The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: zonder who wrote (5395)	9/18/2002 9:17:09 PM
From: patron_anejo_por_favor	Read Replies (4) of 306849

<<So I am looking for stuff with real-estate exposure to short. First on the list are highly leveraged real-estate lenders.>> Hi zonder, welcome to the thread. A good place to start your quest is the 10 components of the Residential Real Estate Crash Index. They were selected to give a broad exposure to the residential real estate sector. Among home finance related plays, the private mortgage insurers (PMI, RDN and MTG) look particularly ripe because they're exposed to the segment of the mortgage market with the weakest equity holdings. FNM and FRE are interesting here, both because they've penetrated technical support and because it appears that their risks are accelerating due to prepayments brought on by the refinancing boom. Builders will get it in the neck as well, but it might take a bit longer. If/when rates start back up, the entire list will be a smoking crater, but in the meantime expect credit quality deterioration to exact a big toll on the lenders. DISCLOSURE: Short FRE, CCR, PMI, NCEN and PHM. Regards, Patron

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