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jackjack
Posts:155
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| 09/04/2008 11:02 PM |
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The HOPE for Homeowners Act of 2008 officially begins in October 1, 2008. I actually think that this will soften the real estate downturn. Do I think it is fair? No. But, I do think it will alter the real estate market. Buyers should keep this in mind in today's market. As history has taught us, the government is the biggest X-factor in the real estate market.
Futher, more and more lenders are modifying loan agreements in order to avoid complete bank failure. I recently confirmed that a lender modified a 800K loan that was fully amortized to an interest only loan of only 3.5% (this is not a joke) for 5 years. Then, the loan adjusts to a fully amortized loan.
With the HOPE for Homeowners Act of 2008, stories like the foregoing will become more and more prevalent. It is a shame, but it is the sad reality of our "take no responsibility and bail out the irresponsible" nation we are becoming. It is going to affect the real estate market whether we like it or not.
Again, the mortgage industry (with the exception of a few irresponsible borrowers) created this mess. Shouldn't they be the ones paying the price and subsidizing the "bailout"? I have said it a million times - we need stiffer penalties for mortgage crooks and some sort of independent audit system in place in the mortgage industry. We do not need these constant bailout bandaids. |
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NCgirl
Posts:210
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| 09/05/2008 7:26 AM |
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| 3.5 %!! I want to sign up for that program. I'm over here like an idiot paying 6.1%. Not fair. |
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jackjack
Posts:155
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| 09/05/2008 8:20 AM |
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[quote]Posted By NCgirl on 09/05/2008 7:26 AM
3.5 %!! I want to sign up for that program. I'm over here like an idiot paying 6.1%. Not fair.[/quote]
You might want to ask your lender for a modification. |
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airplanedad
Posts:133
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| 09/05/2008 8:36 AM |
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Doesn't this act have some serious strings attached? Isn't this the program that limits the amount of appreciation the beneficiary (aka deadbeat buyer) can realize once the property is eventually sold? (if it indeed the "asset" appreciates during the time it is held)?
If it is, NCGirl, don't bother feeling bad that you, most likely a thoughtful, responsible person, cannot sign up for the program: from my reading of the Act (albeit a rather casual reading), it's not a smokin' deal. You'd be far better off renting and you'd be paying less to do so. |
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ilivehere
Posts:138
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| 09/05/2008 9:00 AM |
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Confirmed,
1,000,000 loan dropped to 4.5%. They had their loan modified to the minimum payment they were making. They are very happy.
You would not be better off renting because most of these people would have to short sale their homes. They can now stay in their homes, same school and who knows find a better paying job.
I wish I could do it on my loan, I also wish I could qualify for section 8 housing assistance, sdg&e low income plan, phone company low income plan and everyone else getting something handed to them because they haven't work hard and would rather get by. so i'll continue to work hard, pay a unfair amount for tax and live my life. |
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NCgirl
Posts:210
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| 09/05/2008 9:02 AM |
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I was just kidding. You would have to payback 50% of the profits when you sold. I've already jumped in the pool... I'm just thinking 3.5% would be sweet, I'd have so much more d-income every month. I think your payments have to be more than 30% of your income to qualify.
It will def help people with adjusting ARM's . People will still probably choose to walk on these loans or short sale if they can, if they are too far upside down L to V..why stay? Rent and save for 7 years till their credit picks up, then jump back in. |
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airplanedad
Posts:133
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| 09/05/2008 9:17 AM |
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[quote]Posted By ilivehere on 09/05/2008 9:00 AM
Confirmed,
1,000,000 loan dropped to 4.5%. They had their loan modified to the minimum payment they were making. They are very happy.
You would not be better off renting because most of these people would have to short sale their homes. They can now stay in their homes, same school and who knows find a better paying job.
I wish I could do it on my loan, I also wish I could qualify for section 8 housing assistance, sdg&e low income plan, phone company low income plan and everyone else getting something handed to them because they haven't work hard and would rather get by. so i'll continue to work hard, pay a unfair amount for tax and live my life.[/quote]
I am not sure we are talking about the same thing. Read the Act. It has strings attached. Serious strings if you ask me.
You seem to be talking about a loan modification. That is not the topic of this thread. Your example cannot be an example of the Help for Homeowners Act since the Help for Homeowners Act has kicked in yet.
Yes, it might be nice to take advantage of such a Act to avoid the trauma of moving, especially for people who have families and kids in a school they like. It would be even BETTER to avoid getting into the kind of situation that makes it necessary to pass this kind of Act in the first place. My comment about renting was intended as a preventive measure--not a band-aid for dealing with a poor decision already made. Too late for that. |
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artist
Posts:83
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| 09/05/2008 10:21 PM |
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| It will be amazing how many will jump on this kind of program and how high the failure rate will still be. My next prediction will be for huge job layoffs and how do you pay a mortgage on unemployment. I was more up beat on the up-turn but now think it will head down for 3 more years and the government will not be able to prevent its downturn and will in fact raise taxes by 2 or 3 precent across the board. It is just a matter of a week or two before Cailif adds a 1% sails tax increase. They next will be overturning Prop 13. Have fun watching your property taxes head for the sky. Thank you Schwarzenegger!!!! |
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Brian
Posts:2277
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| 09/05/2008 10:43 PM |
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[quote]Posted By artist on 09/05/2008 10:21 PM
It will be amazing how many will jump on this kind of program and how high the failure rate will still be. My next prediction will be for huge job layoffs and how do you pay a mortgage on unemployment.[/quote]
That's exactly it. Those programs are not designed to save the homeowners who are foolish enough to sign on. They are financially better off walking. Those bail-out programs are meant to slow down the foreclosure rate in the present and spread out the pain over time, to stabilize the market. Those homeowners will fail sooner or later; better later for the sake of the banks.
BTW, artist, what do you think will happen to the value of those pied-a-terres in the Marina district where rich San Diego take their mistresses? ;-)
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tpc
Posts:507
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| 09/06/2008 9:29 AM |
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| Propellerhead/Brian-Good posts. Accurate analysis. The govt bailout program is a sucker deal. |
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