BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Do not expect to see as many refis as when home prices were rising. Refis will be hampered by people being underwater on their mortgages, unemployment rising, and credit card defaults rising. All three of those will have a negative effect on FICO scores at a time when refis are going to require better FICO scores. Most importantly, those who most need to refinance will not find it so easy, especially if they are upside down on their mortgage or out of a job. Refinance relief and lower mortgage rates are starting to become available, but only for those who least need it. I think the reported numbers are suspect. There are so many applications that get turned down today it is not funny. The reasons are: Number 2 is playing a huge role right now because all lenders have now cut the LTV by 5% in any declining area that Freddie or Fannie recognizes. This alone shuts out nearly everyone who bought in California in the last 3 yrs who did 90% financing or more. California will collapse hard over the next 3 to 4 yrs. All the first time home buyer areas are facing foreclosures bigger than any time in history. The high end areas are going to get killed next, especially when all the Neg Am Loans start to reset. The big problem with the number is that people are getting turned down multiple times hoping to land a better rate. Each time they apply for an application the counter goes up. While applications may be soaring, applications are not proof that actual refis are soaring. Make a mental note that this is just another part of the The increasing desperation to refinance at a better rate does not imply actual success in refinancing. While some may be benefiting from the recent decline in rates, those who need it most are probably not benefiting much. Looking at the chart above, the implications are ominous for California. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Moody's Investors Service on Thursday placed Ambac Financial Inc (ABK), which insures more than $500 billion in bonds, on review for a possible ratings cut, an event that could trigger similar downgrades on billions of dollars of debt. A cut could mean the ratings on the bonds it insured -- which amount to $556 billion in value -- would also be lowered, forcing the owners of those bonds to mark down the value of their portfolios. Moody's announcement came after Ambac, hard hit by the turmoil in credit markets, said it was recording a $3.5 billion write-down, equivalent to nearly two-thirds of its net worth, and plans to raise $1 billion in new capital to maintain its ratings. MBIA Inc (MBI), the world's biggest bond insurer, sold $1 billion of surplus notes last week to shore up capital and preserve its crucial triple-A rating. 'The markets are...
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