Cityscape Financial (CTYS) Message Board

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Non-Tech : Cityscape Financial (CTYS)

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To: Rational who wrote (865)	10/12/1997 2:40:00 PM
From: Brooks Jackson	of 2544

Sankar: While it's true the "Sav*-a-loan" program amounts to roughly half CTYS's loans, is it not true that those loans go up to 125% of the appraised value of the home? And while it's true that home values nationally have not gone up much in the past few years, that does not mean they won't go down. They HAVE gone down -- look at California -- in regional economic recessions. That means a 125% LTV loan can easily become a 150% LTV loan. And CTYS would be looking at collecting pennies on the dollar -- after foreclosure expenses. Not to mention more bad publicity for turning homeowners into the street. I'm not averse to risk. As I said at the outset, I'm long on this stock already. So your comment about inflation-adjusted Treasuries was patronizing and gratuitous. But I would like a better understanding of what the risks are -- long term as well as short term -- before I go any longer. It's no trick to give away money in a booming ecomony. Getting paid back in a downturn is another matter. If anybody here knows how CTYS expects to weather the inevitable downturn, and the probable decline of home values in at least some regions, I would appreciate a constructive dialogue.

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