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Assumable Mortgages For EVERYONE

By BoomAndBustCycle   Follow   Sun, 30 Sep 2012, 5:39pm   1,454 views   21 comments
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I don't see this being necessary for another 5-10 years. But I do believe that the trick to prop up home prices when interest rates begin to rise again, will be a law passed that allows new buyers to assume the original buyers interest rate and the remainder of the original buyers loan.

This won't really help Boomers who have their home paid off in full that much, but it will help buyers in the first 15 years of their 30 year fixed sell for a reasonable price by selling the interest rate along with the home.

This is already an option with all FHA loans, so I think it will only be natural to extend it to private loans via a retroactive law in the future.

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1. Patrick Follow Befriend (54) 5,191 threads 6,158 comments 46 male Menlo Park, CA

   1   6:08pm Sun 30 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   BoomAndBustCycle says This is already an option with all FHA loans I did not know that. So if you buy someone's house and it has an FHA loan, you can just assume all the terms of the loan? Seems like a flaw in the system, encouraging people to buy with FHA terms and quickly sell with a locked-in low interest rate sponsored by taxpayers.

2. BoomAndBustCycle Follow Befriend 28 threads 351 comments

   2   11:49pm Sun 30 Sep 2012   Share   Quote   Permalink   Like   Dislike   Patrick says BoomAndBustCycle says This is already an option with all FHA loans I did not know that. So if you buy someone's house and it has an FHA loan, you can just assume all the terms of the loan? Seems like a flaw in the system, encouraging people to buy with FHA terms and quickly sell with a locked-in low interest rate sponsored by taxpayers. From what i have read, yes, no one talks about it now since rates are so low and keep falling. But if rates rise in the future i am sure you will see real estate listings advertising assumable fha loan at 3.5%! Have ultra low monthly payments with this assumable loan home. I wouldnt say its a quick sell scam.. More of a hedge against future higher rates that gives u the advantage of getting more money for your home high rate / low home price future scenario.

3. New Renter Follow Befriend (3) 13 threads 2,220 comments San Jose, CA Premium

   3   12:00am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   BoomAndBustCycle says This is already an option with all FHA loans, so I think it will only be natural to extend it to private loans via a retroactive law in the future. That assumes the buyer qualifies. What are the chances the standards tighten up? Yeah, I know :(

4. HHB Follow Befriend 1 threads 1 comments

   4   4:19am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   I know people who did this in the early 80s when rates were sky high. I also agree we will see it again when rates increase.

5. 37108605 Follow Befriend 1 threads 1,055 comments

   5   4:27am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   HHB says I know people who did this in the early 80s when rates were sky high. I also agree we will see it again when rates increase. I also saw LA real estate in the 80s and this is not exactly what happened.

6. 37108605 Follow Befriend 1 threads 1,055 comments

   6   4:27am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   New Renter says BoomAndBustCycle says This is already an option with all FHA loans, so I think it will only be natural to extend it to private loans via a retroactive law in the future. That assumes the buyer qualifies. What are the chances the standards tighten up? Yeah, I know :( AND that is where it all falls apart because so few qualify for ANYTHING today and that is why housing will continue to collapse. THERE ARE NO QUALIFIED BUYERS. And the ones who are qualified have their heads on straight.

7. 37108605 Follow Befriend 1 threads 1,055 comments

   7   4:32am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   Patrick says BoomAndBustCycle says This is already an option with all FHA loans I did not know that. So if you buy someone's house and it has an FHA loan, you can just assume all the terms of the loan? Seems like a flaw in the system, encouraging people to buy with FHA terms and quickly sell with a locked-in low interest rate sponsored by taxpayers. There are specific qualifications behind taking over an FHA loan. First and foremost (which wipes out the majority of the public) is per FHA "Assumption of an FHA loan is a process where the responsibility of the mortgage is acquired by another person through “either Simple or Creditworthiness process.” according to FHA.gov." That is only one stipulation to taking over an FHA loan. It isn't just walk in the door like a Sec 8 recipient and demand your rights. It is 2012 and the game is entirely different. There are no more easy loans. Therefore the prices have no where to go but down and down and down. If one takes prices back to the mid-1970s before all this easy lending shite. This is just reality. There is nothing they can do to prop up a falling real estate object that is falling as a direct result of the force of fraud and greed.

8. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

   8   6:46am Mon 1 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   BoomAndBustCycle says But if rates rise in the future i am sure you will see real estate listings advertising assumable fha loan at 3.5%! Have ultra low monthly payments with this assumable loan home Banks are so greedy nowdays, what makes you think they will give this opportunity not to fleece mainstreet? If interest rates rise, house prices will decline. Why would banks want to throw a bone to main street if they have locked main street out of many of the best transactions already.

9. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

   9   6:47am Mon 1 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   HHB says I know people who did this in the early 80s when rates were sky high. I also agree we will see it again when rates increase. That was when bankers were your friend.

10. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

    10   6:49am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Reader says There are no more easy loans. And yet, between first quarter, 2011 and first quarter, 2012, prices have increased 27 percent yoy in Phoenix. 41 percent of purchases last month per Dr Housing Bubble were cash. And most of that is from big money.

11. 37108605 Follow Befriend 1 threads 1,055 comments

    11   6:50am Mon 1 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike   bgamall4 says If interest rates rise, house prices will decline. Slight correction When interest rates rise (AND THEY WILL) house prices will continue to decline EVEN MORE.

12. BoomAndBustCycle Follow Befriend 28 threads 351 comments

    12   9:27am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   Reader says bgamall4 says If interest rates rise, house prices will decline. Slight correction When interest rates rise (AND THEY WILL) house prices will continue to decline EVEN MORE. Reader I think there is a stronger chance we get sub 1% 30 year fixed mortgages and a bubble 2.0 before the next devasting crash in say 2025. I guess you could wait til then and u probably will... But makes more sense to ride the next bubble up and cash in on FED built bubble 2.0 before they destroy the value of the dollar altogether.

13. BoomAndBustCycle Follow Befriend 28 threads 351 comments

    13   9:29am Mon 1 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Reader says New Renter says BoomAndBustCycle says This is already an option with all FHA loans, so I think it will only be natural to extend it to private loans via a retroactive law in the future. That assumes the buyer qualifies. What are the chances the standards tighten up? Yeah, I know :( AND that is where it all falls apart because so few qualify for ANYTHING today and that is why housing will continue to collapse. THERE ARE NO QUALIFIED BUYERS. And the ones who are qualified have their heads on straight. Reader Its pretty easy, too easy to qualify for fha loans. What are you talking about?

14. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

    14   10:27am Mon 1 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   BoomAndBustCycle says Its pretty easy, too easy to qualify for fha loans. What are you talking about? You spoke the truth, but that will not make a strong housing recovery. There will be mass defaulting.

15. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

    15   10:32am Mon 1 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   BoomAndBustCycle says I think there is a stronger chance we get sub 1% 30 year fixed mortgages and a bubble 2.0 before the next devasting crash in say 2025. Crash will happen years before 2025.

16. 37108605 Follow Befriend 1 threads 1,055 comments

    16   10:42am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   BoomAndBustCycle says I think there is a stronger chance we get sub 1% 30 year fixed mortgages and a bubble 2.0 before the next devasting crash in say 2025. On interest I agree. Bubble 2.0 cannot happen because of what this mess has caused. I see a major crash not a mini-crash A CRASE and way sooner than 2025. The economic numbers right now, the debt this crew has created is totally off the charts and cannot be paid back.

17. 37108605 Follow Befriend 1 threads 1,055 comments

    17   10:44am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   BoomAndBustCycle says Its pretty easy, too easy to qualify for fha loans. What are you talking about? You better go to the FHA site and read the fine print.

18. tiny tina Follow Befriend 2 threads 175 comments

    18   10:49am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   BoomAndBustCycle says I don't see this being necessary for another 5-10 years. But I do believe that the trick to prop up home prices when interest rates begin to rise again, will be a law passed that allows new buyers to assume the original buyers interest rate and the remainder of the original buyers loan. This won't really help Boomers who have their home paid off in full that much, but it will help buyers in the first 15 years of their 30 year fixed sell for a reasonable price by selling the interest rate along with the home. This only works if the old mortgage and mortgage rate combination is less than the new mortgage and mortgage rate combination. Why would someone take over a higher mortgage with a low mortgage rate, when they could buy it for a lower price with a higher mortgage rate? Unless you guys have all now agreed that prices are going higher in the near future.

19. BoomAndBustCycle Follow Befriend 28 threads 351 comments

    19   11:04am Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   tiny tina says This only works if the old mortgage and mortgage rate combination is less than the new mortgage and mortgage rate combination. Why would someone take over a higher mortgage with a low mortgage rate, when they could buy it for a lower price with a higher mortgage rate? Unless you guys have all now agreed that prices are going higher in the near future. Because in CRASH 2.0... If you think there was vandalizing and trashing of homes in 2007-2008 crash... Wait until crash 2.0.. People will be burning there homes to the ground out of spite. So people might be willingly to pay a little extra for a well-maintained owner-occupied home with a low rate... vs gamble on a crash 2.0 timebomb home at dirt cheap price.

20. New Renter Follow Befriend (3) 13 threads 2,220 comments San Jose, CA Premium

    20   11:44am Mon 1 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   BoomAndBustCycle says Because in CRASH 2.0... If you think there was vandalizing and trashing of homes in 2007-2008 crash... Wait until crash 2.0.. People will be burning there homes to the ground out of spite. So people might be willingly to pay a little extra for a well-maintained owner-occupied home with a low rate... vs gamble on a crash 2.0 timebomb home at dirt cheap price. At least the burned homes could be rebuilt to a modern design, with modern materials to modern codes.

21. tiny tina Follow Befriend 2 threads 175 comments

    21   12:16pm Mon 1 Oct 2012   Share   Quote   Permalink   Like   Dislike   BoomAndBustCycle says Because in CRASH 2.0... If you think there was vandalizing and trashing of homes in 2007-2008 crash... Wait until crash 2.0.. People will be burning there homes to the ground out of spite. So people might be willingly to pay a little extra for a well-maintained owner-occupied home with a low rate... vs gamble on a crash 2.0 timebomb home at dirt cheap price. Is this an analogy or literal? If literal, then you'd just be paying for the land and could build a new home. If it's an analogy, I don't get it. Anyway, if you think assumable mortgages are going to be a significant factor in the future of housing, I guess we'll just wait and see.