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

To: neolib who wrote (111067)	3/17/2008 3:56:52 PM
From: Hawkmoon	Respond to of 306849

Yes, but the question going forward is at what point should you encourage her to buy one? Well.. in her case, when she can come up with 20% downpayment.. She would have been a "sub-prime" given her current lack of savings. There's a reason that people have been expected to have 20% down on their house.. It decreases their chances of walking away from the loan.. Which, once again, goes back to Bernanke's premise.. If the banks forgive a portion of the loan and increase the level of equity the borrower has in the home, it will be a lot cheaper than trying to foreclose and liquidate millions of homes. Let's face it.. over the course of 30 years, the cost of that mortgage is going to be twice the actual price of the property that was purchased. So there's a bit of leeway when it comes to forgiving a portion of the mortgage and still not hitting the principle loan amount.. It amounts to giving up future interest revenue (or adjusting current revenue if that future interest has already been recognized due to accounting tricks).. Hawk

To: neolib who wrote (111067)	3/18/2008 12:42:45 AM
From: John Vosilla	Read Replies (1) \| Respond to of 306849

Were you active during the last downturn in the early 1990's? For all the problems out there today I still see a huge interest in RE investment that wasn't evident the last time when it seems nobody was paying much attention. Perhaps it is the steeper plunge in prices in my state, the realization our dollars are turning into pesos, the media frenzy from this wipeout, the internet and many more deep pocketed folks? Enjoyed your posts today. Hope you visit here more often.