{"id":3363,"date":"2008-07-15T10:51:06","date_gmt":"2008-07-15T17:51:06","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=3363"},"modified":"2008-07-15T10:51:26","modified_gmt":"2008-07-15T17:51:26","slug":"dont-learn-all-the-wrong-lessons-about-creative-mortgages","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3363\/dont-learn-all-the-wrong-lessons-about-creative-mortgages\/","title":{"rendered":"Don’t learn all the wrong lessons about creative mortgages"},"content":{"rendered":"

This is my column for last week from the Arizona Republic<\/i> (permanent link<\/a>).<\/p>\n

 
Don’t learn all the wrong lessons about creative mortgages<\/strong><\/p>\n

Arguably, the Phoenix real estate market is in a state of incipient recovery. Will there be more bad news? Certainly. There are still thousands of homes stuck in the foreclosure process. But prices are low enough, by now, that our surplus inventory will be absorbed — by investors, new-comers and second-home bargain-hunters.<\/p>\n

The bad news is that, at the end of all this, we will have learned all the wrong lessons from the real estate market downturn.<\/p>\n

Are Adjustable Rate Mortgages a bad thing? People learned to hate the first generation of ARMs, so lenders built in guaranteed flat starter rates, fixed adjustment periods, maximum adjustment caps. But even with all that, ARMs came through the down market with a sullied reputation. With fixed rates still riding so low, ARMs don’t make a lot of sense right now, but that doesn’t mean they never make sense.<\/p>\n

How about stated-income loans? Many of the foreclosed homes in the Valley were bought on stated income. But the problem wasn’t the loans, it was the buyers — who lied about their income — and the lenders — who let them get away with it.<\/p>\n

Negative-amortization loans were another source of foreclosures, even though the idea behind the loan product itself is perfectly sound — in an appreciating real estate market.<\/p>\n

The problem with all these loan products — and other “exotics” — was not the particular loan program. The problem was the profligacy of a surging real estate market — coupled with the securitization of mortgages.<\/p>\n

Everyone acted as if the party would never end, that home prices would continue to rise indefinitely. Still worse, lenders had socialized the risk of their poorly-vetted loans to securities investors. Ultimately, lenders didn’t have to care if their loans were properly secured by good credit, steady income and valuable assets.<\/p>\n

You can blame the people involved if you want, but don’t blame creative mortgage programs. Everything’s a trade-off, and it could make sense for you to get a stated neg-am ARM for your next Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This is my column for last week from the Arizona Republic (permanent link).  Don’t learn all the wrong lessons about creative mortgages Arguably, the Phoenix real estate market is in a state of incipient recovery. Will there be more bad news? Certainly. There are still thousands of homes stuck in the foreclosure process. But prices […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,6,5],"tags":[],"class_list":{"0":"post-3363","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"category-marketing","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1698,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1698\/what-should-you-do-when-the-real-estate-news-turns-out-not-to-be-as-bad-as-you-had-feared\/","url_meta":{"origin":3363,"position":0},"title":"What should you do when the real estate news turns out not to be as bad as you had feared?","author":"Greg Swann","date":"July 25, 2007","format":false,"excerpt":"A. Smile in good grace:Today, in its Existing Home Sales report for June 2007, the National Association of REALTORS noted that mortgage rates are lower by 0.02% than in June 2006. I guess I knew that, but wasn't paying attention to it.\u00a0 I had wrongly assumed rates were higher because\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14306,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14306\/sane-people-dont-comment-on-real-estate-blogs-you-dont-need-1000-facebook-friends-other-valuable-lessons-learned-from-3-years-slinging-stuff-online\/","url_meta":{"origin":3363,"position":1},"title":"Sane People Don’t Comment on Real Estate Blogs, You Don’t Need 1,000 Facebook Friends & Other Valuable Lessons Learned From 3 Years Slinging Stuff Online","author":"Chris Johnson","date":"March 10, 2011","format":false,"excerpt":"The real thing that pissed me off about the well intentioned jackals at Agent ReBoot was not what was explicitly taught: it was what was implied. \u00a0Somehow you need oodles of traffic to be successful. \u00a0Somehow, you need oodles of Facebook Likes. \u00a0That somehow all being able to be at\u2026","rel":"","context":"In "Inmanically Incorrect"","block_context":{"text":"Inmanically Incorrect","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/inmanically-incorrect\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":861,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/861\/lessons-from-the-epicenter\/","url_meta":{"origin":3363,"position":2},"title":"Lessons from the Epicenter","author":"Brian Brady","date":"January 6, 2007","format":false,"excerpt":"I am biased towards Phoenix. I should be. I lived in the Valley of the Sun for twelve years. I was married in St. Mary's Basilica, celebrated that conjugal union at Heritage Square, and watch my daughter come into this world at St. Joseph's Hospital. I've lent money on mansions\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9101,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9101\/rotarian-socialism-in-action-taking-lessons-from-the-nar-and-the-namb-wal-mart-is-using-compulsory-health-insurance-as-a-weapon-to-destroy-its-smaller-competitors\/","url_meta":{"origin":3363,"position":3},"title":"Rotarian Socialism in action: Taking lessons from the NAR and the NAMB, Wal-Mart is using compulsory health insurance as a weapon to destroy its smaller competitors","author":"Greg Swann","date":"July 2, 2009","format":false,"excerpt":"Today is July the Second, the date of the actual drafting of the Declaration of Independence. By now the United States is just another National Socialist oligarchy, a savage jungle of predatory pressure groups, each one looking to plunder the national treasury at the expense of all the others, each\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4812,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4812\/other-types-of-credit-may-be-feeling-the-crunch-but-home-mortgages-are-still-readily-available\/","url_meta":{"origin":3363,"position":4},"title":"Other types of credit may be feeling the crunch, but home mortgages are still readily available","author":"Greg Swann","date":"October 4, 2008","format":false,"excerpt":"This is my column for this week from the Arizona Republic (permanent link). \u00a0Other types of credit may be feeling the crunch, but home mortgages are still readily available Bad news about the economy is coming in from all directions, so you may be in the mood for some good\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1655,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1655\/not-all-neighborhoods-feeling-a-downturn\/","url_meta":{"origin":3363,"position":5},"title":"Not all neighborhoods feeling a downturn","author":"Greg Swann","date":"July 14, 2007","format":false,"excerpt":"This is me in yesterday's Arizona Republic (permanent link): \u00a0Not all neighborhoods feeling a downturn There are neighborhoods in the Phoenix area where the housing downturn is barely discernible. 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Defaults, foreclosures and interest rates are up, with\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=3363"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3363\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=3363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=3363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=3363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}