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Contest: Who will offer the Afterlife Mortgage first?

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  • Contest: Who will offer the Afterlife Mortgage first?

    Giving away gold coins in these contests is getting expensive. No big deal in the old days when gold was trading at $270. But with the world's central banks, led by the Fed, playing Race to the Bottom with the world's major currencies, these English Sovereigns ain't cheap anymore. They were $80 when we started, now $180.

    With the housing market crashing on schedule and in line with our Jan. 2005 forecast, it's time to challenge the iTulip crew–in our opinion the smartest finance and economics community on the whole Web–to tell us: Which bank or lender will be the first to offer a 100 Year Mortgage?

    The 50 Year Mortgage debuted April 2006. As Holden Lewis at Bankrate.com reported then:
    Half of first-time home buyers are 32 or older, according to the National Association of Realtors. If those buyers get 50-year mortgages and never refinance or make extra payments, they won't pay off their loans until they're well into their 80s. Would they be crazy to get loans that amortize or pay off the balance over 50 years instead of the standard 30 years? Not at all, Diaz says.

    "Getting a 50-year loan is a perfectly rational way to avoid an interest-only or payment-option adjustable-rate mortgage," he says.
    Perfectly rational. Let's take "rational" to the extreme. If you have to choose between defaulting on your mortgage and giving up your home or extending your mortgage out to 1200 affordable monthly payments, which are going to do? Why the perfectly rational thing, of course!

    As the dollar sinks and long term interest rates rise to price in inflation and, dare we say, default risk, homes become even less affordable on a monthly basis as mortgage rates rise.

    Remember, the Monthly Payment Consumer debt serf couldn't care less about the total price of anything, only the monthly cost.

    When long term interest rates, such as on 10 year treasury bonds, rise to 10%, the monthly payment on a 30 year fixed rate mortgage will be out of reach for Joe Home "Owner" when he tries to switch out of a balooning adjustable rate mortgage and into a nice, stable fixed rate mortgage. It won't help him one bit if the price of his home falls 30% from the time he bought the home with a 3.4% teaser rate with an ARM–he'll still be stuck refinancing the old, underwater mortgage.

    The Japanese style 100 Year Mortgage is just the thing to bring the monthly payment on "his" home into range, and keep him paying until he's rotting in his grave.

    Forget a lifetime of debt. Soon millions will enjoy an afterlife of debt. Call it the Afterlife Mortgage.

    Each registered iTulip member gets to post the name of one bank or lender they believe is most likely to be first to offer the 100 Year Mortgage. If the bank you choose gets acquired, then your guess transfers to the acquiring bank or Resolution Trust Taxpayer Bail-Out Company or whatever. In case of a tie, the first poster to post the winning name wins. This thread closes to posts in one week. Good luck!

    (Sorry, iTulip employees, contractors, writers, sponsors, and affiliates are not eligible to play.)
    Last edited by FRED; 10-19-07, 05:35 PM.
    Ed.

  • #2
    Re: Contest: Who will offer the Afterlife Mortgage first?

    Bank of America.

    Comment


    • #3
      Re: Contest: Who will offer the Afterlife Mortgage first?

      Washington Mutual

      Comment


      • #4
        Re: Contest: Who will offer the Afterlife Mortgage first?

        Countrywide

        I would also expect to see other exotic products proposed to avoid write-downs, short sales and renegotiated balances. Banks will be willing to take whatever blood they can get from stones as long as they don't have to drop the principal balance due. How about an indefinite-term inflation-indexed mortgage with an artificially low initial payment that increases each year with the CPI. All the while interest is compounding away.
        Last edited by jimmygu3; 10-19-07, 05:52 PM.

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        • #5
          Re: Contest: Who will offer the Afterlife Mortgage first?

          Statewide Bancorp

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          • #6
            Re: Contest: Who will offer the Afterlife Mortgage first?

            I'm stuck with Wells Fargo. WaMu's been taken!

            Comment


            • #7
              Re: Contest: Who will offer the Afterlife Mortgage first?

              Wachovia

              Plus a few extra characters. Apparently 10's the bottom limit.

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              • #8
                Re: Contest: Who will offer the Afterlife Mortgage first?

                Originally posted by don View Post
                I'm stuck with Wells Fargo. WaMu's been taken!
                Might be a mid tier bank.
                Ed.

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                • #9
                  Re: Contest: Who will offer the Afterlife Mortgage first?

                  My answer may not be eligable, but:

                  Nobody. The 50 year mortgage will disappear before the 100 appears.

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                  • #10
                    Re: Contest: Who will offer the Afterlife Mortgage first?

                    Originally posted by Fred View Post
                    Might be a mid tier bank.
                    Just out of curiosity, are you sure it's going to happen anytime soon? That 50 year mortgage was over a year ago. I keep reading now that mortgages are harder to get because they've tightened up standards a bit. How would this be tighter?

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                    • #11
                      Re: Contest: Who will offer the Afterlife Mortgage first?

                      Chase Bank
                      raja
                      Boycott Big Banks Vote Out Incumbents

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                      • #12
                        Re: Contest: Who will offer the Afterlife Mortgage first?

                        Citibank. (The good ones were taken.)
                        "The test of our progress is not whether we add more to the abundance of those who have much it is whether we provide enough for those who have little." - Franklin D. Roosevelt

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                        • #13
                          Re: Contest: Who will offer the Afterlife Mortgage first?

                          Bank United - if they survive

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                          • #14
                            Re: Contest: Who will offer the Afterlife Mortgage first?

                            metalman beat me to it - see entry below
                            Last edited by DemonD; 10-20-07, 06:29 PM.

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                            • #15
                              Re: Contest: Who will offer the Afterlife Mortgage first?

                              GMAC. Gotta pay for those retirees pension benefits by some exotic scheme!

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