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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (159)	7/11/2003 2:54:18 PM
From: ild	Read Replies (2) \| Respond to of 110194

<<<What happens when the refi boom is over? >>> New refi boom? Isn't it a constitutional right to extract 30K of RE equity per year?

To: russwinter who wrote (159)	7/12/2003 7:19:56 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

One way to keep those bankcard delinquencies down is to charge-off even more and call everything under control: spotlightonfinance.org Delinquency rates on residential mortgages have stayed fairly constrained at 1.96% in 1Q/2003, versus a peak of 2.55% in 2Q/01. spotlightonfinance.com Cause for celebration? The obvious reason is the fact that virtually any rational person will do whatever he or she can (borrow elsewhere, sell, cut back expenses) to keep equity perceived as appreciating away from foreclosure. And some figures from Kurt Richbacher sheds additional light on the matter. Homeowners borrowed $768 billion extra out of their homes in 2002 at a savings of about 1.75% interest. In otherwords most kept the payments the same, but extracted the rest of the money without additional cost, a free loan shall we say. Where did the money go? Consumer durables spending? No, that was flat. Non-durables goods? Yes, spending for food, gas, and fuel increased. Consumers borrowed to pay their increased natural gas and car fuel bills, and that will be an even bigger expense this year. Mostly (63%) though it went for making house payments, insurance and medical payments. In otherwords, consumers used one of the greatest windfalls in mortgage history to pay for essentials and go into deeper debt.