Mortgage Finance True or False True or false: being underwater (owing more on a home than the home’s worth) precludes an owner from refinancing. Answer: False. You’re excused for answering “true”; normally, if the homeowner has no equity, there’s no collateral to secure the lender’s mortgage. Today is most certainly not a “normal” environment, though....Read More
Regular readers know that I don’t make market predictions — stocks or housing. However . . . given the carnage last week on Wall Street, you’d certainly except a “respite rally” sometime soon (also called a “bounce” — or, depending on the overall environment and what happens next, a “dead cat bounce”). In the meantime,...Read More
Upper Bracket No Longer Immune The rich are different than you and me. –F. Scott Fitzgerald When it comes to escaping the scourge of foreclosure, the rich have three singular advantages — and one distinct disadvantage — relative to mere financial mortals. First, the advantages: One. Bigger financial cushion. More affluent home buyers frequently put down...Read More
Jumbo Mortgages for 4.75% The Federal Reserve anticipates that very low interest rates will be needed for an extended period. –Fed Reserve Chairman Ben Bernanke Mortgage interest rates have been so low for so long (2 years? 5 years?) that it’s no longer perceived as “new news” — but actually, it is. Namely, jumbo mortgages (over...Read More
Why It’s Smart to Be Nice to Appraisers As I’ve written previously (“Appraisers vs. Realtors vs. Trulia“), Realtors active in an area will often field calls from appraisers trying to establish the value of similar, nearby homes. Whether the bank they’re working for is considering a new mortgage or refinancing an existing one, the questions...Read More
Rational Moves in an Irrational Market Cont. from Part One: —Two. If you’re a Buyer, take advantage of a soft market to upgrade. That’s what stock market investors do during a bear market. Specifically, they buy blue chip stocks that are temporarily “on sale.” Similarly, today’s real estate downturn has lowered the entry point for...Read More
