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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Lizzie Tudor who wrote (176835)1/13/2009 1:44:43 PM
From: GraceZRead Replies (1) of 306849
 
I really can't see any reason for the govt not to step in and force banks to offer 4% refis to every current homeowner though.

I can think of 14 trillion reasons.

That is the dollar value of existing mortgages.

Now let's suppose they fix the price at 4%, you still need a very large supply of money at that price. Do you want to invest in mortgage backed securities at say a 3.75% coupon? If you've been suffering along in CDOs and someone does an early payoff (giving you back your principle to reinvest) are you going to turn around and jump back into shark infested waters or look somewhere else?

Personally it would take 15-20% yields to even get me looking at them until housing stops it's precipitous slide.
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