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Why Low Mortgage Rates Are A Problem

By OurBroker   Follow   Wed, 6 Jun 2012, 9:41am   3,052 views   22 comments
In Silver Spring MD 20902   Watch (1)   Share   Quote   Permalink   Like   Dislike  

Low rates are great -- but only for borrowers who can get through the application process.

Ben Bernanke says even borrowers with 20 percent down are having a hard time getting a mortgage.

Low rates suggest little economic expansion or confidence in the economy. In a strange way rising mortgage rates might actually be a sign of economic recovery.

http://www.ourbroker.com/news/why-low-mortgage-rates-are-a-problem-060412/

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1. tatupu70 Follow Befriend (3) 15 threads 5,718 comments

   1   9:55am Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Low mortgage rates are a symptom, not the problem.

2. Call it Crazy Follow Befriend 249 threads 2,915 comments

   2   10:06am Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   From the article above: "Bernanke said one recent survey of bank loan officers found that even with 20% down many lenders still will not approve qualified borrowers." One word, CONFIDENCE!!! It shows that even the banks are concerned that the housing market has at least another -20% to drop and they don't want to be "holding the bag" on the underwater loans!!

3. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

   3   10:07am Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Sure. A very visible symptom. I've been in the process of refinancing a property and it's not easy to get the symptoms....

4. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

   4   10:08am Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Or, the banks are seriously worried that if a lot of loans are financed at 3 and 4 percent then the refinancing business will be dead for the next decade.

5. Call it Crazy Follow Befriend 249 threads 2,915 comments

   5   10:12am Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   OurBroker says Or, the banks are seriously worried that if a lot of loans are financed at 3 and 4 percent then the refinancing business will be dead for the next decade. I don't think its that, the banks borrow money a near zero%, so 3 or 4 percent isn't bad. They are more concerned with the cascading defaults when the mortgage holders stop paying when they go underwater....

6. tatupu70 Follow Befriend (3) 15 threads 5,718 comments

   6   12:29pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says I don't think its that, the banks borrow money a near zero%, so 3 or 4 percent isn't bad. They are more concerned with the cascading defaults when the mortgage holders stop paying when they go underwater.... More likely, it's the usual overreaction. Underwriting standards went to crap in the 2000s so now in response, banks are super tight. Well qualified borrowers aren't having any problems getting loans. It's the marginal borrowers that are having some troubles.

7. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

   7   12:48pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   >>>Dump it while you still can.... or more eloquently stated: Really? You're familiar with the property? You have a better place to put the money?

8. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

   8   1:24pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   >>> in your checking account. The house throws off a positive cash flow and tax benefits. The tenants have been there since the 1990s. If we sell we would face capital gains taxes and the necessity of finding an alternative investment. Putting money in a checking account does not seem appealing, refinancing does.

9. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

   9   2:03pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   And what are the tax benefits of a checking account? Rental rates are not falling. Check the numbers from Reis or Axiometrics.

10. swebb Follow Befriend (3) 29 threads 505 comments Denver, CO

    10   2:12pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   OurBroker says he house throws off a positive cash flow and tax benefits. The tenants have been there since the 1990s. If we sell we would face capital gains taxes and the necessity of finding an alternative investment With significant (?) positive equity, positive cash flow and steady tenants...why are you having trouble refinancing? Are you trying to pull cash out? Is your other income low enough that the debt to income ratio looks high?

11. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

    11   4:34pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   The property was bought in the 1980s. In the Washington suburbs prices have gone up since then. It's not a problem to refinance but it is tedious and there are a lot of requirements for paperwork. As to the matter of rental rates, the Financial Times reports that "for the first time in decades, it is cheaper to buy a home than rent it across much of the US. Home prices are down 35 per cent from their 2006 peak and mortgage rates are at record lows. Even so, residential vacancy rates have dropped, rents are soaring and investors are driving up prices for buildings in many US cities." See: http://www.ft.com/cms/s/0/ae4c8274-a35a-11e1-ab98-00144feabdc0.html#axzz1x3j23jpt

12. BoomAndBustCycle Follow Befriend 28 threads 353 comments

    12   5:25pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Build New For Less Than Used says That's a lie and you know it. Why are you lying about rental vacancy rates? Rental vacancy rates are at a MULTI-DECADE HIGH. Why are you lying to the public? do you pull those charts out of your ass? I don't see any 9% vacancy rates in Los Angeles... or nationally for that matter. Did you cherry pick that unlabeled vacancy chart from the one city in the US with the highest vacancy rate? (I'm sure you did). This article refutes your unlabeled chart above: http://www.reuters.com/article/2012/04/04/us-usapartmentmarket-idUSBRE83305720120404

13. jaz5 Follow Befriend 3 threads 32 comments

    13   5:32pm Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Lots of vacancies in my area of Orange County... infact my rent has not increased this year and in addition there is a new 1bd unit in my complex that was for rent - initially asking was $1100 and then they dropped it to $1040 because the manager said he was finding it difficult to attract buyers with decent credt...a lot of people have SHOT credit and shaky job history.

14. BoomAndBustCycle Follow Befriend 28 threads 353 comments

    14   5:36pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Build New For Less Than Used says Stop your corrupt filthy lies. That's the US Census Bureaus data. You lying, conniving, corrupt realtors, mortgage pimps and other assorted losers are going down. And going down hard. Well whoever is collecting this data Reuters source is DRAMATICALLY different than the US Census Bureau's data... Reis claimed 4.9% national vacancy rate... nearly half what the census estimates. I'm surprised you trust a government entities statistics though... Personally i think it's probably better to take the average of multiple sources than trust one entirely. I'll have to research this more.. But you go ahead blindly putting all your faith in the Governments census data. "Lies, damned lies, and statistics"

15. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

    15   5:36pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Jaz -- there will certainly be local areas with lower rents. The broad reason for higher rents nationally is that the population is growing, many people have lost homes through foreclosure and new home construction remains minimal.

16. BoomAndBustCycle Follow Befriend 28 threads 353 comments

    16   5:46pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Our Broker Is a Liar says REIS is a NAR organization. The aftermath of the constant stream of lies from you people over years and you have the gall to stand by the lies once more? You people are so pathetic. don't get mad at me... I don't know how these TWO charts can co-exist.. somebodies numbers are way off...

17. BoomAndBustCycle Follow Befriend 28 threads 353 comments

    17   6:50pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Stop The Lies says That's apartment vacancy, not rental vacancy rate what's the difference? Does the Census Bureau have a chart for Apartment Vacancy?

18. tdeloco Follow Befriend (2) 11 threads 218 comments San Jose, CA

    18   1:39am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Stop The Lies says That's apartment vacancy, not rental vacancy rate. Smarten up and stop lying to the public. I just want to clarify what you're saying... Rental vacancy = apartment vacancy + ???home rental vacancy??? Are commercial rental vacancies excluded?

19. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

    19   3:48am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   >>>Rents are LOWER nationally. Source: 2012 Federal Reserve Report To Congress http://www.federalreserve.gov/publications/other-reports/files/housing-white-paper-20120104.pdf

20. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

    20   4:29am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Obviously the chart above shows that the "multi-decade high" for vacancies occurred several years ago.

21. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

    21   4:58am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Obviously the chart shows that vacancy rates have fallen from multi-year highs and are actually below 2004 and 2010 vacancy levels.

22. OurBroker Follow Befriend (15) 61 threads 174 comments Silver Spring, MD OurBroker's website

    22   2:42pm Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   >>>In May, rents were 6.0 percent higher than they were a year ago, up from the 5.4 percent Y-o-Y rent increase in April, and 4.8 percent in March.[1] In San Francisco, rents rose 14.4 percent Y-o-Y in May; Oakland, Miami, and Denver rents are also up over 10 percent Y-o-Y. Of the 25 largest rental markets in the U.S., only in Las Vegas did rents decline Y-o-Y. http://info.trulia.com/trulia-price-and-rent-monitor-may-2012