tag:blogger.com,1999:blog-7514357.post114496163298943510..comments2024-02-25T08:16:25.546-08:00Comments on Exurban Nation: Important Information About Your Home LoanRob Dawghttp://www.blogger.com/profile/10042154106850545479noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7514357.post-1145641990392616692006-04-21T10:53:00.000-07:002006-04-21T10:53:00.000-07:00Anon (Julia),The banks learned the hard way back i...Anon (Julia),<BR/><BR/>The banks learned the hard way back in the 70s when inflation ate their mortgage portfolios. They needed a way out from under money losing loans so they introduced and/or reinforced several rules that gave them more control over the terms. <BR/><BR/>We don’t know exactly when they'll start enforcing the terms of their loans except the general; when it makes them money. Used to be 3rd year was the worst point to be exposed but we don’t have a clue how this will play out in an environment of rising rates and declining prices and rapid reporting. In case you can’t read between my lines; I’m positive that banks are poised to come down fast and hard. If you read my humorous letter you’d know that I also expect a new wrinkle; mortgage recision based on fraud/tax arears/changed occupancy status. Think like a bank: If you had a 5% fixed out there on a house purchased 4 years ago and you knew it wasn’t owner occupied what would you do? Ans; nothing until now. Now however you can call the loan and force them into higher rates or cal the loan and foreclose on a house with substantial appreciation. It pays in this environment to have a “hole card” and the best part is you get to blame the Fed and their insistence on lending standards.<BR/><BR/>A lender would have a strong incentive to call an otherwise performing 5% fixed with a late tax bill or other minor violation because it can only be replaced with a 6.5% fixed. Everyone else “upstream or down” still gets their 5% and you get rich. <BR/><BR/>Loans get closed out all the time with no problem. Happens when you refi. The process is well understood. <BR/><BR/>Loans, bonds, all kinds of debt are often subject to early calls. Happened to lots of municipal bond holders in the last few years as cities refied themselves locking in low rates. Most times there’s a limit say not callable in the first two years without penalty or only callable between 5 and 10 years, that kind of stuff.<BR/><BR/>But more important what is said; these loans are "technically" NOT in good standing. The bank probably knows it never was a primary residence like on the loan application, they know when you are late with a tax payment or lapse on PMI or even just regular home insurance. These are all violations exposing the borrower to being called. Whether they get called will depend on whether the bank sees profit in taking action.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1145635011357662432006-04-21T08:56:00.000-07:002006-04-21T08:56:00.000-07:00I did not know that, is this new?I know a few peop...I did not know that, is this new?<BR/><BR/>I know a few people delinquent on their tax payments, no one has mentioned the loan being called.<BR/><BR/>JuliaAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1145035978543695572006-04-14T10:32:00.000-07:002006-04-14T10:32:00.000-07:00I think it reads; "...house being worth $800k with...I think it reads; "...house being worth $800k with our mortgage only $250k." Clear now? Iwas talking about the millions of Californians with low mortgages on vastly apperciated houses. A missed tax payment than they are potentially liable for loan calls. Scary stuff. actually sounds like an investment opportunity. Buy a lot of these low rate fixed low LTV loans and watch the taxroles carefully and extort concessions at the first hiccup.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1145035140170036942006-04-14T10:19:00.000-07:002006-04-14T10:19:00.000-07:00Did I read that right? OMS is prepared to forgive...Did I read that right? OMS is prepared to forgive $550K of an $800K loan?? Wow, where can I sign up?Anonymousnoreply@blogger.com