bostonbubble.com

StallionMang · Joined: 29 Apr 2008 Posts: 54

I assume that mortgages are getting harder to obtain - are there any reports on # of mortgages being issued? Anecdotes are easy to come by but is there any way to quantify it?

Less money+tighter regs = less demand = further downward price pressure.

showgunx · Joined: 14 Jul 2005 Posts: 60

I hope that is happening and continue happening for a long while. It is about time for diligent saver to get some bargains in this indebted nation.
You know, hard to get mortgage = large down payment, which = less buyers, which = housing price continue going south.

john p · Joined: 10 Mar 2006 Posts: 1820

What do you think will go down more, the investments your futue down payment is currently parked in or house prices? I'm hoping you've got it in a place where it won't get hit.

Do you think a big wave will hit Main Street soon and we get a massive recession?

Brian C · Guest

When the rates dropped a few weeks back, I tried to get locked-in for a 30 yr fixed, just in case something in the market popped up. Ive been going to the same mortgage place so they have everything on me already on file.

This time it was different. Here is what happened:
- They removed my stocks out of my asset column but did keep my money market and mutual funds.
- They made sure I had 15% down, which I do.
- Asked about employment, and ive been at the company for more than 3 years.
- My monthly debt to income ratio had to be under 38% for my loan.

Ive been approved for the loan but it took me about 2 weeks to get everything finalized.

prokeds · Joined: 18 Oct 2007 Posts: 5 Location: near Boston

Very interesting. I don't quite get how they wouldn't count stocks, but would count mutual funds, which are basically the same thing, only in different clothing.

Guest

Keeping on topic, it looks like the MBA, Mortgage Bankers Association, releases a weekly survey of mortgage applications in press release form here - http://www.mbaa.org/NewsandMedia

This does *not* track approval rate, just applications. PaperEconomy has a blog post with some great graphs - http://paper-money.blogspot.com/2008/09/reading-rates-mba-application-survey_17.html

I'm still on the lookout for approval data.

StallionMang · Joined: 29 Apr 2008 Posts: 54

Prof. Karl Case doesn't know of any, so it probably is not being tracked:
"I don't know of any statistics on people turned down for mortgages"
http://www.youtube.com/watch?v=_1kBxoBNd14 , at 5:00

john p · Joined: 10 Mar 2006 Posts: 1820

To the "Keeping on topic" guest:

What comment was off topic? What are you the blog police? The impression I have of you is that you buy your clothes at Banana Republic, have a thick framed eye glasses and drive a Jetta and use words like uber-. Here's two of what I'm talking about:

http://www.youtube.com/watch?v=l1saUrUSo-M

The first poster comments that he assumes that mortgages are getting harder to obtain. I tell him to make sure he's got his down payment in something that isn't risky. The next poster, who is going through the process confirms my suspicion and says the bank actually doesn't count assets if they are tied up in equities. What comment isn't in the strike zone and isn't helpful.

Guys, I don't know if it is a younger generation thing, but when I was out looking, very, very few people were out there to help, very few and we APPRECIATED AND RESPECTED anyone that took the time to offer any assistance.

This hayseed has some pearls of wisdom:

http://www.youtube.com/watch?v=TeBEvvbr1s4

It was the dumb hayseeds, the House Republicans, that held their ground and voted their values and prevented us from a disaster of a Bailout Bill.

StallionMang · Joined: 29 Apr 2008 Posts: 54

I forgot to sign in. Opening up the thread to "will there be a massive recession" seemed off topic.

stillRenting · Guest

A coworker just closed on a house this week and had no problem getting a loan. He got his through a credit union and he only put 10% down.

I am pre-approved at Bank of America for mine. Called them up yesterday and was told that that they are still giving out loans to "those who qualify". I couldn't get much more info from them than that.

Offtopic: Thank God someone else is trying to keep things on topic. Thanks StallionMang

Brian C · Guest

Guest · Posted: Fri Oct 03, 2008 1:34 pm GMT Post subject:

City of Lowell- Mortgages - in Sept 2007, 268 mortgages were recorded. In Sept 2008, there were 196 - a 27% decline
http://www.lowelldeeds.com/blog/index.php/2008/10/02/september-recording-stats/

john p · Joined: 10 Mar 2006 Posts: 1820

StallionMang:

I apologize for my prior post. You're a bright guy that makes me think alot.

Sometimes I get like Newman on Seinfeld.

StallionMang · Joined: 29 Apr 2008 Posts: 54

Thanks, John. I'm sure we can find common ground if we work at it...

Interesting Article:
http://www.portfolio.com/views/blogs/market-movers/2008/10/14/will-the-banks-lend?tid=true

Bottom line, it's better for banks to hoard cash, it makes their capitalization ratios look better - and going into a recession where lots of loans are likely to go bad, it's less risky.

Lowell Mortgage #'s down 34% in 3d quarter - http://www.lowelldeeds.com/blog/index.php/2008/10/14/credit-crunch/

john p · Joined: 10 Mar 2006 Posts: 1820

You know, sometimes I find it a simple fix to scapegoat "elites" when I'm frustrated, but then I think of that dam Yale Professor Robert Shiller and Wellesley Professor, Karl Case who really are voices of reason.

I don't know if you've been checking, but interest rates spiked almost 1/2 a point in the matter of days.

http://www.bankrate.com/brm/graphs/graph_trend.asp?product=1&prodtype=M&ec_id=brmint_brm_large_new_mpro_mtg_all

I think when the markets saw that central banks were going to stop the natural course of events correction, they measured that the balance of the correction would take the form of inflation, so the inflation premium is increased and therefore the mortgage rates increased because the future value of money will be worth less and less.

As we know a mortgage payment consists of two primary things, the house price and the cost of capital (mortgage rate). If you're a new buyer I think you need to look at two formulas, one for the house price and one for the cost of capital:

house price: by Stallion Mang - Less money+tighter regs=less demand-further downward price pressure. Add in supply and demand and migration to lower cost of living areas as well.

and, the formula for the cost of capital: more inflation=higher interest rates.

I feel that on the one hand, prices will drop, but on the other hand interest rates might go up and you have to measure the benefit and balance of each. The overview will be solvency. If an individual feels comfortable in their job and future, most likely so does many others so the valve will be open and the deals and selection might not be there.