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Most of the banks "loaning" money are just getting paid origination and servicing fees; the loans are "conforming" which means that they are basketed up into MBS's and then resold.
Mortgages are long dated, and the prime rate is short dated; the difference in terms cannot be arbitraged without absorbing huge risk.
I no longer live on LI, but I still love LI, for many family members still live there. I love where I am now, but never regretted being a native LI'er. That said, I am only asking since you really seem to be very, very unhappy with LI life. Why are you still there? Family or Job? If not, why be miserable, just leave and find your happiness.
Thanks for the advise and the heads up.
We just walked away from our new home a week from closing thanks to your help.
Probably lose deposit but I guess that's better than we could be in for.
We'll just rent instead.
Thanks for the advise and the heads up.
We just walked away from our new home a week from closing thanks to your help.
Probably lose deposit but I guess that's better than we could be in for.
We'll just rent instead.
Great advice!
So I should walk away from my house too?
Tell me what part of L.I. I can "Rent" a 1700 SF, 3 BR, 2 bath, with a basement & garage for the current price of my mortgage amount of $2,600? Which includes my taxes & homeowners insurance too?
Thanks for the advise and the heads up.
We just walked away from our new home a week from closing thanks to your help.
Probably lose deposit but I guess that's better than we could be in for.
We'll just rent instead.
Sure! Spend 30k++++ per year renting. Hey, that's only 300k after 10 years thrown out the window.
If government does not blink and it just keeps raising taxes trying to support a system that is unsustainable, then we end up in the full crash and burn and you are compelled to walk away from real estate. Hopefully, with education understanding the past, we can for once avoid the same outcome and advance in this learning curve of civilization.
Vacation properties are the worst to survive. I bought such a place to live in at about 50% of its 2007 high. So while high-end properties in cities were rising, vacation spots on the beach declined. I wanted beach front. So understanding the cycle helps tremendously for entry and exit points.
The risk of mortgages declining is real. As governments get in trouble, long-term confidence starts to decline. Banks will not longer be able to package mortgages. As that unfolds, the lack of the availability of mortgages means the only cash rules.
...
The Consumer Financial Protection Bureau puts regulations on people buying real estate with a mortgage that has been highly burdensome to normal people. When friend bought a house with his girlfriend, they had to explain absolutely every check where she had written to him each month paying her half of the rent. They made them account not just once, but for every check going back 5 years.
....
The whole reason Franklin D. Roosevelt created the 30 year mortgage was to try to get people to buy on credit. ... Roosevelt created federal agencies that form the basis of the housing market the United States to this day. They provided mortgage insurance, established a secondary market for mortgage loans, and converted 1 million loans into long-term mortgages. There were truly transformational in nature. It did make housing affordable and it made housing, homeownership, sustainable. However, it effectively leveraged the entire real estate market. It was truly that then more people could afford to buy, but as demand rose, so did property values.
The crisis we face is what happens this time when the banks cannot lend money, interest rates rise, and mortgages for 30 year periods vanish?
Like any market, prices will crash. The maximum length of a mortgage was extended to 30 years in the 1940’s, making home ownership even more affordable and leveraged the entire housing market. Today, Roosevelt’s economic fix became the norm. The 30-year fixed-rate mortgage accounted for nearly 90% of all new mortgages.
If the government can no longer subsidize the real estate market, the 30-year fixed-rate mortgage will become too expensive, become far too risky for a lender even if the person does not default by the rise in the cost of money, and it will simply disappear. The long-term mortgage is a bet a lot of lenders don’t want to take on their own.
This is the risk to the housing market. If you have the bulk of your assets in real estate, then one way to keep them is to run out and get a 30-year FIXED mortgage now while you can. You have sold the risk to a third party and it is now their problem. You use the cash wisely for investment into other movable areas.
Thanks for the advise and the heads up.
We just walked away from our new home a week from closing thanks to your help.
Probably lose deposit but I guess that's better than we could be in for.
We'll just rent instead.
I think the OP is a clever goof on the overwrought pessimists. Just too over the top to be serious.
Either that or he's seriously got some mental issues.
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