Posted by CJ/OR on 10/9/07 8:23pm
Msg #215686

SCARY STUFF!!!

I was just in a seminar where a real estate consultant spoke. Here are some scary figures>

$1.3 Trillion in ARM's and interest only loans ...

$400 Billion to convert by the end of 2007 ... with an average increase in the interest rate of 2%;

$700 Billion to convert by the end of 2008 ... with an average increase in the interest rate of 2%;

Economists anticipate that the sub-prime crisis will take 2-4 years to run its course.

Reply by CARID on 10/9/07 9:45pm
Msg #215719

Somebody has to close those loans !!! n/m

Reply by claudine osborne on 10/9/07 9:51pm
Msg #215723

Re: Somebody has to close those loans !!!

More work on the horizon??

Reply by CJ/OR on 10/9/07 9:59pm
Msg #215725

No ...

Someone has to buy the houses that are about to go into foreclosure. Believe it or not, developers are starting to build apartments because they are in great demand by people losing their homes. If there is a $1.3 Trillion bailout then, there will probably be a bunch of fixed-rate refi's. But, that isn't likely anytime soon.

Reply by CARID on 10/9/07 10:09pm
Msg #215727

Many of these lenders are going to do what they can to

refi these loans. They don't want a mass of homes from foreclosures that they have to deal with. Lenders would rather keep borrowers in their homes. The cost of foreclosures and then selling the property, for many times less than market value.

Reply by Larry/Ca on 10/10/07 12:30am
Msg #215745

Before summer most thought of this..

huge reset of ARM's extending through 2008 as an indication that business would be great throughout the reset. I have seen nothing that puts a percentage to these loans as to how many are subprime. We all know that many subprime borrowers will no longer qualify since the crunch. Another negative aspect is that house values have fallen as much as 20-25% and many of these people were counting on refinancing with property values much higher than when they originally took the ARM. Even if you cannot make the reset monthly payments it's not a problem if your house is now worth more and you call sell it. Fewer loan products, reduced appraisals, and tighter credit has taken the wind from the sails. I'm hoping there are still a lot of people out there with good credit who haven't mortgaged their place to the hilt and are wanting to get out of those ARM's with a fixed loan. Time will tell, I'm down 50-60% from 2005-2006. I have seen a slight pickup from the July-Aug crunch.

Reply by CJ/OR on 10/10/07 1:08am
Msg #215749

Yes, but

The lenders will refi IF they have the funds ... which they won't ... if people don't pay them.

Reply by Dennis_IN on 10/9/07 9:55pm
Msg #215724

Sounds like $$$$$ to me n/m