Interesting Read About The U.S. Economy

Question

https://biz.yahoo.com/ap/080402/bernanke_congress.html

CurtisSumpter · Answer

https://biz.yahoo.com/ap/080402/bernanke_congress.html

asloper6001 · Answer

We still have all the 3 yr arm coming due shortly. The 2 yr arms are just finishing up, now imagine doing it all over again with the 3 yr arms. If someone doesn't help these people keep the same rate, then this poor economy will be the same for a long time in the near future.

SteelHop · Answer

[Quote: Originally Posted by asloper6001] We still have all the 3 yr arm coming due shortly. The 2 yr arms are just finishing up, now imagine doing it all over again with the 3 yr arms.  If someone doesn&#x27;t help these people keep the same rate, then this poor economy will be the same for a long time in the near future. &#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA; &#xD;&#xA;True.  But there is a slight difference in the 3 ARM.  The first being that most of them are unlikely to be underwater like the 2 yr ARMS and thus can refinance.   Second, interest rates are lower now than a year ago which might enable more people to refinance.   It all could still be a problem but just because it is 3 yr ARM v. 2 yr arm could create the same issue.

asloper6001 · Answer

The values are still not their. The main key is the values of the homes. 3 I/O with no equity in the home is the same as a 2 yr I/O with no equity. The more time goes by the lesser values come in for someones home. Every scenario is different, but their is a ton of 3yr arm I/O people who's value have tremdoulsly dropped and they have been paying interest only, just like the 2 years. I talk to about 5 people a day that are in the same boat. All depends on if they put money down and a ton of other factors, but the forecast looks the same as the 2 yr arms.

LeRinkRat · Answer

was watching nightline wednesday night and they were talking the south florida condo crash. a real estate agent done there said he&#x27;s not looking for anyone who bought since 2004 to get CLOSE to EVEN for the next 6 to 8 YEARS

SteelHop · Answer

[Quote: Originally Posted by asloper6001] The values are still not their. The main key is the values of the homes. 3 I/O with no equity in the home is the same as a 2 yr I/O with no equity. The more time goes by the lesser values come in for someones home. Every scenario is different, but their is a ton of 3yr arm I/O people who&#x27;s value have tremdoulsly dropped and they have been paying interest only, just like the 2 years. I talk to about 5 people a day that are in the same boat. All depends on if they put money down and a ton of other factors, but the forecast looks the same as the 2 yr arms.&#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA;Again, I am not necessarily disagreeing with you on your position just saying a blanket treatment of all 3 year ARMS will be similar to 2 year ARMS.  &#xD;&#xA;First off all RE is local and there are great many facts on the price of home.  In fact, I live in an area where housing prices increased, though marginally, from last year, even the overall metro market dropped by 5%.&#xD;&#xA;If you had a 2 yr ARM you bought in &#x27;06 at the height of the market so there was much less cushion if your home priced dropped.  If you bought in the early part of &#x27;05 with 3/1 ARM you likely saw 25-30% increase of your home to the top.  The question becomes if there was a drop in pricing for the 3/1 ARM whether it has reached to the level of the &#x27;05 price.  Maybe it has, maybe it hasn&#x27;t but you have more play in the value of your home that a 2 yr ARM didn&#x27;t.&#xD;&#xA;No equity is no equity, but if you had a 3/1 ARM and it is about to reset there is a chance the value of the house is the same as the purchase price and you can refinance which would make you lucky but rather dumb to spend the last 3 years paying on interest.  Others aren&#x27;t going to be so lucky but were just as dumb.

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