winter said:samko said:clyde_frog said:if my ARM reset today it would 'explode' from 5.125% to 4.25%. thanks ben b.At the risk of feeding a troll.... Do you care to explain how your ARM would be at 4.25%? What index are you using and what's your spread? Also, who is carrying this loan? It's hard for me to believe that an ARM after a reset will have a lower rate than a 30 yr fixed. Please check with your bank and get back to us.I don't know about clyde_frog's ARM but why are you surprised that an ARM reset rate right now would be lower than a 30-year fixed?

ING uses 1-year LIBOR for their ARM index:

This week 2.66
Month ago 2.58
Year ago 5.23

You don't think its possible to have a 1.5% margin?
I agree, Winter. If my 5/1 ING arm were to reset today, the rate would be 4.125% (1yr CMT + 2.5 on first reset, rounded to nearest eighth).

samko said:clyde_frog said:vrb747 said:Option ARMs start exploding 2010-2011,

Keep calling a bottom, oh wise ones ! This fool is going to wait

if my ARM reset today it would 'explode' from 5.125% to 4.25%. thanks ben b.At the risk of feeding a troll.... Do you care to explain how your ARM would be at 4.25%? What index are you using and what's your spread? Also, who is carrying this loan? It's hard for me to believe that an ARM after a reset will have a lower rate than a 30 yr fixed. Please check with your bank and get back to us.

Maybe you meant to say that if you were to get an ARM today that your rate would be 4.25%.

The mechanics of an Option ARM loan are being lost in this discussion. You basically get to pick your payment from one of several options, the cheapest of which doesn't even cover the interest on the loan. Sure you can also choose to pay P&I as one of the choices, but if you could afford to do that why not get a fixed rate loan?

So the worry is not what the rate is on the loan, it's that after racking up less than interest-only payments people owe more than the original loan balance. Eventually the payment will adjust to be amortizing, meaning that you have to pay both principal and interest - this is where the huge jump in monthly payment will come from. It has nothing to do with rates - they could be 0% and the payment would still jump dramatically because you're acutally paying the loan off instead of building the loan balance.

The "good" news is that many people in these loans will probably suffer the same fate as late vintage subprime loans, and default before the payment even goes up. This would make the pain in 2010+ a bit less bad by pulling it in to the near term.

bradman said: <snip>
Is this something I can fight to get my 8K back (10K premium paid – 2K builder already agreed to pay)? Does the builder is accountable for the contract we both signed to build the home on the original lot?

Thanks

Sounds like you ought to consult a real estate lawyer. If it was me, I'd ask for all my money back, and cancel the whole thing. Not the type of outfit I would want to deal with.

newlin99 said:What does your contract say about this?

Green for you. To add to that.. read your contract. If it says nothing about this sort of situation, then tell the builder to F off, and request all your money back. Seeing as how most are struggling these days (unless you're perhaps in the midwest), they will likely try and play hardball. In this case, getting a lawyer should resolve the situation quickly. Best of luck.

pop!

kranky said:bradman said: <snip>
Is this something I can fight to get my 8K back (10K premium paid – 2K builder already agreed to pay)? Does the builder is accountable for the contract we both signed to build the home on the original lot?

Thanks

Sounds like you ought to consult a real estate lawyer. If it was me, I'd ask for all my money back, and cancel the whole thing. Not the type of outfit I would want to deal with.

Whether they knew it or not, the builder has one demonstrated instance of bait-and-switch. I would not deal with them.

As a matter of fact, read your contract, and see if you have any basis to sue them for damages. Long shot probably.

umcsom said:psychtobe said:

By the way, I just saw a nice-looking REO for sale in Oceanside for about $150/sf. That's down by about half from its bubble price. It's six miles to the ocean, but still, it's SD county and six miles to the ocean sounds pretty nice if you live in, say, the Midwest.

I live in the midwest. It does not sound nice to me. Why do most people in California think that the midwest people all secretly desire to move to a coast? Such an ego.

I agree, the ocean is the world's toilet.

kevpriest said:Based on this story, I think it might be time for a different thread.

A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday.
At any given time, a majority or near majority of Americans don't intend to buy a home anytime soon...because they're not planning on moving, so I don't think that comment has much content. The story also states, "Fifty-nine percent think now is a good time to buy."

As for historical trends, "Sixty percent said they definitely won't buy a home in the next two years, up from 53 percent who said so in an AP-AOL poll in September 2006. At the same time, just 11 percent are certain or very likely to buy soon, down from 15 percent two years ago."

where exactly is this thread located in? I can never seem to find it

Dealguy123 said:Sounds like to me Kahlifohnia is in deep doodoo:

Mr Mortgage esplaining el problemos in housing

From the vid: 68k homes sold in a 10 state region for Feb, vs 70k foreclosure filings in cali alone in March.. WoW! I just heard a big explosion..

ahhh guy is similar to flip this house.

using foreclosure data from march, but sales data from feb.

then making extrapolations that mean to imply that boa/chase/wells 2nd mortages are ALL worthless? so now all homes are going to foreclose?

His a good speaker, but full of fluff and crap.