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This bailout will not wipe all those debts off the books..they will just be moved.
This bailout is to help the banks get the exotic investments - CDS off their balance sheets.
The banks will still need to recoup and get money back..in the form of higher rates and fees.
The Fed has lowered rates..but those are rates the bank pays to the Fed. Those lowered rates have not made their way to consumers.
Maybe the banks will go back to lax lending standards seeing they now have a clean slate to start all over again..but it will be a while before they do. They have to get their own houses in order and the only way to do that is via higher consumer rates/fees.
I am still waiting to find out how this package will help the millions of responsible homeowners who are NOT in 'distressed' situation because they made all the right decisions to begin with.
I am still waiting to find out how this package will help the millions of responsible homeowners who are NOT in 'distressed' situation because they made all the right decisions to begin with.
I read a good analogy in a our small local paper's editorial section today. The basics were along these lines - Tina, Charles and Dan go out and rob a bank. They take every dime out of the bank. They spent most of the money before they were caught and put into jail. Since they didn't have the funds to pay everyone back, every person in the town paid a share of what was stolen, sharing the burden among the town's people.
In essence, that is how I feel about this bailout. But I don't know that there is much choice.
From my 15 year old, a quote: "When government is big enough to give you everything you want, the government is powerful enough to take everything away from you." Thomas Jefferson.
But thye automakers are in a worse fix that the home builkders and banks.Just looking that they can take poff 1/4 of the MSRP plus loan you the money at )% tells you juts how much profit they made of vehiucles in the past.Of courdse these are vehiuclkes that already have losssalot of resale value before you buy them also.
would be interested in knowing if the general mortgage rates for 30 year will increase or decrease. since congress is almost there to approve the 1 trillion $ package.
I did lock in my rate. I hope I wasn't wrong in doing so, but at least now I know what it is.
Peace of mind is worth more than most of us can put a dollar figure on, LOL. Even if rates go down, it won't be by much. At least this way, things are securely at a place where you can feel okay w/ the whole process. You did the right thing. Just don't look backwards and feel frustrated if things change. All you can do in life is make the best decision at the moment, based on the best info. That can always change. Never look back w/ regret as long as you did your best to make the soundest decision possible at the time.
would be interested in knowing if the general mortgage rates for 30 year will increase or decrease. since congress is almost there to approve the 1 trillion $ package.
This is not about FHA but private loans.
Thx
In the past, conventional 30 year fixed and FHA rates have moved in tandem.
Unfortunately, FHA loans is going to be what this is all about. It will also be about non-ARM, fully amortized loans, and loans where the qualifying ratios were in line. Everyone has the misconception that this is singularly a subprime loan problem or an ARM problem. FHA could soon very well be the source of the majority of loans for a long time and not only for minimum down loans. This several hundred trillion price tag could monopolize all non federal financing from even being available for longer than we can even imagine. EVERY major announcement has been on FHA and I would not be a bit surprised to see a moratorium on Fannie and Freddie funds for a while. (or priced so that there may as well be a moratorium). FHA loan limits have been increased just to accommodate where the other programs are going to fall short.
And, if this is an overblown, worse case scenario, the direction of all loans, conventional conforming, jumbo, FHA, VA (and private, whatever those are) are all going to share the same trend in the future, as they do now and have in the past. We will not see one loan type decline in rate, while another advances (outside of the yield curve, meaning if one 30 year rate goes up, so will the others).
Being in this business for over 20 years, the best money I have seen made has been in high rate, low value cycles - not low rate, high values.
It is so true. You will be sleepless until u lock in the rate. Especially in these turbulent times.
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