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Re: ZeroHedge - Correlation Of Mortgage Rates With Real Housing Prices II
This only works because american banksters are s*ckers. Look what the real pros have been doing here in Spain:
It would be fun in such scenario when interest rates will be playing catch with inflation before the top at 35%. Spanish banks will own all houses empty, but the previous owners will be still paying to them for living on the street.
By the way, what is the event that causes inflation to drop after year 3? Maybe a dozen new Gawar oil field will be found? Or will interest rates go to 40%?
This only works because american banksters are s*ckers. Look what the real pros have been doing here in Spain:
- Teaser rate for the first year. (Nothing new).
- Rates automatically revised each year thereafter, based on short term interest rates. Usually this is EURIBOR + (0.20 - 1.50)%. EURIBOR is now running at about 1.45%, so most people is paying less than 2%.
- Mortgage guarantee is NOT limited to the property. If you get foreclosed and the sale price doesn't cover the remaining debt, you're still indebted for live.
- Foreclosure auctions controlled by insiders and rigged. You should sell before foreclosure because at the auction they would bid just for the amount of the debt and you'll lose any remaining equity.
- No practical personal bankruptcy procedures.
- The only loose corner is inheritance. Your children can reject your inheritance and get rid of your debts.
It would be fun in such scenario when interest rates will be playing catch with inflation before the top at 35%. Spanish banks will own all houses empty, but the previous owners will be still paying to them for living on the street.
By the way, what is the event that causes inflation to drop after year 3? Maybe a dozen new Gawar oil field will be found? Or will interest rates go to 40%?
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