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: yard_man who wrote (15345)	12/6/2003 10:52:21 PM
From: Elroy Jetson	Read Replies (1) of 306849

Since fixed rates have risen, roughly 2/3 of home purchase loans have been variable rate loans - I assume new loan purchases at Fannie and friends mirror the market mix. These variable rate loans are offered by all major home builders with no down-payment and no closing costs required. Just have a heart-beat and be able to sign your name. Although the top 20% of the loan is insured by a company like PMI, these loans will be at the greatest risk of defaulting as rates rise. Losses often exceed 20% with the balance bourne by the buyer of these smart-ass securities. Not many intelligent people would want to buy them, certainly not China, so they seem prepared to market them to the general public.

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