Comments on: Is it time to lock in your mortgage? http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html?utm_source=rss&utm_medium=rss&utm_campaign=is-it-time-to-lock-in-your-mortgage Bubble? What Bubble? Thu, 24 May 2012 08:06:05 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Humble Studen of the http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21796 Humble Studen of the Wed, 09 Jul 2008 11:16:38 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21796 You can't have it both ways. If the economy weakens then inflation and commodity inflationary pressures will weaken...and so will property prices. With lower inflationary pressures the long bond rates will fall. On the other hand, if the economy is strong then inflation will be a problem long bond rates will rise but the downward pressure will be off property prices. <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21796">0</span> <small>(to vote for this comment, please visit the site)</small></p> You can't have it both ways. If the economy weakens then inflation and commodity inflationary pressures will weaken…and so will property prices. With lower inflationary pressures the long bond rates will fall.

On the other hand, if the economy is strong then inflation will be a problem long bond rates will rise but the downward pressure will be off property prices.

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]]> By: Deliverator http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21759 Deliverator Tue, 08 Jul 2008 20:10:18 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21759 <i>The creditworthiness of the borrower matters little, because this is an incentive for the borrower to default.</i> ...or to shoot his real estate agent in the head... six of one, half a dozen of the other, really... <a href="http://tinyurl.com/3edxkg" rel="nofollow">http://tinyurl.com/3edxkg</a> <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21759">0</span> <small>(to vote for this comment, please visit the site)</small></p> The creditworthiness of the borrower matters little, because this is an incentive for the borrower to default.

…or to shoot his real estate agent in the head… six of one, half a dozen of the other, really…

http://tinyurl.com/3edxkg

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]]> By: RJB http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21749 RJB Tue, 08 Jul 2008 18:27:23 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21749 "The cost of repairs to the tower was estimated at $29 million, and each of the 237 condo owners had to fork over at least $118,000, with the cost depending on the size of their apartments, Fox said." Nice! <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21749">0</span> <small>(to vote for this comment, please visit the site)</small></p> "The cost of repairs to the tower was estimated at $29 million, and each of the 237 condo owners had to fork over at least $118,000, with the cost depending on the size of their apartments, Fox said."

Nice!

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]]> By: patriotz http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21748 patriotz Tue, 08 Jul 2008 18:12:28 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21748 <i>Which is why I say it’s a mistake to talk about “the subprime mortgage crisis” in the US.</i> To paraphrase Shakespeare, the problem lies not with the borrowers, but with the collateral. The root cause of the mortgage crisis in the US is that loans were made far in excess of the fundamental value of the collateral. Now that the market price of the houses is adjusting back to fundamental value, as was inevitable, the mortgages are defaulting. The creditworthiness of the borrower matters little, because this is an incentive for the borrower to default. That's really all there is to it. <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21748">0</span> <small>(to vote for this comment, please visit the site)</small></p> Which is why I say it’s a mistake to talk about “the subprime mortgage crisis” in the US.

To paraphrase Shakespeare, the problem lies not with the borrowers, but with the collateral.

The root cause of the mortgage crisis in the US is that loans were made far in excess of the fundamental value of the collateral. Now that the market price of the houses is adjusting back to fundamental value, as was inevitable, the mortgages are defaulting. The creditworthiness of the borrower matters little, because this is an incentive for the borrower to default.

That's really all there is to it.

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]]> By: blueskies http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21747 blueskies Tue, 08 Jul 2008 18:11:21 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21747 <i>re: leaky condos</i> love the way Concord Pacific suggests that strata was not "proactive" enough to prevent these problems..... <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21747">0</span> <small>(to vote for this comment, please visit the site)</small></p> re: leaky condos

love the way Concord Pacific suggests that strata

was not "proactive" enough to prevent these problems…..

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]]> By: Bizznitch http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21746 Bizznitch Tue, 08 Jul 2008 17:43:33 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21746 Good link here...re. leaky condos. <a href="http://www.cbc.ca/canada/british-columbia/story/2008/07/08/bc-leaky-condo-towers.html" rel="nofollow">http://www.cbc.ca/canada/british-columbia/story/2...</a> <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21746">0</span> <small>(to vote for this comment, please visit the site)</small></p> Good link here…re. leaky condos.

http://www.cbc.ca/canada/british-columbia/story/2…

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]]> By: alexcanuck http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21745 alexcanuck Tue, 08 Jul 2008 17:30:56 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21745 LaLaLand; Strataman has said a lot about shoddy work and problems in newer buildings. Lots of special assessments coming in a few years, helping to drive this great boom into the great bust. <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21745">0</span> <small>(to vote for this comment, please visit the site)</small></p> LaLaLand;

Strataman has said a lot about shoddy work and problems in newer buildings. Lots of special assessments coming in a few years, helping to drive this great boom into the great bust.

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]]> By: LaLaLand http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21744 LaLaLand Tue, 08 Jul 2008 17:11:49 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21744 Sorry...news item is on their TV news at 6pm. Buildings are Concord Pacific, Yaletown. Problems with their earlier tower buildings built 14 years ago. Only caught a few details: one building cost $8 million to repair. Strata and Concord reached a deal, but the settlement reached included a strict confidentiality clause as to the details. New chapter in the leaky condo crisis, not entirely unexpected, but this bad publicity will surely hasten the turn in the condo market... <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21744">0</span> <small>(to vote for this comment, please visit the site)</small></p> Sorry…news item is on their TV news at 6pm. Buildings are Concord Pacific, Yaletown. Problems with their earlier tower buildings built 14 years ago. Only caught a few details: one building cost $8 million to repair. Strata and Concord reached a deal, but the settlement reached included a strict confidentiality clause as to the details.

New chapter in the leaky condo crisis, not entirely unexpected, but this bad publicity will surely hasten the turn in the condo market…

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]]> By: LaLaLand http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21743 LaLaLand Tue, 08 Jul 2008 17:00:20 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21743 Off Topic to mortgages: CBC Radio just said that they will have a news item about newer downtown condos leaking at the windows. Owners being asked to cough up $ and the builder trying to keep the problem hush-hush. <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21743">0</span> <small>(to vote for this comment, please visit the site)</small></p> Off Topic to mortgages: CBC Radio just said that they will have a news item about newer downtown condos leaking at the windows. Owners being asked to cough up $ and the builder trying to keep the problem hush-hush.

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]]> By: Aleks http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21741 Aleks Tue, 08 Jul 2008 16:34:26 +0000 http://vancouvercondo.info/2008/07/is-it-time-to-lock-in-your-mortgage.html#comment-21741 Alexcanuck, I saw that too and had a little chuckle. Apparently these "re-remmic"s are better (how many times do you have to remix it before it stops being poison?). They're not backed by subprime mortgages, they're Alt-A mortgages "issued to borrowers with higher credit scores who don't prove their incomes, seek higher debt ratios or buy investment properties." Oh, good, sounds as rock solid as a t-bill. Mish periodically looks at a <a href="http://globaleconomicanalysis.blogspot.com/2008/04/wa-mu-alt-pool-deteriorates-further.html" rel="nofollow">pool of Alt-A mortgages</a> originated in May 2007. As of March 25% were 60 days delinquent or more, and 13% were in foreclosure. And that's after <i>one year!</i> Which is why I say it's a mistake to talk about "the subprime mortgage crisis" in the US. Subprime fell first and may be the worst, but there are a ton of bad Alt-A loans and I'd bet a bunch more so-called "Prime" loans to follow them. I'll be very surprised if these re-branded re-remics do anything to stop the writedowns by big US investment banks. <p class="top-comments">Current score: <span class="top-comments-karma" id="karma-21741">0</span> <small>(to vote for this comment, please visit the site)</small></p> Alexcanuck,

I saw that too and had a little chuckle. Apparently these "re-remmic"s are better (how many times do you have to remix it before it stops being poison?). They're not backed by subprime mortgages, they're Alt-A mortgages "issued to borrowers with higher credit scores who don't prove their incomes, seek higher debt ratios or buy investment properties." Oh, good, sounds as rock solid as a t-bill.

Mish periodically looks at a pool of Alt-A mortgages originated in May 2007. As of March 25% were 60 days delinquent or more, and 13% were in foreclosure. And that's after one year!

Which is why I say it's a mistake to talk about "the subprime mortgage crisis" in the US. Subprime fell first and may be the worst, but there are a ton of bad Alt-A loans and I'd bet a bunch more so-called "Prime" loans to follow them. I'll be very surprised if these re-branded re-remics do anything to stop the writedowns by big US investment banks.

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