Your Questions About Mortgage Rates Trends

Joseph asks…

Do you think house buyers are fueling the problems in the economy?

I’d like to air my frustration a little here and get some feedback from the more intelligent users (and not idiots who post stupid comments or those who are under five years old).

I’m in the process of selling my house in the Midlands (Coventry) and buying in the South East (a massive upgrade and large mortgage – GULP). I’m so p*sed off at this whole house price thing as estate agents have been trying to bump up prices and I haven’t seen any evidence of a so called house price drop in the South East. In fact, some of the properties I’ve viewed that were sold in the peak 2007 have been put on for sale now for well over those prices… Erm, I thought 2007 was a peak and property prices have dropped since then?… I put my house in Coventry on at a realistic price taking into account what it peaked at in 2007 (I had it valued then too). So why are the snobs down in the South East insisting that nothing has happened to the property market and keeping their prices high as if nothing has dropped at all? I guess stupid people like me fuel the system by attempting to buy these properties at inflated prices. I’m half tempted to stick with my place in the Midlands, live a comfortable life and s*rew the estate agents and banks who have put us all in this situation in the first place. The other thing is, why do banks and the government make it so tough for people who run their own business? People showing some initiative? Why am I being punished on the interest rate side? I’m self employed, doing ok considering the economic climate, and when it comes to borrowing anything, I’m punished heavily for trying to put something back into the economy.
I think we should all (or those that are stupid enough to buy property at peak prices out of desperation), hold out on what we think are reasonable prices based on the property indexes and force agents and sellers to drop their prices where they are over inflated. To give you an example, I have been looking at a house that sold for £237k in the peak of 2007. There have been no mods to it since then and it is now on the market for £249k. Erm…. according to the statistics and trends, that house should now be around the £213k mark…. What the f?

Comments please…

admin answers:

The simple reason for house prices increasing even though we are supposedly is a house price “free fall” (as the media love to say) is that the recession, in some areas has created a mini housing boom. People are reluctant to sell their properties at the moment because they are led to believe that they are worth tens of thousands less than this time two years ago, so they sit tight and don’t sell. People looking to buy however, think that now is the time to buy and grab a real bargain. So this creates a simple supply and demand issue and estate agents can cash in. The other side of it is that people are over-valuing properties knowing full well those bargain hunters our there are going to come in with ridiculously low offers below the asking price. So bump up the asking price, bump up the lower offer. For example, we recently sold my grandparents home as they have gone into residential care. We believed it was worth around £140,000 but would have been happy to sell at anything over £130,000. Knowing full well the bargain hunters would be out in force, we put the house on the market at £155,000. Sure enough, the first offer we had 6 weeks later was for a ridiculous £35,000 below the asking price! Someone trying their luck! Obviously we weren’t desperate to sell so turned his offer down. After some negotiation we then sold it to him for £138,000. He feels he got a bargain adn we got what we wanted to sell it for, all because we increased the asking price.

Michael asks…

financing real estate thru a LLC?

Quick question for my fellow rehabbers out there… Over the last couple of years, the volume of transactions that I have been doing in the rehabbing/flipping arena has escalated substantially from past years. As my “training wheels” have come off, I have found that I can do more deals at once than I used to and have been taking advantage of the added income opportunities. I have noticed the disturbing trend, however, that my credit score has been slowly but steadily declining over the last year. My mortgage guys are telling me that this is due to the fact that I am accumulating properties (I buy for long term buy and hold rentals as well) at an increased rate. Some of my colleagues are touting the benefits of purchasing properties through your LLC in order to avoid this problem what companys actually do these loans? and im curious how do you other investors finance multiple properties?

admin answers:

Very few banks will lend to LLC’s. Thornburg Mortgage is one of the few that have a specific program for it. They almost got shut down last week though, but it seems they’re back on track with new funding.

Ideally though, you should find a local bank to partner up with. Someone who can look at your past track record, and see that you know what you’re doing and making money at it.

Susan asks…

History Homework help!?

1. The stock market crash triggered the beginning of the Great Depression, the worst economic crisis in U.S. history. Which factor did not contribute to the crash?

A a false belief that stock prices would continue to rise

B purchasing of stock on credit by individuals and trusts

C overvalued stock prices

D too many ordinary people owning stock

2. Which one was a cause of the Great Depression?

A failure to collect income taxes

B problems with home mortgages

C risky banking practices

D too many people on government welfare

3. What was one impact of the stock market crash and the Depression on American society?

A a return to a more rural way of life

B record high rates of unemployment

C a trend toward larger families

D government redistribution of wealth

4. Which did not contribute to the Dust Bowl conditions in the plains states?

A overplanting of wheat

B stripping of natural grasses

C severe drought

D clear-cutting of the region’s forests

5. How did many plains farmers respond to the challenges they faced during Dust Bowl conditions?

A They left for California in hopes of starting a new life.

B They began using more productive farming techniques.

C They marched on Washington in hopes of federal assistance.

D They formed cooperatives to share equipment.

6. What was one effect of the Great Depression on the lives of ordinary Americans?

A Thousands of people lived in makeshift shantytowns.

B America experienced increases in marriage and birth rates, as fewer women had jobs.

C Fewer people bought televisions.

D More people applied for food stamps and welfare.

7. What did Herbert Hoover believe was the job of the government?

A to give people direct aid during the crises

B to regulate business

C to interfere as little as possible

D to strictly oversee the banking industry strictly

8. What effect did Herbert Hoover’s philosophy of government have on the federal response to the economic crisis?

A His belief in government oversight resulted in vast new regulatory legislation.

B His belief in small government led him to veto all legislative attempts to address the situation.

C His belief that the federal government could not give direct aid to individuals left millions without help.

D His belief in limited government kept him from seeking any action.

9. Which was not a response taken during the Hoover administration in an attempt to turn the economy around?

A Reconstruction Finance Corporation to lend money directly to banks

B Relief and Reconstruction Act to create jobs through public works projects

C Revenue Act to increase taxes

D Family Assistance Act to provide direct monetary aid to families

10. What is one reason government intervention proved necessary during the Great Depression?

A European markets were booming and the United States needed to keep up.

B Bank failures and credit problems meant spiraling unemployment, home losses, and business failures.

C Voters demanded intervention.

D Businesses wanted more government regulation.

I know its alot. I just need to see what you guys think, I answered them i just want have someone answer them to compare answers 😀

admin answers:

Jeez do you want us to do it for you, youre not gonna learn this way

Chris asks…

Whether the real estate market is good or bad….is the media to blame?

Do you think the media should be the driving force of whether real estate goes up or down? is
the media a good economic predictor? In 2004, the media dangerously touted how “red hot”
the real estate market was and that everyone should jump on the bandwagon before its too late.
“Buy! buy! buy! The American Dream of home ownership is within reach!” I couldn’t believe
the frenzy created by the media as if they were out-of-control monkeys in a zoo who just
escaped from their cage. I was in shock reading the news resports and the news on television
about how the media was alone—-fueling this upward real estate trend so recklessly when they
dont even know real estate! They are only journalists! Then mortgage brokers and banks
foolishly starting throwing subprime loans at minimum wage earners who worked at
McDonalds. Banks were qualifying these minimum wage earners for $250,000 home-doc and
piggy back loans. They told them not to worry because they could refinance next year when the
real estate market keeps going up(even though your hourly won’t) Your low 1% interest rate
wont adjust until next year! Dont worry—-because thats what the media and economic data
indicates. The market will keep going up…up…up!
Then, in 2006 the real estate market collapses and three-quarters of country goes into
foreclosure. So much for the economic data and the media. I blame the media for this fraud.
The economists are just as bad. Look at this negative nonsense posted in Jan. of 2008…..
“We are closing the book on the worst year for housing possibly since the Depression,” said
Joel Naroff, chief economist at Naroff Economic Advisors. “I keep thinking a bottom is near,
but we haven’t gotten there yet.”
We havent gotten there yet?
Well, according to the positive news posted in Jan of 2008 on it states that….
“new home sales are actually up from last month, albeit slightly, even though median prices
declined. The gist of the post was that demand will likely ramp up sales and assist the rebound
and likely the “doom and gloom” will likely be over late in 2008. Still more mortgage resets
coming in the next few months and it will likely take 2-3 mos. for the inventory to be normalized
after the foreclosures.”
Now the question is….Who is lying and who is telling the truth? Should real etstate be swayed
by the media’s opinions? They are just journalists who promote or destroy with no real
knowledge of market conditions—other than the crap thats fed to them by other journalists and
economists. What is your opinion?

admin answers:

Well., so many words. The answer is simple. Law makers responsible for this mess. If you have stricted law in mortgage industry, even with low interest rate, we would not have this crap today with real estate.

There would be so many families with not abilities pay for mortgage in those homes with adjustable mortgages.

There would be a millions made by mortgage lenders

we did not learn lesson from stock market before y2k, Market bubble,

now we paying for not preventing real estate bubble.

What next?

Mark asks…

Is MSNBC right.. “10 signs the double-dip recession has begun?”?

Friday’s news on GDP shows the double dip has arrived — an expansion of only 1.3 percent and consumer spending up 0.1 percent in the second quarter. Astonishingly low by any account. The debt ceiling trouble and lack of a longer term resolution to the deficit will make it worse.

The U.S. has entered a second recession. It may not be as bad as the first. Economists say that the Great Recession began in December 2007 and lasted until July 2009. That may be the way that the economy was seen through the eyes of experts, but many Americans do not believe that the 2008-2009 downturn ever ended. A Gallup poll released in April found that 29 percent of those queried thought the economy was in a “depression” and 26 percent said that the original recession had persisted into 2011.

It is any wonder that many Americans believe that the economic downturn is still in progress? Home prices have fallen to 2002 levels. Values have dropped nearly 50 percent in parts of Florida, California, Nevada and Arizona. Property values are also down that much in parts of troubled big cities like Detroit. Estimates are that as many as 11 million homes have underwater mortgages. Banks have inventories of as many as 2 million foreclosed homes which have not even been released to the market. Home prices could fall another 10 percent if current trends persist.

Perhaps the most powerful argument that the recession never ended or that a new one has begun is the persistence of unemployment. Fourteen million people are out of work. A third of those have been jobless for more than a year. May employment data showed the jobless rate rose unexpectedly and that the economy added only 58,000 jobs. Experts believe that the unemployment rate will not improve significantly until the monthly gain in jobs is consistently 300,000 jobs or more. And, at that rate the gains would have to go one for more than two years to bring the economy back to what is traditionally considered a reasonable unemployment figure.

(read the rest at the link)

admin answers:

Even broken clocks are right twice a day

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