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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (5274)	9/12/2002 10:09:56 PM
From: nextrade!	Read Replies (1) \| Respond to of 306849

From your link, Conclusion Home prices are holding up in most markets, and, generally, permanent residential mortgages have fared well in prior recessions. However, history might understate credit risks for insured institutions during this cycle because the mortgage lending business has changed since the last recession. Chief among these changes are robust mortgage market competition, which has contributed to narrower collateral margins; increased reliance on underwriting automation; and expanded involvement in the subprime credit market. In addition, residential C&D lenders in certain markets might be particularly vulnerable, since C&D credits typically undergo higher loss rates and some areas are experiencing continued construction despite a cyclical slowdown (as measured by employment trends). Permanent mortgage lenders in certain areas, such as the San Francisco Bay area, could also face higher loss rates and foreclosures going forward, as the current economic weakness places downward pressure on home prices and dampens the ability of households to meet mortgage payments