HelluvaEngineer

How Long Will the Good Times Last?

How are people refinancing when 30%+ of them are underwater and have no savings?


On Apr 09 03:04 PM Chris B wrote:

> The thing is, companies like WFC and BAC are refinancing these loans
> into 15-30 year fixed mortgages like crazy right now, so many of
> these resets will never have a chance to occur. Politically imposed
> demand for these loans from Freddie and Fannie is keeping such refi's
> available. Obama even took the trouble to remind everybody that
> this is a great time to refi.
>
> I'd say the government's goal is pretty transparent - to make sure
> everybody is sitting on refinanced 15-30 year loans in 2010-2011
> instead of resetting option ARM's. By pushing interest rates down
> to near 4% and maintaining loan availability through treasury actions,
> they've created a self-interest incentive and window of opportunity
> for the holders of these loans to refi en masse.
>
> In any case, Obama is right on one thing: Now is a great time to
> get a home loan. In 3-5 years inflation will return and you'll be
> earning 7% on treasuries or 8% in bank CD's using the home equity
> you extracted at 4.5% in 2009! That 4.5% interest you're paying
> will be less than the rate of inflation = you win. Worst case scenario
> you lower your expenses.
>

A Sign That Housing Is Approaching Bottom

You're also forgetting the fact that the banks are keeping their giant inventories off of the market. I don't think anyone knows how many foreclosures are really out there.

Option ARMs: The Banking Backdrop of 2009

They can't refinance if they are underwater, unless they're sitting on a pile of cash. If they are, its unlikely that they would have chosen such a bad mortgage. Nope, many of these people went for the lowest payment and then spent the difference on H2's and flat screen TVs.


On Jan 04 02:51 PM Ishortyou wrote:

> God knows, but if I were the one having the ARM or resetting ALT-A
> loan, I would be worrying now on how to refinance those loans to
> more affordable ones with or without the governments help.