Are the interests only loans and 80/20's gone for good?
Will we ever see mid 5's 30yr fixed rates again any time soon?
Will the .5 rate cut from the Feds ne enough to help?
Are the interests only loans and 80/20's gone for good? - Cashout 80/20's are gone for right now. Only subprime lenders allowed them anyway. Countrywide is still offering an 80/20 purchase for qualifying customers(it is a lot harder to qualify now), but who knows for how much longer. First Magnus going under last week crippled our office, as they were the last to offer really creative loans. I/O's are around, but hard to find at higher than 90% ltv. Eventually, they will go down to 80% from what I have heard.
Will we ever see mid 5's 30yr fixed rates again any time soon?- Yeah, we will. The banks left standing will still have to be competitive in the future. We are seeing low sixes now, so it's not a far cry really. The rate now are not bad, but it's the property values and the lack of programs for risky buyers that's killing the biz.
Will the .5 rate cut from the Feds ne enough to help? - No, not here anyway. People don't give a fuck about a few bips on the rate. They either want to sell their house without coming in with too much money or buy a house and get a way better deal than they should be getting. Only people who are refinancing really are the people in ARMS that are going to adjust. And most of them are fucked, Appraisal reviews are tighter now than I have even seen and there are going to be more foreclosures than people are predicting as these ARMS keep adjusting. People just owe more than their houses are worth.
On another note Alex, remember when I said it was a good time to invest in Apartments? Scratch that, more and more people are going to be renting their houses out now. Apartments might actually suffer. Thats why I am TRYING to buy a car wash, gotta get something that is cheap and everyone needs, salt ruins cars in the winters here.
Oh, and I am worried a bit. We have lost over half of our brokers, but their old customers still need loans so I deal with quite a few of them, cuz some of the other guys I work with actually have the balls to give a guy a 100 dollar referral fee when they close a loan. If I make 3 grand, I'll give the guy who sent it to me a grand, fuck it, structuring them is not the hard thing, finding clients is, so I have been fortunate to get a lot of referrals lately.