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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ild who wrote (24553)	1/13/2005 12:05:59 PM
From: Ramsey Su	Read Replies (1) of 110194

I am not even sure what is the profile of a typical borrower who has a MIed loan anymore. It is so easy to bypass that now that it is almost a no brainer. Furthermore, when interest rates were higher, 1/4%ish is not that much. Today people refi if they can save 1/8. MDC conf call answered the question about LTV and FICO. LTV is low 80% average and FICO around 720. So for the high end builder, TOL, LTV is only slightly better at 75%? (per last qtr's CC) MDC was very hesitant in answering the question about cancellations. At 32%, that means 1/3 of their backlog may evaporate. MDC said they hope cancellations happen early, before the sticks go up. I can only assume that if the house is completed, they may be sitting on inventory instead of backlog. I am getting daring at my old age and am going to venture into a real trading opinion: IF 1. DHI blows away earnings estimates next week. AND 2. DHI and other homebuilders skyrocket on that release. Then I think it could be hell of a good entry point for shorting the homebuilders.

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