Ouch!!! But between the symbolism of them being blindsided by a truck a perfect metaphor for how the rapid changes in the market have hit them. And the ad for a company willing to undercut the traditional 6% commission is telling on how many will be saling there properties in the future.
Because I cannot post excerpts directly from this source, I'm restricted to saying very few words it. But Bloomberg is saying that Countrywide may need to shift to `more reliable' sources of funding. Apparently, the sources CFC reported it was planning to rely on are not going to be 'reliable' with turmoil in the subprime market. Bloomberg quotes a report from CreditSights Inc. Read the report for yourself.
My interpretation is that the largest U.S. mortgage lender is feeling the pinch of market turbulence and tightening money sources. I'm suggesting that things are not nearly as rosy as CFC wants the world to believe.
All of which means things are going to get worse after October, 2007 and the whole world knows it. Jumbo loans in California are already restricted to people with very high credit scores. Market rates are increasing weekly. Brokers must charge 7.94% or higher rates for 30 year fixed rate loans. Which means virtually every mortgage loan written since 2004 will be nearly impossible to refinance. Unless home buyers are willing to pay higher rates.
So all those people who now are paying 4.94% on their ARM loans are suddenly going to hit with 7.9% and higher interest rates. Which mean monthly payments on $ 600,000 are going to jump from about $ 2,490 to upwards of $ 3,970. Not including local taxes and utility costs.
And a $ 600,000 home in Californicated is, most likely, a postage stamp sized dump in South Central La La Land.
The people who were suckered into opting for 2% teaser rates will be hit even harder. Payments jumping up $ 1,600 per month is one thing. Increases of $ 2,500 + are another animal altogether. That animal has very sharp teeth and a nasty temperament.
But what do I know anyway. I'm just a geezer in Oregon.