Posted on 12/13/2009 10:25:10 AM PST by FromLori
Current mortgage rates should be the answer to everyone's prayers--the chance to refinance at articificially low rates and enjoy artificially low payments into the hereafter.
But, as David Streitfeld explains in the NYT, banks aren't refinancing all that many loans.
Why not?
They've raised lending standards to where they should have been on the first go-round, which makes many homeowners ineligible
Many loans are underwater, and banks won't lend more than the house is worth (shocking, we know). Many loans have been securitized, so your current bank can't just modify them on its own. Some key stats:
An estimated six of 10 homeowners with mortgages have rates that exceed the 4.8 percent rate currently available on 30-year fixed mortgages, the least risky form of home loans.
Nevertheless, only half as many refinancing applications were reported last week than were reported at the beginning of January, the peak level for the year. The total dollar volume of refinancing activity in 2009 will be about $1 trillion. In 2003, another year when rates fell, it was $2.8 trillion.
Meanwhile, rates are at record lows...and are expected to climb in the spring when the Fed stops subsidizing rates:
It is highly unusual for mortgage money to be available below 5 percent. Average rates fell as low as 4.7 percent in the 1940s, as the government held down interest rates to finance World War II, and stayed just below 5 percent until the early 1950s. Rates went above 5 percent in 1952 and stayed there — until this year.
The super-low rates are not likely to last much longer. The Federal Reserve program that has driven rates to such lows, which involves buying $1.25 trillion in mortgage-backed securities, is scheduled to expire in March, and Fed leaders have said that it would not be
(Excerpt) Read more at businessinsider.com ...
ping
don’t worry the government will loan to just about anyone won’t they? Its only taxdollars after all.
“...but it took a rectal exam to get this far....”
Some banks are requiring stool samples!
I wonder if that is only for refinancing because I read they are once again giving loans to people who really are not qualified to buy homes. My daughter knows someone who is thousands in debt on credit cards their payments would be at least 50% of their take home pay and they gave them a mortgage with that tax credit program. In fact the business insider was running stories about this happening again not too long ago.
I don’t have much sympathy for ANYONE in these scenarios. These buyers bought at the top of the market and feel like they should be able to change their loans because their houses are worth less.
If I buy gold now and the price falls $300 an ounce, should I get some of my money back? Heck no. Now if I borrow money to buy that gold, and then the price drops should I get different loan terms? Double heck no!
You’d be surprised how many “conservatives” disagree with you.
So did my brother-in-law and they tried everything, even being rude to him,to discourage him from even refinancing thru them.
I closed on a house last July, one month later took a 25% equity hit, just missed the $8,000 tax giveaway , then took a 25% pay cut when Obama took the oath as capital investors fled my industry.
the bank holding my mortgage said they can't help me, I have made every payment on time (800+ credit) but I have a straight 6%
....... and I am not a black panther going through ACORN so no bannanas for me
Will not appraise!! Simple!!
I think conservatives would argue the merits of the contract signed between the two parties. If it is a non-recourse loan, then why should not the mortgage owner walk away if he is willing to live with the consequences of his action (loss of the home and a hit to the credit score)? If it is good enough for Donald Trump or any other financial big wig, then it is good enough for mortgage Joe.
If I was a $100K underwater, and the only recourse the lending company had was to get the house then I would let them have it.
These artificially low rates come at a good time for me as well. just locked in 5.25% on a 30 year jumbo.
thats where I am. I am considering to stop making payments and keep the money for myself, maybe buy lots of ammo, and stay six months or so until the marshalls come to remove me.
It makes it a little hard when your house is 80k underwater.
The merits of a contract can be negotiated between the parties or settled in court. They are typically not for the parties to decide independently. But, as you say, if somebody is willing to accept the consequences of a default and foreclosure without whining about it...fine.
No it's not, most state laws view it as payment in full when you deed the property to the lender of record. If a mortgage company reports it otherwise they are playing law suite lotto.
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