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September 14, 2012
nprfreshair:

It Is Now Cheaper to Own Than Rent In Every Single One of America’s Largest Metros 
There’s no doubt that home ownership is far more affordable today than it was before the bubble burst. Even so, it still makes sense to balance the short-run costs of owning versus renting with longer-run expected returns. Four of the five metros above — New York, San Francisco, San Jose, and L.A. — may be expensive because the market is pricing in predicted appreciation over the long-run. The reason prices are lower, and more affordable, in other metros likewise may be because the market expects lower rates of appreciation. There’s also the all-important question of ability to exit — whether and how quickly you can sell if you need to.
Read more. [Image: Trulia]

Do you rent or buy? Personally, we rent — but that’s because moving to a different city is a huge hassle if you own a home.

nprfreshair:

It Is Now Cheaper to Own Than Rent In Every Single One of America’s Largest Metros 

There’s no doubt that home ownership is far more affordable today than it was before the bubble burst. Even so, it still makes sense to balance the short-run costs of owning versus renting with longer-run expected returns. Four of the five metros above — New York, San Francisco, San Jose, and L.A. — may be expensive because the market is pricing in predicted appreciation over the long-run. The reason prices are lower, and more affordable, in other metros likewise may be because the market expects lower rates of appreciation. There’s also the all-important question of ability to exit — whether and how quickly you can sell if you need to.

Read more. [Image: Trulia]

Do you rent or buy? Personally, we rent — but that’s because moving to a different city is a huge hassle if you own a home.

9:12 // 1 year ago
March 18, 2012
I may be poorer in my wallet, but psychologically I feel I have more.
38-year-old Palestinian Ayman abu Hussein • Discussing how, despite the fact that he and his wife are both working and he has a second job, most of his family’s combined income — 60 percent — goes to paying back mortgages, loans and other kinds of debt, something which was rare in the West Bank until recently. Before, you needed three cosigners — or to be rich — to be able to get a mortgage. Now, upward mobility with the help of consumer debt is becoming more common. The region’s difficult political situation makes loans like this somewhat volatile, along with unique cultural factors — specifically, it’s difficult for lenders to repossess property in the region due to community pressure — but banks in the region are nonetheless moving forward. Fascinating.
21:42 // 2 years ago
February 9, 2012

Federal government, states agree to settle with mortgage industry

  • $26 billion “historic” settlement with the mortgage industry
  • $17B of that settlement is expected to help out more than 1 million homeowners — breaking that dow, that’s an average of $17,000 each
  • 50 states could sign on as part of the settlement, making it the largest multistate settlement since the big tobacco deal in 1998
  • $2,000 the amount some homeowners who already lost their homes to foreclosure could get as part of the long-planned settlement source

» But is all this enough? While some will say the settlement doesn’t go far enough in addressing the concerns homeowners have dealt with in the years since the housing bubble burst, officials suggest it could provide $40 billion in mortgage relief by reducing loan principals, which would make the dollars go further. Problem is, it’s estimated that homeowners collectively owe $700 billion more on their homes than they’re actually worth. So while the dollar number sounds high, it may only be a drop in the bucket comparatively.

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11:12 // 2 years ago
December 18, 2011

So … who’s paying for the payroll tax cut, anyway? Homeowners

  • $17 per month charges on new homeowners’ mortgages source

» Those who refinance will feel the pinch, too: To help pay for the $33 billion cost of the extended-by-two-months payroll tax cut, the federal government will increase the cost for homeowners to get their homes insured by Fannie Mae and Freddie Mac, who currently back nine out of ten home mortgages in the U.S. The fee, currently around 0.3 percentage points, would jump by 0.1 percentage points, which translates to roughly $17 per month for most homeowners. However, this fee would not affect current homeowners unless they refinance starting next year. Is this the best way to handle the extension?

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11:20 // 2 years ago
December 17, 2011
These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books.
Securities and Exchange Commission enforcement division director Robert Khuzami • Discussing the civil fraud charges that the SEC filed against six former top execs at Fannie Mae and Freddie Mac, charges that came about due to alleged misrepresentation of investors’ exposure to the subprime mortgage crisis. Lawyers for the six officials claim that the executives acted in the best interests of investors despite the allegations otherwise.
11:09 // 2 years ago
November 25, 2011

squashed says: I can offer a bit more on the refinace question. First, the caveat: any sort of financial analysis is going to be highly subjective based on an individual's situation. Make your own decisions, etc.. WIth that said, there isn't much of a disadvantage to lowering the interest rate--though people may get hurt if there are fees connected with the refinance that increase the principle balance. Second, the banks have sold the loans to investors. The investors don't get a choice to prevent a refinance.

» SFB says: Ah, thank you. I admit offering people refinancing info is not my strong suit. :) Thanks for the tips! Hope these help, guys! — Ernie @ SFB

20:28 // 2 years ago

aclutteredmind says: I've been wondering about Obama's refinance plan. Is there any downside to a homeowner refinancing from a 6.5-7.5% interest rate to 4.38 or whatever the rate currently is? Why would the mortgage companies go for it, if they're set to lose so much over the course of the 30 years? Is there some way they can take it off their taxes or something? I guess I'm just missing the catch.

» SFB says: Admit that this question is slightly above our pay grade (which is why we’ve been slow to respond … sorry), but fortunately it appears that Daniel Indiviglio of The Atlantic has worked out the pros and cons at length here. His take? "If this works as hoped, then those consumers will have more money in their pockets each month. Borrowers who see their mortgage interest rates drop from 5% or 6% to near 4% will often have a few hundred dollars more per month to spend or save." He also notes that changes between the 2009 plan and this one could help out more homeowners over a longer period. However, one key point Indiviglio mentions which might explain a lot: “This program only applies to loans owned or guaranteed by F&F." As the government technically owns Fannie Mae and Freddie Mac, they have more leverage with them. Anyway, we’ll point you over that-a-way. — Ernie @ SFB

19:45 // 2 years ago
September 2, 2011
16:46 // 3 years ago
September 1, 2011
U.S. to sue banks over mortgages: This oughta be fun. The list includes a over a dozen names, such as Bank of America, Goldman Sachs and JPMorgan Chase. “The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors,” the article says, “failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.”

U.S. to sue banks over mortgages: This oughta be fun. The list includes a over a dozen names, such as Bank of America, Goldman Sachs and JPMorgan Chase. “The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors,” the article says, “failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.”

22:14 // 3 years ago
August 18, 2011

Mortgage rates fall to their lowest level in 50 years

  • 4.15% the current rate for a 30-year fixed loan source

» To explain why this is important: Mortgage rates tend to go down when people aren’t buying homes, as an incentive to get them to buy. When the economy was doing well back around 2000, this rate was around 8 percent. Now, the rate is so low that the last time it was this low, 30-year fixed loans weren’t even widely available and the numbers were based on 20 or 25-year fixed loans. This particular statistic has been below 5 percent for the entire year, minus around two weeks.

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11:52 // 3 years ago