<p>There is no silver bullet that is going to save every party in this crisis. No lowering of interest rates is going to save the guy in Stockton CA who bought at the peak of the market. That house is going into foreclosure. The bank isn’t getting any mortgage payments on the house, and is looking at a loss which comes out of its capital. Capital reduced, it can’t make loans. People who can’t get loans can’t spend, and curtailed spending reduces company revenues. Companies faced with reduced revenues respond by reducing costs – yes, layoffs. </p>
<p>Now I happen to agree that helping people keep their homes is a good thing. But that doesn’t mean that homeowner in Stockton will survive. And since bailout money is limited, it probably means that those who handled their finance responsibly will not benefit. Like Tom, I’m kind of P.O.'d about that. But “fair” is pretty far down the government’s priority list at the moment.</p>
<h1>4. “Mortgage rates are dropping for FNM-FRE type loans. That’s for everybody.”</h1>
<p>That’s nice. But if this is limited to 1st time buyers, just who has the 20% dp. Most people who wanted to buy a house upto 2006, bought a house with ndp and now or close to foreclosure. This leaves recent grads but they have huge student loans and looking for possible layoffs. If this program is for Everybody, I’m not sure that everybody has $40,000 dp cash laying around for a starter home worth $200,000. </p>
<p>Everybody will certainly need to compromise as Newhope says.</p>
<p>Stockton is about 60+ road miles from SF and it’s just the beginning. People were buying out in Modesto and Merced and similar places that now have new development ghost towns. Same in SoCal where places out in Riverside County were selling like crazy. But many people did not even plan to live in these homes–just flip them. Crazy.</p>
<p>I have a 5-1 ARM now on my residential property and my mortgage payments have been going down because the lending rate is dropping. Now I am hearing that it will get to 0% at some point! Wow, do I really need to think about refinancing? How long do you think the lending rate will stay that low?</p>
<p>4.5% is not that great a rate, I have an existing mortgage at 4.75% and I am sure lots of people do too. </p>
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<p>I am looking for a winter home and I think Riverside County may be suitable. Seemingly not close to any big cities, hopefully not congested and warm and dry. Maybe other seniors will think so too.</p>
<p>Me too. My mortgage is actually a low rate…about 5%. AND it’s not for very much of the value of my home, another good thing. Still…we’ve been responsible spenders, have not overextended (well…except maybe on the COLLEGE costs). <em>WE</em> could use a “bailout” of our college expenses…help subsidize some of that. Heck…if I got $10,000 per year over what I have now, I would be able to put some money back into the economy. As it is now…no vacations, no new cars, no new real estate, no unneeded items purchased at all.</p>
<p>I just checked, I have a 7 yr/arm at 4.75 %. At the of the period it is expected to be retired. Or maybe not. Who knows what the future holds. </p>
<p>I normally don’t pay attention to the time periods, because the expectation is to retired it long before. But I agree 4.5 % for 30 years floated around is good for most people.</p>
<p>“I have a 30-year fixed at 5.00% with no points.”</p>
<p>15-year fixed at 4.875% with three-fourths of a point – a re-fi earlier this year. Dumb luck on the rate really. A week later it was back over 5.25%.</p>