On Monday November 14, 2011, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate Radio show on The Big Talker 1580 AM, hosted by Ryan Sloper.
Listen to the show.
Part 1 (15:00)
Ryan notes a curious answer by Newt Gingrich about housing during the recent Republican debate. Louis notes the problem of having a real debate with nine candidates in an hour and noted Ron Paul, for example only spoke for 90 seconds in the most recent debate. Louis notes that there is no free market in real estate as the government is so involved in the real estate market. Louis notes the absurdity of giving the executives of Freddie Mac and Fannie Mae bonuses.
Ryan discusses the issues that Private Mortgage Insurance companies are having and their impact on Freddie Mac and Fannie Mae. Louis notes the analogy during the financial crisis when AIG was unable to meet its insurance obligations to Goldman Sachs and the Fed had to bail them out. Louis notes that the government caused the housing bubble with low interest rates.
Louis notes that the government also causes the cost of education to go higher by guaranteeing loans. Louis note that when the government sponsors services by guaranteeing loans, prices go higher but the quality does not go up. Louis notes that students with excessive loans will have a hard time getting a job and even if they get one will have a hard time getting a loan to buy a home. Louis notes that 70% of the U.S. economy is based on spending-spending with borrowed money.
Part 2 (12:08)
Ryan notes that the economic releases have been secondary to economic events in Europe. Ryan notes that mortgage rates have held steady and predicts that it will remain so till the rest of the year. Louis agrees and notes that Italy has had a debt problem for a while but that it has just dawned on investors.
Louis also notes that the US has a debt problem but no one is focused on it as they are focused on European problems and therefore conclude that the US is a safe haven. Nial Ferguson was recently a guest on the Peter Schiff show and noted that markets are myopic and tend to ignore fundamentals for a while. Louis notes that at some point investors will focus on the fact that the US owes over $14 trillion and won’t be able to pay it back. Once investors focus on that fact interest rates will rise. Ryan notes that the Fed’s manipulation of interest rates is inflationary and notes the rise in the prices of gas and food.
Ryan advises locking into a low long term interest rate. Louis notes that locking in a long term interest rate may be a wise move even if the value of the home drops as during the term of the loan, rental costs and interest rates will most likely rise, while a fixed interest rate will remain the same. Louis notes that just because interest rates are low doesn’t mean the US should borrow more just because it can as it already owes $14 trillion.
Louis notes that if there is significant inflation, you want to be paying back your mortgage with today’s dollars at today’s low rates. Louis and Ryan note that rates are more likely to rise than fall. Louis notes that consumers are lured into a false sense of security re low interest rates as they believe that the Fed can keep rates low as promised through 2013. This scenario takes away the need to lock in now as consumers are still expecting rates to remain low. Louis notes, however that if the Congressional “super committee” does not reach an agreement, rates could rise.
Part 3 (12:03)
Ryan discussed refinance options and notes that each person’s options are unique. Louis and Ryan discuss investment properties. Ryan discusses ways to pay down mortgage debt. Louis questions the wisdom of doing so, if consumers have higher interest credit card debt, that should be paid first. Louis notes that the government favors debtors over creditors as people can’t get good interest rates on their savings and debtors are encouraged to borrow more money lured by low interest rates
Part 4 (12:00)
Ryan notes the existence a 3.8% tax provision on home sales in the Obama Care bill and discusses when such tax is applicable.Louis notes that the obama care bill is up for review by the Supreme Court.
Louis notes that the Federal government classifies high income earners in a universal manner and doesn’t take into account regional differences. For example a couple making 200K in the Washington DC area is not as wealthy as a couple making $200k in Alabama. Ryan notes that adding taxes can only harm the real estate market.
Louis notes that people should not view their primary residence as an investment vehicle. Louis notes that if home owners are interested in flipping their homes they are not supporting the home ownership model as the basis for promoting home ownership is to encourage stable communities, not one where there is constant turnover due to incessant home flipping.
Listen to other Real Estate Radio shows with Louis Cammarosano
Listen to the Real Estate Radio show of November 7, 2011
Listen to the Real Estate Radio show of October 31, 2011
Listen to the Real Estate Radio show of October 24, 2011
Listen to the Real Estate Radio show of October 3, 2011
Listen to the Real Estate Radio show of September 26, 2011
Listen to the Real Estate Radio show of August 8, 2011
Listen to the Real Estate Radio show of July 25, 2011
Listen to the Real Estate Radio show of July 11, 2011
Listen to the Real Estate Radio show of June 27, 2011
Listen to the Real Estate Radio show of June 20, 2011
Listen to the Real Estate Radio show of May 23, 2011
Listen to the Real Estate Radio show of May 16, 2011
Listen to the Real Estate Radio show of May 9, 2011
Listen to the Real Estate Radio show of May 2, 2011
Listen to the Real Estate Radio show of April 25, 2011
Listen to the Real Estate Radio show of April 18, 2011
Listen to the Real Estate Radio show of April 11, 2011
Listen to the Real Estate Radio show of March 21, 2011
Listen to the Real Estate Radio show of March 14, 2011
Listen to the Real Estate Radio show of February 28, 2011
Listen to the Real Estate Radio show of January 24, 2011
Listen to the Real Estate Radio show of November 29, 2010
Real estate radio interviews also available on Youtube
About the Real Estate Radio Network
The Real Estate Radio Network® is a nationwide alliance of real estate related professionals with a common objective: delivering the timely truth about local Real Estate Markets over local radio stations.
The Real Estate Radio Network brings hard-working and ethical professionals in a community together. We provide the media and forum necessary for Consumers to learn the truth about important aspects of their financial life, which is mostly centered around their biggest investment, the home they live in. The Real Estate Radio Network® brings each radio program to the audience with a “live and local” show hosted by well-respected members in the local Real Estate and Financial community.
About Ryan Sloper
As a highly motivated mortgage consultant, with more than nine years of mortgage lending experience, Ryan Sloper has acquired a solid understanding of the local and national real estate markets. Ryan has been investing in residential and commercial real estate for the last 5 years, where he has first hand knowledge of what it takes to be a successful real estate investor. Ryan also hosts a weekly radio show, Real Estate Radio, which airs every Monday on 1580 AM in the Washington, DC Metro Area. Real Estate Radio also streams live nationally @ http://whfs.cbslocal.com/shows/real-estate-radio-with-ryan-sloper/