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Author: 3muttsmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76078  
Subject: Re: A fools view? Date: 5/9/2004 9:50 AM
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Depending on when those mortgage were taken out, 8% could have been the going rate (e.g., around February-June 2000). If the buyers had good credit, they can refinance at the current rates and then the sellers would have the same poblems as other collateralized mortgage obligation investors: having the "bond" called and now have a bunch of cash with no where to invest at such attractive rates. If the buyers can't refinance at a lower rate, it would have been because of poor credit, which means the sellers are taking on risks for carrying those mortgages.

Or, it's possible that the buyers aren't very savvy. Or, they may have gotten 100% financing from the sellers and the properties have not appreciated to the point where pmi wouldn't be required.

Or, they're not planning on staying in the house for more than a couple more years. Which brings me to a question. If the buyers decide they want to move, whose problem does this become? Do the buyers have the same latitude to list and sell the residence as a person financed by a bank? Would the previous seller attend the closing or be the "invisible" third party with the payoff obtained by the title company as a corporate lender would be? Does the present buyer-cum-seller have the option of doing an FSBO and would the previous seller have any say/stake in how the sale was handled, e.g requiring a title company or attorney closing?

just curious
3MM
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