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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (93683)	2/2/2009 3:43:48 PM
From: Sr K	1 Recommendation Read Replies (1) of 116555

Did you notice that Bloomberg article referred to: "straight into the insolvent arms of Freddie Mae (FNM) and Fannie Mac (FRE"? 30 years at 5.375 would be 1,119.84/month (on $200,000 principal) and at 3.875 is 940.47. It's the same as any buydown of rate. So the builder has to finance the $179.46 per month for 360 months. That's only about $4,988 upfront per home, or 2.5% of the loan amount and 2.00% of the "selling price" if the LTV is 80%. Straightforward marketing, even to the point of being a little under 4% to entice buyers.

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