Posted on 08/24/2007 11:11:03 AM PDT by Hydroshock
Until a few months ago, it seemed that anyone who could fog up a mirror could get a mortgage.
Now, with a credit crisis roiling the industry, some consumers might think they have a better chance winning the lottery than finding a home loan.
The truth is that you can still get a mortgage. It just may not be as easy--or as cheap--as it was over the past few years.
"If you have good credit, can document your income and have money for a downpayment, it’s largely business as usual," says Greg McBride, senior financial analyst at Bankrate.com.
Borrowers seeking non-"jumbo" mortgages of $417,000 or less and have good credit "will get the red carpet rolled out for them at the bank," McBride adds.
But if you are lacking in any of that criteria, or need to get a jumbo loan, be prepared to be turned down or pay a much higher rate.
"Tough Sledding"
"If you have poor credit, cannot document income, or looking for 100% financing -- it's tough sledding," says McBride.
Subprime loans for people with credit scores of 600 or less? Forget it. The standards have been tightened to the point that subprime mortgages, 20% of the mortgage market last year, are a thing of the past.
Also gone are a variety of products ranging from "no-money-down loans" with low teaser rates to interest-only mortgages that increase the amount owed to the lender over time.
(Excerpt) Read more at cnbc.com ...
meh.
Values will drop yes...to more reasonable levels. In the long run...that's good for everyone.
Property values (at least in my area) have reached ridiculous levels since 2000-2001.
I guarantee you that these lenders are BEGGING for help from the govt. It’s worse than you think.
What was the specific reason they gave?
My property was suddenly devalued by $30,000, after an initial appraisal my my mortgage firm. The funny thing is that there are a number of homes on our road that are of lesser stature than ours that have either been sold at or above our original appraisal, or are currently on the market for that price. I’m baffled about that...
The housing market could go down over the next couple of years, if you stay put the market will recover one day. The best move would be to just ride it out.
If we allow our taxes go up they'll never come back down.
That's funny! What would you post if not for gloom and doom?
He’s lost his house, and living at his parent’s house.
He’s trying to get his wife to work, but she’s now expecting their 2nd child.
I don’t think he’s ever done that well in the mortgage business.
“Now in the credit and default category alone considered by accepted authorities as totaling more than USD$20 trillion in notional value.” Jim Sinclair
http://www.jsmineset.com/home.asp
In that case, he’s probably a “hoper.”
Someone who saw the money someone else made and was not of the same personality type as that someone else but hasn’t yet figured that out.
Look...It makes me sick that OUR tax money would have to go towards bailing out people who should have never been given loans in the first place....however, If the Govt. does not get involved, we risk property values dropping like dominoes...Bankruptcy's would quadruple...everyone would feel it.
Especially states like Ohio, Michigan, Indiana, Vegas, parts of Florida, parts of Cali, and hundreds of other city's. The collateral damage will be felt by EVERYONE!...including most other country's.
Its bail out time in my opinion...address these ARM’s now before its to late.
jwh_Denver, thanks for the link!
http://www.jsmineset.com/home.asp
Posted On: Friday, August 24, 2007, 6:53:00 PM EST
A Letter To Chairman Bernanke
Author: Jim Sinclair
Dear Chairman Bernanke,
This is a problem based on the revelation that over the counter derivatives on credit and defaults are:
Without regulation.
Without listing on public exchanges.
Without standards.
Therefore not in the least bit transparent.
Therefore without an open market of the bid/ask type.
Dealt in by private treaty negotiations.
Without a clearinghouse.
Unfunded without financial guarantee of any kind.
Functioning as contracts of specific performance.
Financial character or ability to perform is totally dependent on the balance sheet of the loser in the arrangement.
Evaluated by computer assumptions made by geek, non market experienced mathematicians who assume religiously that all markets return to their normal relationships regardless of disruptions.
Now in the credit and default category alone considered by accepted authorities as totaling more than USD$20 trillion in notional value.
Notional value becomes real value when the agreement is forced to find a real market for ending the obligation which is how one says sell it.
Interest rate adjustment will not replace the necessary act of providing liquidity in proportion to the problem. When the Fed was initiated, its prime legal directive was to provide liquidity in periods of disruptive credit problems.
Adjustments of interest rates can only hope to hide the problem for a time, causing a global extension of liquidity at unprecedented levels. Good luck, but your academic approach is unlikely to do much and will only lose precious time.
Sincerely,
Jim Sinclair
They will be addressed as properties are foreclosed on and eventually purchased at much lower prices! These cycles have been repeated countless times in history!
Sounds scary! So what?
Notional value becomes real value when the agreement is forced to find a real market for ending the obligation which is how one says sell it.
Huh? Exchanging a fixed interest rate on $1,000,000 for an adjustable rate on $1,000,000 does not mean the derivative contract is worth $2,000,000.
For each winner, there is a loser.
Ok.........
The government would never have enough money to fix this even if they taxed us to the hilt.
Not to worry. There will be a One World currency backed by gold (wink, wink) that will come along to fix all our problems one day.
What a load of crap! I can do Jumbo, Sub-prime, conventional, VA and FHA loans all day long! LOL
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