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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (57797)	7/15/2006 4:23:51 PM
From: Jim McMannis	Read Replies (1) \| Respond to of 306849

RE:"All those ARMS are going to reset in the next two years. People are either going to have to pay the higher interest rates, or refinance to higher interest rates. Either way the mortgage lenders win." Plus they have lower overhead and can downsize quickly. Mortgage Brokers just go poof like Stock Brokers and RE Brokers. Not carrying a bunch of land etc.

To: Think4Yourself who wrote (57797)	7/15/2006 6:06:54 PM
From: Les H	Respond to of 306849

Their customers are forced to refinance and the firms receive huge pre-payment penalties and processing fees from the suckers who pay it out of their remaining home equity.

To: Think4Yourself who wrote (57797)	7/16/2006 6:34:51 PM
From: ChanceIs	Respond to of 306849

>>>People are either going to have to pay the higher interest rates, or refinance to higher interest rates. Either way the mortgage lenders win.<<< Those who can will probably refinance, and pay points and other costs - in addition to a higher rate - all very good for the banks. The problem is - what happens to those who can't refi - because their mortgage is under water - and can't pay the higher rate on their ARM - because their salaries haven't kept up. The banks with the option ARMs have a lot of virtual profits on interest not paid, but that is the problem. They have lots of properties to foreclose in a declining market with mortgages made at near market value.