Tag

option-ARM’s

Non-Exploding ARM’s

Setting the Record Straight on ARM’s It’s easy to think that every adjustable rate mortgage (“ARM”) burned the borrowers who took them out. After all, aren’t so-called “Option ARM’s” supposed to be financial time bombs? They are, but most ARM’s don’t function that way (at least, the ones most common outside of Southern California, Arizona,...
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When Does 2 -1 = 0?

Housing Market Math, Circa 2010 When does 2 – 1 = 0? When a two-income family that’s “upside down” on their mortgage loses one of those jobs (“upside down” is Realtor-speak for owing more on your home than it’s worth). The first wave of foreclosures largely consisted of marginal borrowers — putting very little (or...
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Banks & Foreclosures: Rational Actors or . . .

. . . Foot-Dragging Ostriches?Just a heard a very thorough — and harrowing — overview of the foreclosure picture nationally from Rick Sharga, a senior executive at RealtyTrac. His company compiles one of the most complete databases tracking foreclosures, so he’s speaking from authority. What does he see? –The housing mess is going to persist...
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Option-ARM with 12 Zeroes?

The Mother of All Re-Financing Risks? Taking on new debt is an action that has implications for the true cost of the U.S. government’s financial rescue initiatives. This cost may have significant refinancing risk.” –Special Inspector General Neil Barofsky Let’s see . . . one of the main story lines of the housing bubble involves...
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3 Keys to 2010 Housing Market

Which Way the “Move-up Market?” I’m working on my 2010 letter to clients now, but here’s a quick preview — following are 3 factors that I think are key to next year’s housing market (p.s.: if you want a copy of the letter in December, instead of February when I’ll post it on this blog,...
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Bailout Math

Bailout Money Bolsters Banks Against Prospective Losses?“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be. “ –Wayne Gretsky It’s a stretch to compare Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson to the incomparable Wayne Gretsky; their ad hoc and inconsistent handling...
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