Mortgage fix that could save every home owner as much as $500 a month.

[Dawgs]

If everyone could refinance at their original loan amount, with very little closing costs (<$500), it could save most families $150 to $500 dollars a month. That's a lot more than the middle class tax cut.

This will help keep people in their homes, increase buying, stop falling prices, and increase incomes. It might even help the banks get rid of bad loans.

I'm not sure how easy this would work, but something similar was proposed as an amendment for the stimulus, so it looks like it might be possible.

For example, I calculated that I could save $356 dollars a month if I refinanced my loan at 4%(currently at 6%).

The trick is low closing costs, low interest rate(4% isn't far off from the current low), and making it easy.

I'm sure I'm missing something, so flame away.

[Delphinus]

1. I think there's something

out there right now ... will have to check with my son, who told me about it.

[Stellabella]

2. Exactly.

Easy fix, would help most people, and would punish predatory lenders. Seems like a win-win to me.

[midnight]

3. I would love to be able to refinance at 4%.

[mountainvue]

48. Yeah. Especially when the going rate is about

5 right now and the only way to get 4 is to buy it.

[Kashka-Kat]

4. why does it have to be at original loan amt? I've already pd down a bunch m,

[Dawgs]

5. I meant, your original loan after what you've put down.

:hi:

[gollygee]

6. How did you keep the closing costs so low?

We looked into it but the closing costs would have been much higher.

[Xenotime]

8. yea $3000 - $5000 for some.

The government should help with keeping those low. Perhaps they need to open an investigation into fair practices in that industry.

[mountainvue]

51. Yes. Some of the fees seem exorbitant. n/t

[ipfilter]

7. How can you make closing costs less than $500?

Indeed, some fees charged by some lenders are junk fees. However, most of the expenses related to a mortgage are directly related to the cost of obtaining and servicing the mortgage. The biggest expenses for closing are pre-funding escrow accounts, pre-paid interest, title searches and insurance, and appraisals. FHA loans require a rather large insurance premium paid in advance. One can mitigate the pre-paid interest by closing a loan on the last day of the month. Few people I know pay their taxes and insurance without an escrow account. Closing costs don't just appear out of nowhere, they are real expenses.

[Dawgs]

10. Think of it as a government fix to our mortgage crisis.

If they could figure out how to eliminate some of these expenses then it could be a real help to the economy. I figured $500 would be a low enough amount that almost every family could afford it. $1000 might be low enough. My number was just a guess.

[msongs]

12. closing costs are just tacked on garbage to gouge buyers...

here is what it takes to refinance a house:

a person sits at the computer and types in some numbers. press enter. print. sign docs. save and close file. that's it!

most of the rest of this stuff is just added on crap that has become "traditional" over the years by add on
parties who have figured out ways to scam house buyers. and appraisal only costs $500 around here. BTW does it really cost $200 to ship documents overnight? yeah, right.

Msongs

[ipfilter]

18. I've gone over my HUD-1 statements with a fine tooth comb.

There isn't one dollar I've ever paid in closing costs that I didn't make damn sure shouldn't be there. Every single item was a cost I incurred because I wanted a loan. The bank didn't make me pay for title insurance, or title inspections, or document recording fees, or pre-funding my escrow account for my own insurance and property taxes. These are all things I had to pay to close the loan because they are real expenses. If the bank were trying to pull any funny business with undisclosed fees I would have caught it because I'm anal retentive like that. I guess I could have just bitched about the cost of my own closing, but instead I researched every single line on my HUD to understand what was being charged, and more importantly, why.

[MercutioATC]

21. Some are, but most are legitimate.

There ARE state and local recording fees. There ARE tax and utility prorations. There ARE appraisal fees.

If the "loan origination fee" is high, that's where the mortgage company is padding their fees...but there's NO way closing costs are going to be under $500...not even under $1k.

[mountainvue]

59. If the origination fee is high, it may in fact be

points used to buy the rate you are trying to obtain. Your state should have a disclosure that is presented to you when you apply for the loan called a MORTGAGE LOAN ORIGINATION AGREEMENT. It explains what the origination fees are for, how your lender is being compensated, etc.

[Hassin Bin Sober]

29. You are being silly.

I wish it were that easy.

I'm a fairly good sized independent Chicago lender with very low overhead - meaning we don't spend millions (almost nothing) on advertising like the big lenders that run television commercials every 15 seconds. We don't have extra layers of management between producers and ownership no "VPs" in charge of endless email cc'ing. One operations manager and that's it - she works her ass off.

That said, evey loan gets handled by five overworked people before it goes to the title company.

1. The loan officer - responsible for generating the customer, meeting with the customer (sometimes several times), placing the loan, generating pre-approval documents, obtaining signatures, delivering the loan to the processor, babysitting the customer throughout the process.

2. The processor - obtains income and asset documents. verifies employment, orders title, orders appraisal, orders insurances......chases down customers and insurance agents often requesting information several times. Orders pay-offs etc.

3. Underwriter - responsible for confirming the loan meets published program requirements, processes the loan through underwriting engines, issues approval letters.

4. Appraiser - meets customer at the home at the customer's convenience - often hard to do. Inspects the property and investigates comparables and writes a report.

5. Closer - prepares documents, issues checks coordinates with the title company, loan officer, processor and customer to assure everything arrives at the title company on time and without errors......corrects errors while the loan is at the table.

That's not to mention the funder, the shipper and other post-closing people that make it work on the back end. These people have to eat too - accounting, HR, tech support, etc.

For all this we charge about $1000 dollars including $300 that goes to the appraiser (he/she is really an independent entity).


I've never heard of a $200 dollar shipping charge. We don't charge anything and the title companies charge 50 bucks.

I should add that we also make money when we sell the loan to the end lender. We get paid a "service release premium" when we deliver the loan to the end lender. The loan officer gets a cut and the rest goes to the house.

I'm not crying poor. It can be a lucrative business when times are good.....but it ain't that easy.

[mountainvue]

55. You are dead wrong. n/t

[flvegan]

47. You can cut out most of the search/exam and title insurance fees

by providing your prior policy and getting a reissue rate. Work with the title agent to just do an update/datedown on the search, and get a reissue on the policy.

[mountainvue]

52. The upfront MIP on FHA loans can be added

directly on top of the base loan amount so it is not out of pocket to the borrower.

[MercutioATC]

9. Many people purc hased low-rate variable loans with the understanding that the rate would increase.

They bought on teaser rates, either because they were irresponsible, planned to move within a few years, or expected their income to rise.

Why should I, who got a 15-year mortgage at 5% (my original rate) pay more than somebody who bought a house at a low rate because they were irresponsible?

[Dawgs]

11. Because it will help keep the value of you home from going down.

Is that important to you?

And, why are interested in seeing other people suffer? You are a Democrat, right?

[MercutioATC]

13. I'm not opposed to helping the responsible buyers who fell on hard times.

However, many people bought homes they couldn't afford, using low introductory variable rates to qualify.

These people shouldn't be rewarded at taxpayer expense.

[justgamma]

14. Some people did not sign up for these loans.

My daughter and her hubby bought a cheap home and fixed it up. Their $450 house payments went up to almost $700 at 10% interest. When they complained about it they were told that the fixed rate loan of 6% they signed the contract for went up because their mortgage was sold to another company. They don't have the means to fight this because that costs money.

One thing that I don't hear from a lot of people is that house payments are sometimes cheaper than rent payments and in the end you have something to show for them. That's why they were able to dream of buying a house.

Yes, lets throw people like them under the bus because some effing people were stupid.

[MercutioATC]

16. Mortgages can not legally change like that.

Unless it was a variable rate mortgage or they failed to comply with a contractual requirement, the rate CANNOT change even if the mortgage is sold to another company.

Your daughter's problem wouldn't be solved by Dawgs' proposed fix. Her problem isn't one of rates, it's because she either didn't understand the contract or the mortgage company is violating the terms of that contract.

[Statistical]

23. Mortgage can't change when sold.

Mortgage is a contract between the buyer and original lender.

If another lender buys the loan they are buying the terms that it was originally set at.
If they don't like the terms then they don't buy the loan.

If the loan adjusted then it originally was an ARM.

They should have their original loan contract & truth in lending statement.
If they have that not only could they get the loan reduced most lawyers would gladly take a case like that on consignment alone.
Changing rate in violation of contract is fraud. Likely they would be looking at 6 figure settlement.

If they face brass tacks and pull out that contract & truth in lending document it will clearly show a ARM which adjusted upward.

[Dawgs]

15. "These people shouldn't be rewarded at taxpayer expense."

Who's rewarding them? And, what do you mean "at taxpayer expense"?

WTF!!

[MercutioATC]

19. Who pays if you reset all variable rate mortgages to their original (teaser) rate?

Those rates were never meant to be fixed rates. Who's going to pay the difference between, say, the 4% teaser rate and the 6% new rate?

[dionysus]

32. yeah, fuck em.. let's put those fuckers out in the streets.

how compassionate of you
:eyes:

[Dawgs]

34. Thank you.

:hi:

[taught_me_patience]

45. Yeah... fuck many renters who have been waiting

for prices to fall. ONLY Homeowner's interests should be protected. Renters are dirty lowlifes anyway.
:eyes:

[taught_me_patience]

43. Maybe homes are overpriced and values should fall?

Take a look and tell me that prices should be maintained at that level.

pg


Secondly, many people took out fixed mortgages, at a higher interest rate, because the bank is assuming the risk of interest rates rising and falling in the future. However, people who took out variable rate loans got a lower rate because they were taking on the risk of interest rates rising and falling. They took the risk and lost... rates rose. Allowing them to refinance at the original rate 1) screws the people who took out fixed rate loans (the prudent thing to do) 2) Introduces extreme moral hazard (the people who are benefiting are the ones who least deserve it).

Also... I'd suppose you'd like to fuck renters over who have been waiting for prices to come down so they can buy. But who gives a shit about them anyway.:sarcasm:

[Dawgs]

57. Uh, my home price fell by $50,000 in the past year and a half. Prices have already come down.

How much did you lose over that time?

And, I noticed you're another compassionate Democrat looking to blame the homeowner instead of the Republicans or lenders. How nice of you.

[KillCapitalism]

17. I think the best housing stimulus would be this:

A guaranteed 2% interest rate on all refi's and on all 30 yr. conventional mortgages.

[Dreamer Tatum]

20. In other words, free money

Would you lend money to someone for 30 years at 2%?

If you'd rely on the givernment printing press to implement that 2% loan, you don't think
there are better places to put that money for 30 years?

[MercutioATC]

22. Exactly.

Why not just give away houses?

[Dawgs]

24. The total cost of such a stimulus plan would be $130 billion.

That's if 2 out of every 3 homes in America refinanced @ 4%; paying $1000 in closing costs. The balance of the closing costs would be taken from the $130 billion.

[Dawgs]

33. $350 a month(my scenario) sounds a lot better than $67(tax cut) a month.

This stimulus plan means that 87,231,028 million homeowners would have an additional $200+ bucks each month to spend on whatever they want. It wouldn't be a one time tax credit check or payment; which doesn't work anyways.

Also, the lenders would get a ton of new business, which would create tens of thousands of new jobs. Even if they are temporary, it would still help give a boost to the economy.

[Fresh_Start]

25. it would be easier if the government would provide tax credit

for mortgage interest above 4%. One stop shop to get the moolah instead of having everyone need to refinance

[Dawgs]

26. Would that tax credit be realized in the monthly mortgage payment?

And how much would we see in savings?

[Fresh_Start]

27. they could do it for the current year taxes so you'd get the

money back that you paid in 2008. So no, you wouldn't see your 2009 mortgage payments reduced but you might have enough tax rebate to pay 6-8 months of them entirely.

It really is faster AND it doesn't require 60-70 million mortgagees to get their asses in gear.

[Fresh_Start]

30. the mortgage companies already report to the federal

government how much you paid in interest on your mortgage. They'd have to calculate how much of that interest was due to APR above 4%.

The people with the ARMS would get proportionally more back because they are paying a higher interest rate.
People who are more likely to be underwater would get more back because their loan payments have a higher interest component because their loans are new loans (think amortization schedule)

[Oregone]

28. Huh? So people could spend their tax credit at Walmart?

How does that help anything? People still have high payments. Local economy isn't stimulated. People don't build wealth (equity). It just gets pissed away. No one takes a stake in the actual mortgage other than the original bank.

If the government allowed a refi, they would stand to make up to 50% of the cost of the loan in interest. The government would make money! Tax cuts create deficits, debt, currency devaluation, inflation, etc...Its just borrowed crap.

[Fresh_Start]

31. what does walmart have to do with it?

people will get their own money back. If they want they can make direct principle payments on their mortgages with the tax rebate which would actually build equity faster. If they want, they could keep their small business afloat longer or pull their mortgage out of arrears.

[Oregone]

35. People only get their own money back if they had the income to pay taxes in the first place....

bing, bing, bing.....

You can't get more tax credit back than you pay in taxes, just remember that. So this definitely would leave low income homeowners substantially behind.

And so what if people get their own money back from the government?!? The point of stimulus is for the government to determine efficient ways to spend it. The government can't give everyone their money back, trust them to spend it, and have anything left over for stimulation the economy (unless they just borrow it out of thin air). That is some shitty fiscal policy.

Walmart has everything to do with it. It gets pissed away to a foreign economy when consumers get their hands on cash. They aren't going to spend it on their mortgage! Thats Republican wishful thinking. And its all good if they do, until that next emergency comes along.

If they refi'ed, wouldn't that happen anyway with the excess? Yes, but it isn't government money produced by printing more paper dollars! Plus, they would build instant equity (wealth). Their payments would go from 90% interest to 50% interest instantly. Putting wealth into the housing market has numerous long term rewards.

Further, this solves future bank assets from becoming toxic in the future and banks can regain confidence in their liquidity (which they would instantly get). If alot of their loans were cashed in and refi'ed, they don't have to worry about the foreclosure rate fucking them. It instantly solves the credit freeze.

[Fresh_Start]

36. actually thats not true

because this is a rebate on the interest paid on mortgages.

So with zero income but a 10K in excess mortgage interest, you'd get the 10K in mortgage interest back as a tax credit which becomes a tax refund check

[Oregone]

37. So....essentially you think the government should subsidize the banks?!?!?

Taxpayer money should be shuttled to the banks to pay off interest?!? For how long? This is absurd...

When the government could OWN the note and make money off it, you suggest instead the government (via taxation or borrowing) just shuttle money to private institutions on behalf of the homeowner to pay down interest? Thats what this does. Since the money is given back to the individual, it is as if the government is paying it themself. This doesn't help the government make money off the loan. This doesn't help the people build any instant equity.

You are conceptualizing this as the government giving a check to its people (who in turn are giving it/have gave it to the bank). Its just the same as the government passing it straight through to a financial institution WHO IS BORROWING MONEY from the government in the first place. The government would be paying down interest on a loan, created from a loan originally from the government in the first place. The government would be signing up to get fucked.

Essentially, if the original source of the capital was the government itself, this program would just be paying banks to exist. Thats it. The government is loaning money out to banking institutions, and then paying them to take it by paying off the interest. Have you ever heard of a system where you pay someone to borrow money? Why doesn't the bank pay you to borrow money? What doesn't the government just pay you to borrow instead, and cut out the middle man?

Have you thought this through?

[Fresh_Start]

40. its not the same thing because the people chose how to spend

the money returned to them.

In this case, the government does not give the banks the money. It gives the money back to you.
You spend it how you need to or chose to. The banks aren't getting their hands on it.
You can still chose to default on your loan if that's your inclination.

I was responding to the post which fantasized about everyone refinancing their home loan to a lower rate.
Thats not gonna happen or at the very least its not gonna happen quickly it will take lots of time.
The government cannot force banks to refinance loans. While it may be in the interest of the banks to refinance some loans, they will not and cannot refinance the loans of everyone.

[Fresh_Start]

42. Think of it this way, today you can deduct your mortgage

interest from your income to calculate your income taxes.

Instead of being able to reduce your taxes by a tiny percentage of your mortgage interest, you deduct your taxes by a larger percentage of your mortgage interest. There is no bank in the process. You used to be able to deduct your interest on other consumer loans as well but they eliminated that. I thought I read that the stimulus is re-adding some part of the deduction for car loan/purchase. The intention is to stabilize the related market. In this case by directly helping mortgagees, it should indirectly help the real estate market.

By doing the rebate on APR above some number, it will most directly help the adjustable ARM people which are the group most at risk today. And it doesn't require that the banks cooperate. The taxpayer gets the money, period.

[Oregone]

65. Anyway you cut it, you are paying a person percentage of mortgage for them.

You are subsidizing mortgage, and thereby, the banking institutions. You are pissing money away into private institutions that will never see the light of day, while driving the government into further debt.

[Oregone]

61. It really is the same thing

Especially if you look at how the money is flowing. Yes, you may have different names for things, but the money is essentially flowing from the government to consumer to the bank. Now although it "refunds" last years payment, as time becomes arbitrarily close to infinity, the payment to the consumer (which replaces funds guaranteed to have been paid to a bank) becomes applied to their mortgage in basically real-time.

Essentially, if you are refunding interest, you are subsidizing interest payments of the consumers. Since that money goes no where else, this is a de-facto subsidization of the bank. Since the loan comes from the government in the first place, this is incredibly irresponsible and foolish.

-----

Imagine Johnny gave his friend Eddie $100 at 1% lifetime (expects $101 back). Now, Eddie turns around and lends $100 to Ronnie (Johnny's little brother) at 5% lifetime (expects $105 back). Eddie stands to net $4 dollar that week, off Johnny's money. Now Ronnie isn't good with money, and needs his brother Johnny to help him come up with the $5 dollars of interest. Ronnie could probably pay it with his allowance but wouldn't have any extra food money. Johnny tells Ronnie that he will pay for his food if he just pays off the interest (either way didn't really matter to the both of them, because the food needs to be bought and interest needs to be paid off). So Ronnie pays off the $5 dollars of interest, which Johnny replaces in his account. It was a hassle, and if they did it in the future, it probably would of been easier if Johnny just paid it for them.

In the end though, Johnny lent out $100 dollars to Eddie. He gave $5 dollars to his brother, because of interest to Eddie. Johnny ended up emptying his pockets of $105 dollars. Eddie pays him back $101 dollars. Johnny ends up with $-4 at the end of the day, and Eddie just profited $4 dollars. Ronnie has the same amount of money regardless. The only thing that happened was that the money shifted from Johnny to Eddie, when originally, Johnny was supposed to make money from Eddie.

Years later, Ronnie learns that Johnny raised all his money by stealing 30% out of his piggy bank (and their millions of siblings) for years. Sadly, despite all Johnny's stealing, he ended up in debt! The only one that got the money was his sleazy friend Eddie!

-----

Get it? Doesn't make sense now, does it?

"I was responding to the post which fantasized about everyone refinancing their home loan to a lower rate.
Thats not gonna happen or at the very least its not gonna happen quickly it will take lots of time.
The government cannot force banks to refinance loans."

No, but the government can start their own government owned, direct to consumer lending branch. Thats not fantasy. It would of costs less money than the TARP funds, PLUS, by allowing struggling homeowners to REFI, it would put liquidity into the actual banks (when the loan is taken over by the government), and reduce the chance of mortgages becoming toxic. While you think this is "fantasy", to me it just makes good sense. Even better to think the government would go from measly margins of 1% to 4% on money loaned.

[Dawgs]

63. Why do you assume I wasn't thinking of government owned lending?

I never said anything about banks.

See post #24 and #33.

:hi:

[Oregone]

68. I never assumed anything...

I was replying to this poster who suggests a better plan is subsidizing banks and dressing it up as a pretty "tax rebate"

My suggestion in that post, and always, is a government lending branch. Youre probably on the same page as I am.

[Dawgs]

70. Sorry. I misread.

We are on the same page.

:)

[sinkingfeeling]

38. If you refinance a loan, you restart the clock. I took out a 15 yr. fixed loan at 6 3/8% in 2001. I

make additional principle payments each month and will have it paid in full in less than 5 years. By making the additional principle payments and paying it off early, I will have saved something like $120K in interest charges.

[Oregone]

39. Yes, but if you go from a 30 to a 25 or 20, with lower interest, then you can

instantly have a larger portion of you payment go to principle and still have a smaller term. So its all about the overall approach. Not every refi sets the homeowner back.

[Dawgs]

41. And not every homebuyer would or needs to refinance.

But, many of us would, especially if it meant an additional $200-$500 dollars a month.

[mountainvue]

44. How do you expect the people that provide your closing services

to be paid? There is going to have to be a new deed recorded, documents drawn, loan approval process, appraisal, etc.
You will pay these costs one way or another. Watch out for lenders who offer you little or no closing costs. Those costs will surely be built into your interest rate which will most like be ammortized over 30 years. There is no real way to get around paying closing costs and why people think they are unnecessary is beyond me. Do you expect to get paid for your work?

[Dawgs]

50. See post #24 and #33.

It would cost us, but not nearly as much as the current tax cut; which offers little benefit.

[mountainvue]

78. Banks getting "a ton of new business"

still doesn't answer the question. You seem to think that banks should refi you for next to nothing. Banks are in the business of making money. That in turn makes an income for those that they employ/contract for these services.
Also, you made no mention of the stimulus in your original post, so I'm not going to address that as it only dilutes the point.

[Dawgs]

81. So I'm only allowed one chance at making a point? I can't revise it later?

And, where did I say anything about banks? My plan always involved the government helping out.

[mountainvue]

46. Dupe.

[taught_me_patience]

49. Better idea

Give every homeowner 100k becuase tax deductions (on mortgages) and no capital gains (250k profit) is not enough. Give every homeowner 100k so the party can continue like it was 2006.

Screw renters... they don't deserve help.

[Dawgs]

53. WTF!!! NOT fixing our mortgage crisis will SCREW everyone.

And, this is just one plan. I never said this should be the ONLY one.

[taught_me_patience]

56. The way to fix is to let foreclosures happen

and allow the market to settle at a market clearing price. Anything else will only delay the inevitable.

[Dawgs]

60. So, you think that hundreds of thosands of owners being "under water" by over $100,000 is good?

WTF!!

[taught_me_patience]

69. So you think thousands of owners who enjoyed 100-300% apprecation in 2004-2006

for no fundamental reason is good? And now you want goverment to do something to maintain those artifically high levels?

[Dawgs]

79. How many times do I have to tell you that all of that appreciation is gone?

There are no "high levels" anymore. Lowering them more will destroy our economy.

You're sounding really selfish. FUCK!!!

[taught_me_patience]

82. All of the appreciation is not gone

please look at this chart

http://mysite.verizon.net/vodkajim/housingbubble/

We are no where near historical levels. Why do you want to keep prices artifically high?

[pnutbutr]

64. allowing more foreclosures

will only force home prices to continue dropping and putting more and more people into negative equity situations. Local communities that rely on property taxes to help pay for schools will suffer even more than they already are. Something needs to be done to help stop or at the very least slow the foreclosures and get people buying homes again.

[Oregone]

74. But if you are a renter looking to buy, its all in your interest

So you can convince yourself its good public policy

[Oregone]

75. Why not delay the inevitable?

The inevitable sucks. Why not delay it inevitably? You are advocating pain. Lots of pain, in the hopes a free market can fix itself.

[taught_me_patience]

76. We'll end up like japan where home prices are still 50% below

1990 levels... 19 years later. I'm am advocating pain becuase the free market WILL fix itself.

[Oregone]

84. huh?

1) Wont advocating an utter collapse in housing prices produce an impact worse or equal to stabilizing them with affordable mortgages? By allowing reasonable mortgages at 4%, why does that suggest we will hit massive stagflation? What economic rules dictates a market/economy can only have moderate inflationary movement with mortgages at 6.125%?

2) Isn't * believing * that the unfettered free market will produce the best result for all over a time period diametrically opposed to being a Democrat?

[pnutbutr]

54. I'm at 6.35% right now

I don't mind helping those who need help but this wouldn't allow me to save anything because I made a good financial decision with a fixed rate in the beginning. It's really starting to piss me off that people are expecting to be helped out of a bad financial decision to be placed in a much better position than people like me. Getting rewarded for making a bad decision. I could really use extra cash also especially with my property taxes rising every year and although I don't mind this as much, my home value is continuing to rise because I'm in a very stable market area.

[Dawgs]

58. Why couldn't you refinance and save $300 a month?

I didn't limit this to those that made a bad financial decision.

[pnutbutr]

62. refinancing won't help

when the fixed rate is the same or higher than my current APR. Fixed rate 30 year APR is always going to be higher than an adjustable someone got years ago when they were hot because of really low interest rates like the 4% you mentioned.

[Dawgs]

66. Fixed rate 30 year APR would be at 4% in my scenario.

Why do you assume differently?

[pnutbutr]

72. I tried recently

You can get 4.25 today with 2-2.5 points. I have 0 points with my 6.35%. Each point is basically 1%

[Oregone]

71. I could refi right now....

But

1) I can't go to a 30, because I have 20 years left, and that would screw me in interest.
2) My payments would go up 100
3) My closing costs would be $4000
4) It would take 4 years to break even consider closing costs, higher payments and the amortization schedule. I want to sell before then.

Im between a bank and a hard place.

[Dawgs]

77. Under my scenario, with help from the government, you would pay less than $1000 in closing costs.

A lower interest might save you some money.

But, you might just be one of those homeowners that wouldn't do it because it wouldn't be in your best interest.

[Greyhound]

67. No flame, but what you've missed is the artificial inflation of house prices

has created an intolerable imbalance in the economy.

Either house prices have to be allowed fall or all wages have to increase, neither is good but house prices falling places more of the burden on those that profited the most from the latest looting of America.

[Dawgs]

73. Home prices have already come down.

I've personally lost over $50,000 on my home.

If home prices fall any lower then we will not survive economically as a country.

Everyone will suffer; not just those that profited.

[taught_me_patience]

80. Please see this chart - THEY HAVE NOT COME DOWN ENOUGH

http://mysite.verizon.net/vodkajim/housingbubble/

Looks like you got another 50k to go.

[Dawgs]

83. Whatever. The point is you are okay with the economy collapsing, while everyone is not.

Bye-bye.

[MercutioATC]

86. No, he's just not advocating artifically inflating home prices again.

Homes today are like Beanie Babies were in the 90's.

The values were artificially inflated by many times the actual value of the toy for years. When the market dropped, they returned to their fair value. Homes haven't dropped to their fair value yet, and they have to do that for a real recovery to begin.

[Greyhound]

85. The artificially induced house inflation went on for 5 or 6 years and even then,

thanks to decades of stagnant wages, were high. $50,000 is irrelevant without total valuation and location, and I certainly sympathize with your pain, but overall we are not even close to the end of this. Pumping even more money into the industry that caused this debacle (and half of which is under investigation by the FBI) doesn't seem to be a prudent strategy to address this very real issue.

If we can raise wages while house prices decline that will be helpful, but the basis for this crisis is that the prices are just too high and cannot be sustained, there is no way around that and lots of money is going to be lost, the question is who will lose it.