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

To: ChrisJP who wrote (59556)	8/10/2006 7:24:26 AM
From: Dale Baker	Respond to of 306849

This morning's Wall Street Journal; I always forget they don't include the WSJ logo in their stories, sorry. A lot of people will be crunched by the whole lending bubble in the next year or two.

To: ChrisJP who wrote (59556)	8/10/2006 10:47:00 AM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

>>>Thank God pre-payment penalties are illegal in Maryland. They should be illegal period.<<< I don't necessarily agree. I am somewhat of a caveat emptor believer. I think that the lenders were offering significantly lower rates with the expectation that the loan would be in place for a certain period of time. They were packaging and selling those loans to investors who wanted a steady rate of return w/o "prepayment risk" - so that they wouldn't have to go shop for a new source of fixed income. It was a deal. If you want a lower rate today, then you have to live with the prepayment penalty. There are hundreds of investment vehicles from which to shop today. Having said that, I suspect that 80% of borrowers either didn't read the fine print, didn't understand it, somehow didn't think that it would apply to them, or forgot about it within a year. I do believe in clarity and lack of complications. I could go with banning prepayment penalties as a matter of course, if for no other reason than to keep the costs of litigation down. I don't consider prepayment penalties to be immoral. In the same vein, I would love to see grocery store coupons banned. We have a medium of exchange, its called money. Why should I have to wait in line at the supermarket for three minutes while someone fumbles with coupons. They pay 97% cash and 3% coupons. It gets in everybody's way, and you are penalized if you don't use them. Silliness.