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September 24, 2007

As Mortgage Rates Rise, More Deals Sink

The suffocating embrace of the subprime crisis is definitely starting to take the wind out of the city’s residential deals. Mortgage brokers say they’re seeing a pronounced uptick in the number of buyers who are backing out of deals because they can’t get mortgages at competitive interest rates. Hardest hit are borrowers who don’t have excellent credit histories, or who expected to take out large mortgages and then pay them down with bonuses. A number of brokers say they’re seeing plenty of prospective buyers who didn’t lock in rates and who can’t close on the units because they can’t afford higher-than-expected monthly payments. And these are borrowers who aren’t necessarily on financially shaky ground—a sobering article in today’s Times documents some of the effects of too-lenient lending practices geared towards lower-income earners. Large swaths of working-class enclaves in the boroughs, like parts of central Brooklyn, have turned into new-development “ghost towns” because of predatory lending practices and concomitant rising foreclosure rates. So it’s becoming clear that the mortgage industry crisis is now affecting the city’s haves and have-nots. Anyone had a deal scuttled recently?
Frustrated New Yorkers Grapple With Loan Rates [NY Times]
Risky Loans Help Build Ghost Town of New Homes [NY Times]
Photo by D.B. Blas

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Comments

Just locked in a great mortgage with Commerce Bank.

Originally was going to fund a $540K Jumbo with Countrywide at 6.375%. When time came to lock in - Rates were like 7.25%.

Commerce split the Mortgage into a $417K at 6.125% and $123K Home Equty at 6.74%. Overall, Mortgage came out cheaper than before.

Key is good Fico though, if you dont have that your lost!

Posted by: newsouthsloper at September 24, 2007 9:15 AM

Were these fixed or adjustable?

Posted by: brownstoner at September 24, 2007 9:22 AM

Both Fixed - The 417K is 30 years, the 123K is 29 years

Posted by: newsouthsloper at September 24, 2007 9:29 AM

We are very nosey but, how much did you put down?

Posted by: guest at September 24, 2007 9:31 AM

I put 10% Down - Fico is over 720 Though.

If we didnt get this deal through commerce, we would have ended up paying like 4 or 5 hundred a month more...

Might have thought about backing out at that point.

Posted by: newsouthsloper at September 24, 2007 9:35 AM

I just closed on a deal that involved 95% financing through Washington Mutual for 1st time buyers without a huge salary in Bed-Stuy. It was a jumbo loan too. Bad news sells more papers for the NY Times. But it's not really representative of what we are seeing in the marketplace at this point for most of our buyers. If the employment numbers go way down in NYC I think there will be trouble. But so far that seems relatively stable.

Posted by: guest at September 24, 2007 9:41 AM

9:41 - Funny, Wamu was a close second in mortgage. They also had really decent programs.

I think the local banks have alot to offer in this mortgage market. They tend to be more willing to extend 80/10/10 deals because they are not packaging these things off to investors so quickly like the "Big Boys". They also typically keep the Home Equity in-house which means better approvals and rates.

Posted by: newsouthsloper at September 24, 2007 9:50 AM

I went into contract in June and closed in August. 700+ credit, 10% down, 30 yr fixed loan. I didn't lock my rate back in June. My quotes in June were 6.25%; by August they were 7.5%. I ended up somewhere in between by splitting the loans up, but still, it increased the costs of the deal to me by several hundred a month.

Posted by: guest at September 24, 2007 9:55 AM

Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men. -

Woodrow Wilson

Good week sheeple.

This issue is important. No money no sales. It's funny if people would lower their price, houses would sell again.

But human greed will kill this Real Estate Mutant Bubble.

BTW on Friday, I got into a war over rate sheets. Let me clear that up. The 9.5% quote was for under 640 fico , 20% down programs. Not someone who has a fico score of 720 and over. These people will always get great rates. The 680 and under crowd will get hammered. The 680 and under crowd is 80% of people looking for homes now, 80%!!!!!!!!!!!! So if someone is buying you house with good credit, you better take that deal.

Last thing, people say that "I closed with Bah Bah Bah program". That program is GONE GONE GONE. From July until now mortgage programs got vaporized. roker are have problems finding homes for deals.

Posted by: The What at September 24, 2007 10:03 AM

Since the cost of financing has risen 5-10% over the last few months, shouldn't prices fall by a corresponding amount?

Posted by: guest at September 24, 2007 10:12 AM

Oh, Hey What - I was wondering where you been...

I knew you would be weighing in with some irrelevant recycled quote sooner or later.

BTW - As far the the blah blah blah programs, I locked in last week not July.

I do agree with you though (Yes, I actually did say that)in that Fico is the Key. No one wants to lend money to people with low Fico anymore - just dont know what you are getting. Maybe that is the way it should be.

Posted by: newsouthsloper at September 24, 2007 10:13 AM

Thx for creating a login 'The What'

It makes it easier to skip your dribble.

Posted by: guest at September 24, 2007 10:14 AM

" irrelevant recycled quote "

Wow it's shows how much people know about our banking system.
I had a talk with a friend over the weekend, he said "the system needs to operate in this manner to rip you off.

Thank God for Ron Paul.

Posted by: The What at September 24, 2007 10:36 AM

To the person that posted that there 2nd loan is a heloc. I suggest you read your loan docs again, I have never heard of a heloc being fixed. You mention that the rate was at 6.74% that seems like a teaser rate to me that will reset at some time in the near future. HOpefully i am wrong

Posted by: guest at September 24, 2007 10:40 AM

"Thx for creating a login 'The What'

It makes it easier to skip your dribble."

Yeah but not commenting on it.
I think you will get this weeks first 'Go Fuck Yourself' Quote.

Posted by: The What at September 24, 2007 10:40 AM

To the person that suggests that wamu doesnt try to sell of there loans there is some truth to that. WAMU has been 1 of the banks hit the hardest by the subprime meltdown and this is due to there willingness to hold on to there loan portfolio.; I bet you that 1) they are will adjust that strategy and start selling off that risk or 2) increase there rates to make it work keeping that risk in its SPV

Posted by: guest at September 24, 2007 10:43 AM

What - Dont get me wrong, I totally respect your right to post your opinion here, even though you resort to calling people a-holes and worse.

I just wish you would come up with some more new stuff to quote - getting tired of the Jefferson, Wilson, and Acpocolypse now stuff.

Surely you have alot of time on your hands being a broker in bed-suy and all. Maybe you could research some new material.

Greenspan had some interesting stuff to say over the weekend - maybe you could start with that...

Oh BTW - Another comment I agree with you on "Thank God for Ron Paul." Totally love the guy, but unfortunately he is politically 'irrelevant' and wont have any impact on our world.

Posted by: newsouthsloper at September 24, 2007 10:45 AM

Hey 10:40 - Never Said HELOC, it is a Home Equity Loan fixed for 19 years. Check Commerce Bank Website for your self...Its one of the best Home Equity Loans out there right now.

Posted by: newsouthsloper at September 24, 2007 10:48 AM

meant 29 not 19 years.

Posted by: newsouthsloper at September 24, 2007 10:49 AM

I pay my bills. Not always -- and for years not often -- on time, but I get around to them and pay them off. For several years in my early 20s I carried a balance which is dumb but how credit cards make their money. I even defaulted on a credit card bill when I was in college (by typical 21yr dealings of moving around 5x in 3 months and not realizing that I need to tell cc company).

Anyway, my credit score is 740.

Just saying that I don't really think it's that big a deal for people with credit scores under 620 and hoping to finance 90% of expensive condos to have to pay 7-8% interest rates.

Posted by: guest at September 24, 2007 10:57 AM

"Thank God for Ron Paul."

Your comments sound more like real estate advice from RuPaul.

Posted by: guest at September 24, 2007 11:08 AM

" just wish you would come up with some more new stuff to quote - getting tired of the Jefferson, Wilson, and Acpocolypse now stuff."

The quotes are very important. Please try to understand them.

"What - Dont get me wrong, I totally respect your right to post your opinion here, even though you resort to calling people a-holes and worse."

I will try to chill, I took the Meds without water. ; ^ }

"Greenspan had some interesting stuff to say over the weekend - maybe you could start with that..."

Greensperm is trying to CYA. Understand, the FED is a private bank. The FED loans money to our government at interest. This system has NO REASON to exist. That is the MAIN point!!!!!!!!!

Let bring back REAL money.

Posted by: The What at September 24, 2007 11:13 AM

Has the definition of "Haves" and "Have-nots" been reduced to a FICO score? 720+ you're a "Have" and under 720 you're a "Have-not".

Posted by: guest at September 24, 2007 11:31 AM

Looks that way 11:31 - With one exception:

If your Fico is under 720 and you've got lots of cash, you are still a "Have"

Posted by: newsouthsloper at September 24, 2007 11:35 AM

anyone else see this??

http://www.nytimes.com/2007/09/23/nyregion/23brooklyn.html?_r=1&ref=nyregion&oref=slogin

Posted by: guest at September 24, 2007 11:54 AM

you can definitely lock in a HELOC - I just spoke to my bank about it since our HELOC currently is adjustable. Am waiting for rates to go down as feds cut rates one more time this fall, then will lock it in.

Posted by: guest at September 24, 2007 12:06 PM

The WHAT- some people are unwilling to dig an see how things really work. But for the people that don't believe the Federal Reserve is a private bank built on the idea to make as much money off you as possible, here is an informative video for you all. http://video.google.com/videoplay?docid=-515319560256183936&pr=goog-sl

Posted by: guest at September 24, 2007 12:11 PM

Mortgage rates are going up despite the Fed rate cuts. Too much fear about inflation/falling dollar. Don't expect the Fed to be able to help you. They only care about short term solutions for Wall Street. The horse is out of the barn.

Posted by: guest at September 24, 2007 12:55 PM

12:11 and "The What" are in the middle of another joint snow job. Soon, when they realize the Federal Reserve isn't going anywhere, they will begin stockpiling ammo and threatening people. The Federal Reserve exists to centralize bank functions in this country. It's not a perfect system, but it beats the relative anarchy that proceeded it. Alarmist videos can counter what's in the history books: In 1863, as a means to help finance the Civil War, a system of national banks was instituted by National Banking Act. Later, a series of retractions of loans and refusal to renew old ones created bank "panics," in 1873, 1893, and 1907. This provided the backdrop for the renewed calls for the creation of a centralized banking system,[1] although the notion of a central bank was unpopular with the people due to fears of giving a central authority power over the monetary system.[2]

Posted by: guest at September 24, 2007 1:11 PM

12:11 is right. If you want to know how the Federal Reserve system works, there's no more relevant authority than http://video.google.com/videoplay. All the yuppies on this board with their 700+ FICO scores just cant handle the truth--but they're probably also using those plastic cards and paper money.

Posted by: guest at September 24, 2007 1:42 PM

Anyone know how banks look at the credit scores of couples. My wife carried a bunch of debt for years until recently paying it off so she has a great FICO, whereas I was late on a $5 checking account fee in '98 and have a much lower score. Should a loan be sought after only using her name? Thanks.

Posted by: guest at September 24, 2007 2:34 PM

2:34 - Doubt very much that being late on 1 payment in 1998 for $5 is really affecting your score that much.

Really, the key factors are total credit used compared to credit available, status of any installment loans - i.e car, student, etc., and number of deliquencies.

If you are going for a full doc loan (Which is definately becoming mandatory these days) you will have to apply jointly with your wife if you want your income to be considered. The banks will consider your low credit, but not necessarily as the overiding factor. Best to just start calling some banks and see what programs will be avaiable with your situation.

You can also speak with a mrtgage broker who may be able to get around your credit issues, but with a substantially higher rate.

Posted by: guest at September 24, 2007 2:42 PM

"12:11 and "The What" are in the middle of another joint snow job. Soon, when they realize the Federal Reserve isn't going anywhere, they will begin stockpiling ammo and threatening people. The Federal Reserve exists to centralize bank functions in this country. It's not a perfect system, but it beats the relative anarchy that proceeded it. Alarmist videos can counter what's in the history books: In 1863, as a means to help finance the Civil War, a system of national banks was instituted by National Banking Act. Later, a series of retractions of loans and refusal to renew old ones created bank "panics," in 1873, 1893, and 1907. This provided the backdrop for the renewed calls for the creation of a centralized banking system,[1] although the notion of a central bank was unpopular with the people due to fears of giving a central authority power over the monetary system.[2]

Posted by: guest at September 24, 2007 1:11 PM"

This is why things are fucked up. The powers that be want you to be ignorant. THE FED IS THERE FOR THE PRIVATE BANKING INTEREST!!!!!!!!!! THEY DON"T GIVE A FUCK ABOUT YOU OR ME!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Posted by: The What at September 24, 2007 2:46 PM

You do realize, "the what" that not a single person on this board seems to give a rats ass about what you speak of.

It's all jibberish and nonsense.

Perhaps you can take an English course or two and then revisit our lovely site...?

Posted by: guest at September 24, 2007 3:05 PM

I kind of dont mind "The What" too much.

His views are alarmist and extreme, but he does make some interesting points...

Better than alot of the other dribble that comes out on this board.

I think he is wrong, but entitled to an opinion like everyone else.

Posted by: newsouthsloper at September 24, 2007 3:11 PM

Hey What - your excessive use of capital letters (and exclamation points) doesn't make you correct. You're like one of those people who believe that whoever yells loudest "wins" the argument.

Posted by: guest at September 24, 2007 3:13 PM

Sure, freedom of speech is great. The What can post all he wants, as far as I'm concerned.

I just hope he realizes that the second I see his trademark posts, I move to the next.

I'm guessing a lot of people do the same.

Hey bud...reposting the previous comment every time really isn't necessary btw.

It's all a smokescreen to make your comments as long as possible because you think more people will read them, when it actually has the opposite affect.

Posted by: guest at September 24, 2007 3:22 PM

Profanity is the refuge of people who are unable to adequately express themselves.

Posted by: guest at September 24, 2007 3:24 PM

"Hey What - your excessive use of capital letters (and exclamation points) doesn't make you correct. You're like one of those people who believe that whoever yells loudest "wins" the argument."

It's not a question of right of wrong, I just look at the facts. Our money has lost 45% of it's value in 7 years. The cost of living is skyrocketing to new highs. Rent, food, gas and heath cost are more expensive than ever. I find it funny that no one else notice this. I just trying to bring my point across, thats all.

"You do realize, "the what" that not a single person on this board seems to give a rats ass about what you speak of.

It's all jibberish and nonsense.

Perhaps you can take an English course or two and then revisit our lovely site...?"

Well.. if you send your children to schools in this neighborhood, they will come out like me. Remember that's the price of Gentrification. Shity schools, crime and the lovely things that come with it.

"Sure, freedom of speech is great. The What can post all he wants, as far as I'm concerned.

I just hope he realizes that the second I see his trademark posts, I move to the next.

I'm guessing a lot of people do the same.

Hey bud...reposting the previous comment every time really isn't necessary btw.

It's all a smokescreen to make your comments as long as possible because you think more people will read them, when it actually has the opposite affect."

People have a problem paying attention (like the FED). I don't want to be misunderstood.

"Profanity is the refuge of people who are unable to adequately express themselves."

I agree with this statement, now go fuck yourself.

Posted by: The What at September 24, 2007 3:38 PM

Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.
Martin Luther King Jr. (1929 - 1968), Strength to Love, 1963

Posted by: guest at September 24, 2007 4:17 PM

I don't notice that, actually.

While housing prices have gone through the roof, I would not say the same for everything else.

I think you're smokin somethin, 4:17.

Posted by: guest at September 24, 2007 4:33 PM

4:17 is sincerely ignorant of the difference between nominal and real prices.

Posted by: guest at September 24, 2007 5:15 PM

4:17 here. Hey dummies (4:33 and 5:17), I was COPYING the 3:38 comments from "The What" and attempting to juxtapose them against the quote from Dr. King. I AGREE that the "pricing" information is ridiculous.

Posted by: guest at September 24, 2007 5:25 PM

are you crazy - what about health care and education??? Prices have gone completely through the roof. Although I read a very very interesting article in WSJ a few weeks ago that said that housing prices tended to follow the value of gold and the recent explosion in home values is no exception - some kind of reaction to the value of the dollar going down/inflation.

Posted by: guest at September 24, 2007 5:26 PM

Thats right 5:26, there is an ABSOLUTE corollation between higher prices and lower dollar (or any other currency).

It takes more dollars to fill up gas because the strength of the dollar (in the eyes of foreign investors,oil suppliers,bond buyers,etc.) is steadily declining. You see America's "FICO score" is worst than anyone elses on this blog!!!!

Just like the guy with maxed out credit and high debt levels takes a big credit hit...so does our greenback!

The government, our government, is currently in debt to the tune of approx 8.3 TRILLION bucks (because not only do they spend more than they take in in tax revenue... but they are essentially repaying bond debt, INTEREST ONLY, by selling more bonds!!!

So yes, homes will continue to "appreciate" simply because the dollar, in my opinion, will continue to "depreciate"....

ALONG WITH THE PRICE OF EVERYTHING ELSE IN OUR COUNTRY.

Lets just hope wages will rise as fast.

P.S. Oh and please please please take any economic news/figures the government gives you with a pound of salt just like you would any political, social news they throw on the wall.

Mr. Greenscam

Posted by: greenscam at September 24, 2007 7:45 PM

12:11,

Antipasti for your link. Shorter (45 min), simpler animated video to warm one up for 3-hr long Money Masters.

http://video.google.com/videoplay?docid=-9050474362583451279&total=30&start=0&num=10&so=0&type=search&plindex=6

Glad to see some non-sheeps out there.

Posted by: guest at September 27, 2007 9:18 AM

« Monday Events Not in My Front Yard? »

September 24, 2007

As Mortgage Rates Rise, More Deals Sink

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