When Rates Go Up?

[wyecoyote]

Dee Dee,

I am with you I do not understand for one second people refinance and pulling money out of their house to buy a new car. Never will understand it one bit. I talked to my partner the other day and he is talking about remodeling his kitchen and pulling what little equity he has from his condo out to pay for it. Never understand that. I paid for everything I do with the cash I have on hand. But guess it does pay the bills doing these appraisals. I think I will have a shot of tequila and my now.

Ryan

 

[Dee Dee]

Ryan,

Did you get it figured out or do you just end up with a nasty headache like me?

 

[Greg Brinkley]

Dee Dee

I totally agree with you here. I don't think its a good thing at all. I was just commenting on what I think may happen when rates finally go up and homeowners stop refinancing. There are alot of people out there that are overextended and just getting themselves in deeper. At least twice a week, I have a homeowner tell me that they couldn't even afford this house if they had to buy it today, but there they are doing a cash-out refi for every penny they can get. In 2 years when banks are offering home equity loans to 95 or 100% LTV, these are the same homeowners that will be taking advantage of that program as well and getting themsevles in real trouble if they ever lose a job of home prices start to go down. I think alot of people are in for a rude awakening within the next 5 years just like new investers were when the market crashed.

 

[Dee Dee]

Greg,

I can tell you first-hand that it really stinks working and living in a market area that goes stagnant or even backwards after a period of excess demand. Those who have no equity left will take you down right along with them. The only ones who won't take a financial hit are the ones who bail out at the peak, if they are smart enough to know when that is.

Watching what equity position that you have in your own home slowly shrinking because of growing seller competition and a diminishing number of buyers is d*mned depressing. Even if you don't touch your equity at all you still lose if the economy around you goes flat.

The number of appraisal orders with unattainable LO and homeowner 'estimates of value' far exceeds those that are possible. The tension level as you try to do your job in a professional manner is increased as you become the 'deal breaker' and 'home wrecker' that causes families to finally have to face the inevitable.

REO appraising starts feeling like a cakewalk. At least you're examining a dead corpse to determine what is left to salvage, versus having to face the daily screams and cries of the terminal dying.

Argggggh! Off to work I go. At least this one doesn't appear to be upside down.

 

[Farm Gal]

:rofl:

E-Gadds!! :lol: Dee-Dee!!
How much "anesthesia" did you treat yourself to???
:rofl:

"The worms go in the worms go out"

My Sister-in-law came to town in my absence to assist Ted. She has her class hours in and a provisional license... Ted figured she'd like to hang as he ran through a series of REO's.

They were as you so prettily describe 'em "corpses". And these had been rotting for a while.

She has probably permenently rethought her position on appriasing and REO appriasing in particular! I asked him why he didn't give her one of the carbon-filter masks... he said we don't NEED no-stinking mask'es

 

[Dee Dee]

Hey LeeAnn....great to see you :rofl: again....unfortunately it is at MY expense. :scrambled: Hope Ted doesn't scare the sister-in-law away.

Greg,
Sorry to sound like such a downer, but I've also seen first-hand what happens when the plug gets pulled on government defense contracts. What you have there is an economy based on the possibilities of war. If peace breaks out all over the place like it did when the cold war ended, lots of people get laid off. Considering the current state of heightened military activity, your market could continue to do well for quite awhile. Unfortunately, it's kind of a bummer if you're one who prays for peace but knows that if it comes you might be out of work.