Can We Please Put All of These Option ARM Doomsday Scenarios to Rest?
Started by alpine292
over 17 years ago
Posts: 2771
Member since: Jun 2008
Discussion about
As I have said a hundred times before, 70% of all Option ARMs are confined to Califiornia and Florida, so the impact they will have on NYC real estate will be barely noticeable, if it is noticeable at all. There are a lot of factors that have the potential to cause downward pressure on NYC housing values, but Option ARMs are not one of them. "A major concern is that 70% of option arms are... [more]
As I have said a hundred times before, 70% of all Option ARMs are confined to Califiornia and Florida, so the impact they will have on NYC real estate will be barely noticeable, if it is noticeable at all. There are a lot of factors that have the potential to cause downward pressure on NYC housing values, but Option ARMs are not one of them.
"A major concern is that 70% of option arms are concentrated in California and Florida – two states that have already been hard hit by the housing slump. Subprime mortgages, on the other hand, were dispersed across the country (about 60% of them were outside Florida and California) And as prices in those states continue to fall, refinancing options for these borrowers disappear even as recasts loom."
http://www.businessweek.com/the_thread/hotproperty/archives/2008/07/the_rate_of_opt.html[less]
Response by aboutready
over 17 years ago
Posts: 16354
Member since: Oct 2007
i guess it won't matter to new york if BofA or Wells or Chase takes a huge hit on the mortgages. We don't require a healthy financial environment for our own real estate values in the slightest.
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Response by CarolSt
over 17 years ago
Posts: 361
Member since: Jun 2009
Not sure why this is an issue at all.
Most reset will probably be lower compared to a few years back.
...and even if Manhattan has thus far been relatively "insulated" (if 30% down is "insulated"), if the economy - and banking sector - takes a hit in line with that chart, you can kiss that "insulation" good bye.
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Response by tina24hour
over 17 years ago
Posts: 720
Member since: Jun 2008
I'm thinking that starting a thread about Option ARMs is NOT the best way to put the topic to rest.
Tina
(Brooklyn broker)
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Response by alpine292
over 17 years ago
Posts: 2771
Member since: Jun 2008
LOL, true. But people here hate me so much, that if I start a thread about someting, I might kill that topic.
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Response by aboutready
over 17 years ago
Posts: 16354
Member since: Oct 2007
Tina, very funny.
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Response by anonymous
over 17 years ago
I guess the reserves the banks will have to take against the wave of defaults of the Options ARM will have nothing to do with their ability to offer low cost 30 year mortgages for everyone else
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Response by Trompiloco
over 17 years ago
Posts: 585
Member since: Jul 2008
To put the issue to rest just after a 10-day span in which interest rates have shot up almost a full percentage point? That's equivalent to a scene in Carlito's way in which the turncoat has just shot Carlito and insists "No hard feelings, Carlito!". I would imagine that's when the hard feelings start. Well, the reset and recast of ARMs IS one of the hottest issues just right now.
i guess it won't matter to new york if BofA or Wells or Chase takes a huge hit on the mortgages. We don't require a healthy financial environment for our own real estate values in the slightest.
Not sure why this is an issue at all.
Most reset will probably be lower compared to a few years back.
option arms RECAST, they don't just reset. go over to www.calculatedriskblog.com.
1. the immediate problem is recasting, not resetting.
2. the potential "first reset" problem carries out to 2012. the moving trend in interest rates should make that an interesting ride.
The FACT is that the bulk of Option ARM resets has yet to occur. When those waves hit, look out below.
http://mortgagenewsclips.com/wp-content/uploads/2009/05/dr2.jpg
...and even if Manhattan has thus far been relatively "insulated" (if 30% down is "insulated"), if the economy - and banking sector - takes a hit in line with that chart, you can kiss that "insulation" good bye.
I'm thinking that starting a thread about Option ARMs is NOT the best way to put the topic to rest.
Tina
(Brooklyn broker)
LOL, true. But people here hate me so much, that if I start a thread about someting, I might kill that topic.
Tina, very funny.
I guess the reserves the banks will have to take against the wave of defaults of the Options ARM will have nothing to do with their ability to offer low cost 30 year mortgages for everyone else
To put the issue to rest just after a 10-day span in which interest rates have shot up almost a full percentage point? That's equivalent to a scene in Carlito's way in which the turncoat has just shot Carlito and insists "No hard feelings, Carlito!". I would imagine that's when the hard feelings start. Well, the reset and recast of ARMs IS one of the hottest issues just right now.
goolsbee how do you know 914 sold for $870K...