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To: John F. Dowd who wrote (168273)	7/15/2002 4:47:04 PM
From: Jim McMannis	Read Replies (1) \| Respond to of 186894

RE:"On top of that they have turned around and taken out an equity loan and either paid down debt or bought something. They have therefore monetized the increased value in their home." They? Everybody? Don't think so. OTOH, A lot of people have refinanced at lower rates but now they are thinking of doing it again. Of course banks get fees for this and make a lot of money. Jim

To: John F. Dowd who wrote (168273)	7/15/2002 5:10:04 PM
From: Ali Chen	Read Replies (1) \| Respond to of 186894

"but now they only pay 550 which puts 150 of cash in their pockets every month." I don't think I misunderstand anything. For how many month they are pocketing those puny $150? This is barely enough to pay out the closing costs, for several years to come. (Of course, they can elect to borrow these closing costs from their equity, but in your scenario of loan amortization, it will translate in sizeable increase in accrued interest payments, very sizeable.) If some souls got equity loans trying to "capitalize" on the bubbled home valuation, and put those money in the high-tech stocks in 2000-2001, I really feel sorry for them. So much for "monetizing". - Ali