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User Info	Bush freezing adjustable interest rates; entered at 2007-12-02 13:27:53
Agxli Posts: 3378 Registered: 2007-11-02	I'm very interested in the likelihood of this bail-out happening as this will affect my time-frame of buying another house in Northern California. I sold my house one year before the absolute top in our neighbourhood (2004) and am renting and waiting for a decline. With my money in CDs, I am still ahead but what happens in the next year or two with price declines will really show whether my decision was the best investment-wise. I'm looking at both buying a home to live in (thus I can withstand not getting the best price because there is only one specific area we want to live in), but I'm also thinking about a possible investment property so price on this property would be the only criteria. Currently prices are down approx. 10% from the high but are still significantly overvalued by 20-30%. I am buying in an area of mostly jumbo loans. I can tell you from following the market that it is absolutely frozen here. The neighbourhood we are looking to buy in; NOTHING is selling right now. There is a stand-off between buyers and sellers. If there were no bail-out I would expect to start seeing significant declines this coming spring. But I'm really not sure now. Can anyone with a background in the MBS business etc. give an opinion on whether this will get the secondary market moving again; especially whether this is likely to get the jumbo secondary market going? As I see it, the problem is two-fold. Stop a large number of sub-prime mortgages from defaulting to prevent to MBS, CDOs ,credit-defaults and everything else leveraged on-top from falling apart. But it seems that the bigger problem is really the option-arm resets, many of them alt-prime with high fico scores. The investment banks, banks (such as Wells Fargo, Wamu, Countrywide) must know this. Does anyone believe that more than likely this plan will also be a back-door route to prevent all these mortgages from going bad. Many of them from people claiming owner-occupied (to get a lower rate) even though as was common in California many houses were really second investment properties. I'm really unsure about what the affect of this bail-out will be on California prices now. Still a big quick decline? or slow the decline and turn it into a many year decline, mostly from inflation adjusting the price rather than outright price declines. I can tell you though that outer fringes of the bay area are almost to the point of cash-flow positive as rental properties with 20% down. I really didn't expect this to happen for at least another couple of years. 2007-12-02 13:27:53