appraisal, but was surprised that it is going to be a walk-through appraisal this Friday. When I took out a home equity loan in September to perform some repairs to the roof/garage/siding the bank (same as for the refi) only did a drive-by.
They should have the final details to me by Monday, I'll be curious to see how things wind up.
santa brought me a nice JNK (junk bond etf) rally.
hope he is as good to everyone here this week.
peace and good times with the family to everyone, even you crusty SRS scrooges and the tinfoil hat brigade!
Comrade K- that "used" to be the normal documentation and will be again, I expect.
Lyndal
Conversely, when I got the original mortgage two years ago, I was asked where I worked and for the phone number.
From previous thread:
" Speed writes:
Denninger redeemed himself this morning with an excellent analysis of why the current stimulus plan (Keynes) will either fall flat or merely postpone the inevitable collapse of the economy.
Speed | 12.24.08 - 1:12 pm | # "
I wonder if his description of zero velocity money could be modeled with the differential equation used to describe the motion of a pendulum?
When a pendulum is at the peak of its arc, its velocity is zero, but its potential to do work is at its greatest. Conversely, when the velocity is at the greatest, the pendulum is at the bottom of its arc and its potential is at a minimum.
If saving was modeled as potential, and spending as high velocity, one might be able to use phasor math to predict the effect if increased saving. However, these models imply a fixed amount of "energy", though the energy can be changed from potential to kinetic, corresponding to savings versus spending.
Has anyone seen such an analysis?
Comrade Terry: Conforming Jumbo and LFKAJ are the same thing.
It denotes loans about the conforming loan limit and below the high cost conforming loan limit.
Conforming jumbo is a term coined by Freddie Mac & Fannie Mae to describe those new loans and those two terms which were mutually exclusive before are no longer.
404 File Not Found - Freddie Mac
We are using the descriptive term conforming jumbo mortgages to distinguish Freddie Mac-eligible jumbo mortgages from other jumbo mortgages that are ineligible for purchase by Freddie Mac and from eligible conventional, conforming mortgages
Conversely, when I got the original mortgage two years ago, I was asked where I worked and for the phone number.
Comrade Kristina | 12.24.08 - 1:39 pm | #
Heh..... when I moved in 2006, I called up Wells, who had my mortgage in NJ. I was concerned about how to swing the move.... because of external factors, we were defintely going to carry two mortgages for a while. Even though we had perfect credit, savings out the wazoo, god job, etc, etc, I was sure I was going to have to take a bridge loan (or other 10%+ product).
"Oh no... (click click click on the computer.... twenty seconds go by)......... we'll definitely approve you to carry a 2nd full mortgage (which would put my DTI way into the 50s).... NO PROBLEM!!!!"
Market rate, no points.......
If only I'd been smart enough then to rent. (Not really an option though, when you have tons of stuff, and six cats).
Ug.
Nostrovia,
OT: Has anyone seen Sam Zells christmas card this year. I cant find it... TIA!
I hope that everyone here has a safe, happy, and joyful holiday season with their friends & family. Merry Christmas !
Eric, I have six cats as well and a Greyhound. Renting would be ugly...
The jumbo problem is the price problem. No more jumbo prices no more price problem.
P.S. to Nemo:
Jumbo Spread is a decription of the behinds that can be seen waddling around your local Wal-Mart.
Conforming jumbo is a term coined by Freddie Mac & Fannie Mae to describe those new loans and those two terms which were mutually exclusive before are no longer.
® | 12.24.08 - 1:42 pm | #
Okay, thanks for the edumacation. I'm glad I got out of the biz four years ago, and still think the old fashioned way!
The jumbo problem is the price problem. No more jumbo prices no more price problem.
Elvis | 12.24.08 - 1:48 pm | #
Seems like the USG is subsidizing non-jumbo loans. Get rid of USG in the mix and no more price problem.
six cats
Eric | 12.24.08 - 1:43 pm | #
Bless your soul! Your cats, or your bride's?
P.S. to Nemo:
Jumbo Spread has something to do with Tufts University co-eds.
Tufts Magazine Online
looks like you need more documentation ot get a mortgage loan than you do to get a few billion from the TARP....
ades --
Seems like the USG is subsidizing non-jumbo loans. Get rid of USG in the mix and no more price problem.
Or the USG can subsidize jumbo loans, too.
I wonder which approach Team Obama is going to take...
good point. a lota jumbo country is blue thru and thru....
Bless your soul! Your cats, or your bride's?
Comrade Terry | 12.24.08 - 1:52 pm | #
I grew up with cats.... My family always had an average of 4..... went as high as 9 once (thank god I was in college then....)
Currently, the mix is: Three she brought, and three we added (I had two of my own when we first met, one passed while we were dating, another passed after we were married).
We even did our part to help the economy last year... the two youngest are Scottish Folds (price? don't ask, don't tell). We've both always had pound kitties all our lives, so spare me the lectures. We know, we know.
cat hoarders
" Elvis writes:
The jumbo problem is the price problem. No more jumbo prices no more price problem.
Elvis | 12.24.08 - 1:48 pm | # "
My old boss just split his mortgage (took out 2 separate loans) to buy his house back in '03.
"Even though we had perfect credit, savings out the wazoo, god job, etc, etc, I was sure I was going to have to take a bridge loan (or other 10%+ product)."
Eric, who would deny a loan to god?
A scottish fold ? is that a breed of cat ? I don;t remember them from my boyhood days in Dumfries.
Nah, I'm not a hoarder just have a hard time not helping where I can. My husband complains about the cats and then I explain to him "If it weren't for my propensity for taking in strays, your ass would be out on the front stoop still too..."
went as high as 9 once
Eric | 12.24.08 - 1:59 pm | #
Ex-girlfriend had thirteen. She was otherwise tolerable.
I've only got one. An $800 Ragdoll, so I've no standing to deliver any lecture.
In No. VA it is a Jumbo or no gumbo.
Unless you have a nice down payment.
Wells Fargo, our mortgage holder for 20 plus years, wanted 30% down. This was for a Jumbo that we had them do a prequalify on. No missed payments, had 20% down, and a 750 plus FICA.
To buy a house here, in a good area, at %20 down equals out, with closing, to close to 200k cash. Last time I looked for No. VA on ZipReality there was 27 pages of houses over 1M for sale here.
My old boss just split his mortgage (took out 2 separate loans) to buy his house back in '03.
\t xxxxx
xxxxx | 12.24.08 - 2:01 pm | #
ahhh I dont think you can do that. not with prime paper. Thats a huge second loan (someone needs to be first in line) and I can only image the rate would be high.
..................
CK,
My wife takes in foster dogs. Nothing quite like having 3 pitbulls running thru a two bedroom apt, pure chaos!
Anyway she says the same thing. I've got a roof over my head for one reason!
..........
"Uncle Ar writes:
"Even though we had perfect credit, savings out the wazoo, god job, etc, etc, "
How do I get one of those jobs
How do I get one of those jobs
xxxxx | 12.24.08 - 2:07 pm |
Usually you had to start 25 years ago... The god jobs, well, not a lot vacancies open up on earth.
"nades writes:
....
ahhh I dont think you can do that. not with prime paper. Thats a huge second loan (someone needs to be first in line) and I can only image the rate would be high."
This was in '02 or '03. I don't know if it was prime or what. I just recall that he told me that he took out 2 loans; one for 300k, and one for 30k, and this was presumably to get a lower interest rate vs. a jumbo rate. I'd never heard of jumbo rates before that.
The drop in the Jumbo Conforming limit will hurt the CA market a lot.
Guess it depends on which side of the fence you're sitting.
" nova writes:
How do I get one of those jobs
xxxxx | 12.24.08 - 2:07 pm |
Usually you had to start 25 years ago... The god jobs, well, not a lot vacancies open up on earth.
nova | Homepage | 12.24.08 - 2:09 pm | # "
I though is was about 2800 years ago
xxxxx,
I missunderstood. I thought you were talking about two 279K loans or what ever the max was. A big one and a little second could pencil i'm sure....
" nades writes:
xxxxx,
I missunderstood. I thought you were talking about two 279K loans or what ever the max was. A big one and a little second could pencil i'm sure....
nades | Homepage | 12.24.08 - 2:12 pm | # "
NP, and Merry Xmas, or solstice, or whatever
Yes and when you are underwater the rate does not matter. Just walk away.
Happy holidays,
REMEMBER,
Where you stand depends upon where you sit!!!
Cheers...
Crude contract plunged an additional 7% after the NYSE and GLOBEX closed. USO closed @ 29.02, was trading in the low $27s a moment ago. Yikes.
Wow PCA...what did it close at here?
I like the pendulum idea - might be worth fooling with. The trouble, of course, is that at any given time, the Fed can push on the pendulum or increase its weight. Worse still, mob mentality could cause it to reverse at any time during the swing. If only it were a simple model -
I think crowd control models are more applicable.
Service sector unemployment levels have to be impacting the credit models based on two income households sooner or later, with unemployment claims running close to 600K a week.
Thought for awhile that the two income household from a DTI credit point of view has not reflected unemployment risks. Another credit model about to be broken?
Wholesale gasoline trading @ <a href="http://www.bloomberg.com/energy/>78 cents
YouTube - Grandma Got Run Over by a Reindeer by Dr. Elmo
An analogue for the economy, no doubt.
Nostrovia,
haloscan?
cat hoarders
Sooner or later, the cat ownership bubble will collapse
food ideas for the GP2: cat stew; stir-fried cat; filet of cat; catburgers. just like raising chickens.
http://www.safehaven.com/images/du_plessis/12162_k.png
Safe Haven | Credit Crisis Watch: Signs of Progress
" Speed writes:
I like the pendulum idea - might be worth fooling with. The trouble, of course, is that at any given time, the Fed can push on the pendulum or increase its weight. Worse still, mob mentality could cause it to reverse at any time during the swing. If only it were a simple model -
I think crowd control models are more applicable.
Speed | 12.24.08 - 2:18 pm | # "
I think there are two trickier issues to deal with:
1) Unlike a pendulum, I think this is a nonlinear system, in that inflationary/deflationary expectations provide some positive feedback to the system, changing where and how the shift from velocity to savings (and vice versa) occurs.
2) It's possible that the "energy" in the system can change, but I'm not sure.
For a pendulum, changing the weight (actually the mass) of the pendulum will affect the frequency at which it swings but not its oevrall behavior.
GP2 should be GD2
Kristina,
Why don't you and your cats simply move into your Greyhound. Park anywhere you like...
In 3 months, a 4.5% fixed rate mortgage will seem high.
The bubble will re-inflate quickly as the govt drives down rates.
This will drive people to buy out of fear they may miss the next leg up.
Ross, I think the Greyhound has considered that possibility in regards to the cats a few times...
Happy Winter Solstice Day everyone.
To Can haz, posted to a dead thread 2 down.
House price at peak, 460,000, South Florida, half off ==$230.
So "value" say $200,000 to 240 at bottom.
You won't be too far underwater to ever recover. I wouldn't walk.
Leaving in half an hour. Mom had to have pacemaker put in, prolly not as a result of mugging. They have her there, may as well squeeze the max out.
Non-cynically, she did need it.
But when do say stop? Slippery slope.
Everywhere we went today to get some last minute stuff was very very very busy.
Shoppers waiting until merchants totally despair?
And back on topic, these so call rates and stuff mean nothing in South Florida, because there are NO loans being made to anybody, except hard equity and FHA.
Are they really making loans in Cali and elsewhere, or is it an illusion?
Comrade Kristina,
Give that dog a bone...or cat.
Good dog!
;P
Nostrovia,
" friardaddy writes:
In 3 months, a 4.5% fixed rate mortgage will seem high.
The bubble will re-inflate quickly as the govt drives down rates.
This will drive people to buy out of fear they may miss the next leg up.
friardaddy | 12.24.08 - 2:31 pm | # "
It's not the ride to the top of the roller coaster that scares folks, it's the ride down.
Misean, you and your brain cells are back!!!
Welcome, welcome, where were you?
[talk to me in march.
12th Percentile]
I can't say I'm underwater $50k but around 1/3 of that. Takes some stamina to fight the tape but the real economy evidence supports it so I am right there with you on it, and I'm adding at these levels. It would be worse if I hadn't traded it on the way down during the convulsions.
Be careful with your '08 tax position. Ultras paid some pretty hefty CapGains out of equity reflected in the share drops yesterday.
So if one has a home started and is paying cash, but needs to put in another 100k, hoard the cash and finance.
This can be waited out, no hurry, already in the dry.
Who might be giving the best rates for credit score of 800, debt free and owned their company for years.
Another red herring. Mort rates are artifically low and should march higher when priorities shift to supporting employment, and forms of govt assistance.
Housing has another leg down coming.
ll,
Merry Christmas.
A much deserved vacation...without many electronic toys.
Quite relaxing.
Nostrovia,
We try to stick with 2 cats only.
Scottish folds have floppy ears.
The cat bubble can easily explode. I think cats have evolved to be irresitably cute. We have no choice.
Kristina: I used to be a landlord and I, if I could, would always take people with pets over people with kids..cleaner, quieter and less damage..less garbage...
Cats will be the new squirrels in 2011, when squirrels become scarce. There will be recipes posted. Just watch. They already are in Asian populated areas. Not kidding.
Well, it depends. There are truly horrible renters and unchanged cat litter smells truly horrible.
From Mish:
The chart shows a massive reduction in net worth of households over the last 4 quarters.
2007 Q4 -$1.46 Trillion
2008 Q1 -$2.42 Trillion
2008 Q2 -$0.39 Trillion
2008 Q3 -$2.81 Trillion
$7.08 Trillion in wealth has vaporized in the past year. Figure 2008 Q4 to be as bad as Q3. If so, roughly $10 Trillion in household wealth will be vaporized in little over a year. And looking ahead, there is no reason to believe the stock market, the housing market, or the economy will show signs of recovery anytime soon.
Destruction of wealth has clearly affected consumer spending as discussed in Consumer Demand For Nearly Everything Plunges.
It's important to keep the above in mind before getting hyperinflationary ideas about Obama's Expanding Recovery Plan now aiming to create 3 million jobs. Obama needs to create 3 to 4 million new jobs just to counterbalance another 3 to 4 million layoffs that I foresee for 2009. I doubt Obama can do that quickly, if indeed at all.
Cats will be the new squirrels in 2011, when squirrels become scarce. There will be recipes posted. Just watch. They already are in Asian populated areas. Not kidding.
bearly | 12.24.08 - 2:47 pm | #
meow
The big problem with refi in a declining market is the LTV requirement require a pay down of principle on the existing loan
Assume:
Purchase Price = 500K in 2007
Assume 20% down (100K)
Equals 400K loan circa 2007
Assume that price has fallen only 10%
Chances are they will only offer you $360K loan, not the 400 owed as they will take into account the declining appraisal.
You'll need to bring $40k to the table in addition to all the other fees.
So to get the lower rate, not only do you have to pay the fees, but you also have to bring $40K to pay off the principle/equity you lost between the purchase and current price.
This a big reason none of this will have much affect on the foreclosure rates. The borrower in trouble certainly isn't going to bring 40K to the table if they already can't afford the loan.
LL..well, theres always dirty diapers and horrible people with children. anyhow...a nice single person with a kitty...the BEST.!
Re meat for GDII, I prefer guinea pig. They are quiet, docile, easily raised in an indoor environment, and were/ are domestic animals in South America. Rabbit is next best. Both are easier to hide from nosy neighbors than chicken.
Weren't they bred to be meat by
the South American Indians? I think I heard on NPR, that you can buy it canned and stuff in certain places.
I live rural...chickens all the way! dont have to feed them for the most part...they go thru the garden, livestock pens looking for bugs/dropped grain...and sleep in the barn rafters...sometimes they hide thier eggs, tho..breed like rats..now if someone knows a way to remove the rooster voice box so i can sleep in the morning..
Being xmas time I am feeling a little hopeful for the future. I was reading about the Marshall plan and looking at the pictures of damage done to Europe. They recovered from nearly complete destruction, millions of deaths, lingering hatred and anger between nations and recovered.
We will recover from overspending. Yes the nation will change but the majority of Americans will persevere and come out the other side of this learning many valuable lessons and a clearer perspective for what really matters.
I also peruse the linked site when I need to remember the many times "the end is nigh" has been foretold. We are still here and kickin'.
Too the many experiencing hardship, I wish all the best for you and yours and hope the new year brings positive changes. Good luck and happy holidays to everyone.
My wife and I used the money we would have bought each other gifts with this year and gave it to our local food bank. The reason food banks prefer cash is the money you would spend on donated food would buy three times the amount of food from their wholesalers.
Armageddon Online - Human Extinction
<a href="http://www.youtube.com/watch?v=Jln8RBjZFiw>Not so funny meow is it?
Merry Christmas!
from mp and Conjure Bag
bearly - Be careful with your '08 tax position. Ultras paid some pretty hefty CapGains out of equity reflected in the share drops yesterday.
bearly, can you please elaborate on that? Is this different from regular Cap Gains/Losses you have on any stock?
You probably didn't see this in the newspapers, but real wages rose at an incredible 14.8 percent annual rate over the last three months. The basic story is straightforward, while nominal wages have continued to grow at a modest 3.2 percent annual rate, prices have plummeted, hugely increasing the value of the paychecks of those workers lucky enough to still have a job.
This pattern is not likely to continue. Price declines will almost certainly slow, and rising unemployment will dampen nominal wage growth, but the nature of this wage gain presents an extremely important economics lesson.
Put simply, real wages rose because house prices and stock prices crashed. The collapse of the housing bubble destroyed more than $6 trillion of housing bubble wealth, while the plunge in the stock market eliminated more than $8 trillion in stock wealth.
This means that more than $14 trillion of paper wealth (@$46,000 per person) has been destroyed in the last couple of years. This paper wealth gave its owners command over the goods and services the economy produces.
The elimination of this wealth has the same impact on those of us not directly affected as the elimination of $14 trillion of counterfeit money. The economy still has the potential to produce the same amount of goods and services, but the owners of housing and stock have much less claim over this output. That means more for the rest of us.
The more for the rest of us part of the story shows up in the form of lower prices for a wide range of goods and services. The most obvious item on this list is oil, as weakened demand, combined with speculation on both sides, has pushed the price of oil below $40 a barrel from its peak near $150 a barrel. This has allowed drivers to buy gas for less than $2 a gallon, as opposed to the $4 plus prices faced earlier during the summer.
It is not just energy prices that are falling. New car prices have fallen at a 6.9 percent annual rate over the last quarter, while used car prices have plunged at a 22.9 percent annual rate. There is an enormous glut of cars on the market right now and sellers are forced to slash prices to reduce their inventories.
There is a similar story with hotel prices, where a large number of empty rooms are forcing price reductions. Hotel prices fell at a 7.1 percent annual rate over the quarter.
In short, the loss of a massive amount of wealth by stockholders and homeowners has produced real dividends for those who had little wealth in stock or housing. Of course, the resulting falloff in consumption from these stockholders and homeowners is throwing the economy into a severe recession, which will threaten the jobs of almost everyone.
" lawyerliz writes:
Weren't they bred to be meat by
the South American Indians? I think I heard on NPR, that you can buy it canned and stuff in certain places.
lawyerliz | 12.24.08 - 2:56 pm | # "
Why not chinchilla instead? Then you get a bit of salable fur to go with your burger.
Phil Glau: Streamline refinances (property value not considered, no cash out allowed, Rate & Term) can help the market. FHA does them now, Fannie/Freddie have streamlines but they take property value into consideration. Fannie/Freddie are considering dropping the prop value requirement. They are on the hook for the loan anyways, if a refi can make the borrower stronger it will help them.
ever been a better time to buy or sell cats.
FHA does them now
® | 12.24.08 - 3:11 pm | #
Has FHA published the new loan limits?
Sorry - I'm to lazy to go look.
Comrade Terry.
Yes
/snicker
Sorry to not be PC, BUT...
Merry Christmas to all.
AHHHHHHHHHHHHHHHHH!
A day for the markets to be closed. Ah, but to have more days like that.
When everything should just slow down and we enjoy each other's company.
I can wish, can't I?
We've got two cats that are 13 lbs of fat each, a cross between Main-Coon and Persian. Loud, big and lazy. I swear they're starting to look kind of tasty. I've been warning them if they don't shut up in the early morning they may end up as a Christmas BBQ.
Yes
/snicker
® | 12.24.08 - 3:17 pm | #
Tnx. I'll get off my butt and go take a peek!
U.S. Department of Housing and Urban Development (HUD)
08-36
L-Liz,
Yes, they were bred for meat by native americans.
Re cats, carnivores don't taste good. But if you're hungry enough, and the squirrels are gone...
Happy holidays to all.
OT, but quite interesting article on PE and the destruction of Mervyn's, as it sheds light on Cerberus and Chrysler. Also shows you where Eddie Lampert's Sears is probably headed.
Yahoo! 404 - Page Not Found
"The cat bubble can easily explode. I think cats have evolved to be irresitably cute. We have no choice."
so its a new paradigm and this bubble will be different ? is that what you are saying
At home nursing a wicked flu - on the day before Christmas of all things.. wtf?
If I was the market I'd be up 1,200 points I'm sure.
Just wanted to wish everyone a happy and healthy holiday..
Cheers.
Merry Christmas all
Misean - sorry, we shrank the economy in your absence. Will have another go in the New Year.
C
I always eat cat on Chinese New Year. Why is everybody making such a big deal about eat cats? They taste great with a wine sauce.
08-36
® | 12.24.08 - 3:24 pm | #
Att 1 & 2 are pretty darned generous. The standard fare seems to be as conservative as it always was.
I'm sure others may disagree with 'generous', but it's not the function of FHA to take on all comers. Besides, they've got a (for now) limited budget.
I think I'd prefer eating people over cats...I like cats better as companions therefore they have more value to me...People tend to be little more than nuisances...I'm eyeing up a plump neighbor for when the hard times hit
" Elvis writes:
I always eat cat on Chinese New Year. Why is everybody making such a big deal about eat cats? They taste great with a wine sauce.
Elvis | 12.24.08 - 3:47 pm | # "
A milk sauce will help tenderize the tough old tom cats.
"I think I'd prefer eating people over cats..."
People taste like cigarettes, french fries, and bacon all blended together and served with a side or mayo. I think you'd prefer cats more.
Left NOVA Wed. with cranky old tortoise shell pound kitty. 2,395 miles later dragging a 7 x 14 Wells Cargo trailer we arrived at our new home. Cranky Kitty kept trying to climb back into the Jeep - more bouncing , more bouncing. Oh, well - we are a long way from GD II down here.
Feliz Navidad and Happy New Year All
MrM, oh yeah, unless you planned for it which I don't know how you could do in advance...
Expired
Major hit for Seattle.
JPMorgan Chase is notifying landlords it will pull out of all the downtown Seattle office space rented by Washington Mutual by the end of March. The New York bank is laying off 80 percent of WaMu's Seattle work force and consolidating the 800 remaining office workers into the WaMu Center headquarters building it owns downtown. ... WaMu leased about 700,000 square feet in Seattle, according to brokers and building owners.
Cats bouncing, ha!
BTW, my Bloomie is stuck on 2:55pm. Early close?
C
I don't mind paying taxes at '08 rates. I think taxes might increase in '09, '10, or '11, or all three! (Is this an understatement?)
I guess now I've also got a ton of losses to carry over...
Sorry, but there is no bubble to reinflate. The fact people can't understand that, makes the problems worse.
It's not the ride to the top of the roller coaster that scares folks, it's the ride down
amen. People don't get that "rates" are overrated. There were very high rates in the mid-80's from the early 80's fallout yet the economy still recovered. It wasn't like the 80's were a overly good time for the economy either. Poverty was very high and crime rates soared. Yet, the recovery continued to about mid-1996 when the economy finally got back to the 79 peak and soared further.
Ditto on 'gas prices'. When deflation has become embedded into the system, much like inflation did in 69, it is tough to get it out. The REAL reason rates stayed low in the 00's was of this looming deflation becoming embedded.
Eventually, gas will be given away free if the idiots don't start getting it.
bearly - thanks much!
Why do you say that it is "jumbo" rates that matter in California, when the median price has plunged way below the conforming loan limit?
It's not just jumbo rates. Try looking at refis on rental property. Even small loans, with low LTV are quoted at 7.5% or higher. Only owner-occupied financing is benefiting from the much publicized rate drops.
A housing recovery must start at the low end with starter homes. The sellers can then move up.
Conforming loan limits are well above what is needed for the starter home buyer, and for the middle of the market almost everywhere.
Home prises are down substantially, and morgtgage rates are at historic lows. Affordability has rarely (if ever) been better. However, buyer psychology remains negative.
The stage is set for the recovery.
I thought many different ethnic groups ate pussy cats,...I think that's what they were talking about eating pussies