patrick.net

SQT?

DinOR,

Those mortgages have been around for about 6 years in the UK, we didn't have one as they had just started up at the time, but I loved the idea - I think the US one is slightly different to the one offered in the UK - or at least the one offered 6 years ago - I think it could be fixed then. The only thing that confused me in the article is about how the said deposit your salary into the account, and withdraw your expenses, but it almost implied your mortgage payment had to come for somewhere else - maybe I was reading it wrong.

One thing people should be sitting up and noticing is not only is this effectively giving you a higher interest on your savings (by saving you the extra interest payment you would have to make) but you don't pay any tax on the "interest savings" as opposed to having to pay tax on any interest earned from a savings account.

One thing I would like to see is a few more companies offering this product - to make the competition a bit better and maybe the terms too.

the = they

Claire,

I had heard that the UK was well ahead of the U.S in this regard. I suppose had you planned to stay there it may well have made sense. To me, this is one of THE most important debates we should be having on this blog!

1. Extent of "the damage".

2. Assessing proper entry point.

3. Method of finance.

Virtually no one in the U.S addresses client's debt. Tons of CPA's to deal w/your tax issues. Page upon page in the phonebook for insurance people to contend w/your liabilities and then there's my crowd, the investment guys. Yet when it comes to dealing with debt well........ you're on your own! Now we have a fledgling start on what could be a good thing. That's why I was imploring Allah to "not throw the baby out with the bath water"!

Allah,

I'm absolutely tickled pink that your sis' was able to get out of debtors prison. For me it's like a scene out of "Cool Hand Luke" for crissakes. Can we talk about the other 99.9% of us though!

Yesterday HARM had a great quote from the CEO at Indy Mac Bank touting that there was 51% of homeowners "equity" left (that is, at TODAY's hyperinflated values) and he wasn't going to stop until he's spoken for that measly percentage as well!

What we could be looking at is the end of "spread banking" as we know it! These are exciting times indeed! Especially considering their embracing 40 and 50 year loans! WTF? Come over to the "dark side" with me, embrace your inner rage!

OK, regarding the chinese lucky number 8, here is the explanation.

China has many elaborated and highly-developed systems of astro-numerology. I am surprised that people like certain numbers only because of how they sound.

I thought your lucky numbers tie to your birthday.

Allah,

Oh, I'm in TOTAL agreement! The guys I met last night (after speaking at length) so much as admitted that volume is absolutely drying up. Many of the MB's that came in at the peak of the RE-FI CRAZE have been bounced out on their ear!

What is more telling is that during "da boom" these types of loans were no where to be found on the American financial landscape! Pffft. Why? We've reached a permanently high new plateau! Why we'll have these FB's lined up around the block until we retire early! Many of these MB's were drinking their own kool-aid!

Well now that the wheels have come off this thing the smart ones are looking at new "products" from beyond our shores in an effort to keep their careers viable. Trust me, I HATE taking up with MB's, really I do. But imagine you have kids, kids that are buying their own homes. Would you rather see them on HARM's definition of affordable (meaning zero down and then serial re-finance from one toxic loan to another) or see them on a path to where mortgage payments become a thing of the past while they are still in 30's?

It's a leap of faith for me too! I've never done this type of thing before but the products have been "tested" in the UK and Aussie markets. At this point I'm ready to try anything.

DinOR, Randy H,

If there's a mortgage product out there that can actually help the BUYER for a change vs. banks and/or Casey Serins, hey, I'm all for it. However, given the timing and vagueness of the particulars, I --like Allah-- am a tad skeptical until convinced otherwise.

Banks & mortgage lenders are generally not in the business of "charity" and if they are eager to push something "new & improved" (especially now as the tide is turning), I must assume it's because it helps THEM until/unless I am convinced otherwise. The Bankrate article Allah posted (and granted we're only talking one superficial relatively math-free blurb) left me with more questions than answers. For instance:

1. If the goal of mortgage accelerator loans is truly to pay off the loan more quickly, why are they structured as 30-year ARMs with a 10-year (!) Interest-Only period? Why not just set the maximum term to 10 or 15 years and make the minimum payment an amortizing one?

2. Based on the interest rate caps (21% for one of the 2 loans fetaured) and relatively low FICO scores required (660/680), can we assume you will be paying a considerable premium (points) over prime/LIBOR, plus significant kick-backs going to the originator?

If you can answer the above and demonstrate that these loans actually have a realistic chance of shortening the loan life and saving the buyer money over your 15/30-yr. FRM, then I'm all ears. Until then....

I remain skeptical.

DinOR, all you need to do to start a thread is go to main page & login (you have to be logged in, which you currently are not). Once you're in, just click on the "Site Admin" link, which will magically appear on the right, under "Meta". Click on "Write" and you're off to the races!

If you forgot your pwd, email me with whatever you want or click on "Lost your password?" to have it re-sent.

New Thread: Mortgage Accelerator Programs: Bunk or Freedom?

(I did this one for you DinOR. Please post the details of the debate in your first comment.)

By the way, I don’t think these 40 or 50 year loans are going to get very popular here…there is more incentive to rent a house instead.

There's this strange assumption that The Sheeple are rational or good at math. Besides, you could just sell the 40/50 year loan as an investment. Or, if all the banks stop offering 30 - then it won't be a choice.

END of Troll Discussion

Admins & Authors please post your conclusions:

Mine are that we should systematically unban all previously marked Trolls, and then reban as necessary.

Automatic bans should result from:

1. Spam and/or gratuitous advertising
2. Automated annoyances (really a form of spam), like some users have been known to script/macro in the past.
3. Overtly inappropriate material. If you need to ask what is "overtly inappropriate", then the answer is "yes, it is".

I concur that SQT's definition of "troll" has somehow been twisted to mean banning all dissenting opinion and this is completely untrue and always has been as long as I've been here.

What's more, I would argue that very few people have actually been banned. When you read some of the opinions here, you get the impression that we conduct regular purges against honest dissenters, which is completely ridiculous. In fact, the only few trolls that actually HAVE been banned easily exceeded Randy's "abuse" conditions above.

Personally, I would prefer that we NOT un-ban obnoxious, repetitive asshats like MP, CuriousCat, Jukubot, etc., but if this is the majority opinion, then I won't oppose it. Just don't be surprised if we don't start getting spammed by these juvenile idiots and have to re-institute the ban soon.

Randy,

I agree, but would say repeated violation of the "inappropriate" materials is necessary for banning. Say, perhaps 3 separate instances of erasure for inappropriateness.

A very savvy hedge fund trader client (multi millionaire high school drop-out type) tells me that having a mortgage of any type is a bad financial investment.

@ SFwoman and Skibum: thanks for the good wishes!
It's an old recurring problem (the back) and comes from being 'swaybacked' - ie I walk around all the time with ma old Ts & A sticking out, leading to compression of the lower spine. I haven't had a yoga class in a month (great help in both posture and stretching) but have one planned for monday, once the muscle spasms have subsided.

And, no, our 'vacation' was in a bone-jarring F350 wheelchair lift-eqipped van, over 3000 miles of decomposing Southwest roads.
Add to that the stress of finding suitable hotel rooms for my sister-in-law who is wheelchair-bound due to advanced MS.
In Flagstaff we had to scout out 7 different hotels, all offering 'hadicapped access' rooms, with differing and often hilarious interperations of 'handicapped access', despite having booked rooms a month earlier.
And, what exactly is meant by 'easy paved trail' in most National Parks... don't do the Lower Emerald Pool trail in Zion, with anyone not capable of propelling themselves in a wheelchair, despite what the Rangers may tell you - its scary for the wheelchair user and much too up/down for the wheelchair pushers.

Throw in the fact that all the in-laws are 'fussy' eaters - ie nothing spicy/garlicy thankyou, so the whole vacation fuelled courtesy of Denny's and the like.

Anyway, the point being that the whole thing pretty much beat the tar out of us, so no surprise that our bodies gave up in surrender as soon as the In-Laws got on the plane back to the UK. They had a great time, we're knackered....;-)

DinOR: I get your point re:trolls, but I'm beginning to think of perma-bulls as some sort of endangered forest creature like the Ivory Billed Woodpecker or (bigger and out of the forest) the American Bison.
Once they were plentiful and now they're not.
As long as they don't become too agressive then they are free to roam here. If they stray beyond the park boundaires, then, like the buffalo in Yellowstone, they're fair game to all comers

'iconoclast' literally means 'one who breaks icons' from the Greek, i think... referring originally to the movement against icon worship or idolatry that sprung up in eastern churches etc. (i'm willing to be corrected on the finer historical detail by anyone who wants to google it.) it now means anyone who is 'contrarian', i suppose, or breaks with commonly held ideas or traditions. 'postmodernism' was described concisely but perhaps too narrrowly by lyotard as 'an incredulity towards grand metanarratives', which is a philosophical form of iconoclasm by defn. i suppose i am a postmodern socia1ist iconoclast, altho in my circle that's more or less mainstream... sociology ruins you for any good work, sigh

DS

I'd call myself a neomodern contrarian amongst iconoclasts. Or is that an iconoclast trapped amongst neoregressive postmodernists?

CR

I agree that wages are strengthening. This is supported by national, state and Bay Area data. The Bay Area real wages have grown the past couple quarters stronger than any time since 2002.

However, that follows a long period of *falling* median real wages. And the key word here is median

You well know the old joke: Bill Gates walks into a bar and by average salary everyone is instantly a millionaire. But the median salary doesn't budge.

The FT had a full page opinion piece yesterday with lots of data, charts and fact references regarding the US' languishing middle class income. The fact his those private equity firms you're talking about enrich only the top 15% (I'm being very generous). Meanwhile the rest are left working harder for less of the pie. Rising productivity. Rising GDP, corporate profits, global share. Falling real wages.

These are the fundamentals that will deflate the housing bubble; here and elsewhere. But it won't be any 50% correction in 6 months like some folks continually insist. It will probably take longer and be less pronounced.

I’d call myself a neomodern contrarian amongst iconoclasts.

i'd say so...

Or is that an iconoclast trapped amongst neoregressive postmodernists?

what about unreconstructed apologists for anarchic libertarianism...

You well know the old joke: Bill Gates walks into a bar and by average salary everyone is instantly a millionaire. But the median salary doesn’t budge.

that's

wow, managed to trash an entry just from the keyboard...

You well know the old joke: Bill Gates walks into a bar and by average salary everyone is instantly a millionaire. But the median salary doesn’t budge.

that’s a good one -- i was only just thinking the boring old line about a statistician drowning in a lake of average depth 4"...