Berkeley CSUA MOTD:Entry 48732
Berkeley CSUA MOTD
 
WIKI | FAQ | Tech FAQ
http://csua.com/feed/
2025/07/08 [General] UID:1000 Activity:popular
7/8     

2007/12/2-6 [Finance/Banking, Reference/RealEstate] UID:48732 Activity:kinda low
12/2    http://tinyurl.com/2lgwc2 (signonsandiego.com)
        Old mortgage:
          2004-2007  4.97% interest-only on $352K
          2007-2009  7.97% to 11.97%, principal payments start
          2009-2034  11.97%
        New mortgage:
          2004-2007  4.97% interest-only on $352K
          2007-2010  5.25% interest-only
          2010-2034  5.25% principal payments start
        Countrywide is da b0mb!
        \_ Moral of the story: it doesn't pay to be fiscal responsible.
        \_ Lame.  "Oh we didn't understand the terms of our ARM.  We're too
           dumb to read the papers right in front of us.  We thought we were
           getting a free lunch because we're nice people.  Now, only because
           the rest of the mortgage industry is fucked, we get totally lucky
           and keep a super low rate forever".
           \_ Countrywide can tell them to go pound sand. It's the free
              market at work like it should be. What I have a problem with
              is the government attempting to legislate these discounts
              or, worse, making taxpayers pay the bill.
             \_ All the deficit spending is effectively a tax. We are getting
                taxed out the ass.
                \_ This is a non sequitur.
                  \_ Well, it's related to fiscal irresponsibility. Someone
                     always pays the bill in some way. Legislating discounts
                     for idiots passes the bill onto responsible people.
2025/07/08 [General] UID:1000 Activity:popular
7/8     

You may also be interested in these entries...
2013/8/29-11/7 [Finance/Banking] UID:54734 Activity:nil
8/29    Applying for a home loan now. The loan officer keeps asking why
        I wrote large amounts of check, and what they're for, and fax
        her proof to support what I said. She said loan regulations have
        tightened a lot to prevent money laundry. What is the max amount
        of money I can transfer these days without triggering annoying
        audits? I am not a terrorist.
	...
2013/7/31-9/16 [Reference/RealEstate, Finance/Investment] UID:54720 Activity:nil
7[31    Suppose you have a few hundred thousand dollars in the bank earning
        minimum interest rate and you're not sure whether you're going to
        buy a house in 1-5 years. Should one put that money in a more
        risky place like Vanguard ETFs and index funds, given that the
        horizon is only 1-5 years?
        \_ I have a very similar problem, in that I have a bunch of cash
	...
2013/5/13-7/3 [Finance/Banking] UID:54676 Activity:nil
5/13    Does FDIC ever matter? How likely is it that your deposit of
        over $250k going to be screwed over in a major US bank?
        \_ Was Washington Mutual a major bank?
        \_ Was Washington Mutual a major US bank?
        \_ Hahahahahahahahahahaha. Good one.
        \- As with nuclear weapons, this insurance produces much of its value
	...
2013/3/9-4/16 [Finance/Banking] UID:54621 Activity:nil
3/9     In a 15/30 year loan, the amount of payment stays the same but
        the payment on interest decreases while the principal increases.
        Suppose I decide to pay off a huge chunk of principal, will
        the amount of interest I need to pay decrease drastically, or
        do banks still want to take out a huge chunk of interest rate?
        \_ You don't actually have separate "interest" and "principal"; you
	...
2011/11/27-2012/1/10 [Finance/Banking] UID:54243 Activity:nil
11/27   Whoa, since when did FDIC coverage go up to $250,000? That's cool.
        So is this coverage per customer per bank, per account per bank,
        total per person, etc?
        \_ I believe that it is per customer per bank. Not 100% sure though.
           \_ Yes, and you can get even more with joint accounts, etc.:
              http://www.fdic.gov/deposit/deposits/dis/index.html
	...
2013/8/1-10/28 [Reference/RealEstate] UID:54722 Activity:nil
8/1     Suppose your house is already paid off and you retire at 65.
        How much expense does one expect to spend a year, in the Bay
        Area? Property tax will be about $10K/year for a modest $850K
        home. What about other stuff?
        \_ I think at age 65, health insurance is the next biggest expense.
        \_ I am thinking that we can have a nice middle class
	...
2013/6/3-7/23 [Reference/RealEstate] UID:54685 Activity:nil
6/3     Why are "real estate" and "real property" called so?  Does the part
        "real" mean something like "not fake"?
        \- without going into a long discourse into common law,
           it is to distinguish land/fixed property from intangible
           property [like a patent] and movable, personal property,
           like your car. Real property has historically had special
	...
2013/3/11-4/16 [Reference/RealEstate] UID:54622 Activity:nil
3/10    I'm trying to help my parents, in their mortgage there's an
        "escrow" amount. What exactly is this? From reading Google,
        the loan company uses the escrow account to pay for home
        insurance, but they've been paying home insurance themselves.
        I'm really confused on what this fee is.
        \_ Without an escrow account, you write checks to your insurance
	...
2013/2/19-3/26 [Reference/RealEstate] UID:54610 Activity:nil
2/19    I just realized that my real estate broker has a PhD in plant
        molecular cell biology from an Ivy League school in the mid 70s.
        Now she has to deal with a bunch of young dot-comers, and they're
        pain in the ass.                        -Only a BS in EEC$
        \_ My agent used to be a hardware engineer.  He switched to real estate
           when he got laid off during the 80's.  Now he's doing very well.
	...
Cache (8192 bytes)
tinyurl.com/2lgwc2 -> www.signonsandiego.com/news/business/20071202-9999-lz1b2mortgage.html
Couple renegotiates home loan to stave off soaring adjustable rate By Melanie Stevens UNION-TRIBUNE December 2, 2007 When Michael and Suzanne Hornbeek moved from upstate New York to California three years ago, they were willing to deal with the higher cost of living and a smaller house in exchange for a more lucrative career opportunity, a warmer climate and a relaxed Southern California lifestyle in which to raise their two young children. An interest-only mortgage they took out three years ago was set to adjust to a much higher interest rate. They knew the transition from their quarter-acre property and home in Buffalo - which they bought for $128,000 - to their $440,000, 1,400-square-foot Poway condo wasn't going to be easy. The low-interest loan they were offered through Countrywide helped sweeten the move, though it seemed like a rate too good to be true. Upon purchasing their home in 2004, the couple accepted a $352,000 interest-only mortgage at 497 percent, a rate that was set to adjust Nov. In dollar terms, that meant an extra $880 a month - with more potentially to follow. "We understood the situation with loan adjustments to be that after our first three years, our low rate would increase to the rate that everyone else is buying at right now," said Suzanne, 38. "We didn't realize that we would see an increase of our monthly mortgage payments by several hundred dollars or that we'd now be facing this uphill interest rate climb that we're not going to be able to afford." Financial planner Kevin Barrett was able to renegotiate the loan to give the Hornbeeks breathing room, as somelenders are increasingly willing to do to avoid foreclosing on a property. Such situations have become increasingly common in San Diego County, where thousands of families used adjustable-rate loans to finance houses they might otherwise not have been able to afford. Although homeowners could have dealt with such problems in the past by refinancing, sagging property values have made that a less-viable solution. They could have tried to sell the condo, but they thought its value had fallen to about $400,000 from the $440,000 they paid for it. They could have refinanced, but that also would have required them to come up with the $40,000 difference to make up for the decline in the unit's value. But, as the Hornbeeks learned when they consulted with financial planner Kevin Barrett, there was another alternative: Renegotiate the loan. With lenders reluctant to take over massive numbers of properties they might have difficulty reselling, some have become more willing to work with homeowners such as the Hornbeeks who find themselves in difficult situations. Barrett, whose firm is Barrett Financial Strategies in San Diego, spent several weeks talking with the Hornbeeks about the pros and cons to each option for handling their mortgage. Ultimately, he was able to negotiate a deal with Countrywide under which their loan would increase only to 525 percent, a level that would enable them to keep their home. "The Hornbeeks really were in a predicament, and it's not so far off from what tons of other people in San Diego are facing with their mortgages right now," Barrett said. "They knew they could lose their home, but facing it at this stage in the game has at the very least taken some of the burden off their shoulders." The Hornbeeks worked with Barrett after volunteering for a San Diego Union-Tribune Money Makeover, sponsored by the newspaper and the San Diego chapter of the Financial Planning Association. In exchange for sharing their story in the newspaper, the Hornbeeks received a comprehensive plan at no charge. The couple's situation was complicated by the fact that the family of four depends solely on Michael's salary to pay the bills: a $2,900 monthly mortgage payment, including taxes and homeowners association dues; Suzanne used to work as a hair stylist but had to quit a year ago when she was diagnosed with an autoimmune condition. The condition, which requires her to live in dry, warm climates, also ruled out one option the couple considered: returning to New York. With the thought of moving out of San Diego temporarily off the table, Barrett looked at other scenarios, starting with the possibility of selling the condo and then renting until the couple were able to get back on their feet. Although they could have the $40,000 difference considered by a lender as a forgiven debt, it would still be a source of income that they ultimately could have to pay taxes on. The option to refinance put them in a similar situation, where a bank or lending institution would only likely give the Hornbeeks the current maximum value of their home, which would again leave them to come up with the remaining $40,000 they initially borrowed. "This is almost a no-win situation for us," Suzanne said. "If we refinance, we're spending $40,000 to keep the place, or we spend $40,000 to lose the place in a short sale. Ideally, we need to stay where we're at, but we don't know how to make that happen." Foreclosure was another option, one Barrett said could be imminent if the Countrywide rate adjusted from the 497 percent to nearly 8 percent. But Barrett pointed out that Countrywide might not be eager to foreclose, which could give the company an incentive to help the Hornbeeks keep their home. "Banks are not in the business of owning and selling homes, but they've had to do it a lot lately with all the foreclosures happening, particularly in San Diego," Barrett said. "That, and the time it takes to sell the home means more time lenders aren't receiving mortgage payments. They're also likely paying Realtor commissions, which make the value of the home decrease." Barrett said the ideal scenario would be to negotiate a three-to five-year extension of their initial interest-only loan payments at a rate of 497 percent, along with an understanding for how the rate would eventually adjust. This arrangement would allow the couple to catch their breath over the next few years, pay off some debt, beef up their savings, and potentially ride out the housing market long enough to see their property start gaining value. Last month, the Hornbeeks and Barrett were able to sit down at the negotiating table with Countrywide representatives to hash out the details. Although the arrangement isn't yet confirmed, both Barrett and the Hornbeeks are more than pleased with the probable outcome. According to Barrett, Countrywide is reviewing a tentative proposal to allow the Hornbeeks to keep their initial loan without having to refinance. Instead, Countrywide would renegotiate the terms of their primary mortgage for the full $352,000, an amount that relieves the couple from having to make up the $40,000 difference. The couple would be able to continue paying on an interest-only loan for the next three to five years at a slightly higher, but manageable, rate of 525 percent. Once the interest-only period is up, the Hornbeeks would begin paying off the principal as well as interest for the remaining 22 to 24 years left on the loan. The interest rate would remain at 525 percent during this time. "This is really great news for the Hornbeeks," Barrett said. "Their mortgage would only go up about $1,000 a year based on the new interest rate, but it's something we all agree that they'll be able to manage in the short term. And, as we'd hoped, it will give them some time for the market to recover and for Mike's salary to increase." In addition to their primary mortgage, the Hornbeeks had taken out a second mortgage with Chase for $85,750 at a fixed rate of 8 percent. Barrett and the Hornbeeks have already contacted Chase to pursue similar negotiations to lower the interest rate for that mortgage. The financial planner gave some advice to other homeowners who might be in a similar situation. "This is a perfect example of 'the squeaky wheel gets the oil,' and I'd encourage other people to do everything they can to save their home from foreclosure," Barrett said. "There's a huge time commitment involved with negotiating, and a ton of phone messages and bureaucracy to work through. We eventually got there for the Horn...