Thursday, March 30, 2006

Money Magazine article, mortgage update and more

I know it has been a little while since I last posted, but I have been pretty busy with my 'plan B' job. Things are going GREAT with my new line of work, and I can honestly say it is refreshing to be out of the mortgage industry as my primary source of income. I have several great friends that are still 'in the trenches' and I still keep abreast of what is going on in the mortgage/real estate industry.

For those of you that are coming here for the first time since you saw the write up in Money magazine (subscribers edition...not the newsstand edition) or from this CNN/Money story, I want to say thank you for stopping by! Since I am no longer posting everyday like I was for many months, the best way to use this site is to check out the archives on this site, as well as my 'ORIGINAL SITE', and use the FORUMS. I will be organizing all of my posts so that they are easy for people to access here shortly. Until then, check out some of the 'Popular Posts' that I have linked to below, as well as the archives on the right hand side. Some of the 'popular posts' will link you to the 'original site' or you can get there with the navigation bar. There is also a TON of information and activities going on in the FORUMS. There are almost 350 members, 500 topics, and 3000 posts at this time!

Here are just a few of the posts that have been popular with readers:

  • -Math behind "should I buy or wait"

  • -Why is it taking so long to 'burst'?

  • -Welcome to the gun show - show me your ARMs

  • -Stock bubble vs. RE bubble

  • -The 40 year mortgage

  • -Investors count equity loans as 'income'

  • -Trillion dollar game of 'Jenga'

  • -Who is to blame for the 'bubble'?

  • -OCC Mortgage Guidance

  • -MTV Cribs, BLING and the Housing Bubble

  • -Population BANKRUPT in MATH

  • -When ARMs adjust

  • "-Help an FB" story

  • "-Uh-Oh...The times are changing

  • "-The market has changed"

  • These are just a few of the 80+ posts I have made. I have covered all aspects of the mortgage lending business. I have talked about interest only, negative amortization, adjustible rate mortgages (2/28, 3/27, 5/1, etc), fixed rate mortgages, 40 year mortgages, refinancing, appraisals, packaging loans, selling loans, loan standards, loan programs, stated loans, no doc loans, no ratio loans....I think you get the point. Don't worry, I made it entertaining. I wouldn't have been featured by CNN/Money magazine if it was dry and boring like your Econ 101 class.

    It just shake my head when I see how the media reports information. The media is a great 'lagging indicator'. We should have been seeing articles like this back in 2002 before everybody tried to become the next 'genius' real estate investor. It is amazing to me that nobody thinks about the long term financial repercussions of taking on some of these mortgages.

    I still get lots of e-mails with questions about option-ARMs, how they work, and the different indexes they can be linked to (COSI, COFI, MTA, LIBOR, etc). It is simply amazing to me that people will think they will be 'fine' making a $1600 payment on a 500k loan. That is about what the minimum payment can be on an option-ARM today. If you could theoretically make that payment for the full 30 years, you would barely cover the original loan amount ($578k). Too bad the 'real' payment for 30 years would have to be about double that amount to 'afford' a 500k loan. And you wonder how property has doubled or tripled in many areas over the last few years?!?!?

    The floodgates have been opened the past 5 years. Pretty much anybody could get a loan for 400-500k with not much problem. If you don't make enough, go stated. If you want to buy more house, go interest-only or negative amortization (option ARM). If you have no money problem. If you FICO is in the toilet, get it into the 500's, and you have options. For a while there, a 560-580 FICO score would get you a 100% loan. A month or so before I left my last company, they got rid of bankruptcy seasoning. That means that a borrower with no BK would get pretty much the same loan/rate as somebody who was 1-day out of bankruptcy. Does that sound right to you?!?!?

    I could go on and on. It seems that so many of the articles that are coming out now about the 'dangers' of interest only ARMs, etc. are a day late and a few trillion dollars short. Amazing that the 'important' people didn't notice that 80% of the loans in CA being interest-only ARMs or option ARMs might cause problems down the road. I saw it from the beginning. Many people were jumping into houses with ARMs, and their plan was to sell when the payments increased. Seems like lots of people had that same great 'idea'...

    If San Diego inventory is any indicator, it could take a l-o-n-g time to look at all the houses on the market. 18,192 per tonight. Prices skyrocket when buyers are chasing 2800-3000 properties on the market as they were in the spring of 2004. What happens when there are over 18,000 properties on the market?? Do we really need to poll Mensa to get the answer to this one?

    I happened to be in the LA area a week or so ago and I was scrolling through the radio stations and I came across 102.7 where Ryan Seacrest has a morning show. Part of his show is this little girl called Ali who calls people up and asks them questions. If you have heard it, you know what I'm talking about, if not...just trust me, it can be hilarious. I happened to tune in to catch little Ali calling a real estate agent and she asked about a 'housing bubble'. The realtor assured little Ali that the housing bubble is a 'myth'. Little Ali said "like Bigfoot" and the realtor said exactly.

    Sorry, but if that is the case, then Bigfoot IS real...and has been doing more steroids than Barry Bonds.

    Stay tuned, stay informed, and I look forward to the comments and feedback.
    I am going to keep making my posts over here, but most of the comments are happening at the new site. Go to...

    ...if you would like to see more comments and activity. Don't forgot to check out the activity in the FORUMS!



    Anonymous Anonymous said...

    You have been missed. Thanks for all the info. which has confirmed what I have long (since 2001) suspected.

    3/30/2006 11:15 PM  
    Blogger SoCalMtgGuy said...

    Thanks anon...

    I wish I could blog more and that it payed the bills, but...

    I'll still be around, just posting several times per month. I'm sure I will start posting more as I get settled into my new job.



    3/30/2006 11:50 PM  
    Anonymous Anonymous said...

    From 3K listings to 18K listings..
    wow, absolutley wow..

    what is this a sign of?

    and I guess they all want top dollars?



    3/31/2006 10:53 AM  
    Blogger Contrary Guy said...

    Glad to see that things are working out at the new job; I'm sure that eventually you'll see a topic that just BEGS for a proper blog post and then we'll see your text again. Maybe when rates start skyrocketing for one reason or another.

    I'll be looking through your archived posts to freshen myself up on the whole mortgage game, as I am currently restarting my own house hunt. The buyers agent is in hand, I have one preapproval already (Wells Fargo guy, the quotes looked reasonable), and no issues other than finding a decent place to buy in the area I want. Despite the fact that central Ohio isn't really bubble territory, this spring's new listings have started off with some crazee-stoopidt high prices (for around here, anyway, $150/sqft for a run-of-the-mill suburban condo is overpriced) and I'm already seeing a few reductions. No rush on the buy; my apt can be leased month to month. But it *is* interesting seeing how the market goes once you're in the system.

    Looking forward to the next post...

    4/01/2006 8:44 AM  
    Anonymous Anonymous said...

    Hey, SoCalMTGguy, I know that you are busy and wish you the best with your plan B. But I realy waiting for your new valuable inputs. Be well!

    4/18/2006 9:55 PM  

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