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Stated, jumbos, no docs, and no ratios are 'exotic products'.
The real problem came when they mixed 'stated documentation' with 'adjustable rate mortgages'. Option ARMs is going to be killing the US market pretty soon.
Quote:
Originally Posted by anifani821
The biggest product that got people in problem were no doc loans.
Stated, jumbos, no docs, and no ratios are 'exotic products'.
The real problem came when they mixed 'stated documentation' with 'adjustable rate mortgages'. Option ARMs is going to be killing the US market pretty soon.
Agree - and good observation/point. Amazing what types of loans were floating out there.
Now tell me - on the FHA loans . . . I am ignorant . . . so please explain . . . is there a pool of money available by region . . . and/or by bank? And at what interest rate? And closing costs.
Thank you for the info - very interesting discussion.
I would think it would be as much as the bank has to fund.
We all know that there are a lot of investors having problems funding loans.
Quote:
Originally Posted by anifani821
Agree - and good observation/point. Amazing what types of loans were floating out there.
Now tell me - on the FHA loans . . . I am ignorant . . . so please explain . . . is there a pool of money available by region no
. . . and/or by bank? no
And at what interest rate? And closing costs. Depends on the lender
Thank you for the info - very interesting discussion.
FHA has raised their loan limits in Charlotte to 303k...and to 270k for the bottom limit. You only need 2.25% down payment, and can still have a 400 credit score to qualify. Of course you can't have any credit lates in the last 12months, but that has always been like this.
The only thing that has changed is the 'exotic products'.
renriq02 - I didn't think the bottom of the credit score was 400! I was always led to believe that much under 650 and the credit lenders start reading your mortgage application and start rolling on the floor laughing hysterically! From my NJ experience with a "starter" home still on the market up there at 300K, there are very few qualified buyers. I've gone through 3 false alarms with the potential buyer having a line of credit at the bank (BofA twice) that seems to fall through at closing. In NJ, to buy the "average" home at about $550,000, you would need the FHA loan which tops out at $417,000 and another one on top of that! Most of my potential buyers didn't have enough money to pay the closing costs, which in NJ, can run up to 15K. If the banks ever went back to the traditional model of lending - 20% down and a mortgage payment that is no more than 28% of a buyer's gross income, the real estate market would be dead, dead, dead!
The Charlotte region has traditionally (last few years - anyway) relied on say 4-5 thousand people from about 10 of the "expensive" housing markets to keep its momentum. Once you kill the first-time buyers market in those areas, the "real estate" machines there start to grind to a halt. There will always be people that absolutely have to move and others that can bring wheelbarrows of cash to the table, but those folks will not sustain the Charlotte market in and of themselves.
If the interest rates ever rise to the level of the late 70's or early 80's, you'll see home prices drop like rocks!
bottom is actually 350....but I know only a couple of lenders that go to 400.
FHA has a 'no credit score' requirement. They dont look at your credit score.
They look to see if you have been on time in the last 12months, no bk 13 in the last 12months, no bk 7 in the last 2yrs, and no foreclosure in the last 3yrs.
720+ borrowers are kicking themselves whenever they find out that borrowers with less than 620 scores are getting an average in the 5.5-6% interest rate range on a 30yr fixed mortgage with 2.25% down.
A lot of ppl are mad that they worked their tail off to get a good credit score
bottom is actually 350....but I know only a couple of lenders that go to 400.
FHA has a 'no credit score' requirement. They dont look at your credit score.
They look to see if you have been on time in the last 12months, no bk 13 in the last 12months, no bk 7 in the last 2yrs, and no foreclosure in the last 3yrs.
720+ borrowers are kicking themselves whenever they find out that borrowers with less than 620 scores are getting an average in the 5.5-6% interest rate range on a 30yr fixed mortgage with 2.25% down.
A lot of ppl are mad that they worked their tail off to get a good credit score
Well, amazes me. I have never had anyone offer me a product like that.
I guess since I had good credit and nice FICO score - but still - 5.5- 6% is right on the money.
Again, people are buying and will contine to buy in Charlotte metro, no one is arguing that. There will never be a "freeze" in terms of buying...again no one is saying that. The problem is that the pool of qualified buyers has shrunk immensely.
Sales have dropped about 20% YOY. That is a huge amount. Inventory is still sky high & DOM are much higher now.
The question is how bad will things get and for how long?
I think things will continue to trend down as they've been over the last year.....
I do agree that interest rates being so low can help (for the people that are qualified)....for how long they will stay this low is anyone's guess.....
It's futile I tell you Mr Gloom N Doom! We should sit around the camp fire singing coombiyah instead of trying to convince people a decline is still happening. They just don't want to hear it. The funny thing is that I've asked the same question a hundred times - even directly to realtors... where is the YOY for inventory and sales? Where?! It has to be a conspiracy!
So the real doom and gloom - we're basically down to ONE metro area in the WHOLE United States where home values are still rising and CoL is low... The infrastructure is already falling way behind, yet people continue to pour in - often times without jobs (convinced that they know the trick to getting a job!). Flood gates are opening out of places like Michigan (mostly sad stories of financial woe). Inventory is at an all time high everywhere... short sells and foreclosures reaching numbers never seen before. Banks and financial institutions getting hammered... Fed flirting dangerously with inflation/recession by keeping rates down. None of this secret or even covert information... it's amazing that this is all ignored if a house sells! lol
It's futile I tell you Mr Gloom N Doom! We should sit around the camp fire singing coombiyah instead of trying to convince people a decline is still happening. They just don't want to hear it. The funny thing is that I've asked the same question a hundred times - even directly to realtors... where is the YOY for inventory and sales? Where?! It has to be a conspiracy!
So the real doom and gloom - we're basically down to ONE metro area in the WHOLE United States where home values are still rising and CoL is low... The infrastructure is already falling way behind, yet people continue to pour in - often times without jobs (convinced that they know the trick to getting a job!). Flood gates are opening out of places like Michigan (mostly sad stories of financial woe). Inventory is at an all time high everywhere... short sells and foreclosures reaching numbers never seen before. Banks and financial institutions getting hammered... Fed flirting dangerously with inflation/recession by keeping rates down. None of this secret or even covert information... it's amazing that this is all ignored if a house sells! lol
Awwww Mikey - we LOVE to hear you talk
Some of us just don't interpret things the way you do and are more optimistic about the housing market - nothing personal
It's futile I tell you Mr Gloom N Doom! We should sit around the camp fire singing coombiyah instead of trying to convince people a decline is still happening. They just don't want to hear it. The funny thing is that I've asked the same question a hundred times - even directly to realtors... where is the YOY for inventory and sales? Where?! It has to be a conspiracy!
So the real doom and gloom - we're basically down to ONE metro area in the WHOLE United States where home values are still rising and CoL is low... The infrastructure is already falling way behind, yet people continue to pour in - often times without jobs (convinced that they know the trick to getting a job!). Flood gates are opening out of places like Michigan (mostly sad stories of financial woe). Inventory is at an all time high everywhere... short sells and foreclosures reaching numbers never seen before. Banks and financial institutions getting hammered... Fed flirting dangerously with inflation/recession by keeping rates down. None of this secret or even covert information... it's amazing that this is all ignored if a house sells! lol
MikeyKid - It seems there are a lot of folks out there like "Little Orphan Annie" singing "Tomorrow" for the umpteenth time!Remember there is a fine line between unbridaled optimism and delusion! Like Dr Pangloss always said "All's for the best, in this best of all possible worlds!"
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