Posted by CaliNotary on 3/1/08 1:02am
Msg #237728

One good thing about the real estate market crash

Since adjustable loans have all but disappeared, I've noticed that my signings are going much much quicker. I did 4 today, three of them were done in 30 minutes, the fourth was done in 45 minutes and that's because it was a first, a second, and a line of credit.

On the whole, my borrowers seem to be pretty well informed in advance and there aren't too many surprises at the table that require lengthy explanations and phone calls. It's pretty great, be nice if it stays this way for awhile.

Reply by Joan Bergstrom on 3/1/08 1:50am
Msg #237731

The last 8 loans I have completed (Calif) since Monday were all adjustable 5 year interest only loans, with potential serious payment increases after 2013.

All the borrower(s) had great credit (duh) and the signing I did today had a 4.75% interest rate for the 5 years and he didn't buy down the interest rate. The lenders were from 4 different companies.
All the borrower(s) said they would refinance after the 5 years.

Yesterday, one of the loans was at 5.25% for 5 years and none of the loans I signed this week for this type of loan was over 5.67%.
Is this type of loan common in other parts of the US?

Reply by SueW/Tn on 3/1/08 3:10am
Msg #237733

This type of loan is frowned upon in my neck of the woods and the only time I see something such as this is when the BO's intention is to move prior to those 5 years expiring. I've seen one BO do this strictly for the tax repurcussions as he was self-employed and needed the larger write off. Again (or should I say still) we have folks borrowing on the hope and promise that the home will significantly appreciate and a refi will be easier than falling off a log.

Reply by CF on 3/1/08 6:37am
Msg #237734

I did 2 last week- good credit, equity, doing the adjustable b/c kids were going to college....one family was going to have 3 in college at one time; and they were paying for all of it b/c on paper they make too much money for the kids to get loans.....when in reality.....they are really strapped with the education expenses and the kids are all working to help with the expenese.

I was surprised to see them around again....I had not seen an adjustable for about 3 mos. Everyone was getting out of the adjustable into fixed....but there are still certian borrowers that it makes sense for.

Reply by Vince/KS on 3/1/08 7:59am
Msg #237737

They are advertising interest only loans here, but I have not closed any of this type, and/or arms, for over three months.

Reply by Pat/IL on 3/1/08 12:44pm
Msg #237765

I have begun to see the fixed/adjustable, interest only loans in the past week. One five-year fixed and another was seven-year fixed. Both high-end and A paper and one planned to sell in five years. The interesting aspect that I noticed is that they were both assumable. Not knowing where long-term fixed interest rates will be in five years, it might turn out to be a home-selling tool down the line.

Reply by Linda Juenger on 3/1/08 2:19pm
Msg #237773

I too have seen a couple interest only in the past couple weeks. One of them, I walked away not feeling so good for these two young parents. 10 years, interest only. First 5yrs are fixed. They cashed out the equity (all $800) to pay for childcare. Then after I thought about it, ya know these kids are living in a brand new home, not huge, not anything spectacular, but its brand new. They are in over their heads and they know it.
Why in the world do these young kids have to start out in a brand new home? What ever happened to starting out with a fixer upper or something a little older? Makes no sense to me, but again, don't analyze, just notarize. My favorite motto.

Reply by jba/fl on 3/1/08 2:41pm
Msg #237776

Makes you want to get into financial consulting, right?

Reply by Laura Vestanen on 3/1/08 11:47pm
Msg #237802

You are so right, Linda.

My mum and dad purchased their first house in the late 1950s.

At that time, a perfect starter house for a couple or a couple with a baby in this country was 600 square feet. 1 living room, 1 kitchen with dining nook, 1 bedroom, 1 bathroom. No garage. The word "new" was never in the picture. Clean and in a safe neighborhood made people happy.

Trading up ONLY when you could afford it was the norm.

We have become crazily unrealistic.

LauraV

Reply by Susan/CA on 3/2/08 10:12am
Msg #237814

That's funny because I am finding just the opposite. More borrowers are much more skeptical now and I am finding a lot of borrowers are finding their loan terms wrong and refusing to sign. So I am seeing a lot of borrowers being a lot more careful than ever, however, I am also finding that when they are happy with their terms they are signing (for the most part) within 20 to 40 minutes too . .