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

To: David Jones who wrote (14999)	11/11/2003 9:40:28 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Yes, people who can purchase a $1 million dollar home with 3% down can afford to walk away. But that's not a problem for the home builder, in this case one that is ranked among the top-ten largest home builders in the country (although I doubt the buyers are any different at the nearby developments of another three of the top-ten builders). It should be the lenders problem, but it's not. The lender sells the jumbo $970k loan on the secondary market. In the event of a default it will hit the Mortgage Insurance Company as well as the Pension Fund who buys the Collateralized Mortgage Obligation if the loss is greater than 20% - which I guarantee it will be.