tag:blogger.com,1999:blog-8529580665294663953.post3750685946028064355..comments2023-10-27T04:26:57.609-07:00Comments on InvestorCentric: New Mortgage Regulations Come Just A Tad LateNuWire Investorhttp://www.blogger.com/profile/02512928198926080436noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8529580665294663953.post-1390462096854465302008-07-26T11:17:00.000-07:002008-07-26T11:17:00.000-07:00As someone who sought out and won the right to NOT...As someone who sought out and won the right to NOT escrow (and paid $150 for the privilege on a 30-year 5.625% fixed) I am alarmed at losing the power to do this and maybe having escrow forced on me. Debt service (I have a 35-year background in studying corporate debt historically) totals 12x$345.40= $4150 or so annually BUT quarterly taxes and annual insurance total about $2300. I get a discount for paying the insurance all at once and I'm sure the mortgage holder (citicrop) (never sure of who is nortgagor and mortgagee; best way to check is to at a forclosure sale ad!) would like to pay in pieces and stick me with their higher cash flow.<BR/> What this means is the escrow is an effective slush fund for the mortgage outfits, and requiring escrows may be a way of helping bail them out. OK, I maintain a large cash position so I can visit city hall on the tax due date and pay them in full (Friday Aug 1, 250 feet away); same with the insurance. Most people aren't so disciplined and I was annoyed that the bankers thought I was a rube like everybody else "building equity" (I bot this place to live in rather than worry about eviction by a capricious landlord). Yes, on an income only basis I can't afford this but I have a huge pot of assets (I don't count capital gains as income except for taxes; capital gains are seed corn for the next deal and I had to sink a lot of seed corn into my condo and I can't get that seed corn out without putting the living place at risk.) I am doing a slow liquidation; fortunately all the numbers worked: I didn't have to sell the crown jewels of the portfolio, got the 60% down payment, and had cash left over to play with outside of the $10-20k cushion I like to keep.<BR/> As for the Housing bill about to be signed today 26. July--it is going to be the "Smoot-Hawley Tarriff" of 2008: the pebble that starts the downturn that causes a recession to become a Depression. I've been continuing the net-selling program as I spotted the CDO securitization problem years ago. All because I pay my card bills in FULL each month it made me think of what could happen/go wrong to CMO/CDO cash flows..<BR/> Only good feature is that if Obama wins enough people will blame him for the crash, but there are a lot of stupid people out there who always vote Democrat, plus a lot of dishonest ones who do.Anonymousnoreply@blogger.com