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May 22, 2009

Chase Turns Off Our Spigot—For Now at Least

Here's an interesting twist in our refinancing story. We received in the mail earlier this week the following notice from Chase, which is the provider of both our current mortgage and our Home Equity Line of Credit:

With home values falling in many parts of the country, we've used a proven valuation method to estimate your home's value at $1,000,000. Unfortunately, that valuation no longer supports the full amount of your Line of Credit, so we are suspending future draws again your account as of May 15, 2009.

Say what? Leaving aside for a moment our suspicion that their "proven valuation method" did not take into account the fact that ours is a five-story house, the most interesting part of this is the perverse incentive it creates: After we finished our renovation in late 2005, our HELOC was pretty close to maxed out at $62,500. Since then, we've chipped away a few hundred dollars a month at the principal, so that the balance is now around $47,000. (Our credit score, as of last week, was the equivalent of an "A+", according to our Chase refinancing so that can't have anything to do with it.) So now, instead of continuing to reduce our balance, we're going to just pay off the interest, since we know we can't tap the line in the future if we needed to. The appraiser came for our mortgage refi yesterday morning; if that goes okay, we should have a decent case to make for unfreezing the line of credit. Regardless, the "proven valuation method" sounds like some very unnuanced generalizing at best and suspiciously like the beginnings of some old-school red-lining at worst. If, for example, the computer is using zip codes to group areas by risk, then it has no way of differentiating between a house on Classon and a house on Clinton. Or if it's merely using physical proximity, our house could be impacted by comps a half-mile away on a less valuable block of Bed Stuy. Scary.

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Comments

For what it's worth, we received the same letter from Chase last fall, despite the fact that we have excellent credit, live in prime landmark North Slope, and the comps in our area were and still are holding steady. I was considering appealing, but considering that we were not really drawing on the account, decided it was not worth the time or money. Not sure what their "proven valuation method" is, but I bet it's crap.

Posted by: coho at May 22, 2009 9:39 AM

Why is it no longer sensible to pay down the principal?

Posted by: tekniskakustik at May 22, 2009 9:44 AM

Because liquidity is king in a crap market. Before when we were paying own the HELOC, it was fine b/c we could always get it back if we needed it. Now it makes sense to hoard cash.

Posted by: brownstoner at May 22, 2009 9:46 AM

Good post, but I thought you were out of here? Have a great time!

Posted by: Schultz at May 22, 2009 9:47 AM

My understanding is that the "proven valuation method" is something proprietary but very much like zillow. We ran into this problem with BOA and Wamu a few years back when, contrary to how WAMU treated the rest of the world, the appraisal came in low. My zillow suspicion is based on how quickly during my initial phone call with each they could tell me what they thought my house would appraise for and whether I was within the LTV they needed to make the loan. Obviously, they plugged our address into some software. The problem with this method is not only data error (wrong # floors, bedrooms, etc." but that, if you have put a lot into your home, you are not compared with similarly renovated homes, but lumped into an average of sales that includes unrenovated houses. That drags the number down.

Posted by: slopefarm at May 22, 2009 9:47 AM

arent you supposed to be on vacation mr b? hahah

*rob*

Posted by: PitbullNYC at May 22, 2009 9:52 AM

I heard the same thing from my mortgage broker so I pulled down 99% of my 2.99% $140k line and put it in an ING account! It's worth the 1.25% interest cost / year to have an emergency cash cushion. Plus, with my low rate from back in the day (Prime - 0.25%) I'm sure I was a prime candidate for line reduction, regardless of comps. Banks are lame.

Posted by: Mr Joist at May 22, 2009 9:55 AM

the proven valuation method sounds very much like red lining. I'm sure the same general principals are at work.

Posted by: sam at May 22, 2009 9:56 AM

"So now, instead of continuing to reduce our balance, we're going to just pay off the interest, since we know we can't tap the line in the future if we needed to."

You realize every banker who reads this will have a little shudder of joy.

I mean, I understand if you need to protect yourself and build an emergency fund to take the place of that line of credit, and it makes perfect sense to do that.

But if you are asking *why* would bank cut back on your credit limit, you need look no further than the fact that you are now going to make them richer by giving them interest only payments.

FWIW, banks are cutting back their credit liabilities all over the place. Also they know with all the unemployment out there, that default rates will be going up on personal loans.

Bank of America recently cut my credit limit on one of my credit cards. Now, the limit was absurd (it was about 40% of my annual salary...), and I still have a much higher limit than I need, but they had no reason to do this based on *me*. I pay the balance in full every month and have never been late, have fine credit, yadda yadda yadda. The reason they did it, I presume, is that they have pretty much given out too much credit across the board, so they are cutting back across the board. No doubt their balance sheet will look prettier because of it.

Oh, and I decided to stop using that card and use one of my 4 other credit cards for no reason except to hopefully confuse one of their market research people ("OMG! we cut his limit and he stopped using our card! Who would have thunk it!")

Posted by: northsloperenter at May 22, 2009 9:56 AM

Credit rationing. They don't have the balance sheet to lend.

In fact, they are so overextended on NYC property - we are talking billions over where they should be. So can't do more.

Banks - they lend too much, then too little.

Condemned to repeat history, we are.

Posted by: chrishavens at May 22, 2009 9:57 AM

> "Condemned to repeat history, we are."

Master Yoda, is that you?

Posted by: SnarkSlope at May 22, 2009 10:02 AM

"...our house could be impacted by comps a half-mile away on a less valuable block of Bed Stuy. Scary."

The market is a continuum. Welcome to the crash. ROTW's not up yet. So allow me...

KERBOOM!!! (I love it when he says that)

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 10:04 AM

how does one just pay the interest on their HELOC?

Posted by: ltjbukem73 at May 22, 2009 10:08 AM

Very funny, BHO. You gonna wake him up and make him some coffee? He's late.

Posted by: slopefarm at May 22, 2009 10:11 AM

"The appraiser came for our mortgage refi yesterday morning; if that goes okay, we should have a decent case to make for unfreezing the line of credit. Regardless, the "proven valuation method" sounds like some very unnuanced generalizing at best and suspiciously like the beginnings of some old-school red-lining at worst."

Good morning Retards! You know something? I hate when I'm right!

The only thing the Appraiser is going to unfreeze is your brains Brownstoner! If you was smart kill the appraisal and start paying down the mortgage but, you and other retards believe the hype!

"like the beginnings of some old-school red-lining at worst"

Here Dumbasses suck it it down--Maximum Financing in Declining Markets Fannie Mae.

Warring PDF- https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2007/0722.pdf

Declining Markets is a legal way of Redlining! Plus since you retards live in the Ghetto every Bank is running for the hills now. No Refinance Game Over!

"of, for example, the computer is using zip codes to group areas by risk, then it has no way of differentiating between a house on Classon and a house on Clinton. Or if it's merely using physical proximity, our house could be impacted by comps a half-mile away on a less valuable block of Bed Stuy. Scary."

Oh no Brownstoner! When everything was going "up" there was no problems, so why is there a problem now????!!!! I'll tell you- You thought everything was going to be smooth. Hi-Jack the Ghetto, put asshead shops here, price everyone out and conquer! Now the whole thing is falling apart, ROTFLMMFAO!! The collapse of the Mutant Asset Bubble is a slight to behold!!!

Next! Thanks for playing!

The What (Buh Bye Retards! Nice knowing ya!)

Posted by: Return of The What at May 22, 2009 10:14 AM

Naw, slopefarm. This story will be like a triple shot of espresso for him. I asked a question in the Amalfi Coast thread that I'm going to repeat: Are there sharks off the coast?

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 10:15 AM

They're doing this to everyone - it's happening quite a bit in Manhattan too. They're then forcing borrowers (at their own expense) to hire appraisers to provide a value that proves Chase's "proven valuation method" wrong.

It's a ridiculous process and they're doing it to some of the best customers... but it's definitely not a form of red-lining.

Posted by: BrianR at May 22, 2009 10:18 AM

I would think they use a tool very similar to the comps valuation churned out by Pshark: look at recent sales by zip and or radius, divide by square footage and voilà! All done. It doesn't really account for the condition of the properties right now, because so few deals are being done (in part because of the tightening of credit.)
I would think that the recent sales of 306 St James ($229/sq ft) and 405 Clinton ($277/sq ft) make the bank think current value in that zip code is $250/sq ft, which of course is true for all cash wrecks. It's classic bureaucratic behavior, too much followed by too little, all the while never assessing competently what is happening.

Posted by: Maly at May 22, 2009 10:18 AM

"The market is a continuum. Welcome to the crash. ROTW's not up yet. So allow me..."

Thanks BHO! What's cracking Homeskillet! Oh I think it's the MAB! Hey BHO go to Costco and load up on some popcorn and a nice lawn chair! The mushroom cloud is going to be real pretty!

"how does one just pay the interest on their HELOC?"

Grab your ankles!

"Very funny, BHO. You gonna wake him up and make him some coffee? He's late."

Went to see "Terminator Salvation" last night! Now Chase is paying "Annnnoooolllddddd"

The What (I'll be back)

Someday this war is gonna end...

Ker-boom!

Posted by: Return of The What at May 22, 2009 10:20 AM

"...we've used a proven valuation method to estimate your home's value at $1,000,000."

Hey!!! That's half off!!! I'm suing for infringement!!!

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 10:23 AM

"Naw, slopefarm. This story will be like a triple shot of espresso for him. "

More like the old school strip club "Happy go lucky" in Flatbush! That place was the shit, like a Petting Zoo!

Hey guys I'm on some new shit! What is going to happen to all the new Condo construction when it goes rental????? Nobody is addressing that shit!!!

The What (5 months of life support left)

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 10:24 AM

When I did my refi in February with Chase, the agent told me that Chase is phasing out HELOCs. My refi sailed through, the appraisal was good but the HELOC terms they offered me kept shifting. Finally the HELOC they offered me was ridiculously expensive and limited to 1/2 the amount I wanted. I bailed and opened one with TD Bank at great terms. If Chase doesn't want your HELOC money, other banks do.

Posted by: brooklynlorax at May 22, 2009 10:28 AM

"What's cracking Homeskillet!"

Feeling great, fam! I'm watching the crash from inside - don't want all that radiation to get in my Orville Redenbacher.

"Down goes Brooklyn [prices]!!!...Down goes Brooklyn!!!" - Howard Cosell

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 10:29 AM

if this means brownstones are sold for all-cash only, we're staring at 90% off

Posted by: more4less at May 22, 2009 10:41 AM

"Feeling great, fam! I'm watching the crash from inside - don't want all that radiation to get in my Orville Redenbacher."

Put the Popcorn on a stick and hold it out the window! The heat from the Mutant Asset Bubble collapse will pop that shit in no time! BHO if you think this is fun wait until August! There are some big thing Popping and little things stopping in the Bond Market right now!

Hey Retards that stagecoach is turning into a turd now! Buh bye..

The What (Pass me a bag)

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 10:41 AM

"...limited to 1/2 the amount I wanted."

Patent pending.

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 10:43 AM

Funny thing - Where are the retards at? Nice of Brownstoner putting this diddy on here on Friday before Memorial Day. Remember a year ago "The What NY Magazine" story? How time flies when you're having fun!

The What (Tick.. Tick.. Tick..)

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 10:52 AM

Years ago, we opened a HELOC; now we owe more on our (paltry, by today's standards) mortgage principal than the day we bought our house 21 years ago. We will pay it off when we are 72. Credit is overrated! If we had simply lived within our means, without heat or a car, we would be able to pay it off when we were still young whippersnappers of, oh, 65 or so!

Admiring Mr. B's financial candor (between him and the NY Times reporter in last week's Times mag, I think we are over that particular social taboo),
blb

Have a nice weekend with your radioactive popcorn and Abilify, What!

Posted by: Brenda from Flatbush at May 22, 2009 10:53 AM

"Credit is overrated!"

Not anymore!

"Have a nice weekend with your radioactive popcorn and Abilify, What!"

You too!

The What

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 10:56 AM

"Credit is overrated!"

Not anymore!

"Have a nice weekend with your radioactive popcorn and Abilify, What!"

You too!

The What

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 10:56 AM

"Put the Popcorn on a stick and hold it out the window! The heat from the Mutant Asset Bubble collapse will pop that shit in no time!"

LMAO! Peace.

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 10:59 AM

Its only just begun Mr. B. Commercial loan resets, or calls, this summer through 2010, and the like will bring all the over-priced BS in Brooklyn and NYC down. Not to much the true condo inventory of probably close to 15k that will be dumped.

You see I don't actually enjoy this, but for the one simple fact it hopefully puts 99% of the RE agents/brokers out of business. These people are a reason the process will only be more painful in NYC.

Posted by: goodoleboy at May 22, 2009 11:23 AM

Oh yeah, Its already been said before, but lets think about it?.. You've lent tons of people money AND all of the sudden lots of those people have stopped paying you. Its random, no rhyme or reason, good credit score or bad. So, let me think? Should I just keep rolling the dice and hope Mr. B gonna make it in dis hard time? Or just pull the plug before he and everyone else draws down fully before they go bust?

Before posting STUPID rants about how your awesome property is dragged down by "Bed Stuy", use some commen sense and think about the logic of the bank...

Posted by: goodoleboy at May 22, 2009 11:27 AM

We received the same letter several months ago from Chase, basically saying they were freezing our HELOC because our house was valued to low. We knew the value estimate was way off, and found out that the bank was lumping houses together within a 10 mile radius! We really needed to keep access to our HELOC this year so we bit the bullet and paid for their appraiser to come (yes the bank assigns you an appraiser). Luckily the appraisal came back high enough to unfreeze our HELOC. So if you really need it, might be worth the hassle.

Posted by: mdmh at May 22, 2009 11:41 AM

After the intial post, I contacted our mortgage broker, whom I trust dearly thier response was:

" Chase is beyond a nightmare to work with so I would strongly advise avoiding them as they are not closing any of the loans they are originating. I have a number of friends who had worked there for years and left since they couldn't get their loans done."

Posted by: OTIS at May 22, 2009 11:45 AM

"Before posting STUPID rants about how your awesome property is dragged down by "Bed Stuy", use some commen sense and think about the logic of the bank..."

Wow like goodoleboy! Very nice!

The What

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 11:45 AM

"Hey BHO go to Costco and load up on some popcorn and a nice lawn chair! The mushroom cloud is going to be real pretty!"

"Put the Popcorn on a stick and hold it out the window! The heat from the Mutant Asset Bubble collapse will pop that shit in no time!"

You broke off some classic lines today, my man.

Posted by: East New York at May 22, 2009 12:17 PM

"Homeskillet." I officially love the What.

Posted by: talknerdytome at May 22, 2009 12:18 PM

You broke off some classic lines today, my man.

Posted by: East New York at May 22, 2009 12:17 PM

Wait until this Fall...

""Homeskillet." I officially love the What.

Posted by: talknerdytome at May 22, 2009 12:18 PM"

Thanks but the Retards make it all possible! They just stand there while I punch them in the face!

The What

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 12:34 PM

HELOCs are viewed as one of the riskier loan exposures, and JPM/ Chase is trying to cut its exposure to these loans. I guess they'd rather just use a blunt instrument and get their exposure down more quickly than go through case by case and make sure they're getting it right every single time. Add to that the fact that mortgage-related businesses have been overwhelmed recently by the volume of refis. Unfortunate for those whose lines are getting cut but makes sense from a business perspective.

Posted by: woodys at May 22, 2009 12:44 PM

If the government did to the banks what banks are doing to their
customer the borrowers) It would be over for the banks.
Its great that the banks decide to restrict lending and credit
just when its really needed.

Posted by: MRivera at May 22, 2009 1:01 PM

My guess is the appraisal will be way lower than you expect. That's what happened to us with Citibank. They based our appraisal on an apartment half our size that happened to be two blocks away.

When the banks want to lend again, voila, all the appraisals will magically go up.

Posted by: Brettson at May 22, 2009 1:08 PM

People always complain about nonsense and stupidity of government workers. Well, here is perfect example of how the wonderful profit-making corporate world is cutting off its own source of income.... acting very bureaucratically
(all probably with non-union workers of course).
Very well-paid over rewarded MBA's and the like (lots of top IVY league college grads) propably sent a 100 emails and had tons of meetings to come up with this great policy to cut of a source of revenue for them. And next year they will give them a bonus for doing so.
I so love capitalism. It is so efficient.

Posted by: Petebklyn at May 22, 2009 1:32 PM

Banks always shrink credit in a recession. More banks would fail if they didnt.

Posted by: woodys at May 22, 2009 1:34 PM

Hey BHO! I think you might have missed my very late reply to your comment about buy now or wait in a thread two days ago. Here it is, curious what you think:

BHO, every calculation I do shows us saving money if we buy now.

Example: House is $425,000 now. With 10 percent down and interest rates at 4.9 percent, the monthly mortgage payment is $2096.

If the interest rate goes up to 7.0 (reasonable -- this was the rate in July '08) and the price comes down to $350,000, it is slightly more expensive at $2096 a month.

If the interest rate goes up to 12.0 and the price comes down to $300,000, the monthly mortgage jumps to $2777.

We can't afford that.

Posted by: mopar at May 22, 2009 2:10 PM

Arg, keep forgetting, mortgage in first example is 2032.

Posted by: mopar at May 22, 2009 2:10 PM

Everyone is very jolly and amusing today.

Posted by: mopar at May 22, 2009 2:18 PM

mopar -- don't take out a mortgage at 12%. Renting is almost certainly going to be an option than a 12% mortgage.

Also, if you have 10% on that 425k house now, you should be able to have 20% by the time it gets down to 300k. And you are going to need 20% anyway, because you aren't getting a mortgage with 10% down.

Posted by: northsloperenter at May 22, 2009 2:49 PM

Morgan Stanley froze my HELOC claiming my credit rating had gone down since I first opened it. Since my credit rating is 762, I thought that was pretty bogus. In order to appeal, I would have to submit reams of paper as if they never vetted me before. It's quite annoying as I had planned to use it for some repairs. My understanding is that all the financial institutions are using any excuse to lower their debt ratio and that there's no rhyme or reason to their freezing HELOCs.

Posted by: coppermaven at May 22, 2009 2:52 PM

Mopar:

While your calculations are correct, I have to disagree with you.
I'd rather buy at $350K with a 7% rate than $425K with a 4.9% rate. Once you closed, the initial loan amount carved in stone while the interest may change over the year.

Nowadays we are in a situation where both property prices and interest rates are low. So yes, you should take advantage of it.

I heard that the rates may go up starting mi-June though ...

Posted by: lostintranslation at May 22, 2009 3:08 PM

My understanding is that all the financial institutions are using any excuse to lower their debt ratio and that there's no rhyme or reason to their freezing HELOCs

Oh yes there is... The funny thing is the retards don't get it, it's fucking over! The party is over and everyone is in scramble mode and code blue. Lookie here dumbasses!

http://www.bloomberg.com/markets/rates/index.html

Look at the 10 and 30 Treasures! The Foreign Central Banks and the Primary Dealers are saying "NO Mas" to US Debt and looking to unload very quickly! What does it mean for you???? A big Mushroom cloud where your "equity" used to be! Buh bye Retards thanks for the shits and giggles...

The What

Someday this war is gonna end..

Posted by: Return of The What at May 22, 2009 3:08 PM

"...the bank was lumping houses together within a 10 mile radius!"

They see what's coming and are thinking ahead. Chase is on the cutting edge of what all other banks should and will start doing: hitting the risk panic button.

"...they'd rather just use a blunt instrument and get their exposure down more quickly than go through case by case and make sure they're getting it right every single time."

It's called fear. Fear is quite appropriate to balance out all the greed and deceipt of the recent past.

"BHO, every calculation I do shows us saving money if we buy now."

Why are you holding the savings balance constant? You can outsave interest rates (they won't go up THAT quick - if so, instant armeggedon!). More money down on a cheaper house can equal the same monthly payment or less. Rerun your numbers with a growing savings account and a price of $212,500, half off (12% would definitely do this!).

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 3:12 PM

Thanks, North and Lost.

Lost, we could put down 20 percent but need cash reserves for repairs and emergencies. Also, we don't want to wait ten years to buy a house. We are old.

Posted by: mopar at May 22, 2009 3:15 PM

"we don't want to wait ten years to buy a house. We are old."

Do you want to retire?

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 3:18 PM

One more comment: Higher interest rates will self-cancel the higher monthly payment effect because they will help to further reduce the fundamental price (affordability) and thus principal.

Good weekend.

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 3:23 PM

Mopar:

Try to lock your rate soon even if you haven't found the property you want to buy yet. The low rates may be over very soon ...

Posted by: lostintranslation at May 22, 2009 3:26 PM

Okay one more comment: rates are inversely proportional to prices. I'd wait for higher rates until Case-Shiller stops falling (higher rates will add to the decline, not take away and definetly NOT have no effect at all).

Common guys! Stop eating the sheepfeed and stop drinking the koolaid. Get the brokerthink out of your head. Do the excel sheet.

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 22, 2009 3:32 PM

"deceipt"--this is an interesting new word you have invented BHO. Combo of Deceit and Receipt? Do deposit, no return!

Posted by: wasder at May 22, 2009 3:34 PM

BHO, I agree higher rates will result in lower prices, but if you look at my calculations for this hypothetical house, it shows our monthly payment stays at or below $2,000 only with a very low interest rate. ($2,000 is our max.)

We're not retiring. We are getting married and hopefully having a kid and we are in our 40s. We need to get on with life. We don't have ten years to wait.

Lost, how can we lock in a rate if we're not in contract yet?

Posted by: mopar at May 22, 2009 3:44 PM

Mpoar:

My bad, I meant put in your application asap then lock your rate once in contract. You can send all your documents (paystubs, W2s, ...) to the bank to speed up the process before getting in contract.

Posted by: lostintranslation at May 22, 2009 3:56 PM

I am in the middle of a refinancing and things are a little different from a purchase. I got confused.

Posted by: lostintranslation at May 22, 2009 3:58 PM

Thanks, Lost.

Posted by: mopar at May 22, 2009 4:01 PM

" Stop eating the sheepfeed and stop drinking the koolaid. Get the brokerthink out of your head. Do the excel sheet."

"One more comment: Higher interest rates will self-cancel the higher monthly payment effect because they will help to further reduce the fundamental price (affordability) and thus principal"

BHO fire up the grill and get the Corona's ready. The retards are not done yet! Mopar is a great example of the insanity encrusting the Assheads minds!

"You can outsave interest rates (they won't go up THAT quick - if so, instant armeggedon!)"

Eh BHO you may want to pull out the Radiation suits for you and your family.

Here Retards keep your eyes right here..

Government Bonds

http://www.bloomberg.com/markets/rates/index.html

Peace goes out to Team Bear (We go Hard)! Peace goes out to my Brownstoner peep's and a great big Fuck you goes out to the retards, stupid motherfuckers!

The What (Coming down the court)

Someday this war is gonna end...

Posted by: Return of The What at May 22, 2009 4:01 PM

Lost, where did you hear rates may go up in June? Do you know why or why then? Thank you so much!

Posted by: mopar at May 22, 2009 4:02 PM

What, you are currently working as a real estate agent and telling people not to buy? Very confusing.

Posted by: mopar at May 22, 2009 4:12 PM

Mopar:

A friend of mine works for a large bank in NYC. He told me the mortgage rates are going to go up starting mid-June. I then asked my mortgage specialist who told me that the rate that I have is still good for two weeks. Well I cannot assure you that it is true. But I trust my friend.

I just checked Bankrate.com:
http://www.bankrate.com/finance/mortgages/mortgage-analysis.aspx

Posted by: lostintranslation at May 22, 2009 8:49 PM

Thanks!

Posted by: mopar at May 23, 2009 12:18 AM

Mopar, I think they'll go down again. Raising and lowering them moves the markets. Dunno if they'll be this low... but prices will drop -- doesn't that make your downpayment go farther? Math not my strong suit at 1AM. Neither are financial markets. Perhaps I should not pontificate.

Anyways, I hope you guys find something you like! And we could use you on the playground :)

Posted by: Heather at May 23, 2009 1:17 AM

"if this means brownstones are sold for all-cash only, we're staring at 90% off"

I doubt that banks will stop offering mortgages, but, if they did, it would likely lead to the return of purchase money mortgages (the seller taking the mortgage) or other creative financing, common in the bad old days of redlining

Posted by: Bob Marvin at May 23, 2009 8:11 AM

Mopar:

Good luck on your house hunting. If you need any help please let me know. I may be able to provide some input depending on the neighborhood. Also I can put you in contact with my mortgage specialist.

Posted by: lostintranslation at May 23, 2009 9:08 AM

brownstoner - I'm sorry but I don't buy your logic. You need to pay off that heloc and not rely on borrowed money to finance. You are in debt, so hoarding cash doesn't make sense. Would you borrow from your heloc to put it in a savings account? Probably not. Set aside a reasonable emergency fund - a few thousand dollars - and get hard core about paying off Chase. Pay off your credit cards and close them too. Then save up for stuff you want.

Posted by: Uppergeorgetowner at May 23, 2009 11:32 AM

I would probably do the same as Uppergeorgetowner is suggesting. However it really depends on what Brownstoner has in mind. He may have other plans with the money he's trying to save. In my opinion, if you are planning to keep your property for many years, there is no point holding the cash and paying so much interest in the long run. If you have cash available try to pay off your loan faster by adding to your principal. If you are refinancing and have enough cash try to bring down the loan amount so that you can meet the 80% LTV and remove your PMI (assuming you have to pay PMI).

Posted by: lostintranslation at May 23, 2009 12:15 PM

Thanks, Heather. Of course, you're right, prices may go up and down again. Hadn't thought of that.

Say, any chance you're going to buy in Bed Stuy or Bushwick and join us?

Posted by: mopar at May 23, 2009 5:07 PM

I mean, interest rates.

Posted by: mopar at May 24, 2009 10:40 PM

Just got back from a getaway and read through all the posts above.

nothing new here, banks aren't lending as much and they're balancing their sheets by cutting back where they can.

It is quite annoying though to have this assclown buffoon chiming in every 5 posts with a non-sensical rant about how the market is falling and we are all going down and everything is over and so on and so on ad nauseum.

Give us a break from your musings from momma's basement.

I don't know what's worse, this talking donkey or his obsequious toadies supporting the psychosis.

cut and paste away oh master of the Turrets fueled tirade.

Posted by: Legion at May 25, 2009 11:30 PM

I'm still lmbo about momma's basement--
Actually' I can even see it from waaaay over here!

Yes, the sky, I mean the market, has fallen. But it's not
doing a Humpty Dumpty. It will bounce back; not fall to pieces. Sorry guy. It may take longer than WE would like; but it's not the end of the world that YOU would like either.

Sorry to disappoint--

Sounds more like sour grapes, and too much time on his hands.

If he quickly buys (@ that great new discounted price) he can then move out of the basement office, and put his computer in a non rental apartment.

Happy hunting!

Posted by: brookland at May 26, 2009 3:49 AM

« Open Thread PS 133's Most Desperate Hour »

May 22, 2009

Chase Turns Off Our Spigot—For Now at Least

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