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Old 04-04-2013, 01:31 PM
 
Location: Los Angeles (Native)
25,303 posts, read 21,561,753 times
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Americans again using homes like ATMs - CBS News

i thought this was pretty interesting...it looks like we are in the making of a new bubble right now.
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Old 04-04-2013, 02:34 PM
 
3,803 posts, read 9,349,072 times
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66% of this "ATM use" is coming from the SALE of homes. How is this dangerous?

Additionally, LTVs are far more restrictive for cashout refinances. Several Big Banks won't even do them.

Texas has held fast on its 80% max-forever, once-a-cashout-always-a-cashout Home Equity 50 a(6) Law, which helped rein in some potential over tapping.

The author of that article is merely seeking pageviews.
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Old 04-04-2013, 03:34 PM
 
5,075 posts, read 11,120,377 times
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Two things are missing. Equity withdrawals are at a tiny fraction of where they were in 2006 - maybe 2% of the peak? How is this alarming?

Second, there's no evidence that today's equity borrowers have high debt to income ratios or bad credit. Quite the opposite - these are people that made it through the crash with their equity, credit and income intact. Not people I'd generally consider high-risk spendthrifts.
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Old 04-04-2013, 07:37 PM
 
3,803 posts, read 9,349,072 times
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The Boogy Man ain't in housing.

He is in Bonds. There's your bubble.

Blast From the Future on the Crash of 2015
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Old 04-04-2013, 07:59 PM
 
4,565 posts, read 10,698,136 times
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People are running out of money and still trying to maintain the same lifestyle. The end result will be the same, higher rates of foreclosures when the money runs out.
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Old 04-04-2013, 09:17 PM
 
5,075 posts, read 11,120,377 times
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Quote:
Originally Posted by 399083453 View Post
People are running out of money and still trying to maintain the same lifestyle. The end result will be the same, higher rates of foreclosures when the money runs out.
Except everyone I knew doing that a few years ago has horrible credit now. Banks are not handing out loans based on home equity anywhere close to the way they were 7 years ago.

Now, even if you have a 750+ credit score, good of income and reserves, you get put through the wringer just to get a loan.

Back then, you could walk in to a broker and say "yeah, I make $100K/yr, sign me up" and you'd get a $500K loan. Now they want to see every financial document you can produce from pay stubs, W2/W9, tax returns, checking, savings, 401K, IRAs, invoices for any freelance work, whatever. I was asked for my PayPal account records as well.

It's not the same. Not even close.
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Old 04-04-2013, 09:26 PM
 
4,565 posts, read 10,698,136 times
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Some people still have "approved" home equity loans they have not used....... yet. They are now starting to use them. I know people doing this. All you have to do is write a check, the HELOC is just sitting there waiting to be used.
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Old 04-04-2013, 09:51 PM
 
5,075 posts, read 11,120,377 times
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Quote:
Originally Posted by 399083453 View Post
Some people still have "approved" home equity loans they have not used....... yet. They are now starting to use them. I know people doing this. All you have to do is write a check, the HELOC is just sitting there waiting to be used.
There was a huge wave of cancellations and modifications in 2009 that wiped out most of the excess credit lines. Same happened with unused credit cards.
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Old 04-04-2013, 11:54 PM
 
28,115 posts, read 63,861,329 times
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Quote:
Originally Posted by mkarch View Post
There was a huge wave of cancellations and modifications in 2009 that wiped out most of the excess credit lines. Same happened with unused credit cards.
So true... Sears sent me a new card and I was going to put tires on the truck and get to the counter and told my card had been closed... said that was impossible because I had called in last night to activate and all was good.

Almost the same with my HELOC... had a renovation to do and the rate was very attractive... learned it had been canceled.

Getting a loan or refi today is almost not worth it... I know people with 20 years on the job, 800+ credit scores and 50% loan to value and are having the hardest of times... 8 to 10 weeks or longer.
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Old 04-06-2013, 03:39 PM
 
Location: Cape Cod
24,728 posts, read 17,469,691 times
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Gee I hope there isn't another RE bubble. I believe the banks are being smarter with their loans after learning their lesson but who is to say that when they loan to everyone that can handle it that the banks won't lower their standards bit by bit and then.... there you go.
I did hear on the radio the other day that it is extremely easy to get a car loan today so maybe that will be the next bubble. On a recent trip to PA. we drove by a auto mile, forget what town it was but it was more or less a farming community and there was like 100,000 new and used cars spread over like 50 dealers! WHO IS GOING TO BUY ALL THESE CARS?? My wife and I have 4 cars and the newest is a 05 and we don't plan on trading anything in for many years. So Who is buying all these cars and how many will be reposessed??
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