Comments on: Dotzour’s Take on Mortgage Solutions http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/ Austin Real Estate Blog Fri, 11 May 2012 17:13:15 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Steve Crossland http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-36968 Steve Crossland Sun, 28 Sep 2008 16:00:46 +0000 http://crosslandteam.com/?p=514#comment-36968 Yep, Freddie and Fannie were used as political means to appease those who wanted to spread "home ownership" to more Americans. They were forced, through legislation, to start buying subprime loans. The entire set of moving parts in all of this is at the same time simple and very complicated. One piece of it is certainly the desire of americans to live a lifestyle beyond our means, to buy houses when not financially prepared to do so, to invest in real estate without proper downpayment, and to think that housing prices would rise forever. Steve Yep, Freddie and Fannie were used as political means to appease those who wanted to spread “home ownership” to more Americans. They were forced, through legislation, to start buying subprime loans.

The entire set of moving parts in all of this is at the same time simple and very complicated. One piece of it is certainly the desire of americans to live a lifestyle beyond our means, to buy houses when not financially prepared to do so, to invest in real estate without proper downpayment, and to think that housing prices would rise forever.

Steve

]]> By: Gordon Baker http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-36887 Gordon Baker Sun, 28 Sep 2008 00:11:55 +0000 http://crosslandteam.com/?p=514#comment-36887 The Investors Business Daily had a great article about yesterday about what has happened to Fannie Mae and Freddie Mac since the early 90's when they were used for political purposes of Congress. Some saw this disaster coming but were ignored. Congress is quick to point the finger at others at Wall Street when they had a hand in all of this. The Investors Business Daily had a great article about yesterday about what has happened to Fannie Mae and Freddie Mac since the early 90′s when they were used for political purposes of Congress. Some saw this disaster coming but were ignored. Congress is quick to point the finger at others at Wall Street when they had a hand in all of this.

]]> By: Gordon Baker http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-36082 Gordon Baker Tue, 23 Sep 2008 05:15:30 +0000 http://crosslandteam.com/?p=514#comment-36082 I hope that the feds can get it right now. And what about the CEO's of the companies that were driven by greed who still received bonuses and gold parachutes as their companies went down the drain. That's the part that bothers me. I hope that the feds can get it right now. And what about the CEO’s of the companies that were driven by greed who still received bonuses and gold parachutes as their companies went down the drain. That’s the part that bothers me.

]]> By: anonymous http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-35973 anonymous Mon, 22 Sep 2008 14:11:10 +0000 http://crosslandteam.com/?p=514#comment-35973 Rates need to go up along with down payment requirements. I cannot believe that rates haven't moved up more, considering banks need more capital to survive. The only way to attract more capital in this situation is to pay higher interest for the depositors, thus passing on the higher rate to borrowers. Buyers should only be buying want they can afford and not everyone is meant to be a home owner. -Anon Rates need to go up along with down payment requirements. I cannot believe that rates haven’t moved up more, considering banks need more capital to survive. The only way to attract more capital in this situation is to pay higher interest for the depositors, thus passing on the higher rate to borrowers.

Buyers should only be buying want they can afford and not everyone is meant to be a home owner.

-Anon

]]> By: Steve Crossland http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-35672 Steve Crossland Sat, 20 Sep 2008 14:55:23 +0000 http://crosslandteam.com/?p=514#comment-35672 Hi Todd, Thanks for the excellent analysis and your take on things. > Personally, it sure would be nice to see a sub-5% 15 year rate with fairly reasonable credit eligibility with a decent downpayment. That would be a welcome and motivating (for buyers) situation and would certainly get buyers off the fence. Hope you're doing well. Steve Hi Todd,

Thanks for the excellent analysis and your take on things.

> Personally, it sure would be nice to see a sub-5% 15 year rate with fairly reasonable credit eligibility with a decent downpayment.

That would be a welcome and motivating (for buyers) situation and would certainly get buyers off the fence.

Hope you’re doing well.

Steve

]]> By: Todd http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-35670 Todd Sat, 20 Sep 2008 14:46:36 +0000 http://crosslandteam.com/?p=514#comment-35670 Mortgage rates are in for some interesting times as several strong crosscurrents impact the market. First, yield spreads should fall as credit markets improve. The first wave of this was seen after the Frannie nationalization. The second wave should occur as credit spreads between financial institutions normalize. This may be offset by the coming jump in Treasury yields. Friday saw historic jumps in Treasury yields on the 10 year bond. This is a result of the governments decision to create $500 billion to $1 trillion dollars of new debt to fund the purchases of illiquid bad debt to clean up the balance sheets of financial institutions. Which will win, spread contraction or underlying rate increases on gov't bonds? Who knows, but it may be a wash. The third factor which may impact rates and push them lower are the coming economic impacts of the financial crisis. With unemployment rising, households still strapped and lenders in an extended healing process, economic activity and growth should remain below trend for several more quarters. This could have the effect of reducing treasury and other lending rates over the balance of 2008 once the shock of the new debt burden wears off. Personally, it sure would be nice to see a sub-5% 15 year rate with fairly reasonable credit eligibility with a decent downpayment. Mortgage rates are in for some interesting times as several strong crosscurrents impact the market. First, yield spreads should fall as credit markets improve. The first wave of this was seen after the Frannie nationalization. The second wave should occur as credit spreads between financial institutions normalize. This may be offset by the coming jump in Treasury yields. Friday saw historic jumps in Treasury yields on the 10 year bond. This is a result of the governments decision to create $500 billion to $1 trillion dollars of new debt to fund the purchases of illiquid bad debt to clean up the balance sheets of financial institutions. Which will win, spread contraction or underlying rate increases on gov’t bonds? Who knows, but it may be a wash. The third factor which may impact rates and push them lower are the coming economic impacts of the financial crisis. With unemployment rising, households still strapped and lenders in an extended healing process, economic activity and growth should remain below trend for several more quarters. This could have the effect of reducing treasury and other lending rates over the balance of 2008 once the shock of the new debt burden wears off.

Personally, it sure would be nice to see a sub-5% 15 year rate with fairly reasonable credit eligibility with a decent downpayment.

]]> By: Tim http://crosslandteam.com/blog/2008/09/18/dotzours-take-on-mortgage-solutions/#comment-35284 Tim Thu, 18 Sep 2008 21:58:10 +0000 http://crosslandteam.com/?p=514#comment-35284 Not mentioned is that this keeps the price of homes artificially high. We need foreclosures to pull prices back to where they're supposed to be. If everyone in a neighborhood needed a subprime loan to buy a house, than the neighborhood is overvalued. While adjusting the mortgage to their "current value" sounds great from a customer perspective, it keeps the value of neighborhoods way over what they should be. Not mentioned is that this keeps the price of homes artificially high. We need foreclosures to pull prices back to where they’re supposed to be. If everyone in a neighborhood needed a subprime loan to buy a house, than the neighborhood is overvalued. While adjusting the mortgage to their “current value” sounds great from a customer perspective, it keeps the value of neighborhoods way over what they should be.

]]>