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Could $50 Per Month Save Housing?

Could $50 Per Month Save Housing?

The 30 year mortgage.  As American as apple pie.  It’s the sacred cow of the real estate finance industry.  But, is it also destroying wealth in this country? When you take out a mortgage, they are simple interest.  That means that you pay interest on the outstanding principal balance each month.  After 10 years on a $100,000 original mortgage, you are only down to owing $78,000. But, if you paid $50 per month more (on a 25 year mortgage), you would be down to $67,000.  It may not be much, but psychologically, it’s better to have your head over the water level rather than underwater! Looking at the bigger picture, the fact that there is more equity farther down the road, people will be in a slightly better financial position when they are ready to sell or retire. That makes the economy a little more secure in the long run. If someone can’t qualify, they may need to buy the rate down with points or go for a long...

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Thanks Putin for Overpaying for a House

Thanks Putin for Overpaying for a House

As I have been saying ad nausem, the real estate market will not sustain its current insane activity.  The previous reasons I have stated had to do mostly with economic conditions but now we find the out of the box reason. The Panama Papers and SF’s housing crisis The Panama Papers (can’t keep thinking Pentagon papers) have revealed the hiding of money in a Russian Bank.  Now, it’s been tied to the purchase of real estate.  This article shows what allegedly has been purchased by this dirty money in the Bay Area of San Francisco. These high bid purchases squeezed out real buyers and drove prices higher.  It’s not just about the homes bought, but the fact that these became comparables for appraisers and real estate agents to use to justify higher prices. Now that they are caught, the buying may stop thereby adding to the Linkedin effect, the anti-unicorning of the Silicon Valley, the slowing in the Chinses economy, etc.  Add to that all the sub-prime stalkers giving loans...

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The Big Short II

The Big Short II

In the week that the movie, The Big Short comes out, a San Francisco Credit Union is doing exactly what partially caused the big short to happen. These geniuses are putting out a loan with No Money Down up to, get ready…….$2,000,000.  That’s two million dollars with no down payment.  Let me say that again.  Buy a $2,000,000 house in San Francisco and put nothing into it.  No skin in the game. Will the CFPB do anything about it?  Will anyone be up in arms (except me?).  No.  They’ll just say that it is a great business decision on their part for the non-profit credit union to attack a niche in the market. Bullshit. First, if you put no money down, you have costs to sell the place.  Between brokerage commission, transfer taxes, title insurance, possible closing cost credit to buyer for a defect in the house, etc., you could be looking at upwards of $200,000 or 10% as a fee to leave.  And if you don’t have that...

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-$1,188,103.00 Last 30 Days

-$1,188,103.00 Last 30 Days

Yes.  I do think I am the Bernie Saunders of the real estate/mortgage industry. For those new to my prose, I like to tell what I think, feel and see in the market based on a combination of gut and numbers. Sometimes the numbers talk to me and sometimes the brain just feels that something is going to happen. I just let it come out and I enjoy doing it that way. And now to today…….. I’ve seen the basic plateau of the market for about 9 months and now I see my first real proof that people have said, ENOUGH and real estate prices will begin to drop. Here is how it starts. This chart on a home on the Upper East Side of New York’s value decline. The example is a premier townhome. Because of the events of the last year or so beginning with the collapse of oil prices and the Chinese economic slide, we have seen the lessening of spending by those that have had...

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Condo Financing Just Got Easier

Condo Financing Just Got Easier

If your client is putting 10% down on a condo purchase, you do not need all the massive amounts of paperwork as you did in the past. These condos just need a limited review (one page of stuff instead of thousands). No more fidelity insurance or budgets either! And, you will still get “normal” rates for condos through Fannie Mae or Freddie Mac. Happy condoing! Share this:TwitterFacebookGoogleTumblrLinkedInEmailPrintPocketRedditPinterestLike this:Like...

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