Clock is Running Down on 'Cheap' Mortgages

Hearld Tribune.com ^ | 1/ | Michael Pollick

[Kozak]

My favorite on Art Bells show was when he went over predictions for 2005, and one of them was " tornados in the US". Duh. that one really required a crystal ball.

[kx9088]

Apparently you know me well enough and my family well enough to know the end result, eh?

[JackDanielsOldNo7]

And, these same women get angry and confused when their hubbies find sex somewhere else. . .

Then they take half....of what is left after they have decimated your finances.

[bigsigh]

so far lol!

[HamiltonJay]

[HamiltonJay]

Even if you make an extra payment a year, some banks/mortgage companies will apply this as "prepayment of future interest" and not credit it toward your principle.

Fact sadly is, lots of banks are blatantly criminal in their activities, in all levels of their businesses.

[Sunnyflorida]

I agree. You need to read the fine print. One other thing to watch are the terms insurance payments are controlled in case of major damage. Some hold the money until after repairs are made - expecting out of pocket payments from the insured home-owner during repairs.

Wells Fargo requires all repairs to be completed and inspections done before they give you the final third of the money.

[OKIEDOC]

bigsigh wrote:

I'm in Oceanside. The population in San Diego Co. will double in the next 25 years. I'm a buy and hold longtime guy. Those who will feel this are those who for some reason will have to sell this year. I like the long term and low end. That's where popluation will create demand.

REPLY
What I do know, is, nothing is for sure, just pure speculation and opinion on my part.

San Diego is certainly a very nice place to live and the people here are friendly and very active.

Lots of can do spirit in this part of Southern California.

However, a lot depends on whether or not the job situation stays vibrant over the coming years.

America no longer has a large manufacturing base on which to fall when things get bad.

There are only so many service jobs and most of them are expendable when push comes to shove for employers.

As long as people want to stay in this area, rentals should remain strong and parking will always be a premium.

The kids (mid twenties) up the way, bought their house just about (guessing)16 months ago.

Just so they can live in this neighborhood the wife with new baby has gone back to work and now they have two working relatives living with them helping to make the payments.

As for the population doubling in San Diego, I personally hope not for a long time.

Always a need for low end housing.

Especially for people who have bitten off high mortgages and want to move down to affordable housing.

[freedumb2003]

4.75% fixed 15 year -- I got it 3 years ago. Works for me.

[OKIEDOC]

Excellent article.

I suppose that those who presently own investment property will disagree.

Probably more than in hopes that what is looming doesn't come to past.

I have been in the same situation and know the feeling of losing my shirt, pants and under ware on speculative investment in the real estate market.

The sky certainly isn't falling but it has started to rain and the wind is blowing at a faster clip.

[OKIEDOC]

LOL

[OKIEDOC]

I believe something is up with those who think their in the know.

Why else the doubling of minimum credit card payments.

Americans are awash in expendable non secure debt.

[HamiltonJay]

Well the real problem is the organization that regulates banks, has not done jack to reign in high risk lending that has put a lot of folks on less than stable ground...

Basically this group, is sort of where the SEC was in the late 90s... fraud was blatant and everyone knew it, but the SEC was not going to move in, because the money was flowing so freely and was afraid to rock the boat..... That's where the bank regulator is right now...

Its going to be an ulgy ride... lots of pigeons are going to come home to roost.

[ex-Texan]

You aint't seen anything yet. Wait until Congress starts to investigate. Check this thread out:

http://www.freerepublic.com/focus/f-news/1551120/posts

[HamiltonJay]

I own investment property and I agree completely that the markets going to tank, and tank hard.... particularly in many of the hyper inflated markets.. (There will always be local markets that buck national trends, whether they are up or down in housing) but nationally its pretty obvious the run up is over... and a lot of folks are going to be taking baths.

In most normal markets, it will be a flat to slow decline... just as it was a flat to slow increase over the last decade.. but those areas that have just skyrocketed, a lot of those are going to come down hard.. just a matter of when.. not if.

[Phantom Lord]

People who elected to purchase $ 500,000 homes with Option ARM loans in 2004 will be getting notices of increased rates. Their mortgage payments will be going went up from about $ 1,200 a month to over $ 3,000.

Option ARMs are a MONTHLY ARM, so those who got Option ARMs have been having an increase in their rate monthly for the better part of a year or more. They do not suddenly get a letter at the beginning of the year saying "Your rate is going up to X%." It doesn't work that way.

And anyone with a standard ARM would get their rate adjustment letter 45 days prior to the anniversary of their 1st payment. Not a beginning of the year letter.

And also, with an Option ARM, your minimum payment can not go up more than 7%. So a $1,200 payment could go to a maximum of $1,284. Not $3,000.

[em2vn]

Your in laws aren't your family. Never forget that,eh.

[kx9088]

Sounds like someone has had some bad experiences.

[em2vn]

Not at all. My mother in law and father in law were quite old when I married their late in life daughter. I didn't have nearly enough time to enjoy them before they died.
The point is that in law are not family because there is no blood attachment. An important element that isn't missing in the relationship with their child to whom you are married.
Justly so, you are second fiddle in all matters if you are living with them. It's not a good position for a person to allow themself to be in.

[NCLaw441]

We paid off our 15 year fixed last year, and just paid off a small equity line used to build a screened in porch in the back. You are so right about the freedom feeling it has given us. We stayed in this house as our income doubled over the years, avoiding the temptation to "buy up" as we could have as we did better.

Now, we have 4 years to get ready for boy/girl twins' college expense. Not QUITE out of debt. Still, knowing that even if it all goes away, we will at least own our home.... feels very comforting.