patrick.net

Yeah throw in some credit default swaps (CDS) gone bad and we will have ourselves a real party. Warren Buffet even said many financial inovations were Weapons of Mass Destruction.

Sorry for the double post, but I was thinking the Financials are all in a Mexican Standoff. BS pulled the trigger first and the gun jammed. The next guy to blink will likely get the bullets flying.

All I can say is find some good cover and bring popcorn. This will be one hell of a show.

jumbo rates are over 8%! and they post the 'bestest credit' rates on WF

https://www.wellsfargo.com/mortgage/rates

no wonder median is tanking so friggin fast, only poor people can afford to buy homes...wait that doesnt make sense...WTF is happening?

Citibank is quoting 12% for Jumbo 30-yr fixed in the Bay Area.

Either Citibank is going down, or it doesn't want to take on any more mortgage loans.

HK,

I love it. 8%!! That ought to do a thing or two about the fortress.

12%, even better.

the 8% is w/20% down payment per WF page.

It looks like 80/20 zero down is gone 4eva...what about 80/10/10 (10% down)? anyone shopping rates now?

I wonder when that 729k conforming limit will take effect and if it will make a difference... if it DOESNT make a huge difference the whole year 2008 is a disaster....

8+% jumbos are year 2000 rates....now prices should adjust back to that year...

seriously if you were lending YOUR OWN money to a homebuyer with good credit...what return would be attrative knowing house prices are tanking?

I would want 9% minimum and 30% down payment full doc before I even would think about it. Even though CD's are paying 3% they are safe...the risk premium needs to be re established BIG TIME here....thus we have majority of loans being govenment insured....I bet people who cant fake thier way into a government loan really do have to pay 12%-thus sales are 50% off permanently now.

Downpayments: its a whole new paradigm.

and what kind of dope would get a 12% mortgage when renting is half the cost of a 6% home loan(25% of a 12%?) ?! I can imagine if it was fraud and you got the whole down payment from some one else then you default it might make sense....or you are a flipvestor....

Is the rate for 30 YR FRM? Who needs a fixed mortgage nowadays?

Just get a cheap ARM! When it resets, cry LOUD to our lady president to get your rate frozen and call your bank to get your principal modified! :)

Not financial advice. I recommend financial responsibility, if it still means anything.

Gold is still falling in Hong Kong. Volume on GCJ8 is very light.

new word-

Fraudflation: When home prices skyrocket due to liar loans,rumber stamp appraisals, and other mortgage/lending fraud.

London opens... and gold drops even more.

(It is just fun to watch price actions.)

jumbo rates are over 8%! ... gold drops even more ... Citibank is quoting 12% for Jumbo 30-yr fixed ... "broad bloodbath in the credit markets," Citigroup said.

De-leveraging is a scary process - it is like watching the earth rotate backwards...

Or even just the Earth standing still.

Klatu: barada nikto.

so what IS deleveraging? is it paying off debt (by selling assets),and/or defaulting on debt?

only poor people can afford to buy homes

The truly rich. to paraphrase Patrick, pay cash. I would say that with the higher jumbo rates compared to sub $400k rates, only the poor can still stretch to hock beyond thier means. The rich will just have to settle for a house they can afford. No problem, just rent for a while. Soon the $750k home will fall in price and the nee-jumbo will not be needed.

I belong to a Credit Union. Rates were hiked just from yesterday, but

30 year fixed up to $500,0005.750%
30 year fixed up to $1,000,000

That was weird, never hit enter.
The price on that $1,000,000 is 6.125%
That is for no points.

Very strict lending standards as I stated.

Fraudflation! LOL

And all this time we've been trying to shoe horn this whole mess into existing terms? I haven't been tracking it so I can't believe Jumbo rates are that high. Then why were CAR/NAR/NAHB/CFC so adamant the levels be raised? Are they in such a state of shock and disbelief they actually thought...? Thought, WHAT!? I don't get it.

For those seeking "Jum-lo" (I wouldn't hold my breath) The article I saw on bankrate described all kinds of rules, regulations and stipulations. Looks like they finally figured out the whole equity-stripping/3rd income thing.

Sorry guys, OT, but this was a funny Freudian slip:

http://money.cnn.com/2008/03/20/news/economy/economic_indicators/index.htm?postversion=2008032011

The National Bureau of Economic Recession said the nation's economy went into recession from March through November 2001.

> God save us all.

Indeed. I think things will much worse before it gets any better.

I read an article yesterday that households are actually beginning to do something called "budgeting".

Racist losers (like the OB) will come out of the woodwork and start blaming "dem damn forreiners".

The Federal reserve's myth of infallibility will take a huge hit but eventually everything bad will get blamed on the "free market."

HelloKitty Says:
so what IS deleveraging?

In simple terms, it is paying off debt.

It also includes the phenomenon of getting out of investments which were made with borrowed assets. In the happy case, de-levering is fairly orderly, with profits from the investments being sufficient to cover the debt-service. At times like now, on the other hand, some investors are forced into de-levering when both the investment and the collateral for the debt are depressed - so liquidating either one is a losing proposition.

The other problem now is that when I-banks are levered at 32:1 or greater, trying to de-lever in a hurry is painful and can force the liquidation of _other_ unrelated assets to raise money. So the impact can be unpredictable because even "safe" asset classes could be hit with fire-sales.

About a year or more ago, there was an article on one of Patrick.net's links that described how this deleveraging might look - an increasingly frantic exit from risky, speculative positions, hedge-fund blow-ups, followed by counterparty default (insurers), with contagion spreading to bigger financial institutions, flight to treasury, unwinding the carry trade, precipitous drop in USD against Yen and commodities, liquidation of precious metals and other safe hedges, default on sovereign debt etc. - so far, it seems to be tracking that script.

BS pulled the trigger first and the gun jammed.

LOL ! Not good at a Mexican stand-off. Not good.

Racist losers (like the OB) will come out of the woodwork and start blaming “dem damn forreiners”.

Don't let yourself be bothered by their comments. You should know better.

HK :

Thanks a lot for the Wells Fargo link. You made my day. I am also very curious to see what effect the new regulation has on the interest rates. I am speculating that there will be an additional "fee" of some sort to offset the higher loan limit. Or the rates for all amounts (including formerly conforming) will raise due to all of them bundled together.

And no matter what. Down payment sizes will keep increasing. About time.

Don't. Feed. The. Troll.

Frugal is the new black.

People can buy items at a whole seller and then divide amongst themselves. For example Costco sells many things in multi-packs. Like the tea bags. They are 3 packs bundled together, each having 100+ tea bags. Frugal shoppers can buy this multi-pack and take one for each.

I am pretty sure it happens at a very very small scale and among friends. But maybe there is a Web2.0 startup idea here - like FrugaList (TM) - a Craigslist like version. People can start a pool for sharing a multi-pack,others can join it etc. A lot of advertising revenue might be generated.

Maybe someone else has already thought of this.

there will be an additional “fee” of some sort to offset the higher loan limit.

And these fees will be added to the down payment, not rolled into the loan.

StuckInBA said:
And no matter what. Down payment sizes will keep increasing. About time.

A couple of months ago, I posted about someone whose financing failed despite pre-approval, with the bank asking for a lot more money down for an "old" jumbo (not even the new super-duper-jumbo). Back then it was an anecdote, now it is the norm. About f*king time.

Frugal shoppers can buy this multi-pack and take one for each.

Interesting. You are correct on the upcoming bulk buy/coupon sharing strategies. Funny how people can come up with inventive ways to save relatively small amounts on groceries and gas, but never considered big ways to save money, such as buying the minivan over the SUV or the 2,000 sqft house over the 3,500 sqft McMansion.

Peter P and SP, I see what you mean and I agree. Which is why I don't respond anymore.

But sometimes I am not sure if everyone else on the thread is (a) ignoring the troll or (b) tacitly agreeing with the troll. Do you know what I mean?

Anyway, back to real issues.

I think a return to frugality will be a good thing for Americans.

When people stop believing in the nonsense that consumption drives this country's prosperity, it will be even better.

"actually beginning to do something called "budgeting" LOL

How long can this go on!? Why I won't hear of it!

But sometimes I am not sure if everyone else on the thread is (a) ignoring the troll or (b) tacitly agreeing with the troll. Do you know what I mean?

Have faith. ;)

I think a return to frugality will be a good thing for Americans.

Not necessarily. It will hurt corporations and that may in turn harm Americans.

"I think a return to frugality will be a good thing for Americans."

I don't know about any of you, but my grandparents were in that group that were just striking out on their own, about the time the great depression hit. They were very frugal and tried to waste as little as possible, the rest of their lives. My grandmother's mantra was that oft repeated "save for a rainy day" scenario. My parents, the first wave of Boomers, were also frugal but it seemed more like "cheap" to me.

Now I wonder if my teenager's generation is about to experience what my grandparents did at that age, and if they will spend thier lives much the same.

At the very least, we are leaving them quite a mess to figure out.

Back then it was an anecdote, now it is the norm. About f*king time.

No kidding. Down-payments, full doc/income verfication and higher rates +points for high leverage was all S.O.P. pre-bubble --a mere 7-8 years ago. And it was S.O.P. for the vast majority of mortgage-lending history. But that fact won't stop FBs from whining, stamping their feet and throwing tantrums 'cuz they actually gotta *qualify* for a million-dollar loan now.

Now I wonder if my teenager’s generation is about to experience what my grandparents did at that age, and if they will spend thier lives much the same.

Of course not, they were born under different stars. The collective personality of a generation decides the reaction of people in economic events.

Funny how people can come up with inventive ways to save relatively small amounts on groceries and gas, but never considered big ways to save money

Oh, tell me about it ! I am surrounded by people who will not order from Pizza Hut without a coupon, but have purchased sh1tboxes in the Fortress for an obscene amount. "Penny-wise, pound-foolish" should be engraved on the Cupertino town hall.

“Penny-wise, pound-foolish” should be engraved on the Cupertino town hall.

Perhaps they are saving the pennies for the copper.

Of course not... The collective personality of a generation decides the reaction of people in economic events.

Well in that case, lets hope they grow out of their "cheat code" mentality and choose learning from the past over being entertained and accommodated in every way. Entitlement may have a drastically different meaning in 20 years.

But then, who am I kidding right?

Perhaps they are saving the pennies for the copper.

I just had a coworker suggest this strategy to me, recently. Are pennies really worth more for the physical metal in them, than their face value?