Posted by Craig / CA
on March 26, 2009, 11:18 am, in reply to "=) Game on, Craig!"
69.235.2.50
I wish I could....
Unfortunately all I have is diplomacy, as I have no access to a past jobs tools of war.
I don't have access to the 20 some compliance books sitting on the shelf of the Job I left in 2003. For which daily updates were received to some section or another.
So all I have to come to an old west gun fight is charm, and wit.... which I can't recall ever winning in any Western, or historical records of yesteryear.
A few notes on the above posting,
1.) Rules are defined by the Fed. Therefore it requires each institution (escrow, lenders) ect. legal dept. to interpret them. That alone will make product comparisons from one company to another elusive, even for the same term/rate.
2.) I wouldn't go there with the definition of "annualized" either. But from you above posting, I'm not sure you understand it either. Annualized, like a yield on a savings is not a flat number (simple interest) you can't just multiply by it, and in return your numbers above are not correct, it is a logarithmic equation. Annualized, like a yield, take into consideration the changing target of the balance (down on a loan, up on a CD account) each month (or what ever term the change takes place, and interest is applied).
Now regarding the 7 yr thing... I can't find any reference to it beyond the following on Wikipedia, (with out access to those books) which is so generic, it dosn't say it either, other than... well read for yourself. (Bold & Underline are my additions)
"For example, $100,000 mortgaged (without fees, since they add into the calculation in a different way) over 15 years costs a total of $193,429.80 (interest is 93.430% of principal), but over 30 years, costs a total of $315,925.20 (interest is 215.925% of principal)."
Actually the entire Wikipedia posting on APR, pretty much sums it up... the rules are so lax, unless your comparing two products from the same company... it's about as accurate as a hand grenade. Gets the job done, but accurate is not the primary mission.
I would love to know where you said you found the formula to calculate the APR you mentioned above, as I'm concerned it's missing the "fee" calculation the discussion is all about, just as the Wikipedia calculation left it out with a note stating such. (were again we would implement the 7 yr. issue I mentioned)
Looking forward to your response.... I'm booked for the day, and leaving town for a race the weekend early Friday, so please don't take a delayed response as anything other than that. Cheers!
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