real estate rants, ramblings, and questions

NEW -> Contingent Buyer Assistance Program
Another question. We all know there is a credit squeeze and a mortgage is a bit more difficult to get and the secondary market is alot less inclined to loan money for mortgages. But, what if credit becomes more available, but buyers don't become more available? What if buyers go on strike? What if present renters just say, "No thanks, I don't want to be on the hook for that much debt."? What if all the potential buyers already bought?
 
<em>"What if all the potential buyers already bought?"</em>





IMO, this is what started the slowdown. When a bubble bursts, volume drops dramatically due to buyer fatigue.





If more credit became available, it might slow the decline as it would increase sales. Remember we saw continued appreciation early this year at the high-end even while the low end had no sales mostly because prime borrowers could still obtain credit. Particularly here in California, if someone is willing to loan money, there will be someone willing to borrow it. Are there enough to these potential borrowers left to save the market? I don't think so. If there were, sales would not have dropped off from late 2005 through the present.
 
<p><em>"if someone is willing to loan money, there will be someone willing to borrow it."</em></p>

<p>We always assume this to be true, but consider the alternate.</p>
 
<em>"We always assume this to be true, but consider the alternate."</em>





That would certainly facilitate the market crash.





What do you think of this: <a href="http://en.wikipedia.org/wiki/Liquidity_trap">Liquidity trap?</a>





Doesn't sound like fun to me.
 
<p>Effen, you most certainly could qualify easily up to 55% DTI and even 65% DTI. It's crazy, but I don't make the rules.</p>

<p>You begin to see that prices no longer have any bearing on incomes (they should and they soon will). Within the last 6 years, it became about THE PAYMENT. Everything was payment this, payment that, etc. When you start looking at payments instead of your total debt obligations, you lose sight of the magnitude of those obligations. Would you rather have a a 25k car loan for a nice honda on a 4 year term @ 5.75%?? ($585 a month) OR a 40k loan for a BMW on a 7 year term @ 6.5%?? ($594 a month).</p>

<p>Loans kept getting longer and longer while rates got lower and lower. People didn't have to worry about paying anything off so they never did! They just kept making those minimum payments as if they'd be there for ever. </p>

<p>Cash Flow! Cash Flow! Come learn about how to maximize your cash flow by taking out neg am loans!! What a crock of sh*t.</p>
 
417k is the limit on a mortgage. There are also CLTV limits. You cannot get a conforming approval if you have a 417k first mortgage AND a 100k 2nd mortgage.
 
<p>Maestro,</p>

<p>Didn't you post, five minutes ago, a jumbo quote you were working on?</p>

<p>What is your agenda?</p>
 
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