California is now a Red State
August 29, 2007
Found this at CNNMoney.com through one of the comments in Dr Housing Bubble blog and thought it was funny.
But seriously…
I’ve been looking at houses for a while, but when you have a house that can be rented for $2500/mo going for $800k, which translates to a $3600 mortgage (considering a 200k downpayment and a 600k loan @ 6% fixed for 30yrs), you can call it a bubble.
House prices have been dropping and they will probably keep dropping for a few years.
2008 will be a bad, bad year for housing with a lot of those suprime mortgages defaulting and thus increasing the number of foreclosures.
From CNNMoney
The company predicts that 2.5 million first mortgages will default this year, with little chance for improvement soon - Economy.com expects delinquencies to peak in the summer of 2008 at 3.6 percent of all outstanding mortgage debt, up from 2.9 percent during the first three months of 2007.
The worst-hit loan category will be subprime adjustable-rate mortgages (ARMs). Economy.com expects foreclosures for those loans to hit 10 percent of that group by mid-2008. The foreclosure rate for that group is currently 4 percent and was as low as 2.5 percent in 2005.
Posted in Finances, Real State
SUBSCRIBE
Archives
Blogroll
Popular Posts
Site Admin
content rss
August 30th, 2007 at 9:33 pm
This is sad. Home ownership has always been an American dream. But when unscrupulous realtors and loan officers see dollar signs, they often “get” people into homes that are way over their budgets. Buyers have even been able to “throw” their appliances into their mortgages, and who knows what else. Top that off with an appraiser that over appraises the home, an adjustable rate mortgage or an i/o (interest only loan), and it’s a train wreck waiting to happen.
So, if banks, and mortgages companies get burnt, are we suppose to have sympathy? I don’t think so.
Unfortunately, it’s the home owner who’s gong to suffer in the long run. But hopefully they will have learned from their mistake—trusting others to help(?) them make a decision, when all along, they should have been their own best advocate, by being more educated on the one of the biggest purchases they will ever make in their life.