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All those adjustable rate mortgages that people thought were such good deals at the time and now arefinding out that they aren't quite so attractive are coming into play. I read a report where several large lending institutions are preparing to write off defaulted home loans in the billions.
 

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Give it hell Remy!
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Most of the lenders have not stopped making the bad loans like the news is reporting. I had one come across my desk last week from Countrywide's subprime mortgage operation in California for a $86,000 mortgage with the seller contributing all of the buyers down payment and closing costs and get this, 40 year term at 10.75% interest. The buyer has absolutely no equity and the house was on the market for $81,000. The sales price was juiced to cover some of the cash to be contributed by seller. The housing market will not be in recovery anytime soon if lenders keep making these loans.
 

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Mont said:
Chris, just be glad you aren't Tillman Ferttita and got called on a 400 million dollar loan yesterday. Ouch.
Hey Mont, I know where you might get a good deal on a "never been rode on roller coaster".

If this trend continues, it will be interesting to see what kind of effect it will have on some of this new construction along the coast.
 

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Mont said:
I distinctly remember 1986 and the following couple of years. It's not a matter of if, it's just when. My 5% fixed interest house note works just fine for me.
Mont, I would like to forget 82-86, less than stellar years to be employed in the oil patch. Even though I survived many Bonzai Charges, it gives pause for reflection anytime you have "adjustments" like this. Also, being married to a banker, she makes sure we stay away from any / all of those good deals. Like you, happy with my bidness just the way it is...don't need a bigger house, faster boat or a newer truck.
 

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Let's Go Fishin Boss!
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Almost like the 80's all over again when FHA was doing 3-2-1 buydowns and the buyers were rolling 6 - 8 points into the loan amount. I was appraising in Austin back then and when the bottom fell out it really fell out. Nothing but FannieMae work for the next couple of years as people were upside down on their mortgage and just walked from their houses.

Haute Pursuit said:
Most of the lenders have not stopped making the bad loans like the news is reporting. I had one come across my desk last week from Countrywide's subprime mortgage operation in California for a $86,000 mortgage with the seller contributing all of the buyers down payment and closing costs and get this, 40 year term at 10.75% interest. The buyer has absolutely no equity and the house was on the market for $81,000. The sales price was juiced to cover some of the cash to be contributed by seller. The housing market will not be in recovery anytime soon if lenders keep making these loans.
 

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I heard on Dave Ramsy..1.1 millon homes predicted to go into foreclosure by 2010...I diversified a third of our oil stock 2 weeks ago.....The '08 elections are somewhat predictable as is the aftermath.
Hes begging folks with A.R.M.s to convert to fix rate...asap
 

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It's like the S&L crash all over and somehow the taxpayer will be stuck.
I saw this in a March issue of Fortune Mag.

NEW YORK (Fortune) -- When a certain $126,000 subprime loan on a $696,000 house on the West Coast failed to produce a single mortgage payment, alarm bells went off at Clayton Holdings, a company that monitors credit risk.

Closer scrutiny revealed other red flags. The borrower's previous rent payment had been $1,000, compared to the $4,482 she was supposed to be shelling out for both the primary loan and the $126,000 piggyback. And her stated income was $84,000 even though she was an hourly worker at Target.
 

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Borders, language, culture
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Discussion Starter · #19 ·
kenny said:
It's like the S&L crash all over and somehow the taxpayer will be stuck.
I saw this in a March issue of Fortune Mag.

NEW YORK (Fortune) -- When a certain $126,000 subprime loan on a $696,000 house on the West Coast failed to produce a single mortgage payment, alarm bells went off at Clayton Holdings, a company that monitors credit risk.

Closer scrutiny revealed other red flags. The borrower's previous rent payment had been $1,000, compared to the $4,482 she was supposed to be shelling out for both the primary loan and the $126,000 piggyback. And her stated income was $84,000 even though she was an hourly worker at Target.
Sad. $84g a year ain't going to cover a $4,482 a month nut either.
 
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