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To: Rebelbase
I see this alleged all the time on these threads. Does anyone have any *real* data on this? Are anything like a majority pulling major equity out in a re-fi?

I re-fi'd about a year ago, and not a penny went towards credit card debt. Credit cards get paid in full every month. I did go from a 30-year note (20 remaining) to a 15-year note, though.
7 posted on 12/10/2003 7:33:35 AM PST by FreedomPoster (this space intentionally blank)
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To: FreedomPoster
Are anything like a majority pulling major equity out in a re-fi?

The data is published weekly & monthly by the Fed. It has been posted often in the "Credit Bubble Bulletin" threads. But here is the same point made by Alan Greenspan:

From the Federal Reserve Board website:

Remarks by Chairman Alan Greenspan
At the annual convention of the Independent Community Bankers of America, Orlando, Florida (via satellite)
March 4, 2003

... Previous Federal Reserve surveys of the disposition of cash-outs indicate that a substantial amount--perhaps half--was used to finance home modernization and personal consumption expenditures, outlays that directly affect GDP and jobs, and that likely was the case again last year.
[...snip...]
It is likely, however, that home sellers, after setting aside a down payment for the family's next home, expended a considerable part of their home equity extraction on goods and services.
[...snip...]
Refinance and home purchase originations, seasonally adjusted, peaked in the fourth quarter of last year. It is difficult to imagine that pace being maintained in the current quarter.
[...snip...]
In summary, the frenetic pace of home equity extraction last year is likely to appreciably simmer down in 2003, possibly notably lessening support to household purchases of goods and services....
[...snip...]
Home equity extraction directly finances household purchases of goods and services by liquefying previously illiquid assets. It also indirectly finances such purchases by facilitating outlays financed by credit card and other nonmortgage consumer debt. Equity extraction has been a major source of repayment of such debt.

Home equity extraction (re-fi's), at record levels, at a pace "difficult to imagine" even "frenetic" at the end of last year, mostly spent on goods and services, and this year (2003) is still setting records.

And...

Remarks by Chairman Alan Greenspan
At the Securities Industry Association annual meeting, Boca Raton, Florida
November 6, 2003

Fortunately, a vibrant housing market lifted construction activity and, by facilitating home equity extraction, provided extra support to consumer spending.
And re-fi's still supporting consumer consumer spending 8 months later.
8 posted on 12/10/2003 7:58:40 AM PST by Starwind (The Gospel of Jesus Christ is the only true good news)
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