Out at the peak

Wednesday, September 06, 2006

Homebuilders promoting toxic loans

Homebuilders are accumulating inventory. In order to move this inventory, they are willing to promote non-conforming loans to people who could not afford a conforming loan.

Centex Homes: Affordability Days
Ryland Homes: 40% off mortgage payments
(Thanks Bubble Meter)

Home buyers: my suggestion is if you cannot afford to make payments on a 30 year fixed mortgage, then you simply cannot afford that house. Actual affordability is virtually gone, and once buyers stop risking their financial credibility with non-conforming loans, house prices will have to realign with reality.

Please link to other similar promotions you come across.

10 Comments:

  • Tips for Being a Successful Landlord

    In today’s apartment rental market there are several things that are “must do’s” for becoming a successful landlord. The reason you’re playing the real estate rental game is to have the check in your mailbox on the first of the month, right? Here are a few tips that can help you to achieve this with as little aggravation and frustration possible.

    First and foremost is finding the right tenant to rent your apartment, house or other rental. This is the most important ingredient in the recipe. Checking the prospective tenant’s credit history to make sure they are paying their bills is one of the best ways you can screen. A tenant that pays their bills on time most likely will send you their rent on time. Establish a clear system on collecting rent, handling complaints from the tenant and how you will contact them if you need to gain access to the apartment.

    Secondly, get all the important terms of the tenancy in writing. You have the option to have a basic rental agreement or draw up a formal lease. Whichever you decide, the important thing is to document the terms that you and the tenant agreed to. Clarify who is paying the utilities, the rental price and any other agreements made between you and your tenant.

    It’s a good idea to stay on top of the repair and maintenance needs of your property. When you are notified of something that is broken or not working, repair it as soon as possible to prevent further damages. You may also lawfully enable the tenant to withhold rent, sue for injuries caused by defective conditions or move out without notice.

    On a similar topic make sure you are carrying enough property and liability insurance to cover yourself in any situation. A well designed insurance program can protect your rental property from losses caused by everything from fire and storms to burglary, vandalism, and personal injury lawsuits.

    I hope that this has been helpful to you. Just remember, as long as you follow these simple tips you will be on your way to a happy and fulfilling landlord future. Best of luck!

    ABOUT THE AUTHOR: Eric Goldstein, associated with www.AllSpacses.com which Conveniently Connects All People with All Spaces in All Places, has been dedicated to the real estate rental market for over 8 years. He has assisted over 25,000 landlords with their renting needs. Any questions about renting apartments, houses or other rentals feel free to visit www.AllSpaces.com or email him at Eric@AllSpaces.com.

    By Blogger allspaces, at 2:58 PM  

  • My big question is, "Who is going to be stuck without a chair when the music stops?"

    Many homeowners will have no choice but to default on their loans. Will their lenders eat the bad deal? Will it have been sold off to Fanny Mae? Will that loan be part of some Hedge Fund asset? Who is going to be the primary Piper payer?

    By Blogger Walt Howard, at 4:22 AM  

  • Many lenders agree to repurchase loans back from the larger institutions if the borrower does not perform. They have already set aside some money for those events. However, the events will likely be in greater number than they expect.

    Fannie Mae and Freddy Mac supposively only carry conforming loans that do not exceed the jumbo limit. I could imagine new scandles that make this not true, but who knows?

    Washington Mutual will probably be one of the bigger names in dire times. (They have a C+ rating due to their dealings with exotic loans.) But the bad news will be wide spread, and more research needs to be done to figure out what is mostly a risk.

    By Blogger Out at the peak, at 11:23 PM  

  • http://millionairenowbook.blogspot.com/2006/09/call-to-arms.html

    By Blogger Larry Nusbaum, at 8:04 PM  

  • Your blog entry was very interesting. I am a realtor specializing in Tampa Bay Florida Real Estate .

    By Blogger David Ashley Gilbert, at 5:07 PM  

  • Good info. Thanks.

    Regards,

    Stock Trader
    Stock Option Trading

    By Blogger TradingCourses, at 5:18 PM  

  • November 11, 2006:
    Silicon Valley's reported median prices appear to be holding up but we increasingly see evidence of manipulation of the data.

    We see it in our own neighborhood:
    http://www.viewfromsiliconvalley.com/id277.html

    and also in reported county-wide stats:
    http://www.viewfromsiliconvalley.com/id125.html

    Keep checking
    www.viewfromsiliconvalley.com for all the latest numbers and news.

    Thanks!

    By Blogger vfsv, at 8:10 PM  

  • Take a look at my market history report for the Bakersfield and Los Angeles at

    http://homepricehistory.blogspot.com/

    By Anonymous Anonymous, at 10:56 AM  

  • By Blogger Delly News Blog, at 12:15 AM  

  • “How Toxic Is Your Mortgage?" is what all are concerned of nowadays.
    Thanks for that interesting information here.

    Regards,
    new homes Wisconsin

    By Blogger david, at 11:52 PM  

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