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Old 04-10-2010, 01:31 AM
 
1,347 posts, read 2,451,349 times
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Quote:
Originally Posted by olecapt View Post
ARMs were pretty common at 300K. Option ARMs were not.

But take this guy. It resets. His payment goes down 30%. This hurts him how?

In actually fact he probably should think about getting out from under. Simply because he probably owes more than twice what the place is worth....but that is a different problem. He can stay there for a long time if it is merely the question of the monthly payment. He probably should not...for good financial health. But could.
He said the problem was the 5 year recast, not reset. In other words, going from interest only to fully amortized loan payments. He'll be fine interest rate wise but his payment is definitely not going down by 30%. It's likely not going down at all. I've seen the numbers in the past and most loan recasts are resulting in higher monthly payments.
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Old 04-10-2010, 02:01 AM
 
2,723 posts, read 4,768,700 times
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OleCapt,

I think you may have missed the point I was trying to make, that being, that there are ALOT of toxic loans still active where people have not made a dent in the principal while the values have been slashed in half.

Everyone knows that rate recasts have not driven defaults, I guess I should have stated that but I thought it was a forgone conclusion.

50% is a monolithic loss, it won't take much more (perhaps as little as 5%) for people who were hanging on waiting to see what was going to transpire to finally throw in the towel.

The rates won't even matter anymore except to keep Fannie and Freddie afloat a little longer.
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Old 04-10-2010, 02:05 AM
 
2,723 posts, read 4,768,700 times
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Quote:
Originally Posted by tony soprano View Post
He said the problem was the 5 year recast, not reset. In other words, going from interest only to fully amortized loan payments. He'll be fine interest rate wise but his payment is definitely not going down by 30%. It's likely not going down at all. I've seen the numbers in the past and most loan recasts are resulting in higher monthly payments.
You are CORRECT Sir!

His mortgage will become a principal AND interest loan payment for the remaining 25 years and if he couldn't afford the full payment for the past 5 years how on earth will he now?!?

Very bad loan product, it should never have been allowed...


Last edited by eventusstultorummagister; 04-10-2010 at 02:18 AM..
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Old 04-10-2010, 03:26 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,249,805 times
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Quote:
Originally Posted by eventusstultorummagister View Post
You are CORRECT Sir!

His mortgage will become a principal AND interest loan payment for the remaining 25 years and if he couldn't afford the full payment for the past 5 years how on earth will he now?!?

Very bad loan product, it should never have been allowed...

In general a high end product which has been recasting for at least the last few quarters at substantial rates. Or said another way the options are in the mix already. So is there reason to expect a change in the rate of option ARM recast that would significatly impact the Las Vegas market?

Hold on a while. We shall see. I remain skeptical that it really changes much...LV was mostly a sub prime market on the toxic side.
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Old 04-10-2010, 04:37 PM
 
177 posts, read 357,539 times
Reputation: 55
The chinese government is expected to let the chinese currency rise about 5% against the US dollar. That could definitely benefit chinese investors as they get an additional 5% discount buying American properties. With their government worried about a domestic housing bubble, more mainland Chinese investors are looking toward America's housing market as a haven for their dollars.
According to my knowledge, chinese investors only want to invest their money in cities that they are familiar with.
Among all major North American metropolitian areas, Vancouver, Toronto, San Francisco, Los Angeles, and New York are their first-tier targets. This is the reason why the housing markets in those cities had experienced a very strong uplift last year. Las Vegas is also an area which the chinese investors are interested in, though to a lesser extent than the cities I mentioned above. Consequently, once the yuan is allowed to appreciate, we may see an uplift here in Las Vegas too.
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Old 04-10-2010, 05:33 PM
 
1,558 posts, read 4,790,298 times
Reputation: 1106
Yes, Chinese Dragon is no longer sleeping.
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Old 04-10-2010, 06:23 PM
 
380 posts, read 1,064,041 times
Reputation: 203
The Chinese know about property taxes too; LV here they come. The Canadians, too.
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Old 04-11-2010, 12:38 AM
 
2,723 posts, read 4,768,700 times
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Quote:
Originally Posted by Kalbo View Post
Yes, Chinese Dragon is no longer sleeping.
Apparently they're not aware of the drywall issue...
<just kidding, on second thought, no I'm not>
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Old 04-11-2010, 01:17 AM
 
4,538 posts, read 10,644,151 times
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Gee, and I can't even ask questions about Chinese investing money in United States real estate because no one provided any facts/statistics backing up their assertions................
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Old 04-11-2010, 06:47 AM
 
2,723 posts, read 4,768,700 times
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Quote:
Originally Posted by JohnG72 View Post
Gee, and I can't even ask questions about Chinese investing money in United States real estate because no one provided any facts/statistics backing up their assertions................
Coming to America: Chinese Looking for Bargains

Coming to America: Chinese Looking for Bargains - ABC News

Chinese finding U.S. real estate a bargain
With U.S. home prices so depressed, the Chinese are coming

U.S. real estate a bargain for Chinese - Real estate- msnbc.com
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