I guess even the ultra high end is feeling a little pinched in today’s market… This beautiful lakeview estate home in Incline Village was recently reduced $1 million to $14,950,000. If any of you are interested in purchasing it, please call me, as I am also a member of the Incline Board of Realtors. see it.
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Reno Ignoramus
A $15 million house. Now that’s really relevant to most people.
But look at this:
“The Office of the Comptroller of the Currency, the Federal Reserve and other regulators kept intact a proposal that says banks must qualify borrowers for popular payment-option and interest only loans at a ‘fully-indexed’ rate–the highest rate that they could incur over the life of the loan.”
Reuters
September 29, 2006
“Starting Monday, it’s going to get much riskier to fib about your income when you apply for a home mortgage. That’s because the IRS is overhauling a key income verification tool used by lenders, making it faster and easier to pull up electronically the confidential income tax information of borrowers.”
The Hartford Courant
September 30, 2006
HOLY COW!
Does this mean that hairdressers making $36,000 a year will no longer be able to apply for a liar loan stating they make $100,000 a year?
Does this mean that hairdressers won’t be able to buy a $600,000 house in Somersett??
Does this mean that valet runners won’t be able to buy a $450,000 house in South Meadows??
Does this mean that bartenders won’t be able to buy three Triana condos with neg am interest only liar loans??
WHAT IS THIS GOING TO DO TO THE MARKET????
gotlots
A sigificant segment of the mortgage market, and particularly of the sub-prime market, is independent of the reach of the federal regulators. So the spigot of suicide loans will not be instantly shut off. For an example, just go the mall and observe the kiosk of the suicide loan makers. However, regulation at the State level, patterned after the federal regulations, will be implemented eventually.
The writing, however, is clearly on the wall. Much to the chagrin of the real estate industrial complex, and particularly to realtors and mortgage agents, we shall return to the day when people will only be able to get loans they can demonstrate they can repay. Prices will fall accordingly. It is called reversion to the mean. And it will be painful.
Painful to people who bought at bubble prices with loans they cannot repay. Painful to people who bought before the buubble but who HELOCd themselves with loans they cannot repay.
And painful to the pocketbooks of realtors and mortgage agents who will see their commissions drop significantly.