Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: russwinter who wrote (12098)	4/17/2004 12:49:47 PM
From: loantech	Read Replies (2) \| Respond to of 110194

Hi Russ, As you know I work for a major Bank in their mortgage dept., but at the bottom of the food chain. I do not have the stats on types of mortgages etc. and stats may be proprietary. But I can provide information from the trenches. Borrower quality is slipping. Lower down payments are pervasive. People predominately want 0-3 % down mortgages. 100% loan to value mortgages are very popular. Both sub prime and FNMA or FDMAC. Lot of purchases are 80% 1st with a credit line 2nd maxed as a variable to 100% LTV. Total debt to income ratio limit parameters have gone from around 41% max FHA and FNMA in the mid 90's to the low-mid 50% range. Total debt can be 53% of income. So let's see if someone nets out about 68% of gross income after state and federal taxes etc. that would leave this: $65,000 average family income X .68 = $44,200 net. Total debt to gross income ratio of 53% for a mortgage payment including PITI + MI + consumer debt = $34,450. $44,200 - $34,450 = $9750 divided by 12 = $812.50 net cash left for Groceries, insurance, home up keep, utilities, clothes, gas and oil, auto repairs, miscellaneous. Family of 4 = $600.00 for groceries and meals out. (Bet it's more than that.) That leaves $212.50 for the rest. Gas and oil, insurance, utilities, etc. This does not balance out unless you are the federal government. IS THERE ANY DOUBT THAT THERE ARE NO SAVINGS AND THAT WE ARE A NATION OF CREDIT CARD USERS?

To: russwinter who wrote (12098)	4/17/2004 2:03:08 PM
From: ild	Read Replies (1) \| Respond to of 110194

As of now the most popular loan in So. California is 5/1 which is fixed for 5 years and then becomes adjustable. If you talk to a realtor she'd tell you a few "common knowledge" facts: 1. houses here double in price every four to five years 2. most people move in 6-7 years (to bigger houses to make even more money) so no need to pay for 30 year rate lock. I don't know if those 5/1 loans show up as fixed or adjustable in government statistics. Tom, do you know?