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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (7205)	5/28/2004 12:17:56 AM
From: CalculatedRisk	Read Replies (2) \| Respond to of 116555

Oh my! Quoting from that article: Ms. McGee said that the San Francisco Bay Area and Orange County were most vulnerable, with 65% of buyers in the San Francisco Area and 67% in Orange County using adjustables in 2003 to qualify for more expensive homes. "Many of those buyers," she pointed out, "stretched themselves to the limit to qualify for homes in a market with rapid price appreciation. With lenders allowing payment/income ratios of over 40% it won't take much of a payment increase to put those people in distress. The next 18 months will be a critical period." ME: If there is a hint of a bubble, regulators should stress credit worthiness. Instead they feed the bubble by allowing looser terms and more aggressive financing ratios. Incredible.