Friday, September 06, 2013

Banks do the funniest things.

Banks are about one full point from killing their whole entire refi sector. My primary is at 6.25 which I bought in 2006. Right after the market was starting to turn. That means anyone who still has their house from that time, is at roughly that interest rate. Which I'd guess is about 20% of people. Since that's still how many people are underwater. With a one point spread - you could go either way. With fees and points, it becomes almost not worth it to refi. I mean, all they have is the 2006 and before houses. It seems anything bought after 2007 is either flat or has at least some equity. So this group has most likely refi'd like I did on my crapshack in January.

And if it's true that 50% of homes are being bought with all cash - how are banks making money? I mean, obviously they are bumping up rates faster than the economy can handle it. But.... things that can not go on forever - will not.

I wonder if the Bernanke is pissed. I don't think anyone expected banks to raise rates until the Fed did. Now there is absolutely no room for them to do so.

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