Posted on 02/16/2006 11:12:27 AM PST by ex-Texan
"And that is it. Only idiots would get any other loan, that and extended warrantees."
That is not true. ARMs can actually be much better options than fixed rate mortgages in certain situations. The people who get overextended in an ARM are basically the same type of people who get overextended in a conventional loan.
A No Doc loan means when you are on the floor with your heart attack after receiving the foreclosure papers, they can't call a doc to work on you...(probably because you didn't pay your insurance...) "Sorry sir No Doc..."
I totally disagree with you. These arms will start costing people houses in about 12 to 118 months at a high rate.
Cute.
118 = 18, coffee level low.
Well I did say in certain situations, and there are many types of ARMs. Some ARMs are fixed for as long as five years. I would not want an ARM that wasn't fixed for at least some period of time. If someone bought in 2001 in Las Vegas or MD on a 5-year fixed ARM they would have built up a huge amount of equity due to appreciation. They would have been paying a very low rate, even by the standards of the past 6 years. They could have invested the money they saved with the extra low rates. And they could have just locked in on a 30-year fixed back in November when they rates were close to their recent low points. An ARM is also an excellent choice if you plan on selling before it is time for your rates to be readjusted. I would be a little more weary of ARMs at this point in time, but it is still a good option for some people.
Are you "Fee Only". Fee Based, or Straight Commission for you compensation.
Yes asset allocation and the total picture (including real estate) are often overlooked and even poo-pooed by some investors. Mankowitz, Tobin, and Sharpe all Nobel Laureates gave us modern portfolio theory then ergo Asset Allocation. With brain power like that, those that lend their ear to what they have so say, may in-fact be showing they possess something sometimes lacking these days in our culture; wisdom.
"Mortgage brokers are evil people."
Sounds Howard Deanish.
Anyone who has a vested intrest in getting my money from me is evil as far as I am concerned.;)
I'm waiting too. There's been a slight increase in foreclosures in LA, and I think a significant number of people are on the edge and will need to get out in a couple of years, leading to a glut of single-family homes from people who couldn't really afford them in the first place. They need to dump it, and that's where I come in...
Southern California is goign to bleed red ink. With over 40% of the mortgages being intrest only, ballon, or arms. And like you I figure there are a lot of people just hanging on. Another .5% increase in intrest rates, a slow down in the economy, or just a opps that happens in life, will push a lot over the edge. My wife and I budget at 90% our net income so we can afford lifes opps.
"Anyone who has a vested intrest in getting my money from me is evil as far as I am concerned."
I am not a banker, but have done a lot of business with various of all sizes. Calling bankers evil is a ludicrous statement. The US Banks are largely responsible for our place in the world and the power of our economy. The money banks lend to people and businesses drives the economy. When bankers come after people, they aren't coming after your money. They are coming after their money that you owe because they lent you money. As far as I'm concerned, calling banks evil is a socialist concept.
And nobody needs to get all worked up thinking that I'm calling them a socialist. I'm just saying that banks are a major component of the capitalist system, and criticizing banks is criticizing capitalism.
If you owe the money, it ain't your money.
Everyone loves banks when they are getting the cash, but some people start hating them when it is time to pay the money back.
I represent some clients acquiring an Alabama building with a NNN lease, very strong national credit tenant credit with defense contracts, and a 9.5% cap rate. I am going to own a piece of the building, and it will be free and clear. I will pass on the advice from those brokers.
If they cannot sell the condo, they may be able to exchange it for another property. I've done that for clients in several states for many years. There will be someone, somewhere who wants a condo in Chicago and will exchange either real or personal property for it. There may be a doctor out there who would offer 20K in future medical services in exchange for the equity. Unless the loan is already upside down relative to value, there are ways to get out of the investment. They should also consider a lease-option to give a lessee some incentive. They could take a personal note from someone with good credit as a down payment. With no cash down, the tax benefits to that investor may be worth owning the condo.
No offense, but I can't help feeling that it's a bad sign when attorneys start "half joking".
Or, they own the bank. I have heard about scared mortage companies coming up with 40 year mortages with at the 30 year mark a baloon payment. It ain't over till the fat lady sings and never underestimate the creativity of the printing press operators.
I'm taking note of your advice to have professionals help with investing, which I do, since, while I am not totally ignorant, my personal confidence level is not up to me making such decisions on my own. However, I'm considering changing professionals. Have you any advice on how to select professional investment advisors?
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