Why we haven't hit the bottom: Alt-A and Option ARM Mortgage Resets are coming
- Thread starter daveportman
- Start date
Sad but true. Our own gov. can't do 8th grade math.
PS - the reason I am posting all of this stuff is because I have been a loan officer for a lot of years now. I am basing it off of experience with clients and not the misinformation flying through the media. Almost every day, I talk to people who are upside-down on their houses.
Virtually without exception, the only ones who want or need to foreclose are the ones with high rate/payment and can't manuever due to the LTV problem.
The ones with a really decent low rate/payment are hanging in there because they would need a similar payment to go rent a house anyway.
So the obvious solution is to make sure their payments are low enough that they are willing to live with the negative equity situation, if they are severely upside-down.
Financial fears grow
More consumers are just a paycheck or two away from ruin
The results of a bevy of surveys found a growing number of consumers are only a couple paychecks away from a household collapse even as many scramble to shore up savings. Rainy-day funds appear to be a distant memory as households burn cash to cover food and energy bills as well as mortgage and car payments.
A large number of households say that even one missed paycheck would spell financial ruin. And even in households that remain well off, the surveys show a festering fear that financial problems are lurking.
This is flashing so bright red," said Paul Ballew, senior vice president of Nationwide Insurance Co. "Roughly 60% of the population was ill-prepared (financially) before the meltdown."
A MetLife study released last week found that 50% of Americans said they have only a one-month cushion -- roughly two paychecks -- or less before they would be unable to fully meet their financial obligations if they were to lose their jobs. More disturbing is that 28% said they could not make ends meet for longer than two weeks without their jobsAnd it's not just low-income earners who would find themselves financially challenged. Twenty-nine percent of those making $100,000 or more a year said they would have trouble paying the bills after more than a month of unemployment
from marketwatch
More consumers are just a paycheck or two away from ruin
The results of a bevy of surveys found a growing number of consumers are only a couple paychecks away from a household collapse even as many scramble to shore up savings. Rainy-day funds appear to be a distant memory as households burn cash to cover food and energy bills as well as mortgage and car payments.
A large number of households say that even one missed paycheck would spell financial ruin. And even in households that remain well off, the surveys show a festering fear that financial problems are lurking.
This is flashing so bright red," said Paul Ballew, senior vice president of Nationwide Insurance Co. "Roughly 60% of the population was ill-prepared (financially) before the meltdown."
A MetLife study released last week found that 50% of Americans said they have only a one-month cushion -- roughly two paychecks -- or less before they would be unable to fully meet their financial obligations if they were to lose their jobs. More disturbing is that 28% said they could not make ends meet for longer than two weeks without their jobsAnd it's not just low-income earners who would find themselves financially challenged. Twenty-nine percent of those making $100,000 or more a year said they would have trouble paying the bills after more than a month of unemployment
from marketwatch
That is exactly what Japan already tried - they have 100 year mortgages that get passed down through generations. This has led to another long-term insane RE price bubble there.
I was thinking something more modest to avoid unintended inflation. A nice 4% for up to 40 year term. No doc, no appraisal unless there have been mortgage lates in the last year, then borrower must prove they can manage new lower payment (to screen out re-defaults).