[olecapt]

About two thirds of the buyers in the exuberant years were just regular buyers. And that is born out by the eventual forclosures...about 60% were owner occupied.

They did not use interest only and such gimmicks in general. The did use low down, zero down mortgages generally 80/20s for 30 years. I did close to 100 transactions during the period and I think I had one with anything more exotic than an 80/20.

In actual fact the peole with 80/20s are probably better off than those who took conventionals. And some who used the interest only things did fine. My SIL in Portland went two years on a 3% interest only and then jumped to a conventional thirty year. Made 25K on the arrangement.

In general the speculators in LV did fine. Doubled their money or more and went on to Phoenix where they did it again. It was mostly regular workers who caught the bad news.

And the statistics continue to show this continues. The number of foreclosures from the 2004 to 2007 years dominates the other years.

There are some people...mostly LV investors...who speculated and lost...but the majority were just people buying a home.

[airics]

Originally Posted by olecapt

And some who used the interest only things did fine.

can you explain this.. my loans are interest only based on libor.. the rental is a hair over 5%, and the one i am living in is at 4 1/4%... the way i read the loan papers is that if it changed today, my rates would be around 3 1/2% i am at 2% above libor.

[olecapt]

Originally Posted by airics

can you explain this.. my loans are interest only based on libor.. the rental is a hair over 5%, and the one i am living in is at 4 1/4%... the way i read the loan papers is that if it changed today, my rates would be around 3 1/2% i am at 2% above libor.

That is past my job grade. Daddy probably would know off hand or pop a guery on the CD mortgage list. Some smart loan guys there.

[MadManofBethesda]

Originally Posted by airics

can you explain this.. my loans are interest only based on libor.. the rental is a hair over 5%, and the one i am living in is at 4 1/4%... the way i read the loan papers is that if it changed today, my rates would be around 3 1/2% i am at 2% above libor.

Which LIBOR? 1 month? 3 month? 1 yr?

My ARM is based on the three-month LIBOR, which is less than 1/2 of 1% right now. If it is that one, your mortgage should readjust to 2 1/2, not 3 1/2.

[MadManofBethesda]

Originally Posted by yellowsnow

People seem to be very passionate about the housing/real estate problems in Las Vegas. It seems like a lot of the posters here think the answer is to always blame the individual debtor. A good example is here: I'm Walking away from my home in Las Vegas

Joe hasn't done anything wrong, and I don't think anyone would "despise" him. But this hypothetical case is much different then the one in the thread that you linked to. In that one, the individual hasn't lost his job yet, but has decided to quit paying the mortgage now and just live there without making any payments whatsoever until such time as he is kicked out of the house.

Quite a different scenario from "Joe."

[airics]

Originally Posted by MadManofBethesda

Which LIBOR? 1 month? 3 month? 1 yr?

My ARM is based on the three-month LIBOR, which is less than 1/2 of 1% right now. If it is that one, your mortgage should readjust to 2 1/2, not 3 1/2.

you are correct, 3 month libor, my goof

so the way i see it, we are in great shape.. loan wise that is.. correct?

[cedar_bluff_tree_farm]

Originally Posted by olecapt

About two thirds of the buyers in the exuberant years were just regular buyers. And that is born out by the eventual forclosures...about 60% were owner occupied.

They did not use interest only and such gimmicks in general. The did use low down, zero down mortgages generally 80/20s for 30 years. I did close to 100 transactions during the period and I think I had one with anything more exotic than an 80/20.

In actual fact the peole with 80/20s are probably better off than those who took conventionals. And some who used the interest only things did fine. My SIL in Portland went two years on a 3% interest only and then jumped to a conventional thirty year. Made 25K on the arrangement.

In general the speculators in LV did fine. Doubled their money or more and went on to Phoenix where they did it again. It was mostly regular workers who caught the bad news.

And the statistics continue to show this continues. The number of foreclosures from the 2004 to 2007 years dominates the other years.

There are some people...mostly LV investors...who speculated and lost...but the majority were just people buying a home.

I didn't buya house in Vegas, so I can't so for sure there. But I bought one in Phoenix and this is how my conversation went...

Lender: "Would you like to put more than 5% down payment?"
Me: "What is the advantage of doing so?"
Lender: "There isn't any"
Me: "Well, lemee see. No"

Lender: "Would you like a interest only loan?"
Me: "No, but are very many people going for them?"
Lender: "Yes, nearly everyone is opting for a interest only loan"

I bought my house through Beazer and the loan was from Beazer Mortgage. It was new construction.

[cedar_bluff_tree_farm]

Originally Posted by yellowsnow

There was a lot of bad financing. But the average Joe had to listen to the advice the experts gave him. At least for the most part. Joe had more sense than many. And he still ended up financially ruined. All those other folks, who may have done nothing worse than listen to expert advice, ended up in worse shape.

Here's a huge mistake that many people made, including your Joe. The "experts" that he likely consulted were mortgage lenders, loan officers, real estate agents, and the like. All of these people benefit financially by Joe buying a house. None of these 'experts' are independent, and as such, their advice is clouded by what will benefit them financially.

A good rule of thumb is when seeking advice to consider if the person's giving the advice has a conflict of interest. If they do, look elsewhere.

[MadManofBethesda]

Originally Posted by airics

you are correct, 3 month libor, my goof

so the way i see it, we are in great shape.. loan wise that is.. correct?

Yep. And you're in better shape than I am because mine is set at 2 1/4% above LIBOR, rounded up to the nearest 1/8, so mine would reset at 2 7/8% or 3% if done today. But I'm currently paying 4%, so that's still not too bad.

And with any luck, I will have sold my house and moved to Vegas before the next adjustment and this will all be moot anyway!

[olecapt]

Originally Posted by cedar_bluff_tree_farm

I didn't buya house in Vegas, so I can't so for sure there. But I bought one in Phoenix and this is how my conversation went...

Lender: "Would you like to put more than 5% down payment?"
Me: "What is the advantage of doing so?"
Lender: "There isn't any"
Me: "Well, lemee see. No"

Lender: "Would you like a interest only loan?"
Me: "No, but are very many people going for them?"
Lender: "Yes, nearly everyone is opting for a interest only loan"

I bought my house through Beazer and the loan was from Beazer Mortgage. It was new construction.

Sorry but I remain very skeptical. Interest only or option loans were primarily a high ticket house loan often used to qualify the unqualifiable. I don't believe I ever saw one used in Las Vegas though I am sure there are some...but not very many. It may have been a developer tactic but I saw virtually none in resale.

Note, as has been discussed here, at least for now some interest only loans are very nice...and likely to be for some time yet.