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rward

Please help - Morgage Loans 2011

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rward - If you throw out something political, you have to realize someone is going to bite. Had you posted without the snippet of blaming Obama, no one would've brought politics into it!

 

On another note, the decision joining ARCR should have nothing to do with whether you like people posting on this forum. ARCR is a huge resource if you're seriously considering expat life & they open avenues for you that would be closed otherwise. You may even be able to work with them in getting info on mortgages since they are "in the know" about anything to do with expat life.

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Not sure if you would be interested, but I am selling my house and would consider owner financing for the right person. My house is located in the central valley in the mountains, very secluded. PM me if interested. My interest rate is far below what they charge here.

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And the most important comment I think is this whole thread is from Jim--NO ONE should consider borrowing their way into CR.

 

I agree. Can you imagine moving to CR and buying a house somewhere, and then deciding you want to move but you're trapped there by a very expensive mortgage/house that nobody else wants?

 

Maybe the frequent advice here about renting in an area before you buy (if ever) should also include the suggestion to take a 2-day tour of some of the thousands of failed and partially completed housing projects in CR. There are several along the road to Quepos, about 20-30 miles to the north. There are 30 or 15 house/condo units, each in various stages of completion, but none are completed. It's easy to imagine that the various owners realized what a bad idea it was and stopped pouring in money at various stages...

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My thread is NOT about US politics...Why do think I came to this forum? I'm fed up with things here and the constant potlitcal battles being fought and my desire for pura vida.

 

Sorry to tell you the bad news, but if you think US politics is bad, and you think coming to CR will get you away from that you're going to be in for a rude surprise. Politics in CR is worse, and it tends to be so on a more personal scale. In my opinion, the legislators in CR have the ability and common sense of a US High School student government, and maybe not that good. A very obvious example is the "new" Ley Transito and the new fines. Imagine if a fine for speeding in the US was 30-40% of your (middle-class) monthly salary. Well, that's the reality now for people stopped for speeding in CR. The legislators spent years arguing about the new law, then passed it into law, and now they've spent the last year and a half arguing about how to revise it... with no solutions in sight.

 

The amount of graft and corruption is on another scale. Go to some smaller towns outside of San Jose and ask them how they feel about the governmental support for their area, and how they feel about the amount of money that comes to their town for critical needs, and how much of that money ever makes its way to the projects and other needs.

 

You will learn that part of "pura vida" is the tacit acceptance or tolerance of things like this, or at least finding ways to deal with your frustration about things like this.

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Sorry to tell you the bad news, but if you think US politics is bad, and you think coming to CR will get you away from that you're going to be in for a rude surprise. Politics in CR is worse, and it tends to be so on a more personal scale. In my opinion, the legislators in CR have the ability and common sense of a US High School student government, and maybe not that good. A very obvious example is the "new" Ley Transito and the new fines. Imagine if a fine for speeding in the US was 30-40% of your (middle-class) monthly salary. Well, that's the reality now for people stopped for speeding in CR. The legislators spent years arguing about the new law, then passed it into law, and now they've spent the last year and a half arguing about how to revise it... with no solutions in sight.

 

The amount of graft and corruption is on another scale. Go to some smaller towns outside of San Jose and ask them how they feel about the governmental support for their area, and how they feel about the amount of money that comes to their town for critical needs, and how much of that money ever makes its way to the projects and other needs.

 

You will learn that part of "pura vida" is the tacit acceptance or tolerance of things like this, or at least finding ways to deal with your frustration about things like this.

 

I appreciate your insight.

 

Thanks

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Amen--it is never simple and falls on the shoulders of many, and let's not forget that the Clinton administration wanted to push home ownership to the 67% level from the 60% or so where it was at the time and then that same goal was adopted by the Bush administration's ownership society strategy--the simple and noble goal of getting more folks into owning their own home led I think to all the things you identified above--as always, be careful what you wish for since the unintended consequences can be broad and deep

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If you are referring to the real estate bubble and bust, aren't you leaving out some background on the salient facts through the 90s and 2000s which led to the bubble such as:

Starting in the 90s, in the interest of diversity and fairness to low income families, the home ownership American Dream craze was pushed (by HUD and congressman Frank and Dodd in a vote grab) on what would otherwise be non qualifying home buyers. Banks not making the quota are penalized under the 1977 Community Reinvestment Act by preventing them from opening additional branches among other things.

 

I was in the mortgage business in the 90's, and while some (large) banks had some issues with what you describe above, the larger part of the industry that is the mortgage banking industry didn't seem much affected by it, at least not in California. And some of those programs were for relatively small areas-certainly not significant enough to affect the overall market in a city or county. And... most of those programs were for houses bought in the 90's, and prices continued to climb for nearly ten years after that-those loans lost their risk when their property's value increased by 50+%.

 

The Fed and politicians (both Democrat and Republican) during both the Clinton and Bush administrations manipulated the currency pressuring interest rates lower making it artificially easier to get loans.

 

Well, the currencies were manipulated for many significant reasons that had nothing to do with loans. The more significant factor for mortgage loan interest rates is the current and futures prices of bonds, and particularly 30-year bonds, and then the 1-year bonds and T-bills (for adjustable rate loan rates). It's important to understand that mortgage rates are closely tied to those bond prices, which are almost always directly affected by the current and future safety of investing in the stock market. In boiled down terms, when the economy looks bad the price of stocks usually decreased and the price on bonds changed such that their effective interest rates went down. I made a fair bit of money in the industry because I understood this relationship and other bond market factors and trends pretty well and could predict daily and weekly changes in mortgage pricing correctly about 70-80% of the time.

 

I think that even now, interest rates aren't artificially forced to be low by what the President does or doesn't do, and compared to the period before 2002'ish, rates today are significantly more affected by global factors and world markets.

 

Politicians buying votes pushed Fannie and Freddie (then quasi government entities, and now owned wholly by you and me, the US taxpayer) to lower their standards and buy ever more risky loans. They then became the number one buyer of mortgages for a period of time between 98 and about 03. Banks taking on bad loans (no down payment, non qualifying income etc.) became the norm as they were increasingly bailed out by Fannie and Freddie.

 

I agree that Fannie and Freddy became the number one buyer of loans, but that in itself wasn't a bad thing because money moved faster and allowed more people to get loans. I think the problem began mostly when Fannie and Freddie lowered their qualifying standards quite a bit near the beginning of the 2000's. No downpayment loans other than VA loans were very, very rare, and no income verification loans became more common, but they were only for loans with 20% or more down, and neither of these loans "became the norm"-I don't think they accounted for more than 10% of loans that I did.

 

In my case, we stressed that no income verification was not the same as no income qualifying. The stated income still had to make sense, and the borrower understood that if they ever defaulted on their loan their tax returns would be obtained by the bank to determine if they committed fraud. I'm sure some people went elsewhere and got a loan somewhere else with less concern about fraud.

 

All this mess is made possible by fraud from buyers themselves, the banks, Wall Street, Fannie and Freddie, rating agencies, and our politicians (basically our own government was happy to lie to us and screw us for our own votes).[/size]

 

Don't forget to mention the idea that Americans tend to want more than they can afford, whether it's houses or cars, or, jewelry, etc... I saw many, many houses sold to people who were at their limit of being able to afford the house and other bills, and then they'd go and buy or lease a car they couldn't afford, which meant they couldn't pay their mortgage... and then one, or both of the couple lost their job. I think the loss of jobs is what really set off the housing bubble burst-the final straw, because the entire industry was already in a precarious state for the reasons we've mentioned above.

 

 

The market is still artificially high because the Government does 90% of mortgage loans through FHA. They used to do only 3%. So now we the taxpayers are directly on the hook for defaults; in the end, nothing has changed in that regard.

 

From what I saw in the 90's and 2000's, FHA accounts for much less than half the loans in California-in part because the house prices in California exceed FHA's limits. IMO it is a sin that the banks have done very well for themselves because of government (taxpayer) bailouts that virtually eliminated the banks' losses if they foreclosed on somebody, and in many cases the bank got so much government help that they MADE money on foreclosures. To me, that's the really disgraceful part the politicians have played in this whole thing.

 

In the meantime, the people who bought and sold/lost houses have not done very well at all, unless you were/are buying or building in this market during the past 2-3 years.

 

I think we agree that Americans will have to get used to the fact that not everybody gets to OWN a house and two new cars, at least not yet. During a pretty bad time in the housing market, I remember the words of an arrogant realtor when a friend of his asked "How's business? He replied, "Well, I've still got my Mercedes". One other thought, when I was in the mortgage business I used to say that 80% of the realtors and 80% of the mortgage loan officers were in the wrong business-they were not competent, just lazy and greedy.

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Well after turning over every rock known to man I found my answer. There are no mortgages being made in CR. All the banks and broker phones have been disconnected. If you don't have cash or get owner financing you're screwed. There are reasons why this is the case but it doesn't matter. As I've learned from others you never ask why in CR. Just my humble opinion.

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Well after turning over every rock known to man I found my answer. There are no mortgages being made in CR. All the banks and broker phones have been disconnected. If you don't have cash or get owner financing you're screwed. There are reasons why this is the case but it doesn't matter. As I've learned from others you never ask why in CR. Just my humble opinion.

 

By "All the banks and broker phones have been disconnected", what exactly do you mean? Which banks? Which brokers?

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rward I'm sure some banks out there are still loaning money, but what can you for collateral, as a 'newbie/possible non-resident' in Costa Rica? They may ask for a large, possibly 50-60% down.

Edited by costaricafinca

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By "All the banks and broker phones have been disconnected", what exactly do you mean? Which banks? Which brokers?

 

Any Bank in CR that had a mortgage department phone. Natiional Banks or otherwise. Try it and you will see. "Beep..Beep..I'm sorry but the number you have called has been disconnected".

 

I don't care to get into the economics ot it as it is a waste of brain function.

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