Positive Jumbo Loan News

Thanks for posting steveF, this is very good news.

http://www.nytimes.com/2009/07/05/realestate/05mort.html?ref=realestate

You are welcome Juiceman. The pendulum swings back. Once fear is gone then "business as usual" returns.
Please keep posting as well JuiceMan. aka KingBull :)

Keep up the good work fellas.

I'm not as nutty as you guys are but here's a major positive. Credit card limits and small business credit are starting to loosen up again.

Is it me, or is loose credit card limits and easily accessible jumbo mortgages some of the things that got us into this mess in the first place?

ynotie29 - it is. underwriting standards are way way tougher and we will NOT see the loose lending practices that defined the euphoria stage of the bubble. IN meantime, delinquencies are rising and spreading to higher quality debt classes, HELOCS delinquencies are surging, credit card delinquencies are surging, and prime is starting to look more like subprime. But hey, it aint kool to be a bear turkey so close to thanksgiving

http://www.bloomberg.com/apps/news?pid=20601087&sid=axMDObJEk6eA

SteveF and JM - you guys have seriously become completely divorced from reality. "Very good news"? "Business as usual"? I mean, do you REALLY BELIEVE this nonsense??? Are you so deep in the hole that you've actually created an alternate reality that you live in? If so, I feel bad for you, but hiding your head in the sand is not how you deal with problems.

I'm seeing the average for 30-year jumbo mortgages at 6.04% versus 5.32% for conforming mortgages today on Bloomberg.

The spread is now at 0.72%.

At its worst last year the spread had widened to 1.95%.

The average for 2007 was a spread of 0.41%.

All in all, quite significant improvement. I'm sure the terms are more demanding as regards downpayment - but that makes good sense.

Data per Bloomberg

"I'm sure the terms are more demanding as regards downpayment"

Yes, and they might actually check to see if you have any prospects of paying back the loan (e.g., an income). You know, the kinds of responsible things that weren't done from 2000-2007.

this is great news. I remember not too long ago jumbo rates were 7%.

So, prices still declining, and mortgages getting cheaper.

Mmm, mmm... nice to be a bitter renter.

Maybe this can explain why homes in Long Island are starting to inch up a little in Zillow.com

No, no, 10022, don't you get it? It means that prices will likely be back to 2007 bubble levels by the end of this year! That's the "great news"!!!

What a f-ing joke these clueless, desperate, in denial owners are.

For further perspective, as recently as March 31, 2009 the spread between 30-year jumbos and conformings loans was 1.63%. So the improvement in spreads has been quite considerable over the past few months.

Zillow is crap. My Zestimate went from $924,000 to $676,000 in only a matter of months. And there is no way prices declined that much in that time period.

"SteveF and JM - you guys have seriously become completely divorced from reality. "Very good news"? "Business as usual"? I mean, do you REALLY BELIEVE this nonsense??? "

BSex, can you tell my why a declining spread on jumbo's isn't very good news? Why the hysteria?

"What a f-ing joke these clueless, desperate, in denial owners are."

Wow, what a remark based on a simple comment that it is good to see the jumbo spread easing. Why the anger BSex?

don't waste your time juice man. The bears want high interest rates so that prices will fall more. Anything less than 10% is bad news for them.

apparently the bears have this stupid delusion where it's better to buy at lower prices and higher mrotgage rates than vice versa.

JM - I think you confuse exasperation for "hysteria" and "anger". You and SteveF pathetically and desperately attempt over and over to make a case that things are going to be "business as usual" in short order in the Manhattan RE market. Yet 99% percent of the news (which you conveniently ignore) is disastrous. It's just hilarious to witness your repeated efforts to drum up positive sentiment on this board. So my question is - WHEN WILL YOU TWO COME TO GRIPS WITH REALITY????

"I mean, do you REALLY BELIEVE this nonsense??? Are you so deep in the hole that you've actually created an alternate reality that you live in? If so, I feel bad for you, but hiding your head in the sand is not how you deal with problems."

Come on, BSexposer, why the shrill hysterics? I don't think anyone (except possibly steveF) thinks this means everything's instantly back to 2007. Why the instant need to knock anything even remotely positive?

Sorry, I forgot to add the 2 other clueless fools - LICC and The_President - to the list. You 4 are unbelievable - I can hardly believe the nonsense you guys post.

i dont want higher rates

"Why the instant need to knock anything even remotely positive?"

No - I have a need to knock ridiculous nonsense and BS - hence my monicker.

"WHEN WILL YOU TWO COME TO GRIPS WITH REALITY????"

Take a deep breath BSex. What am I ignoring? I commented on jumbo rates and I think it is a good thing. Is it not? Why is that a departure from reality? Are you sad that jumbo rates are coming down? Why?

OK, JM, here is the "great news" about your jumbo rates - please commence spinning (I know you will think of something).

"There is a conforming jumbo which was created for higher end areas and goes up to about $729,000 in some counties; however, conforming jumbo loans are extremely hard to qualify for. True jumbo mortgages by private lenders make the higher end housing market move.

Before the housing market collapse the difference between true jumbo rates and conforming mortgage rates averaged about 0.25%. Today, the difference is tremendous, over 2%."

http://www.examiner.com/x-15861-LA-Mortgage-Industry-Examiner~y2009m7d6-Mortgage-Rate-News-Mortgage-Rates-Improve-but-Underwriters-are-Scared-to-Approve-Jumbo-Mortgages

Huh? BSex, what in the hell are you talking about? The OP is about the spread you referenced finally easing after many months. Just admit it, that is good news. Why the fuss?

More good news...

http://www.cnbc.com/id/31761094

> Once fear is gone then "business as usual" returns.

By "business as usual", I think SteveF means real estate going back to declining fast, instead of super-fast.

JM - jumbo rates may be declining BUT IT'S ALMOST IMPOSSIBLE TO QUALIFY FOR THE MORTGAGE IN THE FIRST PLACE. What do you not understand about this????????????

Mr President,
I have ignored your posts for months now, but that last one deserves a comment. It is FAR better to have lower prices and a higher mortgage rate than vice versa. Lower prices means people are able to buy with smaller mortgages. Though the higher mortgage rate means larger monthly payments, any additional payments made (that go directly to the principle) will reduce your overall loan size by sizable percentages. Having a huge mortgage at a low rate is good in that it provides reasonable monthly payments, but you are much more susceptible to losses in equity, and any additional payments to the principle will reduce your overall loan size by negligible percentages.
Personally, I'm hoping mortgage rates go up in the near future. At the very least, it would force people to buy real estate that they can actually afford.

From the CNBC piece...

"Without a large down payment, loans are difficult to obtain or come with prohibitively high interest rates, which shrinks the pool of potential buyers and reduces demand for homes."

GET IT??????????????????????????????????????????????????

You really are emotional on this subject BSex. I'm not sure what I said that requires you to type everything in capital letters but it is funny to watch. Jumbo rates are easing, qualification is difficult (as it should be), but it is still good news that Jumbo rates are easing. Sorry that good news upsets you.

JM - does it REALLY help prices if jumbo rates are declining due to the fact that A TINY SLIVER OF APPLICANTS QUALIFY???? Try THINKING about it for a second, instead of your typical knee-jerk response of "great news!!!" And if it doesn't help prices, then why is it "great news"?

Looks like JM is stumped - LOL.

Would it have been better if I said "good news"? or how about "things are trending in a positive direction"? or how about "gee wilikers Batman, it is goody goody gum drops to see the spread narrowing"? Are you seriously having this argument with me?

OK, JM, I see that you simply don't get it. Your last response was a complete non-sequitor.

JM - I think those loans being more difficult to qualify for is a good thing and the fact that the spreads are easing is a good thing, too. It doesn't mean the downturn is over, but it's good news.

I don't get why there can only be all one-way to think about things. Why can't any positive news be just that...a bit of positive news?

JM has no argument, no rationale, no nothing - he thinks that if he proclaims something "good news" then it indubitably is good news - hilarious (yet sad). Learn to THINK, JM, instead of just react - it may save you from making future dumb decisions.

"I have a need to knock ridiculous nonsense and BS - hence my monicker."

You know, if you look at it quickly or out of the corner of your eye it appears as B Sex poser. I'm just sayin...

Great idea!! Let's loosen credit again so ANYONE with a pulse can get a mortgage and 15 credit cards. Now there's a novel solution. Oh brother!!

Thank you, waverly, for your brilliant insight - yes, I am aware of the fact - no, I don't care one bit.

> Would it have been better if I said "good news"?

Probably "less bad news".

Things are definitely getting funny where things falling slower is an "improvement" and a recession that ends in 12 months not 18 months means the economy is "better".

"I don't get why there can only be all one-way to think about things. Why can't any positive news be just that...a bit of positive news?"

I have no idea waverly, BSex seems to have lost his mind because I said it was good news that the spread was easing. I also agree that tighter qualification standards are a good thing.

It is fun to watch BSex spit the dummy over an innocuous statement though, he is really losing it over this one. I call it bear rage.

"Learn to THINK"

Right, which means that a loosening of credit is not necessarily a bad thing, since the credit markets were frozen. Loosening doesn't mean "ANYONE with a pulse can get a mortgage and 15 credit cards."

And the easing of spreads, which will help SOME people, is good news.

If jumbo rates fell to 3% due to the fact that the only qualifying applicants were those individuals with liquid net assets of at least 10X the mortgage amount, it would be "good news". To JM, at least.

Whatever. The bottom line is that the OVERWHELMING NUMBER of economic factors is decidely AGAINST NYC RE prices appreciating anytime soon; and, in fact, prices in Manhattan will almost certainly continue along a slowly declining path for the foreseeable future. THIS IS THE REALITY THAT CERTAIN PEOPLE ON THIS BOARD REFUSE TO ACCEPT. Period.

"I have no idea waverly, BSex seems to have lost his mind because I said it was good news that the spread was easing."

I have "lost my mind" b/c I point out how ridiculous your statements are???? HUH?

"I also agree that tighter qualification standards are a good thing."

Good for banks, yes. Terrible for RE prices, though. Sorry, JM.

"It is fun to watch BSex spit the dummy over an innocuous statement though, he is really losing it over this one. I call it bear rage."

I think you project, JM. Why would I have rage over the fact that everything I foresaw happening is now coming true? The only "rage" I may have (if you can call it that) is when I see idiotic statements and arguments posted by the likes of you and SteveF. I have a "rage for truth" maybe. You should try it sometime.

The article about BofA making more jumbo loans was from 3 months ago. I guess it wasn't enough to keep prices from falling sharply over the last 3 months. But still good news if you are trying to get a loan. Can someone please post some articles from 2 years ago about how prices are rising, just to make us feel better? Can you post an article about how the Dow just hit 14,000 so I can feel rich again?

well prices didnt fall sharply over the past 3 months. rather, they fell sharply from the illiquidity that came with the fall of lehman in 4th qtr and 1st qtr as we approached lows in stock indexes and fear rose.

The past 3 months saw an acceleration of action/demand/interest, whatever you want to call it, from the prior wave down where no bids were coming in, as equity markets rallied to latest high marks a few weeks ago. So, the past 2-3 months, in my opinion, actually priced OUT Armageddon and saw deal levels rise, albeit slightly based on price point.

Here's some more recent news - no doubt this bodes well for RE prices, right JM?

http://www.inman.com/news/2009/07/6/bankruptcy-filings-jump-365

"The past 3 months saw an acceleration of action/demand/interest..."

Have prices gone up in the past 3 months? Not that I'm aware of.

brodie - Haha....if that would actually work I would do it for you in a second!

"brodie - Haha....if that would actually work I would do it for you in a second!"

JM, LICC, SteveF et al - they all think it works - the power of positive thinking. Also known as "hiding your head in the sand" or "hear no evil, see no evil". Also known as DENIAL.

"everything I foresaw happening is now coming true?"

Ding-Ding-Ding-Ding....there's your real answer JM.

BSExposure - 'gone up' is a very general term. think of it this way, in the sense that Armageddon & Fear was priced OUT of the market during the past few months, then yes. Deals are happening at the lower end of the range down from peak, based on price point, as opposed to upper level of range say in February & early March contracts that were signed. Make sense? The market from say late April to late June, deals done then especially in late may and early june as equity rally neared its peak, was not trading at the fear levels seen only 2-3 months earlier...yet were still trading in the lower end of range down from peak based on price point.

Here's the thing, money must seek returns ... and that is an undeniable fact. There's been a whole lot of money being pumped into the system (both in the form of monetary and fiscal policy), and the BRIC countries still predominately settle their trades in U.S. dollars. All that money needs an outlet to earn yields. If bank standards toughen, despite the spread between jumbo and conforming loans narrowing, then perhaps that money is not being pumped into R/E directly. However, depending on the outlet, and where this money concentrates (i.e., the next bubble), the productivity gains may end up in R/E, indirectly. This may not translate into 2007 pricing levels, but the reaction will at least stablize prices. Remember, some of these indicators are lagging and therefore, may be a few quarters behind. When in doubt, always follow the cash!

"everything I foresaw happening is now coming true?"

"Ding-Ding-Ding-Ding....there's your real answer JM."

Yes waverly, and this is all coming from the guy who has been posting here for about 3 months. What a prognosticator!

BSex, I just read the article again and believe my statement was wrong. I should have said it was really, really good news. My bad.

"Yes waverly, and this is all coming from the guy who has been posting here for about 3 months. What a prognosticator!"

I'll take the guy who has been right for 3 months over the guy who has been wrong for 3 years...

"I'll take the guy who has been right for 3 months over the guy who has been wrong for 3 years..."

If you choose BSex over steve, so be it. At least steve has been consistently wrong.

Well, it is a tight race between you and SteveF... but I think you have him in length.

I think some of you are missing the forest for the trees. Banks are now willing to lend THEIR OWN MONEY ( as opposed to the OPP-fannie-freddy-who-gives-a-shit-its-not-our-money-at-risk lending which "got us in trouble") TO LOW RISK DEALS. You put some real equity down, you have good credit and good income, they make you a loan. guess what? This is what mortgage banking was all about for 100 years before lenders realized that they didn't need to give a shit about risk because someone else was bearing it. So now lenders who got billions from the gov't to make loans are making HIGH INTEREST/LOW RISK loans. OH MY FUCKING GOD!!!!!!!!! WHAT A SHOCK AND A HALF!!!!!!