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To: Lee who wrote (68093)	8/26/2007 9:51:25 PM
From: 10K a day	Respond to of 116555

Golly i'm 200K upside down and my payment is increasing by 40 percent. Should I stay or should i Go...

To: Lee who wrote (68093)	8/27/2007 1:30:21 AM
From: sea_biscuit	Respond to of 116555

Here's an anecdotal example. A friend has a 5/1 ARM due for a reset next year. He now pays an interest rate of 4.75%. The index is 1yr treasury and the margin is 2.75%. Now the 1yr Trsry yield is about 4.5%. A cut of 75 bps, and assuming that 1yr Trsry yield tracks exactly, would cause the interest rate to be 6.50% when the reset happens. So we need a cut of about 200bp before it makes a difference in this case. Keep in mind that this was a prime loan - NOT a NINJA or sub-prime loan or Alt-A loan; there are a lot more folks in lot worse situations than this.

To: Lee who wrote (68093)	8/27/2007 9:22:14 AM
From: Dan3	Read Replies (1) \| Respond to of 116555

Re: Lets say that the Fed cuts rates by 50-75 points by November. The problem is more from cascading penalties and fees and things like 5% over prime rate adjustements. We need usury laws on mortgages. Changing the discount rate has no meaningful affect on borrowers who aren't accountants with law degrees (and no one with less training can figure out the 100+ pages of these agreements). We need legislated caps on rates and those rates need to include the amortization of penalties and fees. Penalties on mortgages need to be included in the rate cap. If the borrower doesn't pay, then foreclose. The definition of a mortgage is that the lender has security for the loan and that's enough. Giving someone a "6%" mortgage and then charging fees equal to 5% of the amount loaned is not a 6% mortgage.