Posted:
#1
Interesting Read About The U.S. Economy
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Posted:
#3
Quote Originally Posted by asloper6001:
We still have all the 3 yr arm coming due shortly. The 2 yr arms are just finishing up, now imagine doing it all over again with the 3 yr arms. If someone doesn't help these people keep the same rate, then this poor economy will be the same for a long time in the near future.
We still have all the 3 yr arm coming due shortly. The 2 yr arms are just finishing up, now imagine doing it all over again with the 3 yr arms. If someone doesn't help these people keep the same rate, then this poor economy will be the same for a long time in the near future.
True. But there is a slight difference in the 3 ARM. The first being that most of them are unlikely to be underwater like the 2 yr ARMS and thus can refinance. Second, interest rates are lower now than a year ago which might enable more people to refinance. It all could still be a problem but just because it is 3 yr ARM v. 2 yr arm could create the same issue.
Posted:
#4
The values are still not their. The main key is the values of the homes. 3 I/O with no equity in the home is the same as a 2 yr I/O with no equity. The more time goes by the lesser values come in for someones home. Every scenario is different, but their is a ton of 3yr arm I/O people who's value have tremdoulsly dropped and they have been paying interest only, just like the 2 years. I talk to about 5 people a day that are in the same boat. All depends on if they put money down and a ton of other factors, but the forecast looks the same as the 2 yr arms.
Posted:
#6
Quote Originally Posted by asloper6001:
The values are still not their. The main key is the values of the homes. 3 I/O with no equity in the home is the same as a 2 yr I/O with no equity. The more time goes by the lesser values come in for someones home. Every scenario is different, but their is a ton of 3yr arm I/O people who's value have tremdoulsly dropped and they have been paying interest only, just like the 2 years. I talk to about 5 people a day that are in the same boat. All depends on if they put money down and a ton of other factors, but the forecast looks the same as the 2 yr arms.
The values are still not their. The main key is the values of the homes. 3 I/O with no equity in the home is the same as a 2 yr I/O with no equity. The more time goes by the lesser values come in for someones home. Every scenario is different, but their is a ton of 3yr arm I/O people who's value have tremdoulsly dropped and they have been paying interest only, just like the 2 years. I talk to about 5 people a day that are in the same boat. All depends on if they put money down and a ton of other factors, but the forecast looks the same as the 2 yr arms.
Again, I am not necessarily disagreeing with you on your position just saying a blanket treatment of all 3 year ARMS will be similar to 2 year ARMS.
First off all RE is local and there are great many facts on the price of home. In fact, I live in an area where housing prices increased, though marginally, from last year, even the overall metro market dropped by 5%.
If you had a 2 yr ARM you bought in '06 at the height of the market so there was much less cushion if your home priced dropped. If you bought in the early part of '05 with 3/1 ARM you likely saw 25-30% increase of your home to the top. The question becomes if there was a drop in pricing for the 3/1 ARM whether it has reached to the level of the '05 price. Maybe it has, maybe it hasn't but you have more play in the value of your home that a 2 yr ARM didn't.
No equity is no equity, but if you had a 3/1 ARM and it is about to reset there is a chance the value of the house is the same as the purchase price and you can refinance which would make you lucky but rather dumb to spend the last 3 years paying on interest. Others aren't going to be so lucky but were just as dumb.
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